SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 20, 1995
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Sirco International Corp.
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(Exact name of registrant as specified in its charter)
New York 0-4465 13-2511270
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(State or other jurisdiction (Commission IRS Employer
of incorporation) File Number) Identification No.)
24 Richmond Hill Avenue, Stamford, Connecticut 06901
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(203) 359-4100
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10 West 33rd Street, Suite 606, New York, New York 10001
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(Former name or former address, if changed since last report.)
Exhibit Index is located at page 8 herein.
<PAGE>
Item 1. Change in Control of Registrant.
On March 20, 1995, pursuant to a Stock Purchase Agreement, dated as of
March 20, 1995 (the "Stock Purchase Agreement"), among Yashiro Company, Ltd.
("YC, Ltd."), Yashiro Co, Inc. ("YC, Inc."; together with YC, Ltd. sometimes
referred to herein collectively as the "Sellers"), Joel Dupre ("Dupre"), Pacific
Million Enterprise, Ltd., a Hong Kong corporation ("Pacific"), Cheng-Sen Wang
("Wang") and Albert H. Cheng ("Cheng"; and together with Dupre, Pacific and Wang
sometimes collectively referred to herein as the "Buyers"), the Buyers acquired
an aggregate of 681,000 shares (the "Shares") of Common Stock, par value $.10
per share (the "Common Stock"), of Sirco International Corp., a New York
corporation (the "Registrant"), constituting approximately 56.3% of the issued
and outstanding shares of Common Stock, for an aggregate purchase price of
$1,532,230.
Dupre acquired 414,334 of the Shares, constituting approximately 34.3%
of the issued and outstanding shares of Common Stock, in exchange for a cash
payment of $400,001.50 and the issuance of a promissory note (the "Promissory
Note") in the principal amount of $532,250 in favor of YC, Inc., individually
and as agent for YC, Ltd. The Promissory Note bears interest at the rate of 10%
per annum payable quarterly in arrears commencing on June 30, 1996, with
principal payable in equal annual installments of $88,708.33 commencing on March
31, 1996. Dupre borrowed $200,000 of the cash portion of the purchase price from
Wang, which loan is evidenced by a promissory note, dated March 9, 1995, bearing
interest at 10% per annum, with principle and interest payable on March 31,
2000. Dupre borrowed an additional $200,000 from Cheng, which loan is evidenced
by a promissory note, dated March 13, 1995, bearing interest at 7 3/4% per
annum, with principal and interest payable on March 31, 2000.
Pacific acquired 133,333 of the Shares, constituting approximately 11.0%
of the issued and outstanding shares of Common Stock, in exchange for
$299,999.25 in cash. The funds for the purchase price were obtained from
Pacific's working capital. Wang acquired 88,889 of the Shares, constituting
approximately 7.3% of the issued and outstanding shares of Common Stock, and
Cheng acquired 44,444 of the Shares, constituting 3.7% of the issued and
outstanding shares of Common Stock, for cash payments of $200,000.25 and
$99,999, respectively. The purchase price was paid from Wang's and Cheng's
respective personal funds.
Joseph Takada ("Takada") is the Managing Director of Pacific. He is also
the Managing Director of Ideal Pacific Ltd., the Registrant's manufacturing
agent in Hong Kong ("Ideal"). During the Registrant's fiscal year ended November
30, 1994 ("Fiscal 1994"), the Registrant paid aggregate commissions of
approximately $245,000 to Ideal. Wang is the Managing Director of Kao-Lien
Industrial Co., Ltd., the Registrant's manufacturing agent in Taiwan
("Kao-Lien"). During Fiscal 1994, the Registrant paid aggregate commissions of
approximately $146,000 to Kao-Lien. Cheng is the Managing Director of each of
Constellation Enterprises Co., Ltd. and Fine and Fast Co., Ltd., manufacturers
of luggage and related products (collectively, the "Chen Companies"). During
Fiscal 1994, the Registrant paid an aggregate of approximately $1,267,000 to the
Cheng Companies for merchandise manufactured and sold by the Cheng Companies to
the Registrant.
Concurrently with the acquisition of the Shares, the Registrant entered
into an Asset Purchase Agreement (the "Asset Purchase Agreement") with Bueno of
California, Inc., a Delaware corporation ("Bueno") and an affiliate of the
Sellers, the terms of which are described in Item 2. below.
As an inducement to the Sellers to sell the Shares, Dupre executed and
delivered to the Sellers a guaranty, dated March 20, 1995, pursuant to which
Dupre guaranteed all of the obligations of the Registrant under the Letter of
Credit Agreement, the Non- Competition Agreements and the Severance Agreement
(each as defined below).
In addition, the Buyers entered into a Pledge Agreement, dated as of
March 20, 1995 (the "Pledge Agreement"), with Bueno and YC, Inc., on its own
behalf and as agent for YC, Ltd. Pursuant to the Pledge Agreement, the Buyers
pledged the Shares to Bueno and the Sellers as security for the payment of (i)
all obligations of Dupre under the Promissory Note, (ii) all obligations of the
Buyers under the Stock Purchase Agreement, (iii) all obligations of the
Registrant under the Asset Purchase Agreement, (iv) all obligations of the
Registrant under any agreement that is an exhibit to the Asset Purchase
Agreement, including the Exclusive Purchasing Agreement (as defined below), the
Non-Competition Agreements and the Severance Agreement and (v) all obligations
of the Buyers under the Pledge Agreement.
Concurrently with the closing of the transactions contemplated by the
Stock Purchase Agreement and the Asset Purchase Agreement, Takeshi Yamaguchi
resigned from the Board of Directors and the office of President of the
Registrant; Yutaka Yamaguchi and Neil Grundman resigned from the Board of
Directors of the Registrant; and Tsuguya Saeki resigned from the offices of
Executive Vice President and Chief Financial Officer of the Registrant. Pursuant
to a Severance Agreement, dated as of March 20, 1995, with Takeshi Yamaguchi,
the Registrant agreed to pay Mr. Yamaguchi $100,000 plus interest at the rate of
10% per annum on March 31, 1996 and $100,000 plus interest at a rate of 10% per
annum on March 31, 1997. On March 29, 1995, the entire Board of Directors of the
Registrant, consisting of Dupre, Ian Mitchell, Eric Smith and Douglas Turner,
elected Dupre as the Chairman of the Board and Chief Executive Officer of the
Registrant.
The Registrant expects that the vacancies created on the Board of
Directors of the Registrant as a result of the resignation of Takeshi Yamaguchi,
Yutaka Yamaguchi and Neil Grundman will be filled at the next annual meeting of
shareholders of the Issuer. To date, no individuals have been identified to fill
any such vacancy.
A complete description of the terms of the transaction is contained in
the Stock Purchase Agreement, and the exhibits thereto, filed as Exhibit 2(a)
and the Asset Purchase Agreement, and the Exhibits thereto, filed as Exhibit
2(b), each of which is hereby incorporated herein by reference.
<PAGE>
Item 2. Acquisition or Disposition of Assets.
Pursuant to the Asset Purchase Agreement, the Registrant sold to Bueno
all of the assets relating to the Registrant's handbag division for a negotiated
purchase price of $1,785,605.55, of which $86,167.82 was paid in cash and
$1,699,447.73 was applied by the Registrant to the repayment of indebtedness of
the Registrant to the Sellers. The aggregate indebtedness owed by the Registrant
to the Sellers at the date of the acquisition was $2,238,506.01. The Sellers,
which are affiliates of Bueno, are controlled by Messrs Yutaka and Takeshi
Yamaguchi.
In connection with the Asset Purchase Agreement, each of the Sellers,
Yutaka Yamaguchi and Takeshi Yamaguchi entered into a non-competition agreement
(collectively, the "Non-Competition Agreements"). Pursuant to the terms of the
Non-Competition Agreements, each of the Sellers and Messrs Yutaka and Takeshi
Yamaguchi agreed not to compete with the Registrant's luggage and related
products business prior to the earlier of March 20, 2001 and the date of
repayment in full of all amounts due under the Promissory Note (the "Restricted
Period"). In consideration of their agreements to not compete, the Registrant is
obligated to pay $60,000 to each of the Sellers and each of Messrs Yutaka and
Takeshi Yamaguchi, payable in three equal annual installments commencing on
March 31, 1996. In addition, pursuant to a separate non-competition agreement,
the Registrant agreed not to compete with Bueno in the handbag business during
the Restricted Period.
Also in connection with the Asset Purchase Agreement, the Registrant
entered into an Exclusive Purchasing Agreement, dated as of March 20, 1995, with
YC, Inc. (the "Exclusive Purchasing Agreement"), pursuant to which the
Registrant granted to YC, Inc. and its designees the exclusive right to purchase
in Japan, at prices to be mutually agreed upon, any goods manufactured or
purchased from unaffiliated vendors (the "Vendors") by the Registrant. Under the
Exclusive Purchasing Agreement, YC, Inc. will pay a commission to the Registrant
for all goods purchased by it or its designees pursuant thereto equal to 5% of
the purchase price of all such goods paid by the Registrant (or directly by YC,
Inc. or its designees) to the Vendors. The Exclusive Purchasing Agreement will
terminate on the date that all amounts due under the Promissory Note are repaid
in full and all obligations of the Registrant, Dupre, Pacific, Wang or Cheng, as
the case may be, under the Stock Purchase Agreement and the Asset Purchase
Agreement and all agreements that are exhibits thereto are satisfied in full.
In addition, pursuant to a letter agreement (the "Letter of Credit
Agreement"), YC, Inc. has agreed to issue, or cause to be issued, for the amount
of the Registrant, from time to time, until March 20, 1997 one or more unsecured
trade letters of credit in an aggregate amount of up to the lesser of $1,200,000
or 35% of the book value of all inventory owned by the Registrant. With respect
to each letter of credit issued under the Letter of Credit Agreement, the
Registrant will be obligated to pay an origination fee equal to 3% of the full
amount of such letter of credit and a financing fee equal to (i) the product of
(x) the aggregate amount drawn under such letter of credit multiplied by (y) the
sum of (A) the base rate of interest announced publicly by Citibank, N.A. in New
York, New York, from time to time, as its base rate plus (B) two (2%) percent
multiplied by (z) the number of days during the period commencing on the date
such letter of credit is presented for payment and ending on the date the amount
drawn under such letter of credit is repaid in full, divided by (ii) 365.
A complete description of the terms of the transaction is contained in
the Asset Purchase Agreement and the exhibits thereto, a copy of which is filed
as Exhibit 2(b) and is hereby incorporated herein by reference.
Item 7. Financial Statements.
(a) Financial Statement of Businesses Acquired: Not Applicable.
(b) Pro Forma Financial Information:
It is impracticable at this time for the Registrant to
provide the required pro forma financial information in this
report on Form 8-K. The Registrant will file such information
by amendment as soon as it becomes available. The Registrant
anticipates it will file an appropriate amendment on or before
June 5, 1995.
(c) Exhibits.
2(a) Stock Purchase Agreement, dated as of March 20, 1995,
among Joel Dupre, Pacific Million Enterprise, Ltd.,
Cheng-Sen Wang and Albert H. Cheng
2(b) Asset Purchase Agreement, dated as of March 20, 1995,
between Sirco International Corp. and Bueno of
California, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: April 3, 1995 SIRCO INTERNATIONAL CORP.
By: /s/Joel Dupre
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Joel Dupre
Chairman of the
Board and Chief
Executive Officer
<PAGE>
EXHIBIT INDEX
The following documents are filed herewith or incorporated herein by
reference.
Exhibit No. Description
2(a) Stock Purchase Agreement,
dated as of March 30, 1995,
among Joel Dupre, Pacific
Million Enterprise, Ltd.,
Cheng-Sen Wang and Albert H. Cheng
2(b) Asset Purchase Agreement,
dated as of March 20, 1995,
among Sirco International
Corp. and Bueno of California, Inc.
<PAGE>
Exhibit 2(a)
<PAGE>
STOCK PURCHASE AGREEMENT
dated as of March 20, 1995
by and among
YASHIRO COMPANY, LTD.
and
YASHIRO CO., INC.,
as Sellers,
and
JOEL DUPRE,
PACIFIC MILLION ENTERPRISE LTD.,
CHENG-SEN WANG
and
ALBERT H. CHENG
as Buyers
and
YASHIRO CO., INC.,
as Agent
<PAGE>
TABLE OF CONTENTS
EXHIBITS
SCHEDULES
INDEX OF DEFINITIONS
1. THE PURCHASE
1.1 The Purchase
1.2 Consideration
1.3 Failure of Seller
2. CLOSING
2.1 Time and Place
2.2 Deliveries
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
3.1 Necessary Authority
3.2 No Bankruptcy, etc.
3.3 Authorized and Outstanding Stock
3.4 Ownership of Shares
3.5 No Conflicts
3.6 No Conflicts of Corporation
3.7 Reports
3.8 Events Since Filing of Annual Report
3.9 Brokers
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER
4.1 Necessary Authority
4.2 No Bankruptcy, etc.
4.3 No Conflicts
4.4 Brokers
4.5 No Breach or Adverse Effect
4.6 Investigation
4.7 Buyers' Purchase for Investment
5. ADDITIONAL COVENANTS
5.1 Covenants of Both Parties
5.1.1 Best Efforts
5.1.2 Certain Filings
5.1.3 Public Announcements
5.1.4 Notice of Certain Events
5.2 Covenants of the Sellers
5.2.1 No Transfer
5.2.2 Conduct of the Corporation
5.2.3 No Solicitation
5.2.4 Financial Books and Records
5.3 Covenant of the Buyers
6. CONDITIONS TO THE OBLIGATIONS OF THE BUYERS
6.1 Representations and Warranties True
6.2 Performance
6.3 Resignations
6.4 Consents; Releases
6.5 Opinion of Counsel to the Sellers
6.6 Delivery of Certificates
6.7 Releases
6.8 Asset Purchase Agreement
6.9 No Adverse Change
6.10 Proceedings
6.11 Sellers Certificate
7. CONDITIONS TO THE OBLIGATIONS OF THE SELLERS
7.1 Representations and Warranties True
7.2 Performance
7.3 Opinion of Counsel
7.4 Consents; Releases
7.5 Additional Agreements
7.6 Payment of Purchase Price
7.7 Asset Purchase Agreement
7.8 Proceedings. .
7.9 Buyers Certificate
8. TERMINATION
8.1 Termination
8.2 Effect of Termination
9. THE AGENT
9.1 Delivery of Shares
9.2 Agent Not Responsible
9.3 Reliance on Instructions
10. GENERAL
10.1 Actions After the Closing
10.2 Execution of Counterparts
10.3 Notices
10.4 Assignment, Successors and Assigns
10.5 Applicable Laws
10.6 Entire Agreement
10.7 Expenses
10.8 Survival
10.9 Amendments
EXHIBITS
A Form of Promissory Note
B Form of Asset Purchase Agreement
C Balance Sheet
D Form of Buyers' Pledge
SCHEDULES
I Shares Sold by Sellers
II Shares Purchased by Buyers
6.4 Buyer Consents; Releases
7.3 Seller Consents; Releases
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of March 20, 1995, by and among
Yashiro Company, Ltd., a Japanese corporation and Yashiro Co., Inc., a Japanese
corporation (herein sometimes referred to collectively as the "Sellers" or
individually as a "Seller"), and Joel Dupre ("Dupre"), Pacific Million
Enterprise Ltd., Cheng-Sen Wang and Albert H. Cheng (herein sometimes referred
to collectively as the "Buyers" or individually as a "Buyer"), and Yashiro Co.,
Inc., as Agent (the "Agent").
WHEREAS, the Sellers collectively own 681,000 shares (the "Shares") of
common stock, par value $.10 per share (the "Common Stock"), of Sirco
International Corp., a New York corporation (the "Corporation"), which Shares
represent approximately 56.04% of the issued and outstanding shares of Common
Stock of the Corporation;
WHEREAS, the Buyers desire to purchase the Shares from the Sellers and
the Sellers desire to sell the Shares to the Buyers in accordance with and
subject to the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements, covenants, representations and warranties hereinafter contained, the
parties hereto hereby agree as follows:
SECTION 1. THE PURCHASE.
1.1 The Purchase. Subject to all of the terms and provisions of this
Agreement, and for the consideration specified in Section 1.2 hereof, each
Seller shall sell, assign, transfer and deliver to the Buyers at the Closing (as
hereinafter defined) the number of Shares of Common stock set forth opposite the
name of such Seller in Schedule I hereto, and each Buyer shall purchase and
accept delivery of the number of Shares of Common Stock set forth opposite the
name of such Buyer in Schedule II hereto. If one or more of the Buyers shall
fail (other than for a reason sufficient to justify the termination of this
Agreement) to purchase the Shares agreed to be purchased by such Buyer, the
remaining Buyers may find one or more substitute purchasers to purchase such
Shares or make such other arrangements as they may deem advisable to purchase
such Shares in such proportions as they may agree, in each case upon the terms
herein set forth. A substitute purchaser hereunder shall become a Buyer for all
purposes of this Agreement, a copy of which shall be executed by such substitute
purchaser.
1.2 Consideration. As consideration for the Shares, each Buyer will, at
the Closing, purchase the Shares to be purchased by such Buyer for $2.25 per
Share, amounting to a total purchase price of $1,532,250 (the "Purchase Price")
for all of the Shares to be purchased hereunder. At the Closing, the Buyers
shall pay the Purchase Price to the Agent, against delivery of the Shares as
provided in Section 2.2, as follows: (i) each Buyer other than Dupre shall pay
to the Agent on behalf of each Seller, in immediately available funds, by
delivering to the Agent a certified or official bank check or by wire transfer
of funds to the bank account designated by the Agent in writing prior to the
Closing, $2.25 per Share for each Share set forth opposite the name of such
Buyer in Schedule II hereto, and (ii) Dupre shall pay to the Agent, for the
accounts of the respective Sellers, $2.25 per Share for each Share set forth
opposite his name in Schedule II hereto, to be paid (a) in immediately available
funds, by delivering to the Agent a certified check or official bank check or by
wire transfer of funds to the bank account designated by the Agent in writing
prior to the Closing, $400,001.50, and (b) by delivery of a promissory note in
favor of the Agent, on behalf of each Seller, in accordance with their
respective interests, substantially in the form annexed hereto as Exhibit A (the
"Promissory Note"), in the principal amount of $532,250.
1.3 Failure of Seller. If any Seller shall fail or refuse to deliver to
Buyers on the Closing Date any Shares to be sold, transferred and delivered by
such Seller hereunder, such failure or refusal shall not relieve any other
Seller of any obligation under this Agreement, and the Buyers, at their option,
and without prejudice to their rights against the defaulting Seller, may either
acquire the remaining Shares that they are entitled to purchase hereunder, or
refuse to do so and thereby terminate all of the obligations of the Buyers
hereunder.
SECTION 2. CLOSING.
2.1 Time and Place. Subject to the fulfillment or waiver of the terms
and conditions set forth in Sections 6 and 7 hereof, the closing of the purchase
and sale of the Shares (the "Closing") shall take place at the offices of Olshan
Grundman Frome & Rosenzweig, 505 Park Avenue, New York, New York, at 10:00 a.m.
local time on March 20, 1995, or at such other location or such other time and
date as shall be mutually agreed upon by all of the parties. The date of the
Closing is sometimes referred to herein as the "Closing Date".
2.2 Deliveries. At the Closing, (i) the Buyers shall deliver the cash
portion of the Purchase Price specified in Section 1.2 hereof, together with the
Promissory Note, (ii) the Sellers shall deliver the certificates representing
the Shares, together with appropriate stock powers attached and properly signed
and with all necessary stock transfer stamps affixed and (iii) the parties
hereto shall deliver the documents referred to in Sections 6 and 7 hereof and
shall take all such further actions as may be necessary to consummate the
transactions contemplated by this Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLERS.
The Sellers, jointly and severally, hereby represent and warrant to
each of the Buyers as follows, which representations and warranties shall
continue in full force and effect to and including the Closing and for two (2)
years thereafter in accordance with Section 10.8 hereof:
3.1 Necessary Authority. Each Seller, if a corporation, is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and if a partnership, is a
partnership duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization. Each Seller has all requisite power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated herein. This Agreement has been duly authorized,
executed and delivered by each Seller and constitutes each Seller's legal, valid
and binding obligation, enforceable against each Seller in accordance with its
terms, except (i) as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other laws affecting generally the enforcement of
creditors' rights now or hereafter in effect, and (ii) that the remedies of
specific performance, injunction and other forms of equitable relief are subject
to certain tests of equity jurisdiction, equitable defenses and the discretion
of the court before which any proceeding therefor may be brought. The
Corporation is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
requisite power and authority to own, operate and lease its properties and to
carry on its business as such business is now being conducted.
3.2 No Bankruptcy, etc. There has not been filed any petition or
application, or any proceedings commenced, by or against, or with respect to any
assets of, either Seller or the Corporation under Title 11 of the United States
Code or any other law, domestic or foreign, relating to bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of debt or
creditors' rights, and no Seller or the Corporation has made any assignment for
the benefit of creditors.
3.3 Authorized and Outstanding Stock. The Corporation's authorized
capital stock consists of 3,000,000 shares of Common Stock, of which 1,215,200
are issued and outstanding. All of such outstanding shares of capital stock are
duly authorized and validly issued, fully paid, nonassessable and free of
preemptive rights. To the best of each Seller's knowledge, except as disclosed
in the Exchange Act Documents (as defined below), there are no outstanding or
authorized options, warrants, subscriptions or other rights of any nature
whatsoever that could require the Corporation to issue, sell or otherwise cause
to become outstanding any shares of its capital stock. To the best of each
Seller's knowledge, except as contemplated by this Agreement, there are no
voting agreements, proxies or other understandings with respect to the Shares,
and none of the Shares were issued in violation of the Securities Act of 1933,
as amended (the "Securities Act"), or the securities or blue sky laws of any
state or other jurisdiction.
3.4 Ownership of Shares. The Shares are owned beneficially and of
record by the Sellers, free and clear of any lien, pledge, option, contractual
right, equitable right or other encumbrance of any kind whatsoever. The delivery
of the Shares to the Buyers at the Closing in accordance with Section 1.2 hereof
will effectively vest in the Buyers good and marketable title to such Shares,
free and clear of any security interest, claim, lien, or encumbrance, other than
the pledge (the "Buyers' Pledge") of the Shares by the Buyers pursuant to the
pledge agreement described in Section 7.5 hereof.
3.5 No Conflicts. The execution, delivery and performance of this
Agreement by each Seller and the consummation by the Sellers of the transactions
contemplated herein, do not (i) require either Seller to obtain the permission,
authorization, consent or approval of any person or public authority which has
not been obtained, except as set forth in Section 7 hereof, (ii) constitute or
result in the breach of any provision of, or constitute a default under, the
certificate of incorporation or By-Laws of either Seller, if a corporation, or
the partnership agreement of either Seller, if a partnership, or any agreement,
indenture or other instrument to which either Seller is a party or by which
either Seller or any of its assets may be bound, or (iii) violate any law,
regulation, judgment or order binding upon either Seller.
3.6 No Conflicts of Corporation. To each Seller's knowledge, the
execution, delivery and performance of this Agreement by each Seller and the
consummation by the Sellers of the transactions contemplated hereby do not (i)
require the Corporation to obtain the consent or approval of any person or
public authority which has not been obtained, (ii) constitute or result in the
breach of any provision of, or constitute a default under, the certificate of
incorporation or By-laws of the Corporation, (iii) violate any law, regulation,
judgment or order binding upon the Corporation, or (iv) result, under any
agreement to which a Seller is a party, in the creation of any security
interest, claim, lien or encumbrance upon any of the property or assets of the
Corporation or upon any of the Shares (other than the Buyers' Pledge).
3.7 Reports. To the best of each Seller's knowledge, the Corporation
has filed with the Securities and Exchange Commission (the "Commission") all
forms, reports and documents required by the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or the rules or regulations of the Commission
thereunder (the "Exchange Act Documents"), all of which Exchange Act Documents
have complied in all material respects with all applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission thereunder.
3.8 Events Since Filing of Annual Report. To the best of each Seller's
knowledge, since the date of the Corporation's most recent Annual Report on Form
10-K or Quarterly Report on Form 10- Q filed with the Commission, there has not
been, except as disclosed in any Exchange Act Document subsequently filed with
the Commission, (i) any material adverse change in the business, results of
operations, assets, financial condition, or the manner of conducting the
business of the Corporation, (ii) any of the events described in Section 5.2.2
hereof, or (iii) any legal, administrative, arbitration or other proceedings or
governmental investigations pending or, to the knowledge of a Seller, threatened
against the Corporation or its assets or business or which questions or
challenges the validity of this Agreement or any action to be taken in
connection with the transactions contemplated hereby, nor does any Seller have
any reason to believe there is any basis therefor.
3.9 Brokers. No Seller has engaged, consented to, or authorized any
broker, investment banker or third party to act on its behalf, directly or
indirectly, as a broker or finder in connection with the transactions
contemplated hereby or by the Asset Purchase Agreement (as defined in Section
6.8 hereof).
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BUYERS.
Each of the Buyers severally, and not jointly, represents and warrants
to each of the Sellers as follows, which representations and warranties shall
continue in full force and effect to and including the Closing and for two (2)
years thereafter in accordance with Section 8.8 hereof:
4.1 Necessary Authority. Such Buyer, if a corporation, is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all requisite power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated herein. This Agreement has been duly executed and delivered by such
Buyer and constitutes the legal, valid and binding obligation of such Buyer,
enforceable against such Buyer in accordance with its terms, except (i) as the
same may be limited by bankruptcy, insolvency, reorganization, moratorium or
other laws affecting generally the enforcement of creditors' rights now or
hereafter in effect, and (ii) that the remedies of specific performance,
injunction and other forms of equitable relief are subject to certain tests of
equity jurisdiction, equitable defenses and the discretion of the court before
which any proceeding therefor may be brought.
4.2 No Bankruptcy, etc. There has not been filed any petition or
application, or any proceedings commenced, by or against, or with respect to any
assets of such Buyer under Title 11 of the United States Code or any other law,
domestic or foreign, relating to bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt or creditors' rights, and such
Buyer has not made any assignment for the benefit of creditors.
4.3 No Conflicts. The execution, delivery and performance of this
Agreement by such Buyer and the consummation by such Buyer of the transactions
contemplated herein, do not and will not (i) require such Buyer to obtain the
permission, authorization, consent or approval of any person or public authority
which has not been obtained, except as set forth in Section 6 hereof, (ii)
constitute or result in the breach of any provision of, or constitute a default
under, the certificate of incorporation or By-Laws of such Buyer, if a
corporation, or any agreement, indenture or other instrument to which such Buyer
is a party or by which such Buyer or any of its assets may be bound, or (iii)
violate any law, regulation, judgment or order binding upon such Buyer.
4.4 Brokers. Such Buyer has not engaged, consented to, or authorized
any broker, investment banker or third party to act on its behalf, directly or
indirectly, as a broker or finder in connection with the transactions
contemplated hereby or by the Asset Purchase Agreement.
4.5 No Breach or Adverse Effect. The execution, delivery and
performance of this Agreement by such Buyer, and the consummation by such Buyer
of the transactions contemplated herein, do not and will not (i) result in the
creation of any security interest, claim, lien, or encumbrance upon any of the
property or assets of the Buyers, except the Buyers' Pledge, (ii) violate the
terms or conditions of, or result in the loss or suspension of, any license or
permit enjoyed by such Buyer or give to any party to any agreement to which such
Buyer is a party the right of termination or other rights which become
applicable by reason of such actions, or (iii) give any lender or note holder or
trustee therefor any right to accelerate the maturity of any indebtedness of
such Buyer.
4.6 Investigation.
(a) Such Buyer is thoroughly familiar with the business and
operations of the Corporation, the Sellers have answered all inquiries such
Buyer has put to the Sellers relating thereto, and such Buyer has been afforded
the opportunity to obtain any additional information necessary to evaluate the
merits and risks of purchasing the Shares, to the extent the Corporation or the
Sellers possessed such information or were able to acquire it without
unreasonable effort or expense.
(b) Such Buyer has made such independent inspection,
investigation, analysis and evaluation of the business of the Corporation as
such Buyer deemed necessary to make an informed decision to purchase the Shares;
such Buyer's decision to purchase the Shares has been made on the basis of such
inspection, investigation, analysis and evaluation and the Sellers'
representations, warranties and covenants made herein.
4.7 Buyers' Purchase for Investment. The Shares are not being purchased
by such Buyer with a view to distribution, as such term is interpreted under
Section 2(11) of the Securities Act; and such Buyer is not participating,
directly or indirectly, in an underwriting of any such distribution or other
transfer. Such Buyer agrees that the Shares may not be sold or otherwise
disposed of without registration under the Securities Act, except pursuant to an
exemption from registration under the Securities Act to the extent applicable.
SECTION 5. ADDITIONAL COVENANTS.
5.1 Covenants of Both Parties. The Buyers and the Sellers agree that:
5.1.1 Best Efforts. Subject to the terms and conditions of this
Agreement, each party will use its best efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated hereby.
5.1.2 Certain Filings. The parties shall cooperate with one another (i)
in determining whether any action by or in respect of, or filing with, any
governmental body, agency or official, or authority or any actions, consents,
approvals or waivers are required to be obtained from parties to any leases and
other material contracts in connection with the consummation of the transactions
contemplated hereby, and (ii) in seeking any such actions, consents, approvals
or waivers or making any such filings, furnishing information required in
connection therewith and seeking timely to obtain any such actions, consents,
approvals or waivers.
5.1.3 Public Announcements. The parties will consult with each other
before issuing any press release or making any public statement with respect to
this Agreement or the Asset Purchase Agreement or the transactions contemplated
hereby and thereby, and except as may be required by applicable law, will not
issue any such press release or make any similar public announcement, or cause
the Corporation to do so, prior to such consultation and without the prior
approval of the other parties.
5.1.4 Notice of Certain Events. Each party shall promptly notify the
other parties in writing of:
(a) any notice or other communication from any person or
entity alleging that the consent of such person or entity is or may be required
in connection with the transactions contemplated hereby or by the Asset Purchase
Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
hereby or by the Asset Purchase Agreement;
(c) any action, suit, claim, investigation or proceeding
commenced or, to its knowledge, threatened against, relating to or involving or
otherwise affecting the Corporation which relates to the consummation of the
transactions contemplated hereby or by the Asset Purchase Agreement;
(d) the occurrence of any event or circumstances known to such
party that has or may result in any material adverse effect on the Corporation
prior to the Closing; and
(e) the occurrence of any event or circumstance prior to the
Closing that causes any of the representations and warranties made in Section 3
or Section 4 of this Agreement (as applicable) to be incomplete or inaccurate in
any material respect.
5.2 Covenants of the Sellers. The Sellers agree that:
5.2.1 No Transfer. Prior to the Closing Date, no Seller will (i) sell
or otherwise transfer any Shares owned by such Seller or (ii) incur or permit to
exist any lien, charge or encumbrance on the Shares owned by such Seller.
5.2.2 Conduct of the Corporation. From the date hereof through the
Closing Date, the Sellers (a) shall cause the Corporation to conduct its
business in the ordinary and usual course, consistent with past practice, (b)
will use their best efforts to cause the Corporation to preserve intact its
business organization and relationships with third parties, including, without
limitation, customers, suppliers, distributors and others having business
dealings with it, and to keep available the services of its officers and
employees and (c) shall not (without the prior written consent of Dupre)
authorize or cause the Corporation to:
(a) incur any material obligation or liability (absolute,
accrued, contingent or otherwise), except in the ordinary course of the
Corporation's business or in connection with the performance of, or as
specifically contemplated by, this Agreement or the Asset Purchase Agreement;
(b) mortgage, pledge or subject to any lien, charge or other
encumbrance any of the assets, properties or business of the Corporation;
(c) sell or transfer any asset, property, inventory or
business or cancel any debt or claim or waive any right, except in the ordinary
course of business of the Corporation or in connection with the performance of
this Agreement or the Asset Purchase Agreement;
(d) dispose of or permit to lapse any patent or trademark or
any patent or trademark application, permit or any license to use any thereof,
material to the operation of the business of the Corporation;
(e) grant any general or uniform increase in the rates of pay
of employees of the Corporation or any increase in salary payable or to become
payable to any officer, employee, consultant or agent of the Corporation, or
change or increase the compensation payable to any officer or employee of the
Corporation for any period, or by means of any bonus or pension plan, contract
or other commitment, increase the compensation of any officer, employee,
consultant or agent of the Corporation;
(f) make or authorize any capital expenditures for additions
to plant and equipment accounts of the Corporation in excess of $5,000 in the
aggregate;
(g) make any loan to any shareholder or declare, set aside or
pay to any shareholder any dividend or other distribution in respect of its
capital stock or redeem or purchase any of its capital stock or agree to take
any such action;
(h) issue, sell or transfer any stock, bond, debenture or
other corporate security of the Corporation, whether newly issued or held in
treasury;
(i) except for this Agreement or the Asset Purchase Agreement,
enter into any material transaction other than in the ordinary course of
business of the Corporation;
(j) enter into any employment contract which is not terminable
upon notice of 30 days or less and without penalty to the Corporation or any
successor thereof;
(k) enter into any contract or agreement (i) which cannot be
performed within three months or less, or (ii) which involves the expenditure of
over $5,000, except for sales and purchase contracts in the ordinary course of
business;
(l) reclassify or change in any manner its outstanding shares
of capital stock or issue or sell any shares of its capital stock or other
securities;
(m) extend credit in excess of $5,000 to any customer who
became such on or after the date of this Agreement, or depart from the normal
and customary trade, discount and credit policies of the Corporation; or
(n) guarantee the obligation of any person, firm or
corporation, except by the endorsement of negotiable instruments for deposit or
collection in the ordinary course of business.
5.2.3 No Solicitation. Prior to the Closing, or until termination of
this Agreement in accordance with Section 8 hereof, the Sellers will not, and
will not cause or permit the Corporation to, solicit, initiate or encourage the
submission of any proposal or offer from any person or entity relating to the
acquisition of the Corporation (whether pursuant to a sale of stock or assets or
a merger or other combination), or participate in any discussions or
negotiations regarding any such proposal or offer or furnish any information
with respect thereto.
5.2.4 Financial Books and Records. On or before May 31, 1995, the
Sellers shall deliver all financial books and records of the Corporation and all
subsidiaries thereof, which are in their possession or control, to the
Corporation.
5.3 Covenant of the Buyers. Each of the Buyers agrees that during the
two year period commencing on the Closing Date, such Buyer will not sell or
otherwise transfer any Shares, provided, however, that Dupre shall be permitted
to sell up to 70,000 Shares at any time or from time to time during such two
year period.
SECTION 6. CONDITIONS TO THE OBLIGATIONS OF THE BUYERS.
The obligations of the Buyers to purchase the Shares under this
Agreement is subject to the satisfaction of each of the following conditions,
any of which may be waived in whole or in part in writing by the Buyers:
6.1 Representations and Warranties True. The representations and
warranties of the Sellers contained in this Agreement shall be true and correct
on the Closing Date with the same effect as if such representations and
warranties had been made at such time.
6.2 Performance. Each of the obligations of the Sellers to be performed
by them at or prior to the Closing pursuant to the terms hereof shall have been
duly performed and complied with in all material respects at or prior to the
Closing.
6.3 Resignations. The Buyers shall have received the resignations of
Yutaka Yamaguchi, Takeshi Yamaguchi and Neil Grundman as officers and/or
directors of the Corporation and, to the extent applicable, each subsidiary
thereof.
6.4 Consents; Releases. All permits, approvals, authorizations and
consents of third parties necessary for the purchase of the Shares as
contemplated herein, as listed on Schedule 6.4, shall have been obtained.
6.5 Delivery of Certificates. Each Seller shall have delivered to the
Buyers a certificate or certificates for the number of the Shares set forth
opposite such Seller's name in Schedule I hereto, duly endorsed for transfer, or
with a duly executed stock power attached, together with all applicable stock
transfer stamps affixed.
6.6 Asset Purchase Agreement. Concurrently with the Closing, each of
the transactions contemplated by the Asset Purchase Agreement dated as of March
17, 1995 between the Corporation and Bueno of California, Inc., as purchaser,
and the agreements ancillary thereto (collectively, the "Asset Purchase
Agreement"), a copy of which is annexed hereto as Exhibit B, shall have been
consummated to the satisfaction of each of the Buyers.
6.7 No Adverse Change. There shall not have been any material adverse
change in the financial condition of the Corporation at the Closing Date from
that disclosed in the audited balance sheet of the Corporation at November 30,
1994 annexed hereto as Exhibit C for the period from the date of such balance
sheet to the Closing Date, or in the assets or properties of the Corporation,
taken as a whole, from the date of such balance sheet to the Closing Date.
6.8 Proceedings. No action, suit, proceeding or investigation shall
have been instituted before any court or governmental body, or instituted by any
governmental agency, to restrain or prevent the carrying out of the transactions
contemplated by this Agreement or the Asset Purchase Agreement or which might
affect the right of any Buyer to own any of the Shares or to own, operate or
control the Corporation after the Closing Date.
6.9 Sellers Certificate. The Buyers shall have received a certificate
from each of the Sellers certifying in such detail as the Buyers may reasonably
request the fulfillment of the conditions set forth in Sections 6.1, 6.2, 6.6,
6.7 and 6.8.
SECTION 7. CONDITIONS TO THE OBLIGATIONS OF THE SELLERS.
The obligation of the Sellers to sell their Shares under this Agreement
shall be subject to the satisfaction of each of the following conditions, any of
which may be waived in whole or in part in writing by the Sellers:
7.1 Representations and Warranties True. The representations and
warranties of the Buyers contained in this Agreement shall be true and correct
on the Closing Date with the same effect as if such representations and
warranties had been made at such time.
7.2 Performance. Each of the obligations of the Buyers to be performed
by them at or prior to the Closing pursuant to the terms hereof shall have been
duly performed and complied with in all material respects at or prior to the
Closing.
7.3 Consents; Releases. All permits, approvals, authorizations and
consents of third parties necessary for the sale of the Shares contemplated
herein, as listed on Schedule 7.3, shall have been obtained.
7.4 Additional Agreement. The Sellers shall have received fully
executed counterparts of the Buyers' Pledge, substantially in the form of
Exhibit D hereto.
7.5 Payment of Purchase Price. The Buyers shall have paid to the Agent
on behalf of the Sellers in the manner contemplated by Section 1.2 the amounts
required to be paid to the Agent pursuant to Section 1.2 and Dupre shall have
delivered to the Agent on behalf of the Sellers the Promissory Note.
7.6 Asset Purchase Agreement. Concurrently with the Closing, each and
all of the transactions contemplated by the Asset Purchase Agreement shall have
been consummated to the satisfaction of each of the Sellers.
7.7 Proceedings. No action, suit, proceeding or investigation shall
have been instituted before any court or governmental body, or instituted by any
governmental agency, to restrain or prevent the carrying out of the transactions
contemplated by this Agreement or the Asset Purchase Agreement or which might
affect the right of any Seller to sell any of its Shares.
7.8 Buyers Certificate. The Sellers shall have received a certificate
or certificates signed by Dupre certifying in such detail as the Sellers may
reasonably request the fulfillment of the conditions set forth in Sections 7.1,
7.2, 7.6 and 7.7.
SECTION 8. TERMINATION.
8.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing:
(a) by mutual written consent of the Sellers and the Buyers;
(b) by the Buyers, if there has been a breach of a
representation, warranty, covenant or agreement contained in this Agreement on
the part of any of the Sellers and such breach has not been promptly cured;
(c) by the Sellers, if there has been a breach of a
representation, warranty, covenant or agreement contained in this Agreement on
the part of any of the Buyers and such breach has not been promptly cured;
(d) by the Buyers or the Sellers, if the Closing has not been
consummated by March 31, 1995;
(e) by any party, if there shall be any law or regulation that
makes consummation of the transactions contemplated hereby illegal or otherwise
prohibited or if any judgment, injunction, order or decree enjoining the Buyers
or the Sellers from consummating the transactions contemplated hereby is entered
and such judgment, injunction, order or decree shall become final and
nonappealable; and
(f) by the Buyers, if there shall have occurred since the date
hereof any of the events sets forth in clauses (i), (ii) or (iii) of Section
3.8.
8.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 8.1, this Agreement shall become void and of no effect with no liability
on the part of any party hereto.
SECTION 9. THE AGENT.
Each Seller, severally, covenants as follows:
9.1 Delivery of Shares. Such Seller hereby irrevocably constitutes and
appoints the Agent, Yashiro Co., Inc., or such other person as may be designated
by such Seller as provided in this Section 9.1, as such Seller's true and lawful
agent and attorney to act for such Seller in all matters hereunder. The
authority of the Agent can be withdrawn and a successor Agent appointed at any
time by a notice in writing of such withdrawal and appointment signed by each
Seller, or its legal representative. Certificates in negotiable form for the
Shares registered in such Seller's name for the number of Shares set forth
opposite such Seller's name in Schedule I have been placed in custody with the
Agent for the purpose of making delivery of such Shares under this Agreement.
Such Seller hereby appoints the Agent as custodian of such Shares for such
Seller. The Shares represented by the certificates held in custody for such
Seller under this Agreement are for the benefit of and coupled with and subject
to the interest of the Agent, each Buyer and the other Seller hereunder. The
arrangements made by such Seller for such custody and appointment of the Agent
by such Seller are irrevocable, and the obligations of such Seller hereunder
shall not be terminated by operation of law or the occurrence of any other
event.
9.2 Agent Not Responsible. The Agent, solely in its capacity as Agent,
shall not be responsible to any Buyer for any recitals, statements,
representations or warranties contained herein or in any certificate received by
any of them hereunder or thereunder or for any failure by any Seller to perform
or observe such Seller's obligations hereunder. The Agent, in its capacity as
Agent, shall be entitled to rely upon any certificate, notice or other document
(including any cable, telegram or telex) believed by him to be genuine and
correct, and upon advice and statements of legal counsel, independent
accountants and other experts selected by him, without responsibility for the
consequences of such reliance.
9.3 Reliance on Instructions. As to any matters not expressly provided
for by this Agreement, the Agent, in its capacity as Agent, shall in all cases
be fully protected in acting or in refraining from acting hereunder in
accordance with written instructions signed by a majority in interest of the
Sellers, and any action taken or failure to act pursuant thereto shall be
binding on all Sellers. The Sellers shall reimburse the Agent for all reasonable
costs, liabilities or expenses incurred by him, as Agent, pursuant to any of the
provisions of this Agreement or in the execution of any of the duties of Agent
hereby created or in the exercise, as Agent, of any duty, right, remedy or power
herein or therein imposed or conferred upon it (other than any such costs,
liabilities and expenses which may result from the Agent's wilful misconduct).
SECTION 10. GENERAL.
10.1 Actions After the Closing. After the Closing Date, the parties
shall execute and deliver such other and further instruments and perform such
other and further acts as may reasonably be required fully to consummate the
transactions contemplated hereby.
10.2 Execution of Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.
10.3 Notices. All notices which are required or may be given pursuant
to the terms of this Agreement shall be in writing and shall be (i) delivered in
person, (ii) sent by confirmed telecopy or (iii) mailed, either by registered or
certified mail, return receipt requested, postage prepaid, or by overnight
express carrier, addressed as follows:
If to Sellers, to:
Yashiro Co., Inc.
Yashiro Company, Ltd.
1-18-5 Tatsumi-Naka
Ikuno-Ku, Osaka 544, Japan
Telecopy No.: 816-757-0152
816-752-0844
with a copy to:
Peter Landau, Esq.
Opton, Handler, Gottlieb, Feiler & Katz
52 Vanderbilt Avenue, 17th Floor
New York, New York 10017
Telecopy No.:
If to the Buyers:
c/o Mr. Joel Dupre
Sirco International Corp.
24 Richmond Hill Avenue
Stamford, Connecticut 06901
Telecopy No.: 203-359-4115
with a copy to:
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attention: Eric M. Hellige, Esq.
Telecopy No.: 212-326-0806
If to the Agent:
Yashiro Co., Inc.
1-18-5 Tatsumi-Naka
Ikuno-Ku, Osaka 544, Japan
Telecopy No.: 816-757-0152
816-752-0844
or in the case of any party, such other address as such party, by written notice
received by the other parties, may have designated as its address for notices.
10.4 Assignment, Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, their successors
and assigns, and no other person or entity shall acquire or have any right under
or by virtue of this Agreement. Prior to the Closing, no Seller may assign or
transfer such Seller's rights hereunder without the prior written consent of the
other parties hereto.
10.5 Applicable Laws. This Agreement and all rights and obligations
hereunder, including matters of construction, validity and performance, shall be
construed and governed by the internal laws, and not the law of conflicts, of
the State of New York. Any judicial proceeding brought by or against any party
hereto, by or against any other party hereto, with respect to this Agreement or
any related agreement shall be brought in any court of competent jurisdiction in
the United States of America in the Southern District of New York, and, by
execution and delivery of this Agreement, each of the parties hereto accepts the
exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement. If any
action is commenced in any other jurisdiction the parties hereto hereby consent
to the removal of such action to the United States District Court for the
Southern District of New York. Each of the parties hereto further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to such party at its address, such service to
become effective fifteen (15) days after such mailing.
10.6 Entire Agreement. This Agreement and the agreements ancillary
hereto constitute the entire agreement among the parties hereto, and no party
hereto shall be bound by any communications between them on the subject matter
hereof unless such communications are in writing and bear a date contemporaneous
with or subsequent to the date hereof. Any prior written agreements or letters
of intent among the parties shall, upon the execution of this Agreement, be null
and void.
10.7 Expenses. The Sellers shall pay all of the expenses incurred by
the Sellers in connection with the authorization, preparation, execution and
performance of this Agreement, including, but not limited to, attorneys' fees.
The Buyers shall pay all of the expenses incurred by the Buyers in connection
with the authorization, preparation, execution and performance of this
Agreement, including, but not limited to, attorneys' fees.
10.8 Survival. The representations and warranties contained in this
Agreement and in any certificate or other writing delivered pursuant hereto
shall survive the Closing for a period of one year.
10.9 Amendments. This Agreement may not be amended or changed in any
other manner, in whole or in part, except by a writing executed by the parties
hereto.
10.10 Headings. The headings of the Sections and paragraphs of this
Agreement are inserted for convenience only and shall not constitute a part
hereof.
<PAGE>
IN WITNESS WHEREOF, each of the parties has executed this Agreement
under the seal on the date first above written.
SELLERS:
YASHIRO COMPANY, LTD.
By:/s/Takeshi Yamaguchi
-------------------------
Name: Takeshi Yamaguchi
Title: Executive Vice
President
YASHIRO CO., INC.
By:/s/Takeshi Yamaguchi
-------------------------
Name: Takeshi Yamaguchi
Title: Executive Vice
President
BUYERS:
/s/Joel Dupre
-----------------------------
JOEL DUPRE
PACIFIC MILLION ENTERPRISE
By:/s/Yoshiyasu Takada
-------------------------
Name: Yoshiyasu Takada
Title:Managing Director
/s/Cheng-Sen Wang
-----------------------------
CHENG-SEN WANG
/s/Albert H. Cheng
-----------------------------
ALBERT H. CHENG
AGENT: YASHIRO CO., INC.,
as Agent
By:/s/Takeshi Yamaguchi
-------------------------
Name: Takeshi Yamaguchi
Title: Executive Vice
President
<PAGE>
SCHEDULE I
SHARES SOLD BY SELLERS
Name of Seller Number of Shares
-------------- ----------------
YASHIRO COMPANY, LTD. 400,000
YASHIRO CO., INC. 281,000
<PAGE>
SCHEDULE II
SHARES PURCHASED BY BUYERS
Name of Buyer Number of Shares
------------- ----------------
JOEL DUPRE 414,334
PACIFIC MILLION 133,333
ENTERPRISE LTD.
CHENG-SEN WANG 88,889
ALBERT H. CHENG 44,444
<PAGE>
SCHEDULE 6.4
BUYER CONSENTS; RELEASES
None
<PAGE>
SCHEDULE 7.4
SELLER CONSENTS; RELEASES
None
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$532,250.00 March __, 1995
FOR VALUE RECEIVED, the undersigned (the "Maker") does hereby
promise to pay to the order of Yashiro Co., Inc. (the "Holder"), as Agent
pursuant to that certain Stock Purchase Agreement, dated as of March __, 1995,
by and among Yashiro Company, Ltd. ("Yashiro Limited") and Holder and Maker,
Pacific Million Enterprise Ltd., Cheng-Sen Wang and Albert H. Wang
(collectively, the "Stock Purchasers") and Holder, as Agent (the "Stock Purchase
Agreement"), at 1-18-5 Tatsumi-Naka, Ikuno-Ku, Osaka 544, Japan, or at such
other place as may be designated in writing from time to time by Holder, the
principal sum of Five Hundred Thirty-Two Thousand Two Hundred Fifty Dollars
($532,250.00), in lawful money of the United States of America, together with
interest in arrears on the principal amount hereof from time to time outstanding
at the rate of ten (10) percent per annum, payable quarterly in arrears
commencing June 30, 1996 and payable quarterly in arrears on each June 30th,
September 30th, December 31st and March 31st thereafter. $88,708.33 of the
principal amount hereof shall be repaid on March 31, 1996 and on each
anniversary of such date thereafter through and including March 31, 2001.
1. Events of Default
The occurrence of any of the following events with respect to
Maker shall constitute an event of default which shall cause the entire
principal amount of this Note and accrued interest to become immediately due and
payable without the necessity for any demand on Maker:
(a) If Maker shall default in the payment of
principal or any interest when due and such default shall
have continued unremedied for a period of thirty (30) days;
or
(b) A final judgment or judgments for the payment of
money in excess of $250,000 shall be rendered against Maker
and shall not be discharged for any period of sixty (60)
consecutive days during which a stay of enforcement shall not
be in effect by reason of appeal or otherwise; or
(c) If Maker shall make an assignment for the
benefit of creditors, or file a voluntary petition under the
U.S. Bankruptcy Code, as amended (the "Bankruptcy Code"), or
any other federal or state insolvency law, or apply for or
consent to the appointment of a receiver, trustee or
custodian of all or part of his property; or
(d) If Maker shall file an answer admitting the
jurisdiction of the court and the material allegations of an
involuntary petition filed against him under the Bankruptcy
Code or any other federal or state insolvency law; or
(e) If a proceeding shall be commenced against Maker
seeking the appointment of a trustee, receiver or custodian
of all or part of Maker's property and such proceeding shall
not be dismissed within sixty (60) days after its
commencement; or
(f) If Sirco International Corp., a New York
corporation (the "Company"), shall have accumulated operating
losses (calculated in accordance with generally accepted
accounting principles) in excess of (i) $1,500,000 for the
eight (8) consecutive fiscal quarters commencing with the
fiscal quarter following the closing (the "Closing") of the
transactions contemplated by the Stock Purchase Agreement or
(ii) $2,000,000 for any period of nine (9) consecutive fiscal
quarters, commencing with the fiscal quarter following the
Closing.
(2) Security Interest
The indebtedness represented by, and all obligations in
respect of, this Note are secured by a lien upon and first priority security
interest in the 681,000 shares of the Company's common stock, par value $.10 per
share, pursuant to that certain Pledge Agreement, dated even date herewith, made
by each of the Stock Purchasers in favor of Bueno of California, Inc. and
Holder, on its own behalf and as agent for Yashiro Limited.
(3) Prepayment
This Note may be prepaid without penalty or premium at any
time, in whole or in part, upon not less than sixty (60) days' prior written
notice.
(4) Default Interest
Without prejudice to any other rights of Holder under this
Note as provided herein, Maker shall pay to Holder a late charge equal to three
(3%) percent of the quarterly installment or other payment due hereunder which
is not paid on the due date thereof. Such late charge shall be made on a monthly
basis for each month such installment is delinquent.
(5) Miscellaneous Provisions
(a) Failure to exercise Holder's rights hereunder
shall not constitute a waiver of the right to exercise same
in the event of any subsequent default.
(b) Maker and Holder hereby irrevocably submit to
the personal jurisdiction of any state or Federal court
sitting in the State of New York over any suit, action or
proceeding arising out of or relating to this Note. Maker and
Holder hereby irrevocably waive to the fullest extent
permitted by applicable law any objection which they have or
hereafter have to laying of the venue of any such suit,
action or proceeding brought in such a court and any claim
that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. Maker and
Holder hereby agree to submit to the exclusive jurisdiction
of the courts of the State of New York for the purpose of
resolving any action or claim arising out of the performance
of the provisions of this Note.
(c) Maker expressly waives any right to a trial by
jury in any action to enforce this Note. Maker also waives
the right to interpose in any proceeding to collect this
Note, any set-off, affirmative defense or counterclaim of any
nature except those asserted in good faith that specifically
arise under the Stock Purchase Agreement.
(d) This Note shall be construed in accordance with
and governed by the laws of the State of New York.
(e) Maker expressly waives presentment for payment,
demand and protest, notice of protest and dishonor, and all
other notices in connection with the delivery, acceptance,
performance default or enforcement of the payment of this
Note.
(f) This Note may not be modified nor shall any
waiver hereunder be effective unless in writing signed by the
party against whom the same is asserted.
---------------------
JOEL DUPRE
<PAGE>
EXHIBIT B
ASSET PURCHASE AGREEMENT
This AGREEMENT, dated March 20, 1995, is by and between SIRCO
INTERNATIONAL CORP., a New York corporation ("Seller"), and BUENO OF CALIFORNIA,
INC., a Delaware corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller is in the business, among other things, of
selling handbags and tote bags through its Handbag Division (the "Division");
and
WHEREAS, Buyer desires to purchase, and Seller desires to
sell, substantially all of the operating assets of the Division on the terms and
subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual promises herein contained, Buyer and Seller hereby agree as follows:
ARTICLE I. ASSETS TO BE PURCHASED
Section 1.1. Description of Assets. Upon the terms and subject
to the conditions set forth in this Agreement, at the Closing (as hereinafter
defined), Seller shall convey, sell, transfer, assign and deliver to Buyer, and
Buyer shall purchase from Seller, all right, title and interest of Seller in and
to, the operating assets, properties, rights (contractual or otherwise) and
business of Seller which are used currently in connection with the business and
operations of the Division (the "Business") and are set forth below:
(a) All machinery, equipment, tooling, parts, furniture,
supplies, and other tangible personal property used currently in
conducting the Business listed on Schedule 1.1(a)1 (the "Personal
Property") and;
(b) All finished goods inventory and other inventory of the
Division on hand at Closing (including samples located in showrooms and
Seller's offices), as set forth on Schedule 1.1(b), or returned to
Seller or Buyer by customers of the Division after the Closing (the
"Inventory");
(c) All proprietary rights, proprietary knowledge, know-how,
trademarks, names, service marks, trade names, symbols, logos,
franchises and permits used in conducting the Business and all
applications therefor, registrations thereof and licenses, sublicenses
or agreements in respect thereof, which Seller owns or has the right to
use or to which Seller is a party and all filings, registrations or
issuances of any of the foregoing with or by any federal, state, local
or foreign regulatory, administrative or governmental office, in each
case listed on Schedule 1.1(c) (collectively, the "Proprietary
Rights");
(d) All contracts, agreements, contract rights, license
agreements, franchise rights and agreements, purchase and sales orders,
quotations and executory commitments, instruments, third party
guaranties, indemnifications, arrangements, and understandings, whether
oral or written, to which Seller is a party (whether or not legally
bound thereby) and used currently in conducting the Business and listed
on Schedule 1.1(d) (the "Contracts");
(e) All deposits, prepaid expenses and other miscellaneous
assets of the Division listed on Schedule 1.1(e);
(f) All books of account, customer lists, files, papers and
records used currently in conducting the Business; and
(g) All goodwill relating to the Division.
Notwithstanding the foregoing, there shall be excluded from
the assets, properties, rights, (contractual and otherwise) and business of
Seller to be conveyed, sold, transferred, assigned and delivered to Buyer under
this Agreement (i) cash and cash equivalents and investment securities, (ii) all
accounts receivable relating to or arising out of the operation of the Division
prior to the Closing, (iii) notes receivable from Seller and third parties to
the Division, (iv) tax refunds paid to Seller, whether or not such tax refunds
relate to the Division, (v) all corporate minute books, stock records, tax
returns and supporting schedules, books of original financial entry, and
internal accounting documents and records relating to the Division (all of which
shall be subject to Buyer's right to inspect and copy at Buyer's expense for any
reasonable purpose during normal business hours) and (vi) all causes of action,
judgments, claims or demands of whatever kind or description relating to the
Division which Seller has or may have against any other person or entity. All of
the assets, properties, rights (contractual and otherwise) and business to be
conveyed, sold, transferred, assigned and deliv-ered to Buyer pursuant to this
Section 1.1 are hereinafter collectively referred to as the "Property."
Section 1.2. Non-Assignment of Certain Property. To the extent
that the assignment hereunder of any of the Contracts shall require the consent
of any other party (or in the event that any of the same shall be
non-assignable), neither this Agreement nor any action taken pursuant to its
provisions shall constitute an assignment or an agreement to assign if such
assignment or attempted assignment would constitute a breach thereof or result
in the loss or diminution thereof; provided, however, that in each such case,
Seller shall use its reasonable efforts to obtain the consents of such other
party to an assignment to Buyer. If such consent is not obtained, Seller shall
cooperate with Buyer in any reasonable arrangement designed to provide for Buyer
the benefits of any such Contract including, without limitation, en-forcement,
for the account and benefit of Buyer, of any and all rights of Seller against
any other person with respect to any such Contract; provided, however, that all
expenses related thereto shall be borne by Seller.
Section 1.3. Preservation of Books and Records. For a period
of five years following the Closing, each of Seller and Buyer will preserve and
maintain all books and records of the Business in their possession. If either
Seller or Buyer desires to dispose of any such books and records at the end of
such five-year period or before the expiration of such five-year period, the
party so desiring will first give notice thereof to the other party and will, at
such party's option and expense, appropriately package and deliver such books
and records to such party at such location as such party shall designate.
ARTICLE II. ASSUMPTION OF OBLIGATIONS
Section 2.1. Assumption of Certain Liabilities. At the
Closing, Seller shall assign and delegate to Buyer, and Buyer shall assume and
undertake to pay, discharge and perform in full when due, the liabilities and
obligations (i) arising under the Contracts, to the extent such liabilities and
obligations are required to be performed after the Closing, (ii) related to
severance, pension or welfare benefits including, without limitation, accrued
payroll, accrued sick days and accrued vacation days, for Employees (as
hereinafter defined) to which Buyer shall extend employment in accordance with
Section 5.8 hereof, (iii) related to goods purchased by the Division prior to
the Closing but not yet delivered to the warehouse and (iv) related to Inventory
returned to Seller after the Closing by customers of the Division. The
liabilities of Seller being assumed by Buyer are hereinafter referred to as the
"Assumed Liabilities."
Section 2.2. Liabilities Not Assumed. With the exception of
the Assumed Liabilities, Buyer shall not by execution and performance of this
Agreement, or otherwise, assume or otherwise be responsible for any liability or
obligation of any nature of Seller, whether relating to the Division or any of
Seller's other assets, operations, businesses or activities, or claims of such
liability or obligation, matured or unmatured, liquidated or unliquidated, fixed
or contingent, or known or unknown, whether arising out of occurrences prior to,
at or after the date hereof including, without limitation, any liability (i) as
of the Closing for wages, salaries, severance, pension or welfare benefits
including, without limitation, accrued sick days and accrued vacation days, for
employees or former employees of the Division (other than the Employees to which
Buyer shall extend employment in accordance with Section 5.8 hereof), (ii) as of
the Closing for employee medical benefits based upon claims arising prior to the
Closing, whether or not notice of such claim is received prior to or after
Closing, (iii) for retroactive premium adjustments for workers' compensation,
(iv) for commissions and other fees earned prior to the Closing by agents,
salesmen and other employees or former employees of the Division, (v) under any
workers' compensation claims based upon claims arising prior to the Closing,
whether or not notice of such claim is received prior to or after the Closing
and (vi) claims of any nature or kind relating to or arising out of goods
shipped prior to the Closing.
ARTICLE III. PURCHASE PRICE
Section 3.1. Consideration. (a) Upon the terms and subject to
the conditions set forth in this Agreement, in consideration for the Property,
at the Closing Buyer shall (i) assume the Assumed Liabilities as provided in
Section 2.1 hereof and (ii) pay to Seller the sum of (x) Fifty Thousand Dollars
($50,000), (y) an amount equal to the Book Value (as hereinafter defined) of the
Personal Property, as jointly determined by Seller and Buyer prior to the
Closing, and (z) an amount equal to the product of (A) the Book Value of the
Inventory (other than Inventory samples located in showrooms and Seller's
offices) on hand as of the Closing (the "Inventory Valuation"), as jointly
estimated by Seller and Buyer (the "Preliminary Closing Inventory Valuation")
pursuant to Section 3.2, multiplied by (B) 90%. As of the date hereof, the Book
Value of the Personal Property and the Inventory is $35,234 and $1,889,368.39,
respectively. For purposes of determining each of (i) the purchase price for the
Personal Property, (ii) the Preliminary Closing Inventory Valuation and (iii)
the Final Inventory Valuation (as hereinafter defined), "Book Value" shall mean
the book value of the Personal Property or the Inventory, as the case may be,
being purchased by Buyer pursuant to Sections 1.1(a) and 1.1(b) hereof as
determined by the parties hereto; provided, however, that in no event shall any
Inventory or Personal Property, as the case may be, be valued at an amount less
than the value carried therefor on the Seller's audited balance sheet at
November 30, 1994 (the "Balance Sheet") and, provided, further, all Inventory
and Personal Property shall be valued in a manner consistent with that utilized
for the purposes of the Balance Sheet.
(b) The payments of the purchase price relating to the
Inventory transferred on the Closing Date shall be made at Closing through
reduction in the amount of $1,699,497.73 of Seller's outstanding aggregate
indebtedness to Yashiro Company, Ltd. and Yashiro Co., Inc. ("Yashiro"), each of
which are Japanese corporations and affiliates of the Buyer (together, the
"Yashiro Entities"), which aggregate indebtedness as of the date hereof is
$2,238,506.01. To the extent the purchase price for the Inventory transferred at
Closing exceeds $1,699,497.73, Buyer shall pay to Seller in cash, by wire
transfer of immediately available funds in accordance with Seller's
instructions, the amount of such excess. The Payment of the remaining portion of
the purchase price payable at Closing shall be paid by Buyer to Seller in cash,
by wire transfer of immediately available funds in accordance with Seller's
instructions. The aggregate indebtedness of Seller to Yashiro following the
Closing will be $897,827.58, as summarized on Schedule 3.1(b) hereof.
Section 3.2. Adjustment of Inventory Valuation.
(a) Immediately after the date of the Closing (the "Closing
Date"), Seller and Buyer shall cause the joint audit of the Preliminary Closing
Inventory Valuation. The Preliminary Closing Inventory Valuation shall be the
Book Value set forth for the Inventory on the Seller's accounting records and
provided by Seller to Buyer within two days prior to the Closing Date. During
the ten-day period following the Closing Date, Buyer and its accountants shall
consult with Seller and its accountants regarding the Preliminary Closing
Inventory Valuation.
If within 15 days after the Closing Date, Buyer notifies
Seller in writing that modifications are required to be made in order for the
Preliminary Closing Inventory Valuation to present fairly the Inventory
Valuation in accordance with this Agreement, the Preliminary Closing Inventory
Valuation shall be so modified or, if within ten days after receipt of notice
from Buyer that modifications should be made, Seller notifies Buyer in writing
of Seller's disagreement with respect to any of the modifications, the
modifications subject to such disagreement shall be determined by Ernst & Young
("E&Y"), Seller's independent public accountants, in accordance with the terms
of this Agreement to arrive at a final inventory valuation (the "Final Inventory
Valuation"), on the basis of such procedures as E&Y, in its sole judgment, deems
applicable and appropriate, taking into account the nature of the issues, the
amount(s) in dispute and the respective positions asserted by the parties. If
Buyer and Seller agree upon a modification or if Buyer does not notify Seller
that modifications to the Preliminary Closing Inventory Valuation are required
within such 15 day period, the Preliminary Closing Inventory Valuation as
jointly modified, or as originally estimated, as the case may be, shall be
deemed to be the Final Inventory Valuation. In the event Seller objects to any
of the modifications requested by Buyer, E&Y shall review the disputed matters
and as promptly as practicable deliver to Seller and Buyer the Final Inventory
Valuation, setting forth its determination as to the proper treatment of the
modifications as to which there was disagreement, and such Final Inventory
Valuation shall be final and binding upon the parties hereto without any further
right of appeal. All charges of E&Y incurred in determining the Final Inventory
Valuation shall be borne equally by Buyer and Seller.
(b) If the Final Inventory Valuation exceeds the Preliminary
Closing Inventory Valuation paid at Closing, the purchase price paid by Buyer in
accordance with Section 3.1 hereof shall be increased by an amount equal to the
amount of such excess (such amount a "Purchase Price Increase"). If the Final
Inventory Valuation is less than the Preliminary Closing Inventory Valuation
paid at Closing, the purchase price paid by Buyer in accordance with Section 3.1
hereof shall be decreased by an amount equal to the amount of such shortfall
(such amount a "Purchase Price Decrease").
(c) If there is a Purchase Price Increase, Buyer shall pay to
Seller within three business days of the date of the final determination of the
Purchase Price Increase, the amount of the Purchase Price Increase, together
with simple interest accrued thereon at the rate of 10% per annum (the
"Applicable Rate") from the Closing Date. If there is a Purchase Price Decrease,
Seller shall pay to Buyer within three business days of the date of the final
determination of the Purchase Price Decrease that amount of the Purchase Price
Decrease, together with simple interest accrued thereon at the Applicable Rate
from the Closing Date.
Section 3.3. Returned Goods.
(a) To the extent a customer of the Division returns goods in
saleable condition to Seller following the Closing and Seller subsequently
refunds to such customer the purchase price therefor, the purchase price paid by
Buyer in accordance with Section 3.1 hereof shall be increased by an amount
equal to the sum of (A) the product of (i) the Book Value of such returned goods
multiplied by (ii) 90% (such amount a "Refund Purchase Price Increase") and (B)
an amount equal to any salesman's commissions paid by Seller to any salesman in
connection with the original sale of such returned goods. All of the above is
subject to receipt of reasonable documentation confirming amounts paid by the
Seller.
(b) To the extent a customer of the Division returns damaged
goods to Seller following June 1, 1995 and Seller subsequently refunds to such
customer the purchase price therefor, the purchase price paid by Buyer in
accordance with Section 3.1 hereof shall be increased by an amount equal to the
sum of (A) the Refund Purchase Price Increase and (B) an amount equal to any
salesman's commissions paid by Seller to any salesman in connection with the
original sale of such returned goods. All of the above is subject to receipt of
reasonable documentation confirming amounts paid by the Seller.
(c) To the extent a customer of the Division returns goods to
Buyer following the Closing, the purchase price of which was previously paid to
Seller, and Buyer subsequently refunds to such customer the purchase price
therefor, the purchase price paid by Buyer in accordance with Section 3.1 hereof
shall be decreased by an amount equal to the difference between (x) the purchase
price previously paid to the Seller for such returned goods and (y) the product
of (i) the Book Value of such returned goods multiplied by (ii) 90% (such amount
a "Refund Purchase Price Decrease") and (z) an amount equal to any salesman's
commissions paid by Seller to any salesman in connection with the original sale
of such goods. All of the above is subject to receipt of reasonable
documentation confirming amounts returned to Buyer and paid by Buyer.
(d) If there is a Refund Purchase Price Increase, Buyer shall
pay to Seller, within three business days of the date upon which Seller notifies
Buyer that it has refunded any money to a customer of the Division for goods
returned thereby, by wire transfer of immediately available funds to a bank
account designated by Seller, the amount of such Refund Purchase Price Increase
and Seller shall promptly deliver to Buyer, at Seller's expense, the goods
returned by such customer. If there is a Refund Purchase Price Decrease, Seller
shall pay to Buyer, within three business days of the date upon which Buyer
notifies Seller that it has refunded any money to a customer of the Division for
goods returned thereby, by wire transfer of immediately available funds to a
bank account designated by Buyer, the amount of such Refund Purchase Price
Decrease.
Section 3.4. Chargebacks. In the event that, following the
Closing, a customer of the Division takes a chargeback to an account receivable
of Seller, Buyer shall pay to Seller, within ten business days of the date upon
which Seller notifies Buyer of such chargeback, by wire transfer of immediately
available funds, an amount equal to the aggregate amount of any salesman's
commissions paid by Seller to any salesman in connection with the sale giving
rise to such account receivable.
Section 3.5. Purchase Price Allocation. Seller and Buyer
hereby agree that the aggregate purchase price for the Property shall be
allocated for purposes of this Agreement and for federal, state and local tax
purposes as set forth on an allocation certificate in the form attached hereto
as Exhibit A (the "Allocation Certificate") to be executed by Buyer and Seller
at the Closing. Buyer and Seller shall file all federal, state, local and
foreign tax returns, including Internal Revenue Form 8594, in accordance with
the allocation set forth in such Allocation Certificate. Any aggregate (i)
Purchase Price Increase or Purchase Price Decrease or (ii) Refund Purchase Price
Increase or Refund Purchase Price Decrease shall adjust the dollar value
allocated to the asset categories to which it is attributable.
Section 3.6. Adjustments. The Closing shall be deemed to occur
as of 11:59 p.m. on the Closing Date and for all purposes, any adjustments under
this Agreement pursuant to Section 3.2 hereof shall be deemed to be made as of
such time.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
Section 4.1. Buyer represents and warrants to Seller that:
(a) Corporate Existence. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. As a result of the Business conducted by the Division or the character
or location of the Property, Buyer is duly qualified to do business and in good
standing in the State of California, which is the only jurisdiction where the
nature of the Business conducted by the Division or the character or location of
the Property requires such qualification, except where the failure to be so
qualified would not in the aggregate have a material adverse effect on the
Business or on the Property; provided, however, that no representation is made
as to the necessity or requirement to qualify to do business in the State of
Connecticut.
(b) Authorization; Validity. Buyer has all requisite corporate
power and authority to enter into this Agreement, perform its obligations
hereunder and to consummate the transactions contemplated hereby. All necessary
corporate action has been taken by Buyer with respect to the execution, delivery
and performance by Buyer of this Agreement and the consummation of the
transactions contemplated hereby. Assuming the due execution and delivery of
this Agreement by Seller, this Agreement is a legal, valid and binding
obligation of Buyer, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization and moratorium laws and other
laws of general application affecting the enforcement of creditors' rights
generally, and the discretion of the court before which any proceeding therefore
may be brought.
(c) Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by or on behalf of
Buyer in such a manner as not to give rise to any claim against Buyer, Seller or
the Property for a finder's fee, brokerage commission, advisory fee or other
similar payment.
Section 4.2. Seller represents and warrants to Buyer that:
(a) Corporate Existence. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and has the corporate power to own, operate or lease the Property and
to carry on the Business as now being conducted. As a result of the Business
conducted by the Division or the character or location of the Property, Seller
is duly qualified to do business and in good standing in those jurisdictions
listed on Schedule 4.2(a), which include the only jurisdictions where the nature
of the Business conducted by the Division or the character or location of the
Property requires such qualification, except where the failure to be so
qualified would not in the aggregate have a material adverse effect on the
Business or on the Property; provided, however, that no representation is made
as to the necessity or requirement to qualify to do business in the State of
Connecticut.
(b) Authorization; Validity. Seller has all requisite
corporate power and authority to enter into this Agreement, perform its
obligations hereunder and to consummate the transactions contemplated hereby
without the approval of any third party except as set forth on Schedule 4.2(b).
All necessary corporate action has been taken by Seller with respect to the
execution, delivery and performance by Seller of this Agreement and the
consummation of the transactions contemplated hereby. Assuming the due execution
and delivery of this Agreement by Buyer, this Agreement is a legal, valid and
binding obligation of Seller, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization and moratorium laws and
other laws of general application affecting the enforcement of creditors' rights
generally, and the discretion of the court before which any proceeding therefor
may be brought.
(c) Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by or on behalf of
Seller in such a manner as not to give rise to any claim against Seller, Buyer
or the Property for a finder's fee, brokerage commission, advisory fee or other
similar payment.
ARTICLE V. COVENANTS
Section 5.1. Release. Upon the earlier of (i) 180 days
following the Closing or (ii) the date upon which Seller executes documentation
with respect to any alternative financing source on terms substantially similar
to those set forth in that certain Factoring Agreement, dated September 16,
1992, between Rosenthal & Rosenthal Inc. and Seller (the "Factoring Agreement"),
Seller shall cause the release of all obligations of any and all guarantors with
respect to the Factoring Agreement existing as of the date hereof.
Section 5.2. Shinhan Bank. Seller shall repay the indebtedness
outstanding and cause the discharge of all guarantees under that certain
Revolving Credit Agreement, dated as of July 20, 1990, by and among Seller,
Yutaka Yamaguchi and Shinhan Bank New York Branch, as amended on June 23, 1992
(the "Revolving Credit Agreement"), in accordance with the payment schedule
listed on Schedule 5.2; provided, however, that, notwithstanding the foregoing,
Seller shall not increase the aggregate amount of its indebtedness under the
Revolving Credit Agreement at any time from and after the date hereof.
Section 5.3. Issuance of Capital Stock.
(a) Without the prior written consent of Buyer, Seller shall
not, until the earlier of (i) twenty seven months from the Closing Date and (ii)
the date upon which all obligations of Seller or the Stock Purchasers (as
hereinafter defined), as the case may be, under (x) this Agreement, (y) the
Stock Purchase Agreement, dated even date herewith by and among the Yashiro
Entities and Joel Dupre ("Dupre"), Pacific Million Enterprise Ltd., Cheng-Sen
Wang and Albert H. Cheng (collectively, the "Stock Purchasers") and Yashiro Co.,
as Agent (the "Stock Purchase Agreement"), and (z) any agreements that are
exhibits hereto or thereto are either satisfied or paid in full by the Stock
Purchasers or Seller, as the case may be (all such obligations hereinafter
referred to as the "Seller's Liabilities"), issue any of its capital stock, or
any securities exercisable or convertible into, or exchangeable for, its capital
stock unless (A) such securities are issued in consideration of cash, (B) in the
event Seller issues its common stock, par value $.10 per share (the "Common
Stock"), such Common Stock is sold in consideration of cash and in accordance
with Section 5.3(b) hereof and (C) the net cash proceeds from such issuance(s)
are applied concurrently to the payment of Seller's obligations under (x) this
Agreement, (y) any agreement that is an exhibit hereto or (z) any other
indebtedness of Seller to either of the Yashiro Entities outstanding as the
Closing.
(b) Until the date upon which all of Seller's Liabilities are
paid in full or satisfied, as the case may be, Common Stock may only be issued
as follows:
(i) During the first year following the Closing,
Seller may only issue Common Stock in consideration of an amount of
cash per share that is not less than the average last reported bid
quotation for the Common Stock on the National Association of
Securities Dealers Automated Quotation ("NASDAQ") (as reported in the
Wall Street Journal) for thirty consecutive Trading Days (as
hereinafter defined) ending on the Closing Date, provided the Common
Stock continues at all times to be registered under Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
"Trading Day" shall mean a full day on which trading in the Common
Stock is conducted on NASDAQ, whether or not any trades are actually
consummated.
(ii) During the second year following the Closing,
Seller may only issue Common Stock in consideration of an amount of
cash per share that is not less than the fair market value thereof, as
reasonably determined in good faith by Seller's Board of Directors (the
"Fair Market Value"), provided the Common Stock continues at all times
to be registered under Section 12 of the Exchange Act; and
(iii) During the third year following the Closing and
thereafter, Seller may only issue Common Stock in consideration of an
amount of cash per share that is not less than the Fair Market Value at
the time of such issuance.
(c) Notwithstanding anything to the contrary herein, Seller
shall not, until the date upon which all of Seller's Liabilities are paid in
full or satisfied, as the case may be, sell any of its capital stock, or any
securities exercisable or convertible into, or exchangeable for, its capital
stock if, following such issuance(s), the Stock Purchasers would beneficially
own less than 35% of the outstanding Common Stock on a fully-diluted basis.
Section 5.4. Restricted Payments. Until the date upon which
all of Seller's Liabilities are paid in full or satisfied, as the case may be,
Seller shall not (i) declare or pay any dividend, (ii) make any other
distribution on any shares of its capital stock or (iii) redeem or purchase any
shares of its capital stock.
Section 5.5. Financial Statements and SEC Filings. Until such
time as all of Seller's Liabilities are paid in full or satisfied, as the case
may be, Seller shall deliver to Buyer (i) within a period of time consistent
with current practice but in no event more than (x) ninety days after the end of
any month during Seller's fiscal first quarter and (y) forty- five days after
the end of any other month, Seller's unaudited balance sheet, statement of
operations and statement of cash flows (collectively, the "Financial
Statements"), certified as true and correct in all material respects by the
Chief Financial Officer thereof, (ii) within 90 days following the end of
Seller's fiscal year, the Financial Statements of Seller, audited by Seller's
independent public accountants and (iii) within three days after the filing
thereof, any report or document filed by Seller with the Securities and Exchange
Commission.
Section 5.6. Change of Accountants. Seller shall not change
its independent public accountants without the prior written consent of Buyer;
provided, however, that Seller may change its accountants to the firm of
Nussbaum Yates & Wolpow, P.C. ("NY&W"), provided Buyer receives, prior to any
such change, the written agreement of NY&W, in form reasonably satisfactory to
Buyer, to the effect that NY&W shall deliver directly to Buyer, in accordance
with and during the period required by Section 5.5 hereof, copies of all
Financial Statements previously certified by NY&W.
Section 5.7. Bulk Sales Law. To the extent that the terms and
conditions of any bulk sales laws may be deemed to be applicable to the
transactions contemplated by this Agreement, Buyer hereby waives compliance by
Seller with the provisions of any such laws, and Seller warrants and agrees to
pay and discharge when due all bona fide claims of creditors of Seller actually
made against Buyer which have been or will be asserted against Buyer by reason
of such non-compliance to the extent such liabilities are not Assumed
Liabilities. Seller agrees to indemnify and hold harmless Buyer following the
Closing from and against any and all damages, losses, liabilities, claims, costs
and expenses including, without limitation, reasonable attorneys' fees and other
costs and expenses incident to any suit, action, claim or proceeding related to
the foregoing (collectively, the "Claims"), incurred by Buyer by reason of the
failure of Seller to pay and discharge such Claims; provided, however, that (i)
Buyer shall notify Seller promptly in writing of any Claim for which it may seek
indemnification from Seller pursuant to this Section 5.7, (ii) Seller shall have
the right to assume the defense of any such Claim and Buyer shall fully
cooperate with Seller in any such defense and (iii) Seller shall not be
responsible for the payment of any amount arising out of any settlement of any
Claim made by Buyer without Seller's prior written consent.
Section 5.8. Employee Matters. Buyer agrees to offer
employment solely to the employees of the Division on the Closing Date set forth
on Schedule 5.8 (the "Employees"), subject to such terms and conditions of
employment as Buyer may set or establish after the Closing Date including,
without limitation, such matters as wages, hours and working conditions. In all
respects after the Closing, such Employees shall be at-will employees and Buyer
shall have the right to dismiss in its sole discretion any of such Employees.
Seller shall indemnify and hold harmless Buyer with respect to any and all
claims made by employees of Seller not set forth on Schedule 5.8.
Section 5.9. Fairness Opinion. Any fees and related charges
(including the reimbursement of expenses) paid to Delta Financial Group
Incorporated ("Delta") in connection with its rendering to Seller of a fairness
opinion in connection with the transactions contemplated by this Agreement and
the agreements ancillary hereto (the "Fairness Opinion") shall be borne equally
by Buyer and Seller.
Section 5.10. Severability. With respect to any provision of
this Article V finally determined by a court of competent jurisdiction to be
unenforceable, Seller and Buyer hereby agree that such court shall have
jurisdiction to reform such provision so that it is enforceable to the maximum
extent permitted by law, and the parties agree to abide by such court's
determination. In the event that any provision of this Article V cannot be
reformed, such provision shall be deemed to be severed from this Agreement, but
every other provision of Article V of this Agreement shall remain in full force
and effect.
Section 5.11. Further Assurances. On and after the Closing,
Seller shall prepare, execute and deliver, at Seller's expense, such further
instruments of conveyance, sale, assignment or transfer, and shall take or cause
to be taken such other or further action as Buyer's counsel shall reasonably
request at any time or from time to time in order to perfect, confirm or
evidence in Buyer title to all or any part of the Property or to consummate, in
any other manner, the terms and conditions of this Agreement. On and after the
Closing, Buyer shall prepare, execute and deliver, at Buyer's expense, such
further instruments, and shall take or cause to be taken such other or further
action as Seller's counsel shall reasonably request at any time or from time to
time in order to confirm or evidence Buyer's assumption of the Assumed
Liabilities or to consummate, in any other manner, the terms and conditions of
this Agreement.
Section 5.12. Announcements. Neither party to this Agreement
shall make any public announcements prior to the Closing with respect to this
Agreement or the transactions contemplated hereby without the consent of the
other party hereto, except as required by law.
Section 5.13. Consents. The parties hereto agree to use all
reasonable efforts to obtain all approvals, authorizations and consents of all
third parties necessary for the consummation of the transactions contemplated
hereby.
Section 5.14. Confidentiality. Each of Seller and Buyer shall
hold and shall cause its consultants and advisors to hold in strict confidence,
unless compelled to disclose by judicial or administrative process or, in the
opinion of its counsel, by other requirements of law, all documents and
information concerning the other party furnished it by such other party or its
representatives in connection with the transactions contemplated by this
Agreement including, without limitation, the Financial Statements delivered to
Buyer pursuant to Section 5.5 hereof (except to the extent that such information
can be shown to have been (i) previously known by the party to which it was
furnished, (ii) in the public domain through no fault of such party or (iii)
later lawfully acquired from other sources by the party to which it was
furnished), and neither Seller nor Buyer shall release or disclose such
information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors in connection with this
Agreement. If the transactions contemplated by this Agreement are not
consummated, such confidence shall be maintained except to the extent such
information comes into the public domain through no fault of the party required
to hold it in confidence, and such information shall not be used to the
detriment of, or in relation to any investment in, the other party and all such
documents (including copies thereof) shall be returned to the other party
immediately upon the written request thereof. Each party shall be deemed to have
satisfied its obligation to hold confidential information concerning or supplied
by the other party if it exercises the same care as it takes to preserve
confidentiality for its own similar information.
ARTICLE VI. CLOSING
Section 6.1. Closing. This transaction shall close and all
deliveries to be made at the time of closing shall take place at 10:00 a.m., New
York City time, on March 20, 1995, at the offices of Olshan Grundman Frome &
Rosenzweig, 505 Park Avenue, New York, New York, or at such other place or date
as may be agreed upon from time to time in writing by Seller and Buyer (the
"Closing").
Section 6.2. Deliveries by Seller. At or prior to the Closing,
Seller shall deliver to Buyer, duly and properly executed, the following:
(a) Good and sufficient General Conveyance, Assignment and
Bill of Sale, in the form attached hereto as Exhibit B (the "General Conveyance,
Assignment and Bill of Sale"), conveying, selling, transferring and assigning to
Buyer title to all of the Property, free and clear of all security interests,
liens, charges, encumbrances or equities whatsoever, except for those (i) in
favor of Rosenthal & Rosenthal, Inc. pursuant to the Factoring Agreement, (ii)
assumed by Buyer pursuant to this Agreement or (iii) approved in writing by
Buyer prior to the Closing.
(b) Assumptions of the Assumed Liabilities, in the form
attached hereto as Exhibit C (the "Assumption Agreement"), and shall include, to
the extent obtained, the written consents of all parties necessary in order to
duly transfer to Buyer all of Seller's rights under the Contracts.
(c) An agreement, in the form attached hereto as Exhibit D,
with respect to the provision to Seller by Yashiro Co. of a letter of credit
facility (the "Letter of Credit Agreement").
(d) The Fairness Opinion of Delta in the form attached hereto
as Exhibit E, to the effect that the terms of the transactions contemplated by
this Agreement and the agreements ancillary hereto are fair to the shareholders
of Seller from a financial point of view.
(e) A Sublease, in the form attached hereto as Exhibit F,
providing for the use and occupancy by Buyer of space in Seller's California
warehouse (the "Sublease").
(f) A Sharing Agreement, in the form attached hereto as
Exhibit G, providing for the shared use by Seller and Buyer of Seller's New York
showroom (the "Sharing Agreement").
(g) An Exclusive Purchasing Agreement, in the form attached
hereto as Exhibit H, granting Buyer or designees thereof the exclusive right to
sell Seller's goods in Japan (the "Exclusive Purchasing Agreement").
(h) The Guaranty of Dupre, in the form attached hereto as
Exhibit I, guaranteeing the payment of Seller's obligations under the agreements
set forth on Exhibit A thereto (the "Guaranty").
(i) A Pledge Agreement, in the form attached hereto as Exhibit
J, whereby the Stock Purchasers shall pledge an aggregate of 681,000 shares of
Common Stock to secure all of Seller's Liabilities (as that term is defined in
Section 5.3 hereof) (the "Pledge Agreement").
(j) Non-Competition Agreements, in the forms attached hereto
as Exhibits K-1, K-2, K-3 and K-4 to be executed by Seller and each of (x) the
Yashiro Entities, (y) Yutaka Yamaguchi and (z) Takeshi Yamaguchi, respectively
(collectively, the "Non- Competition Agreements").
(k) A Severance Agreement, in the form attached hereto as
Exhibit L, to be executed by Seller and Takeshi Yamaguchi (the "Severance
Agreement").
(l) A License Agreement, in the form attached hereto as
Exhibit M, granting Buyer the right to use the trade name "Mondo" (the "License
Agreement").
(m) An Assignment of the United States trademarks of Seller,
in the form attached hereto as Exhibit N (the "Trademarks Assignment"),
conveying, transferring and assigning to Buyer, all of Seller's right, title and
interest to such trademarks.
(n) A certificate of the President and Secretary of Seller in
accordance with Section 7.1(d) hereof.
(o) The Certificate of Incorporation of Seller, certified as
of a recent date by the Secretary of State of New York.
(p) A certificate of the Secretary of State of New York, dated
as of a recent date, as to the good standing of Seller in such state.
(q) A certificate of the Secretary of State of each state
listed on Schedule 4.2(a), dated as of a recent date, as to the good standing of
Seller in each such state.
(r) A Non-competition Agreement, in the form attached hereto
as Exhibit O, to be executed by each of the Seller and the Buyer.
(s) Resolutions of the Board of Directors of Seller
authorizing the execution and delivery of this Agreement by Seller and the
performance of its obligations hereunder, certified by the Secretary of Seller.
(t) Such other separate instruments of sale, assignment or
transfer that Buyer may reasonably deem necessary or appropriate in order to
perfect, confirm or evidence title to all or any part of the Property.
Section 6.3. Deliveries by Buyer. On or prior to the Closing,
Buyer shall deliver to Seller the purchase price in accordance with Section 3.1
hereof and shall deliver to Seller, all duly and properly executed, the
following:
(a) The Assumption Agreement.
(b) The Letter of Credit Agreement.
(c) The Sublease.
(d) The Sharing Agreement.
(e) The Exclusive Purchasing Agreement.
(f) The Pledge Agreement.
(g) The Non-Competition Agreements.
(h) The Severance Agreement.
(i) The License Agreement.
(j) A certificate of the President and Secretary of Buyer in
accordance with Section 7.2(d) hereof.
(k) The Certificate of Incorporation of Buyer, certified as of
a recent date by the Secretary of State of Delaware.
(l) A certificate of the Secretary of State of Delaware, dated
as of a recent date, as to the good standing of Buyer in such state.
(m) Resolutions of the Board of Directors of Buyer authorizing
the execution and delivery of this Agreement by Buyer and the performance of its
obligations hereunder, certified by the Secretary of Buyer.
(n) Such other separate instruments of assumption that Seller
may reasonably deem necessary or appropriate in order to confirm or evidence
Buyer's assumption of the Assumed Liabilities.
ARTICLE VII. CONDITIONS PRECEDENT TO OBLIGATIONS
Section 7.1. Conditions to Obligations of Buyer. Each and
every obligation of Buyer to be performed at the Closing shall be subject to the
satisfaction as of or before the Closing of the following conditions (unless
waived in writing by Buyer):
(a) Representations and Warranties. Seller's representations
and warranties set forth in Section 4.2 hereof shall have been true and correct
in all material respects when made and shall be true and correct in all material
respects at and as of the Closing as if such representations and warranties were
made as of the Closing.
(b) Performance of Agreement. All covenants, conditions and
other obligations under this Agreement which are to be performed or complied
with by Seller, shall have been fully performed and complied with in all
material respects on or prior to the Closing including, without limitation, the
delivery of the fully executed instruments and documents in accordance with
Section 6.2 hereof.
(c) No Adverse Proceeding. There shall be no pending or
threatened claim, action, litigation or proceeding, judicial or administrative,
or governmental investigation against Buyer, Seller or the Property for the
purpose of enjoining or preventing the consummation of this Agreement, or
otherwise claiming that this Agreement or the consummation hereof is illegal.
(d) Certificate. Seller shall have delivered to Buyer a
certificate executed by Seller's President and Secretary, dated the Closing
Date, to the effect that the conditions set forth in subsections (a) and (b)
and, to the best knowledge of such officers, (c), of this Section 7.1 have been
satisfied.
(e) Stock Purchase Agreement. The transactions contemplated by
the Stock Purchase Agreement and the agreements ancillary thereto shall have
been consummated.
Section 7.2. Conditions to Obligations of Seller. Each and
every obligation of Seller to be performed at the Closing shall be subject to
the satisfaction as of or before such time of the following conditions (unless
waived in writing by Seller):
(a) Representations and Warranties. Buyer's representations
and warranties set forth in Section 4.1 hereof shall have been true and correct
when made and shall be true and correct at and as of the Closing as if such
representations and warranties were made as of such time and date.
(b) Performance of Agreement. All covenants, conditions and
other obligations under this Agreement which are to be performed or complied
with by Buyer shall have been fully performed and complied with in all material
respects on or prior to the Closing including the delivery of funds and the
fully executed instruments and documents in accordance with Section 6.3 hereof.
(c) No Adverse Proceeding. At the Closing there shall be no
pending or threatened claim, action, litigation or proceeding, judicial or
administrative, or governmental investigation against Buyer, Seller or the
Property for the purpose of enjoining or preventing the consummation of this
Agreement, or otherwise claiming that this Agreement or the consummation hereof
is illegal.
(d) Certificate. Buyer shall have delivered to Seller a
certificate executed by Buyer's President and Secretary, dated the Closing Date,
to the effect that the conditions set forth in subsections (a) and (b) and, to
the best knowledge of such officers, (c), of this Section 7.2 have been
satisfied.
(e) Stock Purchase Agreement. The transactions contemplated by
the Stock Purchase Agreement and the agreements ancillary thereto shall have
been consummated.
ARTICLE VIII. TERMINATION
Section 8.1. Termination by Either Party. This Agreement may
be terminated and cancelled at any time prior to the Closing by Buyer or Seller
upon written notice to the other if: (i) any of the representations or
warranties of the other party, as the case may be, contained herein or in any
Schedule attached hereto shall prove to be inaccurate or untrue in any material
respect; (ii) any obligation, term or condition to be performed, kept or
observed by such other party, as the case may be, hereunder has not been
performed, kept or observed in any material respect at or prior to the time
specified in this Agreement or (iii) the Closing shall not have occurred by
March 31, 1995.
Section 8.2. Termination by Buyer. This Agreement may be
terminated and cancelled by Buyer without penalty, damages, payments or
liabilities whatsoever to either party at any time prior to the Closing in the
event of a material adverse loss or damage to the Property in excess of
$500,000, it being understood by the parties that none of the risk of any such
loss or damage prior to the Closing shall be borne by Buyer. In the event of a
loss or damage to the Property prior to the Closing and the Closing shall have
occurred, Buyer shall be entitled to reserve any insurance proceeds received by
Seller in respect of such loss or damage.
ARTICLE IX. MISCELLANEOUS PROVISIONS
Section 9.1. Notices. All notices and other communications
required or permitted under this Agreement shall be deemed to have been duly
given and made if in writing and if served either by personal delivery to the
party for whom intended (which shall include delivery by Federal Express or
similar service) or three business days after being deposited, postage prepaid,
certified or registered mail, return receipt requested, in the United States
mail bearing the address shown in this Agreement for, or such other address as
may be designated in writing hereafter by, such party:
If to Seller: Sirco International Corp.
24 Richmond Hill Avenue
Stamford, Connecticut 06901
Attention: Mr. Joel Dupre
with a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attention: Eric M. Hellige, Esq.
If to Buyer: Bueno of California, Inc.
16000 Heron Avenue
La Mirada, California 90638
Attention: Mr. Takeshi Yamaguchi
with a copy to: Olshan Grundman Frome & Rosenzweig
505 Park Avenue
New York, New York 10022
Attention: Victor M. Rosenzweig, Esq.
Section 9.2. Entire Agreement. This Agreement, the exhibits
and schedules hereto and the documents referred to herein embody the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof, and supersede all prior and contemporaneous agreements and
understandings, oral or written, relative to said subject matter.
Section 9.3. Binding Effect; Assignment. This Agreement and
the various rights and obligations arising hereunder shall inure to the benefit
of and be binding upon Seller, its successors and permitted assigns and Buyer,
its successors and permitted assigns. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be transferred or assigned (by
operation of law or otherwise) by any of the parties hereto without the prior
written consent of the other party or parties except that Buyer shall have the
right to assign its rights but not its obligations hereunder to an affiliate of
Buyer. Any transfer or assignment of any of the rights, interests or obligations
hereunder in violation of the terms hereof shall be void and of no force or
effect.
Section 9.4. Captions. The Article and Section headings of
this Agreement are inserted for convenience only and shall not constitute a part
of this Agreement in construing or interpreting any provision hereof.
Section 9.5. Expenses of Transaction. Except as provided
herein, Seller shall pay all costs and expenses incurred by it in connection
with this Agreement and the transactions contemplated hereby, and will make all
necessary arrangements so that the Property will not be charged with or
diminished by any such cost or expense; provided, however, that Buyer shall pay
all fees and expenses of Olshan Grundman Frome & Rosenzweig in excess of
$20,000. Buyer shall pay all costs and expenses incurred by it in connection
with this Agreement and the transactions contemplated hereby. The liability for
sales, real estate transfer and/or documentary taxes (but not income or similar
type taxes) in connection with the sale and delivery of the Property shall be
borne equally by each of Buyer and Seller.
Section 9.6. Waiver; Consent. This Agreement may not be
changed, amended, terminated, augmented, rescinded or discharged (other than by
performance), in whole or in part, except by a writing executed by the parties
hereto, and no waiver of any of the provisions or conditions of this Agreement
or any of the rights of a party hereto shall be effective or binding unless such
waiver shall be in writing and signed by the party claimed to have given or
consented thereto. Except to the extent that a party hereto may have otherwise
agreed to in writing, no waiver by that party of any condition of this Agreement
or breach by the other party of any of its obligations or representations
hereunder or thereunder shall be deemed to be a waiver of any other condition or
subsequent or prior breach of the same or any other obligation or representation
by the other party, nor shall any forbearance by the first party to seek a
remedy for any noncompliance or breach by the other party be deemed to be a
waiver by the first party of its rights and remedies with respect to such
noncompliance or breach.
Section 9.7. No Third Party Beneficiaries. Subject to Section
9.3 hereof, nothing herein, expressed or implied, is intended or shall be
construed to confer upon or give to any person, firm, corporation or legal
entity, other than the parties hereto, any rights, remedies or other benefits
under or by reason of this Agreement.
Section 9.8. Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
Section 9.9. Gender. Whenever the context requires, words used
in the singular shall be construed to mean or include the plural and vice versa,
and pronouns of any gender shall be deemed to include and designate the
masculine, feminine or neuter gender.
Section 9.10. Remedies of Buyer. The Property is unique and
not readily available. Accordingly, Seller acknowledges that, in addition to all
other remedies to which Buyer is entitled, Buyer shall have the right, subject
to the provisions of Section 8.1 hereof, to enforce the terms of this Agreement
by a decree of specific performance provided Buyer is not in material default
hereunder.
Section 9.11. Governing Law. This Agreement shall in all
respects be construed in accordance with and governed by the laws of the State
of New York, with regard to the principles of conflicts of law thereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
WITNESSES:
BUYER:
_________________________ BUENO OF CALIFORNIA, INC.
By:________________________________________
Name:
Title:
_________________________ SELLER:
SIRCO INTERNATIONAL CORP.
By:________________________________________
Name:
Title:
<PAGE>
EXHIBIT C
Sirco International Corp. and Subsidaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
November 30
1994 1993
----------- ----------
<S> <C> <C>
Assets
Current Assets:
Cash an cash equivilents .............................. $ 955,869 $ 702,916
Accounts receiveable, trade - net of allowance of
$322,000 in 1994 and $242,000 in 1993 and including
$1,737,000 and 1,992,000, net of advances, due from
factor in 1994 and 1993, respecively ................ 1,826,400 2,890,920
Inventories .......................................... 5,213,120 4,967,742
Prepaid Expensees .................................... 326,909 309,347
Other current assets (including approximately
$220,000 due from related parties in 1993) ........... 344,020 1,209,940
----------- -----------
Total Current Assets .................................. 8,666,318 10,080,865
Property, plant and equiptment - at cost:
Land ................................................. 206,383 212,718
Building ............................................. 493,347 508,488
Machinery and equiptment ............................. 824,835 745,609
Automobiles and trucks ............................... 10,871 6,040
Leasehold improvements ............................... 326,120 304,765
----------- -----------
1,861,556 1,777,620
Less accumulated depreciation and amortization ....... 1,088,524 945,150
----------- -----------
773,032 832,470
Other Assets .......................................... 211,592 91,539
Investment in and advances to subsidary ............... 600,793 924,345
----------- -----------
Total Assets .......................................... $10,251,735 $11,929,219
=========== ===========
<PAGE>
<CAPTION>
November 30
1994 1993
----------- ----------
<S> <C> <C>
Liabilitles and Stockholders' Equity
Current liabilities:
Loans payable to financial institutions .............. $ 2,067,764 $ 1,353,444
Short-term loan payable to related party ............. 1,743,235 1,538,260
Current maturites of long-term debt .................. 448,401 96,905
Accounts payable (including approximately
($37,000 due to a related party in 1993) ............ 1,981,945 1,445,188
Accrued expenses (including approximately
$50,000 due to a related party) ..................... 1,062,692 1,615,986
----------- -----------
Total Current Liabilites .............................. 7,304,037 6,049,783
Long-Term debt, less current maturities ............... 49,651 505,916
Commitments and contingencies
Shareholders' equity:
Common stock, $.10 par value; 3,000,000
shares authorized, 1,215,200 shares issued .......... 121,520 121,520
Capital in excess of par value ....................... 4,027,534 4,027,534
Retained earnings (deficit) .......................... (645,104) 1,789,921
Treasury stock at cost ............................... (27,500) --
Accumulated foreign currency translation
adjustment .......................................... (578,403) (565,455)
----------- -----------
Total stockholders equity ............................. 2,898,047 5,373,520
----------- -----------
Total liabilities and stockholders' equity ............ $10,251,735 $11,929,219
=========== ===========
See accompanying notes
</TABLE>
<PAGE>
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
SIRCO INTERNATIONAL CORP.
AND BUENO OF CALIFORNIA, INC.
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.1(a) Personal Property
Schedule 1.1(b) Inventory
Schedule 1.1(c) Proprietary Rights
Schedule 1.1(d) Contracts
Schedule 1.1(e) Miscellaneous Assets
Schedule 3.1(b) Indebtedness Following Closing
Schedule 4.2(a) Jurisdictions in Which Seller is Qualified to Do
Business
Schedule 4.2(b) Necessary Consents
Schedule 5.2 Payments to Bank
Schedule 5.8 Employees
EXHIBITS
A Allocation Certificate
B General Conveyance, Assignment and Bill of Sale
C Assumption Agreement
D Letter of Credit Agreement
E Fairness Opinion
F Sublease
G Sharing Agreement
H Exclusive Purchasing Agreement
I Guaranty
J Pledge Agreement
K-1 Non-Competition Agreement with Yashiro Co., Inc.
K-2 Non-Competition Agreement with Yashiro Company, Ltd.
K-3 Non-Competition Agreement with Yutaka Yamaguchi
K-4 Non-Competition Agreement with Takeshi Yamaguchi
L Severance Agreement
M License Agreement
N Trademarks Assignment
O Non-Competition Agreement between Sirco and Bueno of
California, Inc.
<PAGE>
EXHIBIT D
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of March 20, 1995, made by each of
JOEL DUPRE ("Dupre"), Pacific Million Enterprise Ltd., Cheng-San Wang and Albert
H. Cheng (collectively, the "Pledgors") in favor of BUENO OF CALIFORNIA, INC., a
Delaware corporation ("Bueno"), and YASHIRO CO., INC., a Japanese corporation
("Yashiro Co."), on its own behalf and as agent for YASHIRO COMPANY, LTD., a
Japanese corporation ("Yashiro Limited," together with Yashiro Co., the "Yashiro
Entities"). Bueno and Yashiro Co., as agent, are together hereinafter referred
to as the "Pledgees".
WITNESSETH:
WHEREAS, the Pledgors are parties to that certain Stock
Purchase Agreement, dated as of March 20, 1995, by and among the Yashiro
Entities and the Pledgors and Yashiro Co., as Agent (the "Stock Purchase
Agreement"), pursuant to which the Pledgors shall purchase from the Yashiro
Entities an aggregate of 681,000 shares (the "Pledged Shares") of common stock,
par value $.10 per share (the "Common Stock"), of Sirco International Corp., a
New York corporation (the "Corporation"), in partial consideration of which
Dupre shall execute and deliver to Yashiro Co., as agent for the Yashiro
Entities, a promissory note in the principal amount of $532,250 (the "Note");
and
WHEREAS, Bueno is party to that certain Asset Purchase
Agreement, dated March 20, 1995, by and between Bueno and the Corporation,
pursuant to which Bueno shall purchase the Corporation's Handbag Division; and
WHEREAS, as a condition precedent to (i) the Yashiro Entities
entering into the Stock Purchase Agreement and (ii) Bueno entering into the
Asset Purchase Agreement, the Pledgors shall have made the pledge contemplated
by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Yashiro Entities to enter into the Stock Purchase Agreement and
Bueno to enter into the Asset Purchase Agreement, the Pledgors hereby agree as
follows:
SECTION 1. Pledge. The Pledgors hereby pledge to the Pledgees,
and grant to the Pledgees a security interest in, the following (the "Pledged
Collateral"):
(a) the Pledged Shares and the certificates representing the
Pledged Shares, and all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares; and
(b) all proceeds of any and all of the Pledged Collateral
(including, without limitation, proceeds that constitute property of
the types described above).
SECTION 2. Security for Obligations. This Agreement secures
the payment of all of the
following obligations:
(a) All obligations of Dupre now or hereafter existing under
the Note, whether for principal, interest, fees, expenses or otherwise;
(b) All obligations of the Pledgors now or hereafter existing
under the Stock Purchase Agreement or any agreement that is an exhibit
thereto;
(c) All obligations of the Corporation now or hereafter
existing under the Asset Purchase Agreement including, without
limitation, the obligations and covenants of the Corporation pursuant
to each of Sections 5.1 and 5.2 thereof;
(d) All obligations of the Corporation now or hereafter
existing under any agreement that is an exhibit to the Asset Purchase
Agreement; and
(e) All obligations of the Pledgors now or hereafter existing
under this Agreement.
All obligations set forth in subsections (a) through (e), inclusive, of this
Section 2 shall hereinafter be collectively referred to as the "Obligations."
The Stock Purchase Agreement, the Asset Purchase Agreement and any agreement
that is an exhibit to either of the foregoing agreements shall hereinafter be
collectively referred to as the "Operative Agreements." Without limiting the
generality of the foregoing, this Agreement secures the payment of all amounts
and the fulfillment of all obligations which constitute part of the Obligations
and would be owed or required to be performed by (i) Dupre to the Yashiro
Entities under the Note or (ii) by the Pledgors or the Corporation, as the case
may be, under the Operative Agreements but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving any of the Pledgors or the
Corporation; provided, however, that this Agreement shall nevertheless remain
enforceable notwithstanding any such proceeding.
SECTION 3. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of the Pledgees pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Pledgees. The Pledgees shall have the right, at any time in
their discretion and without notice to the Pledgors, to transfer to or to
register in the name of the Pledgees or any of their nominees any or all of the
Pledged Collateral, subject only to the revocable rights specified in Section
6(a) hereof. In addition, the Pledgees shall have the right at any time to
exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger denominations.
SECTION 4. Representations and Warranties. The Pledgors
represent and warrant to each of the Pledgees as follows:
(a) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(b) The Pledgors are the legal and beneficial owner of the
Pledged Collateral free and clear of any lien, security interest, option or
other charge or encumbrance except for the security interest created by this
Agreement.
(c) The pledge of the Pledged Shares pursuant to this
Agreement creates a valid and perfected first priority security interest in the
Pledged Collateral, securing the payment of the Obligations.
(d) No consent of any other person or entity and no
authorization, approval, or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required (i) for the pledge by
the Pledgors of the Pledged Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by the Pledgors, (ii) for
the perfection or maintenance of the security interest created hereby (including
the first priority nature of such security interest) or (iii) for the exercise
by the Pledgees of the voting or other rights provided for in this Agreement or
the remedies in respect of the Pledged Collateral pursuant to this Agreement
(except as may be required in connection with any disposition of any portion of
the Pledged Collateral by laws affecting the offering and sale of securities
generally).
(e) There are no conditions precedent to the effectiveness of
this Agreement that have not been satisfied or waived.
SECTION 5. Further Assurances. The Pledgors agree that any
time and from time to time, at their own expense, the Pledgors will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Pledgees may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Pledgees to exercise and enforce
their rights and remedies hereunder with respect to any Pledged Collateral.
SECTION 6. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing;
(i) The Pledgors shall be entitled to exercise or refrain from
exercising any and all voting and other consensual rights pertaining to
the Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement; provided, however, that
the Pledgors shall not exercise or refrain from exercising any such
right if, in the Pledgees' sole judgment, such action would have a
material adverse effect on the value of the Pledged Collateral or any
part thereof.
(ii) The Pledgors shall be entitled to receive and retain any
and all dividends paid in respect of the Pledged Collateral; provided,
however, that any and all
(A) dividends paid or payable other than in cash in
respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in
exchange for, Pledged Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Pledged Collateral in
connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus
or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange
for, any Pledged Collateral, shall be, and shall be forthwith
delivered to the Pledgees to hold as, Pledged Collateral and
shall, if received by the Pledgors, be received in trust for
the benefit of the Pledgees, be segregated from the other
property or funds of the Pledgors, and be forthwith delivered
to the Pledgees as Pledged Collateral in the same form as so
received (with any necessary indorsement or assignment).
(iii) The Pledgees shall execute and deliver (or cause to be
executed and delivered) to the Pledgors all such proxies and other
instruments as the Pledgors may reasonably request for the purpose of
enabling the Pledgors to exercise the voting and other rights which
they are entitled to exercise pursuant to paragraph (i) of this Section
6(a) and to receive the dividends which they are authorized to receive
and retain pursuant to paragraph (ii) of this Section 6(a).
(b) Upon the occurrence and during the continuance of an Event
of Default:
(i) All rights of the Pledgors to exercise or refrain
from exercising the voting and other consensual rights which
they would otherwise be entitled to exercise pursuant to
Section 6(a)(i) and to receive the dividends which they would
otherwise be authorized to receive and retain pursuant to
Section 6(a)(ii) shall cease, and all such rights shall
thereupon become vested in the Pledgees who shall thereupon
have the sole right to exercise or refrain from exercising
such voting and other consensual rights and to receive and
hold as Pledged Collateral such dividends.
(ii) All dividends which are received by the Pledgors
contrary to the provisions of paragraph (i) of this Section
6(b) shall be received in trust for the benefit of the
Pledgees, shall be segregated from other funds of the Pledgors
and shall be forthwith paid over to the Pledgees as Pledged
collateral in the same form as so received (with any necessary
indorsement).
(c) As used in this Agreement, "Event of Default" shall mean
any of the following:
(i) the failure by Dupre to pay any principal of,
interest accrued on, or any other payment required under, the
Note when the same becomes due and payable after giving effect
to any applicable grace periods; or
(ii) the failure by the Pledgors to fulfill any of
their obligations under the Stock Purchase Agreement or any
agreement that is an exhibit thereto within ten (10) days
after written notice by Pledgee of such failure; or
(iii) the failure by the Corporation to fulfill any
of its obligations under the Asset Purchase Agreement
including, without limitation, its obligations pursuant to
each of Sections 5.1 or 5.2 thereof within ten (10) days after
written notice by Pledgee of such failure; or
(iv) the failure by the Corporation to fulfill any of
its obligations under any agreement that is an exhibit to the
Asset Purchase Agreement within ten (10) days after written
notice by Pledgee of such failure.
SECTION 7. Transfers and Other Liens. The Pledgors agree that:
(a) They will not (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect
to, any of the Pledged Collateral, or (ii) create or permit to exist
any lien, security interest, option or other charge or encumbrance upon
or with respect to any of the Pledged Collateral, except for (i) the
security interest under this Agreement and (ii) the granting of an
option or proxy with respect to, or sale of, the Pledged Collateral to
Dupre. Notwithstanding the preceding sentence, any transfer of the
Pledged Collateral to Dupre from any other Pledgor pursuant to an
option granted to Dupre shall be subject to such documentation as
Pledgees may reasonably request to assure compliance with applicable
securities laws and to confirm their continuing security interest in
the Pledged Collateral to be so transferred, all in accordance with
Section 5 hereof.
(b) Notwithstanding anything contained herein to the contrary,
during the term of this Agreement, Dupre may sell a maximum of 70,000
shares of Common Stock. In connection with any such sale, upon 10 days
written notice to Yashiro, Pledgees will cooperate with Dupre in making
available in The City of New York certificates representing any Pledged
Shares to be sold by Dupre so that, among other things, upon
consummation of any sale following such 10 day notice period, Dupre can
make available to his purchaser certificates for the Pledged Shares
being sold within the time period and in the manner required by
applicable law.
SECTION 8. Pledgees Appointed Attorney-in-Fact. The Pledgors
hereby appoint each of Yashiro Co. and Bueno, the Pledgors' attorney-in-fact,
each with full authority in the place and stead of the Pledgors and in the name
of the Pledgors or otherwise, from time to time in their discretion to take any
action and to execute any instrument which the Pledgees may deem necessary or
advisable to accomplish the purposes of this Agreement (subject to the rights of
the Pledgors under Section 6) including, without limitation, to receive, indorse
and collect all instruments made payable to the Pledgors representing any
dividend or any part thereof and to give full discharge for the same.
SECTION 9. Pledgees May Perform. If the Pledgors fail to
perform any agreement contained herein, the Pledgees may themselves perform, or
cause performance of, such agreement, and the expenses of the Pledgees incurred
in connection therewith shall be payable by the Pledgors under Section 12
hereof.
SECTION 10. The Pledgees' Duties. The powers conferred on the
Pledgees hereunder are solely to protect their interest in the Pledged
Collateral and shall not impose any duty upon them to exercise any such powers.
Except for the safe custody of any Pledged Collateral in their possession and
the accounting for moneys actually received by them hereunder, the Pledgees
shall have no duty as to any Pledged Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Collateral, whether or not the Pledgees
have or are deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Pledged Collateral. The Pledgees shall be deemed to have
exercised reasonable care in the custody and preservation of any Pledged
Collateral in their possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Pledgees accord their own property.
SECTION 11. Remedies upon Default. If any Event of Default
shall have occurred and be continuing:
(a) The Pledgees may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to them, all the rights and remedies of a
secured party on default under the Uniform Commercial Code in effect in
the State of New York at the time (the "Code") (whether or not the Code
applies to the Pledged Collateral), and may also, without notice except
as specified below, sell the Pledged Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange,
broker's board or at any of the Pledgees' offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as
the Pledgees may deem commercially reasonable. The Pledgors agree that,
to the extent notice of sale shall be required by law, at least ten
(10) days' notice to the Pledgors of the time and place of any public
sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Pledgees shall not be obligated
to make any sale of Pledged Collateral regardless of notice of sale
having been given. The Pledgees may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
(b) Any cash held by the Pledgees as Pledged Collateral and
all cash proceeds received by the Pledgees in respect of any sale of,
collection from, or other realization upon all or any part of the
Pledged Collateral may, in the discretion of the Pledgees, be held
thereby as collateral for, and/or then or at any time thereafter be
applied (after payment of any amounts payable to the Pledgees for any
reasonable expenses incurred thereby pursuant to Section 12) in whole
or in part by the Pledgees against, all or any part of the Obligations
in such order as the Pledgees shall elect. Any surplus of such cash or
cash proceeds held by the Pledgees and remaining after payment in full
of all the Obligations shall be paid over to the Pledgors or to
whomsoever may be lawfully entitled to receive such surplus.
(c) Notwithstanding anything set forth in this Agreement to
the contrary, if the Corporation breaches either of its covenants set
forth in Section 5.1 or 5.2 of the Asset Purchase Agreement, the
Pledgees may, in accordance with Section 11(a) hereof, sell only that
part of the Pledged Collateral determined solely by the Pledgees in
good faith to be necessary as a result of claims made or about to made
to (i) satisfy the covenant or covenants so breached by the Corporation
and (ii) reimburse the Pledgees for any reasonable expenses incurred in
connection therewith in accordance with Section 12 hereof.
SECTION 12. Expenses. The Pledgors will upon demand pay to the
Pledgees the amount of any and all reasonable expenses including, without
limitation, the reasonable fees and expenses of their counsel and of any experts
and agents, which the Pledgees may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Pledged
Collateral, (iii) the exercise or enforcement of any of the rights of the
Pledgees hereunder or (iv) the failure by the Pledgors to perform or observe any
of the provisions hereof.
SECTION 13. Security Interest Absolute. The obligations of the
Pledgors under this Agreement are independent of the Obligations and a separate
action or actions may be brought and prosecuted against the Pledgors to enforce
this Agreement. All rights of the Pledgees and security interests hereunder, and
all obligations of the Pledgors hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Note or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Note
including, without limitation, any increase in the Obligations
resulting from the extension of additional credit to Dupre or any of
his affiliates or otherwise;
(c) any taking, exchange, release or non-perfection of any
other collateral, or any taking, release or amendment or waiver of or
consent to departure from any guaranty, for all or any of the
Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Obligations
or any other assets of the Corporation or any of its subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Corporation or any of its subsidiaries;
or
(f) any assignment for the benefit of creditors or filing by
the Corporation or any of the Pledgors of a voluntary petition under
the U.S. Bankruptcy Code, as amended, or any other federal or state
insolvency law; or
(g) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, the Pledgors.
SECTION 14. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the Pledgors
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Pledgees, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION 15. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier
communication) and mailed, telecopied or delivered to them, if to the Pledgors,
c/o Dupre at the Corporation's address at 24 Richmond Hill Avenue, Stamford,
Connecticut 06901, and if to the Pledgees, c/o Yashiro Co. at its address at
1-18-5 Tatsumi-Naka, Ikuno-Ku, Osaka 544, Japan, Attention: Takeshi Yamaguchi,
or, as to any party, at such other address as shall be designated by such party
in a written notice to the other party. All such notices and other
communications shall, when mailed or telecopied, be effective when deposited in
the mails or telecopied, respectively.
SECTION 16. Continuing Security Interest; Assignments under
the Note or any Operative Agreement. This Agreement shall create a continuing
security interest in the Pledged Collateral and shall (i) remain in full force
and effect until the payment in full of the Obligations and all other amounts
payable under this Agreement, (ii) be binding upon the Pledgors, their
successors and assigns, and (iii) inure to the benefit of, and be enforceable
by, the Pledgees and their successors, transferees and assigns. Without limiting
the generality of the foregoing clause (iii), the Pledgees may assign or
otherwise transfer all or any portion of their rights and obligations under the
Note or any Operative Agreement to any other person or entity, and such other
person or entity shall thereupon become vested with all the benefits in respect
thereof granted to the Pledgees herein or otherwise. Upon the later of the
payment in full or the complete performance of the Obligations and all other
amounts payable under this Agreement, the security interest granted hereby shall
terminate and all rights to the Pledged Collateral shall revert to the Pledgors.
Upon any such termination, the Pledgees will, at the Pledgors' expense, return
to the Pledgors such of the Pledged Collateral as shall not have been sold or
otherwise applied pursuant to the terms hereof and execute and deliver to the
Pledgors such documents as the Pledgors shall reasonably request to evidence
such termination.
SECTION 17. Governing Law; Terms. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, except as required by mandatory provisions of law and except to the extent
that the validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Pledged Collateral are governed by the
laws of a jurisdiction other than the State of New York. Unless otherwise
defined herein, terms defined in Article 9 of the Code are used herein as
therein defined.
<PAGE>
IN WITNESS WHEREOF, the Pledgors have executed and delivered
this Agreement as of the date first above written.
PLEDGORS:
_____________________________________________
JOEL DUPRE
PACIFIC MILLION ENTERPRISE LTD.
By: _________________________________________
Name: Joe Takada
Title:
_____________________________________________
CHENG-SEN WANG
_____________________________________________
ALBERT H. CHENG
<PAGE>
SCHEDULE I
Attached to and forming a part of that certain Pledge
Agreement dated March 20, 1995, by and among
Dupre and other pledgors, as Pledgors,
to Bueno and Yashiro Co., as agent, as Pledgees
PART I
Stock Certificate No(s). Number of Shares Name of Stockholder
- ------------------------- ----------------- -------------------
NB 5878 133,333 Pacific Million
Enterprise Ltd.
NB 5877 414,334 Joel Dupre
NB 5880 44,444 Albert H. Cheng
<PAGE>
Exhibit 2(b)
<PAGE>
ASSET PURCHASE AGREEMENT
This AGREEMENT, dated March 20, 1995, is by and between SIRCO
INTERNATIONAL CORP., a New York corporation ("Seller"), and BUENO OF CALIFORNIA,
INC., a Delaware corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller is in the business, among other things, of
selling handbags and tote bags through its Handbag Division (the "Division");
and
WHEREAS, Buyer desires to purchase, and Seller desires to
sell, substantially all of the operating assets of the Division on the terms and
subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual promises herein contained, Buyer and Seller hereby agree as follows:
ARTICLE I. ASSETS TO BE PURCHASED
Section 1.1. Description of Assets. Upon the terms and subject
to the conditions set forth in this Agreement, at the Closing (as hereinafter
defined), Seller shall convey, sell, transfer, assign and deliver to Buyer, and
Buyer shall purchase from Seller, all right, title and interest of Seller in and
to, the operating assets, properties, rights (contractual or otherwise) and
business of Seller which are used currently in connection with the business and
operations of the Division (the "Business") and are set forth below:
(a) All machinery, equipment, tooling, parts, furniture,
supplies, and other tangible personal property used currently in
conducting the Business listed on Schedule 1.1(a)(2)(1) (the "Personal
Property") and;
(b) All finished goods inventory and other inventory of the
Division on hand at Closing (including samples located in showrooms and
Seller's offices), as set forth on Schedule 1.1(b), or returned to
Seller or Buyer by customers of the Division after the Closing (the
"Inventory");
(c) All proprietary rights, proprietary knowledge, know-how,
trademarks, names, service marks, trade names, symbols, logos,
franchises and permits used in conducting the Business and all
applications therefor, registrations thereof and licenses, sublicenses
or agreements in respect thereof, which Seller owns or has the right to
use or to which Seller is a party and all filings, registrations or
issuances of any of the foregoing with or by any federal, state, local
or foreign regulatory, administrative or governmental office, in each
case listed on Schedule 1.1(c) (collectively, the "Proprietary
Rights");
(d) All contracts, agreements, contract rights, license
agreements, franchise rights and agreements, purchase and sales orders,
quotations and executory commitments, instruments, third party
guaranties, indemnifications, arrangements, and understandings, whether
oral or written, to which Seller is a party (whether or not legally
bound thereby) and used currently in conducting the Business and listed
on Schedule 1.1(d) (the "Contracts");
(e) All deposits, prepaid expenses and other miscellaneous
assets of the Division listed on Schedule 1.1(e);
- --------
1 Each reference in this Agreement to an Exhibit or Schedule shall mean an
Exhibit or Schedule attached to this Agreement and incorporated into this
Agreement by such reference.
<PAGE>
(f) All books of account, customer lists, files, papers and
records used currently in conducting the Business; and
(g) All goodwill relating to the Division.
Notwithstanding the foregoing, there shall be excluded from
the assets, properties, rights, (contractual and otherwise) and business of
Seller to be conveyed, sold, transferred, assigned and delivered to Buyer under
this Agreement (i) cash and cash equivalents and investment securities, (ii) all
accounts receivable relating to or arising out of the operation of the Division
prior to the Closing, (iii) notes receivable from Seller and third parties to
the Division, (iv) tax refunds paid to Seller, whether or not such tax refunds
relate to the Division, (v) all corporate minute books, stock records, tax
returns and supporting schedules, books of original financial entry, and
internal accounting documents and records relating to the Division (all of which
shall be subject to Buyer's right to inspect and copy at Buyer's expense for any
reasonable purpose during normal business hours) and (vi) all causes of action,
judgments, claims or demands of whatever kind or description relating to the
Division which Seller has or may have against any other person or entity. All of
the assets, properties, rights (contractual and otherwise) and business to be
conveyed, sold, transferred, assigned and delivered to Buyer pursuant to this
Section 1.1 are hereinafter collectively referred to as the "Property."
Section 1.2. Non-Assignment of Certain Property. To the extent
that the assignment hereunder of any of the Contracts shall require the consent
of any other party (or in the event that any of the same shall be
non-assignable), neither this Agreement nor any action taken pursuant to its
provisions shall constitute an assignment or an agreement to assign if such
assignment or attempted assignment would constitute a breach thereof or result
in the loss or diminution thereof; provided, however, that in each such case,
Seller shall use its reasonable efforts to obtain the consents of such other
party to an assignment to Buyer. If such consent is not obtained, Seller shall
cooperate with Buyer in any reasonable arrangement designed to provide for Buyer
the benefits of any such Contract including, without limitation, en-forcement,
for the account and benefit of Buyer, of any and all rights of Seller against
any other person with respect to any such Contract; provided, however, that all
expenses related thereto shall be borne by Seller.
Section 1.3. Preservation of Books and Records. For a period
of five years following the Closing, each of Seller and Buyer will preserve and
maintain all books and records of the Business in their possession. If either
Seller or Buyer desires to dispose of any such books and records at the end of
such five-year period or before the expiration of such five-year period, the
party so desiring will first give notice thereof to the other party and will, at
such party's option and expense, appropriately package and deliver such books
and records to such party at such location as such party shall designate.
ARTICLE II. ASSUMPTION OF OBLIGATIONS
Section 2.1. Assumption of Certain Liabilities. At the
Closing, Seller shall assign and delegate to Buyer, and Buyer shall assume and
undertake to pay, discharge and perform in full when due, the liabilities and
obligations (i) arising under the Contracts, to the extent such liabilities and
obligations are required to be performed after the Closing, (ii) related to
severance, pension or welfare benefits including, without limitation, accrued
payroll, accrued sick days and accrued vacation days, for Employees (as
hereinafter defined) to which Buyer shall extend employment in accordance with
Section 5.8 hereof, (iii) related to goods purchased by the Division prior to
the Closing but not yet delivered to the warehouse and (iv) related to Inventory
returned to Seller after the Closing by customers of the Division. The
liabilities of Seller being assumed by Buyer are hereinafter referred to as the
"Assumed Liabilities."
Section 2.2. Liabilities Not Assumed. With the exception of
the Assumed Liabilities, Buyer shall not by execution and performance of this
Agreement, or otherwise, assume or otherwise be responsible for any liability or
obligation of any nature of Seller, whether relating to the Division or any of
Seller's other assets, operations, businesses or activities, or claims of such
liability or obligation, matured or unmatured, liquidated or unliquidated, fixed
or contingent, or known or unknown, whether arising out of occurrences prior to,
at or after the date hereof including, without limitation, any liability (i) as
of the Closing for wages, salaries, severance, pension or welfare benefits
including, without limitation, accrued sick days and accrued vacation days, for
employees or former employees of the Division (other than the Employees to which
Buyer shall extend employment in accordance with Section 5.8 hereof), (ii) as of
the Closing for employee medical benefits based upon claims arising prior to the
Closing, whether or not notice of such claim is received prior to or after
Closing, (iii) for retroactive premium adjustments for workers' compensation,
(iv) for commissions and other fees earned prior to the Closing by agents,
salesmen and other employees or former employees of the Division, (v) under any
workers' compensation claims based upon claims arising prior to the Closing,
whether or not notice of such claim is received prior to or after the Closing
and (vi) claims of any nature or kind relating to or arising out of goods
shipped prior to the Closing.
ARTICLE III. PURCHASE PRICE
Section 3.1. Consideration. (a) Upon the terms and subject to
the conditions set forth in this Agreement, in consideration for the Property,
at the Closing Buyer shall (i) assume the Assumed Liabilities as provided in
Section 2.1 hereof and (ii) pay to Seller the sum of (x) Fifty Thousand Dollars
($50,000), (y) an amount equal to the Book Value (as hereinafter defined) of the
Personal Property, as jointly determined by Seller and Buyer prior to the
Closing, and (z) an amount equal to the product of (A) the Book Value of the
Inventory (other than Inventory samples located in showrooms and Seller's
offices) on hand as of the Closing (the "Inventory Valuation"), as jointly
estimated by Seller and Buyer (the "Preliminary Closing Inventory Valuation")
pursuant to Section 3.2, multiplied by (B) 90%. As of the date hereof, the Book
Value of the Personal Property and the Inventory is $35,234 and $1,889,368.39,
respectively. For purposes of determining each of (i) the purchase price for the
Personal Property, (ii) the Preliminary Closing Inventory Valuation and (iii)
the Final Inventory Valuation (as hereinafter defined), "Book Value" shall mean
the book value of the Personal Property or the Inventory, as the case may be,
being purchased by Buyer pursuant to Sections 1.1(a) and 1.1(b) hereof as
determined by the parties hereto; provided, however, that in no event shall any
Inventory or Personal Property, as the case may be, be valued at an amount less
than the value carried therefor on the Seller's audited balance sheet at
November 30, 1994 (the "Balance Sheet") and, provided, further, all Inventory
and Personal Property shall be valued in a manner consistent with that utilized
for the purposes of the Balance Sheet.
(b) The payments of the purchase price relating to the
Inventory transferred on the Closing Date shall be made at Closing through
reduction in the amount of $1,699,497.73 of Seller's outstanding aggregate
indebtedness to Yashiro Company, Ltd. and Yashiro Co., Inc. ("Yashiro"), each of
which are Japanese corporations and affiliates of the Buyer (together, the
"Yashiro Entities"), which aggregate indebtedness as of the date hereof is
$2,238,506.01. To the extent the purchase price for the Inventory transferred at
Closing exceeds $1,699,497.73, Buyer shall pay to Seller in cash, by wire
transfer of immediately available funds in accordance with Seller's
instructions, the amount of such excess. The Payment of the remaining portion of
the purchase price payable at Closing shall be paid by Buyer to Seller in cash,
by wire transfer of immediately available funds in accordance with Seller's
instructions. The aggregate indebtedness of Seller to Yashiro following the
Closing will be $897,827.58, as summarized on Schedule 3.1(b) hereof.
Section 3.2. Adjustment of Inventory Valuation.
(a) Immediately after the date of the Closing (the "Closing
Date"), Seller and Buyer shall cause the joint audit of the Preliminary Closing
Inventory Valuation. The Preliminary Closing Inventory Valuation shall be the
Book Value set forth for the Inventory on the Seller's accounting records and
provided by Seller to Buyer within two days prior to the Closing Date. During
the ten-day period following the Closing Date, Buyer and its accountants shall
consult with Seller and its accountants regarding the Preliminary Closing
Inventory Valuation.
If within 15 days after the Closing Date, Buyer notifies
Seller in writing that modifications are required to be made in order for the
Preliminary Closing Inventory Valuation to present fairly the Inventory
Valuation in accordance with this Agreement, the Preliminary Closing Inventory
Valuation shall be so modified or, if within ten days after receipt of notice
from Buyer that modifications should be made, Seller notifies Buyer in writing
of Seller's disagreement with respect to any of the modifications, the
modifications subject to such disagreement shall be determined by Ernst & Young
("E&Y"), Seller's independent public accountants, in accordance with the terms
of this Agreement to arrive at a final inventory valuation (the "Final Inventory
Valuation"), on the basis of such procedures as E&Y, in its sole judgment, deems
applicable and appropriate, taking into account the nature of the issues, the
amount(s) in dispute and the respective positions asserted by the parties. If
Buyer and Seller agree upon a modification or if Buyer does not notify Seller
that modifications to the Preliminary Closing Inventory Valuation are required
within such 15 day period, the Preliminary Closing Inventory Valuation as
jointly modified, or as originally estimated, as the case may be, shall be
deemed to be the Final Inventory Valuation. In the event Seller objects to any
of the modifications requested by Buyer, E&Y shall review the disputed matters
and as promptly as practicable deliver to Seller and Buyer the Final Inventory
Valuation, setting forth its determination as to the proper treatment of the
modifications as to which there was disagreement, and such Final Inventory
Valuation shall be final and binding upon the parties hereto without any further
right of appeal. All charges of E&Y incurred in determining the Final Inventory
Valuation shall be borne equally by Buyer and Seller.
(b) If the Final Inventory Valuation exceeds the Preliminary
Closing Inventory Valuation paid at Closing, the purchase price paid by Buyer in
accordance with Section 3.1 hereof shall be increased by an amount equal to the
amount of such excess (such amount a "Purchase Price Increase"). If the Final
Inventory Valuation is less than the Preliminary Closing Inventory Valuation
paid at Closing, the purchase price paid by Buyer in accordance with Section 3.1
hereof shall be decreased by an amount equal to the amount of such shortfall
(such amount a "Purchase Price Decrease").
(c) If there is a Purchase Price Increase, Buyer shall pay to
Seller within three business days of the date of the final determination of the
Purchase Price Increase, the amount of the Purchase Price Increase, together
with simple interest accrued thereon at the rate of 10% per annum (the
"Applicable Rate") from the Closing Date. If there is a Purchase Price Decrease,
Seller shall pay to Buyer within three business days of the date of the final
determination of the Purchase Price Decrease that amount of the Purchase Price
Decrease, together with simple interest accrued thereon at the Applicable Rate
from the Closing Date.
Section 3.3. Returned Goods.
(a) To the extent a customer of the Division returns goods in
saleable condition to Seller following the Closing and Seller subsequently
refunds to such customer the purchase price therefor, the purchase price paid by
Buyer in accordance with Section 3.1 hereof shall be increased by an amount
equal to the sum of (A) the product of (i) the Book Value of such returned goods
multiplied by (ii) 90% (such amount a "Refund Purchase Price Increase") and (B)
an amount equal to any salesman's commissions paid by Seller to any salesman in
connection with the original sale of such returned goods. All of the above is
subject to receipt of reasonable documentation confirming amounts paid by the
Seller.
(b) To the extent a customer of the Division returns damaged
goods to Seller following June 1, 1995 and Seller subsequently refunds to such
customer the purchase price therefor, the purchase price paid by Buyer in
accordance with Section 3.1 hereof shall be increased by an amount equal to the
sum of (A) the Refund Purchase Price Increase and (B) an amount equal to any
salesman's commissions paid by Seller to any salesman in connection with the
original sale of such returned goods. All of the above is subject to receipt of
reasonable documentation confirming amounts paid by the Seller.
(c) To the extent a customer of the Division returns goods to
Buyer following the Closing, the purchase price of which was previously paid to
Seller, and Buyer subsequently refunds to such customer the purchase price
therefor, the purchase price paid by Buyer in accordance with Section 3.1 hereof
shall be decreased by an amount equal to the difference between (x) the purchase
price previously paid to the Seller for such returned goods and (y) the product
of (i) the Book Value of such returned goods multiplied by (ii) 90% (such amount
a "Refund Purchase Price Decrease") and (z) an amount equal to any salesman's
commissions paid by Seller to any salesman in connection with the original sale
of such goods. All of the above is subject to receipt of reasonable
documentation confirming amounts returned to Buyer and paid by Buyer.
(d) If there is a Refund Purchase Price Increase, Buyer shall
pay to Seller, within three business days of the date upon which Seller notifies
Buyer that it has refunded any money to a customer of the Division for goods
returned thereby, by wire transfer of immediately available funds to a bank
account designated by Seller, the amount of such Refund Purchase Price Increase
and Seller shall promptly deliver to Buyer, at Seller's expense, the goods
returned by such customer. If there is a Refund Purchase Price Decrease, Seller
shall pay to Buyer, within three business days of the date upon which Buyer
notifies Seller that it has refunded any money to a customer of the Division for
goods returned thereby, by wire transfer of immediately available funds to a
bank account designated by Buyer, the amount of such Refund Purchase Price
Decrease.
Section 3.4. Chargebacks. In the event that, following the
Closing, a customer of the Division takes a chargeback to an account receivable
of Seller, Buyer shall pay to Seller, within ten business days of the date upon
which Seller notifies Buyer of such chargeback, by wire transfer of immediately
available funds, an amount equal to the aggregate amount of any salesman's
commissions paid by Seller to any salesman in connection with the sale giving
rise to such account receivable.
Section 3.5. Purchase Price Allocation. Seller and Buyer
hereby agree that the aggregate purchase price for the Property shall be
allocated for purposes of this Agreement and for federal, state and local tax
purposes as set forth on an allocation certificate in the form attached hereto
as Exhibit A (the "Allocation Certificate") to be executed by Buyer and Seller
at the Closing. Buyer and Seller shall file all federal, state, local and
foreign tax returns, including Internal Revenue Form 8594, in accordance with
the allocation set forth in such Allocation Certificate. Any aggregate (i)
Purchase Price Increase or Purchase Price Decrease or (ii) Refund Purchase Price
Increase or Refund Purchase Price Decrease shall adjust the dollar value
allocated to the asset categories to which it is attributable.
Section 3.6. Adjustments. The Closing shall be deemed to occur
as of 11:59 p.m. on the Closing Date and for all purposes, any adjustments under
this Agreement pursuant to Section 3.2 hereof shall be deemed to be made as of
such time.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
Section 4.1. Buyer represents and warrants to Seller that:
(a) Corporate Existence. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. As a result of the Business conducted by the Division or the character
or location of the Property, Buyer is duly qualified to do business and in good
standing in the State of California, which is the only jurisdiction where the
nature of the Business conducted by the Division or the character or location of
the Property requires such qualification, except where the failure to be so
qualified would not in the aggregate have a material adverse effect on the
Business or on the Property; provided, however, that no representation is made
as to the necessity or requirement to qualify to do business in the State of
Connecticut.
(b) Authorization; Validity. Buyer has all requisite corporate
power and authority to enter into this Agreement, perform its obligations
hereunder and to consummate the transactions contemplated hereby. All necessary
corporate action has been taken by Buyer with respect to the execution, delivery
and performance by Buyer of this Agreement and the consummation of the
transactions contemplated hereby. Assuming the due execution and delivery of
this Agreement by Seller, this Agreement is a legal, valid and binding
obligation of Buyer, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization and moratorium laws and other
laws of general application affecting the enforcement of creditors' rights
generally, and the discretion of the court before which any proceeding therefore
may be brought.
(c) Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by or on behalf of
Buyer in such a manner as not to give rise to any claim against Buyer, Seller or
the Property for a finder's fee, brokerage commission, advisory fee or other
similar payment.
Section 4.2. Seller represents and warrants to Buyer that:
(a) Corporate Existence. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and has the corporate power to own, operate or lease the Property and
to carry on the Business as now being conducted. As a result of the Business
conducted by the Division or the character or location of the Property, Seller
is duly qualified to do business and in good standing in those jurisdictions
listed on Schedule 4.2(a), which include the only jurisdictions where the nature
of the Business conducted by the Division or the character or location of the
Property requires such qualification, except where the failure to be so
qualified would not in the aggregate have a material adverse effect on the
Business or on the Property; provided, however, that no representation is made
as to the necessity or requirement to qualify to do business in the State of
Connecticut.
(b) Authorization; Validity. Seller has all requisite
corporate power and authority to enter into this Agreement, perform its
obligations hereunder and to consummate the transactions contemplated hereby
without the approval of any third party except as set forth on Schedule 4.2(b).
All necessary corporate action has been taken by Seller with respect to the
execution, delivery and performance by Seller of this Agreement and the
consummation of the transactions contemplated hereby. Assuming the due execution
and delivery of this Agreement by Buyer, this Agreement is a legal, valid and
binding obligation of Seller, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization and moratorium laws and
other laws of general application affecting the enforcement of creditors' rights
generally, and the discretion of the court before which any proceeding therefor
may be brought.
(c) Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by or on behalf of
Seller in such a manner as not to give rise to any claim against Seller, Buyer
or the Property for a finder's fee, brokerage commission, advisory fee or other
similar payment.
ARTICLE V. COVENANTS
Section 5.1. Release. Upon the earlier of (i) 180 days
following the Closing or (ii) the date upon which Seller executes documentation
with respect to any alternative financing source on terms substantially similar
to those set forth in that certain Factoring Agreement, dated September 16,
1992, between Rosenthal & Rosenthal Inc. and Seller (the "Factoring Agreement"),
Seller shall cause the release of all obligations of any and all guarantors with
respect to the Factoring Agreement existing as of the date hereof.
Section 5.2. Shinhan Bank. Seller shall repay the indebtedness
outstanding and cause the discharge of all guarantees under that certain
Revolving Credit Agreement, dated as of July 20, 1990, by and among Seller,
Yutaka Yamaguchi and Shinhan Bank New York Branch, as amended on June 23, 1992
(the "Revolving Credit Agreement"), in accordance with the payment schedule
listed on Schedule 5.2; provided, however, that, notwithstanding the foregoing,
Seller shall not increase the aggregate amount of its indebtedness under the
Revolving Credit Agreement at any time from and after the date hereof.
Section 5.3. Issuance of Capital Stock.
(a) Without the prior written consent of Buyer, Seller shall
not, until the earlier of (i) twenty seven months from the Closing Date and (ii)
the date upon which all obligations of Seller or the Stock Purchasers (as
hereinafter defined), as the case may be, under (x) this Agreement, (y) the
Stock Purchase Agreement, dated even date herewith by and among the Yashiro
Entities and Joel Dupre ("Dupre"), Pacific Million Enterprise Ltd., Cheng-Sen
Wang and Albert H. Cheng (collectively, the "Stock Purchasers") and Yashiro Co.,
as Agent (the "Stock Purchase Agreement"), and (z) any agreements that are
exhibits hereto or thereto are either satisfied or paid in full by the Stock
Purchasers or Seller, as the case may be (all such obligations hereinafter
referred to as the "Seller's Liabilities"), issue any of its capital stock, or
any securities exercisable or convertible into, or exchangeable for, its capital
stock unless (A) such securities are issued in consideration of cash, (B) in the
event Seller issues its common stock, par value $.10 per share (the "Common
Stock"), such Common Stock is sold in consideration of cash and in accordance
with Section 5.3(b) hereof and (C) the net cash proceeds from such issuance(s)
are applied concurrently to the payment of Seller's obligations under (x) this
Agreement, (y) any agreement that is an exhibit hereto or (z) any other
indebtedness of Seller to either of the Yashiro Entities outstanding as the
Closing.
(b) Until the date upon which all of Seller's Liabilities are
paid in full or satisfied, as the case may be, Common Stock may only be issued
as follows:
(i) During the first year following the Closing,
Seller may only issue Common Stock in consideration of an amount of
cash per share that is not less than the average last reported bid
quotation for the Common Stock on the National Association of
Securities Dealers Automated Quotation ("NASDAQ") (as reported in the
Wall Street Journal) for thirty consecutive Trading Days (as
hereinafter defined) ending on the Closing Date, provided the Common
Stock continues at all times to be registered under Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
"Trading Day" shall mean a full day on which trading in the Common
Stock is conducted on NASDAQ, whether or not any trades are actually
consummated.
(ii) During the second year following the Closing,
Seller may only issue Common Stock in consideration of an amount of
cash per share that is not less than the fair market value thereof, as
reasonably determined in good faith by Seller's Board of Directors (the
"Fair Market Value"), provided the Common Stock continues at all times
to be registered under Section 12 of the Exchange Act; and
(iii) During the third year following the Closing and
thereafter, Seller may only issue Common Stock in consideration of an
amount of cash per share that is not less than the Fair Market Value at
the time of such issuance.
(c) Notwithstanding anything to the contrary herein, Seller
shall not, until the date upon which all of Seller's Liabilities are paid in
full or satisfied, as the case may be, sell any of its capital stock, or any
securities exercisable or convertible into, or exchangeable for, its capital
stock if, following such issuance(s), the Stock Purchasers would beneficially
own less than 35% of the outstanding Common Stock on a fully-diluted basis.
Section 5.4. Restricted Payments. Until the date upon which
all of Seller's Liabilities are paid in full or satisfied, as the case may be,
Seller shall not (i) declare or pay any dividend, (ii) make any other
distribution on any shares of its capital stock or (iii) redeem or purchase any
shares of its capital stock.
Section 5.5. Financial Statements and SEC Filings. Until such
time as all of Seller's Liabilities are paid in full or satisfied, as the case
may be, Seller shall deliver to Buyer (i) within a period of time consistent
with current practice but in no event more than (x) ninety days after the end of
any month during Seller's fiscal first quarter and (y) forty-five days after the
end of any other month, Seller's unaudited balance sheet, statement of
operations and statement of cash flows (collectively, the "Financial
Statements"), certified as true and correct in all material respects by the
Chief Financial Officer thereof, (ii) within 90 days following the end of
Seller's fiscal year, the Financial Statements of Seller, audited by Seller's
independent public accountants and (iii) within three days after the filing
thereof, any report or document filed by Seller with the Securities and Exchange
Commission.
Section 5.6. Change of Accountants. Seller shall not change
its independent public accountants without the prior written consent of Buyer;
provided, however, that Seller may change its accountants to the firm of
Nussbaum Yates & Wolpow, P.C. ("NY&W"), provided Buyer receives, prior to any
such change, the written agreement of NY&W, in form reasonably satisfactory to
Buyer, to the effect that NY&W shall deliver directly to Buyer, in accordance
with and during the period required by Section 5.5 hereof, copies of all
Financial Statements previously certified by NY&W.
Section 5.7. Bulk Sales Law. To the extent that the terms and
conditions of any bulk sales laws may be deemed to be applicable to the
transactions contemplated by this Agreement, Buyer hereby waives compliance by
Seller with the provisions of any such laws, and Seller warrants and agrees to
pay and discharge when due all bona fide claims of creditors of Seller actually
made against Buyer which have been or will be asserted against Buyer by reason
of such non-compliance to the extent such liabilities are not Assumed
Liabilities. Seller agrees to indemnify and hold harmless Buyer following the
Closing from and against any and all damages, losses, liabilities, claims, costs
and expenses including, without limitation, reasonable attorneys' fees and other
costs and expenses incident to any suit, action, claim or proceeding related to
the foregoing (collectively, the "Claims"), incurred by Buyer by reason of the
failure of Seller to pay and discharge such Claims; provided, however, that (i)
Buyer shall notify Seller promptly in writing of any Claim for which it may seek
indemnification from Seller pursuant to this Section 5.7, (ii) Seller shall have
the right to assume the defense of any such Claim and Buyer shall fully
cooperate with Seller in any such defense and (iii) Seller shall not be
responsible for the payment of any amount arising out of any settlement of any
Claim made by Buyer without Seller's prior written consent.
Section 5.8. Employee Matters. Buyer agrees to offer
employment solely to the employees of the Division on the Closing Date set forth
on Schedule 5.8 (the "Employees"), subject to such terms and conditions of
employment as Buyer may set or establish after the Closing Date including,
without limitation, such matters as wages, hours and working conditions. In all
respects after the Closing, such Employees shall be at-will employees and Buyer
shall have the right to dismiss in its sole discretion any of such Employees.
Seller shall indemnify and hold harmless Buyer with respect to any and all
claims made by employees of Seller not set forth on Schedule 5.8.
Section 5.9. Fairness Opinion. Any fees and related charges
(including the reimbursement of expenses) paid to Delta Financial Group
Incorporated ("Delta") in connection with its rendering to Seller of a fairness
opinion in connection with the transactions contemplated by this Agreement and
the agreements ancillary hereto (the "Fairness Opinion") shall be borne equally
by Buyer and Seller.
Section 5.10. Severability. With respect to any provision of
this Article V finally determined by a court of competent jurisdiction to be
unenforceable, Seller and Buyer hereby agree that such court shall have
jurisdiction to reform such provision so that it is enforceable to the maximum
extent permitted by law, and the parties agree to abide by such court's
determination. In the event that any provision of this Article V cannot be
reformed, such provision shall be deemed to be severed from this Agreement, but
every other provision of Article V of this Agreement shall remain in full force
and effect.
Section 5.11. Further Assurances. On and after the Closing,
Seller shall prepare, execute and deliver, at Seller's expense, such further
instruments of conveyance, sale, assignment or transfer, and shall take or cause
to be taken such other or further action as Buyer's counsel shall reasonably
request at any time or from time to time in order to perfect, confirm or
evidence in Buyer title to all or any part of the Property or to consummate, in
any other manner, the terms and conditions of this Agreement. On and after the
Closing, Buyer shall prepare, execute and deliver, at Buyer's expense, such
further instruments, and shall take or cause to be taken such other or further
action as Seller's counsel shall reasonably request at any time or from time to
time in order to confirm or evidence Buyer's assumption of the Assumed
Liabilities or to consummate, in any other manner, the terms and conditions of
this Agreement.
Section 5.12. Announcements. Neither party to this Agreement
shall make any public announcements prior to the Closing with respect to this
Agreement or the transactions contemplated hereby without the consent of the
other party hereto, except as required by law.
Section 5.13. Consents. The parties hereto agree to use all
reasonable efforts to obtain all approvals, authorizations and consents of all
third parties necessary for the consummation of the transactions contemplated
hereby.
Section 5.14. Confidentiality. Each of Seller and Buyer shall
hold and shall cause its consultants and advisors to hold in strict confidence,
unless compelled to disclose by judicial or administrative process or, in the
opinion of its counsel, by other requirements of law, all documents and
information concerning the other party furnished it by such other party or its
representatives in connection with the transactions contemplated by this
Agreement including, without limitation, the Financial Statements delivered to
Buyer pursuant to Section 5.5 hereof (except to the extent that such information
can be shown to have been (i) previously known by the party to which it was
furnished, (ii) in the public domain through no fault of such party or (iii)
later lawfully acquired from other sources by the party to which it was
furnished), and neither Seller nor Buyer shall release or disclose such
information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors in connection with this
Agreement. If the transactions contemplated by this Agreement are not
consummated, such confidence shall be maintained except to the extent such
information comes into the public domain through no fault of the party required
to hold it in confidence, and such information shall not be used to the
detriment of, or in relation to any investment in, the other party and all such
documents (including copies thereof) shall be returned to the other party
immediately upon the written request thereof. Each party shall be deemed to have
satisfied its obligation to hold confidential information concerning or supplied
by the other party if it exercises the same care as it takes to preserve
confidentiality for its own similar information.
ARTICLE VI. CLOSING
Section 6.1. Closing. This transaction shall close and all
deliveries to be made at the time of closing shall take place at 10:00 a.m., New
York City time, on March 20, 1995, at the offices of Olshan Grundman Frome &
Rosenzweig, 505 Park Avenue, New York, New York, or at such other place or date
as may be agreed upon from time to time in writing by Seller and Buyer (the
"Closing").
Section 6.2. Deliveries by Seller. At or prior to the Closing,
Seller shall deliver to Buyer, duly and properly executed, the following:
(a) Good and sufficient General Conveyance, Assignment and
Bill of Sale, in the form attached hereto as Exhibit B (the "General Conveyance,
Assignment and Bill of Sale"), conveying, selling, transferring and assigning to
Buyer title to all of the Property, free and clear of all security interests,
liens, charges, encumbrances or equities whatsoever, except for those (i) in
favor of Rosenthal & Rosenthal, Inc. pursuant to the Factoring Agreement, (ii)
assumed by Buyer pursuant to this Agreement or (iii) approved in writing by
Buyer prior to the Closing.
(b) Assumptions of the Assumed Liabilities, in the form
attached hereto as Exhibit C (the "Assumption Agreement"), and shall include, to
the extent obtained, the written consents of all parties necessary in order to
duly transfer to Buyer all of Seller's rights under the Contracts.
(c) An agreement, in the form attached hereto as Exhibit D,
with respect to the provision to Seller by Yashiro Co. of a letter of credit
facility (the "Letter of Credit Agreement").
(d) The Fairness Opinion of Delta in the form attached hereto
as Exhibit E, to the effect that the terms of the transactions contemplated by
this Agreement and the agreements ancillary hereto are fair to the shareholders
of Seller from a financial point of view.
(e) A Sublease, in the form attached hereto as Exhibit F,
providing for the use and occupancy by Buyer of space in Seller's California
warehouse (the "Sublease").
(f) A Sharing Agreement, in the form attached hereto as
Exhibit G, providing for the shared use by Seller and Buyer of Seller's New York
showroom (the "Sharing Agreement").
(g) An Exclusive Purchasing Agreement, in the form attached
hereto as Exhibit H, granting Buyer or designees thereof the exclusive right to
sell Seller's goods in Japan (the "Exclusive Purchasing Agreement").
(h) The Guaranty of Dupre, in the form attached hereto as
Exhibit I, guaranteeing the payment of Seller's obligations under the agreements
set forth on Exhibit A thereto (the "Guaranty").
(i) A Pledge Agreement, in the form attached hereto as Exhibit
J, whereby the Stock Purchasers shall pledge an aggregate of 681,000 shares of
Common Stock to secure all of Seller's Liabilities (as that term is defined in
Section 5.3 hereof) (the "Pledge Agreement").
(j) Non-Competition Agreements, in the forms attached hereto
as Exhibits K-1, K-2, K-3 and K-4 to be executed by Seller and each of (x) the
Yashiro Entities, (y) Yutaka Yamaguchi and (z) Takeshi Yamaguchi, respectively
(collectively, the "Non-Competition Agreements").
(k) A Severance Agreement, in the form attached hereto as
Exhibit L, to be executed by Seller and Takeshi Yamaguchi (the "Severance
Agreement").
(l) A License Agreement, in the form attached hereto as
Exhibit M, granting Buyer the right to use the trade name "Mondo" (the "License
Agreement").
(m) An Assignment of the United States trademarks of Seller,
in the form attached hereto as Exhibit N (the "Trademarks Assignment"),
conveying, transferring and assigning to Buyer, all of Seller's right, title and
interest to such trademarks.
(n) A certificate of the President and Secretary of Seller in
accordance with Section 7.1(d) hereof.
(o) The Certificate of Incorporation of Seller, certified as
of a recent date by the Secretary of State of New York.
(p) A certificate of the Secretary of State of New York, dated
as of a recent date, as to the good standing of Seller in such state.
(q) A certificate of the Secretary of State of each state
listed on Schedule 4.2(a), dated as of a recent date, as to the good standing of
Seller in each such state.
(r) A Non-competition Agreement, in the form attached hereto
as Exhibit O, to be executed by each of the Seller and the Buyer.
(s) Resolutions of the Board of Directors of Seller
authorizing the execution and delivery of this Agreement by Seller and the
performance of its obligations hereunder, certified by the Secretary of Seller.
(t) Such other separate instruments of sale, assignment or
transfer that Buyer may reasonably deem necessary or appropriate in order to
perfect, confirm or evidence title to all or any part of the Property.
Section 6.3. Deliveries by Buyer. On or prior to the Closing,
Buyer shall deliver to Seller the purchase price in accordance with Section 3.1
hereof and shall deliver to Seller, all duly and properly executed, the
following:
(a) The Assumption Agreement.
(b) The Letter of Credit Agreement.
(c) The Sublease.
(d) The Sharing Agreement.
(e) The Exclusive Purchasing Agreement.
(f) The Pledge Agreement.
(g) The Non-Competition Agreements.
(h) The Severance Agreement.
(i) The License Agreement.
(j) A certificate of the President and Secretary of Buyer in
accordance with Section 7.2(d) hereof.
(k) The Certificate of Incorporation of Buyer, certified as of
a recent date by the Secretary of State of Delaware.
(l) A certificate of the Secretary of State of Delaware, dated
as of a recent date, as to the good standing of Buyer in such state.
(m) Resolutions of the Board of Directors of Buyer authorizing
the execution and delivery of this Agreement by Buyer and the performance of its
obligations hereunder, certified by the Secretary of Buyer.
(n) Such other separate instruments of assumption that Seller
may reasonably deem necessary or appropriate in order to confirm or evidence
Buyer's assumption of the Assumed Liabilities.
ARTICLE VII. CONDITIONS PRECEDENT TO OBLIGATIONS
Section 7.1. Conditions to Obligations of Buyer. Each and
every obligation of Buyer to be performed at the Closing shall be subject to the
satisfaction as of or before the Closing of the following conditions (unless
waived in writing by Buyer):
(a) Representations and Warranties. Seller's representations
and warranties set forth in Section 4.2 hereof shall have been true and correct
in all material respects when made and shall be true and correct in all material
respects at and as of the Closing as if such representations and warranties were
made as of the Closing.
(b) Performance of Agreement. All covenants, conditions and
other obligations under this Agreement which are to be performed or complied
with by Seller, shall have been fully performed and complied with in all
material respects on or prior to the Closing including, without limitation, the
delivery of the fully executed instruments and documents in accordance with
Section 6.2 hereof.
(c) No Adverse Proceeding. There shall be no pending or
threatened claim, action, litigation or proceeding, judicial or administrative,
or governmental investigation against Buyer, Seller or the Property for the
purpose of enjoining or preventing the consummation of this Agreement, or
otherwise claiming that this Agreement or the consummation hereof is illegal.
(d) Certificate. Seller shall have delivered to Buyer a
certificate executed by Seller's President and Secretary, dated the Closing
Date, to the effect that the conditions set forth in subsections (a) and (b)
and, to the best knowledge of such officers, (c), of this Section 7.1 have been
satisfied.
(e) Stock Purchase Agreement. The transactions contemplated by
the Stock Purchase Agreement and the agreements ancillary thereto shall have
been consummated.
Section 7.2. Conditions to Obligations of Seller. Each and
every obligation of Seller to be performed at the Closing shall be subject to
the satisfaction as of or before such time of the following conditions (unless
waived in writing by Seller):
(a) Representations and Warranties. Buyer's representations
and warranties set forth in Section 4.1 hereof shall have been true and correct
when made and shall be true and correct at and as of the Closing as if such
representations and warranties were made as of such time and date.
(b) Performance of Agreement. All covenants, conditions and
other obligations under this Agreement which are to be performed or complied
with by Buyer shall have been fully performed and complied with in all material
respects on or prior to the Closing including the delivery of funds and the
fully executed instruments and documents in accordance with Section 6.3 hereof.
(c) No Adverse Proceeding. At the Closing there shall be no
pending or threatened claim, action, litigation or proceeding, judicial or
administrative, or governmental investigation against Buyer, Seller or the
Property for the purpose of enjoining or preventing the consummation of this
Agreement, or otherwise claiming that this Agreement or the consummation hereof
is illegal.
(d) Certificate. Buyer shall have delivered to Seller a
certificate executed by Buyer's President and Secretary, dated the Closing Date,
to the effect that the conditions set forth in subsections (a) and (b) and, to
the best knowledge of such officers, (c), of this Section 7.2 have been
satisfied.
(e) Stock Purchase Agreement. The transactions contemplated by
the Stock Purchase Agreement and the agreements ancillary thereto shall have
been consummated.
ARTICLE VIII. TERMINATION
Section 8.1. Termination by Either Party. This Agreement may
be terminated and cancelled at any time prior to the Closing by Buyer or Seller
upon written notice to the other if: (i) any of the representations or
warranties of the other party, as the case may be, contained herein or in any
Schedule attached hereto shall prove to be inaccurate or untrue in any material
respect; (ii) any obligation, term or condition to be performed, kept or
observed by such other party, as the case may be, hereunder has not been
performed, kept or observed in any material respect at or prior to the time
specified in this Agreement or (iii) the Closing shall not have occurred by
March 31, 1995.
Section 8.2. Termination by Buyer. This Agreement may be
terminated and cancelled by Buyer without penalty, damages, payments or
liabilities whatsoever to either party at any time prior to the Closing in the
event of a material adverse loss or damage to the Property in excess of
$500,000, it being understood by the parties that none of the risk of any such
loss or damage prior to the Closing shall be borne by Buyer. In the event of a
loss or damage to the Property prior to the Closing and the Closing shall have
occurred, Buyer shall be entitled to reserve any insurance proceeds received by
Seller in respect of such loss or damage.
ARTICLE IX. MISCELLANEOUS PROVISIONS
Section 9.1. Notices. All notices and other communications
required or permitted under this Agreement shall be deemed to have been duly
given and made if in writing and if served either by personal delivery to the
party for whom intended (which shall include delivery by Federal Express or
similar service) or three business days after being deposited, postage prepaid,
certified or registered mail, return receipt requested, in the United States
mail bearing the address shown in this Agreement for, or such other address as
may be designated in writing hereafter by, such party:
If to Seller: Sirco International Corp.
24 Richmond Hill Avenue
Stamford, Connecticut 06901
Attention: Mr. Joel Dupre
with a copy to: Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attention: Eric M. Hellige, Esq.
If to Buyer: Bueno of California, Inc.
16000 Heron Avenue
La Mirada, California 90638
Attention: Mr. Takeshi Yamaguchi
with a copy to: Olshan Grundman Frome & Rosenzweig
505 Park Avenue
New York, New York 10022
Attention: Victor M. Rosenzweig, Esq.
Section 9.2. Entire Agreement. This Agreement, the exhibits
and schedules hereto and the documents referred to herein embody the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof, and supersede all prior and contemporaneous agreements and
understandings, oral or written, relative to said subject matter.
Section 9.3. Binding Effect; Assignment. This Agreement and
the various rights and obligations arising hereunder shall inure to the benefit
of and be binding upon Seller, its successors and permitted assigns and Buyer,
its successors and permitted assigns. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be transferred or assigned (by
operation of law or otherwise) by any of the parties hereto without the prior
written consent of the other party or parties except that Buyer shall have the
right to assign its rights but not its obligations hereunder to an affiliate of
Buyer. Any transfer or assignment of any of the rights, interests or obligations
hereunder in violation of the terms hereof shall be void and of no force or
effect.
Section 9.4. Captions. The Article and Section headings of
this Agreement are inserted for convenience only and shall not constitute a part
of this Agreement in construing or interpreting any provision hereof.
Section 9.5. Expenses of Transaction. Except as provided
herein, Seller shall pay all costs and expenses incurred by it in connection
with this Agreement and the transactions contemplated hereby, and will make all
necessary arrangements so that the Property will not be charged with or
diminished by any such cost or expense; provided, however, that Buyer shall pay
all fees and expenses of Olshan Grundman Frome & Rosenzweig in excess of
$20,000. Buyer shall pay all costs and expenses incurred by it in connection
with this Agreement and the transactions contemplated hereby. The liability for
sales, real estate transfer and/or documentary taxes (but not income or similar
type taxes) in connection with the sale and delivery of the Property shall be
borne equally by each of Buyer and Seller.
Section 9.6. Waiver; Consent. This Agreement may not be
changed, amended, terminated, augmented, rescinded or discharged (other than by
performance), in whole or in part, except by a writing executed by the parties
hereto, and no waiver of any of the provisions or conditions of this Agreement
or any of the rights of a party hereto shall be effective or binding unless such
waiver shall be in writing and signed by the party claimed to have given or
consented thereto. Except to the extent that a party hereto may have otherwise
agreed to in writing, no waiver by that party of any condition of this Agreement
or breach by the other party of any of its obligations or representations
hereunder or thereunder shall be deemed to be a waiver of any other condition or
subsequent or prior breach of the same or any other obligation or representation
by the other party, nor shall any forbearance by the first party to seek a
remedy for any noncompliance or breach by the other party be deemed to be a
waiver by the first party of its rights and remedies with respect to such
noncompliance or breach.
Section 9.7. No Third Party Beneficiaries. Subject to Section
9.3 hereof, nothing herein, expressed or implied, is intended or shall be
construed to confer upon or give to any person, firm, corporation or legal
entity, other than the parties hereto, any rights, remedies or other benefits
under or by reason of this Agreement.
Section 9.8. Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
Section 9.9. Gender. Whenever the context requires, words used
in the singular shall be construed to mean or include the plural and vice versa,
and pronouns of any gender shall be deemed to include and designate the
masculine, feminine or neuter gender.
Section 9.10. Remedies of Buyer. The Property is unique and
not readily available. Accordingly, Seller acknowledges that, in addition to all
other remedies to which Buyer is entitled, Buyer shall have the right, subject
to the provisions of Section 8.1 hereof, to enforce the terms of this Agreement
by a decree of specific performance provided Buyer is not in material default
hereunder.
Section 9.11. Governing Law. This Agreement shall in all
respects be construed in accordance with and governed by the laws of the State
of New York, with regard to the principles of conflicts of law thereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
WITNESSES:
BUYER:
BUENO OF CALIFORNIA, INC.
- -------------------------
By: /s/Takeshi Yamaguchi
----------------------------------------
Name:Takeshi Yamaguchi
Title:President
SELLER:
SIRCO INTERNATIONAL CORP.
- -------------------------
By: /s/Gandolfo Verra
-----------------------------------------
Name:Gandolfo Verra
Title:Secretary
<PAGE>
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
SIRCO INTERNATIONAL CORP.
AND BUENO OF CALIFORNIA, INC.
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.1(a) Personal Property
Schedule 1.1(b) Inventory
Schedule 1.1(c) Proprietary Rights
Schedule 1.1(d) Contracts
Schedule 1.1(e) Miscellaneous Assets
Schedule 3.1(b) Indebtedness Following Closing
Schedule 4.2(a) Jurisdictions in Which Seller is Qualified to Do
Business
Schedule 4.2(b) Necessary Consents
Schedule 5.2 Payments to Bank
Schedule 5.8 Employees
EXHIBITS
A Allocation Certificate
B General Conveyance, Assignment and Bill of Sale
C Assumption Agreement
D Letter of Credit Agreement
E Fairness Opinion
F Sublease
G Sharing Agreement
H Exclusive Purchasing Agreement
I Guaranty
J Pledge Agreement
K-1 Non-Competition Agreement with Yashiro Co., Inc.
K-2 Non-Competition Agreement with Yashiro Company, Ltd.
K-3 Non-Competition Agreement with Yutaka Yamaguchi
K-4 Non-Competition Agreement with Takeshi Yamaguchi
L Severance Agreement
M License Agreement
N Trademarks Assignment
O Non-Competition Agreement between Sirco and Bueno of
California, Inc.
<PAGE>
Schedule 1.1(a)
Personal Property
<TABLE>
<CAPTION>
Sirco Bueno
FURNITURE Total Retain Hdbgs
- --------- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Desk/Rt Cred Exec Blk 4 4 $ 250.00 $1,000.00
Chair Exec Blk Leather 4 4 $ 150.00 $ 600.00
Arm Chair Burgandy 5 5 $ 35.00 $ 175.00
File Cabinet 2dr Blk Wd 2 2 $ 30.00 $ 60.00
Conf Table Sm Blk 1 1 $ 20.00 $ 20.00
Glass Tops Various 5 5 $ 50.00 $ 250.00
Floor Lamp Halogen Blk 2 1 $ 20.00 $ 20.00
Desk Sectry Grey 6 3 3 $ 95.00 $ 285.00
Desk Lgl Grey 3 1 2 $ 50.00 $ 100.00
Bookcase 3s Grey 6 4 2 $ 10.00 $ 20.00
File Cabinets 2dr Blk 25 10 15 $ 10.00 $ 150.00
File Cabinets 4dr Blk 35 34 1 $ 15.00 $ 15.00
Bookcase 2s Grey 1 1 $ 15.00 $ 15.00
Bookcase 5s Oak 1 1 $ 20.00 $ 20.00
Bookcase 5s Blk 3 2 $ 20.00 $ 40.00
Desk Exec Oak 1 1
Bookcase 2s Oak 1 1
Credenza Oak 1 1
File Cabinet 2dr Oak 1 1
Chair Exec Rose 1 1
Arm Chair Rose 4 4
End table Oak 1 1
Drafting Table 2 1 $ 10.00 $ 10.00
Office Chair Sec Grey 13 6 5 $ 40.00 $ 200.00
Table 48"Rd Black 1 1 $ 20.00 $ 20.00
File Cabinet 4dr Legal Blk/Grey 2 1 1 $ 20.00 $ 20.00
Refrigerator Sm Blk 2 1 1 $ 20.00 $ 20.00
File Cabinet 2dr Oak 3 3 $ 15.00 $ 45.00
File Cabinet 2dr Lateral Oak 6 1 3 $ 20.00 $ 60.00
Side Chairs sm Burg 4 2 $ 15.00 $ 30.00
Bookcase 5s Wal 1 1
Desk Sec Wal 16 10 6 $ 20.00 $ 120.00
Credenza Wal 5 3 2 $ 15.00 $ 30.00
Bookcase 3s Wal 4 2 2 $ 10.00 $ 20.00
Desk Sgl Wal 3 3
Desk Sgl Exec Wal 1 1 $ 25.00 $ 25.00
Sofa Leather Blk 1 1
Arm Chair Leather Blk 1 1
Coffee Table Blk 1 1
End Table Blk 1 1
File Cabinet 2dr Lateral Wal 7 5 2 $ 20.00 $ 40.00
Conference Table Blk 1 1 $ 150.00 $ 150.00
Conf Chair Burg 9 9 $ 35.00 $ 315.00
Credenza Blk 1 1 $ 45.00 $ 45.00
Cabinet Blk 1 1
TV 19" Samsung 1 1
Wall Map Blk Frame 2 2 $ 30.00 $ 60.00
Bookcase 3s Oak 1 1
Chair Exec Grn 1 1
Arm Chair Grn 2 2
Lunch Table 36" Rd Nat 3 3
Lunch Rm Chair Grey 12 12
<PAGE>
<CAPTION>
Sirco Bueno
FURNITURE Total Retain Hdbgs
- --------- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Refrigerator Lg 2 2
Microwave 4 4
Chair Sec Brn 16 12 4 $ 10.00 $ 40.00
Chair Exec Rose 1 1
Arm Chair Rose 2 2
Safe Grey 1 1
Conference Table Oak 1 1
Conf Chairs Oak/Grey 8 8
Desk Jr Exec Oak 2 2
Credenza Oak 2 2
Desk Exec Wal 1 1
Chair Exec Blue 1 1
Bookcase 2s Wal 3 2 1 $ 10.00 $ 10.00
Arm Chair Grey 2 2
Lobby Bench Burg 1
Lobby Bench Multi 1 1
Lobby Chair Multi 1 1
Work Table Rd Wal 1 1 $ 10.00 $ 10.00
Table Laminate 1
Comp Table Wal 1
Side Chairs Blk 2 2 $ 10.00 $ 20.00
Business Machines
Fax Canon 450 1 1
Fax Murate 1 1 $ 25.00 $ 25.00
Fax Ricoh 1000L 1 1
Document Shredder 2 1 1 $ 20.00 $ 20.00
Typewriter Brother EM411 1 1 $ 20.00 $ 20.00
Typewriter IBM Selectric 3 2 1 $ 20.00 $ 20.00
Wordprocessor Brother WP200 3 2 1 $ 35.00 $ 35.00
Copier Kodac Ekta 85 1 1
Copier Canon MP1215 1 1
Typewriter Casio CW110 1 1
Label Printer Monarch 9420 1 1
Copies Xerox 1012 1 1
Phone System TIE
Ultracom 1 1 $2,000.00 $2,000.00
18 Phones
3 Exec Phones
1 DSS
1 Control/Power Unit
<PAGE>
<CAPTION>
Sirco Bueno
FURNITURE Total Retain Hdbgs
- --------- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Computer Equiptment
Printer Panasonic KX1124P 1 1
Label Printer Fargo 1 1
PC IBM PS2 1 1
Printer Laserjet IIP 1 2
PC Macintosh II 1 1 $ 500.00 $ 500.00
PC Gateway 2000 1 1 $2,584.00 $2,584.00
Laserjet 4L
Image Scanner Microtek 1 1 $ 250.00 $ 250.00
Printer Laserwriter II 1 1 $ 250.00 $ 250.00
Printer IBM 4234-002 1 1
Printer IBM 5256 2 1 1 $ 35.00 $ 35.00
PC Compaq Proline 1 1 $3,900.00 $3,900.00
HP LaserJet 4
PC Powerflex 1 1
Printer HP Laserjet II 2 2
PC Mac Quadra 605 1 1
Printer Stylewriter II 1 1
PC BSR386 1 1
Printer Tandy 2110 1 1
Terminals Dec Data 3596 8 5
Dec Data 3496 2 1
IBM 3196 5 4
IBM 5251 4 2
IBM Console 1 1
CPU IBM 5263 1 1
Modem Codex 2640 1 1
Modem Microcom 2 1 1 $ 30.00 $ 30.00
Modem Prc Perif 1 1
Modem UDs 1 1
Controller Dec Data 5794 1 1
Printer IBM 5224 1 1
Burater Tab 1 1
Decolater Yale 1 1
PC Compaq Presario 660 1 1 $1,459.00 $1,459.00
Printer HP Deskjet Plus 1 1 $ 50.00 $ 50.00
Warehouse
Order Pickers Crown 4 3 1 $3,500.00 $3,500.00
Hyster O/S
Forklift Toyota 1 1
Nissan 1 1
Pallet Jack 9 6 3 $ 30.00 $ 90.00
Tape Machines 30 18 6 $ 50.00 $ 300.00
Pallet Jack Electric O/S
Power Conveyor 168 Ft 1 1
Compressor Ingersoll-Rand SSR EP25U 1 1
Air Dryer Zeks Air 1 1
Scales Ishida 2 1 1 $ 475.00 $ 475.00
UPS Equip Friden 1 1
Office Rack Upright 9 Ft 14 8
Load Beams 11 Ft 54 27
<PAGE>
<CAPTION>
Sirco Bueno
FURNITURE Total Retain Hdbgs
- --------- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Pallet Rack Upright 15 Ft 251 132 119 $ 30.00 $3,570.00
Upright 12 Ft 299 209 90 $ 20.00 $1,800.00
Load Beams 9 Ft 2422 1412 780 $ 7.50 $5,850.00
12 Ft 87 87
5 Ft 31
Carton Sealer Little David 1 1
Conveyor Stretch 60ft 2 1 1 $ 100.00 $ 100.00
GMC Van 1982 1 1
Stuffing Tables 42 40 2 $ 20.00 $ 40.00
Packing Tables 22 12 10 $ 20.00 $ 200.00
Hand trucks 9 6 3 $ 25.00 $ 75.00
Carts 15 8 4 $ 30.00 $ 120.00
Ladders
57" 4 2 1 $ 30.00 $ 30.00
48" 3 1 1 $ 25.00 $ 25.00
105" 3 2 1 $ 40.00 $ 40.00
Dock Plates 3 1 $ 25.00 $ 25.00
Sample Racking Sections 20 20 $ 15.00 $ 300.00
Wooden Pallets in Hdbg 1152 $ 3.00 $3,456.00
Area = 1152
$35,234.00
</TABLE>
<PAGE>
Schedule 1.1 (b)
This Exhibit will be filed by amendment within three (3) business days from the
date of this filing.
<PAGE>
Schedule 1.1(c)
Proprietary Rights
<TABLE>
<CAPTION>
TRADEMARK GOODS DATE REGISTERED REG. NO.
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTEABLES handbags 09/05/78 1,101,486
wallets
BV (and design) handbags PENDING
CALIFORNIA EDITIONS handbags 02/09/93 1,751,899
GANI handbags 09/26/78 1,103,060
luggage
wallets
GOLD MINE billfolds 01/08/57 639,505
change purses
handbags
key cases
wallets
BARTOLI handbags 04/19/83 1,235,286
key cases
purses
wallets
BUENA VISTA handbags 11/10/92 1,731,122
BUENO clutch bags 09/25/68 851,257
cosmetic bags sold empty
key cases
purses
wallets
BUENO all purpose sport bags 09/05/89 1,554,691
attache cases
backpacks
billfolds
briefcases
change purses
cosmetic cases sold empty
credit car cases
luggage of all types
luggage portfolios
luggage tote bags
</TABLE>
<PAGE>
Schedule 1.1(d)
Contracts
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
4265* (YW-9107-09) 21 MF LUC NO 03/01 - 13 03/13 29,181.60
4297 (YW-9132) 25 WM LUC NO 03/05 - 13 03/13 22,800.00
4281 (9111,12,26-28) 29 LUC NO 03/01 - 10 *03/13 52,398.00
" 03/20
4282 (YW-9113-15) 29 FE LUC NO 03/01 - 10 *03/13 77,267.53
" 03/20
4285 (YW-9118-19) 21 BB LUC NO 03/05 - 20 03/20 25,804.60
4286 (YW-9120) 21 CT LUC NO 03/05 - 20 03/20 2,299.00
4287 (YW-4221) 21 NL LUC NO 03/05 - 20 03/20 2,970.00
4288 (YW-9122) 21 SL LUC NO 03/05 - 20 03/20 11,212.50
4289 (YW-9123) 21 FE LUC NO 03/05 - 20 03/20 16,200.00
4293 (YW-9133) 21 FE LUC NO 03/05 - 20 03/20 9,600.00
" 03/30 38,400.00
4294 (YW-9134) 21 AB LUC NO 03/10 - 20 03/20 6,000.00
4305 (YW-9139) 21 WM LUC NO 03/10 - 20 03/20 4,458.60
4290 (YW-9124-25) 21 AB LUC NO 03/20 - 30 03/30 6,000.00
4295 (YW-9135-36) 21 AB LUC NO 03/20 - 30 03/30 12,000.00
4296 (YW-9137-38) 21 PS LUC NO 03/20 - 30 03/30 9,000.00
4283 (YW-9116) 29 FE LUC NO 03/25-04/01 04/01 31,950.00
4284 (9117,29-31) 29 FE LUC NO 03/25-04/01 04/01 64,579.68
4311 (FS-3215) 30 FS KARL YES 03/20 - 30 04/10 14,130.00
4313 (YW-9140) 21 WM LUC NO 04/01 - 10 04/10 *3,516.00
" 04/17 *10,614.00
4319 N (YW-9141-42) 21 FE LUC NO 04/01 - 10 04/10 14,190.00
4320 N (YW-9143) 21 MB LUC NO 04/01 - 10 04/10 5,279.60
4322 N (YW-9145 21 WM LUC NO 04/10 - 17 04/17 20,434.50
4292 VOID
4323 N (YW-9146) 21 RN LUC NO 04/01 - 20 04/20 9,677.40
4321 N (YW-9144) 21 SN LUC NO 04/05 - 20 04/20 23,880.20
4262 41 B.M CB YES 02/10 - 28 *3/20 1,896.00
4261 43 B.M. CK YES 03/10 - 20 *3/20 22,200.00
4306 21 KAU H MV NO 03/01 - 15 *3/27 20,448.00
4314 21 KAU H MV NO 03/25-04/08 04/08 13,632.00
4307 30 B.M. FBA YES 04/01 - 15 04/15 6,600.00
4308 30 B.M. FB YES 04/01 - 15 04/15 17,300.40
4309 30 B.M. FS YES 04/01 - 15 04/15 9,300.00
4310 30 B.M. FP NO 04/01 - 15 04/15 4,742.00
4312 41 HOI T MT YES 04/05 - 22 04/15 14,640.00
4317 N 30 B.M. SF YES 05/05 - 20 04/22 7,296.00
4318 N 30 B.M. ACF YES 05/05 - 20 05/20 43,680.00
4298 25 L.K. MV NO 03/01 - 08 05/20 2,350.80
4291 21 L.K. MV NO 03/01 - 12 03/13 47,916.00
4219 25 L.K. SR NO 03/10 - 20 03/13 9,358.68
4316 N 29 L.K. ZC/ZH NO 04/01 - 08 03/20 11,520.00
4267 21 L.K. MV NO 05/15 - 25 04/08 27,180.00
4299 25 L.K. MV NO 05/20 - 30 05/25 1,443.00
4268 21 L.K. MV NO 05/25-06/05 05/30 18,997.92
4269 21 L.K. MV NO 06/05 - 15 06/05 16,981.00
4270 21 L.K. MV NO 06/15 - 25 06/15 22,386.12
4300 25 L.K. MV NO 06/25-07/01 06/25 23,685.00
4271 21 L.K. MV NO 06/25-07/05 07/01 27,180.00
4272 21 L.K. MV NO 07/05 - 15 07/05 16,981.20
4273 21 L.K. MV NO 07/15 - 25 07/15 18,997.92
4274 21 L.K. MV NO 08/05 - 10 07/25 27,180.00
4301 25 L.K. SR NO 08/01 - 10 08/10 36,360.00
4302 25 L.K. MV NO 08/10 - 20 08/10 7,613.82
4275 21 L.K. MV NO 08/15 - 25 08/25 27,180.00
4276 21 L.K. MV NO 08/25-09/05 08/25 16,981.20
4303 25 L.K. SR NO 09/01 - 10 09/10 36,576.00
4277 21 L.K. MV NO 09/05 - 15 09/25 27,180.00
4304 25 L.K. MV NO 11/10 - 20 11/20 4,338.60
"U" : UNISSUED P.O. "N" : NEWLY ISSUED P.O., "*" : ANY CHANGE
"DR" : STORE DIRECT BUY "AR" : AIR SHIPMENT, "IN" : INVENTORY ENTERED
</TABLE>
<PAGE>
Schedule 3.1 (b)
SEOUL
HILTON
395-5 ga, namdaamun-no, Chung-gu, Seoul Korea 100-095
TEL: (02) 753-7788 TELEX: K26695 KHILTON FAX: (02) 754-2510
FAX TO: Olshan Grueman Frome & Rosenburg FAX NO: USA 212-755-1467
ATTN.: Ken Schlesnser Esa. Date: 3/22/95
FROM : TAKESHI YAMAGUCHI Room No. (Ref): 1412
Total Pages: 1
(Including Cover Page)
CC: Sirco New York
Fax 212-564-2618
Attn.: Dolf Verra
1. In addition to the 746,915.94 loan remain with Sirco $, there are
Jan L/C Fee & Interest 61,655.21
Feb. L/C Fee & Interest 39,256.43 As in original schedule
My Y. Yamaguchi 50,000.00
Total will be 897,827.58
2. This is FOR DOLF
Please fax me repayment schedule in Sirco's Letterhead; address to
Shin-Han Bank
Headquarters
Fax to me, I will call you later
<PAGE>
Schedule 4.2(a)
California
Texas
<PAGE>
Schedule 4.2(b)
Seller CONSENTS; RELEASES
Consent of Licensor under Fila License
Consent of Licensor under Disney License
Consent of Rosenthal under Factoring Agreement
Consents of Landlord to California Sublease
<PAGE>
Schedule 5.2
Payments to Bank
Repayment Schedule for Shin-Han Bank
304,982.80 by 4/20/95 - Subject to Change
258,099.60 by 5/19/95
353,306.50 by 6/20/95
844,597.40 by 7/19/95
1,760,986.30 Total
Interest payment must be current.
Outstanding L/C must be cancelled (12,188.86) by 4/20/95.
<PAGE>
Schedule 5.8
Employees of Bueno of California
Maria Elena Aranda
Marianne Bailey
Joe Baker
Jane Ellingsworth
Naomi Funshira
Ismael Gonzalez
Shirley Hotwagner
Pamela Linn
Carrie Mason
Lori Norman
Joe Pagliaro
Maria Perez
Philip Rayes
Gloria Robles
Tsuguya Saeki
Irane Shank
Sergio Zavala
Nancy Donnally
Judith Rifkin
Paul Toscamo
<PAGE>
EXHIBIT A
ALLOCATION CERTIFICATE
This Allocation Certificate is provided pursuant to Section
3.5 of the Asset Purchase Agreement (the "Agreement"), dated March 20, 1995, by
and between SIRCO INTERNATIONAL CORP., a New York corporation (the "Seller"),
and BUENO OF CALIFORNIA, INC., a Delaware corporation (the "Buyer"). Buyer and
Seller hereby agree that the aggregate purchase price for the Property (as
defined in the Agreement) shall be allocated, subject to adjustment, as follows:
<TABLE>
<CAPTION>
Assets Amount
------ -------------
<S> <C>
1. To the assets described in Section 1.1(a) of the $1,700,431.55
Agreement
2. To the assets described in Section 1.1(b) of the 35,234.00
Agreement
3. To the assets described in Section 1.1(c) of the 10,000.00
Agreement
4. To the assets described in Section 1.1(d) of the 10,000.00
Agreement
5. All other assets including, without limitation, 30,000.00
goodwill
-------------
Total $1,785,665.55
</TABLE>
Executed this 20th day of March, 1995
SIRCO INTERNATIONAL CORP. BUENO OF CALIFORNIA, INC.
By:_____________________ By:______________________
Name: Name:
Title: Title:
<PAGE>
EXHIBIT B
GENERAL CONVEYANCE, ASSIGNMENT
AND BILL OF SALE
KNOWN ALL MEN BY THESE PRESENTS, that SIRCO INTERNATIONAL
CORP., a New York corporation ("Grantor"), for good and valuable consideration
received to its satisfaction from BUENO OF CALIFORNIA, INC., a Delaware
corporation ("Grantee"), pursuant to the Asset Purchase Agreement, dated March
20, 1995 (the "Agreement"), by and between Grantor and Grantee, does hereby
convey, sell, transfer, assign and deliver to Grantee, its successors and
assigns, all right, title and interest of Grantor at the Closing (as defined in
the Agreement) in and to the Property (all capitalized terms used herein and not
defined herein shall have the meanings given them in the Agreement) including,
without limitation, the Property set forth below:
1. The Personal Property listed on Schedule 1.1(a) to the
Agreement;
2. The Inventory;
3. The Proprietary Rights listed on Schedule 1.1(c) to the
Agreement;
4. The Contracts listed on Schedule 1.1(d) to the Agreement;
5. All deposits, prepaid expenses and other miscellaneous
assets of the Division listed on Schedule 1.1(e) to the Agreement;
6. All books of account, customer lists, files, papers and
records used currently in conducting the Business; and
7. All goodwill relating to the Division.
Notwithstanding the foregoing, there shall be excluded from
the assets, properties, rights, (contractual and otherwise) and business of
Seller to be conveyed, sold, transferred, assigned and delivered to Buyer under
the Agreement (i) cash and cash equivalents and investment securities, (ii) all
accounts receivable relating to or arising out of the operation of the Division
prior to the date hereof, (iii) notes receivable from Seller and third parties
to the Division, (iv) tax refunds paid to Seller, whether or not such tax
refunds relate to the Division, (v) all corporate minute books, stock records,
tax returns and supporting schedules, books of original financial entry, and
internal accounting documents and records (all of which shall be subject to
Buyer's right to inspect and copy at Buyer's expense for any reasonable purpose
during normal business hours) and (vi) all causes of action, judgments, claims
or demands of whatever kind or description relating to the Division which Seller
has or may have against any other person or entity.
TO HAVE AND TO HOLD the same, unto Grantee, its successors and
assigns forever.
This General Conveyance, Assignment and Bill of Sale is being
delivered subject and pursuant to the terms and conditions of the Agreement;
however, the rights and obligations of Grantor and Grantee set forth in the
representations, warranties, covenants, agreements and other terms and
provisions of the Agreement shall be neither limited, altered or impaired nor
enhanced or enlarged hereby or by performance hereunder.
This General Conveyance, Assignment and Bill of Sale shall be
subject to and construed and enforced in accordance with the laws of the State
of New York, without regard to the principles of conflicts of law thereof.
<PAGE>
IN WITNESS WHEREOF, Grantor has caused this General
Conveyance, Assignment and Bill of Sale to be executed on its behalf this 20th
day of March, 1995.
SIRCO INTERNATIONAL CORP.
By:_________________________
Name:
Title:
<PAGE>
EXHIBIT C
ASSUMPTION AGREEMENT
This ASSUMPTION AGREEMENT, dated as of the 20th day of March,
1995, is by and between BUENO OF CALIFORNIA, INC., a Delaware corporation (the
"Buyer"), and SIRCO INTERNATIONAL CORP., a New York corporation (the "Seller").
W I T N E S S E T H:
WHEREAS, Buyer and Seller are parties to that certain Asset
Purchase Agreement, dated March 20, 1995 (the "Agreement"), providing, among
other things, for the assumption by Buyer of certain of Seller's liabilities and
obligations (capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to such terms in the Agreement); and
WHEREAS, the parties hereto desire to provide for the
assumption of such liabilities and obligations in accordance with the terms of
the Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and
satisfaction of their respective obligations under the Agreement, the parties
hereto hereby agree as follows:
(a) Assumption. Buyer hereby assumes and undertakes to pay,
discharge and perform in full when due the liabilities and obligations (i)
arising under the Contracts to the extent such liabilities and obligations are
required to be performed after the Closing, (ii) related to severance, pension
or welfare benefits including, without limitation, accrued payroll, accrued sick
days and accrued vacation days, for Employees to which Buyer shall extend
employment in accordance with Section 5.7 of the Agreement, (iii) related to
goods purchased by the Division prior to the Closing but not yet delivered to
the warehouse and (iv) related to Inventory returned to Seller after the Closing
by customers of the Division in accordance with Section 1.1(b) of the Agreement.
Nothing herein shall serve to limit Buyer's obligations under Section 2.1 of the
Agreement.
(b) Governing Law. This Assumption Agreement shall be subject
to, and construed and enforced in accordance with, the laws of the State of New
York, without regard to the principles of conflicts of law thereof.
(c) Governing Documents. The rights and obligations of the
parties are set forth in the representations, warranties, covenants, agreements
and other terms and provisions of the Agreement. Such rights and obligations
shall be neither limited, altered or impaired nor enhanced or enlarged hereby or
by performance hereunder.
<PAGE>
IN WITNESS WHEREOF, Seller and Buyer have caused this
Assumption Agreement to be executed as of the day and year first above written.
BUENO OF CALIFORNIA, INC.
By:_______________________
Name:
Title:
SIRCO INTERNATIONAL CORP.
By:_______________________
Name:
Title:
<PAGE>
EXHIBIT D
YASHIRO CO., INC.
1-18-5 Tatsumi-Naka
Ikuno-Ku, Osaka 544
Japan
March 20, 1995
Sirco International Corp.
24 Richmond Hill Avenue
Stamford, Connecticut 06901
Attention: Mr. Joel Dupre
Dear Sirs:
This letter agreement (the "Agreement") shall serve to
memorialize our mutual understanding with respect to the provision by Yashiro
Co., Inc., a Japanese corporation ("Yashiro"), directly or indirectly to Sirco
International Corp., a New York corporation (the "Corporation"), of unsecured
trade letters of credit in accordance with the terms and provisions set forth
herein.
1. The Facility. At the Corporation's request in accordance
with Section 2 hereof, Yashiro shall issue, or cause to be issued, from time to
time from the date hereof through and including the second anniversary of such
date (the "Term"), on behalf of the Corporation, one or more letters of credit
in an aggregate amount not to exceed 35% of the book value of all inventory
owned by the Corporation (calculated in accordance with generally accepted
accounting principles ("GAAP")) at the time the Corporation requests a letter of
credit to be issued pursuant hereto by Yashiro; provided, however, that at no
time during the Term shall Yashiro be obligated to issue, or cause to be issued,
to or on behalf of the Corporation one or more letters of credit in an aggregate
amount greater than US$1,200,000.
2. Issuance of Letters of Credit.
(a) The Corporation may request Yashiro to issue, or cause to
be issued, a letter of credit by delivering to Yashiro, thirty (30) days prior
to the issuance of any letter of credit, at its address set forth above a
written request containing (i) the amount of the letter of credit requested,
(ii) a copy of the related agreement or purchase order to which such letter of
credit request relates, (iii) information regarding the manufacturer party to
such agreement and (iv) such other certificates, documents and other papers and
information as Yashiro may reasonably request. Notwithstanding anything set
forth in this Agreement to the contrary, Yashiro's prior written consent, with
respect to the manufacturer party to the agreement to which a letter of credit
request relates (other than manufacturers referred to in Section 2(c) below),
which consent may be withheld by Yashiro in its sole discretion, shall be a
condition precedent to any borrowing hereunder.
(b) Subject to the terms and conditions of this Agreement,
each letter of credit shall, among other things, (i) provide for the payment of
sight drafts when presented for honor thereunder in accordance with the terms
thereof and when accompanied by the documents described therein and (ii) have an
expiration date not earlier than three (3) months after such letter of credit's
date of issuance but in no event later than the last day of the Term. Each
letter of credit shall be subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and any amendments or revision thereof and, to the extent
not inconsistent therewith, the laws of the State of New York.
(c) Schedule A sets forth the manufacturing parties which do
not require the consent of Yashiro with respect to a borrowing hereunder.
3. Repayment. The Corporation hereby agrees to repay Yashiro
with respect to any letter of credit issued or caused to be issued by Yashiro
hereunder on behalf of the Corporation no later than one hundred (100) days
after the date of shipment to which such letter of credit relates (the
"Repayment Date").
4. Fees. In consideration of Yashiro's provision, directly or
indirectly, on behalf of the Corporation, of the letter(s) of credit
contemplated hereby, the Corporation hereby agrees to pay Yashiro in accordance
with Section 5 hereof, each and every time a letter of credit is issued or
caused to be issued by Yashiro on behalf of the Corporation, the following fees:
(a) A fee equal to three (3%) percent of the face amount of
such letter of credit (the "Origination Fee"); and
(b) A fee equal to (i)the product of (x) the aggregate amount
drawn under such letter of credit multiplied by (y) the sum of (A) the base rate
of interest announced publicly by Citibank, N.A. in New York, New York, from
time to time, as its base rate plus (B) two (2%) percent multiplied by (z) the
number of days during the period commencing on the date such letter of credit is
presented for payment and ending on the date the amount drawn under such letter
of credit is repaid in full, divided by (ii) 365 (the "Financing Fee").
5. Payments. All Origination Fees or Financing Fees payable to
Yashiro in accordance with this Agreement shall be paid by the Corporation by
forwarding to Yashiro at the address set forth above a check dated thirty (30)
days prior to the Repayment Date that is drawn on the Corporation's bank account
at Daiwa Bank, New York Branch (the "Bank"), the maintenance of which shall be a
condition precedent to each and every borrowing hereunder. Such check shall also
be delivered to Yashiro thirty (30) days prior to the Repayment Date by DHL
Worldwide Express or another internationally recognized overnight delivery
courier service.
6. Early Termination. This Agreement may be terminated by
Yashiro at any time upon ten (10) days' prior written notice if the Corporation
(i) fails to repay Yashiro for any borrowings under a letter of credit in
accordance with the terms of Section 3 hereof, (ii) fails to pay any Origination
Fee or Financing Fee in accordance with Section 5 hereof, (iii) fails to cause
any check forwarded to Yashiro in accordance with Section 5 hereof to be
received thereby within fifteen (15) days of the Repayment Date, (iv) fails to
maintain with the Bank funds sufficient to make payment for any check forwarded
to Yashiro in accordance with Section 5 hereof and such insufficiency is not
cured within three (3) days or (v) at any time during the Term, has accumulated
operating losses (calculated in accordance with GAAP) in excess of $1,500,000,
commencing with the fiscal quarter following the closing of the transactions
contemplated by that certain Asset Purchase Agreement, dated March 20, 1995, by
and between the Corporation and Bueno of California, Inc.
7. Entire Agreement; Amendment. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and no amendment or modification hereof shall be valid or binding unless made in
writing and signed by the party or parties against whom enforcement thereof is
sought.
8. Notices. Any notice required, permitted or desired to be
given pursuant to any of the provisions of this Agreement shall be deemed to
have been sufficiently given or served for all purposes if delivered in person
or sent by a nationally-recognized express courier, postage and fees prepaid, to
the parties at their addresses set forth above. Either of the parties hereto may
at any time and from time to time change the address to which notice shall be
sent hereunder by notice to the other party given under this Section 8. The date
of the giving of any notice sent by a nationally-recognized express courier
shall be the date which is three days after the date of the posting of the
notice.
9. Assignment. This Agreement may not be assigned by Yashiro
without the prior written consent of the Corporation; provided, however, that
Yashiro may assign this Agreement to any affiliate thereof without any consent.
10. Governing Law. This Agreement shall be governed,
interpreted and construed in accordance with the laws of the State of New York
without regard to the conflicts of laws principles thereof.
11. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original instrument, but both of
which when taken together shall constitute one and the same instrument.
<PAGE>
If the foregoing reflects our mutual understanding, kindly
execute two (2) copies of this Agreement in the space provided below and return
one (1) copy to each of the undersigned.
Very truly yours,
YASHIRO CO., INC.
By:________________________
Name:
Title:
Accepted and Agreed to
this 20th day of March, 1995
SIRCO INTERNATIONAL CORP.
By:___________________________
Name:
Title:
<PAGE>
Schedule A
HING-WAH LEATHER PRODUCTS
BEST MOUNT DEVELOPMENT LTD.
CABOT FASHION BAGS
EVER-EXPAND
FINE & FAST CO. LTD.
CONSTELLATION ENTERPRISE CO. LTD.
CONG CHYUAN INDUSTRIAL CO. LTD.
<PAGE>
EXHIBIT E
Delta Financial Group
Incorporated
March 20, 1995
Board of Directors
Sirco International Corp.
Suite 606
10 West 33rd Street
New York, New York 10001
Gentlemen:
You have requested our opinion regarding the fairness of the proposed
sale (the "Sale") of the Handbag Division of Sirco International Corp. ("Sirco")
to Bueno of California, Inc. ("Bueno"). The terms of the Sale are set forth in
an agreement dated March 20, 1995, between Sirco and Bueno (the "Agreement").
Pursuant to the Agreement Bueno will purchase certain assets and assume certain
liabilities or Sirco related to the Handbag Division for a purchase price equal
to the sum of a) $50,000, b) 90% of the book value (as defined) of the inventory
of the Handbag Division, and c) an amount mutually agreed to by Sirco and Bueno
for certain fixed assets used in the Handbag Division, provided such amount is
not less than the value of such fixed assets on the books of Sirco as of
November 30, 1994. It is currently estimated that the component of the purchase
price related to inventory will be approximately $1,700,000, and the component
of the purchase price related to fixed assets will be approximately $35,000. The
Sale is expected to close on March 20, 1995.
Bueno is wholly owned by Yashiro Co. Inc. and Yashiro Company, Ltd.
(collectively referred to herein as the "Yashiro Companies"). Since 1989 the
Yashiro Companies have been the owners of approximately 56% of Sirco's
outstanding common stock. Thus, during the period the Sale was being negotiated
between Sirco and Bueno, the Yashiro Companies were the controlling shareholders
of Sirco. In a separate transaction, the Yashiro Companies are selling their
shares of Sirco to Mr. Joel Dupre and three other investors (the "Dupre Group").
Mr. Dupre is currently a director and Executive Vice President of Sirco. The
sale of the Sirco shares owned by the Yashiro Companies to the Dupre Group must
close as condition for the closing of the sale of the Handbag Division.
Delta Financial Group, Inc. ("DFG") is frequently engaged in the
valuation of businesses and their securities in connection with both its
investment banking activities and its financial advisory services. DFG has not
previously provided any investment banking or financial advisory services to
Sirco or its principal shareholders.
In connection with rendering this opinion we have reviewed, among other
things:
- The Agreement,
- the contracts which are exhibits to the Agreements covering, among
other things, a) the agreements among Sirco, the Yashiro Companies,
Bueno, and two senior officer of the Yashiro Companies not to compete
with each other in their respective businesses, b) severance payments
to be made to Mr. Takeshi Yamaguci in connection with his planned
resignation as the President and Chief Executive Officer of Sirco, c)
the agreement between Sirco and Bueno relating to certain space to be
subleased by Sirco to Bueno in California, d) the agreement between
Sirco and Bueno relating to certain space to be shared by the parties
in New York City, and e) a revolving letter of credit facility for
$1.2 million to be provided by Yashiro Co., to Sirco for two years,
- the agreement covering the planned sale by the Yashiro Companies of
681,000 Sirco shares to the Dupre Group,
- the audited financials for the years ended November 30, 1993 and 1994
of Sirco, and the profit and loss statements of Sirco's operating
divisions for the fiscal years ending November 30, 1991, 1992, 1993,
and 1994,
- the For 10-K's filed by Sirco for the fiscal years ended November 30,
1993 and 1994, and
- the financial projections of Sirco prepared by the management of
Sirco.
In addition, as part of our review we held discussions with the
management of Sirco regarding the past and present business operations of Sirco.
We have also discussed with the continuing members of Sirco's management their
plans for Sirco's operations following the Sale. In these discussions we were
advised that the personal guarantee provided by Mr. Yutaka Yamaguchi of a bank
loan to Sirco will remain in effect until late June 1995. Mr. Yutaka Yamaguchi
is the principal shareholder of the Yashiro Companies. In developing the opinion
set forth in this letter we considered numerous factors regarding the operations
and financial performance of Sirco. One of the important factors considered in
our deliberations was the performance of the Handbag Division over the past
three fiscal years. During this period the Handbag Division experienced
significant operating losses.
We have relied upon the accuracy and completeness of the financial and
other information we have been provided by Sirco for the purposes of this
opinion. We have not attempted to independently verify such information. We have
also assumed that the financial forecasts provided to us have been reasonably
prepared and reflect the best currently available judgments and estimates of the
continuing management of Sirco.
Based upon and subject to the foregoing and based upon such other
factors as we considered relevant, it is our opinion that the terms of the sale
of the Handbag Division are fair from a financial point of view to Sirco and its
shareholders other that the Yashiro Companies. In addition, it is our opinion
that the terms of the other agreements that are exhibits to the Agreement, when
considered in light of the expected benefits to be derived by Sirco from the
sale of the Handbag Division, and when considered as a group, are also fair from
a financial point of view to Sirco and its shareholders other than the Yashiro
Companies.
Sincerely,
/s/Timoth Hurley
Timothy Hurley
President
<PAGE>
EXHIBIT F
________________________________________________________________________________
SUBLEASE BETWEEN
SIRCO INTERNATIONAL CORP., SUBLANDLORD
AND
BUENO OF CALIFORNIA, INC., SUBTENANT
________________________________________________________________________________
<PAGE>
SUBLEASE made as of the 20th day of March, 1995, by and between SIRCO
INTERNATIONAL CORP., a New York corporation, having an office at 24 Richmond
Hill Avenue, Stamford, Connecticut 06901-3601 (hereinafter called
"Sublandlord"), and BUENO OF CALIFORNIA, INC., a Delaware corporation, having an
office at 16000 Heron Street, La Mirada, California 90638-5513 (hereinafter
called "Subtenant").
W I T N E S S E T H:
WHEREAS:
A. By Agreement of lease dated February 14, 1990,
ORO-MAY-BROWARD INVESTMENT COMPANY (hereinafter called "Overlandlord") leased to
Sublandlord certain space (hereinafter called the "Leased Space") in the
building known as 16000 Heron Street, La Mirada, California (hereinafter called
the "Building") in accordance with the terms of the Overlease. A copy of the
Over-lease has been previously delivered by Sublandlord to Subtenant.
B. Sublandlord and Subtenant desire to consummate a
sub-leasing of a portion of the Leased Space on terms and conditions contained
in this agreement (hereinafter called the "Sublease").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, it is hereby agreed as follows:
1.
1.1. Sublandlord hereby leases to Subtenant and Subtenant hereby hires
from Sublandlord the portion of first floor of the Building (comprising a
portion of the Leased Space) shown hatched on Exhibit A annexed hereto and made
a part hereof (hereinafter called the "Premises") for a term (hereinafter called
the "Sub- lease Term") to commence on the date hereof (hereinafter called the
"Sublease Commencement Date") and to end on the day preceding the expiration or
sooner termination of the Overlease (herein- after called the "Sublease
Expiration Date"), at an annual fixed rent (hereinafter called "fixed annual
rent") of (i) $120,000, in equal monthly installments of $10,000, from the
Sublease Com- mencement Date through the day preceding the fourth (4th)
anniversary of the Sublease Commencement Date, and (ii) $203,880, in equal
monthly installments of $16,990, from the fourth (4th) anniversary of the
Sublease Commencement Date through the Sub- lease Expiration Date, together with
Subtenant's proportionate share of increases in accordance with Addendum Article
1 of the Overlease, Subtenant to reimburse Sublandlord, upon demand, for 33.05%
of any increase in monthly net rental paid or due and owing under the Overlease
in accordance with such Addendum Article 1, to be paid by Subtenant to
Sub-land-lord at Sublandlord's office (or such other location as Sub-landlord
shall designate) by check drawn on a bank which is a member of the New York
Clearing House Association in equal month-ly installments in advance, on the
first day of each month during the Sublease Term without any set-off, off-set,
abatement or reduction whatsoever.
2.
2.1. Subtenant shall not (a) assign this Sublease, nor (b) permit this
Sublease to be assigned by operation of law or other- wise, nor (c) underlet all
or any part of the Premises nor (d) permit the Premises or any desk space
therein to be occupied by any person(s) other than employees, officers and
directors of Subtenant, without first obtaining:
(i) Overlandlord's consent and all other required consents to
such assignment or subletting as set forth in and pursuant to the Overlease,
and
(ii) Sublandlord's consent.
3.
3.1. Except as herein otherwise expressly provided and except for the
obligation to pay rent and additional rent under the Overlease, all of the
terms, covenants, conditions and provisions in the Overlease are hereby
incorporated in, and made a part of this Sublease, and such rights and
obligations as are contained in the Overlease are hereby imposed upon the
respective parties hereto; the Sublandlord herein being substituted for the
Landlord in the Overlease and the Subtenant herein being substi- tuted for the
Tenant named in the Overlease; provided, however, that Sub-landlord herein shall
not be liable for any defaults by Overland-lord and, if Overlandlord is not the
fee owner, the owner in fee of the land and Building of which the Premises are a
part. If the Overlease shall be terminated for any reason during the term
hereof, then and in that event this Sublease shall there-upon automatically
terminate and Sublandlord shall have no liabil-ity to Subtenant by reason
thereof, except if caused solely by a default or wilful act of Sublandlord. Upon
the termination of this Sublease, whether by for-feiture, lapse of time or
otherwise, or upon the termination of Subtenant's right to possession, Sub-
tenant will at once surrender and deliver up the Premises in its present
condition, reasonable wear and tear excepted.
3.2. For the purposes of this Sublease, Sections 2, 3.1, 4, 6.3(a), 12,
15, 39 and Addendum Articles 3 and 4 of the Over-lease shall not be deemed
incorporated in or made a part hereof.
4.
4.1. Subtenant has examined the Premises, is aware of the physical
condition thereof, and agrees to take the same "as is," with the understanding
that there shall be no obligation on the part of Sublandlord to incur any
expense whatsoever in connection with the preparation of the Premises for
Subtenant's occupancy thereof.
5.
5.1. Subtenant agrees that the Premises shall be occupied only as
executive, administrative and general offices, warehouse and shipping facility
for Subtenant's business.
6.
6.1. This Sublease is conditioned upon the consent thereto by
Overlandlord which consent shall be evidenced by Over- landlord's signature
appended hereto or a separate consent in the form utilized by Overlandlord for
such purposes.
6.2. Sublandlord makes no representation with respect to obtaining
Overlandlord's approval of this Sublease and, in the event that Overlandlord
notifies Sublandlord that Overlandlord will not give such approval Sublandlord
will so notify Subtenant and, upon receipt of such notification by Sublandlord
of the disapproval by Overlandlord, this Sublease shall be deemed to be null and
void and without force or effect, and Sublandlord and Subtenant shall have no
further obligations or liabilities to the other with respect to this Sublease.
6.3. Except as otherwise specifically provided herein, wherever in this
Sublease Subtenant is required to obtain Sub- landlord's consent or approval,
Subtenant understands that Sub- landlord may be required to first obtain the
consent or approval of Overlandlord. If Overlandlord should refuse such consent
or approvals Sublandlord shall be released of any obligation to grant its
consent or approval whether or not Overlandlord's refusals in Subtenant's
opinion, is arbitrary or unreasonable.
7.
7.1. Subtenant acknowledges that the services to be rendered to the
Premises are to be rendered by Overlandlord. Anything in this Sublease to the
contrary notwithstanding, if there exists a breach by Sublandlord of any of its
obligations under this Sub-lease and, concurrently, a corresponding breach by
Overlandlord under the Overlease of its obligations under the Overlease exists,
then and in such event, Subtenant's sole remedy against Sublandlord in the event
of any breach of obligations under this Sublease shall be the right to pursue a
claim in the name of Sublandlord against Over-land-lord, and Sublandlord agrees
that it will, at Subtenant's expense, cooperate with Subtenant in the pursuit of
such claim.
7.2. Anything contained in any provisions of this Sublease to the
contrary notwithstanding, Subtenant agrees, with respect to the Premises, to
comply with and remedy any default claimed by Over-landlord and caused by
Subtenant, within the period allowed to Sublandlord as tenant under the
Overlease, even if such time period is shorter than the period otherwise allowed
in the Over- lease, due to the fact that notice of default from Sublandlord to
Subtenant is given after the corresponding notice of default from Overlandlord.
Sublandlord agrees to forward to Subtenant, upon receipt thereof by Sublandlord,
a copy of each notice of default received by Subland-lord in its capacity as
tenant under the Over- lease. Subtenant agrees to forward to Sublandlord, upon
receipt thereof, copies of any notices received by Subtenant with respect to the
Premises from Overlandlord or from any governmental authorities.
8.
8.1. Sublandlord represents (a) that it is the holder of the interest
of the tenant under the Overlease, (b) that the over-lease is in full
force and effect.
9.
9.1. This Sublease is subject to, and Subtenant accepts this Sublease
subject to, any amendments and supplements to the Over-lease hereafter made
between Overlandlord and Sublandlord, provided that any such amendment or
supplement to the overlease will not prevent or adversely affect the use by
Subtenant of the Premises in accordance with the terms of this Sublease,
increase the obliga-tions of Subtenant or decrease its rights under the
Sub-lease or in any other way materially adversely affect Subtenant.
9.2. This Sublease is subject and subordinate to the Over- lease and to
all ground or underlying leases and to all mortgages which may now or hereafter
affect such leases or the real pro- perty of which the Premises are a part and
all renewals, modifi- ca-tions, replacements and extensions of any of the
foregoing. This Section 9.2 shall be self-operative and no further instru- ment
of subordina-tion shall be required. To confirm such sub- ordination, Subtenant
shall execute promptly any certificate that Sublandlord may request.
10.
10.1. Subtenant and Sublandlord each covenants, represents and warrants
that Sub-tenant and Sublandlord, respectively, has had no dealings or
communications with any broker or agent in connection with the consummation of
this Sublease and Subtenant and Sublandlord each covenants and agrees to pay,
hold harmless and indem-nify the other from and against any and all cost,
expense (in-cluding reasonable attorneys' fees) or liability for any
com-pen-sation, commissions or charges claimed by any broker or agent other than
such brokers with respect to this Sublease or the negotiation thereof.
11.
11.1. Subtenant stipulates that it is familiar with the pro-visions of
Article 10 of the Overlease. In the event of any pay-ment of additional rent by
Sublandlord to Overlandlord during the term of this Sublease which increase is
attributable to the provisions of Article 10 of the Overlease (such addi-tional
rent payable by Sublandlord pursuant to Article 10 of the Overlease being
hereinafter called "Article 10 Rent") then Subtenant shall pay as additional
rent pursuant to this Sublease an amount equal to 33.05% of Article 10 Rent. For
purposes of this Section 11.1, the Premises shall be deemed to contain 38,190
rentable square feet and the Leased Space shall be deemed to contain 115,560
square feet. At such time as the Article 10 Rent payable by Sublandlord is
adjusted by reason of any change in the rentable area of the Leased Space, the
percentage thereof payable by Subtenant to Sublandlord shall be similarly
adjusted. At any time after payment by Sublandlord to Overlandlord of any
Article 10 Rent, Sublandlord may deliver to Subtenant a statement with respect
to the payment of the Article 10 Rent and, within ten days after delivery of
such statement, Subtenant shall pay to Subland-lord additional rent determined
as aforesaid in this Section 11.1. Additional rent payable pursuant to this
Section 11.1 shall be based solely upon actual payments made by Sub-land- lord
pursuant to the provisions of Article 10 of the Overlease. Sub-tenant shall not
have the right to question the propriety of or the basis for any such payment
and Sublandlord shall be under no obligation to contest any such payment.
Sublandlord shall, however, at the written request of Subtenant, furnish to Sub-
tenant evidence of such payment.
12.
12.1. Any notice, demand or communication which, under the terms of
this Sublease or under any statute or municipal regula- tion must or may be
given or made by the parties hereto, shall be in writing and given or made by
mailing the same by registered or certified mail, return receipt requested,
addressed to the party for whom intended at its address as aforesaid, except
that after the Sublease Commencement Date, Subtenant's address shall be deemed
to be the Building unless Subtenant shall give notice to the contrary. Either
party, however, may designate such new or other address to which such notices,
demands or communications thereafter shall be given, made or mailed by notice
given in the manner pre-scribed herein. Any such notice, demand or
communica-tion shall be deemed given or served, as the case may be, on the date
of the posting thereof.
13.
13.1. Subtenant shall, promptly upon demand by Sublandlord, reimburse
Sublandlord for 33.05% of payments made by or due and owing from Sublandlord for
electricity, water, gas, heat and other utilities furnished to the Premises;
provided, however, that Sublandlord shall cause to be supplied cleaning services
to the office space portion of the Premises (as opposed to the ware- house or
shipping facilities), in accordance with the provisions of the Overlease,
without charge to Subtenant.
14.
14.1. Subtenant may make no changes, alterations, additions,
improvements or decorations in, to or about the Premises without Sublandlord's
prior written consent in each instance where Overlandlord's consent under the
Overlease is required.
15.
15.1. Intentionally Deleted.
16.
16.1. So long as Subtenant pays all of the rent and addition-al rent
due under this Sublease and performs all of Subtenant's other obligations
hereunder, Subtenant shall peacefully and quiet-ly have, hold and enjoy the
Premises subject, however, to the terms, provisions and obligations of this
Sublease and the Overlease.
17.
17.1. This Sublease may not be changed orally, but only by an agreement
in writing signed by the party against whom enforce- ment of any waiver, change,
modification or discharge is sought.
17.2. This Sublease shall not be binding upon Sublandlord un-less and
until it is signed by Sublandlord and delivered to Sub-tenant. This Section 17.2
shall not be deemed to modify the pro-visions of Article 6 hereof.
17.3. This Sublease constitutes the entire agreement between the
parties and all representations and understandings have been merged herein.
17.4. This Sublease shall inure to the benefit of all of the parties
hereto, their successors and (subject to the provisions hereof) their assigns.
17.5. This Sublease may be executed in one or more counter- parts, all
of which together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
as of the day and year first above written.
ATTEST: SIRCO INTERNATIONAL CORP.,
Sublandlord
________________________________ __________________________________________
By:
Its:
ATTEST: BUENO OF CALIFORNIA, INC.,
Subtenant
________________________________ __________________________________________
By:
Its:
<PAGE>
EXHIBIT A
Description of the Premises
[Graphic of Land Survey]
<PAGE>
EXHIBIT G
March 20, 1995
Sirco International Corp.
24 Richmond Hill Avenue
Stamford, Connecticut 06901-36001
Re: 4-16 West 33rd Street
New York, New York
Room 605
Gentlemen:
Reference is made to the Agreement of Lease made November 13, 1987,
between West Thirty Third Joint Venture ("Landlord") and you, as "Tenant," as
amended October 26, 1988, relating to the above-captioned premises
(collectively, the "Lease"). This letter shall serve as our agreement as to the
following:
1. This agreement shall be in effect from the date hereof to and
including June 30, 1995.
2. The space demised pursuant to the Lease is described on Exhibit
A attached hereto and made a part hereof. You shall have the
sole and exclusive use of the offices marked Nos. 3, 4, 7, 8
and 9 on said Exhibit A. The undersigned, Bueno of California,
Inc., shall have the exclusive use of the offices marked as
Nos. 1, 2, 6 and 10 on Exhibit A, and the remainder of the
space shall be utilized by both of us, on a joint basis as
supplemental facilities, in connection with our use of the
specified portions of the premises.
3. As full payment for our use of the above-referenced portion of
the space, we shall pay you $9,993.00 per month with partial
months prorated.
4. We will make our payments on the first day of each month.
5. Each of us agrees to be bound by and to perform all of the
other obligations of the Tenant under the Lease and not to
cause any default under the terms thereof.
6. Each of us agree that no broker was instrumental in bringing
about this transaction.
7. This agreement may not be changed orally, but only by an
agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is
sought.
8. This agreement shall inure to the benefit of all of the parties
hereto, their successors and (subject to the provisions hereof)
their assigns.
9. This agreement may be executed in one or more counterparts, all
of which together shall constitute one and the same instrument.
Very truly yours,
BUENO OF CALIFORNIA, INC.
By:___________________________
ACCEPTED AND AGREED:
SIRCO INTERNATIONAL CORP.
By:________________________
<PAGE>
EXHIBIT H
EXCLUSIVE PURCHASING AGREEMENT
EXCLUSIVE PURCHASING AGREEMENT made this ____ day of March 1995, by and
between SIRCO INTERNATIONAL CORP., a New York corporation with an office located
at 24 Richmond Hill Avenue, Stamford, Connecticut 06901 (the "Corporation"), and
YASHIRO CO., INC., a Japanese corporation, with its principal place of business
located at 1-18-5 Tatsumi-Naka, Ikuno-Ku, Osaka 544, Japan ("Yashiro Co.,"
together with any designees thereof, the "Purchaser").
WHEREAS, Yashiro Co. and Yashiro Company, Ltd., a Japanese
corporation ("Yashiro Limited," together with Yashiro Co., the "Yashiro
Entities") have agreed to cause the sale and transfer of 681,000 shares of the
Corporation's common stock, par value $.10 per share (the "Shares"), in
accordance with that certain Stock Purchase Agreement, dated as of March __,
1995, by and among the Yashiro Entities and Joel Dupre, Pacific Million
Enterprise Ltd., Cheng-Sen Wang and Albert H. Cheng (collectively, the "Stock
Purchasers") and Yashiro Co., as Agent (the "Stock Purchase Agreement"); and
WHEREAS, Bueno of California, Inc., a Delaware corporation and
subsidiary of Yashiro Co. ("Bueno"), has agreed to purchase the Handbag Division
of the Corporation pursuant to that certain Asset Purchase Agreement, dated
March __, 1995, by and between the Corporation and Bueno (the "Asset Purchase
Agreement"); and
WHEREAS, in partial consideration of the Shares, Dupre is
executing and delivering to Yashiro Co., on its own behalf and as agent for
Yashiro Limited, a promissory note in the principal amount of $532,250 (the
"Promissory Note");
NOW, THEREFORE, in consideration of the foregoing agreements
and the covenants and agreements hereinafter set forth, the adequacy of which
consideration is hereby acknowledged, the parties hereto agree as follows:
1. Appointment. The Corporation hereby grants Purchaser the
exclusive right to purchase in Japan during the term of this Agreement, at
prices to be mutually agreed upon, any goods manufactured, or purchased from
unaffiliated vendors (the "Vendors"), by the Corporation; provided, however,
that in the event Purchaser purchases goods directly from the Vendors, Purchaser
shall pay the Corporation the Commissions (as hereinafter defined) in accordance
with Section 4 hereof.
2. Prohibition With Respect to Competing Sales. For the term
of this Agreement, the Corporation shall not, directly or indirectly, sell in
Japan any goods manufactured, or purchased from Vendors, by the Corporation.
3. Term and Termination. This Agreement shall commence as of
the date first above written and shall continue until the date upon which (a)
all amounts payable under the Promissory Note and (b) all obligations of the
Corporation or the Stock Purchasers, as the case may be, under (i) the Stock
Purchase Agreement, (ii) the Asset Purchase Agreement and (iii) any agreements
that are exhibits to either the Stock Purchase Agreement or Asset Purchase
Agreement are either satisfied or paid in full by the Stock Purchasers or the
Corporation, as the case may be.
4. Commissions. With respect to any goods purchased by
Purchaser in accordance with the terms of this Agreement, Purchaser shall pay
the Corporation a commission equal to five (5%) percent of the purchase price
paid by the Corporation for goods purchased thereby from the Vendors (the
"Commissions"). All Commissions shall be payable, effective sixty (60) days
following Purchaser's purchase of goods, through (i) reduction of the
Corporation's outstanding aggregate indebtedness including interest to the
Yashiro Entities which at the date hereof is $2,238,506.01, and (ii) offset
against any payments payable to Purchaser under that certain Non-Competition
Agreement, dated even date herewith, by and between the Corporation and
Purchaser. Thereafter, all payments of Commissions shall be made sixty (60) days
following Purchaser's purchase of goods, by wire transfer of immediately
available funds in accordance with the Corporation's written instructions.
5. Entire Agreement; Amendment. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and no amendment or modification hereof shall be valid or binding unless made in
writing and signed by the party against whom enforcement thereof is sought.
6. Notices. Any notice required, permitted or desired to be
given pursuant to any of the provisions of this Agreement shall be deemed to
have been sufficiently given or served for all purposes if delivered in person
or sent by express courier or certified mail, return receipt requested, postage
and fees prepaid to the parties at their addresses set forth above. Either of
the parties hereto may at any time and from time to time change the address to
which notice shall be sent hereunder by notice to the other party given under
this Section 5. The date of the giving of any notice sent by mail shall be the
date of the posting of the notice.
7. Assignment. This Agreement may not be assigned by Yashiro
without the prior written consent of the Corporation; provided, however, that
Yashiro may assign this Agreement to any affiliate thereof without any consent.
8. Governing Law. This Agreement shall be governed,
interpreted and construed in accordance with, the laws of the State of New York,
without regard to the conflicts of law principles thereof.
9. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original instrument, but all of
which when taken together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been made and executed
as of the day and year first above written.
YASHIRO CO., INC.
By:______________________
Name:
Title:
SIRCO INTERNATIONAL CORP.
By:______________________
Name:
Title:
<PAGE>
EXHIBIT I
GUARANTY
In consideration of and to induce the sale to the undersigned
by each of Yashiro Company, Ltd. ("Yashiro") and Yashiro Co., Inc. ("Yashiro
Co."), each a Japanese corporation (together with Yutaka Yamaguchi and Takeshi
Yamaguchi, the "Sellers") of 681,000 shares of common stock, par value $.10 per
share, of Sirco International Corp., a New York corporation (the "Corporation"),
and for other good and valuable consideration, the undersigned irrevocably and
unconditionally guarantees to Sellers, payment when due, whether by acceleration
or otherwise, of any and all Liabilities (as hereinafter defined) to Sellers,
together with all interest thereon, if applicable, and all reasonable attorneys'
fees, costs and expenses of collection incurred by Sellers in enforcing any of
such Liabilities and/or this guaranty.
The term "Liabilities" shall mean each and all of the
obligations of the Corporation as set forth on Exhibit A annexed hereto and made
a part hereof.
This is an absolute, unconditional, present and continuing
guaranty of performance and payment, and not of collection, and all Liabilities
to which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. Sellers shall not be required
to exhaust their remedies against the Corporation prior to the exercise of their
rights and remedies against the undersigned.
Sellers may at any time and from time to time without the
consent of, or notice to, the undersigned, without incurring responsibility to
the undersigned, without impairing or releasing the obligations of the
undersigned hereunder, upon or without any terms or conditions and in whole or
in part:
(i) change the manner, place or terms of payments, and/or
change or extend the time of payment of, renew or alter any Liabilities or any
liability incurred directly or indirectly in respect thereof, and the guaranty
herein made shall apply to the Liabilities as so changed, extended, renewed or
altered;
(ii) accept any checks, notes or other obligations secured or
unsecured in any amount, purportedly in payment of the whole or any part of the
Liabilities;
(iii) exercise or refrain from exercising any rights against
the Corporation or others (including the undersigned) or otherwise act or
refrain from acting upon any default of the Corporation; or
(iv) settle or compromise any Liability hereby guaranteed or
any other liability (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof.
In the event that any of such Liabilities (including any
installment payments) are payable and default occurs with respect to the payment
thereof, or in the event of a breach of a covenant in any agreement governing
such Liability which is not cured during any applicable grace period, then, at
the option of Sellers, the specific Liability, including the full unpaid balance
due thereof, whether or not then due, shall be immediately due and payable to
Sellers on demand.
In the event of any proceeding between the parties in respect
of any matter arising under this guaranty, the undersigned hereby consents that
Sellers' records, and entries thereon, shall be admissible into evidence as
proof of sale, delivery, acceptance, price and of all other transactions shown
thereon, and of the amount of the liability of the undersigned.
The undersigned hereby waives notice of acceptance of this
guaranty and notice of any Liability to which it may apply, including, but not
limited to, the making of sales, the rendition of services and the extension of
credit by Sellers to the Corporation, and further waives presentment, demand for
payment, protest, notice of dishonor or nonpayment of any Liabilities, suit or
taking of other action by Sellers, and any other notice to any party liable
thereon (including the undersigned).
Upon the happening of the following events: the insolvency or
suspension of business of the Corporation, or the making by the Corporation or
the undersigned of an assignment for the benefit of creditors, or a trustee or
receiver being appointed for the Corporation or the undersigned or for any
property of either of them, or any proceeding being commenced against the
Corporation or the undersigned under any bankruptcy, reorganization, arrangement
of debt, insolvency, readjustment of debt, receivership, liquidation or
dissolution law or statute which shall not be dismissed within sixty days after
its commencement, then, and in any such event and at any time thereafter,
Sellers may, without notice to the Corporation or the undersigned, make all the
Liabilities to Sellers, whether or not then due, immediately due and payable
hereunder as to the undersigned, and Sellers shall be entitled to enforce the
obligations of the undersigned hereunder.
No invalidity, irregularity or unenforceability of all or any
part of the Liabilities hereby guaranteed or of any security therefor shall
affect, impair or be a defense to this guaranty, this guaranty being a primary
obligation of the undersigned; provided, however, that, notwithstanding anything
set forth herein to the contrary, the undersigned may assert as a defense to
this guaranty, any good faith defense that is applicable under any agreement
governing the Liability under which gives rise to Sellers' enforcement of this
guaranty. Should any one or more provisions of this guaranty be judicially
determined to be unenforceable, all other provisions shall not be affected and
shall remain in full force and effect.
No delay on the part of Sellers in exercising any of their
options, powers or rights, or partial or single exercise thereof, shall
constitute a waiver thereof. No waiver of any of their rights hereunder, and no
modification or amendment of this guaranty, shall be deemed to be made by
Sellers unless the same shall be in writing, duly signed on behalf of Sellers,
and each such waiver, if any, shall apply only with respect to the specific
instance involved, and shall in no way impair the rights of Sellers or the
Liabilities to Sellers in any other respect at any other time.
The rights of Sellers are cumulative and shall not be exhausted
by Sellers' exercise of any of their rights hereunder or otherwise against the
undersigned or by any number of successive actions until and unless all
indebtedness hereby guaranteed has been paid and each of the obligations of the
undersigned hereunder has been fully satisfied.
This guaranty and the rights and obligations of Sellers and of
the Corporation shall be governed and construed in accordance with the laws of
the State of New York, except that body of law relating to the choice of laws.
This guaranty is binding upon the undersigned, his executors, administrator,
successors and assigns, and shall inure to the benefit of Sellers, their
successors and assigns.
Dated: March __, 1995
- -------------------------------
JOEL DUPRE
<PAGE>
EXHIBIT A
As used herein, the term "Liabilities" shall mean the
obligations of the Corporation under the following agreements:
1. The Letter of Credit Agreement, dated even date herewith,
by and between the Corporation and Yashiro Co.
2. The Non-Competition Agreement, dated even date herewith, by
and between the Corporation and Yashiro Co.
3. The Non-Competition Agreement, dated even date herewith, by
and between the Corporation and Yashiro Limited.
4. The Non-Competition Agreement, dated even date herewith, by
and between the Corporation and Yutaka Yamaguchi.
5. The Non-Competition Agreement, dated even date herewith, by
and between the Corporation and Takeshi Yamaguchi.
6. The Severance Agreement, dated even date herewith, by and
between the Corporation and Takeshi Yamaguchi.
<PAGE>
EXHIBIT J
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of March 20, 1995, made by each of
JOEL DUPRE ("Dupre"), Pacific Million Enterprise Ltd., Cheng-San Wang and Albert
H. Cheng (collectively, the "Pledgors") in favor of BUENO OF CALIFORNIA, INC., a
Delaware corporation ("Bueno"), and YASHIRO CO., INC., a Japanese corporation
("Yashiro Co."), on its own behalf and as agent for YASHIRO COMPANY, LTD., a
Japanese corporation ("Yashiro Limited," together with Yashiro Co., the "Yashiro
Entities"). Bueno and Yashiro Co., as agent, are together hereinafter referred
to as the "Pledgees".
WITNESSETH:
WHEREAS, the Pledgors are parties to that certain Stock
Purchase Agreement, dated as of March 20, 1995, by and among the Yashiro
Entities and the Pledgors and Yashiro Co., as Agent (the "Stock Purchase
Agreement"), pursuant to which the Pledgors shall purchase from the Yashiro
Entities an aggregate of 681,000 shares (the "Pledged Shares") of common stock,
par value $.10 per share (the "Common Stock"), of Sirco International Corp., a
New York corporation (the "Corporation"), in partial consideration of which
Dupre shall execute and deliver to Yashiro Co., as agent for the Yashiro
Entities, a promissory note in the principal amount of $532,250 (the "Note");
and
WHEREAS, Bueno is party to that certain Asset Purchase
Agreement, dated March 20, 1995, by and between Bueno and the Corporation,
pursuant to which Bueno shall purchase the Corporation's Handbag Division; and
WHEREAS, as a condition precedent to (i) the Yashiro Entities
entering into the Stock Purchase Agreement and (ii) Bueno entering into the
Asset Purchase Agreement, the Pledgors shall have made the pledge contemplated
by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Yashiro Entities to enter into the Stock Purchase Agreement and
Bueno to enter into the Asset Purchase Agreement, the Pledgors hereby agree as
follows:
SECTION 1. Pledge. The Pledgors hereby pledge to the Pledgees,
and grant to the Pledgees a security interest in, the following (the "Pledged
Collateral"):
(a) the Pledged Shares and the certificates representing the
Pledged Shares, and all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares; and
(b) all proceeds of any and all of the Pledged Collateral
(including, without limitation, proceeds that constitute property of the
types described above).
SECTION 2. Security for Obligations. This Agreement secures the
payment of all of the following obligations:
(a) All obligations of Dupre now or hereafter existing under
the Note, whether for principal, interest, fees, expenses or otherwise;
(b) All obligations of the Pledgors now or hereafter existing
under the Stock Purchase Agreement or any agreement that is an exhibit
thereto;
(c) All obligations of the Corporation now or hereafter
existing under the Asset Purchase Agreement including, without
limitation, the obligations and covenants of the Corporation pursuant to
each of Sections 5.1 and 5.2 thereof;
(d) All obligations of the Corporation now or hereafter
existing under any agreement that is an exhibit to the Asset Purchase
Agreement; and
(e) All obligations of the Pledgors now or hereafter existing
under this Agreement.
All obligations set forth in subsections (a) through (e), inclusive, of this
Section 2 shall hereinafter be collectively referred to as the "Obligations."
The Stock Purchase Agreement, the Asset Purchase Agreement and any agreement
that is an exhibit to either of the foregoing agreements shall hereinafter be
collectively referred to as the "Operative Agreements." Without limiting the
generality of the foregoing, this Agreement secures the payment of all amounts
and the fulfillment of all obligations which constitute part of the Obligations
and would be owed or required to be performed by (i) Dupre to the Yashiro
Entities under the Note or (ii) by the Pledgors or the Corporation, as the case
may be, under the Operative Agreements but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving any of the Pledgors or the
Corporation; provided, however, that this Agreement shall nevertheless remain
enforceable notwithstanding any such proceeding.
SECTION 3. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of the Pledgees pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Pledgees. The Pledgees shall have the right, at any time in
their discretion and without notice to the Pledgors, to transfer to or to
register in the name of the Pledgees or any of their nominees any or all of the
Pledged Collateral, subject only to the revocable rights specified in Section
6(a) hereof. In addition, the Pledgees shall have the right at any time to
exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger denominations.
SECTION 4. Representations and Warranties. The Pledgors
represent and warrant to each of the Pledgees as follows:
(a) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(b) The Pledgors are the legal and beneficial owner of the
Pledged Collateral free and clear of any lien, security interest, option
or other charge or encumbrance except for the security interest created
by this Agreement.
(c) The pledge of the Pledged Shares pursuant to this Agreement
creates a valid and perfected first priority security interest in the
Pledged Collateral, securing the payment of the Obligations.
(d) No consent of any other person or entity and no
authorization, approval, or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required (i) for
the pledge by the Pledgors of the Pledged Collateral pursuant to this
Agreement or for the execution, delivery or performance of this
Agreement by the Pledgors, (ii) for the perfection or maintenance of the
security interest created hereby (including the first priority nature of
such security interest) or (iii) for the exercise by the Pledgees of the
voting or other rights provided for in this Agreement or the remedies in
respect of the Pledged Collateral pursuant to this Agreement (except as
may be required in connection with any disposition of any portion of the
Pledged Collateral by laws affecting the offering and sale of securities
generally).
(e) There are no conditions precedent to the effectiveness of
this Agreement that have not been satisfied or waived.
SECTION 5. Further Assurances. The Pledgors agree that any time
and from time to time, at their own expense, the Pledgors will promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that the Pledgees may reasonably request,
in order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Pledgees to exercise and enforce their rights
and remedies hereunder with respect to any Pledged Collateral.
SECTION 6. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing;
(i) The Pledgors shall be entitled to exercise or refrain from
exercising any and all voting and other consensual rights pertaining to
the Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement; provided, however, that
the Pledgors shall not exercise or refrain from exercising any such
right if, in the Pledgees' sole judgment, such action would have a
material adverse effect on the value of the Pledged Collateral or any
part thereof.
(ii) The Pledgors shall be entitled to receive and retain any
and all dividends paid in respect of the Pledged Collateral; provided,
however, that any and all
(A) dividends paid or payable other than in cash in respect
of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for,
Pledged Collateral,
(B) dividends and other distributions paid or payable in
cash in respect of any Pledged Collateral in connection with a
partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or
paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in respect
of principal of, or in redemption of, or in exchange for, any
Pledged Collateral, shall be, and shall be forthwith delivered
to the Pledgees to hold as, Pledged Collateral and shall, if
received by the Pledgors, be received in trust for the benefit
of the Pledgees, be segregated from the other property or funds
of the Pledgors, and be forthwith delivered to the Pledgees as
Pledged Collateral in the same form as so received (with any
necessary indorsement or assignment).
(iii) The Pledgees shall execute and deliver (or cause to be
executed and delivered) to the Pledgors all such proxies and other
instruments as the Pledgors may reasonably request for the purpose of
enabling the Pledgors to exercise the voting and other rights which they
are entitled to exercise pursuant to paragraph (i) of this Section 6(a)
and to receive the dividends which they are authorized to receive and
retain pursuant to paragraph (ii) of this Section 6(a).
(b) Upon the occurrence and during the continuance of an Event
of Default:
(i) All rights of the Pledgors to exercise or refrain from
exercising the voting and other consensual rights which they
would otherwise be entitled to exercise pursuant to Section
6(a)(i) and to receive the dividends which they would otherwise
be authorized to receive and retain pursuant to Section
6(a)(ii) shall cease, and all such rights shall thereupon
become vested in the Pledgees who shall thereupon have the sole
right to exercise or refrain from exercising such voting and
other consensual rights and to receive and hold as Pledged
Collateral such dividends.
(ii) All dividends which are received by the Pledgors
contrary to the provisions of paragraph (i) of this Section
6(b) shall be received in trust for the benefit of the
Pledgees, shall be segregated from other funds of the Pledgors
and shall be forthwith paid over to the Pledgees as Pledged
collateral in the same form as so received (with any necessary
indorsement).
(c) As used in this Agreement, "Event of Default" shall mean
any of the following:
(i) the failure by Dupre to pay any principal of, interest
accrued on, or any other payment required under, the Note when
the same becomes due and payable after giving effect to any
applicable grace periods; or
(ii) the failure by the Pledgors to fulfill any of their
obligations under the Stock Purchase Agreement or any agreement
that is an exhibit thereto within ten (10) days after written
notice by Pledgee of such failure; or
(iii) the failure by the Corporation to fulfill any of its
obligations under the Asset Purchase Agreement including,
without limitation, its obligations pursuant to each of
Sections 5.1 or 5.2 thereof within ten (10) days after written
notice by Pledgee of such failure; or
(iv) the failure by the Corporation to fulfill any of its
obligations under any agreement that is an exhibit to the Asset
Purchase Agreement within ten (10) days after written notice by
Pledgee of such failure.
SECTION 7. Transfers and Other Liens. The Pledgors agree that:
(a) They will not (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to,
any of the Pledged Collateral, or (ii) create or permit to exist any
lien, security interest, option or other charge or encumbrance upon or
with respect to any of the Pledged Collateral, except for (i) the
security interest under this Agreement and (ii) the granting of an
option or proxy with respect to, or sale of, the Pledged Collateral to
Dupre. Notwithstanding the preceding sentence, any transfer of the
Pledged Collateral to Dupre from any other Pledgor pursuant to an option
granted to Dupre shall be subject to such documentation as Pledgees may
reasonably request to assure compliance with applicable securities laws
and to confirm their continuing security interest in the Pledged
Collateral to be so transferred, all in accordance with Section 5
hereof.
(b) Notwithstanding anything contained herein to the contrary,
during the term of this Agreement, Dupre may sell a maximum of 70,000
shares of Common Stock. In connection with any such sale, upon 10 days
written notice to Yashiro, Pledgees will cooperate with Dupre in making
available in The City of New York certificates representing any Pledged
Shares to be sold by Dupre so that, among other things, upon
consummation of any sale following such 10 day notice period, Dupre can
make available to his purchaser certificates for the Pledged Shares
being sold within the time period and in the manner required by
applicable law.
SECTION 8. Pledgees Appointed Attorney-in-Fact. The Pledgors
hereby appoint each of Yashiro Co. and Bueno, the Pledgors' attorney-in-fact,
each with full authority in the place and stead of the Pledgors and in the name
of the Pledgors or otherwise, from time to time in their discretion to take any
action and to execute any instrument which the Pledgees may deem necessary or
advisable to accomplish the purposes of this Agreement (subject to the rights of
the Pledgors under Section 6) including, without limitation, to receive, indorse
and collect all instruments made payable to the Pledgors representing any
dividend or any part thereof and to give full discharge for the same.
SECTION 9. Pledgees May Perform. If the Pledgors fail to
perform any agreement contained herein, the Pledgees may themselves perform, or
cause performance of, such agreement, and the expenses of the Pledgees incurred
in connection therewith shall be payable by the Pledgors under Section 12
hereof.
SECTION 10. The Pledgees' Duties. The powers conferred on the
Pledgees hereunder are solely to protect their interest in the Pledged
Collateral and shall not impose any duty upon them to exercise any such powers.
Except for the safe custody of any Pledged Collateral in their possession and
the accounting for moneys actually received by them hereunder, the Pledgees
shall have no duty as to any Pledged Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Collateral, whether or not the Pledgees
have or are deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Pledged Collateral. The Pledgees shall be deemed to have
exercised reasonable care in the custody and preservation of any Pledged
Collateral in their possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Pledgees accord their own property.
SECTION 11. Remedies upon Default. If any Event of Default
shall have occurred and be continuing:
(a) The Pledgees may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for herein
or otherwise available to them, all the rights and remedies of a secured
party on default under the Uniform Commercial Code in effect in the
State of New York at the time (the "Code") (whether or not the Code
applies to the Pledged Collateral), and may also, without notice except
as specified below, sell the Pledged Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange, broker's
board or at any of the Pledgees' offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Pledgees
may deem commercially reasonable. The Pledgors agree that, to the extent
notice of sale shall be required by law, at least ten (10) days' notice
to the Pledgors of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. The Pledgees shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having been given. The
Pledgees may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
(b) Any cash held by the Pledgees as Pledged Collateral and all
cash proceeds received by the Pledgees in respect of any sale of,
collection from, or other realization upon all or any part of the
Pledged Collateral may, in the discretion of the Pledgees, be held
thereby as collateral for, and/or then or at any time thereafter be
applied (after payment of any amounts payable to the Pledgees for any
reasonable expenses incurred thereby pursuant to Section 12) in whole or
in part by the Pledgees against, all or any part of the Obligations in
such order as the Pledgees shall elect. Any surplus of such cash or cash
proceeds held by the Pledgees and remaining after payment in full of all
the Obligations shall be paid over to the Pledgors or to whomsoever may
be lawfully entitled to receive such surplus.
(c) Notwithstanding anything set forth in this Agreement to the
contrary, if the Corporation breaches either of its covenants set forth
in Section 5.1 or 5.2 of the Asset Purchase Agreement, the Pledgees may,
in accordance with Section 11(a) hereof, sell only that part of the
Pledged Collateral determined solely by the Pledgees in good faith to be
necessary as a result of claims made or about to made to (i) satisfy the
covenant or covenants so breached by the Corporation and (ii) reimburse
the Pledgees for any reasonable expenses incurred in connection
therewith in accordance with Section 12 hereof.
SECTION 12. Expenses. The Pledgors will upon demand pay to the
Pledgees the amount of any and all reasonable expenses including, without
limitation, the reasonable fees and expenses of their counsel and of any experts
and agents, which the Pledgees may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Pledged
Collateral, (iii) the exercise or enforcement of any of the rights of the
Pledgees hereunder or (iv) the failure by the Pledgors to perform or observe any
of the provisions hereof.
SECTION 13. Security Interest Absolute. The obligations of the
Pledgors under this Agreement are independent of the Obligations and a separate
action or actions may be brought and prosecuted against the Pledgors to enforce
this Agreement. All rights of the Pledgees and security interests hereunder, and
all obligations of the Pledgors hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Note or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Note
including, without limitation, any increase in the Obligations resulting
from the extension of additional credit to Dupre or any of his
affiliates or otherwise;
(c) any taking, exchange, release or non-perfection of any
other collateral, or any taking, release or amendment or waiver of or
consent to departure from any guaranty, for all or any of the
Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Obligations or
any other assets of the Corporation or any of its subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Corporation or any of its subsidiaries; or
(f) any assignment for the benefit of creditors or filing by
the Corporation or any of the Pledgors of a voluntary petition under the
U.S. Bankruptcy Code, as amended, or any other federal or state
insolvency law; or
(g) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, the Pledgors.
SECTION 14. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the Pledgors
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Pledgees, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION 15. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier
communication) and mailed, telecopied or delivered to them, if to the Pledgors,
c/o Dupre at the Corporation's address at 24 Richmond Hill Avenue, Stamford,
Connecticut 06901, and if to the Pledgees, c/o Yashiro Co. at its address at
1-18-5 Tatsumi-Naka, Ikuno-Ku, Osaka 544, Japan, Attention: Takeshi Yamaguchi,
or, as to any party, at such other address as shall be designated by such party
in a written notice to the other party. All such notices and other
communications shall, when mailed or telecopied, be effective when deposited in
the mails or telecopied, respectively.
SECTION 16. Continuing Security Interest; Assignments under the
Note or any Operative Agreement. This Agreement shall create a continuing
security interest in the Pledged Collateral and shall (i) remain in full force
and effect until the payment in full of the Obligations and all other amounts
payable under this Agreement, (ii) be binding upon the Pledgors, their
successors and assigns, and (iii) inure to the benefit of, and be enforceable
by, the Pledgees and their successors, transferees and assigns. Without limiting
the generality of the foregoing clause (iii), the Pledgees may assign or
otherwise transfer all or any portion of their rights and obligations under the
Note or any Operative Agreement to any other person or entity, and such other
person or entity shall thereupon become vested with all the benefits in respect
thereof granted to the Pledgees herein or otherwise. Upon the later of the
payment in full or the complete performance of the Obligations and all other
amounts payable under this Agreement, the security interest granted hereby shall
terminate and all rights to the Pledged Collateral shall revert to the Pledgors.
Upon any such termination, the Pledgees will, at the Pledgors' expense, return
to the Pledgors such of the Pledged Collateral as shall not have been sold or
otherwise applied pursuant to the terms hereof and execute and deliver to the
Pledgors such documents as the Pledgors shall reasonably request to evidence
such termination.
SECTION 17. Governing Law; Terms. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, except as required by mandatory provisions of law and except to the extent
that the validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Pledged Collateral are governed by the
laws of a jurisdiction other than the State of New York. Unless otherwise
defined herein, terms defined in Article 9 of the Code are used herein as
therein defined.
<PAGE>
IN WITNESS WHEREOF, the Pledgors have executed and delivered
this Agreement as of the date first above written.
PLEDGORS:
_____________________________________________
JOEL DUPRE
PACIFIC MILLION ENTERPRISE LTD.
By:__________________________________________
Name: Joe Takada
Title:
_____________________________________________
CHENG-SEN WANG
_____________________________________________
ALBERT H. CHENG
<PAGE>
SCHEDULE I
Attached to and forming a part of that certain Pledge
Agreement dated March 20, 1995, by and among
Dupre and other pledgors, as Pledgors,
to Bueno and Yashiro Co., as agent, as Pledgees
PART I
Stock Certificate No(s). Number of Shares Name of Stockholder
- ------------------------ ---------------- -------------------
NB 5878 133,333 Pacific Million
Enterprise Ltd.
NB 5877 414,334 Joel Dupre
NB 5880 44,444 Albert H. Cheng
<PAGE>
EXHIBIT K-1
NON-COMPETITION AGREEMENT
AGREEMENT made this ____ day of March 1995, by and between
YASHIRO CO., INC., a Japanese corporation with its principal place of business
at 1-18-5 Tatsumi-Naka, Ikuno-Ku, Osaka 544, Japan ("Yashiro"), and SIRCO
INTERNATIONAL CORP., a New York corporation with an office located at 24
Richmond Hill Avenue, Stamford, Connecticut 06901 (the "Corporation").
W I T N E S S E T H :
WHEREAS, the Corporation has agreed to sell its Handbag
Division to Bueno of California, Inc., a Delaware corporation and subsidiary of
Yashiro, pursuant to that certain Asset Purchase Agreement, dated March 20, 1995
(the "Asset Purchase Agreement"); and
WHEREAS, in order to protect the value of its remaining
business, the Corporation desires to enter into this Agreement with Yashiro, and
Yashiro also desires to make the agreements provided for herein in consideration
of the amounts payable and required to be paid to Yashiro and its affiliates
hereunder and under the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the covenants and
agreements hereinafter set forth, the adequacy of which consideration is hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. For purposes of this Agreement the following
terms shall have the meanings set forth below:
"Person" shall mean an individual, partnership, corporation,
limited liability entity, business trust, joint stock company, trust,
unincorporated association, joint venture or other entity of whatever nature.
"Prohibited Activities" shall mean the specific business
presently conducted by the Luggage Division or the Kids Division of the
Corporation as reflected in the books and records thereof as of the date hereof.
2. Covenants Not To Compete or Solicit. Yashiro acknowledges
that the agreements and covenants contained in this Section 2 are essential to
protect the legitimate business interest of the Corporation and that, by virtue
of the long-term employment relationship with the Corporation of Yashiro's
principals and such principals' experience in the industry in which the
Corporation conducts or has conducted business, such principals have obtained
such knowledge, know-how and experience that there is a substantial probability
that such knowledge, know-how and experience could be used to the substantial
detriment of the Corporation. Therefore, Yashiro covenants and agrees that for
the period commencing on the date hereof and ending on the earlier of (i) the
sixth anniversary of the date hereof or (ii) the date of the repayment in full
of the Promissory Note dated March 20, 1995 in the principal amount of $532,250
from Joel Dupre as Maker to Yashiro Co., Inc. as Agent (collectively, the
"Term"), Yashiro shall not, directly or indirectly, (i) engage or participate
in, or furnish aid or assistance in connection with the Prohibited Activities in
North America at any time during the Term; (ii) interfere with, disrupt or
attempt to disrupt any past, present or prospective relationship, contractual or
otherwise, between the Corporation and any supplier or Person who is or who was
a customer of the Corporation or (iii) directly or indirectly hire or attempt to
hire any present or future employee of the Corporation except those employees
listed on Schedule 5.8 to the Asset Purchase Agreement. Notwithstanding anything
set forth in this Agreement to the contrary, Yashiro and its affiliates may (a)
continue to sell "Falchi Sport" over-sized handbags consistent with current
practice and (b) maintain their present relationships with certain of its
customers that are also customers of the Corporation, and the maintenance of
such relationships shall not be deemed a violation of this Agreement.
3. Payment to Seller.
(a) In consideration of the agreement of Yashiro set forth in
Section 2 hereof, the Corporation shall pay Yashiro an aggregate of $60,000,
payable in three equal annual installments commencing on March 31, 1996 and
concluding on the second anniversary of such date.
(b) The payments to be made hereunder may be prepaid without
penalty or premium at any time, in whole or in part, upon not less than sixty
(60) days' prior written notice.
4. Tax Reporting. Each of the Corporation and Yashiro agrees
that they shall each report for all tax purposes the payments made under Section
3 hereof as payments made for the agreement not to compete hereunder and shall
not take any position inconsistent therewith.
5. Remedies. Without intending to limit the remedies available
to the Corporation, Yashiro acknowledges that a breach of any of the covenants
contained in Section 2 hereof will result in material irreparable injury to the
Corporation for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach or threat thereof, the Corporation shall be entitled to obtain
injunctive relief or such other relief as may be required to specifically
enforce any of the covenants contained in Section 2 hereof against Yashiro or to
prevent or restrain any such breach by any Person. Yashiro hereby waives the
defense in any action for specific performance that a remedy at law would be
adequate.
6. Severability. Yashiro acknowledges and agrees that the
covenants set forth in Section 2 hereof are reasonable and valid in
geographical, topical and temporal scope and in all other respects. The
invalidity or unenforceability of any part of such covenants or any other
provision hereof shall not affect the remainder of such covenants or such other
provision, which shall be given full effect, without regard to the invalid
portions, and the invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of this Agreement, or any provision hereof, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.
7. Blue Penciling. In the event that, notwithstanding the first
sentence of Section 6 hereof, any of the provisions of Section 2 hereof relating
to the scope of the covenants contained therein shall be declared by a court of
competent jurisdiction to exceed the maximum restrictiveness such court deems
enforceable, such provision shall be deemed to be replaced herein by the maximum
restriction deemed enforceable by such court.
8. Parties in Interest. This Agreement shall inure to the
benefit of and shall be binding upon the respective successors and assigns of
the parties hereto.
9. Waiver. The failure of either party hereto at any time to
require performance of the other party hereto of any provision hereof or to
resort to its remedy at law or in equity or otherwise, shall in no way affect
the right to such remedy at any time hereafter, nor shall the waiver by either
party of a breach of any provision hereof be taken or held to be a waiver of any
subsequent breach of such provision unless expressly so stated in writing. No
waiver of any of the provisions hereof shall be effective unless in writing and
signed by the party to be charged with such waiver.
10. Notices. All notices that either party hereto is required
to or desires to send to the other party hereto shall be delivered in person or
by responsible overnight carrier and shall be deemed for all purposes to have
been given when received, to the party at its respective address as they appear
on the first page of this Agreement, or at such other address as may be
designated from time to time by notice in accordance with this Section 10.
11. Assignment. Yashiro's obligation to perform under this
Agreement shall be non-delegable, however, Yashiro may assign the right to
receive payments hereunder to whomever Yashiro shall have designated in a
written notice to the Corporation.
12. Entire Agreement; Amendment. This Agreement contains the
full understanding of the parties hereto with respect to the subject matter
hereof and there are no representations, warranties, agreements or
understandings other than expressly contained herein. No termination,
alteration, modification or variation or waiver of this Agreement or any of the
provisions hereof shall be effective unless in writing executed by the parties
hereto, or in the case of a waiver, by the party or parties waiving compliance.
13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to the principles of conflicts of law thereof. Any judicial proceeding brought
by or against any party hereto, by or against any other party hereto, with
respect to this Agreement or any related agreement shall be brought in any court
of competent jurisdiction in the United States of American in the Southern
District of New York, and, by execution and delivery of this Agreement, each of
the parties hereto accepts the exclusive jurisdiction of the aforesaid courts
and irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement. If any action is commenced in any other
jurisdiction the parties hereto hereby consent to the removal of such action to
the United States District Court for the Southern District of New York. Each of
the parties hereto further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to such
party at its address, such service to become effective fifteen (15) days after
such mailing.
14. Counterparts. This Agreement may be executed in two
counterparts, each of which shall constitute an original instrument, but both of
which when taken together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been made and executed
as of the day and year first above written.
YASHIRO CO., INC.
By:________________________
Name:
Title:
SIRCO INTERNATIONAL CORP.
By:________________________
Name:
Title:
<PAGE>
EXHIBIT K-2
NON-COMPETITION AGREEMENT
AGREEMENT made this 20th day of March 1995, by and between
YASHIRO COMPANY, LTD., a Japanese corporation with its principal place of
business at 1-18-5 Tatsumi-Naka, Ikuno-Ku, Osaka 544, Japan ("Yashiro"), and
SIRCO INTERNATIONAL CORP., a New York corporation with an office located at 24
Richmond Hill Avenue, Stamford, Connecticut 06901 (the "Corporation").
W I T N E S S E T H :
WHEREAS, the Corporation has agreed to sell its Handbag
Division to Bueno of California, Inc., a Delaware corporation and subsidiary of
Yashiro, pursuant to that certain Asset Purchase Agreement, dated March 20, 1995
(the "Asset Purchase Agreement"); and
WHEREAS, in order to protect the value of its remaining
business, the Corporation desires to enter into this Agreement with Yashiro, and
Yashiro also desires to make the agreements provided for herein in consideration
of the amounts payable and required to be paid to Yashiro and its affiliates
hereunder and under the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the covenants and
agreements hereinafter set forth, the adequacy of which consideration is hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. For purposes of this Agreement the following
terms shall have the meanings set forth below:
"Person" shall mean an individual, partnership, corporation,
limited liability entity, business trust, joint stock company, trust,
unincorporated association, joint venture or other entity of whatever nature.
"Prohibited Activities" shall mean the specific business
presently conducted by the Luggage Division or the Kids Division of the
Corporation as reflected in the books and records thereof as of the date hereof.
2. Covenants Not To Compete or Solicit. Yashiro acknowledges
that the agreements and covenants contained in this Section 2 are essential to
protect the legitimate business interest of the Corporation and that, by virtue
of the long-term employment relationship with the Corporation of Yashiro's
principals and such principals' experience in the industry in which the
Corporation conducts or has conducted business, such principals have obtained
such knowledge, know-how and experience that there is a substantial probability
that such knowledge, know-how and experience could be used to the substantial
detriment of the Corporation. Therefore, Yashiro covenants and agrees that for
the period commencing on the date hereof and ending on the earlier of (i) the
sixth anniversary of the date hereof or (ii) the date of the repayment in full
of the Promissory Note dated March 20, 1995 in the principal amount of $532,250
from Joel Dupre as Maker to Yashiro Co., Inc. as Agent (collectively, the
"Term"), Yashiro shall not, directly or indirectly, (i) engage or participate
in, or furnish aid or assistance in connection with the Prohibited Activities in
North America at any time during the Term; (ii) interfere with, disrupt or
attempt to disrupt any past, present or prospective relationship, contractual or
otherwise, between the Corporation and any supplier or Person who is or who was
a customer of the Corporation or (iii) directly or indirectly hire or attempt to
hire any present or future employee of the Corporation except those employees
listed on Schedule 5.8 to the Asset Purchase Agreement. Notwithstanding anything
set forth in this Agreement to the contrary, Yashiro and its affiliates may (a)
continue to sell "Falchi Sport" over-sized handbags consistent with current
practice and (b) maintain their present relationships with certain of its
customers that are also customers of the Corporation, and the maintenance of
such relationships shall not be deemed a violation of this Agreement.
3. Payment to Seller.
(a) In consideration of the agreement of Yashiro set forth in
Section 2 hereof, the Corporation shall pay Yashiro an aggregate of $60,000,
payable in three equal annual installments commencing on March 31, 1996 and
concluding on the second anniversary of such date.
(b) The payments to be made hereunder may be prepaid without
penalty or premium at any time, in whole or in part, upon not less than sixty
(60) days' prior written notice.
4. Tax Reporting. Each of the Corporation and Yashiro agrees
that they shall each report for all tax purposes the payments made under Section
3 hereof as payments made for the agreement not to compete hereunder and shall
not take any position inconsistent therewith.
5. Remedies. Without intending to limit the remedies available
to the Corporation, Yashiro acknowledges that a breach of any of the covenants
contained in Section 2 hereof will result in material irreparable injury to the
Corporation for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach or threat thereof, the Corporation shall be entitled to obtain
injunctive relief or such other relief as may be required to specifically
enforce any of the covenants contained in Section 2 hereof against Yashiro or to
prevent or restrain any such breach by any Person. Yashiro hereby waives the
defense in any action for specific performance that a remedy at law would be
adequate.
6. Severability. Yashiro acknowledges and agrees that the
covenants set forth in Section 2 hereof are reasonable and valid in
geographical, topical and temporal scope and in all other respects. The
invalidity or unenforceability of any part of such covenants or any other
provision hereof shall not affect the remainder of such covenants or such other
provision, which shall be given full effect, without regard to the invalid
portions, and the invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of this Agreement, or any provision hereof, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.
7. Blue Penciling. In the event that, notwithstanding the first
sentence of Section 6 hereof, any of the provisions of Section 2 hereof relating
to the scope of the covenants contained therein shall be declared by a court of
competent jurisdiction to exceed the maximum restrictiveness such court deems
enforceable, such provision shall be deemed to be replaced herein by the maximum
restriction deemed enforceable by such court.
8. Parties in Interest. This Agreement shall inure to the
benefit of and shall be binding upon the respective successors and assigns of
the parties hereto.
9. Waiver. The failure of either party hereto at any time to
require performance of the other party hereto of any provision hereof or to
resort to its remedy at law or in equity or otherwise, shall in no way affect
the right to such remedy at any time hereafter, nor shall the waiver by either
party of a breach of any provision hereof be taken or held to be a waiver of any
subsequent breach of such provision unless expressly so stated in writing. No
waiver of any of the provisions hereof shall be effective unless in writing and
signed by the party to be charged with such waiver.
10. Notices. All notices that either party hereto is required
to or desires to send to the other party hereto shall be delivered in person or
by responsible overnight carrier and shall be deemed for all purposes to have
been given when received, to the party at its respective address as they appear
on the first page of this Agreement, or at such other address as may be
designated from time to time by notice in accordance with this Section 10.
11. Assignment. Yashiro's obligation to perform under this
Agreement shall be non-delegable, however, Yashiro may assign the right to
receive payments hereunder to whomever Yashiro shall have designated in a
written notice to the Corporation.
12. Entire Agreement; Amendment. This Agreement contains the
full understanding of the parties hereto with respect to the subject matter
hereof and there are no representations, warranties, agreements or
understandings other than expressly contained herein. No termination,
alteration, modification or variation or waiver of this Agreement or any of the
provisions hereof shall be effective unless in writing executed by the parties
hereto, or in the case of a waiver, by the party or parties waiving compliance.
13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to the principles of conflicts of law thereof. Any judicial proceeding brought
by or against any party hereto, by or against any other party hereto, with
respect to this Agreement or any related agreement shall be brought in any court
of competent jurisdiction in the United States of American in the Southern
District of New York, and, by execution and delivery of this Agreement, each of
the parties hereto accepts the exclusive jurisdiction of the aforesaid courts
and irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement. If any action is commenced in any other
jurisdiction the parties hereto hereby consent to the removal of such action to
the United States District Court for the Southern District of New York. Each of
the parties hereto further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to such
party at its address, such service to become effective fifteen (15) days after
such mailing.
14. Counterparts. This Agreement may be executed in two
counterparts, each of which shall constitute an original instrument, but both of
which when taken together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been made and executed
as of the day and year first above written.
YASHIRO COMPANY, LTD.
YASHIRO CO., INC.
By:________________________
Name:
Title:
SIRCO INTERNATIONAL CORP.
By:________________________
Name:
Title:
<PAGE>
Exhibit K-3
NON-COMPETITION AGREEMENT
AGREEMENT made this 20th day of March 1995, by and between
YUTAKA YAMAGUCHI, with his principal place of business at 1-18-5 Tatsumi-Naka,
Ikuno-Ku, Osaka 544, Japan ("Yamaguchi"), and SIRCO INTERNATIONAL CORP., a New
York corporation with an office located at 24 Richmond Hill Avenue, Stamford,
Connecticut 06901 (the "Corporation").
W I T N E S S E T H :
WHEREAS, the Corporation has agreed to sell its Handbag
Division to Bueno of California, Inc., a Delaware corporation and subsidiary of
Yashiro Co., Inc. ("Yashiro"), pursuant to that certain Asset Purchase
Agreement, dated March 20, 1995 (the "Asset Purchase Agreement"); and
WHEREAS, Yamaguchi is an affiliate of Yashiro; and
WHEREAS, in order to protect the value of its remaining
business, the Corporation desires to enter into this Agreement with Yamaguchi,
and Yamaguchi also desires to make the agreements provided for herein in
consideration of the amounts payable to Yamaguchi hereunder.
NOW, THEREFORE, in consideration of the covenants and
agreements hereinafter set forth, the adequacy of which consideration is hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. For purposes of this Agreement the following
terms shall have the meanings set forth below:
"Person" shall mean an individual, partnership, corporation,
limited liability entity, business trust, joint stock company, trust,
unincorporated association, joint venture or other entity of whatever nature.
"Prohibited Activities" shall mean the specific business
presently conducted by the Luggage Division or the Kids Division of the
Corporation as reflected in the books and records thereof as of the date hereof.
2. Covenants Not To Compete or Solicit. Yamaguchi acknowledges
that the agreements and covenants contained in this Section 2 are essential to
protect the legitimate business interest of the Corporation and that, by virtue
of the long-term employment relationship of Yamaguchi with the Corporation and
his experience in the industry in which the Corporation conducts or has
conducted business, Yamaguchi has obtained such knowledge, know-how and
experience that there is a substantial probability that such knowledge, know-how
and experience could be used to the substantial detriment of the Corporation.
Therefore, Yamaguchi covenants and agrees that during the six (6) year period
commencing on the date hereof (the "Term"), Yamaguchi shall not, directly or
indirectly, (i) engage or participate in, or furnish aid or assistance in
connection with the Prohibited Activities in North America at any time during
the Term; (ii) interfere with, disrupt or attempt to disrupt any past, present
or prospective relationship, contractual or otherwise, between the Corporation
and any supplier or Person who is or who was a customer of the Corporation or
(iii) directly or indirectly hire or attempt to hire any present or future
employee of the Corporation except those employees listed on Schedule 5.8 to the
Asset Purchase Agreement. Notwithstanding anything set forth in this Agreement
to the contrary, Yamaguchi and his affiliates may (a) continue to sell "Falchi
Sport" over-sized handbags consistent with current practice and (b) maintain
their present relationships with certain of its customers that are also
customers of the Corporation, and the maintenance of such relationships shall
not be deemed a violation of this Agreement.
3. Payment to Seller.
(a) In consideration of the agreement of Yamaguchi set forth in
Section 2 hereof, the Corporation shall pay Yamaguchi an aggregate of $60,000,
payable in three equal annual installments commencing on March 31, 1996
and concluding on the second anniversary of such date.
(b) The payments to be made hereunder may be prepaid without
penalty or premium at any time, in whole or in part, upon not less than sixty
(60) days' prior written notice.
4. Tax Reporting. Each of the Corporation and Yamaguchi agrees
that they shall each report for all tax purposes the payments made under Section
3 hereof as payments made for the agreement not to compete hereunder and shall
not take any position inconsistent therewith.
5. Remedies. Without intending to limit the remedies available
to the Corporation, Yamaguchi acknowledges that a breach of any of the covenants
contained in Section 2 hereof will result in material irreparable injury to the
Corporation for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach or threat thereof, the Corporation shall be entitled to obtain
injunctive relief or such other relief as may be required to specifically
enforce any of the covenants contained in Section 2 hereof against Yamaguchi or
to prevent or restrain any such breach by any Person. Yamaguchi hereby waives
the defense in any action for specific performance that a remedy at law would be
adequate.
6. Severability. Yamaguchi acknowledges and agrees that the
covenants set forth in Section 2 hereof are reasonable and valid in
geographical, topical and temporal scope and in all other respects. The
invalidity or unenforceability of any part of such covenants or any other
provision hereof shall not affect the remainder of such covenants or such other
provision, which shall be given full effect, without regard to the invalid
portions, and the invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of this Agreement, or any provision hereof, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.
7. Blue Penciling. In the event that, notwithstanding the first
sentence of Section 6 hereof, any of the provisions of Section 2 hereof relating
to the scope of the covenants contained therein shall be declared by a court of
competent jurisdiction to exceed the maximum restrictiveness such court deems
enforceable, such provision shall be deemed to be replaced herein by the maximum
restriction deemed enforceable by such court.
8. Parties in Interest. This Agreement shall inure to the
benefit of and shall be binding upon the respective successors and assigns of
the parties hereto.
9. Waiver. The failure of either party hereto at any time to
require performance of the other party hereto of any provision hereof or to
resort to its remedy at law or in equity or otherwise, shall in no way affect
the right to such remedy at any time hereafter, nor shall the waiver by either
party of a breach of any provision hereof be taken or held to be a waiver of any
subsequent breach of such provision unless expressly so stated in writing. No
waiver of any of the provisions hereof shall be effective unless in writing and
signed by the party to be charged with such waiver.
10. Notices. All notices that either party hereto is required
to or desires to send to the other party hereto shall be delivered in person or
by responsible overnight carrier and shall be deemed for all purposes to have
been given when received, to the party at its respective address as they appear
on the first page of this Agreement, or at such other address as may be
designated from time to time by notice in accordance with this Section 10.
11. Assignment. Yamaguchi's obligation to perform under this
Agreement shall be non-delegable, however, Yamaguchi may assign the right to
receive payments hereunder to whomever he shall have designated in a written
notice to the Corporation.
12. Entire Agreement; Amendment. This Agreement contains the
full understanding of the parties hereto with respect to the subject matter
hereof and there are no representations, warranties, agreements or
understandings other than expressly contained herein. No termination,
alteration, modification or variation or waiver of this Agreement or any of the
provisions hereof shall be effective unless in writing executed by the parties
hereto, or in the case of a waiver, by the party or parties waiving compliance.
13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to the principles of conflicts of law thereof. Any judicial proceeding brought
by or against any party hereto, by or against any other party hereto, with
respect to this Agreement or any related agreement shall be brought in any court
of competent jurisdiction in the United States of American in the Southern
District of New York, and, by execution and delivery of this Agreement, each of
the parties hereto accepts the exclusive jurisdiction of the aforesaid courts
and irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement. If any action is commenced in any other
jurisdiction the parties hereto hereby consent to the removal of such action to
the United States District Court for the Southern District of New York. Each of
the parties hereto further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to such
party at its address, such service to become effective fifteen (15) days after
such mailing.
14. Counterparts. This Agreement may be executed in two
counterparts, each of which shall constitute an original instrument, but both of
which when taken together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been made and executed
as of the day and year first above written.
YUTAKA YAMAGUCHI
By:________________________
Name:
Title:
SIRCO INTERNATIONAL CORP.
By:________________________
Name:
Title:
<PAGE>
EXHIBIT K-4
NON-COMPETITION AGREEMENT
AGREEMENT made this 20th day of March 1995, by and between
TAKESHI YAMAGUCHI, with his principal place of business at 1-18-5 Tatsumi-Naka,
Ikuno-Ku, Osaka 544, Japan ("Yamaguchi"), and SIRCO INTERNATIONAL CORP., a New
York corporation with an office located at 24 Richmond Hill Avenue, Stamford,
Connecticut 06901 (the "Corporation").
W I T N E S S E T H :
WHEREAS, the Corporation has agreed to sell its Handbag
Division to Bueno of California, Inc., a Delaware corporation and subsidiary of
Yashiro Co., Inc. ("Yashiro"), pursuant to that certain Asset Purchase
Agreement, dated March 20, 1995 (the "Asset Purchase Agreement"); and
WHEREAS, Yamaguchi is an affiliate of Yashiro; and
WHEREAS, in order to protect the value of its remaining
business, the Corporation desires to enter into this Agreement with Yamaguchi,
and Yamaguchi also desires to make the agreements provided for herein in
consideration of the amounts payable to Yamaguchi hereunder.
NOW, THEREFORE, in consideration of the covenants and
agreements hereinafter set forth, the adequacy of which consideration is hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. For purposes of this Agreement the following
terms shall have the meanings set forth below:
"Person" shall mean an individual, partnership, corporation,
limited liability entity, business trust, joint stock company, trust,
unincorporated association, joint venture or other entity of whatever nature.
"Prohibited Activities" shall mean the specific business
presently conducted by the Luggage Division or the Kids Division of the
Corporation as reflected in the books and records thereof as of the date hereof.
2. Covenants Not To Compete or Solicit. Yamaguchi acknowledges
that the agreements and covenants contained in this Section 2 are essential to
protect the legitimate business interest of the Corporation and that, by virtue
of the long-term employment relationship of Yamaguchi with the Corporation and
his experience in the industry in which the Corporation conducts or has
conducted business, Yamaguchi has obtained such knowledge, know-how and
experience that there is a substantial probability that such knowledge, know-how
and experience could be used to the substantial detriment of the Corporation.
Therefore, Yamaguchi covenants and agrees that for the period commencing on the
date hereof and ending on the earlier of (i) the sixth anniversary of the date
hereof or (ii) the date of the repayment in full of the Promissory Note dated
March 20, 1995 in the principal amount of $532,250 from Joel Dupre as Maker to
Yashiro Co., Inc. as Agent (collectively, the "Term"), Yamaguchi shall not,
directly or indirectly, (i) engage or participate in, or furnish aid or
assistance in connection with the Prohibited Activities in North America at any
time during the Term; (ii) interfere with, disrupt or attempt to disrupt any
past, present or prospective relationship, contractual or otherwise, between the
Corporation and any supplier or Person who is or who was a customer of the
Corporation or (iii) directly or indirectly hire or attempt to hire any present
or future employee of the Corporation except those employees listed on Schedule
5.8 to the Asset Purchase Agreement. Notwithstanding anything set forth in this
Agreement to the contrary, Yamaguchi and his affiliates may (a) continue to sell
"Falchi Sport" over-sized handbags consistent with current practice and (b)
maintain their present relationships with certain of its customers that are also
customers of the Corporation, and the maintenance of such relationships shall
not be deemed a violation of this Agreement.
3. Payment to Seller.
(a) In consideration of the agreement of Yamaguchi set forth in
Section 2 hereof, the Corporation shall pay Yamaguchi an aggregate of $60,000,
payable in three equal annual installments commencing on March 31, 1996 and
concluding on the second anniversary of such date.
(b) The payments to be made hereunder may be prepaid without
penalty or premium at any time, in whole or in part, upon not less than sixty
(60) days' prior written notice.
4. Tax Reporting. Each of the Corporation and Yamaguchi agrees
that they shall each report for all tax purposes the payments made under Section
3 hereof as payments made for the agreement not to compete hereunder and shall
not take any position inconsistent therewith.
5. Remedies. Without intending to limit the remedies available
to the Corporation, Yamaguchi acknowledges that a breach of any of the covenants
contained in Section 2 hereof will result in material irreparable injury to the
Corporation for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach or threat thereof, the Corporation shall be entitled to obtain
injunctive relief or such other relief as may be required to specifically
enforce any of the covenants contained in Section 2 hereof against Yamaguchi or
to prevent or restrain any such breach by any Person. Yamaguchi hereby waives
the defense in any action for specific performance that a remedy at law would be
adequate.
6. Severability. Yamaguchi acknowledges and agrees that the
covenants set forth in Section 2 hereof are reasonable and valid in
geographical, topical and temporal scope and in all other respects. The
invalidity or unenforceability of any part of such covenants or any other
provision hereof shall not affect the remainder of such covenants or such other
provision, which shall be given full effect, without regard to the invalid
portions, and the invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of this Agreement, or any provision hereof, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.
7. Blue Penciling. In the event that, notwithstanding the first
sentence of Section 6 hereof, any of the provisions of Section 2 hereof relating
to the scope of the covenants contained therein shall be declared by a court of
competent jurisdiction to exceed the maximum restrictiveness such court deems
enforceable, such provision shall be deemed to be replaced herein by the maximum
restriction deemed enforceable by such court.
8. Parties in Interest. This Agreement shall inure to the
benefit of and shall be binding upon the respective successors and assigns of
the parties hereto.
9. Waiver. The failure of either party hereto at any time to
require performance of the other party hereto of any provision hereof or to
resort to its remedy at law or in equity or otherwise, shall in no way affect
the right to such remedy at any time hereafter, nor shall the waiver by either
party of a breach of any provision hereof be taken or held to be a waiver of any
subsequent breach of such provision unless expressly so stated in writing. No
waiver of any of the provisions hereof shall be effective unless in writing and
signed by the party to be charged with such waiver.
10. Notices. All notices that either party hereto is required
to or desires to send to the other party hereto shall be delivered in person or
by responsible overnight carrier and shall be deemed for all purposes to have
been given when received, to the party at its respective address as they appear
on the first page of this Agreement, or at such other address as may be
designated from time to time by notice in accordance with this Section 10.
11. Assignment. Yamaguchi's obligation to perform under this
Agreement shall be non-delegable, however, Yamaguchi may assign the right to
receive payments hereunder to whomever he shall have designated in a written
notice to the Corporation.
12. Entire Agreement; Amendment. This Agreement contains the
full understanding of the parties hereto with respect to the subject matter
hereof and there are no representations, warranties, agreements or
understandings other than expressly contained herein. No termination,
alteration, modification or variation or waiver of this Agreement or any of the
provisions hereof shall be effective unless in writing executed by the parties
hereto, or in the case of a waiver, by the party or parties waiving compliance.
13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to the principles of conflicts of law thereof. Any judicial proceeding brought
by or against any party hereto, by or against any other party hereto, with
respect to this Agreement or any related agreement shall be brought in any court
of competent jurisdiction in the United States of American in the Southern
District of New York, and, by execution and delivery of this Agreement, each of
the parties hereto accepts the exclusive jurisdiction of the aforesaid courts
and irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement. If any action is commenced in any other
jurisdiction the parties hereto hereby consent to the removal of such action to
the United States District Court for the Southern District of New York. Each of
the parties hereto further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to such
party at its address, such service to become effective fifteen (15) days after
such mailing.
14. Counterparts. This Agreement may be executed in two
counterparts, each of which shall constitute an original instrument, but both of
which when taken together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been made and executed
as of the day and year first above written.
TAKESHI YAMAGUCHI
By:________________________
Name:
Title:
SIRCO INTERNATIONAL CORP.
By:________________________
Name:
Title:
<PAGE>
EXHIBIT L
SEVERANCE AGREEMENT
SEVERANCE AGREEMENT (the "Agreement"), dated as of March __, 1995, by
and between SIRCO INTERNATIONAL CORP., a New York corporation (the
"Corporation"), and TAKESHI YAMAGUCHI (the "Executive").
W I T N E S S E T H :
WHEREAS, Yashiro Company, Ltd. and Yashiro Co., Inc. ("Yashiro Co.") and
Joel Dupre, Pacific Million Enterprise Ltd., Cheng-Sen Wang and Albert H. Cheng,
and Yashiro Co., as Agent, have entered into that certain Stock Purchase
Agreement, dated March 20, 1995, (the "Stock Purchase Agreement") and certain
other agreements ancillary thereto;
WHEREAS, the Corporation and Executive desire to enter into this
Agreement in settlement and cancellation of any and all existing and prior
agreements between them concerning the employment of Executive including but not
limited to the termination of pension benefits and other employee benefits of
the Executive;
NOW, THEREFORE, it is agreed as follows:
1. Termination of Employment. Effective upon the date of closing of the
Stock Purchase Agreement (the "Closing"), the employment of Executive by the
Corporation shall terminate.
2. Severance Payments. In consideration of the termination of
Executive's employment with the Corporation, and the settlement of all claims of
Executive with respect to such employment, the Corporation shall pay Executive
the amounts set forth below as follows:
(a) $100,000 plus interest at the rate of 10% per annum (from
and after the Closing) on March 31, 1996; and
(b) $100,000 plus interest at the rate of 10% per annum (from
and after the Closing) on March 31, 1997.
3. Prepayment. The payments to be made hereunder may be prepaid without
penalty or premium, in whole or in part, upon not less than sixty (60) days'
prior written notice.
4. Benefits. Executive shall be eligible for health, hospitalization and
other benefits under the Corporation's group health insurance plan on the same
basis as that on which such benefits are currently made available to eligible
retirees thereunder, as if he were an eligible retiree thereunder.
5. Withholding. Executive agrees that the Corporation shall be entitled
to withhold from any amounts payable hereunder only to the extent required by
applicable tax law to be withheld in respect of such payments.
6. Entire Agreement. This Agreement replaces and supersedes in their
entirety any and all existing and previous agreements, arrangements or
understandings and amendments thereto between the Corporation and Executive
concerning the employment of Executive.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
___________________________
TAKESHI YAMAGUCHI
SIRCO INTERNATIONAL CORP.
By:________________________
Name:
Title:
<PAGE>
EXHIBIT M
LICENSE AGREEMENT
LICENSE AGREEMENT made this 20th day of March, 1995 by and
between SIRCO INTERNATIONAL CORP., a New York corporation with an office located
at 24 Richmond Hill Avenue, Stamford, Connecticut 06901 (the "Licensor"), and
BUENO OF CALIFORNIA, INC., a Delaware corporation, with its principal place of
business at 16000 Heron Avenue, La Mirada, California 90638 ("Licensee").
W I T N E S S E T H:
WHEREAS, each of Licensor and Licensee are parties to that
certain Asset Purchase Agreement, dated March 20, 1995; and
WHEREAS, Licensee believes that the use of the trade name
"Mondo" would be necessary in Licensee's dealings with purchasers of its goods.
NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Grant of License. Licensor hereby grants Licensee the
non-exclusive right to use the trade name, trademark and logotype "Mondo" (the
"Name") with respect to Licensee's business. The license granted hereunder shall
be royalty free and, except in the event of termination for breach of the
conditions of the grant of this license set forth in Section 2 hereof,
perpetual.
2. Conditions of License. Licensee hereby agrees as follows
with respect to the use of the Name hereunder:
(a) Licensee undertakes to use the Name only upon and so long
as the related products (the "Products") are produced, sold and/or distributed
in accordance with the quality, standards and specifications which are
maintained and utilized by Licensor as of the date hereof.
(b) Licensor has the right, from time to time, to request and
receive samples of the related products and advertising and promotional material
for the Products which are produced, manufactured or distributed by Licensee in
order to determine that the quality standards are being met and to assure proper
use of the Name.
3. Default by Licensee. In the event of any breach of the
conditions set forth in Section 2 which Licensee has not cured within thirty
(30) days of receipt of written notice from Licensor, Licensor shall have the
right to terminate the license granted hereunder.
4. Entire Agreement; Amendment. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and no amendment or modification hereof shall be valid or binding unless made in
writing and signed by the party or parties against whom enforcement thereof is
sought.
5. Notices. Any notice required, permitted or desired to be
given pursuant to any of the provisions of this Agreement shall be deemed to
have been sufficiently given or served for all purposes if delivered in person
or sent by a nationally-recognized express courier, postage and fees prepaid, to
the parties at their addresses set forth above. Either of the parties hereto may
at any time and from time to time change the address to which notice shall be
sent hereunder by notice to the other party given under this Section 5. The date
of the giving of any notice sent by a nationally-recognized express courier
shall be the date which is three days after the date of the posting of the
notice.
6. Assignment. This Agreement may not be assigned by Licensee
without the prior written consent of Licensor; provided, however, that Licensee
may assign this Agreement to any affiliate thereof without any consent.
7. Governing Law. This Agreement shall be governed, interpreted
and construed in accordance with the laws of the State of New York without
regard to the conflicts of laws principles thereof.
8. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original instrument, but both of
which when taken together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this License
Agreement to be executed as of the date first above written.
SIRCO INTERNATIONAL CORP.
By:________________________
Name:
Title:
BUENO OF CALIFORNIA, INC.
By:________________________
Name:
Title:
<PAGE>
SCHEDULE TRADEMARKS
<PAGE>
EXHIBIT N
ASSIGNMENT OF TRADEMARKS
WHEREAS, SIRCO INTERNATIONAL CORP., a New York corporation having an
office at 24 Richmond Hill Avenue, Stamford, Connecticut 06901, together with
each of its consolidated subsidiaries (collectively, the "Assignor") is the
owner of the marks set forth on the attached schedule (the "MARKS"); and
WHEREAS, BUENO OF CALIFORNIA, INC., a Delaware corporation with offices
at 16000 Heron Avenue, La Mirada, California 90638 (the "Assignee") is desirous
of acquiring the MARKS;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Assignor hereby assigns to
Assignee, all right, title and interest in the MARKS set forth on the attached
schedule together with the goodwill of the business symbolized by these MARKS
and their registrations, including Assignor's right to sue for and collect
damages and other recoveries for past infringement thereof; the same to be held
and enjoyed by the Assignee, its successors and assigns, as fully as the same
would have been held and enjoyed by the Assignor had this assignment not been
made.
And for the consideration aforesaid, Assignor agrees that it will, upon
request, execute and deliver to Assignee any and all additional papers and
generally do all other and further lawful acts deemed necessary by Assignee to
record or perfect Assignee's interests in the MARKS and otherwise to carry out
the terms of this Assignment; provided, however, that Assignor shall not be
required to incur any significant out-of-pocket expenses.
EXECUTED THIS 20th day of March, 1995.
SIRCO INTERNATIONAL CORP.
By:______________________
Name:
Title:
<PAGE>
SCHEDULE TRADEMARKS
<TABLE>
<CAPTION>
TRADEMARK GOODS DATE REGISTERED REG. NO.
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTEABLES handbags 09/05/78 1,101,486
wallets
BV (and design) handbags PENDING
CALIFORNIA EDITIONS handbags 02/09/93 1,751,899
GANI handbags 09/26/78 1,103,060
luggage
wallets
GOLD MINE billfolds 01/08/57 639,505
change purses
handbags
key cases
wallets
BARTOLI handbags 04/19/83 1,235,286
key cases
purses
wallets
BUENA VISTA handbags 11/10/92 1,731,122
BUENO clutch bags 09/25/68 851,257
cosmetic bags sold empty
key cases
purses
wallets
BUENO all purpose sport bags 09/05/89 1,554,691
attache cases
backpacks
billfolds
briefcases
change purses
cosmetic cases sold empty
credit car cases
luggage of all types
luggage portfolios
luggage tote bags
</TABLE>
<PAGE>
FOR ASSIGNOR
STATE OF :
: ss:
COUNTY OF :
The foregoing instrument was acknowledged before me in the City of
________________, this ____ day of ___________, 1995, by
__________________________, the ___________________________ of Sirco
International Corp., a New York corporation, on behalf of the corporation.
My commission expires: ___________________
----------------------------------
Notary Public
(Notarial Seal)
<PAGE>
EXHIBIT O
NON-COMPETITION AGREEMENT
AGREEMENT made this 20th day of March 1995, by and between
BUENO OF CALIFORNIA, INC., with its principal place of business at 1600 Heron
Avenue, La Mirada, California 90638 ("Bueno"), and SIRCO INTERNATIONAL CORP., a
New York corporation with an office located at 24 Richmond Hill Avenue,
Stamford, Connecticut 06901 ("Sirco" or the "Corporation").
W I T N E S S E T H :
WHEREAS, the Corporation has agreed to sell its Handbag
Division to Bueno, pursuant to that certain Asset Purchase Agreement, dated
March 20, 1995 (the "Asset Purchase Agreement"); and
WHEREAS, in order to protect the value of the Handbag Division,
Bueno desires to enter into this Agreement with Sirco, and Sirco also desires to
make the agreements provided for herein in consideration of the amounts payable
to Sirco hereunder.
NOW, THEREFORE, in consideration of the covenants and
agreements hereinafter set forth, the adequacy of which consideration is hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. For purposes of this Agreement the following
terms shall have the meanings set forth below:
"Person" shall mean an individual, partnership, corporation,
limited liability entity, business trust, joint stock company, trust,
unincorporated association, joint venture or other entity of whatever nature.
"Prohibited Activities" shall mean the specific business
presently conducted by the Handbag Division of the Corporation as reflected in
the books and records thereof as of the date hereof.
2. Covenants Not To Compete or Solicit. The Corporation
acknowledges that the agreements and covenants contained in this Section 2 are
essential to protect the legitimate business interest of Bueno and that, by
virtue of the long-term relationship of Sirco with Bueno and its experience in
the industry in which Bueno conducts or has conducted business, Sirco has
obtained such knowledge, know-how and experience that there is a substantial
probability that such knowledge, know-how and experience could be used to the
substantial detriment of Bueno. Therefore, the Corporation covenants and agrees
that for the period commencing on the date hereof and ending on the earlier of
(i) the sixth anniversary of the date hereof or (ii) the date of the repayment
in full of the Promissory Note dated March 20, 1995 in the principal amount of
$532,250 from Joel Dupre as Maker to Yashiro Co., Inc. as Agent (collectively,
the "Term"), the Corporation shall not, directly or indirectly, (i) engage or
participate in, or furnish aid or assistance in connection with the Prohibited
Activities in North America at any time during the Term; (ii) interfere with,
disrupt or attempt to disrupt any past, present or prospective relationship,
contractual or otherwise, between Bueno and any supplier or Person who is or who
was a customer of Bueno or (iii) directly or indirectly hire or attempt to hire
any of the employees listed on Schedule 5.8 to the Asset Purchase Agreement.
3. Payment to Seller.
(a) In consideration of the agreement of Sirco set forth in
Section 2 hereof, Bueno shall pay Sirco $100 and other good and valuable
consideration, the receipt sufficiency of which is hereby acknowledged.
(b) The payments to be made hereunder may be prepaid without
penalty or premium at any time, in whole or in part, upon not less than sixty
(60) days' prior written notice.
4. Tax Reporting. Each of Bueno and Sirco agrees that they
shall each report for all tax purposes the payments made under Section 3 hereof
as payments made for the agreement not to compete hereunder and shall not take
any position inconsistent therewith.
5. Remedies. Without intending to limit the remedies available
to Bueno, Sirco acknowledges that a breach of any of the covenants contained in
Section 2 hereof will result in material irreparable injury to Bueno for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of such a breach or
threat thereof, Bueno shall be entitled to obtain injunctive relief or such
other relief as may be required to specifically enforce any of the covenants
contained in Section 2 hereof against Sirco or to prevent or restrain any such
breach by any Person. Sirco hereby waives the defense in any action for specific
performance that a remedy at law would be adequate.
6. Severability. Sirco acknowledges and agrees that the
covenants set forth in Section 2 hereof are reasonable and valid in
geographical, topical and temporal scope and in all other respects. The
invalidity or unenforceability of any part of such covenants or any other
provision hereof shall not affect the remainder of such covenants or such other
provision, which shall be given full effect, without regard to the invalid
portions, and the invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of this Agreement, or any provision hereof, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.
7. Blue Penciling. In the event that, notwithstanding the first
sentence of Section 6 hereof, any of the provisions of Section 2 hereof relating
to the scope of the covenants contained therein shall be declared by a court of
competent jurisdiction to exceed the maximum restrictiveness such court deems
enforceable, such provision shall be deemed to be replaced herein by the maximum
restriction deemed enforceable by such court.
8. Parties in Interest. This Agreement shall inure to the
benefit of and shall be binding upon the respective successors and assigns of
the parties hereto.
9. Waiver. The failure of either party hereto at any time to
require performance of the other party hereto of any provision hereof or to
resort to its remedy at law or in equity or otherwise, shall in no way affect
the right to such remedy at any time hereafter, nor shall the waiver by either
party of a breach of any provision hereof be taken or held to be a waiver of any
subsequent breach of such provision unless expressly so stated in writing. No
waiver of any of the provisions hereof shall be effective unless in writing and
signed by the party to be charged with such waiver.
10. Notices. All notices that either party hereto is required
to or desires to send to the other party hereto shall be delivered in person or
by responsible overnight carrier and shall be deemed for all purposes to have
been given when received, to the party at its respective address as they appear
on the first page of this Agreement, or at such other address as may be
designated from time to time by notice in accordance with this Section 10.
11. Assignment. Sirco's obligation to perform under this
Agreement shall be non-delegable, however, Sirco may assign the right to receive
payments hereunder to whomever it shall have designated in a written notice to
the Corporation.
12. Entire Agreement; Amendment. This Agreement contains the
full understanding of the parties hereto with respect to the subject matter
hereof and there are no representations, warranties, agreements or
understandings other than expressly contained herein. No termination,
alteration, modification or variation or waiver of this Agreement or any of the
provisions hereof shall be effective unless in writing executed by the parties
hereto, or in the case of a waiver, by the party or parties waiving compliance.
13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to the principles of conflicts of law thereof.
14. Counterparts. This Agreement may be executed in two
counterparts, each of which shall constitute an original instrument, but both of
which when taken together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been made and executed
as of the day and year first above written.
BUENO OF CALIFORNIA INC.
By:________________________
Name:
Title:
SIRCO INTERNATIONAL CORP.
By:________________________
Name:
Title:
