Purchase Agreement (2006)Full Document 

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PURCHASE AGREEMENT
BETWEEN
THE MILLWORK TRADING CO., LTD.
as Buyer
AND
OXFORD INDUSTRIES, INC.
as Seller
DATED AS OF MAY 1, 2006
 

 


 

TABLE OF CONTENTS
             
        Page
ARTICLE I  
DEFINITIONS
    1  
   
 
       
ARTICLE II  
PURCHASE AND SALE OF BUSINESS ASSETS
    10  
Section 2.1  
Purchase of Business Assets; Certain Liabilities
    10  
Section 2.2  
Purchase Price
    12  
Section 2.3  
Closing Date Payments
    12  
Section 2.4  
Net Asset Value Adjustment
    13  
Section 2.5  
NAV Calculation; Post-Closing Audit
    13  
Section 2.6  
Claims Receivables
    15  
Section 2.7  
EBITDA Adjustments
    16  
   
 
       
ARTICLE III  
CLOSING
    18  
Section 3.1  
Closing; Closing Date
    18  
Section 3.2  
Items to be Delivered at the Closing by Seller
    18  
Section 3.3  
Items to be Delivered at the Closing by Buyer
    19  
   
 
       
ARTICLE IV  
REPRESENTATIONS AND WARRANTIES OF SELLER
    20  
Section 4.1  
Organization, Authority, Binding Obligation of Seller
    20  
Section 4.2  
No Conflicts; Consents
    21  
Section 4.3  
Business Property
    21  
Section 4.4  
Compliance
    22  
Section 4.6  
Intellectual Property
    25  
Section 4.7  
Contracts
    26  
Section 4.8  
Financial Statements
    27  
Section 4.9  
Disputes and Offsets
    29  
Section 4.10  
Inventory
    29  
Section 4.11  
Employee and Related Matters: ERISA
    30  
Section 4.12  
Litigation
    32  
Section 4.13  
Transactions with Related Parties
    32  
Section 4.14  
Insurance
    32  
Section 4.15  
Tax Matters
    33  
Section 4.16  
Customers; Suppliers
    34  
Section 4.17  
Certain Payments
    34  
Section 4.18  
Broker Fees
    34  
   
 
       
ARTICLE V  
REPRESENTATIONS AND WARRANTIES OF BUYER
    35  
Section 5.1  
Organization; Authority; Binding Obligation
    35  
Section 5.2  
No Conflicts
    35  
Section 5.3  
Broker Fees
    35  
Section 5.4  
Litigation
    35  
Section 5.5  
Available Funds
    35  
   
 
       
ARTICLE VI  
CERTAIN COVENANTS AND UNDERSTANDINGS
    36  


 

             
        Page
Section 6.1  
Full Access
    36  
Section 6.2  
Preservation of Business; Transfer of Assets
    36  
Section 6.3  
Hart-Scott-Rodino Filing
    38  
Section 6.4  
Notices and Consents
    38  
Section 6.5  
Insurance
    38  
Section 6.6  
Transfer of Employees
    38  
Section 6.7  
Letters of Credit
    39  
Section 6.8  
Employee Incentive Program
    39  
Section 6.9  
Transition
    40  
Section 6.10  
Tax Matters
    41  
Section 6.11  
Apportionment
    41  
Section 6.12  
Books and Records; Personnel
    42  
Section 6.13  
Non-Transferability
    43  
Section 6.14  
Post-Closing Covenants; General
    44  
Section 6.15  
Notice to Third Parties
    44  
Section 6.16  
Public Announcements
    44  
Section 6.17  
Further Assurances
    44  
Section 6.18  
Receivables
    45  
Section 6.19  
Buying Agents
    45  
Section 6.20  
Guatemala Subsidiary
    45  
   
 
       
ARTICLE VII  
CONDITIONS TO OBLIGATIONS TO CLOSE
    46  
Section 7.1  
Conditions to Obligation of Buyer
    46  
Section 7.2  
Conditions to Obligation of Seller
    47  
   
 
       
ARTICLE VIII  
INDEMNIFICATION
    48  
Section 8.1  
Indemnification of Seller
    48  
Section 8.2  
Indemnification of Buyer by Seller
    48  
Section 8.3  
Procedure
    49  
Section 8.4  
Settlement of Third Party Claims
    49  
Section 8.5  
Limitations on Indemnification
    50  
Section 8.6  
Survival of Representations, Warranties and Agreements
    51  
Section 8.7  
Definition of Losses
    51  
Section 8.8  
Sole Remedy
    52  
   
 
       
ARTICLE IX  
MISCELLANEOUS
    52  
Section 9.1  
Fees and Expenses
    52  
Section 9.2  
Notices
    52  
Section 9.3  
Governing Law; Disputes
    52  
Section 9.4  
Waiver of Jury Trial
    53  
Section 9.5  
Entire Agreement
    53  
Section 9.6  
Exclusive Representations and Warranties
    53  
Section 9.7  
Assignability; Binding Effect
    53  
Section 9.8  
Amendments
    54  
Section 9.9  
Severability
    54  
Section 9.10  
Third-Party Rights
    54  
Section 9.11  
Certain Interpretative Matters
    54  

ii 


 

             
        Page
Section 9.12  
Incorporation of Exhibits and Schedules
    54  
Section 9.13  
Execution in Counterparts
    54  
Section 9.14  
Termination
    55  
Section 9.15  
Specific Performance
    55  
Section 9.16  
Bulk Sales Laws
    55  

iii 


 

EXHIBITS
EXHIBIT A — Form of Escrow Agreement
EXHIBIT B — Form of Non-Competition Agreement
EXHIBIT C — Form of OXM License Agreement
EXHIBIT D — Form of Services Agreement
EXHIBIT E — Form of Thirteenth Street Lease
EXHIBIT F — Form of Special Warranty Deed
EXHIBIT G — Form of Legal Opinion of Seller’s Counsel
EXHIBIT H — Form of Legal Opinion of Buyer’s Counsel

iv 


 

PURCHASE AGREEMENT
               This PURCHASE AGREEMENT (this “Agreement”), is executed May 1, 2006, between THE MILLWORK TRADING CO., LTD. d/b/a LI & FUNG USA, a Delaware corporation (“Buyer”), and OXFORD INDUSTRIES, INC., a Georgia corporation (“Seller”). Buyer and Seller are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.
RECITALS
               A. Seller, through its “Womenswear Group,” presently conducts the business of designing, manufacturing, processing, marketing, importing, distributing and selling women’s apparel and, to a lesser extent, men’s apparel, as the “Womenswear Group” operating segment is defined under the caption “Segment Definition” in Seller’s fiscal year 2005 Annual Report to its shareholders (the “Business”).
               B. Seller desires to sell and assign to Buyer, and/or cause to be sold and assigned to Buyer by the Seller Subsidiaries, and Buyer desires to purchase, and/or cause to be purchased by one or more Buyer Affiliates, from Seller or a Seller Subsidiary, as appropriate, the Business Assets and Buyer desires to assume, and/or cause one or more Buyer Affiliates to assume, the Assumed Liabilities, subject to all of the terms and conditions hereof.
               Now, therefore, in consideration of the premises and the mutual covenants and agreements herein set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the Parties hereby covenant and agree as follows:
ARTICLE I
DEFINITIONS
     For purposes of this Agreement:
     “Action” means any action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Entity or other tribunal.
     “Adjusted EBITDA” means, for the November 2005 Year, the Net Income of the Business plus the following additions to Net Income: (i) Interest Expense, (ii) Income Taxes deducted to arrive at Net Income for such period, and (iii) all amounts attributable to depreciation and amortization and impairment charges, if any, all determined in accordance with the accounting methodology set forth on Schedule 2.5.
     “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such other Person.
     “Agreement” has the meaning set forth in the preamble hereto.
     “Allocation Schedule” has the meaning set forth in Section 6.10(d).

 


 

     “Ancillary Agreements” means the Escrow Agreement, the Non-Competition Agreement, the Services Agreement, the OXM License Agreement, and the Thirteenth Street Lease.
     “Antitrust Authorities” has the meaning set forth in Section 6.3.
     “Assumed Liabilities” has the meaning set forth in Section 2.1(b).
     “Basket” has the meaning set forth in Section 8.5(a).
     “Books and Records” means the books and records of the Business in whatever form, including without limitation invoices, credit records, customer lists and records, supplier lists and records, price lists, purchasing materials and records, manufacturing, maintenance and quality control records and procedures, warranty and service records, accounting records, inventory records, accounts payable records and files and litigation files, in any case, to the extent Related to the Business, except, in any case, for the books and records of the Business to the extent related to any Excluded Assets.
     “Business” has the meaning set forth in paragraph A of the Recitals.

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