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Title: |
Agency Agreement |
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Date: |
2004 |
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Size: |
Preview shows 8KB of 80KB total |
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Price: |
$49 |
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ID: |
#1585707 |
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AGENCY AGREEMENT
This Agency Agreement is made as of this 10th day of February, 2004, by and
between Garcel, Inc. d/b/a The Great American Group, a California corporation,
with a principal place of business at 6330 Variel Avenue, Woodland Hills,
California 91367 (the "Agent") and Factory 2-U Stores, Inc., a Delaware
corporation with a principal place of business at 4000 Ruffin Road, San Diego,
CA 92123 (the "Merchant").
RECITALS
WHEREAS, the Merchant is a debtor and debtor-in-possession under Chapter 11
of the United States Bankruptcy Code, 11 U.S.C. Sections 101-1330 (the
"Bankruptcy Code"), pursuant to Chapter 11 Case No. 04-10111 (PJW), filed with
the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court") on January 13, 2004 (the "Petition Date"), and
WHEREAS, Merchant desires that Agent act as Merchant's exclusive agent for
the limited purpose of selling all of the Merchandise (as hereinafter defined)
located in Merchant's forty-four (44) retail store location(s) (each
individually a "Store," and collectively the "Stores") set forth on Exhibit "A"
attached hereto and made a part hereof, by means of a store closing, going out
of business or similar theme sale at the Stores (as further described below, the
"Sale").
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Agent and Merchant hereby agree as
follows:
Section 1. Defined Terms. The terms set forth below are defined in the
Sections referenced of this Agreement:
Defined Term Section Reference
Agency Accounts Section 7.2
Agency Documents Section 11.1(b)
Agent Preamble
Agent Claim Section 12.5
Agent Indemnified Parties Section 13.1
Approval Order Section 2
Bankruptcy Code Recitals
Bankruptcy Court Recitals
Benefits Cap Section 4.1
Central Service Expenses Section 4.1
Clearance Merchandise Section 5.2(b)
Defective Merchandise Section 5.2(b)
Excluded Benefits Section 4.1
FF&E Section 5.2(a)
Guaranteed Amount Section 3.1(a)
Gross Rings Section 6.3
Inventory Date Section 5.1
Inventory Taking Section 5.1
Layaway, Repair and Special Order
Merchandise Section 5.2(b)
Letter of Credit Section 3.4
Merchandise Section 5.2(a)
Merchant Preamble
Merchant Consignment Goods Section 5.4
Occupancy Expenses Section 4.1
On-Order Merchandise Section 5.2(b)
Out of Season Merchandise Section 5.2(b)
Proceeds Section 7.1
Petition Date Recitals
Retail Price Section 5.3
Retained Employee Section 9.1
Retention Bonus Section 9.4
Returned Merchandise Section 8.5
Sale Recitals
Sale Expenses Section 4.1
Sale Commencement Date Section 6.1
Sale Guidelines Section 2
Sale Term Section 6.1
Sale Termination Date Section 6.1
Sales Taxes Section 8.3
Store(s) Recitals
Supplies Section 8.4
WARN Act Section 9.1
Section 2. Appointment of Agent; Bankruptcy Court Approval. The Merchant
hereby appoints the Agent, and the Agent hereby agrees to serve, as the
Merchant's exclusive agent for the limited purpose of conducting the Sale in
accordance with the terms and conditions of this Agreement. Merchant's and
Agent's obligations hereunder are subject to approval of the Bankruptcy Court
and shall be of no force and effect in the event that it is not so approved. As
soon as practicable after Merchant's execution of this Agreement, Merchant shall
obtain an order of the Bankruptcy Court approving this Agreement in its entirety
(the "Approval Order"). The Approval Order shall be in a form satisfactory to
the Agent. Attached hereto as Exhibit "B" are Sale Guidelines setting forth the
Agent's conduct at the Sale (the "Sale Guidelines").
Section 3. Payments to Merchant and Agent.
3.1 Payments to Merchant.
(a) (i) As a guaranty of Agent's performance hereunder, Merchant
shall receive from Agent the sum of 45.55% of the aggregate Retail Price of the
Merchandise, less any credits provided for Returned Merchandise under Section
8.5 hereof ("Guaranteed Amount"), plus the payment of all Sale Expenses.
(ii) Agent shall pay to Merchant the Guaranteed Amount in the
manner and at the times specified in Section 3.3 below. The Guaranteed Amount
will be calculated based upon (A) the final report of the Merchandise by the
inventory taking service after verification thereof by Agent and Merchant, and
(B) the aggregate amount of Gross Rings (as defined herein), adjusted for
shrinkage as provided in Section 6.3 hereof.
(iii) The Guaranteed Amount has been calculated and agreed upon
based upon Merchant's representation that the aggregate Retail Price (as defined
in section 5.3 hereof) of the Merchandise as of the Sale Commencement Date (as
defined herein) will not be less than $12 million (the "Merchandise Threshold"),
that all such Merchandise will conform to Merchant's representations and
warranties contained herein, and that no material representations, warranties or
covenants of Merchant hereunder have been or shall be breached. Merchant and
Agent agree that in the event that the final report of the inventory taking
service indicates that the aggregate Retail Price of the Merchandise is less
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