Exhibit 10.1

 

UNIT PURCHASE AGREEMENT

 

Unit Purchase Agreement (this “Agreement”), dated October 25, 2012, among Eyefly
LLC (the “Company”), Bluefly, Inc., a Delaware corporation (“Bluefly”), A+D Labs
LLC, a Delaware limited liability Company (“A+D”) and Tworoger Associates, Ltd
(“Modo”).

 

R E C I T A L S:

 

A.        Bluefly and A+D are the Founding Members of, and own all of the issued
and outstanding Units in, the Company, to wit: Bluefly owns 4,420,000 Class A
Common Units (the “Bluefly Units”) and A+D owns 4,080,000 Class A Common Units.

 

B.        Bluefly, A+D and the Company are parties to an Operating Agreement,
dated January 4, 2011, with respect to the Company (the “Operating Agreement”).

 

C.        Bluefly is a party to a Management Services Agreement dated January 4,
2012 with the Company (the “Bluefly Agreement”) and Modo, an Affiliate of A+D is
a party to a Management Services Agreement dated January 4, 2012 with the
Company (the “A+D Agreement”). As of the date hereof, the Company is indebted to
Bluefly pursuant to the Bluefly Agreement for Service Provider Fees in the
amount of $246,294 (the “Bluefly Account”) and the Company is indebted to Modo
pursuant to the Modo Agreement for Service Provider Fees in the amount of
$221,705 (the “Modo Account”).

 

D.        A+D wishes to purchase the Bluefly Units, and Bluefly wishes to
Transfer the Bluefly Units to A+D, upon the terms and conditions herein set
forth.

 

It is agreed as follows:

1.           Definitions. Except as otherwise set forth herein, capitalized
terms shall have the meanings ascribed to those terms in the Operating
Agreement.

 

2.           Purchase and Sale. For the purchase price of One Hundred Thousand
($100,000.00) Dollars (the “Price”), Bluefly hereby sells and assigns to A+D,
and A+D hereby purchases from Bluefly, all of Bluefly’s right, title and
interest in and to the Bluefly Units, free and clear of all liens, mortgages,
pledges, security interests, claims, restrictions or other encumbrances, or
charges or defects of title of any nature whatsoever (“Liens”). The closing of
the Transfer will take place simultaneously with the execution of this
Agreement. A+D shall pay $50,000.00 of the Price by wire transfer to Bluefly
simultaneously with the execution of this Agreement, and the remaining
$50,000.00 shall be paid in ten installments of $5,000.00 each, with such
installments being due on each of the next ten monthly anniversaries of the date
hereof.

 

2.1 Deliveries. At the Closing, Bluefly shall deliver to A+D: (i) the Assignment
of Units attached as Exhibit 2.1-1 hereto, (ii) the Assignment of Domain Names
attached as Exhibit 2.1-2 hereto, (iii) the resignations of Joseph Park and Kara
Jenny as Managers appointed by Bluefly to the Company’s Board of Managers, and
(iv) the resignations of all current officers of the Company.

 

3.           Representations and Warranties of Bluefly. Bluefly hereby
represents and warrants and covenants to A+D, except as arising from the
execution and performance of this Agreement, as follows:

 

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(a) Authority. Bluefly has full legal capacity to execute and deliver and to
perform its obligations under this Agreement, and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Bluefly and constitutes the legal, valid and binding obligation of
Bluefly, enforceable against Bluefly in accordance with its terms, subject to
the effect of applicable bankruptcy, insolvency and similar laws affecting the
enforcement of creditors’ rights generally, and to general principles of equity,
whether applied in a proceeding at law or in equity.

 

(b) Title to the Bluefly Units. Bluefly is the lawful owner, of record and
beneficially, of the Bluefly Units and has good and marketable title to such
Units, free and clear of any Liens, other than Liens released from Bluefly’s
lender released as of the Closing and Liens created under the Operating
Agreement. Other than the Bluefly Units, Bluefly does not own any other interest
in the Company, including, options, rights, warrants or other securities able to
be converted, exchanged or exercised for or into ownership interests of the
Company.

 

(c) Non-Contravention. The execution, delivery and performance of this Agreement
by Bluefly and the consummation of the transactions contemplated hereby do not
and will not: (i) contravene or result in a violation or breach of any
applicable law, ordinance or regulation or any order, writ, award, judgment,
decree or other determination which affects or binds Bluefly or any of its
assets or properties; or (ii) conflict with, result in a violation of,
constitute a default (with or without notice or lapse of time, or both) under,
or give rise to a right of acceleration, termination or the imposition of
penalties under any contract, deed of trust, mortgage, trust, lease, indenture,
permit, franchise, governmental or other license, permit or other authorization,
contract, agreement, note or any other agreement, instrument or restriction to
which Bluefly is a party or by which any of its assets or properties may be
affected or bound.

 

It is understood and agreed that Bluefly makes no representations and warranties
with respect to the Company and its business.

 

4.           Representations and Warranties of A+D. A+D hereby represents and
warrants and covenants to Bluefly, except as arising from the execution and
performance of this Agreement, as follows:

 

(a) Authority. A+D has full legal capacity to execute and deliver and to perform
its obligations under this Agreement, and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by A+D and constitutes the legal, valid and binding obligation of A+D,
enforceable against A+D in accordance with its terms, subject to the effect of
applicable bankruptcy, insolvency and similar laws affecting the enforcement of
creditors’ rights generally, and to general principles of equity, whether
applied in a proceeding at law or in equity.

 

(b) Non-Contravention. The execution, delivery and performance of this Agreement
by A+D and the consummation of the transactions contemplated hereby do not and
will not: (i) contravene or result in a violation or breach of any applicable
law, ordinance or regulation or any order, writ, award, judgment, decree or
other determination which affects or binds A+D or any of its assets or
properties; or (ii) conflict with, result in a violation of, constitute a
default (with or without notice or lapse of time, or both) under, or give rise
to a right of acceleration, termination or the imposition of penalties under any
contract, deed of trust, mortgage, trust, lease, indenture, permit, franchise,
governmental or other license, permit or other authorization, contract,

 

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agreement, note or any other agreement, instrument or restriction to which A+D
is a party or by which any of its assets or properties may be affected or bound.

 

5.           Trademarks, Service Marks and Domain Names. Based on commercially
reasonable efforts to identify the same, Bluefly believes that the domain names
set forth on Schedule A to the form Assignment of Domain Names attached hereto
as Exhibit 2.1-2, represent the only domain names registered in its name or any
Affiliate other than the Company that contains the term “Eyefly” or were
otherwise obtained for use with respect to the Company’s business (“Eyefly
Domain Names”), it being understood and agreed that a domain name shall not be
deemed an Eyefly Domain Name as a result of containing the word “fly.” In the
event that, following the Closing, the parties become aware of additional Eyefly
Domain Names registered in Bluefly’s name or in the name of a Bluefly Affiliate,
Bluefly shall promptly file an Assignment of Domain Names in the form attached
hereto as Exhibit 2.1-2 with respect to such additional Eyefly Domain Names.
Within five (5) business days of the Closing, A+D will ensure that the Eyefly
website and all Eyefly materials are modified such that Bluefly is not described
as an owner or in any way affiliated or associated with Eyefly. Bluefly
covenants and agrees that it will not anytime in the future, directly or
indirectly, for itself or any Affiliate, without the written consent of A+D and
the Company in advance, own, apply for or register any trademark, service mark
or domain name that contains the term “Eyefly” or any term substantially similar
to the term “Eyefly” (an “Eyefly Use”) anywhere in the world, it being
understood that a trademark, service mark or domain name shall not be deemed an
Eyefly Use as a result of containing the word “fly” unless it contains in
addition to the word “fly” a term related to eyewear (for example, “opticfly”
“eyewearfly” or “glassesfly.

 

6.           Indemnification. Each party agrees to indemnify and fully defend
the other, and save and hold the other harmless, from and against any damage,
liability, loss, claim, cost, expense (including all reasonable attorney’s
fees), deficiency, interest, penalty, imposition, assessment or fine arising out
of or resulting from any breach or violation of any representation, warranty or
covenant of the indemnifying party under this Agreement. In addition, A+D and
the Company agree to indemnify and fully defend Bluefly, and save and hold
Bluefly harmless, from and against any damage, liability, loss, claim, cost,
expense (including all reasonable attorney’s fees), deficiency, interest,
penalty, imposition, assessment or fine arising out of or resulting from the
operation of the Company’s business after the Closing.

 

7.           Termination of Bluefly Agreement; Conversion of Accounts to Loans.
Effective upon the closing, (i) the Bluefly Agreement shall terminate and be of
no further force or effect; (ii) of the Bluefly Account, $61,573.50 shall be
converted to a non-interest bearing loan by Bluefly to the Company (the “Bluefly
Loan”) and the balance of the Bluefly Account ($184,720.50) shall be deemed
forgiven, and (iii) the Modo Account shall be converted to a non-interest
bearing loan by Modo to the Company in the amount of such Account (the “Modo
Loan”). Each such loan shall be repayable at such time as cash becomes
available, provided, however, the Modo Loan shall be subordinate to the Bluefly
Loan and no part of the Modo Loan shall be repaid, and no other Restricted
Payments (as hereinafter defined) shall be made, unless and until the Bluefly
Loan has been repaid in full. For the avoidance of doubt, the foregoing
subordination of the Modo Loan to the Bluefly Loan shall not limit or otherwise
affect the obligations of the Company to make payments to Modo under the Modo
Agreement on obligations thereunder accruing from and after the closing. For
purposes hereof, the term “Restricted Payments” shall

 

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mean: (a) any distributions to members of the Company (other than distributions
for the sole purpose of compensating members for income taxes payable on income
allocated to them by the Company); and (b) any payments to members of the
Company and their affiliates, other than payments made for goods and services
provided to the Company at cost.

 

8.           Termination of Rights Under Operating Agreement. Upon the closing
of the Transfer of the Bluefly Units to A+D, all the rights and obligations of
Bluefly under the Operating Agreement, including but not limited to the Call
Option under Section 19.10 thereof and the provisions of Section 20.2, shall
terminate.

 

9.           Miscellaneous.

 

Governing Law. This Agreement, and any claim, controversy or dispute arising
under or related to this Agreement, the relationship of the parties, and/or the
interpretation and enforcement of the rights and duties of the parties, will be
governed by the laws of the State of New York without regard to principles of
choice of laws.

 

Entire Agreement; Waiver. This Agreement constitutes the entire agreement
between the parties, supersedes any and all other agreements, either oral or in
writing, between the parties with respect to the subject matter hereof, and
except as otherwise set forth in this Agreement may be modified or amended only
by an agreement in writing signed by both parties. No covenant, term or
condition of this Agreement or breach thereof shall be deemed waived unless the
waiver is in writing, signed by the party against whom enforcement is sought,
and any waiver shall not be deemed to be a waiver of any preceding or succeeding
breach of the same or any other covenant, term or condition.

 

Severability. If any term, provision, covenant or condition of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remaining portions of this Agreement shall remain in full force and effect
and shall not be affected or invalidated.

 

Survival. All representations, warranties, covenants and obligations in this
Agreement shall survive the closing.

 

Assignment; Successors. This Agreement is binding upon, and shall inure to the
benefit of, each of the parties hereto and their respective successors and
assigns.

 

No Third Party Beneficiaries. This Agreement is for the sole benefit of the
parties hereto, and their respective successors, permitted assigns and
affiliated individuals, companies and entities, and nothing herein, express or
implied, is intended to, or shall be construed to, provide or create any legal
or equitable rights or benefits to any individual, company or entity other than
such parties.

 

Counterparts; Signatures. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but both of which shall constitute the
same instrument. Facsimile and scanned signatures shall be deemed original
signatures.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of
the day and year first above written.

 

 

  Bluefly, Inc.             By: /s/ Joseph Park     Name: Joseph Park     Title:
Chief Executive Officer             A+D Labs LLC             By: /s/ Alessandro
Lanaro     Name: Alessandro Lanaro     Title: Manager             Tworoger
Associates, Ltd.             By: /s/ Alessandro Lanaro     Name: Alessandro
Lanaro     Title: President             Eyefly LLC             By: /s/
Alessandro Lanaro     Name: Alessandro Lanaro     Title: Manager  

 

 

 

 

 

 

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