EXHIBIT 99.3
PREFERRED STOCK PURCHASE AGREEMENT
AGREEMENT dated as of March 31, 2004, by and between PET
CAPITAL PARTNERS, LLC ("PET"), ABSOLUTE RETURN EUROPE FUND ("ARE"), ▇▇▇▇▇ ▇▇▇▇▇▇
("▇▇▇▇▇▇"), ▇▇▇▇ VENTURES I LLC ("NAFT"), DR. LUIS ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the
"PURCHASER"), PENTHOUSE INTERNATIONAL, INC., a Florida corporation (the
"GUARANTOR"), and THE ▇▇▇▇▇▇ VECTOR INVESTMENT TRUST (the "▇▇▇▇▇▇ TRUST"). Each
of PET, ARE and ▇▇▇▇▇▇ is hereinafter referred to individually as a "SELLER" and
collectively as the "SELLERS").
W I T N E S S E T H:
WHEREAS, the Sellers own (a) 15% Senior Notes due 2004 (the
"SENIOR NOTES") issued by General Media, Inc. ("GMI"), and (b) shares of GMI
Preferred Stock (the "PREFERRED STOCK);" and,
WHEREAS, GMI and certain of its subsidiaries (collectively the
"DEBTORS") are currently debtors in a Chapter 11 case (the "BANKRUPTCY CASE")
pending in the U.S. Bankruptcy Court for the Southern District of New York (the
"BANKRUPTCY COURT");
WHEREAS, on March 4, 2004 the Debtors with the support of the
Guarantor filed a First Amended Joint Plan of Reorganization (the "DEBTORS
PLAN") with the Bankruptcy Court; and
WHEREAS, pursuant to the Plan, the Debtors propose, inter
alia, to (a) pay in cash 100% of the principal amount of and accrued interest
(at the default rate) and costs on all outstanding Senior Notes, and (b)
reinstate the Preferred Stock in accordance with the terms thereof; and
WHEREAS, the Sellers and NAFT have (a) objected to the Debtors
Plan for a variety of reasons, including their position that the Debtors Plan,
as presently filed by Debtors, impairs the value of the Preferred Stock, and (b)
filed on March 11, 2004 a revised plan of reorganization on behalf of the
Sellers and NAFT (the "SELLERS' PLAN");
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto agree as follows:
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1. PURCHASE AND SALE OF PREFERRED STOCK. Upon the terms and
subject to the conditions contained herein, Sellers agree to sell, and Purchaser
agrees to purchase the Preferred Stock.
2. PURCHASE PRICE. The aggregate purchase price for the
Preferred Stock shall be as set forth in SCHEDULE A annexed hereto and made a
part hereof (the "PURCHASE PRICE"). The Purchase Price shall be allocated as
among the Sellers as set forth on SCHEDULE A annexed hereto; provided, however,
that PET shall have the right to reallocate the Purchase Price among the Sellers
by written notice to the Purchaser so long as (a) no other Seller shall object
in writing to such reallocation, and (b) the aggregate amount of the Purchase
Price shall not be increased.
(a) At the "Closing" (as that term is hereinafter
defined), upon (i) the execution and delivery to Purchaser of an assignment of
all of Sellers' right, title and interest in and to and under the Preferred
Stock, in the form of EXHIBIT G attached hereto (the "PREFERRED STOCK
ASSIGNMENT"), and (ii) satisfaction of the provisions of Section 7 hereof, the
Purchaser shall pay the Purchase Price allocated between the Sellers in the
manner as set forth in SCHEDULE A attached hereto, by the issuance to the
Sellers of promissory notes of the Purchaser (the "PURCHASER NOTES"), in such
amounts and allocated between the Sellers as set forth in SCHEDULE A attached
hereto.
(b) The Purchaser Notes shall:
(i) be payable as to interest only until the fourth
anniversary of the Closing, when the Purchaser Notes shall
mature and all unpaid principal of and accrued interest on
the Purchaser Notes shall be due and payable (the
"MATURITY DATE");
(ii) bear interest prior to the second anniversary
of the Closing at the rate of 8% per annum, between the
second anniversary and the third anniversary of the
Closing at the rate of 9% per annum and between the third
anniversary and the fourth anniversary of the Closing at
the rate of 10% per annum interest;
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(iii) bear interest at the rate of 15% per annum,
from and after the occurrence and during the continuation
of an event of default under the Purchaser Notes, and if
and to the extent not paid in full by the Maturity Date;
(iv) be payable as to interest in cash quarterly,
commencing June 30, 2004;
(v) be subject to prepayment at any time or from
time to time, without prepayment penalty of any kind; and
(vi) be qualified in their entirety by reference to
the form of Purchaser Notes annexed hereto as EXHIBIT A
and made a part hereof.
3. CLOSING. The closing of the purchase and sale of the
Preferred Stock (the "CLOSING") shall take place at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, no
later than 12:00 noon New York time on April 15, 2004 (the "CLOSING DATE").
4. REPRESENTATIONS AND WARRANTIES OF GUARANTOR AND PURCHASER.
The Guarantor and the Purchaser severally and not jointly and severally
represents and warrants to Sellers as follows:
(a) NO VIOLATIONS; VALIDITY. No provision of any
agreement, instrument or understanding, or of any order, judgment, decree,
statute, rule or regulation of any court or governmental authority, to which
Purchaser or the Guarantor is a party or by which he or it is bound or subject,
has been or will be violated by the execution by him or it of, or the
performance or satisfaction of any agreement or condition upon his or its part
to be performed or satisfied under, this Agreement. This Agreement and each of
the other instruments executed or to be executed by Purchaser and Guarantor
pursuant to this Agreement constitutes or will constitute the valid and legally
binding obligations of Purchaser and Guarantor in accordance with its terms
except as enforcement may be limited by applicable bankruptcy, insolvency and
other laws relating to or affecting creditors' rights generally and subject also
to general principles of equity affecting the right to specific performance and
injunctive relief.
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(b) AUTHORIZATIONS; APPROVALS. No authorization or
approval of, or filing with, or compliance with any applicable order, judgment,
decree, statute, rule or regulation of, any court or governmental authority, or
approval, consent, release or action of any third party, which has not been
obtained, is required in connection with the execution and delivery by Purchaser
and Guarantor of, or the performance or satisfaction of, any agreement of
Purchaser and Guarantor contained in or contemplated by, this Agreement.
(c) CAPITALIZATION The authorized, issued and outstanding
shares of capital stock of the Guarantor is as set forth on SCHEDULE B annexed
hereto and made a part hereof. As at the Closing, in excess of 90% of the issued
and outstanding shares of Series C convertible preferred stock of the Guarantor
is owned by the ▇▇▇▇▇▇ Vector Investment Trust, and such shares of Series C
convertible preferred stock of the Guarantor at the Closing will have the power
to elect a majority of the members of the board of directors of the Guarantor.
The amended and restated certificate of incorporation of Guarantor, as amended
to date, has been furnished to counsel to the Sellers.
(d) INVESTMENT INTENT. The Preferred Stock to be acquired
by the Purchaser hereunder will be acquired for investment for Purchaser's own
account and not with a view to a sale or other distribution thereof within the
purview of, and none of the Preferred Stock will be offered, sold, or otherwise
disposed of by Purchaser in violation of, any applicable provisions of the
Securities Act of 1933, as amended (the "ACT"), any state "blue sky" or other
securities laws or any rules and regulations thereunder. Purchaser acknowledges
that the Preferred Stock has not been registered by the Sellers under Act, any
state "blue sky" or other securities laws or any rules and regulations
thereunder and are being offered and sold in reliance upon exemptions from the
registration requirements of said Act and such laws. The Preferred Stock is
subject to restrictions and transferability and resale and may not be
transferred or resold except as permitted under said Act or such laws pursuant
to registration or exemption therefrom. The Purchaser further acknowledges that
he will be required to bear the financial risks of any investment in the
Preferred Stock for an indefinite period of time.
(e) FURTHER LIMITATION OF TRANSFER. The Purchaser further
acknowledges that, pursuant to the provisions of Article Fourth, Section (B)(ii)
of the GMI Certificate of
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Incorporation, the Preferred Stock may not be separately transferred or assigned
without the simultaneous assignment of the Senior Notes. Purchaser agrees to
purchase from the Sellers the shares of Preferred Stock listed on SCHEDULE A
annexed hereto, with full knowledge of such limitation and restriction on
transfer of the Preferred Stock, and agrees that the Sellers shall have no
obligation to Purchaser by reason of their sale of the Preferred Stock without a
sale of Senior Notes; the entire risk being borne by the Purchaser.
(f) NO RELIANCE OR REPRESENTATIONS. Guarantor hereby
represents that, as the owner of 99.5% of the common stock of GMI, and Purchaser
hereby represents that, as the indirect controlling shareholder of Guarantor, it
and he is fully familiar with all the affairs of the Guarantor and Debtors, and
each acknowledges that neither Sellers, nor their affiliates have made any
representations or warranties in connection with this Agreement or the
transactions contemplated herein, except those expressly set forth in Section 5.
(g) MODIFIED PLAN. On or before April 30, 2004, the
Guarantor and the Purchaser shall cause the Debtors to file with the Bankruptcy
Court the Debtors' Second Amended and Restated Plan of Reorganization
substantially in the form of EXHIBIT B annexed hereto and made a part hereof
(the "MODIFIED PLAN"). The Guarantor and the Purchaser shall not permit or cause
the Debtors to amend, alter or modify the Modified Plan in any manner that shall
materially and adversely affect the treatment of any holders of Senior Notes of
the Debtors, without in each instance, the affirmative written consent of PET,
as representative of the Sellers (the "SELLERS' REPRESENTATIVE").
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5. REPRESENTATIONS AND WARRANTIES OF SELLERS. Each Seller
represents and warrants to Purchaser as follow:
(a) GOOD TITLE. It has full and unrestricted power and
authority to sell, assign and transfer its Preferred Stock to Purchaser in the
manner provided herein, free and clear of any liens, claims, charges, options,
and encumbrances of any kind or description, subject only to the limitations set
forth in Section 4(e) above.
(b) NO RELIANCE OR REPRESENTATIONS. Such Seller
acknowledges that neither Purchaser nor his affiliates has made any
representations or warranties in connection with this Agreement or the
transactions contemplated herein, except those expressly set forth in Section 4.
(c) NO VIOLATIONS; VALIDITY. No provision of any material
agreement, instrument or understanding, or of any material order, judgment,
decree, statute, rule or regulation of any court or governmental authority to
which such Seller is a party or by which it is bound or subject, has been or
will be violated by the execution by such Seller of, or the performance or
satisfaction of any agreement or condition upon its part to be performed or
satisfied under, this Agreement. This Agreement and each of the other
instruments executed or to be executed by such Seller pursuant to this Agreement
has been duly authorized and constitutes or will constitute the valid and
legally binding obligations of such Seller in accordance with its terms except
as enforcement may be limited by applicable bankruptcy, insolvency and other
laws relating to or affecting creditors' rights generally and subject also to
general principles of equity affecting the right to specific performance and
injunctive relief.
(d) AUTHORIZATIONS; APPROVALS. No authorization or
approval of, or filing with, or compliance with any applicable order, judgment,
decree, statute, rule or regulation of, any court or governmental authority, or
approval, consent, release or action of any third party, is required in
connection with the execution and delivery by such Seller of, or the performance
or satisfaction of any agreement of such Seller contained in or contemplated by,
this Agreement.
6. COLLATERAL TO SECURE PAYMENT OF PURCHASER NOTES. Each of
the Purchaser and the Guarantor do hereby covenant and agree that, as collateral
to secure payment of the Purchaser Notes, at the Closing:
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(a) the Guarantor shall unconditionally individually
guaranty the obligations of the Purchaser under the Purchaser Notes in
accordance with the guaranty annexed hereto as EXHIBIT C-1 and made a part
hereof (the "PENTHOUSE GUARANTY"),
(b) in his capacity as sole trustee of the ▇▇▇▇▇▇ Trust,
the Purchaser shall cause the ▇▇▇▇▇▇ Trust to unconditionally guaranty the
obligations of the Purchaser under the Purchaser Notes in accordance with the
guaranty annexed hereto as EXHIBIT C-2 and made a part hereof (the "TRUST
GUARANTY"),
(c) in his capacity as sole trustee of the ▇▇▇▇▇▇ Trust,
the Purchaser shall cause the ▇▇▇▇▇▇ Trust to secure such Trust Guaranty by
granting to the Sellers a first priority lien and security interest in and to
all of the shares of Series C Preferred Stock of Purchaser that is owned of
record by the ▇▇▇▇▇▇ Trust and listed on SCHEDULE C annexed hereto and made a
part hereof (the "PENTHOUSE CONTROL STOCK"). At the Closing, the Sellers, as
obligees, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, as pledgee, and the ▇▇▇▇▇▇
Trust as record owner of 90.9% of the issued and outstanding Penthouse Control
Stock, as pledgor, shall execute the pledge agreement in the form of EXHIBIT D
annexed hereto and made a part hereof (the "PLEDGE AGREEMENT").
(d) At the Closing, the Purchaser and the ▇▇▇▇▇▇ Trust
shall cause to be delivered to the pledgeholder certificates evidencing all
10,500,000 shares of the Penthouse Control Stock (the "PLEDGED STOCK"), owned of
record by the ▇▇▇▇▇▇ Trust, accompanied by stock powers duly endorsed for
transfer and with the signatures of the record owner of the Pledged Stock
appropriately guaranteed by a bank or member firm of the New York Stock
Exchange, Inc.
7. PAYMENT OF SENIOR NOTES. In accordance with the Modified
Plan, upon the effective date thereof following final confirmation by the
Bankruptcy Court of the "Debtors Final Plan," as hereinafter defined (the
"EFFECTIVE DATE"), all holders of the Senior Notes, including the Sellers, shall
be paid in full, by wire transfer of immediately available funds to accounts
designated by the Sellers and other holders of Senior Notes, the entire then
outstanding principal amount of and accrued interest (at the default rate) on
all Senior Notes held by the Sellers and all other holders of such Senior Notes,
together with costs associated therewith.
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8. ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES.
(a) PURCHASER AND GUARANTOR COVENANTS. The Sellers do
hereby condition their support of the Modified Plan and the Debtors' Final Plan,
as contemplated by this Agreement, upon the Purchaser and Guarantor complying
with the following covenants and agreements:
(i) all of the hearings in the Bankruptcy Case,
currently scheduled for March 31, 2004 and April 1, 2004, shall be adjourned
until April 22, 2004, at the earliest;
(ii) by not later than Friday, April 9, 2004, the
Purchaser shall cause the Debtors
to file the Modified Plan with the Bankruptcy Court;
(iii) in no event shall the Purchaser or Guarantor
permit or cause the Debtors to
materially amend, alter or modify the Modified Plan in any manner that shall
materially and adversely affect the treatment of any holders of Senior Notes or
the Sellers, without in each instance, the affirmative written consent of the
Sellers' Representative;
(iv) the Guarantor shall use its best efforts to
cause the Bankruptcy Court to hold
a hearing on or before June 30, 2004 to confirm the Modified Plan, as the same
may hereafter be amended or modified in accordance with this Agreement, and
which shall be supported by the Guarantor and the Purchaser (collectively, the
"DEBTORS' FINAL PLAN"); and
(v) the Guarantor shall use its best efforts to cause
the Bankruptcy Court to execute an order confirming that the Debtors' Final Plan
has become final (the "CONFIRMATION ORDER") by a date that shall be on or before
July 31, 2004 or such other date thereafter as shall be reasonably practicable
and acceptable to the Bankruptcy Court (the "CONFIRMATION ORDER DATE");
(b) SELLERS AND NAFT COVENANTS. The Purchaser and the
Guarantor do hereby condition their purchase of the Preferred Stock and their
agreement to grant the collateral to secure payment of the Purchaser Notes
specified in this Agreement, upon the Sellers and NAFT complying with the
following covenants and agreements. On or before the Closing Date, the Sellers
and NAFT shall:
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(i) withdraw in writing the Sellers' Plan and any and
all motions or other related objections in opposition to the Debtors Plan,
(ii) support the Modified Plan and the Debtors' Final
Plan, as amended or modified in accordance with this Agreement, and
(iii) not directly or indirectly, whether in
conjunction with any other class of creditors of the Debtors, holders of GMI
Preferred Stock, or other third parties, take any action to either (A) oppose
such Modified Plan or Debtors' Final Plan, as amended or modified in accordance
with this Agreement, or (B) support any competing plan of reorganization
sponsored by any third person, firm or corporation, at any preliminary or final
confirmation hearings in connection with the Debtors Bankruptcy Case.
(c) ADDITIONAL COVENANTS OF THE PARTIES.
(i) On or before the Closing Date, the Purchaser and
Guarantor shall cause the Debtors to execute and deliver general releases to the
Sellers Group (as that term is hereinafter defined) in form and substance
reasonably satisfactory to the Sellers Group and their counsel, which releases
shall exclude the transactions contemplated by this Agreement.
(ii) On or before the Closing Date, the Sellers Group
will execute and deliver to the Debtors general releases in form and substance
reasonably satisfactory to the Debtors and their counsel, which releases shall
exclude the transactions contemplated by this Agreement as well as the
substantial contribution motion of NAFT to the extent that the same relates to
the Debtors' original Plan of Reorganization and Disclosure Statement and to
proposed transactions with ▇▇▇▇▇▇ and Vornado.
(iii) On or immediately following the Confirmation
Order Date, the Purchaser shall assign to the Guarantor and the Guarantor shall
assume from the Purchaser all, and not less than all, of the obligations under
the Purchaser Notes, all pursuant to the assumption agreement in the form of
EXHIBIT E annexed hereto (the "PENTHOUSE ASSUMPTION AGREEMENT"); provided,
however, that such assignment and assumption shall not release the Purchaser
from his obligations under the Purchaser Notes.
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9. FAILURE TO CONFIRM THE DEBTORS FINAL PLAN.
(a) If the Confirmation Order on the Debtors' Final Plan
shall not be executed by the Bankruptcy Court by 5:00 P.M. (New York time) on
August 6, 2004, whether as a result of (i) the failure or refusal of Post
Advisory Group, LLC or its affiliates (collectively, "POST") or any other
person, firm or corporation subsequently offering to provide exit financing to
the Debtors, to provide the Debtors with $30.0 million or more of "Exit
Financing" (as set forth in the Post commitment letter dated March 2, 2004), or
(ii) subject at all times to compliance by Sellers and NAFT with their covenants
contained in Section 8(b)(iii) above, if, prior to August 6, 2004, a plan of
reorganization shall be proposed by any person, firm or corporation that is not
supported directly or indirectly by the Guarantor (a "COMPETING PLAN"), which
Competing Plan offers payment to the creditors in excess of the Modified Plan
(as the same may hereafter be modified or amended in accordance with this
Agreement) AND GMI does not further amend such Modified Plan (as the same may
hereafter be modified or amended in accordance with this Agreement) to at least
match the terms of such Competing Plan, or (iii) for any other reason, then and
in such event:
(i) the Purchaser shall withdraw his commitment to
finance the Plan, the Modified Plan or any other Debtors' Final Plan, and will
not, directly or indirectly (A) propose or participate in any Section 363 sale
of the assets or business of Debtors (a "363 SALE"), (B) present any plan of
reorganization, or (C) support any plan of reorganization, other than a plan
acceptable to PET (the "NEW PET PLAN");
(ii) the Guarantor shall withdraw its support of the
Plan, the Modified Plan or any other Debtors' Final Plan and support no plan
other than the New PET Plan; and
(iii) the Guarantor shall work to cause the Debtors
to withdraw the Plan, the Modified Plan or any other Debtors' Final Plan and,
instead work to cause the Debtors to propose the New PET Plan on or before
September 30, 2004, or such later date as PET shall specify.
(b) In the event that any of the events set forth in
Section 9(a) above shall occur in the Bankruptcy Case, then and within ninety
(90) days after the occurrence of any of
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such events (the "OPTION Period"), either the Purchaser or the Sellers'
Representative shall have the right and option, exercisable upon ten (10) days
prior written notice to the other parties hereto (the "REPURCHASE OPTION") to
require the Purchaser to: (A) transfer back to the Sellers all shares of the
Preferred Stock purchased pursuant to this Agreement and (B) repurchase all, and
not less than all, of the Purchaser Notes, by the payment to the Sellers
(pro-rata as among them as the dollar amount of Preferred Stock owned by each
Seller set forth on SCHEDULE A hereto bears to the total amount of Preferred
Stock owned by all Sellers) of the aggregate sum of Two Million Dollars
($2,000,000), payable to the Sellers by wire transfer of immediately available
funds. Upon such transfer and payment, the Sellers shall deliver the Purchaser
Notes to the Purchaser for cancellation and the Purchaser shall have no further
obligation thereunder or hereunder. The reciprocal rights of the Purchaser or
the Sellers' Representative set forth in this Section 9(b) shall expire and be
of no further force or effect, unless the Repurchase Option shall have been
exercised within such ninety (90) day Option Period.
10. CLOSING CONDITIONS.
(a) The obligation of the Sellers to consummate the
Closing is subject to the satisfaction of all of the following conditions on the
Closing Date:
(i) the Purchaser, Guarantor and the ▇▇▇▇▇▇ Trust, on
the one hand, and the Sellers, ▇▇▇▇ ▇▇▇▇ Capital Partners, NAFT, ▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇ (the "SELLERS GROUP"), on the
other hand, shall exchange mutual general releases, which releases shall exclude
the transactions contemplated by this Agreement;
(ii) The Purchaser shall have executed and delivered
to each Seller the Purchaser Notes;
(iii) The ▇▇▇▇▇▇ Trust will execute the Trust
Guaranty and the Pledge Agreement;
(iv) The Guarantor will execute and deliver the
Penthouse Guaranty;
(v) The Sellers shall have duly transferred and
delivered to the Purchaser the Preferred Stock in accordance with the provisions
of Section 2 above; and
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(vi) Each of the Purchaser and the ▇▇▇▇▇▇ Trust shall
have executed and delivered to Sellers an appointment letter in the form of
EXHIBIT F attached hereto (the "APPOINTMENT LETTER") appointing ▇▇▇▇▇▇▇ Savage
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, LLP as service of process agent (the "PROCESS AGENT")
as provided in Section 16 hereunder, which Appointment Letter shall have been
signed by Process Agent to indicate its acceptance of such appointment.
(b) The obligation of the Purchaser to consummate the Closing
is subject to the satisfaction of all of the following conditions on the Closing
Date:
(i) The Sellers shall have executed and delivered to
the Purchaser the Preferred Stock Assignment; and
(ii) The Purchaser shall receive from the Seller
Group the mutual releases contemplated by Section 10(a)(i) above.
11. DIP LOAN. In accordance with the Debtors' Final Plan, the
Debtors shall have arranged to retire and pay in full, by wire transfer of
immediately available funds, all principal of, accrued interest on and fees
related to (the "DIP LOAN PURCHASE PRICE"), the Financing Agreement dated
February 10, 2004, as approved by the Bankruptcy Court by Order dated February
13, 2004 (the "DIP LOAN FACILITY"). Following the Confirmation Order Date, the
Debtors shall pay the DIP Loan Purchase Price by wire transfer of immediately
available funds to NAFT, as follows: Chase Bank
New York, New York
Acct # ▇▇▇-▇▇▇-▇▇▇
For the Benefit of ▇▇▇▇▇▇ Brothers, Inc.
NAFT Ventures I LLC
831-05486-18-475
NAFT shall deliver such releases in respect of the Financing
Agreement, all in such form and content as shall be reasonably required by
Purchaser and its legal counsel.
12. FURTHER ASSURANCES. From and after the date of this
Agreement and the Closing, each of the parties hereto shall from time to time,
at the request of any other party and without further consideration, do, execute
and deliver, or cause to be done, executed and delivered, all
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such further acts, things and instruments as may be reasonably requested or
required more effectively to evidence and give effect to the transactions
provided for in this Agreement.
13. ASSIGNMENT AND PARTIES IN INTEREST. This Agreement shall
be binding upon, and shall inure to the benefit of and be enforceable by, the
parties hereto and their respective legal representatives, successors and
assigns. Except for the foregoing permitted assignments, no other person shall
acquire or have any rights under this Agreement.
14. ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement
contains the entire agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes all prior negotiations and
understandings, if any, and there are no agreements, representations or
warranties other than those set forth, provided for or referred to herein.
Neither this Agreement nor any provisions hereof may be modified, amended,
waived, discharged or terminated, in whole or in part, except in writing signed
by the party to be charged.
15. INTERPRETATION.
(a) GOVERNING LAW. This Agreement shall be governed and
construed and enforced in accordance with the laws of the State of New York
applicable to contracts made and to be performed exclusively in that State
without giving effect to the principles of conflict of laws.
(b) INTERPRETATION. All pronouns and words used in this
Agreement shall be read in the appropriate number and gender, the masculine,
feminine and neuter shall be interpreted interchangeably and the singular shall
include the plural and vice versa, as the circumstances may require.
16. JURISDICTION; SERVICE OF PROCESS. Each of the parties
hereto agree that any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby may only be brought in the
federal court sitting in the State of New York or any other New York court, and
each of the parties hereby consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the
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venue of any such suit, action or proceeding in any such court or that any such
suit or proceeding which is brought in any such court has been brought in an
inconvenient forum. Concurrently with the execution and delivery of this
Agreement, the Purchaser, the Guarantor and the ▇▇▇▇▇▇ Trust shall execute and
deliver to Sellers an Appointment Letter in form and substance of EXHIBIT F
appointing Process Agent and its successors as their respective designee,
appointee and agent to receive, accept and acknowledge, for and on behalf of the
Purchaser, the Guarantor and the ▇▇▇▇▇▇ Trust, service of any and all legal
process, summons, notices and documents which may be served in any action, suit
or proceeding relating to the Purchaser Notes, this Agreement, the Pledge
Agreement or any ancillary document thereof with respect to any action filed
before the courts of the United States District Court of the Southern District
of New York or of the courts of the State of New York sitting in New York,
Borough of Manhattan, which service may be made on any such designee, appointee
and agent in accordance with legal procedures prescribed for such courts. The
Purchaser, the Guarantor and the ▇▇▇▇▇▇ Trust, agree to take any and all action
necessary to continue such designation in full force and effect and should such
designee, appointee and agent become unavailable for this purpose for any
reason, the Purchaser, the Guarantor and the ▇▇▇▇▇▇ Trust will immediately
deliver an Appointment Letter in the form of EXHIBIT F to a new designee,
appointee and agent with offices in New York, New York, reasonably satisfactory
to Sellers, which shall irrevocably agree to act as such, with the powers and
for purposes specified in this Section 16. The Purchaser, the Guarantor and the
▇▇▇▇▇▇ Trust agree that service upon Process Agent as provided for herein shall
constitute valid and effective personal service upon the Purchaser, the
Guarantor and the ▇▇▇▇▇▇ Trust with respect to all matters and that the failure
of Process Agent to give any notice of such service to any of the Purchaser and
the ▇▇▇▇▇▇ Trust shall not impair or affect in any way the validity of such
service or any judgment rendered in any action or proceeding based thereon.
17. HEADINGS; FACSIMILE SIGNATURES; COUNTERPARTS. The article
and section headings in this Agreement are for reference purposes only and shall
not define, limit or affect the meaning or interpretation of this Agreement.
This Agreement may be executed by facsimile signature and in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
14
18. NOTICES. The parties hereby agree that all notices,
requests, claims, demands and other communications hereunder shall be in
writing, in English, and shall be given or made by delivery in person, by
overnight courier service, or by telefax, to the respective Parties at the
following addresses (or at such other address for a Party as shall be specified
in a notice given in accordance with this Section 18), PROVIDED HOWEVER that
Purchaser shall always maintain an address in the city of Mexico, Distrito
Federal, Mexico, to receive any request for payment under this Agreement, the
Guaranty or the Promissory Note:
DR. LUIS ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇: SELLERS: NAFT:
ANL ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ 6800 Broken Sound Parkway
Reforma 122-9 Piso Suite 2001 Suite 2001
C.P. 06600 ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Mexico D.F. (▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇.▇▇▇.▇▇
Fax: ▇▇▇-▇▇-▇▇-▇▇-▇▇▇▇
[the balance of this page intentionally left blank]
15
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
PET CAPITAL PARTNERS, LLC
By: Naft Ventures I LLC, Managing Member
By
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Member
ABSOLUTE RETURN EUROPE FUND
By: Pet Capital Partners LLC, Attorney-
in-Fact
By: Naft Ventures I LLC, Managing
Member
By
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Member
-------------------------------------------
Dr. LUIS ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
PENTHOUSE INTERNATIONAL INC.
By
----------------------------------------
Name:
Title:
NAFT VENTURES I LLC
By:
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Member
16
▇▇▇▇▇ ▇▇▇▇▇▇
By: Pet Capital Partners LLC, Attorney-
in-Fact
By: Naft Ventures I LLC, Managing
Member
By
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Member
THE ▇▇▇▇▇▇ VECTOR INVESTMENT TRUST
By
----------------------------------------
Name: Dr. Luis ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Trustee
17
EXHIBIT C-2
UNCONDITIONAL AND IRREVOCABLE GUARANTY
The undersigned hereby unconditionally and irrevocably personally guarantees the
full payment and performance, when due, of all obligations of Dr. Luis ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as set forth in agreement, dated as of March 31, 2004, among Pet
Capital Partners LLC, Absolute Return Europe Fund, ▇▇▇▇▇ ▇▇▇▇▇▇, Dr. Luis
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Penthouse International, Inc. and the undersigned (the
"Purchase Agreement"). Unless otherwise defined herein, all capitalized terms
used in this guaranty shall have the same meaning as is defined in the Purchase
Agreement.
The undersigned hereto agrees that any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may only be brought
in federal court sitting in the State of New York or any other New York court,
and the undersigned hereby consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit or
proceeding which is brought in any such court has been brought in an
inconvenient forum
THE ▇▇▇▇▇▇-VECTOR INVESTMENT TRUST
By:
---------------------------------------
Name: Dr. Luis ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Trustee
Date: April 15, 2004
