Exhibit 2
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SECURITIES PURCHASE AGREEMENT
by and between
XXXXXX X. XXXXXX, XXXXXX XXXXX, XXXX X. XXXXXX,
DUTFORD LIMITED and COPLEX FOUNDATION
and
THE PURCHASERS
December 30, 1996
THIS SECURITIES PURCHASE AGREEMENT is made this ___ day of December,
1996, by and between the Purchasers listed on the signature pages hereof (the
"Purchasers") and Xxxxxx X. Xxxxxx ("BAS"), Xxxxxx Xxxxx ("JE"), Xxxx X. Xxxxxx
("XXX") (BAS, JE and XXX are sometimes referred to herein as the "Xxxxxx/Eiger
Group"), Dutford Limited, a British Virgin Islands corporation ("Dutford"), and
Coplex Foundation, a not-for-profit organization ("Coplex" and, together with
Dutford, the "Affiliates").
W I T N E S S E T H
WHEREAS, each of BAS, XXX and the Affiliates own certain equity
securities of Family Bargain Corporation, a Delaware corporation (the
"Company"), as more fully described herein (collectively, the "Equity
Securities").
WHEREAS, the parties desire for the Purchasers to purchase the
Equity Securities in accordance with the terms hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto, each intending to be legally bound, hereby agree
as follows:
1. Purchase and Sale of Equity Securities. BAS, XXX and the
Affiliates hereby agree to sell to the Purchasers, and the Purchasers hereby
agree to purchase from BAS, XXX and such Affiliates, the Equity Securities, as
set forth in Schedule 1 hereof, BAS, XXX and such Affiliates shall deliver such
Equity Securities
to the Purchasers, free and clear of all liens, security interests, pledges,
claims and encumbrances of every kind, nature and description.
2. Consideration to BAS and XXX and the Affiliates. In consideration
of the sale to the Purchasers of the Equity Securities, the Purchasers will
deliver on the Closing Date (as defined herein) to BAS, XXX and the Affiliates,
by wire transfer, to the bank account or bank accounts designated in writing by
BAS, XXX and the Affiliates on Schedule 2, $2,990,000.00 (the "Cash
Consideration").
3. Representations and Warranties by BAS, JE and XXX. As material
inducement for the Purchasers to enter into this Agreement, each of BAS and XXX
hereby jointly and severally represents and warrants to the Purchasers (for
himself only, except that each of BAS, JE and XXX make the representations and
warranties in subparagraphs (b) and (c) for himself and each of the Affiliates)
as follows:
a. That he is not aware of any breaches of representations,
warranties or covenants given by either him or the Company in any of the
agreements listed on Schedule 3(a) (the "Related Agreements').
b. That he and each of the Affiliates has full power and
authority to consummate the transactions contemplated by this Agreement; that
the Agreement, and to the extent he or any of the Affiliates is a party thereto,
the Related Agreements, constitute the valid and binding obligations of him and
such Affiliates, enforceable against them in accordance with their respective
terms; that neither the execution and delivery of this Agreement and the Related
Agreements, nor the consummation of the transactions contemplated herein or
therein in the manner herein
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or therein provided, will violate any agreement to which he or any of the
Affiliates is a party or by which he or any of the Affiliates is bound, or any
law, order, decree or judgment applicable to him or any of the Affiliates; that
any authorization, approval or consent of any third party that is required for
the lawful execution, delivery and performance of this Agreement and the Related
Agreements by him or the Affiliates has been obtained; and that the execution,
delivery and performance of this Agreement has been duly authorized by all
necessary corporate action on the part of the Affiliates.
c. That he and each of the Affiliates transfers the Equity
Securities attributed to him or it on Schedule 1 attached hereto, free and clear
of all liens, security interests and claims and encumbrances of every kind,
nature and description, and neither he nor any of the Affiliates owns, claims
ownership of or is the beneficial owner, directly or indirectly, of shares of
capital stock, or owns or claims ownership or right to any options or other
rights to purchase shares of capital stock, of the Company other than those
identified on Schedule 1.
4. Representations and Warranties by the Purchasers. As material
inducement for the members of Xxxxxx/Eiger Group and the Affiliates to enter
into this Agreement, the Purchasers hereby represent and warrant to the
Xxxxxx/Eiger Group and the Affiliates as follows:
a. That the Purchasers have full power and authority to
consummate the transactions contemplated by this Agreement.
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b. That this Agreement and the Related Agreements constitute
the legal, valid, and binding obligations of the Purchasers, enforceable against
them in accordance with their respective terms.
c. That neither the execution and delivery of this Agreement
and the Related Agreements, nor the consummation of the transactions
contemplated herein or therein in the manner provided herein or therein,
respectively, will violate any agreement to which any Purchaser is a party or by
which it or any of its property or assets is bound, or any law, order, decree or
judgment applicable to any Purchaser, or any provision of their certificate of
incorporation or by-laws, and that no authorization, approval or consent of any
third party is required for the lawful execution, delivery and performance of
this Agreement and the Related Agreements by any Purchaser.
d. That the execution, delivery, and performance of this
Agreement and the Related Agreements have been duly authorized by all necessary
corporate action on the part of each Purchaser.
e. That the Purchasers are purchasing the Equity Securities
for purposes of investment and not with a view toward the distribution thereof.
5. Indemnification by the Members of the Xxxxxx/Eiger Group. Each of
BAS, JE, XXX and the Affiliates agrees to jointly and severally indemnify and
hold harmless the Purchasers from and against any claims, losses, costs
(including, without limitation, reasonable legal, witness and expert fees and
disbursements and other charges of counsel (collectively "Legal Fees")),
expenses, liabilities, damages or expenses arising from or relating to any
material misrepresentation or breach of any
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xxxxxxxx xxxxxxxx, xxxxxxxx or agreement made by him in this Agreement or in any
Related Agreements or in connection with the enforcement of this paragraph.
6. Indemnification by the Purchasers. The Purchasers hereby agree to
indemnify and hold harmless BAS, JE and XXX and the Affiliates from and against
any claims, losses, costs (including Legal Fees), expenses, liabilities or
damages or expenses (including Legal Fees) arising from or relating to any
material misrepresentation or breach of any material covenant, warranty or
agreement made by any Purchaser in this Agreement or in any Related Agreements
or in connection with the enforcement of this paragraph.
7. Termination. This Agreement may be terminated by BAS, XXX
or any Affiliate or the Purchasers, if the Company Securities Agreement (as
defined herein) is terminated.
8. Cooperation. The Purchasers, on the one hand, and BAS, JE and XXX
and the Affiliates, on the other hand, shall, upon the reasonable request of the
other and without compensation, cooperate, including testifying in any relevant
proceeding, with the other in defending litigation to which any Purchasers or
the Xxxxxx/Eiger Group and the Affiliates, as a result of their involvement with
any Purchaser, is a party; provided, however, that any party who agrees to so
testify shall be reimbursed for their reasonable out-of-pocket expenses, so long
as the nature of such expenses is approved in advance by the Purchasers or the
Xxxxxx/Eiger Group, as the case may be, and is incurred in connection with such
testimony.
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9. Deliveries.
a. BAS, XXX and Affiliate Deliveries. On the Closing Date,
BAS, XXX and the Affiliates have delivered or caused to be delivered to the
Purchasers certificates for the Equity Securities, endorsed by the holder
thereof in blank or with stock transfer powers executed by the holder thereof in
blank attached.
b. Purchasers Delivery. On the Closing Date, the Purchasers
shall deliver to BAS, XXX and/or the Affiliates the Cash Consideration by wire
transfer, in immediately available funds, to such account or accounts as are
designated in writing and delivered before the Closing Date to the Purchasers.
10. Miscellaneous.
a. Indulgences, Etc. Neither the failure nor any delay on the
part of any party to execute any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.
b. Controlling Law. THIS AGREEMENT AND ALL
QUESTIONS RELATING TO ITS VALIDITY, INTERPRETATION, PERFORMANCE AND ENFORCEMENT
(INCLUDING, WITHOUT LIMITATION, PROVISIONS CONCERNING LIMITATIONS OF ACTIONS),
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SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
c. Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received only when
personally delivered, or on the next business day when deposited with a
reputable overnight courier service, such as Federal Express, for delivery to
the intended addressee. All notices shall be addressed as follows:
(i) If to the Purchasers:
c/o Three Cities Research, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: J. Xxxxxxx Xxxxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
(ii) If to the Xxxxxx/Eiger Group or any of the
Affiliates:
c/o The Xxxxxx/Eiger Group
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxx Xxxxxx
with a copy to:
Xxxx, Marks & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
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Any person may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this subparagraph for the giving of notice, and such alteration
shall become effective upon actual receipt.
d. Binding Nature of Agreement; No Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, personal representatives, successors and assigns,
except that no party may assign or transfer its rights nor delegate its duties
under this Agreement without the prior written consent of the other parties
hereto.
e. Execution in Counterparts. This Agreement may be executed
in counterparts, each of which shall be deemed to be an original as against the
party whose signature appears thereon, and both of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one (1) or more counterparts hereof, individually or taken together, shall bear
the signatures of each of the parties reflected hereon as the signatories.
f. Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provisions shall be
affected or rendered invalid or unenforceable by virtue of the fact that for any
reason any other or others of them may be invalid or unenforceable in whole or
in part.
g. Paragraph Headings. The Paragraph and subparagraph headings
in this Agreement are for convenience of reference only; they form no part of
this Agreement and shall not affect its interpretation.
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h. Gender, Etc. Words used herein, regardless of the number
and gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate.
i. Number of Days. In computing the number of days for
purposes of this Agreement, only business days shall be counted.
j. Exhibits and Schedules. All Exhibits and Schedules attached
hereto are hereby incorporated by reference into, and made a part of, this
Agreement.
k. Affiliate. When the term affiliate is used in this
Agreement with a lower case "all," such term shall have the meaning ascribed to
it in Rule 251 of the Rules and Regulations promulgated pursuant to the
Securities Act of 1933, as amended.
l. Entire Agreement. This Agreement and the Related Agreements
contain the entire understanding among the parties hereto with respect to the
subject matter hereof, and supersede all prior and contemporaneous agreements
and understandings, inducements or conditions, express or implied, oral or
written, except as herein and therein contained. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.
m. Closing. The closing (the "Closing") with respect to this
Agreement shall occur concurrently with the Initial Closing (as defined in the
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Securities Purchase Agreement, dated December 30, 1996 (the "Company Securities
Purchase Agreement"), between the Company and the Purchasers) of the Company
Securities Purchase Agreement, at the offices of Xxxx, Marks & Xxxxx LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other date and such other
place as the parties hereto shall agree (the "Closing Date").
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement on the date first above written.
Purchasers: THREE CITIES FUND II, L.P.
By: TCR Associates, L.P.,
as General Partner
By: /s/ J. Xxxxxxx Xxxxx
-----------------------------------
Name: J. Xxxxxxx Xxxxx
Title: Attorney-In-Fact
THREE CITIES OFFSHORE II C.V.
By: TCR Associates Offshore, L.P.,
as General Partner
By: /s/ J. Xxxxxxx Xxxxx
-----------------------------------
Name: J. Xxxxxxx Xxxxx
Title: General Partner
TERFIN INTERNATIONAL LTD.
By: /s/ J. Xxxxxxx Xxxxx
-----------------------------------
Name: J. Xxxxxxx Xxxxx
Title: Attorney-In-Fact
Xxxxxx/Eiger Group: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
XXXXXX X. XXXXXX
/s/ Xxxxxx Xxxxx
---------------------------------------
XXXXXX XXXXX
/s/ Xxxx X. Xxxxxx
---------------------------------------
XXXX X. XXXXXX
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Affiliates: COPLEX CORPORATION
/s/ Xxxxxx X. Xxxxxx
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name:
Title:
Attest:
-------------------------------
DUTFORD LIMITED
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name:
Title: Attorney-In-Fact
Attest:
-------------------------------
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SCHEDULE 1
EQUITY SECURITIES
Cash
Seller Securities of the Company Consideration
Xxxxxx X. Xxxxxx 342,140 shares of common stock
23,225 shares of Series A Preferred $ 1,254,524
Xxxx X. Xxxxxx 30,500 shares of Series A Preferred 378,108
Dutford Limited 301,640 shares of common stock 850,369
Coplex Foundation 25,000 shares of common stock
35,000 shares of Series A Preferred 506,999
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$ 2,990,000
=============
OPTIONS TO PURCHASE
COMMON STOCK OF THE COMPANY
EXERCISE PRICE
$1.38 $3.63
----- -----
Xxxxxx X. Xxxxxx 163,917 350,000
Xxxxxx Xxxxx 163,917 350,000
Xxxx X. Xxxxxx 75,883 175,000
SCHEDULE 2
WIRE TRANSFER INSTRUCTIONS
SCHEDULE 3(a)
RELATED AGREEMENTS
1. Separation Agreement, dated December 30, 1996, by and between Xxxxxx X.
Xxxxxx, Xxxxxx Xxxxx and Xxxx Xxxxxx and Family Bargain Corporation ("FBC").
2. Securities Purchase Agreement, dated December 30, 1996, by and among FBC and
the Purchasers listed on Schedule 2.2 thereof.
3. Registration Rights Agreement, dated as of January __, 1997, among FBC,
Three Cities Fund II, L.P., Three Cities Offshore II C.V. and Terfin
International Ltd.
4. Agreement Not to Compete, dated December 30, 1996, by each of Xxxxxx Xxxxx,
Xxxxxx X. Xxxxxx and Xxxx X. Xxxxxx for the benefit of FBC.
5. Non-Compete Agreement, dated January ___, 1997, by and between FBC and
Xxxxxx X. Xxxxxx.
6. Non-Compete Agreement, dated January ___, 1997, by and between FBC and
Xxxx Xxxxxx.
7. Non-Compete Agreement, dated January ___, 1997, by and between FBC and
Xxxxxx Xxxxx.
8. Side Letter, dated December 30, 1996, by FBC in favor of Xxxxxx X. Xxxxxx,
Xxxxxx Xxxxx and Xxxx X. Xxxxxx with respect to payment of expenses and
cancellation of indebtedness.
9. Side Letter, dated January __, 1997, re Standstill Agreement by Xxxxxx X.
Xxxxxx, Xxxxxx Xxxxx, Xxxx X. Xxxxxx, Coplex Corporation and Dutford Limited
in favor of Purchasers.
