EXHIBIT 10.15
REDEMPTION AGREEMENT
THIS AGREEMENT is made as of the 18th day of September, 1997, between The
Children's Place Retail Stores, Inc., a Delaware corporation (the "Company"),
and Nomura Holding America Inc., a Delaware corporation ("Nomura").
RECITALS
WHEREAS, the Company expects to undertake an initial public offering (the
"IPO") of its Common Stock in September 1997 or as soon thereafter as
practicable;
WHEREAS, as set forth in Section 1.1 hereof, the Company desires to
purchase and redeem from Nomura, and Nomura desires to sell to the Company,
concurrently with the consummation of the IPO, that certain warrant (the
"Warrant"), dated June 28, 1996, issued by the Company to Nomura entitling
Nomura to purchase up to 16,602.1 shares of the Company's Series A Common Stock,
par value $0.10 per share (the "Series A Common Stock"), at an exercise price of
$321.24 per share;
WHEREAS, prior to the consummation of the IPO, the Company expects to
effect a 120-for-one stock split (the "Stock Split") of the Series A Common
Stock and to redesignate (the "Reclassification") the Series A Common Stock as
Common Stock (the "Common Stock"); and
WHEREAS, after giving effect to the Stock Split and Reclassification, the
Warrant will be exercisable for 1,992,252 shares of Common Stock at an exercise
price of $2.677 per share.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements of the parties contained herein, the sufficiency of which is
hereby acknowledged, and intending to be legally bound, the Company and Nomura
agree as follows:
I. PURCHASE AND SALE; REDEMPTION; CLOSING
1.1. Redemption of Warrant. On the terms and subject to the
conditions set forth in this Agreement, concurrently with the consummation of
the IPO (the date of such consummation, the "IPO Closing Date"), the Company
will purchase and redeem (such purchase and redemption, the "Warrant
Redemption"), and Nomura will sell and transfer to the Company, the Warrant (in
its entirety) for an aggregate purchase price (the "Redemption Price"), payable
in immediately available funds, which shall equal (after giving effect to the
Stock Split and the Reclassification) the product of (x) the IPO price per share
of Common Stock minus the IPO underwriting discount per share of Common Stock
minus the $2.677 exercise price per share of Common Stock multiplied by (y) the
1,992,252 shares of Common Stock subject to the Warrant.
1.2. Closing. The closing (the "Closing") of the Warrant Redemption
contemplated hereunder will take place at the offices of Stroock & Stroock &
Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx (or such other location in the
City of New York as the Company may designate), immediately following the
consummation of the IPO and concurrently with the repayment (the "Note
Repayment") to Nomura by the Company of the $20,000,000 aggregate original
principal amount of its 12% Senior Subordinated Notes due 2002 (the "Nomura
Note"), together with the payment to Nomura by the Company of any accrued and
unpaid interest thereon and of such reasonable attorney's fees and disbursements
as are incurred by Nomura in connection with the IPO and Warrant Redemption, on
the IPO Closing Date or on such later date as the parties may agree (the date on
which the Closing occurs is herein referred to as the "Closing Date"). At the
Closing:
(a) Nomura will deliver to the Company the certificate or
certificates representing the Warrant, together with an instrument of assignment
duly executed in blank and such other documents as the Company may reasonably
request to transfer record ownership of the Warrant to the Company; and
(b) The Company will deliver to Nomura the Redemption Price in
immediately available funds by wire transfer to an account designated by Nomura
by notice to the Company in accordance with this Agreement not later than two
business days prior to the Closing Date.
1.3. Proceedings. Except as otherwise specifically provided for in
this Agreement, all proceedings that will be taken and all documents that will
be executed and delivered by the parties hereto on the Closing Date will be
deemed to have been taken and executed simultaneously and no proceeding will be
deemed taken nor any document executed and delivered until all have been taken,
executed and delivered.
II. REPRESENTATIONS AND WARRANTIES OF NOMURA
2.1. Nomura represents and warrants to the Company, as follows:
2.1.1. Authority; Enforceability. The execution, delivery and
performance by Nomura of this Agreement is within Nomura's corporate powers and
has been duly authorized by all necessary corporate action on the part of
Nomura. This Agreement constitutes a valid and binding agreement of Nomura,
enforceable against Nomura in accordance with its terms, except as
enforceability may be affected by bankruptcy, insolvency, moratorium or other
similar laws.
2.1.2. No Conflicts. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby and
compliance with the terms hereof will not, violate or conflict with in any
respect or result in a breach under any contract, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Nomura or its
property or assets.
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2.1.3. No Consents. No consent of, approval or filing with, any
court or other governmental authority is required to be obtained or made by or
with respect to Nomura in connection with the execution and delivery of this
Agreement or the consummation by Nomura of the transactions contemplated hereby.
2.1.4. Ownership of Warrant. The Warrant is owned, lawfully of
record and beneficially, by Nomura, free and clear of any Liens (as defined) and
is the only warrant for capital stock of the Company or other equity interest in
the Company owned by Nomura.
As used herein, "Lien" means, with respect to any property or asset,
any mortgage, lien, pledge, charge, security interest, encumbrance or other
adverse claim of any kind in respect of such property or asset but shall not
include the right of any Nomura officer or employee to any portion of the net
proceeds received by Nomura from the Warrant Redemption. For purposes of this
Agreement, a person will be deemed to own subject to a Lien any property or
asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such property or asset.
2.1.5. Title. Upon the repurchase of the Warrant by the Company, the
Company will acquire good title to the Warrant, free and clear of all Liens,
other than Liens arising from, through or as a result of any action or omission
other than of Nomura or any other holder of the Warrant prior to the Closing.
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1. The Company represents and warrants to Nomura as follows:
3.1.1. Corporate Authorization; Enforceability. The execution,
delivery and performance by the Company of this Agreement is within the
Company's corporate powers and has been duly authorized by all necessary
corporate action on the part of the Company. This Agreement constitutes a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforceability may be affected by
bankruptcy, insolvency, moratorium or other similar laws.
3.1.2. No Conflicts. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby and
compliance with the terms hereof will not, violate or conflict with in any
respect or result in a breach under any contract, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to the Company or
its property or assets.
3.1.3. No Consents. No consent of, approval or filing with, any
court or other governmental authority is required to be obtained or made by or
with respect to the Company in connection with the execution and delivery of
this Agreement or the consummation by the Company of the transactions
contemplated hereby.
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IV. CONDITIONS TO CLOSING
4.1. Conditions to Obligations of Nomura. The obligations of Nomura
to consummate the Closing are subject to the satisfaction of the following
conditions:
4.1.1. Representations, Warranties and Covenants of the Company. (a)
The representations and warranties of the Company made in this Agreement shall
be true and correct as of the date hereof and as of the Closing, as though made
as of the Closing, and (b) the Company shall have performed and complied with
all terms, agreements and covenants contained in this Agreement required to be
performed or complied with by the Company on or before the Closing Date;
4.1.2. IPO. The IPO shall have been consummated; the IPO price per
share of Common Stock (without deducting the IPO underwriting discount per share
of Common Stock) shall have been at least $13.00; and the Company shall have
applied $20 million of proceeds from the IPO to repay the Nomura Note.
4.2. Conditions to Obligations of the Company. The obligations of
the Company to consummate the Closing are subject to the satisfaction of the
following conditions:
4.2.1. Representations, Warranties and Covenants of Nomura. (a) The
representations and warranties of Nomura made in this Agreement shall be true
and correct as of the date hereof and as of the Closing, as though made as of
the Closing, and (b) Nomura shall have performed and complied with all terms,
agreements and covenants contained in this Agreement required to be performed or
complied with by Nomura on or before the Closing Date.
4.2.2. IPO. The IPO shall have been consummated.
V. PROVISIONS CONCERNING CERTAIN RIGHTS OF NOMURA
5.1 Waiver of Registration Rights. In accordance with Section 4.8 of
that certain Registration Rights Agreement, dated as of June 28, 1996 (the
"Registration Rights Agreement"), by and among the Company, Nomura and certain
stockholders of the Company, Nomura hereby waives the following:
(a) any requirement set forth in the Registration Rights Agreement
that the Company provide Nomura with notice of the filing of a registration
statement under the Securities Act of 1933, as amended, with respect to the IPO;
and
(b) any rights Nomura may have under the Registration Rights
Agreement to request that the Company include in the IPO any Registrable
Securities (as defined in the Registration Rights Agreement) held by Nomura.
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5.2 Note Prepayment. Nomura and the Company confirm their agreement
that notwithstanding any provision contained in the Note and Warrant Purchase
Agreement dated June 28, 1996, the Company shall have the right to repay the
Note on the IPO Closing Date, without any prior notice and without any
prepayment premium.
VI. SURVIVAL; INDEMNIFICATION
6.1. Survival. The representations and warranties of the parties
contained in this Agreement or in any certificate or other writing delivered
pursuant hereto or in connection herewith will survive the Closing until 18
months after the Closing Date. All covenants and agreements of the parties
contained in this Agreement will survive the Closing indefinitely.
6.2. Indemnification. (a) Nomura will indemnify the Company and hold
it harmless from any and all losses, liabilities and expenses (including,
without limitation, expenses of investigation and attorneys' fees and expenses)
incurred or suffered by the Company and resulting or arising from: (i) any
misrepresentation or breach of any representation or warranty by Nomura
contained in this Agreement or (ii) any breach by Nomura of any covenant or
undertaking made or to be performed by Nomura pursuant to this Agreement.
(b) The Company will indemnify Nomura and hold it harmless from any
and all losses, liabilities and expenses (including, without limitation,
expenses of investigation and attorneys' fees and expenses) incurred or suffered
by Nomura and resulting or arising from: (i) any misrepresentation or breach of
any representation or warranty by the Company contained in this Agreement or
(ii) any breach by the Company of any covenant or undertaking made or to be
performed by the Company pursuant to this Agreement. In addition, the Company
will indemnify Nomura in accordance with, and to the extent of, the
indemnification provisions set forth in the Registration Rights Agreement, all
as if Nomura were a Registering Stockholder (as defined in the Registration
Rights Agreement) with respect to the IPO.
6.3 Limitation of Indemnification. The indemnification obligations
of Nomura will not exceed the amount of the Redemption Price.
VII. MISCELLANEOUS
7.1. Termination. (a) This Agreement shall automatically terminate
and be null, void and of no further effect if the IPO Closing has not occurred
by October 31, 1997 for any reason.
(b) If this Agreement is terminated by reason of a willful and
intentional breach of any provision hereof by any party, the breaching party
will be liable for damages incurred by the nonbreaching party as a result of
such breach, which damages will include, without limitation, any out-of-pocket
costs and expenses incurred by the nonbreaching party in connection with the
enforcement of its rights hereunder (including reasonable fees and disbursements
of counsel).
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7.2. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed postage prepaid by
first-class registered or certified airmail, or sent by nationally recognized
overnight express courier service, or transmitted by telecopier, and shall be
deemed given when so mailed or sent, or, if telecopied, when receipt of
transmission is acknowledged, and shall be delivered as addressed as follows:
(a) If to the Company, to:
The Children's Place
0 Xxxxx Xxxxx
Xxxx Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attn: Xxxxxx Xxxxxxxxx, Esq.
or to such other person or place as the Company shall designate to
Nomura in writing; and
(b) If to Nomura, to:
Nomura Holding America Inc.
2 World Xxxxxxxxx Xxxxxx, Xxxxxxxx X
Xxx Xxxx, XX 00000-0000
Telecopier: (000) 000-0000
Attn: Xxxxxx Xxxxxx, or his authorized representative
or to such other person or place as Nomura shall designate to the
Company in writing;
provided, however, that any notice of change of address shall be effective only
upon receipt.
7.3. Amendments. This Agreement may not be modified or amended
except pursuant to an instrument in writing signed by the Company and Nomura.
7.4. Successors and Assigns. The provisions of this Agreement will
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that neither party may
assign, delegate or otherwise transfer any of its rights or obligations under
this Agreement without the consent of the other party hereto.
7.5. No Third Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their permitted assigns and nothing herein,
expressed or implied, will give or be construed to give to any person or entity,
other than the parties hereto and such permitted assigns, any legal or equitable
rights hereunder.
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7.6. Counterparts. This Agreement may be signed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
7.7. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
7.8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS RULES AS TO CONFLICTS OF LAW.
7.9. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
7.10. Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
THE CHILDREN'S PLACE RETAIL STORES, INC.
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
Title: Secretary
NOMURA HOLDING AMERICA INC.
By:
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Name:
Title:
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