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EXHIBIT 10.28
PURCHASE AGREEMENT,
dated as of August 11, 1999,
between
APPAREL VENTURES, INC.,
as the Issuer,
and
XXXXXX X. XXXXXXX,
VARIOUS JORDAN PARTY INVESTORS,
and
JZ EQUITY PARTNERS PLC,
as the Purchasers,
for
$8,750,000 Principal Amount of
10.0% Subordinated Notes due July 31, 2004
and
Warrants to Purchase
637,500 Common Shares.
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms....................................2
SECTION 1.2. Use of Defined Terms............................15
SECTION 1.3. Cross References................................15
ARTICLE II
PURCHASE AND SALE OF SUBJECT SECURITIES
SECTION 2.1. Purchase Commitment.............................15
SECTION 2.2. Issue Price.....................................15
SECTION 2.3. Closing.........................................15
SECTION 2.4. Purchasers'Acknowledgments......................16
ARTICLE III
CONDITIONS TO CLOSING
SECTION 3.1. Certificates of Incorporation...................16
SECTION 3.2. Resolutions, etc................................17
SECTION 3.3. Satisfaction of Conditions to Recapitalization..17
SECTION 3.5. Certain Affiliate Agreements....................18
SECTION 3.6. Senior Credit Agreement.........................19
SECTION 3.7. Certificate as to Solvency, etc.................19
SECTION 3.8. Opinion of Counsel..............................19
SECTION 3.9. Legal Expenses..................................19
SECTION 3.10. Satisfactory Legal Form.........................19
ARTICLE IV
PAYMENTS, REGISTRATION, ETC.
SECTION 4.1. Place of Payment................................19
SECTION 4.2. Home Office Payment.............................20
SECTION 4.3. Optional Payments...............................20
SECTION 4.4. Allocation......................................21
SECTION 4.5. Mandatory Redemption of Notes...................21
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SECTION 4.6. Registration, Transfer, etc.....................21
SECTION 4.7. Transfer and Exchange...........................22
SECTION 4.8. Replacement.....................................22
SECTION 4.9. Taxes...........................................22
ARTICLE V
WARRANTIES, ETC.
SECTION 5.1. Organization, Power, Authority, etc.............24
SECTION 5.2. Due Authorization...............................24
SECTION 5.3. Validity, etc...................................24
SECTION 5.4. Financial Information...........................25
SECTION 5.5. Capitalization..................................25
SECTION 5.6. Margin Regulations..............................26
SECTION 5.7. Government Regulation...........................26
SECTION 5.8. Offering of Subject Securities..................26
SECTION 5.9. Accuracy of Information.........................27
ARTICLE VI
COVENANTS
SECTION 6.1. Certain Affirmative Covenants...................27
SECTION 6.1.1. Financial Information, etc......................28
SECTION 6.1.2. Notice of Default, Litigation, etc..............28
SECTION 6.1.3. Use of Proceeds.................................29
SECTION 6.1.4. Books and Records...............................29
SECTION 6.2. Certain Negative Covenants......................29
SECTION 6.2.1. Business Activities.............................29
SECTION 6.2.2. Restricted Payments, etc........................30
SECTION 6.2.3. Consolidation, Merger, etc......................30
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1. Events of Default...............................30
SECTION 7.1.1. Non-Payment of Obligations......................30
SECTION 7.1.2. Default on Other Indebtedness...................30
SECTION 7.1.3. Bankruptcy, Insolvency,etc......................31
SECTION 7.1.4. Judgments.......................................31
SECTION 7.2. Action if Bankruptcy............................31
SECTION 7.3. Action if Other Event of Default................32
SECTION 7.4. Suits for Enforcement...........................32
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SECTION 7.5. Remedies Cumulative.............................32
ARTICLE VIII
SUBORDINATION
SECTION 8.1. Payment Over Upon Dissolution, etc..............32
SECTION 8.2. Payment Block Upon Senior Default...............33
SECTION 8.3. Payment Otherwise Permitted, etc................34
SECTION 8.4. Subrogation to Rights of Holders of Senior
Indebtedness.................................35
SECTION 8.5. Provisions Solely to Define Relative Rights.....35
SECTION 8.6. Effect of Failure to Pay........................35
SECTION 8.7. No Waiver of Subordination Provisions...........35
SECTION 8.8. Notice to Noteholders...........................36
SECTION 8.9. Proving, xxx.Xxxxxx.............................36
SECTION 8.10. Reliance on Judicial Order or Certificate of
Liquidating Agent............................36
SECTION 8.11. Notice to Senior Agent..........................37
SECTION 8.12. Amendment of Subordination, etc.Provisions......37
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Waivers, Amendments, etc........................37
SECTION 9.2. Notices.........................................38
SECTION 9.3. Costs and Expenses..............................38
SECTION 9.4. Indemnification.................................38
SECTION 9.5. Survival........................................39
SECTION 9.6. Severability....................................39
SECTION 9.7. Headings........................................39
SECTION 9.8. Counterparts....................................39
SECTION 9.9. Governing Law; Entire Agreement.................40
SECTION 9.10. Jurisdiction....................................40
SECTION 9.11. Successors and Assigns..........................40
SECTION 9.12. Waiver of Jury Trial............................40
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SCHEDULE I
EXHIBIT A Subordinated Note
EXHIBIT B Warrant
EXHIBIT C Certificate as to Certificate of Incorporation
EXHIBIT D Certificate as Authorizing Resolutions, etc.
EXHIBIT E Certificate as to Recapitalization, etc.
EXHIBIT F Certificate as to Merger Filing, etc.
EXHIBIT G Certificate as to Affiliate Agreements
EXHIBIT H Certificate as to Senior Credit Agreement
EXHIBIT I Certificate as to Solvency
EXHIBIT J Opinion of Counsel
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of August 11, 1999, is among APPAREL
VENTURES, INC., a Delaware corporation (alternatively, "OAVI" and "Old AVI"),
Xxxxxx X. Xxxxxxx ("Xxxxxxx"), each of the Jordan Parties (such and other
capitalized terms are used herein with the meanings provided in Section 1.1)
identified on the signature pages hereto and JZ EQUITY PARTNERS PLC, a public
limited liability company incorporated in England and Wales under the Companies
Act (1985) ("JZEP" and, collectively with Xxxxxxx and each such Jordan Party, a
"Purchaser").
W I T N E S S E T H:
WHEREAS, the parties are proposing to restructure the capitalization of
AVI Holdings, Inc., a Delaware corporation (alternatively, "AVIHI" and
"Holdings"), and its wholly-owned Subsidiary Old AVI (the "Recapitalization"),
such that inter alia on the Closing Date,
(a) pursuant to the Recapitalization Agreement, the holders of
all AVIHI Liabilities, all AVIHI Old Preferred Stock and all AVIHI Old
Common Stock will exchange their securities for 2,125,000 AVIHI New
Common Shares;
(b) Old AVI has authorized the sale to the Purchasers of, and the
Purchasers are willing on the terms and conditions hereinafter set forth
(including Article III) to purchase, for an aggregate amount of
$8,750,000,
(i) $8,750,000 principal amount of 10.0% Notes
substantially in the form of Exhibit A hereto due July 31, 2004,
and
(ii) Warrants substantially in the form of Exhibit B
hereto to purchase up to 637,500 SAVI Common Shares, representing
after the Merger on a Fully-Diluted Basis 54.1875% of all SAVI
Common Shares;
(c) pursuant to the Senior Note Repurchase Arrangement, (x)
Holdings will repurchase at least 51% of the Senior Noteholder 1994
AVIHI Warrants for $0.01 a piece and at least 51% of the Senior
Noteholder 1996 AVIHI Warrants for $0.01 a piece and (y) Old AVI will
repurchase at least $34,740,000 of the Senior Notes outstanding in an
aggregate principal amount of $36,000,000 for $222.50 of each $1,000 of
outstanding principal amount or at least $7,700,000 in the aggregate;
(d) pursuant to the Merger Documents, (x) Holdings will merge
(the "Merger") with and into Old AVI, and the Delaware corporation
surviving the Merger (alternatively, "SAVI" and "Surviving AVI") will be
named "Apparel Ventures, Inc." and (y) all of the
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then issued and outstanding AVIHI New Common Shares will be converted
into 212,500 SAVI Common Shares; and
(e) pursuant to the Management Options, Surviving AVI will
reserve 150,000 SAVI Common Shares for issuance from time to time to
directors, officers and employees of Surviving AVI and its Subsidiaries;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms. The following terms (whether or not
italicized) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Affiliate" means, relative to any Person, any other Person which,
directly or indirectly, controls or is controlled by or under common control
with such Person. For the purposes of this definition, "control" (including the
correlative terms "controlling", "controlled by" and "under common control
with") means, relative to any Person, the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of Voting Stock, by agreement or
otherwise; provided, however, that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control.
"this Agreement" means, on any date, this Purchase Agreement as
originally in effect and as thereafter from time to time amended, supplemented
or otherwise modified in accordance with the terms hereof and in effect on such
date.
"Amended Certificate of Incorporation" means the certificate of
incorporation of Holdings as it is to become effective on the Closing Date in
the form furnished to the requesting Purchasers prior to the execution and
delivery of this Agreement and as it is to be further amended on the Closing
Date by the Merger Documents.
"Applicable Law" means, relative to any Person, (x) all provisions of
laws, statutes, ordinances, rules, regulations, requirements, restrictions,
permits, certificates or orders of any Governmental Authority applicable to such
Person or any of its assets or property and (y) all judgments, injunctions,
orders and decrees of all courts and arbitrators in proceedings or actions in
which such Person is a party or by which any of its assets or properties are
bound.
"Approval" means, relative to any Person, each approval, license,
permit, consent, exemption, filing or registration by or with any Governmental
Authority necessary to (x)
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authorize or permit the execution, delivery or performance of, or for the
validity or enforceability of, any Transaction Document or (y) its conduct of
its business.
"Authorized Officer" means, relative to the Company, those of its
officers whose signatures and incumbency shall have been certified to each
requesting Purchaser pursuant to clause (a)(ii) of Section 3.2.
"AVIHI" is defined in the first recital.
"AVIHI New Common Shares" means the 2,125,000 shares of common stock,
$0.01 par value per share, of Holdings to be authorized by the Amended
Certificate of Incorporation and issued pursuant to the Recapitalization of
Holdings (and prior to the effectiveness of the Merger).
"AVIHI Old Common Stock" means the 64,450 shares of all classes of
common stock, $0.01 par value per share, of Holdings, 41,000 Class A Common
Stock shares of which are authorized (and 25,500 of which shares are issued and
outstanding) by the Certificate of Incorporation of Holdings in effect prior to
the Closing Date.
"AVIHI Old Preferred Stock" means the preferred shares, $1.00 par value
per share, of Holdings of which 1,700, 1,700, 900 and 6,450 are issued and
outstanding as Class A Preferred Shares, Class B Preferred Shares, Class C
Preferred Shares and Class D Preferred Shares, respectively.
"AVIHI Liability" means (x) the 12% promissory notes of Holdings due
April 30, 2004 and outstanding in the aggregate principal amount of $10,000,000
and the 14% promissory notes of Holdings due April 30, 2004 and outstanding in
the aggregate principal amount of $6,155,881, all of which notes were issued
pursuant to the purchase agreement, dated as of May 20, 1994 and as amended
through October 31, 1998, between Holdings and JZEP (as the successor to
Mezzanine Capital & Income Trust 2001 plc), together with all unpaid interest
accrued thereon, and (y) the 10.78% non-negotiable subordinated notes of
Holdings due June 30, 2004 and outstanding in the aggregate principal amount of
$3,149,122.00, all of which notes were issued pursuant to the agreement for
purchase and sale of stock, dated April 21, 1994, among Holdings, AVI
Acquisition Co., a Delaware corporation, and all of the shareholders of Apparel
Ventures, Inc., a California corporation, together with all unpaid interest
accrued thereon.
"Business Day" means any day, excluding, however, a Saturday, Sunday and
each legal holiday on which banks are authorized or required to close in New
York, New York.
"Capital Stock" means, relative to any Person, any and all shares,
partnership or membership interests, participations, rights or other equivalents
(however designated) of corporate stock, including (w) capital shares of such
Person (whether voting or non-voting), (x) if such Person is a partnership,
capital partnership interests (whether general or limited), (y) any other
indicia of ownership of such Person and (z) all warrants, options, purchase
rights,
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conversion or exchange rights, voting rights, calls or any claims of any
character with respect thereto, including SARs.
"Change of Control" means
(a) the sale, lease or transfer of all or substantially all the
assets of the Company to any Person or group (as such term is defined in
Section 13(d)(3) of the Exchange Act) other than the Jordan Investors;
(b) the liquidation or dissolution of (or the adoption of a plan
of liquidation by) the Company;
(c) the acquisition by any Person or group (as so defined) (other
than the Jordan Investors) of a direct or indirect majority in interest
(more than 50%) of the issued and outstanding Voting Stock of the
Company by way of merger or consolidation or otherwise; and
(d) any transaction the result of which is that any Person or
group (as so defined) (other than the Jordan Investors) beneficially
owns, directly or indirectly, more of the issued and outstanding Voting
Stock of the Company than is owned beneficially, directly or indirectly,
by the Jordan Investors.
"Closing" is defined in Section 2.3.
"Closing Date" is defined in Section 2.3.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Common Share" means (x) on the Closing Date (and prior to the
occurrence of the Merger), a AVIHI New Common Share and (y) on the Closing Date
(and after the occurrence of the Merger) and thereafter, a SAVI Common Share.
"Company" means (x) at any time prior to the occurrence of the Merger,
Old AVI and (y) at any time on or after the occurrence of the Merger, Surviving
AVI.
"Contractual Undertaking" means, relative to any Person, any provision
of any debt or equity security issued by it or of any Instrument or undertaking
to which it is a party or by which it or any of its property is bound or
subject.
"Default" means
(a) any Event of Default or any act, condition or event which,
after notice or lapse of time or both, would constitute an Event of
Default; and
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(b) any act, condition or event which has resulted in, or would
(without notice or lapse of time or both) permit, any or all of the
monetary obligations of under the Senior Credit Agreement to be declared
immediately due and payable prior to their stated maturity.
"Director Indemnification Agreement" is defined in clause (a) of Section
3.5. At any time after the Closing Date, "Director Indemnification Agreement"
also means any other agreement in substantially similar form entered into by the
Company and any of its directors from time to time after the Closing Date.
"Disclosure Schedule" means Schedule I hereto.
"Event of Default" is defined in Section 7.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Letter" means the letter, dated July 14, 1999, from Holdings
to (and to be accepted by) all holders of AVIHI Liabilities, AVIHI Old Preferred
Stock and AVIHI Old Common Stock pursuant to which such holders, inter alia,
consent to the Recapitalization, agree to exchange their AVIHI Liabilities and
AVIHI Old Preferred Stock for AVIHI New Common Shares and acknowledge the
dilution of their AVIHI Old Common Stock by the AVIHI New Common Shares.
"Financing Memorandum" is defined in Section 5.9.
"Fiscal Quarter" or "FQ" means any period of three consecutive calendar
months comprising a quarter of a Fiscal Year; references to a Fiscal Quarter
with numbers corresponding to a calendar year and a number corresponding to a
Fiscal Quarter (e.g., "1999 FQ 1") refer to such Fiscal Quarter (i.e., the
first) of such Fiscal Year.
"Fiscal Year" or "FY" means a period of 12 consecutive calendar months
ending on each June 30; references to a Fiscal Year with a number corresponding
to any calendar year (e.g., "the 1999 Fiscal Year" or "1999 FY") refer to the
Fiscal Year ending on June 30 of such calendar year.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"Fully-Diluted Basis" means, relative to the number of SAVI Common
Shares into which the Warrants are convertible, the percentage which such SAVI
Common Shares is of the sum of
(a) all SAVI Common Shares issued on the Closing Date (after
giving effect to the transactions contemplated by this Agreement),
including all SAVI Shares into which AVIHI New Common Shares are
converted pursuant to the Merger Documents,
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plus
(b) all SAVI Common Shares issuable upon the exercise of the
Warrants,
plus
(c) all SAVI Common Shares issuable from time to time pursuant to
the Management Options.
"Xxxxxxx" is defined in the preamble.
"Governmental Authority" means any international, national, federal,
state, provincial, local, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, or any court, in each case
whether of the United States or foreign.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
this Agreement or any other Purchase Document refer to this Agreement or such
other Purchase Document, as the case may be, as a whole and not to any
particular Article, Section, paragraph or provision of this Agreement or such
other Purchase Document.
"holder" is defined, relative to a Note, in Section 4.6.
"Holdings"is defined in the first recital.
"including" means including without limiting the generality of any
description preceding such term.
"Indemnified Liability" is defined in Section 9.4.
"Indemnified Party" is defined in Section 9.4.
"Instrument" means any contract, agreement, indenture, mortgage,
document or other writing (whether by formal agreement, letter or otherwise)
under which any obligation is evidenced, assumed or undertaken or any lien (or
right or interest therein) is granted or perfected.
"Jordan Industries" or "JI" means Jordan Industries, Inc., an Illinois
corporation.
"Jordan Investor" means any Jordan Party or JZEP.
"Jordan Party" means TJC, Jordan Industries and their respective
Affiliates and Subsidiaries (excluding, however, the Company and Subsidiaries)
and, relative to each of the foregoing,
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(a) each general partner, limited partner, stockholder, member,
principal or employee thereof or any Affiliate thereof;
(b) any 50% (or more) owned Subsidiary of any one (or jointly of
more than one of any) Person specified in clause (a); and
(c) the spouse or any immediate family member of any Person
specified in clause (a) or any trust solely for the benefit of any such
Person or the spouse or any immediate family member of such Person.
"Jordan Payment" means any payment to any Jordan Party of management
fees, consulting fees, advisory fees, investment banking fees, director's fees
or other fees for services provided to the Company and Subsidiaries, whether
pursuant to a Jordan Services Agreement or otherwise (excluding, however,
amounts paid as (x) reimbursement of out-of-pocket expenses paid to Persons who
are not Affiliates in connection with the delivery of such services and (y)
payments made pursuant to any Director Indemnification Agreement).
"Jordan Services Agreement" means the TJC Management Consulting
Agreement or the TJC Advisory Agreement.
"JZAI" means Jordan/Zalaznick Advisers, Inc., a Delaware corporation.
"JZEP" is defined in the preamble.
"Management Employment Agreement" is defined in clause (e) of Section
3.3.
"Management Option" means each option issued on the Closing Date by SAVI
to each Person identified under the caption "Management Optionees" of Item 3.3
("Stockholders") of the Disclosure Schedule for the number of SAVI Common Shares
set forth opposite such Person's name in such Item 3.3. At any time after the
Closing Date, "Management Option" also means any other option awarded from time
to time by the Board of Directors of the Company to any other officer, director
or employee of the Company or any Subsidiary for a number of SAVI Common Shares
not to exceed, together with all other Management Options awarded after the
Closing Date, the number of SAVI Common Shares set forth opposite the word
"Reserved" in Item 3.3 ("Stockholders") of the Disclosure Schedule.
"Management Stockholder" means each Stockholder identified under the
caption "Management Optionees" of Item 3.3 ("Stockholders") of the Disclosure
Schedule. At any time after the Closing Date, "Management Stockholder" also
means any other officer, director or employee of the Company or any Subsidiary
who shall purchase any of the Common Shares shown as "RESERVED" in Item 3.3
("Stockholders") of the Disclosure Schedule pursuant to an offer made by the
Board of Directors of the Company and who shall in connection therewith have
executed the Stockholders' Agreement.
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"Materially Adverse Effect" means (x) a material adverse effect on the
financial condition, business, assets, operations, properties or prospects of
the Company and Subsidiaries, taken as a whole, (y) a material impairment of the
ability of any Obligor to perform its respective payment obligations under the
Purchase Documents to which it is or will be a party or (z) an impairment of the
validity or enforceability of, or a material impairment of the rights, remedies
or benefits available to the Noteholders under, this Agreement or any other
Purchase Document.
"Merger" is defined in clause (d) of the first recital.
"Merger Document" means the certificate, plan or agreement of merger for
filing with the Secretary of State of the State of Delaware in the form
furnished to the requesting Purchasers prior to the execution and delivery of
this Agreement pursuant to which (x) Holdings shall merge with and into Old AVI
and (y) each AVIHI New Common Share will be converted into one tenth of one SAVI
Share.
"Non-U.S. Noteholder" is defined in Section 4.9.
"Note" means each 10.0% subordinated promissory note of the Company,
issued on the Closing Date in accordance with Section 2.3, substantially in the
form of Exhibit A hereto (as such promissory note may be amended, endorsed or
otherwise modified from time to time) and all other promissory notes accepted
from time to time in substitution, replacement or renewal therefor, including
pursuant to Section 4.7 or 4.8.
"Noteholder" means at any time each Person (including the Purchasers)
then registered in accordance with Section 2.3, 4.7 or 4.8 as the owner or
holder of a Note; requesting Noteholder means JZEP and each Noteholder who shall
from time to time notify the chief financial Authorized Officer that it wishes
to receive copies of all financial information, notices and other information
delivered from time to time pursuant to Section 6.1.
"OAVI" is defined in the preamble.
"Obligation" means all obligations of the Company with respect to the
repayment or performance of all obligations (monetary or otherwise) of the
Company arising under or in connection with the Notes or under this Agreement or
any other Purchase Document in respect of the Notes, the indebtedness evidenced
thereby or to any Person as the holder of a Note.
"Old AVI" is defined in the preamble.
"or" is not exclusive.
"Organizational Document" means, relative to any Person, each Instrument
that (x) defines its legal existence (including, in the case of a corporation,
its articles or certificate of incorporation), as filed or recorded with an
applicable Governmental Authority or (y) governs its internal affairs
(including, in the case of a corporation, its by-laws and all shareholder
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agreements, voting trusts and similar arrangements applicable to any of its
authorized shares of Capital Stock), in each case as amended, supplemented or
restated.
"outstanding" means, at any time relative to the Notes, any Notes
theretofore issued pursuant to Section 2.3, 4.6 or 4.7 and not surrendered
pursuant to Section 4.6 or 4.7 but excluding, however, all Notes which are
deemed pursuant to Section 4.8 to be not outstanding.
"Permitted Junior Payment" means any Restricted Payment (excluding,
however, any payment of the nature referred to in clause (a) or (b) of the
definition of such term) which is made by the Company or any Subsidiary at any
time when, after giving effect thereto and in the good faith determination of
the Board of Directors of the Company evidenced by a duly adopted resolution of
such Board, (x) the funds then available to the Company are sufficient (and are
reasonably expected to continue to be sufficient) to make the next scheduled
payment of interest to become due, and all other payments due and to become due
in the next 190 days, on the Notes and (y) no Default shall have occurred and be
continuing (or would reasonably be expected to occur within the next 190 days).
"Person" means any natural person, corporation, firm, association,
partnership, limited liability partnership, limited liability company,
government, trust, governmental agency or any other entity, whether acting in an
individual, fiduciary or other capacity.
"Post-Petition Interest" means, relative to any Senior Indebtedness, all
interest accrued or accruing on such Senior Indebtedness after the commencement
of any insolvency or liquidation proceeding against such Person in accordance
with and at the contract rate, including any rate applicable upon default,
specified in the Instrument creating, evidencing or governing such Senior
Indebtedness, whether or not, pursuant to Applicable Law or otherwise, the claim
for such interest is allowed as a claim in such insolvency or liquidation
proceeding.
"Pro Forma Balance Sheet" is defined in clause (b) of Section 5.4.
"Projections" means the projections and calculations for the periods
from the Closing Date (assuming the Closing Date has occurred on June 30, 1999)
through the close of each Fiscal Year through and including the 2006 Fiscal Year
set forth in the Financing Memorandum, including the projected income and cash
flow statements, the EBITDA, balance sheets, amortization and capitalization
calculations, the ratio analyses and the revenue and related cost assumptions.
"Purchase Document" means this Agreement, the Notes, and each other
Instrument executed and delivered from time to time by the Company or any
Subsidiary to any other Noteholder pursuant hereto, whether or not mentioned
herein.
"Purchaser" is defined in the preamble; "requesting Purchaser" means
JZEP and each other Purchaser who shall notify counsel to the Company on or
prior to the Closing Date that it wishes to receive copies of all documentation
identified in Article III or IV as being delivered to a requesting Purchaser;
"required Purchaser" means, at any time prior to the purchase of the
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Notes in accordance with Section 2.3, Purchasers committed pursuant to Section
2.1 to purchase at least 50.1% of the original principal amount of the Notes.
"Ratably" means, relative to the Noteholders, ratably according to the
aggregate outstanding principal amount of all Notes held by each Noteholder.
"Recapitalization" is defined in the first recital.
"Recapitalization Agreement" means the recapitalization and exchange
agreement, dated the Closing Date, among Holdings, Old AVI, all holders of AVIHI
Liabilities, all holders of Old AVIHI Preferred Stock and all holders of Old
AVIHI Common Stock.
"Recapitalization Document" means the Recapitalization Agreement, the
Exchange Letter, the Senior Note Repurchase Arrangement, the Merger Documents
and all documents, certificates and Instruments in connection with any thereof.
"Reorganization Security" means, relative to any insolvency or
liquidation proceeding involving the Company or any Subsidiary, any Capital
Stock or other securities of the Company or any Subsidiary as reorganized or
readjusted (or Capital Stock or any other securities of any other Person
provided for by a plan of reorganization or readjustment involving the Company
or any Subsidiary) that are subordinated, at least to the same extent as the
Notes, to the payment of all outstanding Senior Indebtedness after giving effect
to such plan of reorganization or readjustment and authorized by an order or
decree of a court of competent jurisdiction in a reorganization proceeding under
any applicable bankruptcy, insolvency or similar law, giving effect, and stating
in such order or decree that effect has been given, to Article VIII.
"Required Noteholders" means, at any time, Noteholders owning more than
50.1% of the then outstanding principal amount of the Notes.
"Restricted Payment" means
(a) relative to any Capital Stock of the Company,
(i) any dividend or other distribution (in cash, property
or obligations), direct or indirect, by the Company on account of
(x) any shares of any class of such Capital Stock (now or
hereafter outstanding) or (y) any warrants, options or other
rights with respect to any shares of any class of such Capital
Stock (now or hereafter outstanding), excluding, however, in each
case, dividends or distributions payable in such Capital Stock,
or warrants to purchase such Capital Stock, or split-ups or
reclassifications of such Capital Stock into additional or other
shares of its Capital Stock),
(ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or
indirect, by the Company or any
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Subsidiary of any shares of any class of such Capital Stock
(now or hereafter outstanding), and
(iii) any payment by the Company or any Subsidiary made to
retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of such
Capital Stock now or hereafter outstanding;
(b) any payment or prepayment by the Company or any Subsidiary of
principal of, premium, if any, or interest on, or redemption, purchase,
retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to, any indebtedness
subordinated in right of payment to the Obligations;
(c) any Jordan Payment by the Company or any Subsidiary; and
(d) any deposit to fund any of the foregoing.
"SAR" means, relative to any Person, stock appreciation, phantom stock,
incentive stock or similar contractual rights arising under stock-based
incentive or compensation plans or programs established by such Person for
employees which do not involve any issuance of any Capital Stock or other
securities convertible thereinto.
"SAVI" is defined in clause (d) of the first recital.
"SAVI Common Share" means a share of common stock, $0.01 par value per
share, of Surviving AVI as authorized by the Amended Certificate of
Incorporation.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Agent" means Fleet Capital Corporation (as successor to Barclays
Business Credit, Inc.) and also refers to any replacement or successor agent
under a successor Senior Credit Agreement as provided in clause (a) of the
definition of such term.
"Senior Credit Agreement" means the loan and security agreement, dated
May 23, 1994 and as amended as of January 15, 1995, October 6, 1995, December 5,
1995, March 31, 1996, September 30, 1996, April 30, 1997, November 4, 1997,
September 24, 1998, December 4, 1998, January 4, 1999, and February 26, 1999,
and as it is to be further amended on the Closing Date by Senior Credit
Agreement Amendment No. 12, among Old AVI, the Senior Lenders and the Senior
Agent. At any time after the Closing Date, "Senior Credit Agreement" also means
the Senior Credit Agreement as originally executed and delivered, together with
(a) each successor Instrument pursuant to which the Company
obtains from other financial institutions loans to refinance
indebtedness outstanding under the Senior Credit Agreement in effect on
the date of such refinancing; and
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(b) all amendments, supplements, extensions, renewals and other
modifications made thereto or to any such successor Instrument from time
to time after the Closing Date.
"Senior Credit Agreement Amendment No.12" means the amendment, to be
dated the Closing Date, to the Senior Credit Agreement consenting to the
Recapitalization in substantially the form furnished to the requesting
Purchasers in connection with the execution and delivery of this Agreement.
"Senior Indebtedness" means the sum of (x) the aggregate principal
amount of all indebtedness, all unpaid interest thereon (including Post-Petition
Interest) and all other Senior Liabilities outstanding from time to time under
the Senior Credit Agreement and (y) all Hedging Liabilities owing to a Senior
Lender or any Affiliate thereof with respect to indebtedness outstanding under
the Senior Credit Agreement.
"Senior Indenture Trustee" means Firstar Bank of Minnesota, N.A.,
acting, as the context may require, as trustee relative to the Senior Notes or
Senior Noteholder Warrants.
"Senior Lender" means Fleet Capital Corporation (as successor to
Barclays Business Credit, Inc.) and the other lenders, if any, parties to the
Senior Credit Agreement and also refers to any replacement or successor senior
lenders under a successor Senior Credit Agreement as provided in clause (a) of
the definition of such term.
"Senior Liability" means all Obligations under (and as defined in) the
Senior Credit Agreement of the Company and Subsidiaries. At any time after the
Closing Date, "Senior Liability" also means all liabilities or obligations of
the Company and Subsidiaries under each successor Instrument which qualifies as
the "Senior Credit Agreement" in accordance with clause (a) of the definition of
such term which are analogous to the Obligations of the Company and Subsidiaries
as defined on the Closing Date in the Senior Credit Agreement.
"Senior Loan" means a loan outstanding from time to time under the
Senior Credit Agreement.
"Senior Loan Document" means any "Loan Document" as defined in the
Senior Credit Agreement as in effect on the Closing Date. At any time after the
Closing Date, "Senior Loan Document" also means all Instruments which are
analogous to the "Loan Documents" (as defined on the Closing Date in the Senior
Credit Agreement) under each successor Instrument which qualifies as the "Senior
Credit Agreement" in accordance with clause (a) of the definition of such term.
"Senior Note" means the 12 1/4% Series A and Series B Senior Notes of
Old AVI due December 31, 2000 and outstanding prior to the Recapitalization in
the aggregate principal amount of $36,000,000, and of which an aggregate
principal amount not to exceed $1,188,000 of 12 1/4% Series A Senior Notes may
remain outstanding after the Recapitalization as obligations of SAVI.
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"Senior Noteholder AVIHI Warrant" means a Senior Noteholder 1994 AVIHI
Warrants or Senior Noteholder 1996 AVIHI Warrant.
"Senior Noteholder 1994 AVIHI Warrant" means the warrants to purchase an
aggregate of 3,333" shares of AVIHI Old Common Stock issued pursuant to the
warrant agreement, dated as of May 23, 1994, between Holdings and the Senior
Indenture Trustee.
"Senior Noteholder 1996 AVIHI Warrant" means the warrants to purchase up
to an aggregate of 1,764.6 shares of AVIHI Old Common Stock, issued pursuant to
the warrant agreement, dated as of June 21, 1996, between Holdings and the
Senior Indenture Trustee.
"Senior Note Repurchase Arrangement" means collectively (u) the Offer to
Purchase and Consent Solicitation by Old AVI, dated June 29, 1999, relating to
the Senior Notes, (v) the second supplemental indenture, to be dated the Closing
Date, to the indenture, dated as of May 23, 1994 and amended as of December 5,
1995, (and modified by waivers thereto, dated June 21, 1996 and September 22,
1997), relating to the Senior Notes between Old AVI and the Indenture Trustee,
(w) the Offer to Purchase and Consent Solicitation by Holdings, dated June 29,
1999, relating to the Senior Noteholder AVIHI Warrants, (x) the amendment to the
warrant agreement, to be dated the Closing Date, to the Warrant Agreement, dated
as of May 23, 1994, relating to the Senior Noteholder 1994 AVIHI Warrants, (y)
the amendment to the Warrant Agreement, to be dated the Closing Date, to the
Warrant Agreement, dated as of June 21, 1996, relating to the Senior Noteholders
1996 AVIHI Warrants, and (z) the letter agreement, dated June 29, 1999, among
Old AVI and holders of approximately 96.5% of the aggregate outstanding
principal amount of the Senior Notes to tender the Senior Notes and Senior
Noteholder AVIHI Warrants pursuant to the tender offers referred to in items (v)
and (x).
"Senior Payment Bar Notice" is defined in clause (c) of Section 8.2.
"Senior Payment Default" is defined in clause (a) of Section 8.2.
"Senior Performance Default" is defined in clause (b) of Section 8.2.
"Stockholder" means each Person identified in Item 3.3 ("Stockholder")
of the Disclosure Schedule. At any time after the Closing Date, "Stockholder"
also means any employee of the Company becoming a "Management Stockholder" in
accordance with the second sentence of the definition of such term.
"Stockholders' Agreement" means an agreement, to be dated the Closing
Date, between Surviving AVI and all Stockholders.
"Subject Security" means all Notes and Warrants purchased on the Closing
Date pursuant to Section 2.3, together, in each case, with all other securities
issued in replacement or exchange therefor or as a distribution thereon or upon
the conversion thereof.
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"Subsidiary" means, relative to any Person, (x) any corporation,
association or other business entity more than 50.0% of the outstanding shares
of Voting Stock of which is owned directly or indirectly by such Person and (y)
any partnership in which such Person is a general partner. Except as otherwise
indicated herein, references to Subsidiaries refer to Subsidiaries of the
Company.
"Surviving AVI" is defined in clause (d) of the first recital.
"Tax" is defined in Section 4.9.
"TJC" means The Jordan Company LLC, a Delaware limited liability
corporation.
"TJC Advisory Agreement" is defined in clause (b) of Section 3.5.
"TJC Management" means TJC Management Corporation, a Delaware
corporation, or its designees.
"TJC Management Consulting Agreement" is defined in clause (b) of
Section 3.5.
"Transaction Cost" means any fee, cost or expense payable by Holdings,
the Company or any Subsidiary in connection with this Agreement or any
transaction contemplated hereby.
"Transaction Document" means the Purchase Documents, the Amended
Certificate of Incorporation, the Stockholders' Agreement, Recapitalization
Documents, the Management Employment Agreements, the Management Options, the
Jordan Services Agreement, the Director Indemnification Agreements and the
Senior Loan Documents and all documents, certificates and Instruments delivered
in connection with any thereof.
"Voting Stock" means, relative to any Person, Capital Stock of any class
or kind, including any Capital Stock of such Person of any other class or kind
which is then convertible Capital Stock of such class or kind but, ordinarily
having the power to vote (and irrespective of whether at the time Capital Stock
of such Person of any other class or kind shall or might upon the occurrence of
a contingency have voting power) for the election of directors, managers or
other voting members of the governing body of such Person.
"Warrant" means each warrant of the Company, issued on the Closing Date
in accordance with Section 2.3, substantially in the form of Exhibit B hereto
for an aggregate of 150,000 SAVI Common Shares.
"wholly-owned Subsidiary" means, relative to any Person, any Subsidiary
of such Person all of the Capital Stock (and all rights and options to purchase
such Capital Stock) of which, other than directors' qualifying shares, are
owned, beneficially and of record, by such Person or its wholly-owned
Subsidiaries.
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SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule, each
Note and any other Purchase Document or any notice or other communication
delivered from time to time in connection with any Purchase Document.
SECTION 1.3. Cross References. Unless otherwise specified, references
in this Agreement and in each other Purchase Document to any Article or Section
are references to such Article or Section of this Agreement or such other
Purchase Document, as the case may be, and unless otherwise specified,
references in any Article, Section or definition to any item or clause are
references to such item or clause of such Article, Section or definition.
ARTICLE II
PURCHASE AND SALE OF SUBJECT SECURITIES
SECTION 2.1. Purchase Commitments. Each Purchaser hereby severally
agrees, subject, however, to the terms and conditions of this Agreement
(including Article III), to purchase from the Company, and the Company hereby
agrees to sell to each Purchaser, at the Closing the following securities:
(a) a Note in the original principal amount set forth in Item
3.3 ("Stockholder") of the Disclosure Schedule opposite the name of such
Purchaser and below the caption "Notes"; and
(b) a Warrant to purchase the number of SAVI Common Shares set
forth in Item 3.3 ("Stockholder") of the Disclosure Schedule opposite
the name of such Purchaser and below the caption "Warrants".
SECTION 2.2. Issue Price. The Company and the Purchaser agree that, for
purposes of section 1271 et seq. of the Code, the issue price of the Note in the
aggregate is equal to $8,750,000 less the Warrant Issue Price (as defined below)
and the purchase price of the Warrants in the aggregate is equal to $6,375 (the
"Warrant Issue Price"), and that this agreement is intended to constitute an
agreement as to the issue price for all Federal and other income tax purposes.
SECTION 2.3. Closing. The purchase of the Notes and the other Subject
Securities shall take place at a closing (the "Closing") at the offices of
Xxxxx, Xxxxx & Xxxxx, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m., local
time, on August 11, 1999 or such other Business Day on or prior to August 15,
1999 as may be agreed upon by the Company and the required Purchasers (the
"Closing Date"). At the Closing, the Company will deliver to each Purchaser
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(a) a single Note in the aggregate principal amount determined
in accordance with clause (a) of Section 2.1, dated the Closing Date,
and registered in the Purchaser's name,
(b) a Warrant to purchase the aggregate number of Common Shares
determined in accordance with clause (b) of Section 2.1, dated the
Closing Date, and registered in such Purchaser's name,
each against delivery by the Purchaser to the Company of immediately
available funds in the amount of the purchase price therefor. If, at the
Closing, the Company shall fail to tender to the Purchasers the Subject
Securities as provided in this Section or any of the conditions specified in
Article III shall not have been fulfilled to the satisfaction of the Required
Noteholders, all of the Purchasers shall, at the election of such Purchasers, be
relieved of all further obligations under this Agreement, without thereby
waiving any other rights the Purchaser may have by reason of such failure or
such nonfulfillment.
SECTION 2.4. Purchasers' Acknowledgments. Without limitation of the
representations, warranties and acknowledgments of each Purchaser contained in
paragraphs 1, 3, 4, 5, 7, 8, 9, 10 and 13 of the Exchange Letter (which are
hereby incorporated herein by reference as representations, warranties and
acknowledgments of each Purchaser), each Purchaser hereby acknowledges its
knowledge and understanding that the Notes and Warrants are speculative
investments involving a high degree of risk of loss.
ARTICLE III
CONDITIONS TO CLOSING
Each Purchaser's obligation to purchase and pay for the Subject
Securities is subject, however, to the fulfillment, to the satisfaction of the
required Purchasers, prior to, at or concurrently with the Closing, of all of
the following conditions:
SECTION 3.1. Certificates of Incorporation. Each of the following shall
have occurred (and each requesting Purchaser shall have received from Holdings
and Old AVI a certificate, dated the Closing Date, of its Secretary or Assistant
Secretary in the form of Exhibit C hereto confirming inter alia that each of the
following shall have occurred):
(a) its Certificate of Incorporation (or, in the case of
Holdings, its Amended Certificate of Incorporation) shall have been
filed with the Secretary of State of Delaware; and
(b) no further amendments or modifications thereto shall have
been adopted or filed other than the Merger Documents.
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SECTION 3.2 Resolutions, etc. Each requesting Purchaser shall have
received:
(a) from each of Holdings, Old AVI and Surviving AVI, a certificate,
dated the Closing Date, in the form of Exhibit D hereto as to:
(i) resolutions of its Board of Directors then in full force
and effect authorizing (x) in the case of Holdings, the
Recapitalization, the execution, delivery and performance of this
Agreement and each other Purchase Document to be executed by it,
(y) in the case of Old AVI, the Recapitalization, the issuance of
the Notes and the execution, delivery and performance of this
Agreement and each other Purchase Document to be executed by it
and (z) in the case of Surviving AVI, the issuance of the
Warrants and the execution, delivery and performance of this
Agreement, each other Purchase Document to be executed by it and
the Stockholders' Agreement, and
(ii) the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement and each other
Purchase Document executed by it (and, in the case of the
Company, the Stockholders' Agreement).
SECTION 3.3 Satisfaction of Conditions to Recapitalization , etc. Each
of the following shall have occurred (and each requesting Purchaser shall have
received a certificate, dated the Closing Date, in the form of Exhibit E hereto
confirming inter alia that):
(a) the Recapitalization Documents shall be in full force and
effect, and no material term or condition thereof shall have been
amended, waived or otherwise modified;
(b) all Approvals necessary or advisable in connection with the
Recapitalization shall have been obtained and be in full force and
effect, and all applicable waiting periods shall have expired without
any action being taken or threatened by any Governmental Authority which
would restrain, prevent or otherwise impose adverse conditions on the
Recapitalization;
(c) no pending or threatened material litigation, proceeding or
investigation shall exist which contests the consummation of the
Recapitalization;
(d) the Recapitalization shall be consummated simultaneously with
the Closing in the manner contemplated in all material respects by the
Recapitalization Documents and the Financing Memorandum, including
(i) pursuant to the Recapitalization Agreement (a true and
correct copy of which is attached hereto as Attachment 1), the
holders of all AVIHI Liabilities, all AVIHI Old Preferred Stock
and all AVIHI Old Common Stock have exchanged their securities
for 2,125,000 AVIHI New Common Shares, and
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(ii) pursuant to the Senior Note Repurchase Arrangement
(true and correct copies of the constituent documents of which
referred to as items (v) through (z) of the definition of such
term are attached hereto as Attachments 2, 3, 4, 5, 6, and 7),
(x) Holdings has repurchased at least 50.1% of the Senior
Noteholder 1994 AVIHI Warrants for $0.01 per warrant and at least
50.1% of the Senior Noteholder 1996 AVIHI Warrants for $0.01 per
warrant (or, in either case, to the extent that Holdings shall
not be purchasing 51% of such class of Warrants, Holdings having
obtained consents from holders of Warrants of such class,
sufficient to cover such deficiency, to the supplemental
indenture or amendment, as the case may be, referred to in item
(x) of the definition of the term "Senior Note Repurchase
Arrangement") and (y) Old AVI has repurchased at least
$34,740,000 of the Senior Notes outstanding in an aggregate
principal amount of $36,000,000 for $222.50 of each $1,000 of
outstanding principal amount or not more than $7,700,000 in the
aggregate; and
(a) Xxxxxxx with Surviving AVI shall have entered into an employment
and non-competition agreement (the "Management Employment Agreement").
SECTION 3.4 Merger Filing, etc. Each of the following shall have
occurred (and each requesting Purchaser shall have received a certificate, dated
the Closing Date, in the form of Exhibit F hereto confirming inter alia that):
(a) the Merger Documents (x) shall have been duly executed by the
parties thereto in recordable form and (y) counterparts of the Merger
Documents shall be available for filing with the Secretary of State of
the State of Delaware (which filing shall have been authorized by all
parties thereto and shall be consummated simultaneously with the
Closing);
(b) Surviving AVI shall have exchanged executed counterparts of the
Stockholders' Agreement with each Stockholder; and
(c) Surviving AVI shall have issued the Management Options.
SECTION 3.5 Certain Affiliate Agreements. Each of the following shall
have occurred (and each requesting Purchaser shall have received a certificate,
dated the Closing Date, in the form of Exhibit G hereto confirming inter alia
that):
(a) Surviving AVI shall have entered into with its directors an
indemnification agreement (as so originally executed and delivered the
"Director Indemnification Agreements"), and
(b) Surviving AVI shall have entered into with TJC Management an
agreement for the provision of management consulting services (as so
originally executed and
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delivered, the "TJC Management Consulting Agreement") and an agreement
for the provision of transaction advisory services (as so originally
executed and delivered, the "TJC Advisory Agreement"),
in each case in the form furnished to the requesting Purchasers prior to the
execution and delivery of this Agreement.
SECTION 3.6 Senior Credit Agreement. The Senior Lenders shall have
executed and delivered to Old AVI the Senior Credit Agreement Amendment No. 12
which shall have become effective in accordance with its terms, and each
requesting Purchaser shall have received a certificate, dated the Closing Date,
in the form of Exhibit H hereto.
SECTION 3.7 Certificate as to Solvency, etc. Each requesting Purchaser
shall have received a certificate, dated the Closing Date, of the chief
financial Authorized Officer of Surviving AVI, in the form of Exhibit I hereto.
SECTION 3.8 Opinion of Counsel. Each requesting Purchaser shall have
received an opinion, dated the Closing Date, from Xxxxx, Xxxxx & Xxxxx, counsel
to the Company, substantially in the form of Exhibit J hereto. I.6. I.7. SECTION
Legal Expenses.The Company shall have made payment in full of all fees and
expenses of counsel to each requesting Purchaser which shall have been invoiced
to the Company on or prior to the Closing Date (including amounts invoiced on
account).
SECTION 3.9 Satisfactory Legal Form. All documents executed or submitted
pursuant hereto by or on behalf of the Company or any Subsidiary shall be
satisfactory in form and substance to each requesting Purchaser; each requesting
Purchaser shall have received all information, and such counterpart originals or
such certified or other copies of all Instruments, as each requesting Purchaser
or its respective counsel may reasonably request; and all legal matters incident
to the transactions contemplated by this Agreement shall be satisfactory to
counsel to each requesting Purchaser.
ARTICLE IV
PAYMENTS, REGISTRATION, ETC.
SECTION 4.1 Place of Payment. Payments of principal and interest
becoming due and payable on the Notes and any dividends or other payments on or
in respect of any other Subject Securities shall be made at the office of
Republic National Bank of New York, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
SECTION 4.2 Home Office Payment. So long as any Purchaser or its
nominee shall be the holder of any Subject Security, and notwithstanding
anything contained in Section 4.1 or in
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any Subject Security to the contrary, the Company will pay all sums becoming due
for principal of and interest on such Note and all dividends or other payments
on or in respect of any other Subject Security, not later than 12:00 noon, New
York City time, on the date such payment is due, in immediately available funds,
(a) in accordance with the payment instructions set forth below such
Purchaser's signature hereto with instructions to the payee identified
in such instructions to telephone advice of credit in accordance with
such instructions, or
(b) by such other method or at such other address or bank account as
such Purchaser may designate in writing,
without the presentation or surrender of such Note or other Subject Security or
the making of any notation thereon, except that any Note paid or prepaid (or any
other Subject Security redeemed) in full shall be surrendered to the Company at
its principal office for cancellation. Prior to any sale or other disposition of
any Note held by any Purchaser, such Purchaser will, at its election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes, as the case may be, pursuant to Section 4.6. The
Company will afford the benefits of this Section to any institutional holder
which is the direct or indirect transferee of any Subject Security purchased by
a Purchaser under this Agreement and which has made the same agreement relating
to such Subject Security as such Purchaser has made in this Section.
SECTION 4.3 Optional Payments. The Company may, at its option, prepay at
any time, without premium or penalty, all or any part (in an integral multiple
of $1,000) of the outstanding principal amount of, or of interest due or to
become due on the next semi-annual payment date under, the Notes; provided,
however, that no such prepayment may be made at any time unless, concurrently
therewith, the Company shall have made payment in full in cash of all interest,
if any, on the Notes which shall, in lieu of having been paid in cash when due,
have been accrued in accordance with clause (b) of Section 9.1 or the proviso to
the first paragraph of the Notes and which shall remain unpaid. Prepayments of
principal of Notes shall be in the amount so prepaid and be accompanied by
payment in full of all interest accrued on such principal amount and not yet
paid. Each prepayment shall be subject, however, to the Company having given
each holder of Notes written notice of such prepayment not more than 10 days and
not less than five days prior to the date fixed for such prepayment, in each
case specifying (x) such date, (y) the aggregate principal amount, if any, of
(and the amount of unpaid interest accrued on such principal amount), or the
amount of unpaid interest on, the Notes to be prepaid on such date and (z) the
principal amount, if any, of (and the amount of unpaid interest accrued on such
principal amount), or the amount of unpaid interest on, each Note held by such
Noteholder to be prepaid on such date. Such notice shall be accompanied by an
officers' certificate certifying that the conditions to such prepayment have
been fulfilled and specifying the particulars of such fulfillment.
SECTION 4.4 Allocation. Each partial prepayment paid or to be prepaid of
principal of the Notes and each prepayment of interest paid or to be prepaid
shall be allocated Ratably (in
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integral multiples of $1,000) among all of the Notes at the time outstanding, as
nearly as practicable, with adjustments, to the extent practicable, to
compensate for any prior prepayments not made exactly in such proportion. In the
case of each voluntary prepayment of principal of or interest on the Notes, the
principal amount to be prepaid, if any, (together with interest on such
principal amount accrued to such date), or the amount of interest to be prepaid,
as the case may be, shall mature and become due and payable on the date fixed
for such prepayment. From and after the date of any such prepayment of
principal, unless the Company shall fail to pay such principal amount when so
due and payable, together with the interest, as aforesaid, interest on such
principal amount shall cease to accrue. Any Note paid or prepaid in full shall
be surrendered to the Company and cancelled and shall not be reissued, and no
Note shall be issued in lieu of any prepaid principal amount of any Note.
SECTION 4.5 Mandatory Redemption of Notes. Upon the earliest to occur of
(a) any Change of Control,
(b) the Company entering into any written or other arrangement which
will give rise to a Change of Control, or
(c) the Company having notice that any other Person has entered into
a written or other arrangement which will give rise to a Change of
Control,
the Company will immediately give written notice of such transaction or event to
each Noteholder, which notice shall describe such transaction or event in
reasonable detail. Immediately upon (and concurrently with) the occurrence of
any Change of Control, the Company will (x) purchase from each Noteholder all of
the outstanding Notes held by it at a purchase price, payable in immediately
available funds, equal to the unpaid principal amount thereof together with all
unpaid interest accrued thereon to the date of such purchase and (y) make
payment in full in immediately available funds of all interest, if any, on the
Notes which shall, in lieu of having been paid in cash when due, have been
accrued in accordance with clause (b) of Section 9.1 or the proviso to the first
paragraph of the Notes and which shall remain unpaid.
SECTION 4.6 Registration, Transfer, etc. The Company will keep at its
principal office a register in which the Company will provide for the
registration of the Notes and their transfer. The Company may treat the Person
in whose name any Note is registered on such register as the owner thereof for
the purpose of receiving payment of the principal of and interest on such Note
and for all other purposes, whether or not such Note shall be overdue, and the
Company shall not be affected by any notice to the contrary from any Person
other than the applicable Noteholder. All references in this Agreement to a
"holder" of any Note shall mean the Person in whose name such Note is at the
time registered on such register.
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SECTION 4.7 Transfer and Exchange. Upon surrender of any Note for
registration of transfer or for exchange to the Company at its principal office,
the Company at its expense will execute and deliver in exchange therefor a new
Note or Notes, as the case may be, of the same class in denominations of at
least $100,000 (except a Note may be issued in a lesser principal amount if the
unpaid principal amount of the surrendered Note is not evenly divisible by, or
is less than, $100,000), as requested by the holder or transferee, which
aggregate the unpaid principal amount of such Note, registered as such holder or
transferee may request, dated so that there will be no loss of interest on such
surrendered Note and otherwise of like tenor.
SECTION 4.8 Replacement. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Note and, in the case of any such loss, theft or destruction of any Note, upon
delivery of an indemnity bond in such reasonable amount as the Company may
determine (or, in the case of any Note or Notes held by any Purchaser or an
institutional holder, of an unsecured indemnity agreement from such Purchaser or
institutional holder reasonably satisfactory to the Company), or, in the case of
any such mutilation, upon the surrender of such Note for cancellation to the
Company at its principal office, the Company at its expense will execute and
deliver, in lieu thereof, a new Note of the same class and of like tenor, dated
so that there will be no loss of interest on (and registered in the name of the
holder of) such lost, stolen, destroyed or mutilated Note. Any Note in lieu of
which any such new Note has been so executed and delivered by the Company shall
be deemed to be not outstanding for any purpose of this Agreement.
SECTION 4.9 Taxes. Except as otherwise provided in this Section, all
payments by the Company of principal of, and interest on, the Notes, and all
other amounts payable hereunder shall be made free and clear of and without
deduction for any present or future income, excise, stamp or franchise taxes and
other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, excluding, however, franchise taxes
and taxes imposed on or measured by any Noteholder's net income or receipts
(such non-excluded items being called "Taxes"). In the event that any
withholding or deduction from any payment to be made by the Company hereunder is
required in respect of any Taxes pursuant to any Applicable Law, then, the
Company will
(a) pay directly to the relevant authority the full amount required
to be so withheld or deducted;
(b) promptly forward to each affected Noteholder an official receipt
or other documentation satisfactory to such Noteholder evidencing such
payment to such authority; and
(c) except as otherwise provided in this Section, pay to each
affected Noteholder such additional amount or amounts as is necessary to
ensure that the net amount actually received by each Noteholder will
equal the full amount such Noteholder would have received had no such
withholding or deduction been required.
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Moreover, if any Taxes are directly asserted against any Noteholder with respect
to any payment received by such Noteholder hereunder, such Noteholder may pay
such Taxes, and, except as otherwise provided in this Section, the Company will
promptly pay such additional amount (including any penalties, interest or
expenses) as is necessary in order that the net amount received by such
Noteholder after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount such Noteholder would have received
had no such Taxes been asserted.
If the Company fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to any Noteholder the required receipts or other
required documentary evidence, the Company shall indemnify such Noteholder for
any incremental Taxes, interest or penalties that may become payable by
Noteholder as a result of any such failure. For purposes of this Section, a
distribution hereunder by any Noteholder to or for the account of any other
Noteholder shall be deemed a payment by the Company.
Each Noteholder shall provide to the Company on or prior to the due date
of the first payment under the Notes (and any Noteholder which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. Federal income tax purposes (a "Non-U.S. Noteholder") that becomes a
Noteholder under this Agreement after the Closing shall, upon the date of such
Noteholder becoming a Noteholder hereunder, provide to the Company) either (i)
(x) two duly completed copies of either (A) Internal Revenue Service Form W-8BEN
(or, if delivered on or before December 31, 1999, Internal Revenue Service Form
1001) or (B) Internal Revenue Service Form W-8ECI (or, if delivered on or before
December 31, 1999, Internal Revenue Service Form 4224), or in either case an
applicable successor form, and (y) for periods prior to January 1, 2000, a duly
completed copy of Internal Revenue Service Form W-8 or W-9 or applicable
successor form; or (ii) in the case of a Non-U.S. Noteholder that is not legally
entitled to deliver either form listed in item(i)(x), (x) a certificate of a
duly authorized officer of such Non-U.S. Noteholder to the effect that such
Non-U.S. Noteholder is not (A) a "bank" within the meaning of Section
881(c)(3)(A) of the Code, (B) a "10 percent shareholder" of the Company with the
meaning of Section 881(c)(3)(B) of the Code or (C) a controlled foreign
corporation receiving interest from a related person within the meaning of
Section 881(c)(3)(C) of the Code and (y) two duly completed copies of Internal
Revenue Service Form W-8 or applicable successor form. To the extent legally
entitled to do so, on or before the date any such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Company, and otherwise from time
to time upon the reasonable written request of the Company after the Closing,
each Noteholder that is a Non-U.S. Noteholder will provide to the Company two
original signed copies of any forms or certificates required pursuant to this
paragraph.
Notwithstanding anything to the contrary contained in this Section, the
Company shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Noteholder that
is a Non-U.S. Noteholder and that has not provided to the Company the forms
required to be provided to the Company pursuant to the preceding paragraph, and
the Company
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shall have no obligation to pay any additional amount to a Non-U.S.
Noteholder with respect to such withheld amounts or with respect to Taxes
incurred by such Non-U.S. Noteholder to the extent such withholding would not
have been required or such Taxes would not have been incurred if such Non-U.S.
Noteholder would have provided such forms to the Company in the manner required
by the preceding paragraph.
ARTICLE V
WARRANTIES, ETC.
To induce the Purchasers to enter into this Agreement and to purchase
the Subject Securities hereunder, the Company represents and warrants unto the
Purchasers as follows (and, for all purposes of this Agreement, all of such
representations and warranties shall be understood to be made by the Company on
(and only on) the date of execution and delivery of this Agreement and the
Closing Date; provided, however, that (x) the representations in Section 5.4 and
5.9 relative to any financial, other information or projections delivered from
time to time pursuant to this Agreement or any other Purchase Document shall
also be understood to be made with respect thereto on the date of delivery
thereof:
SECTION 5.1 Organization, Power, Authority, etc. The Company is a
corporation validly organized and existing and in good standing under the laws
of the jurisdiction of its incorporation and has full power and authority and
holds all requisite Approvals to own and hold its property and to conduct its
business substantially as currently conducted by it. The Company has full power
and authority to enter into and perform its obligations under this Agreement,
the Notes, the other Subject Securities, each other Purchase Document to which
it is a party and the Stockholders' Agreement and to issue the Subject
Securities (and any Common Shares issuable upon exercise of any thereof).
SECTION 5.2 Due Authorization. The execution and delivery by the Company
of this Agreement, the Notes, and other Subject Securities, each other Purchase
Document to which it is a party and the Stockholders' Agreement, the performance
by the Company of its obligations hereunder and thereunder, and the issuance of
the Subject Securities (and the issuance of other Common Shares issuable upon
exercise of any thereof) by the Company have been duly authorized by all
necessary corporate action, do not and will not require any Approval, do not and
will not conflict with, result in any violation of, or constitute any default
under, any provision of any Organizational Document, any Applicable Law or
material Contractual Undertaking and will not result in or require the creation
or imposition of any lien on any of its properties pursuant to the provisions of
any material Contractual Undertaking.
SECTION 5.3 Validity, etc. This Agreement constitutes, and the Notes,
and other Subject Securities, each other Purchase Document to which the Company
is a party and the Stockholders' Agreement will on the due execution and
delivery thereof constitute the legal, valid and binding obligations of the
Company enforceable in accordance with their respective terms, subject, however,
as to enforcement only, to bankruptcy, insolvency, reorganization,
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moratorium or similar laws at the time in effect affecting the enforceability of
the rights of creditors generally.
SECTION 5.4 Financial Information. All balance sheets, all statements of
operations, of shareholders' equity and of cash flow and all other financial
information of Holdings and its Subsidiaries and Old AVI and its Subsidiaries
which have been furnished by or on behalf of the Company to any requesting
Purchaser for the purposes of or in connection with this Agreement or any
transaction contemplated hereby, including
(a) the consolidated balance sheets at June 30, 1998 and June 30,
1997, and the related consolidated statements of operations, of
shareholders' equity and of cash flow, for each of the Fiscal Years then
ended, of Holdings and its Subsidiaries certified by Xxxx Xxxxx LLP, and
(a) the pro forma consolidated balance sheet at June 30, 1999 (and
after giving effect to this Agreement or any transaction contemplated
hereby, assuming it had occurred on such date) of Surviving AVI and its
Subsidiaries (collectively, the "Pro Forma Balance Sheet") contained in
the Financing Memorandum,
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as disclosed
therein) and present fairly (subject, however, in the case of the Pro Forma
Balance Sheet, to the assumptions specified therein, including as to the
occurrence of the transactions contemplated under this Agreement at an earlier
date) the consolidated financial condition of the corporations covered thereby
as at the dates thereof and the results of their operations for the periods then
ended. All financial information as to the Company and Subsidiaries which shall
hereafter from time to time be furnished by or on behalf of the Company to any
requesting Noteholder for the purposes of or in connection with this Agreement
or any transaction contemplated hereby will be prepared in accordance with GAAP
consistently applied throughout the periods involved (except as disclosed
therein) and will present fairly (subject, however, in the case of pro forma
financial information, to the assumptions specified therein) the consolidated
financial condition of the corporations covered thereby as at the dates thereof
and the results of their operations for the periods then ended.
SECTION 5.5 Capitalization. On the Closing Date, the authorized Capital
Stock of Surviving AVI will be 1,000,000 shares, consisting of Common Shares, of
which 212,500 Common Shares will be issued and outstanding in conformity with
Item 3.3 ("Stockholders") of the Disclosure Schedule. Of the 787,500 authorized
Common Shares which will be unissued on the Closing Date,
(a) 637,500 Common Shares will be reserved for issuance upon
exercise of the Warrants; and
(b) 150,000 Common Shares will be reserved for issuance pursuant
to the Management Options.
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The Common Shares to be issued upon the exercise of the Warrants have been duly
authorized for issuance and, when delivered a Warrant therefor as provided
herein, will be validly issued, fully paid and non-assessable and will be free
and clear of all preemptive rights and liens except as otherwise provided herein
or in the Stockholders' Agreement and will be entitled to the respective voting
powers, designations, preferences and relative, participating, optional or other
special rights and qualifications, limitations or restrictions thereof as are
set forth with respect thereto in the Amended Certificate of Incorporation. The
Company does not have outstanding any Capital Stock or securities convertible
into or exchangeable for any shares of its Capital Stock, nor does it have
outstanding any rights or options to subscribe for or to purchase any Capital
Stock or securities convertible into or exchangeable for any of its shares of
Capital Stock, except as described in this Section. Except as disclosed in Item
5.5 ("Repurchase, etc. Agreements") of the Disclosure Schedule, the Company is
not subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its Capital Stock. Except for the
Stockholders' Agreement, none of the Company or any Subsidiary has entered into
an agreement to register any of its securities under the Securities Act.
SECTION 5.6. Margin Regulations. The Company is not engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying margin stock, and less than 25% of the
assets of the Company, individually and on a consolidated basis with all
Subsidiaries, consists of margin stock. Terms for which meanings are provided in
F.R.S. Board Regulation U or any regulations substituted therefor, as from time
to time in effect, are used in this Section with such meanings.
SECTION 5.7. Government Regulation. Neither the Company nor any
Subsidiary is (or shall upon the consummation of the transactions contemplated
under this Agreement become) (x) an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended, or (y) subject to
regulation under the Federal Power Act, the Interstate Commerce Act, the
Commodity Exchange Act or any Applicable Law limiting its ability to incur or
assume indebtedness for borrowed money.
SECTION 5.8. Offering of Subject Securities. Neither the Company, nor
any Jordan Party (or any Person employed to act on behalf of any thereof in
connection with the offer and sale of the Subject Securities) has directly or
indirectly offered the Notes, the Common Shares or any part thereof or any
similar securities for sale to, or solicited any offer to buy any of the same
from, or otherwise approached or negotiated in respect thereof with, anyone
other than the Persons identified in Item 5.5 ("Stockholders") of the Disclosure
Schedule. Neither the Company nor any Jordan Party (or anyone acting on behalf
of any of them) has taken or will take any action which would subject the
issuance or sale of the Notes, Common Shares or Preferred Shares to the
provisions of Section 5 of the Securities Act or to the registration or
qualification requirements of any securities or blue sky law of any applicable
jurisdiction.
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SECTION 5.9. Accuracy of Information. All factual information (and, for
the sake of clarity, not including any projections) heretofore or
contemporaneously furnished by or on behalf of the Company in writing to each
requesting Purchaser for purposes of or in connection with the transactions
contemplated under this Agreement, including the financing memorandum, dated
July 1999 (the "Financing Memorandum"), prepared by TJC and transmitted under
JZAI's letter, dated July 13, 1999, to JZEP and under the Exchange Letter to the
other Purchasers is collectively, and all other such factual information
hereafter furnished by or on behalf of the Company or any Subsidiary to any
requesting Noteholder will be individually true and accurate in every material
respect taken as a whole on the date as of which such information is dated or
certified, and such information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to make such
information not misleading. There is, to the Company's knowledge, no fact that
the Company has not disclosed to the Purchasers in writing that would,
individually or in the aggregate, reasonably be expected to have a Materially
Adverse Effect. All projections (including the Projections) heretofore,
contemporaneously and hereafter furnished by or on behalf of the Company or any
Subsidiary in writing to any requesting Purchaser or requesting Noteholder for
purposes of this Agreement or any transaction contemplated hereby are and will
be based on good faith estimates and assumptions which the Company believes are
fair and reasonable in light of the historical financial performance of Old AVI
and current and reasonably foreseeable business conditions, and, to the
Company's knowledge, there are or will be no facts or circumstances existing at
the time such projections are furnished which would, individually or in the
aggregate, reasonably be expected to cause a material change in such
projections, it being recognized, however, by each requesting Purchaser and
Noteholder that projections as to future events are not to be viewed as fact and
that actual results during the period or periods covered by any such projections
may differ from the projected results and that the differences may be material.
ARTICLE VI
COVENANTS
SECTION 6.1. Certain Affirmative Covenants. The Company agrees with
(a) each Noteholder that, until all Obligations have been paid and
performed in full, the Company will perform all of the covenants
contained in Section 6.1; and
(b) requesting Noteholder that, for so long as it shall hold any
Subject Security (other than a Note), the Company will perform for the
benefit of such requesting Noteholder the covenants contained in clauses
(c) and (e) of Section 6.1.1 and in Section 6.1.4, in each case as if it
were the holder of a Note.
SECTION 6.1.1. Financial Information, etc. The Company will furnish, or
will cause to be furnished, to each requesting Noteholder copies of the
following financial statements, reports and information:
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(a) promptly when available and in any event when furnished pursuant
to the Senior Credit Agreement, copies of all financial statements,
certificates, audit and other reports, filings, projections, management
letters and other information furnished pursuant to Section 7.1(K)(i),
7.1(K)(ii), 7.1(K)(iv) and 7.1(K)(vi) thereof (and the Company hereby
agrees that (x) each requesting Noteholder is hereby entitled to rely on
such information as if it were required to have been furnished directly
pursuant to this Agreement and (y) all certifications and
representations made therein shall be deemed to be made directly to each
requesting Noteholder as if such information was expressly addressed to
them);
(b) promptly when available and in any event within 90 days after
the close of each Fiscal Year (and only if, and to the extent, financial
information is not being routinely furnished pursuant to clause (a) in
accordance with the Senior Credit Agreement to each requesting
Noteholder), a consolidated balance sheet as of the end of such Fiscal
Year, and consolidated statements of operations, of shareholders' equity
and of cash flow for such Fiscal Year, of the Company and Subsidiaries,
prepared, commencing with the 2001 Fiscal Year, on a comparative basis
with the preceding Fiscal Year and certified without qualification by
Xxxx Xxxxx LLP (or other independent public accountants of recognized
national standing selected by the Company;
(c) promptly when available and in any event within 45 days after
the close of each of the first three Fiscal Quarters of each Fiscal Year
(and only if, and to the extent, financial information is not being
routinely furnished pursuant to clause (a) in accordance with the Senior
Credit Agreement to each requesting Noteholder), consolidated balance
sheets at the close of such Fiscal Quarter, and the related consolidated
statements of operations, of shareholders' equity and of cash flow for
such Fiscal Quarter and for the period commencing at the close of the
previous Fiscal Year and ending with the close of such Fiscal Quarter,
of the Company and Subsidiaries (with, commencing with the 2001 FQ 1,
comparative information at the close of and for the corresponding Fiscal
Quarter of the prior Fiscal Year and for the corresponding portion of
such prior Fiscal Year), certified by the chief accounting, executive or
financial Authorized Officer; and
(d) such other information with respect to the financial condition,
business, property, assets, revenues and operations of the Company or
any Subsidiary as or any requesting Noteholder may from time to time
reasonably request.
SECTION 6.1.2. Notice of Default, Litigation, etc. The Company will
furnish, or will cause to be furnished, to each requesting Noteholder prompt
notice (with a description in reasonable detail) of:
(a) the occurrence, to the Company's knowledge, of any Default which
might likely result in a Materially Adverse Effect; and
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(b) each amendment, waiver or other modification to the Senior
Credit Agreement (and each approval, consent, notice, communication or
other writing delivered, received or exchanged pursuant to Section
7.1(L) or 9 of the Senior Credit Agreement) and, in each case, enclosing
therewith a copy of such modification or approval, etc.).
SECTION 6.1.3. Use of Proceeds. The proceeds of the Notes and other
Subject Securities, together with other funds available to the Company, shall be
applied by the Company to fund the Recapitalization and to pay Transaction
Costs. No portion of the proceeds of any Subject Securities shall be used by the
Company in any manner that might cause the issuance and sale of the Subject
Securities or the application of such proceeds to violate F.R.S. Board
Regulation T, U or X or any other regulation of such Board or to violate the
Exchange Act, in each case as in effect on the date or dates of such issuance
and sale and such use of proceeds.
SECTION 6.1.4. Books and Records. The Company will, and will cause each
Subsidiary to, keep books and records reflecting all of its business affairs and
transactions in accordance with GAAP and permit each Noteholder owning more than
25% of the then outstanding principal amount of the Notes or any of their
respective representatives, at reasonable times and intervals and on reasonable
notice, to visit all of its offices, to discuss its financial matters with its
officers and independent public accountant (and hereby authorizes such
independent public accountant to discuss its financial matters with such
Noteholder or its representatives whether or not any representative of the
Company is present) and to examine (and, at the expense of the Company,
photocopy extracts from) any of its books or other corporate records. The
Company shall pay any fees of such independent public accountant incurred in
connection with any such Noteholder's exercise of its rights pursuant to this
Section.
SECTION 6.2. Certain Negative Covenants. The Company agrees with
(a) each Noteholder that, until all Obligations have been paid and
performed in full, the Company will perform all of the covenants
contained in Section 6.2; and
(b) JZEP that, for so long as it shall hold any Subject Security
(other than a Note), the Company will, for the benefit of JZEP, comply
with the limitations contained in items (v) through (z) of the proviso
to Section 6.2.2 as if it were the holder of a Note.
SECTION 6.2.1. Business Activities. The Company will not, and will not
permit any Subsidiary to, engage in any business activity, excluding, however,
its consummation of the transactions contemplated under this Agreement, its
performance from time to time of its obligations under the Transaction Documents
and its engaging in activities in which Old AVI is engaged on the Closing Date,
and, in each case, activities incidental or related thereto.
SECTION 6.2.2. Restricted Payments, etc. On or after the Closing Date,
the Company will not, and will not permit any Subsidiary to, declare, pay, make,
apply any of its funds, property or assets to making or making any deposit to
fund any Restricted Payment; provided, however, that the Company may pay the
Jordan Parties or their designees (v) closing fees on the
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Closing Date in an aggregate amount not to exceed $3,000,000, (w) consulting
fees on a quarterly basis at an aggregate annual rate not to exceed 3% of net
income before interest, depreciation, taxes, amortization and other non-cash
charges for such Fiscal Year, (x) directors fees in an aggregate amount not to
exceed $90,000 in any Fiscal Year, (y) disposition fees in an aggregate amount
not to exceed 2% of either (1) the total sale proceeds on a sale of the equity
capital of the Company or of all or substantially all of the assets of the
Company and Subsidiaries or (2) the total market capitalization of the Company
in connection with the first sale of common equity by the Company pursuant to a
registration statement under the Securities Act and (z) without duplication of
any of the foregoing, investment banking fees not to exceed 2% of the value to
the Company of other transactional events, subject, however, in the case of any
payment of the nature referred to in item (w) through (z), to such payment then
being permitted to be made as a Permitted Junior Payment.
SECTION 6.2.3. Consolidation, Merger, etc. The Company will not, and
will not permit any Subsidiary to, (x) liquidate or dissolve, consolidate with,
or merge into or with, any other corporation or (y) sell, transfer, convey or
otherwise dispose of all or any substantial part of its assets; provided,
however, that any Subsidiary may liquidate or dissolve voluntarily into, and may
merge with and into, any other Subsidiary.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1. Events of Default. The term "Event of Default" means any
of the following events:
SECTION 7.1.1. Non-Payment of Obligations. The Company shall default in
the payment or prepayment when due of any principal of any Note, or the Company
shall default (and such default shall continue unremedied for a period of 30
days) in the payment when due of interest on any Note or any other Obligation;
provided, however, that, for purposes of this Section, interest accrued on any
Note and due and payable on any date shall be deemed to have been paid on such
date if the Company, pursuant to a resolution duly adopted by or on behalf of
its Board of Directors, shall, if and to the extent permitted by clause (b) of
Section 9.1 or the proviso to the first paragraph of such Note, have accrued as
a liability due and payable to the holder of such Note the full amount of such
interest accrued thereon.
SECTION 7.1.2. Default on Other Indebtedness. Any default shall occur
under the terms applicable to any indebtedness (excluding, however, any
Obligation) outstanding in a principal amount exceeding $5,000,000 of the
Company or any Subsidiary, in each case representing any borrowing or financing
or arising under any other material agreement, and such default shall (x)
consist of the failure to make any payment of principal or interest on, or any
redemption (or to make any required offer to redeem) of, such indebtedness when
due (subject, however, to any applicable grace period) in accordance with the
terms thereof, and such failure, if it shall have occurred under the Senior
Credit Agreement, shall continue unremedied and
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unwaived for a period of 180 days or (y) have resulted in any or all of such
indebtedness having become due and payable in accordance with its terms prior to
its stated maturity, whether by declaration or otherwise.
SECTION 7.1.3. Bankruptcy, Insolvency, etc. The Company or any
Subsidiary shall
(a) become insolvent or generally fail to pay, or admit in writing
its inability to pay, debts as they become due;
(a) apply for, consent to or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for the Company or
any Subsidiary or any property of any thereof or make a general
assignment for the benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for the Company or any Subsidiary or for
a substantial part of the property of any thereof, and such trustee,
receiver, sequestrator or other custodian shall not be discharged within
60 days;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or
liquidation proceeding, in respect of the Company or any Subsidiary,
and, if such case or proceeding is not commenced by the Company or such
Subsidiary, such case or proceeding shall be consented to or acquiesced
in by the Company or such Subsidiary or shall result in the entry of an
order for relief or shall remain for 60 days undismissed; or
(e) take any corporate action authorizing, or in furtherance of, any
of the foregoing.
SECTION 7.1.4. Judgments. A final judgment, to the extent not fully
covered by insurance, shall be rendered against the Company or any Subsidiary
and such judgment shall remain in force, undischarged, unsatisfied and unstayed
for more than 30 days, whether or not consecutive, and such judgment, together
with all other such outstanding final judgments against the Company and
Subsidiaries, exceeds (to the extent of all such uninsured portions) an
aggregate of $5,000,000.
SECTION 7.2. Action if Bankruptcy. If any Event of Default described in
clauses (a) through (d) of Section 7.1.3 shall occur, the outstanding principal
amount of all outstanding Notes and all other Obligations shall automatically be
and become immediately due and payable, without notice or demand.
SECTION 7.3. Action if Other Event of Default. If any Event of Default
(excluding, however, any Event of Default described in clauses (a) through (d)
of Section 7.1.3) shall occur for any reason, whether voluntary or involuntary,
and be continuing, the Required Noteholders
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may, upon notice or demand, declare all or any portion of the outstanding
principal amount of the Notes to be due and payable and any or all other
Obligations to be due and payable, whereupon the full unpaid amount of such
Notes and any and all other Obligations which shall be so declared due and
payable shall, subject, however, if any Senior Indebtedness is outstanding, to
the provisions of Sections 8.3 and 8.11, be and become immediately due and
payable, without further notice, demand or presentment.
SECTION 7.4. Suits for Enforcement. If any Event of Default shall have
occurred and be continuing, the Required Noteholders may proceed, subject,
however, if any Senior Indebtedness is outstanding, to the provisions of
Sections 8.3 and 8.11, to protect and enforce the rights of the holders of such
Notes, either by suit in equity or by action at law, or both, whether for the
specific performance of any covenant or agreement contained in this Agreement or
in aid of the exercise of any power granted in this Agreement, and may proceed
to enforce the payment of all sums due upon such Notes, and such further amounts
as shall be sufficient to cover the costs and expenses of collection (including
reasonable counsel fees and disbursements), or to enforce any other legal or
equitable right of the holder of such Notes.
SECTION 7.5. Remedies Cumulative. No remedy conferred in this Agreement
or in the other Purchase Documents upon the Noteholders is intended to be
exclusive of any other remedy and each and every such remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or otherwise.
ARTICLE VIII
SUBORDINATION
Notwithstanding any other provision of this Agreement, the Company
covenants and each Noteholder, by its acceptance of a Note, likewise covenants
and agrees for the benefit of the holders of Senior Indebtedness, that, to the
extent and in the manner hereinafter set forth in this Article, all Obligations
of the Company are hereby expressly made subordinate and subject in right of
payment to the prior payment in full in cash of all Senior Indebtedness (and the
termination of all commitments of the Senior Lenders under the Senior Credit
Agreement); provided, however, that the Notes, the indebtedness represented
thereby and the payment of the principal of and interest on the Notes and all
other Obligations in all respects shall rank equally with or prior to all
existing and future unsecured indebtedness of the Company that is not Senior
Indebtedness.
SECTION 8.1. Payment Over Upon Dissolution, etc. In the event of (x) any
insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith,
relative to the Company or to its creditors, as such, or to its assets, (y) any
liquidation, dissolution or other winding up of the Company, whether voluntary
or involuntary and whether or not involving insolvency or bankruptcy, or (z) any
assignment for the benefit of creditors or any other marshalling of assets and
liabilities of the Company, then, and in any such event, the holders of Senior
Indebtedness shall be entitled to
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receive payment in full in cash of all amounts due on or in respect of all
Senior Indebtedness, or provision shall be made for such payment, before any
Noteholder is entitled to receive any payment or distribution (excluding,
however, Reorganization Securities) on account of the Obligations, and, to that
end, the holders of Senior Indebtedness shall be entitled to receive, for
application to repayment thereof, any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, by
off-set or otherwise, to which the Noteholders would be entitled but for the
provisions of this Article (excluding, however, Reorganization Securities),
including any such payment or distribution which may be payable or deliverable
by reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Notes.
In the event that, notwithstanding the foregoing provisions of this
Section, the holder of any Note shall have received any payment or distribution
(excluding, however, Reorganization Securities) of assets of the Company of any
kind or character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Company being subordinated to the
payment of the Notes, before all Senior Indebtedness is paid in full in cash or
payment thereof provided therefor, then, and in such event, such payment or
distribution shall be held in trust for and paid over or delivered forthwith to
the Senior Agent or to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full
in cash, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness.
SECTION 8.2. Payment Block Upon Senior Default. In the event
(a) of the occurrence and continuation of
(i) any default in the payment of principal of or interest on
any Senior Indebtedness beyond any applicable grace period with
respect thereto, or
(ii) any event of default with respect to Senior Indebtedness
which shall have resulted in all of such Senior Indebtedness
becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable,
(any such default or event of default, being a "Senior Payment
Default"), or
(b) that any Event of Default of the nature referred to in Section
9.1 of the Senior Credit Agreement (other than a Senior Payment Default)
with respect to any Senior Indebtedness shall have occurred and be
continuing (or would occur after giving effect to the payment of any
Obligation then proposed to be made on a pro forma basis based on the
most recent financial statements then required to have been furnished to
the Senior Agent pursuant to the Senior Credit Agreement) permitting the
holders of such Senior Indebtedness (or a trustee on behalf of the
holders thereof) to declare such Senior
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Indebtedness due and payable prior to the date on which it would have
otherwise have become due and payable (a "Senior Performance Default"),
then, no payment shall be made by the Company, or be demanded or received by any
Noteholder, on account of any Obligation or on account of the purchase or
redemption or other acquisition of the Notes,
(c) in case of any Senior Payment Default, from the date on which
the Company or the Noteholders shall have received written notice (a
"Senior Payment Bar Notice") from the Senior Agent specifically pursuant
to this clause of such Senior Payment Default and continuing until (x)
such Senior Payment Default shall have been cured or waived or shall
have ceased to exist or (y) such acceleration shall have been rescinded
or annulled, or
(d) in case of any Senior Performance Default, from the date the
Company or the Noteholders shall have received a Senior Payment Bar
Notice from the Senior Agent specifically pursuant to this clause of
such Senior Performance Default and continuing until the earlier of (x)
180 days after such date and (y) the date, if any, on which the Senior
Indebtedness to which such Senior Performance Default relates is
discharged or such Senior Performance Default is waived by the holders
of such Senior Indebtedness or otherwise cured.
In the event that, notwithstanding the foregoing, the Company shall make any
payment of any Obligation to any Noteholder prohibited by the foregoing
provisions of this Section, then, and in such event, such payment shall be held
in trust for the benefit of the Senior Lenders and paid over and delivered
forthwith to the Senior Agent for the account of the holders of Senior
Indebtedness. The provisions of this Section shall not apply to any payment with
respect to which Section 8.1 would be applicable.
SECTION 8.3. Payment Otherwise Permitted, etc. Nothing contained in this
Article or elsewhere in this Agreement or in the Notes shall, at any time,
(a) prevent the Company from making payments at any time of
principal of or interest on the Notes or of any other Obligation, except
during the pendency (x) of any case, proceeding, dissolution,
liquidation or other winding up, assignment for the benefit of creditors
or other marshalling of assets and liabilities of the Company or other
circumstance referred to in Section 8.1 or (y) any condition described
in Section 8.2; or
(b) impair the terms of Section 7.2 or 7.3 pursuant to which the
Notes may become due and payable prior to their stated maturity;
provided, however, that any declaration made pursuant to Section 7.3 by
the Required Noteholders shall become effective only upon the first to
occur of (x) the 180th day after notice thereof to the Senior Agent
pursuant to Section 8.11 (unless, on or prior to such day, the Company
shall have cured all Events of Default and have given the Noteholders
notice of such cure) and (y) the acceleration of any Senior
Indebtedness.
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SECTION 8.4. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full in cash of all Senior Indebtedness (and the
termination of all commitments of the Senior Lenders under the Senior Credit
Agreement), each Noteholder shall, to the extent of all payments or
distributions made to the holders of Senior Indebtedness pursuant to this
Article which would otherwise be payable in respect of Obligations, be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of and interest on the Notes and all
other Obligations shall be irrevocably paid in full in cash. For purposes of
such subrogation, no payments or distributions to the holders of Senior
Indebtedness of any cash, property or securities to which any Noteholder would
be entitled except for the provisions of this Article, and no payments over
pursuant to the provisions of this Article to the holders of Senior Indebtedness
by the Noteholders, shall, as among the Company, its creditors other than
holders of Senior Indebtedness, and the Noteholders, be deemed to be a payment
or distribution by the Company to or on account of the Senior Indebtedness.
SECTION 8.5. Provisions Solely to Define Relative Rights. The provisions
of this Article are intended solely for the purpose of defining the relative
rights of the Noteholders on the one hand and the holders of Senior Indebtedness
on the other hand. Nothing contained in this Article or elsewhere in this
Agreement or in the Notes is intended to or shall (x) impair, as among the
Company, its creditors other than holders of Senior Indebtedness and the
Noteholders, the obligation of the Company, which is absolute and unconditional,
to pay to the Noteholders the principal of and interest on the Notes and any and
all other Obligations as and when the same shall become due and payable in
accordance with their terms or (y) affect the relative rights against the
Company or any Noteholder and creditors of the Company other than the holders of
Senior Indebtedness.
SECTION 8.6. Effect of Failure to Pay. The fact that any failure to make
any payment on account of principal of or interest on any Note or of any other
Obligation occurs by reason of the operation of any provision of this Article
shall not be construed as preventing the occurrence of an Event of Default under
this Agreement.
SECTION 8.7. No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any non-compliance by the Company
with the terms, provisions and covenants of this Agreement, regardless of any
knowledge thereof any such holder may have or be otherwise charged with. Without
in any way limiting the generality of the foregoing, the holders of Senior
Indebtedness may, at any time and from time to time, without the consent of or
notice to any Noteholder, without incurring responsibility to any Noteholder and
without impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Noteholders to the holders of Senior Indebtedness,
do any one or more of the following:
(a) rescind, amend, waive, supplement or otherwise modify in any
manner any Senior Loan Document;
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(b) exercise or refrain from exercising its rights as to, foreclose
upon, seize, sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness;
(c) release any Person liable in any manner for the collection of
Senior Indebtedness; and
(d) exercise or refrain from exercising any rights, remedies, powers
or privileges against the Company and any other Person, whether under
the Senior Loan Documents, Applicable Law or otherwise, including any
waiver, consent, extension, indulgence or other action or inaction in
respect of any thereof.
SECTION 8.8. Notice to Noteholders. The Company shall give prompt
written notice to holders of all Notes of any fact known to the Company which
would prohibit the making of any payment to the Noteholders in respect of the
Notes. Notwithstanding the provisions of this Article or any other provision of
this Agreement, no Noteholder (x) shall be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to the
Noteholders in respect of the Notes, unless and until the Noteholders shall have
received a Senior Payment Bar Notice pursuant to Section 8.2 or other written
notice thereof from the Company or a holder of Senior Indebtedness or from any
trustee therefor of any proceeding referred to in Section 8.1 (and, prior to the
receipt by the Noteholders of any Senior Payment Bar Notice or other such
written notice, the Noteholders shall be entitled in all respects to assume that
no such facts exist) and (y) shall be entitled to receive and retain all
payments made by or on behalf of the Company prior to the receipt by the
Noteholders under this Agreement of any such written notice. Each notice
delivered pursuant to this Article to the Company by a holder of Senior
Indebtedness shall be deemed conclusively to have been given to each Noteholder
upon (and only upon) its being forwarded by the Company to such Noteholder.
SECTION 8.9. Proving, etc. Claims. If the Noteholders have not filed,
proved or voted, as the case may be, in any proceeding of the nature referred to
in Section 8.1, the Senior Agent, upon 15 days prior written notice to the
Noteholders (and unless the Noteholders do file, prove or vote, as the case may
be during such period), may so file, prove or vote, as the case may be, in the
name of the Noteholders or otherwise, with respect to any and all claims of the
Noteholders relating to the Obligations of the Company.
SECTION 8.10. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Noteholders shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending and giving effect (and stating in such
order or decree that effect has been given) to this Article, or a certificate so
stating of the trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee for the benefit of creditors, agent or other Person making such payment
or distribution, delivered to the Noteholders, for the purpose of ascertaining
the Persons entitled to participate in such payment or distribution, the holders
of Senior Indebtedness and other indebtedness of the Company, the amount thereof
or payable
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thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article.
SECTION 8.11. Notice to Senior Agent. The Noteholders will give notice
to the Senior Agent of any declaration made pursuant to Section 7.3, and no such
declaration shall become effective until the first to occur, subject, however,
to Section 8.3, of (x) the acceleration of any Senior Indebtedness and (y) five
days after delivery of such notice to the Senior Agent.
SECTION 8.12. Amendment of Subordination, etc. Provisions. The
subordination, postponement, standstill and other provisions contained in this
Article are for the benefit of the holders of Senior Indebtedness and may not be
rescinded, cancelled, amended or modified in any way without the prior written
consent thereto of the Senior Agent.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Waivers, Amendments, etc. The provisions of this Agreement
and of each Purchase Document may from time to time be amended, waived or
otherwise modified, if such amendment, waiver or modification is in writing and
consented to by the Company and the Required Noteholders; provided, however,
that no such amendment, waiver or other modification:
(a) which would modify any requirement hereunder that any particular
action be taken by each Noteholder or by the Required Noteholders shall
be effective unless consented to by each Noteholder;
(b) which would modify this Section or change the definition of
"Required Noteholders" or which would extend the due date for, or reduce
the amount of, any payment or prepayment of principal of or interest on
any Note (or reduce the rate of interest on any Note) shall be made
without the consent of each Noteholder; provided, however, that, in the
case of any non-payment of interest when due on the Notes which is not
permitted to be accrued in accordance with the proviso to the first
paragraph of the Notes by reason of the two accruals permitted thereby
having already occurred, such non-payment may instead be permitted to be
accrued pursuant to this clause with the consent of the holders of 75%
of the aggregate outstanding principal amount of all Notes and otherwise
in accordance with the terms of such proviso;
(c) which would modify clause (b) of Section 6.2 (or any of the
limitations referred to therein) shall be made without the consent of
JZEP; or
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(d) which would amend the subordination, postponement, standstill
and other provisions of Article VIII shall be effective unless made in
accordance with Section 8.12.
No failure or delay on the part of any Noteholder in exercising any power or
right under this Agreement or any other Purchase Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power or
right preclude any other or further exercise thereof or the exercise of any
other power or right. No notice to or demand on the Company in any case shall
entitle it to any notice or demand in similar or other circumstances. No waiver
or approval by any Noteholder under this Agreement or any other Purchase
Document shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION 9.2. Notices. All notices and other communications provided to
any party hereto under this Agreement or any other Purchase Document shall be in
writing and addressed or delivered to it at its address set forth below its
signature hereto or at such other address as may be designated by such party in
a notice to the other parties. Any notice, if sent by mail or courier and
properly addressed and prepaid, shall be deemed given when received; any notice,
if transmitted by facsimile, shall be deemed given when transmitted and
electronically confirmed.
SECTION 9.3. Costs and Expenses. The Company agrees to pay all expenses
of each requesting Purchaser(including reasonable fees and expenses of counsel)
for the negotiation, preparation, execution and delivery of this Agreement,
including Schedules and Exhibits hereto, each other Purchase Document, any
Subject Security and the Stockholders' Agreement and any amendments, waivers,
consents, supplements or other modifications to any thereof, as may from time to
time hereafter be required whether or not the transactions contemplated under
this Agreement are consummated, and to pay all expenses of such requesting
Purchaser (including reasonable fees and expenses of counsel to such requesting
Purchaser) incurred from time to time after the Closing Date in connection with
the administration hereof and thereof, the consideration of legal questions
relevant hereto and thereto or to the enforcement or preservation of rights as
to, or restructuring or "work-out" of, any Obligations or the rights and
preferences of any Subject Security.
SECTION 9.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Purchaser, the Company hereby indemnifies,
exonerates and holds such Purchaser and its officers, directors, employees,
trustees and agents (the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages and expenses actually incurred in connection therewith (irrespective
of whether such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable attorneys' fees and
disbursements (the "Indemnified Liabilities"), incurred by the Indemnified
Parties or any of them as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Note,
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(b) the entering into and performance of this Agreement and any
other Purchase Document by any of the Indemnified Parties (including any
action brought by or on behalf of the Company as the result of any
determination by the required Purchasers pursuant to Article III to not
purchase the Subject Securities), or
(c) any investigation, litigation or proceeding related to the
transactions contemplated under this Agreement,
excluding, however, any such Indemnified Liabilities arising for the account of
a particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or wilful misconduct. If, and to the extent that, the foregoing
undertaking may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under Applicable Law.
SECTION 9.5. Survival. The obligations of the Company under clause (b)
of Section 6.1 and clause (b) of Section 6.2 shall survive the payment in full
of all Obligations and the termination of any other provisions of this Agreement
or any other Purchase Document and shall continue for the benefit of JZEP for so
long as it shall hold the relevant Subject Securities. The obligations of the
Company under Section 9.4 shall remain in full force and effect, regardless of
any investigation made by or on behalf of any Indemnified Party, and the
obligations of the Company under Sections 9.3 and 9.4 shall survive the payment
or prepayment of the Subject Securities, at maturity, upon redemption or
otherwise, any transfer of the Subject Securities by each requesting Purchaser,
and any termination of this Agreement and the other Purchase Documents. The
representations and warranties made by the Company in this Agreement and in each
other Purchase Document shall survive the execution and delivery of this
Agreement and each such other Purchase Document.
SECTION 9.6. Severability. Any provision of this Agreement or any other
Purchase Document which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions of this
Agreement or such Purchase Document or affecting the validity or enforceability
of such provision in any other jurisdiction.
SECTION 9.7. Headings. The various headings of this Agreement and of
each other Purchase Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such Purchase Document
or any provisions hereof or thereof.
SECTION 9.8. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be executed by the Company
and a Purchaser and be deemed to be an original and all of which shall
constitute together but one and the same agreement.
SECTION 9.9. Governing Law; Entire Agreement. This Agreement, the Notes
and each other Purchase Document shall each be deemed to be a contract made
under and governed by the internal laws of the State of New York. This
Agreement, the Notes, and the other
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Purchase Documents, the Recapitalization Document and the Stockholders'
Agreement constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and supersede any prior agreements, written
or oral, with respect thereto.
SECTION 9.10. Jurisdiction. For purpose of any action or proceeding
involving this Agreement or any other Purchase Document, the Company hereby
expressly submits to the jurisdiction of all Federal and State Courts located in
the City of New York, State of New York and consents that it may be served with
any process or paper by registered mail or by personal service within or without
the State of New York, provided a reasonable time for appearance is allowed.
SECTION 9.11. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
(a) the Company may not assign or transfer its rights or
obligations hereunder without the prior written consent of all holders
of Notes; and
(b) the rights of sale, assignment, and transfer of the Notes are
subject to Section 4.6.
SECTION 9.12. WAIVER OF JURY TRIAL. THE PURCHASERS AND THE COMPANY
HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER PURCHASE DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF THE PURCHASERS OR THE COMPANY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PURCHASERS ENTERING INTO THIS AGREEMENT.
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46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
APPAREL VENTURES, INC.
By
--------------------------------------
Name: Xxxx X. Xxxxxx
Title:
--------------------------------------
Address: c/o The Jordan Company
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxx X. Xxxxxx
XXXXXX X. XXXXXXX AND
XXXXXXX X. XXXXXXX REVOCABLE TRUST
By
--------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Address: c/o Xxxxxx X. Xxxxxxx
Apparel Ventures, Inc.
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
Attention: Xxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxx
Address: c/o Xxxxxx X. Xxxxxxx
Apparel Ventures, Inc.
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
47
LEUCADIA INVESTORS, INC.
By
------------------------------------
Name:
----------------------------------
Title:
----------------------------------
Address: c/o The Jordan Company
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxx X. Xxxxxx
XXXX X. XXXXXX XX REVOCABLE TRUST
By:
------------------------------------
Name: Xxxx X. Xxxxxx XX
Title: Trustee
----------------------------------------
Xxxxx X. Xxxxxxxxx
----------------------------------------
Xxxxxxxx X. Xxxxxxx
----------------------------------------
Xxxx X. Xxxxxx
----------------------------------------
Xxxx X. Max
----------------------------------------
A. Xxxxxxx Xxxxxx
48
JZ EQUITY PARTNERS PLC
By
----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Director
Notices: c/o Jordan/Zalaznick
Advisers, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xx. Xxxxx X. Xxxxxx
Copy to: Xxx Xxxxx Xxxxx, Esq.
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Payments to: Account No.: 000-000-000
Republic National
Bank of New York
(ABA No. 026-0048-28)
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Confirmation to: Xx. Xxxxx X. Xxxxxx
c/o Jordan/Zalaznick
Advisers, Inc.
Telephone No.: 000-000-0000
49
----------------------------------------
Xxxxxxx Xxxxxx
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In connection with the Merger on the date hereof of Holdings and Old AVI,
Apparel Ventures, Inc., the Delaware corporation surviving the Merger, hereby
absolutely and unconditionally confirms its assumption and agreement, jointly
and severally, to pay, perform, observe and discharge all of the obligations of
the Company under the foregoing Agreement and each other Purchase Agreement.
APPAREL VENTURES, INC.
By
---------------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
