EXHIBIT 99.3
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STOCK PURCHASE AGREEMENT
among
WARBURG, XXXXXX EQUITY PARTNERS, L.P.,
WARBURG, XXXXXX NETHERLANDS EQUITY PARTNERS I, C.V.,
WARBURG, XXXXXX NETHERLANDS EQUITY PARTNERS II, C.V.,
WARBURG, XXXXXX NETHERLANDS EQUITY PARTNERS III, C.V.
and
TECHNICAL SERVICES PARTNERS, L.P.
January 18, 1999
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TABLE OF CONTENTS
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PAGE
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SECTION 1. PURCHASE AND SALE OF COMMON STOCK.............................. 1
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER.............. 2
2.1. Representations and Warranties of the Stockholder............. 2
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PURCHASERS................... 5
3.1. Representations and Warranties of Purchasers.................. 5
SECTION 4. COVENANTS OF THE PARTIES....................................... 7
4.1. Compliance with Voting and Option Agreement................... 7
4.2. Transfer of the Shares........................................ 7
4.3. HSR Act....................................................... 7
4.4. Additional Agreements......................................... 8
4.5. Notice of Breach.............................................. 8
SECTION 5. PURCHASERS' CLOSING CONDITIONS................................. 9
5.1. Representations and Warranties................................ 9
5.2. Compliance with Stockholder Transaction Documents............. 9
5.3. Certificate................................................... 9
5.4. Expiration or Termination of Waiting Period under HSR Act..... 9
5.5. Counsel's Opinion............................................. 9
5.6. Additional Purchase Agreements................................ 10
5.7. Injunction.................................................... 10
SECTION 6. STOCKHOLDER CLOSING CONDITIONS................................. 10
6.1. Representations and Warranties................................ 10
6.2. Compliance with Agreement..................................... 10
6.3. Purchasers' Certificate....................................... 11
6.4. Expiration or Termination of Waiting Period under HSR Act..... 11
6.5. Injunction.................................................... 11
SECTION 7. RECOVERY OF FEES............................................... 11
SECTION 8. TERMINATION, AMENDMENT AND WAIVER.............................. 11
8.1. Termination................................................... 11
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8.2. Effect of Termination......................................... 13
8.3. Amendment..................................................... 14
8.4. Waiver........................................................ 14
SECTION 9. INTERPRETATION OF THIS AGREEMENT .............................. 14
9.1. Terms Defined................................................. 14
9.2. Directly or Indirectly........................................ 17
9.3. Governing Law................................................. 17
9.4. Paragraph and Section Headings................................ 17
SECTION 10. MISCELLANEOUS................................................. 17
10.1. Survival of Representations and Warranties................... 17
10.2. Notices...................................................... 17
10.3. Fees; Expenses............................................... 19
10.4. Publicity.................................................... 19
10.5. Specific Performance......................................... 19
10.6. Submission to Jurisdiction................................... 20
10.7. Reproduction of Documents.................................... 20
10.8. Successors and Assigns....................................... 20
10.9. Entire Agreement; Amendment and Waiver....................... 21
10.10. Severability................................................ 21
10.11. Limitation on Enforcement of Remedies....................... 21
10.12. Simultaneous Effectiveness.................................. 21
10.13. Counterparts................................................ 22
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EXHIBIT A Form of Company Purchase Agreement
EXHIBIT B Form of Opinion of Counsel
EXHIBIT C Form of Founders Purchase Agreement
EXHIBIT D-1 Form of Xxxxxxx Voting Agreement
EXHIBIT D-2 Form of Flemings Voting Agreement
EXHIBIT E Form of TSP Voting and Option Agreement
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INDEX
Additional Purchase Agreements....................................... 13
Agreement............................................................ 1
Board................................................................ 11
Business Day......................................................... 13
Closing.............................................................. 2
Closing Date......................................................... 2
Company.............................................................. 1
Company Common Stock................................................. 1
Company Purchase Agreement........................................... 1
Company Vote......................................................... 13
Company Voting Matters............................................... 13
Exchange Act......................................................... 2
Expiration Date...................................................... 11
Extended Expiration Date............................................. 11
FCC.................................................................. 13
Flemings............................................................. 13
Flemings Conversion Agreement........................................ 13
Founders............................................................. 13
Founders Purchase Agreement.......................................... 13
Governmental Entity.................................................. 13
HSR Act.............................................................. 4
Lien................................................................. 2
Lock-up Agreements................................................... 13
Per Share Amount..................................................... 1
Person............................................................... 14
Purchase Price....................................................... 2
Purchaser1
Purchaser Conflict................................................... 5
Securities Act....................................................... 14
Shares............................................................... 1
Stockholder.......................................................... 1
Stockholder Conflict................................................. 3
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Stockholder Transaction Documents.................................... 14
Subject Shares....................................................... 1
subsidiary........................................................... 14
Takeover Proposal.................................................... 14
Transaction Documents................................................ 14
TSP.................................................................. 14
TSP/Xxxxxxx Agreement................................................ 1
Voting Agreements.................................................... 14
Voting and Option Agreement.......................................... 14
Xxxxxxx Shares....................................................... 1
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STOCK PURCHASE AGREEMENT, dated as of January 18, 1999 (this
"Agreement"), by and among Warburg, Xxxxxx Netherlands Equity Partners, L.P., a
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Delaware limited partnership, Warburg, Xxxxxx Netherlands Equity Partners I,
C.V., a Dutch limited partnership, Warburg, Xxxxxx Netherlands Equity Partners
II, C.V., a Dutch limited partnership, Warburg, Xxxxxx Netherlands Equity
Partners III, C.V., a Dutch limited partnership, (each, a "Purchaser", and
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collectively, "Purchasers") and Technical Services Partners, L.P., a Delaware
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limited partnership (the "Stockholder").
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WHEREAS, the Stockholder is the record and beneficial owner of
4,552,502 shares (the "Shares") of common stock, $.01 par value per share (the
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"Company Common Stock"), of Four Media Company, a Delaware corporation (the
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"Company"); and
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WHEREAS, pursuant to an agreement with Xxxxxx X. Xxxxxxx (the
"TSP/Xxxxxxx Agreement"), Xx. Xxxxxxx is the beneficial owner of 1,432,875 of
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the Shares (the "Xxxxxxx Shares"; the Shares excluding the Xxxxxxx Shares are
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referred to herein as the "Subject Shares"); and
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WHEREAS, Purchasers and the Company have entered into a Securities
Purchase Agreement, dated as of the date hereof (the "Company Purchase
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Agreement"), substantially in the form of Exhibit A hereto, which provides,
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among other things, that, upon the terms and subject to the conditions therein,
Purchasers will purchase from the Company and the Company will sell to
Purchasers 6,582,607 shares of Company Common Stock and the Company will issue
to Purchasers a warrant to purchase an additional 1,100,000 shares of Company
Common Stock.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and subject to the terms and conditions set forth herein,
the parties hereto hereby agree as follows:
SECTION 1. PURCHASE AND SALE OF COMMON STOCK
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(a) Subject to the terms and conditions set forth in this Agreement
and in reliance upon the Stockholder's and Purchasers' joint and several
representations and warranties set forth below, on the Closing Date (as defined
below) the
Stockholder shall sell to Purchasers, and Purchasers shall jointly and severally
purchase from the Stockholder, all of the Subject Shares for a cash purchase
price of $7.50 per share (the "Per Share Amount"). Such sale and purchase shall
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be effected on the Closing Date by the Stockholder delivering to Purchasers
certificates representing the Subject Shares duly registered in its name, duly
endorsed in blank for transfer or accompanied by stock powers duly endorsed in
blank, against delivery by Purchasers to the Stockholder of the product of the
Per Share Amount and the total number of Subject Shares (the "Purchase Price")
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by wire transfer of immediately available funds to such account as the
Stockholder shall designate prior to the Closing Date.
(b) The closing of such sale, purchase and issuance (the "Closing")
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shall take place at 10:00 A.M., New York City time, on the third Business Day
after all of the conditions set forth herein have been satisfied or waived, or
such other date as Purchasers and the Stockholder shall agree in writing (the
"Closing Date"), at the offices of Xxxxxxx Xxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx,
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New York, New York, or such other location as Purchasers and the Stockholder
shall mutually select.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
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2.1. Representations and Warranties of the Stockholder
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The Stockholder represents and warrants to Purchasers as follows:
(a) The Stockholder is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware, has the
requisite power and authority to execute and deliver the Stockholder Transaction
Documents and to consummate the transactions contemplated hereby and thereby,
and has taken all necessary action to authorize the execution, delivery and
performance of the Stockholder Transaction Documents.
(b) The Stockholder is the beneficial owner (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
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which meaning will apply for all purposes of this Agreement) of, and has good
title to, all of the Subject Shares, free and clear of any mortgage, pledge,
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hypothecation, rights of others, claim, security interest, charge, encumbrance,
title defect, title retention agreement, voting trust agreement, interest,
option, lien, charge or similar restriction or limitation (each, a "Lien")
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(including any restriction on the right to vote, sell or otherwise dispose of
the Subject Shares), except as set forth in this Agreement.
(c) Other than the Xxxxxxx Shares, the Subject Shares constitute all
of the securities (as defined in Section 3(10) of the Exchange Act, which
definition will apply for all purposes of this Agreement) of the Company
beneficially owned, directly or indirectly, by the Stockholder (excluding any
securities beneficially owned by any of its affiliates or associates (as such
terms are defined in Rule 12b-2 under the Exchange Act, which definition will
apply for all purposes of this Agreement) as to which it does not have voting or
investment power); provided, however, that the Stockholder holds the exclusive
power to vote the Xxxxxxx Shares.
(d) Other than the Shares, the Stockholder does not, directly or
indirectly, beneficially own or have any option, warrant or other right to
acquire any securities of the Company that are or may by their terms become
entitled to vote or any securities that are convertible or exchangeable into or
exercisable for any securities of the Company that are or may by their terms
become entitled to vote, nor is the Stockholder subject to any contract,
commitment, arrangement, understanding or relationship (whether or not legally
enforceable), other than this Agreement and the TSP/Xxxxxxx Agreement, that
allows or obligates it to vote or acquire any securities of the Company. The
Stockholder holds exclusive power to vote the Shares and has not granted a proxy
to any other Person to vote the Shares, subject to the limitations set forth in
this Agreement.
(e) This Agreement has been duly executed and delivered by the
Stockholder and, assuming due authorization, execution and delivery of this
Agreement by Purchasers, is a valid and binding obligation of the Stockholder
enforceable against the Stockholder in accordance with its terms, except that
(i) the enforceability hereof may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereinafter in effect, affecting
creditors' rights generally, and (ii) the availability of the remedy of specific
performance or injunctive or other forms of equitable relief may be subject to
equitable
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defenses and would be subject to the discretion of the court before which any
proceeding therefor may be brought.
(f) Neither the execution and delivery of this Agreement nor the
performance by the Stockholder of its obligations hereunder will conflict with,
result in a violation or breach of, or constitute a default (or an event that,
with notice or lapse of time or both, would result in a default) or give rise to
any right of termination, amendment, cancellation, or acceleration or result in
the creation of any Lien on any Subject Shares under (collectively, a
"Stockholder Conflict"), (i) the Stockholder's certificate of limited
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partnership or partnership agreement or other constituting documents, (ii) any
contract, commitment, agreement, understanding, arrangement or restriction of
any kind to which the Stockholder is a party or by which the Stockholder is
bound, to the extent such Stockholder Conflict would be reasonably likely to
affect the Stockholder's ability to consummate the transactions contemplated
hereby or (iii) any injunction, judgment, writ, decree, order or ruling
applicable to the Stockholder, to the extent such Stockholder Conflict would be
reasonably likely to affect the Stockholder's ability to consummate the
transactions contemplated hereby.
(g) To the knowledge of the Stockholder, neither the execution and
delivery of this Agreement nor the performance by the Stockholder of its
obligations hereunder will violate any law, decree, statute, rule or regulation
applicable to the Stockholder or require any order, consent, authorization or
approval of, filing or registration with, or declaration or notice to, any
court, administrative agency or other governmental body or authority, other than
any required notices or filings with the Federal Communications Commission or
pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder (the "HSR Act") or
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the federal securities laws.
(h) All agreements, contracts, transfers of assets or liabilities or
other commitments or transactions, whether or not entered into in the ordinary
course of business, to or by which the Company or any of its subsidiaries (as
defined in Section 9.1 of this Agreement, which definition will apply for all
purposes of this Agreement), on the one hand, and the Stockholder or any of its
affiliates (other than the Company or any of its subsidiaries), on the other
hand, are or have been a party or are
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otherwise bound or affected, that (i) are currently pending or in effect or (ii)
involve continuing liabilities and obligations that, individually or in the
aggregate, have been, are or will be material to the Company or any of its
subsidiaries taken as a whole, have either been disclosed in the SEC Reports (as
such term is defined in the Company Purchase Agreement) or are set forth on
Schedule 3.23 to the Company Purchase Agreement.
(i) Neither the Stockholder nor anyone acting on its behalf shall
offer the Subject Shares for sale to, or solicit any offer to acquire any of the
same from, anyone so as to bring the sale of the Subject Shares, or any part
thereof, within the provisions of Section 5 of the Securities Act.
(j) There are no claims for brokerage commissions or finder's fees or
similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement made by or on behalf of the Stockholder and
the Stockholder agrees to indemnify and hold Purchasers harmless against any
costs or damages incurred as a result of any such claim.
(k) The Stockholder has executed terminations of the Lock-up
Agreements. Schedule 2.1(k) sets forth complete and accurate copies of such
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terminations.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PURCHASERS
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3.1. Representations and Warranties of Purchasers
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Each Purchaser jointly and severally represents and warrants to the Stockholder,
as of the date hereof and as of the Closing Date, as follows:
(a) Each Purchaser is a limited partnership duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, and each Purchaser has the requisite power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby, and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement.
(b) This Agreement and each other Transaction Document to which it is
a party has been duly executed and delivered by
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each Purchaser and, assuming the due execution and delivery of this Agreement by
the Stockholder and of such other Transaction Documents by the other parties
thereto, are the valid and binding obligations of each Purchaser, enforceable
against each Purchaser in accordance with their respective terms, except that
(i) the enforceability hereof and thereof may be subject to applicable
bankruptcy, insolvency or other similar laws, now or hereinafter in effect,
affecting creditors' rights generally, and (ii) the availability of the remedy
of specific performance or injunctive or other forms of equitable relief may be
subject to equitable defenses and would be subject to the discretion of the
court before which any proceeding therefor may be brought.
(c) Neither the execution and delivery of this Agreement nor the
performance by each Purchaser of its respective obligations hereunder or
thereunder will conflict with, result in a violation or breach of, or constitute
a default (or an event that, with notice or lapse of time or both, would result
in a default) or give rise to any right of termination, amendment, cancellation
or acceleration under (collectively a "Purchaser Conflict"), (i) its certificate
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of limited partnership, partnership agreement or comparable instrument, (ii) any
contract, commitment, agreement, understanding, arrangement or restriction of
any kind to which such Purchaser is a party or by which such Purchaser is bound,
to the extent such Purchaser Conflict would materially affect such Purchaser's
ability to consummate the transactions contemplated under the Stockholder
Transaction Documents or (iii) any injunction, judgment, writ, decree, order or
ruling applicable to such Purchaser, to the extent such Purchaser Conflict would
materially affect such Purchaser's ability to consummate the transactions
contemplated under the Stockholder Transaction Documents.
(d) Neither the execution and delivery of this Agreement nor the
performance by each Purchaser of its respective obligations hereunder will
violate any law, decree, statute, rule or regulation applicable to such
Purchaser or require any order, consent, authorization or approval of, filing or
registration with, or declaration or notice to, any corporation, Person, firm,
Governmental Entity or public or judicial authority, other than any required
notices or filings with the FCC or pursuant to the HSR Act or the federal
securities laws.
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(e) It is acquiring the Subject Shares for its own account for
investment and not with a view towards the resale, transfer or distribution
thereof, nor with any present intention of distributing the Subject Shares, but
subject, nevertheless, to any requirement of law that the disposition of such
Purchaser's property shall at all times be within such Purchaser's control
(subject to any restrictions set forth in the Company Purchase Agreement), and
without prejudice to such Purchaser's right at all times to sell or otherwise
dispose of all or any part of such securities under a registration under the
Securities Act or under an exemption from said registration available under the
Securities Act.
(f) There are no claims for brokerage commissions or finder's fees or
similar compensation in connection with the transactions contemplated by this
Agreement or the other Transaction Documents to which it is a party based on any
arrangement made by or on behalf of such Purchaser or any of its affiliates and
such Purchaser agrees to indemnify and hold the Stockholder harmless against any
costs or damages incurred as a result of any such claim.
SECTION 4. COVENANTS OF THE PARTIES
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4.1. Compliance with Voting and Option Agreement
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The Stockholder shall perform and comply with all agreements and covenants
contained in the Voting and Option Agreement which are required to be performed
or complied with by the Stockholder prior to or on the Closing Date.
4.2. Transfer of the Shares.
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During the term of this Agreement, except as otherwise provided herein
or in the Voting and Option Agreement, the Stockholder will not (a) tender into
any tender or exchange offer or otherwise sell, transfer, pledge, assign,
hypothecate or otherwise dispose of, or encumber with any Lien, any of the
Subject Shares, (b) acquire any shares of Common Stock or other securities of
the Company, (c) deposit the Subject Shares into a voting trust, enter into a
voting agreement or arrangement with respect to the Subject Shares or grant any
proxy or power of attorney with respect to the Subject Shares or (d) enter into
any contract, option or other arrangement or undertaking with respect to the
direct or indirect acquisition or sale, transfer, pledge,
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assignment, hypothecation or other disposition of any interest in or the voting
of any shares of Common Stock or any other securities of the Company.
4.3. HSR Act
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If required under the HSR Act, Purchasers shall use their best efforts
to file as soon as practicable notifications under the HSR Act, in connection
with the transactions contemplated hereby, and to respond as promptly as
practicable to any inquiries received from the Federal Trade Commission and the
Antitrust Division of the Department of Justice for additional information or
documentation and to respond as promptly as practicable to all inquiries and
requests received from any State Attorney General or other Governmental Entity
in connection with antitrust matters relating to the transactions contemplated
by this Agreement.
4.4. Additional Agreements
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(a) Subject to the terms and conditions herein provided, each of the
parties hereto agrees to cooperate with the other and use its best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by the Stockholder
Transaction Documents and the other Transaction Documents to which such party is
a party, including using its best efforts to obtain all necessary waivers,
consents and approvals, and to effect all necessary registrations and filings as
may be required hereunder or thereunder, including any filings required to be
made with the Federal Communications Commission.
(b) In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of any of the Stockholder
Transaction Documents, Purchasers and the Stockholder shall take all such action
as promptly as practicable.
4.5. Notice of Breach
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Each party shall promptly give notice to the other party upon becoming
aware of the occurrence or, to its knowledge, impending or threatened
occurrence, of any event which would cause any of its representations or
warranties to be untrue on
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the Closing Date or cause a breach of any covenant by it contained in any of the
Stockholder Transaction Documents and will use its best efforts to prevent or
promptly remedy the same. Any such notification by the Stockholder or
Purchasers shall not be deemed an amendment of this Agreement.
SECTION 5. PURCHASERS' CLOSING CONDITIONS
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The obligations of Purchasers to effect the transactions contemplated
by this Agreement shall be subject to the satisfaction on or prior to the
Closing Date of the following conditions, any one or more of which (except for
the conditions set forth in Section 5.4 and Section 5.7) may be waived in
writing by Purchasers in accordance with Section 8.4 hereof:
5.1. Representations and Warranties
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The representations and warranties of the Stockholder contained in the
Stockholder Transaction Documents shall be true in all material respects on and
as of the Closing Date (except to the extent any such representation and
warranty speaks as to an earlier date, in which event it shall be true and
correct in all material respects as of such earlier date) as though such
representations and warranties were made at and as of such date, except as
otherwise affected by the transactions contemplated hereby and thereby.
5.2. Compliance with Stockholder Transaction Documents
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The Stockholder shall have performed and complied in all material
respects with all agreements, covenants and conditions contained in the
Stockholder Transaction Documents which are required to be performed or complied
with by the Stockholder prior to or on the Closing Date.
5.3. Certificate
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Purchasers shall have received a certificate, dated the Closing Date,
signed by the general partner of the Stockholder, certifying that the conditions
specified in the foregoing Sections 5.1 and 5.2 hereof have been fulfilled.
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5.4. Expiration or Termination of Waiting Period under HSR Act
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Any waiting period (and any extension thereof) under the HSR Act
applicable to the transactions contemplated by this Agreement shall have expired
or been terminated .
5.5. Counsel's Opinion
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Purchasers shall have received from Xxxxxxx Xxxx & Xxxxx LLP, the
legal counsel to the Stockholder, an opinion, dated the Closing Date,
substantially in the form of Exhibit B hereto.
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5.6. Additional Purchase Agreements
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The transactions contemplated by the Company Purchase Agreement shall
be consummated concurrently on the Closing Date.
5.7. Injunction
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No preliminary or permanent injunction or other order by any federal
or state court in the United States which prevents the consummation of the
transactions contemplated by the Stockholder Transaction Documents or the
Additional Purchase Agreements shall have been issued and remain in effect.
SECTION 6. STOCKHOLDER CLOSING CONDITIONS
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The obligations of the Stockholder to effect the transactions
contemplated by this Agreement shall be subject to the satisfaction on or prior
to the Closing Date of the following conditions, any one or more of which
(except for the conditions set forth in Section 6.4 and Section 6.5) may be
waived in writing by the Company in accordance with Section 8.4 hereof:
6.1. Representations and Warranties
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The representations and warranties of each Purchaser contained in the
Stockholder Transaction Documents shall be true in all material respects on and
as of the Closing Date (except to the extent any such representation and
warranty speaks as to an earlier date, in which event it shall be true and
correct in all material respects as of such earlier date) as though such
representations and warranties were made at and as of such date,
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except as otherwise affected by the transactions contemplated hereby.
6.2. Compliance with Agreement
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Each Purchaser shall have performed and complied in all material
respects with all agreements, covenants and conditions contained in the
Stockholder Transaction Documents which are required to be performed or complied
with by it prior to or on the Closing Date.
6.3. Purchasers' Certificate
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The Stockholder shall have received a certificate from Purchasers,
dated the Closing Date, signed by duly authorized representatives of Purchasers,
certifying that the conditions specified in the foregoing Sections 6.1 and 6.2
hereof have been fulfilled.
6.4. Expiration or Termination of Waiting Period under HSR Act
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Any waiting period (and any extension thereof) under the HSR Act
applicable to the transactions contemplated by this Agreement shall have expired
or been terminated.
6.5. Injunction
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No preliminary or permanent injunction or other order by any federal
or state court in the United States which prevents the consummation of the
transactions contemplated hereby shall have been issued and remain in effect.
SECTION 7. RECOVERY OF FEES
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Any party hereto who shall obtain a final judgment in a court of
competent jurisdiction for the payment of damages by another party hereto for a
breach of this Agreement shall be entitled to recover reasonable attorneys' fees
and court costs incurred in connection with the obtaining of such judgment.
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SECTION 8. TERMINATION, AMENDMENT AND WAIVER
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8.1. Termination
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This Agreement may be terminated at any time prior to the Closing,
whether before or after approval of the Company Voting Matters (as defined) at
the Company Vote:
(a) By mutual written consent of the Stockholder and Purchasers; or
(b) (i) By Purchasers if any of the conditions specified in Section 5
have not been satisfied or waived by Purchasers at such time as such condition
is no longer capable of satisfaction including the failure to obtain any
required approval of the Company's stockholders at the Company Vote or at any
adjournment thereof (provided Purchasers are not otherwise in material breach of
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their representations, warranties, covenants or agreements under the Transaction
Documents); or (ii) by the Stockholder if any of the conditions specified in
Section 6 have not been satisfied or waived by the Stockholder at such time as
such condition is no longer capable of satisfaction including the failure to
obtain any required approval of the Company's stockholders at the Company Vote
or at any adjournment thereof (provided the Stockholder is not otherwise in
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material breach of its representations, warranties, covenants or agreements
under the Stockholder Transaction Documents); or
(c) By either Purchasers or the Stockholder if any Governmental
Entity of competent jurisdiction shall have issued a final permanent order
enjoining or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement or rendering the conditions to closing incapable
of being satisfied, and in any such case the time for appeal or petition for
reconsideration of such order shall have expired without such appeal or petition
being granted; or
(d) By Purchasers if, without any material breach by Purchasers of
their obligations under this Agreement or any other Transaction Document to
which it is a party, the transactions contemplated hereby shall not have been
consummated on or before June 30, 1999 (the "Expiration Date") unless the sole
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reason for the failure to consummate the transactions contemplated hereby by
such date is the nonfulfillment of the conditions specified in Section 7.2 of
the Company Purchase Agreement, in which case the
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Expiration Date shall be extended to September 30, 1999 (the "Extended
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Expiration Date"); or
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(e) By the Stockholder if, without any material breach by the
Stockholder of its obligations under any of the Stockholder Transaction
Documents, the transactions contemplated hereby shall not have been consummated
on or before the Expiration Date or, if applicable, the Extended Expiration
Date; or
(f) By the Stockholder if there shall be a material breach of any of
Purchasers' representations, warranties or covenants in any of the Stockholder
Transaction Documents, which breach cannot be or has not been cured within ten
days of the receipt of written notice thereof; or
(g) By Purchasers if there has been a material breach of any of the
Stockholder's representations, warranties, covenants or agreements set forth in
any of the Stockholder Transaction Documents, which breach cannot be or has not
been cured within ten days of the receipt of written notice thereof; or
(h) By Purchasers, if (i) the Board of Directors of the Company (the
"Board") shall withdraw, modify or change its recommendation or approval in
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respect of the Company Purchase Agreement or the Company Voting Matters in a
manner adverse to Purchasers, (ii) the Board shall have recommended any proposal
other than by Purchasers in respect of a Takeover Proposal, (iii) the Company
shall have exercised a right with respect to a Takeover Proposal and shall,
directly or through its representatives, continue discussions with any third
party concerning such Takeover Proposal for more than fifteen Business Days
after the date of receipt of such Takeover Proposal, (iv) a Takeover Proposal
that is publicly disclosed shall have been commenced or communicated to the
Company which contains a proposal as to price (without regard to whether such
proposal specifies a specific price or a range of potential prices) and the
Company shall not have rejected such proposal within fifteen Business Days from
the date such Takeover Proposal was communicated to the Company (provided, that
such Takeover Proposal shall be deemed to have been communicated to the Company
on such date as it shall have been disclosed in a filing with the Securities and
Exchange Commission by the party making such Takeover Proposal) or (v) any
Person or group (as defined in
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Section 13(d)(3) of the Exchange Act) other than Purchasers or any of their
respective subsidiaries or affiliates shall have become the beneficial owner of
more than 15% of the outstanding shares of Company Common Stock (either on a
primary or a fully diluted basis); provided, however, that with regard to a
-------- -------
Person that owns more than 15% of the outstanding shares of Company Common Stock
on the date hereof, this provision shall be triggered by such Person becoming
the beneficial owner of an additional 5% of the outstanding shares of Company
Common Stock (either on a primary or a fully diluted basis); or
(i) Subject to the terms of the Voting and Option Agreement, by the
Stockholder if the Company Purchase Agreement is terminated.
8.2. Effect of Termination
---------------------
In the event of termination of this Agreement as provided in Section
8.1 hereof, written notice thereof shall forthwith be given to the other parties
specifying the provision hereof pursuant to which such termination is made, and
this Agreement shall forthwith become null and void and there shall be no
liability on the part of Purchasers or the Stockholder or their respective
officers, directors or partners; provided that nothing herein shall relieve any
--------
party from liability for any breach of this Agreement.
8.3. Amendment
---------
This Agreement may be amended by the parties hereto, by or pursuant to
action taken by Purchasers and the Stockholder. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
8.4. Waiver
------
At any time prior to the Closing, the parties hereto, by or pursuant
to action taken by Purchasers and the Stockholder, may (i) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties of the
other parties contained herein or in any documents delivered pursuant hereto by
the other parties and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or
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waiver shall be valid if set forth in an instrument in writing signed on behalf
of such party.
SECTION 9. INTERPRETATION OF THIS AGREEMENT
--------------------------------
9.1. Terms Defined
-------------
As used in this Agreement, the following terms have the respective
meanings set forth below or set forth in the Section hereof following such term:
Additional Purchase Agreements: shall mean the Company Purchase
------------------------------
Agreement and the Founders Purchase Agreement.
Business Day: shall mean a day other than a Saturday, Sunday or other
------------
day on which banks in the States of New York or California are not required or
authorized to close.
Company Vote: shall mean a meeting of or solicitation of consents from
------------
the stockholders of the Company to be convened as promptly as practicable after
the date of this Agreement.
Company Voting Matters: shall have the meaning set forth in the
----------------------
Company Purchase Agreement.
FCC: shall mean the Federal Communications Commission.
---
Flemings: shall mean Xxxxxxx US Discovery Fund III, L.P., a Delaware
--------
limited partnership, and Xxxxxxx US Discovery Offshore Fund III, L.P., a Bermuda
limited partnership, collectively.
Flemings Conversion Agreement: shall mean the Preferred Stock
-----------------------------
Conversion and Stockholders Agreement, dated as of the date hereof, between the
Company, Flemings and Purchasers.
Founders: shall mean Xxxx X. Xxxxxx, Xxxxx X. Xxxxxx, Xxxxxx Xxxxxx
--------
and the Estate of Xxxx X. Xxxxx.
Founders Purchase Agreement: shall mean the Stock Purchase Agreement,
---------------------------
dated as of the date hereof, between Purchasers and the Founders, substantially
in the form of Exhibit C hereto.
Governmental Entity: shall mean any United States or international (a)
-------------------
federal, state, county, local or municipal
-15-
government or administrative agency or political subdivision thereof, (b) court
or administrative tribunal, (c) non-governmental agency, tribunal or entity that
is vested by a governmental agency with applicable jurisdiction, or (d)
arbitration tribunal or other non-governmental authority with applicable
jurisdiction.
Lock-up Agreements: shall mean the Lock-up Agreements, dated as of
------------------
January 15, 1997, by and between Xxxxxx Xxxx LLC and each of the following
Persons: Xxxxxx Xxxxxxx and Xxxxxx Xxxxx.
Person: shall mean an individual, partnership, joint-stock company,
------
corporation, limited liability company, trust or unincorporated organization,
and a Governmental Entity.
Securities Act: shall mean the Securities Act of 1933, as amended.
--------------
Stockholder Transaction Documents: shall mean this Agreement and the
---------------------------------
Voting and Option Agreement.
subsidiary: shall mean any (a) Person of which the Company (or other
----------
specified Person) shall own directly or indirectly through a subsidiary, a
nominee arrangement or otherwise (i) at least a majority of the outstanding
capital stock (or other shares of beneficial interest) or (ii) at least a
majority of the partnership, membership, joint venture or similar interests, or
(b) in which the Company (or other specified Person) is a general partner or
joint venturer. For the sake of clarity, Cinram-POP DVD Center LLC, a California
limited liability company in which the Company holds a 49% membership interest,
shall not be deemed to be a subsidiary of the Company.
Takeover Proposal: shall mean any tender or exchange offer involving
-----------------
the Company, any proposal for a merger, consolidation or other business
combination involving the Company, any proposal or offer to acquire in any
manner a greater than 15% equity interest in, or a significant portion of the
business or assets of, the Company (other than immaterial or insubstantial
assets or inventory in the ordinary course of business or assets held for sale),
any proposal or offer with respect to any recapitalization or restructuring with
respect to the Company or any proposal or offer with respect to any other
transaction similar to any of the foregoing with respect to the
-16-
Company other than pursuant to the transactions to be effected pursuant to this
Agreement or the Additional Purchase Agreements.
Transaction Documents: shall mean this Agreement, the Additional
---------------------
Purchase Agreements, the Voting and Option Agreement, the Voting Agreements, the
Registration Rights Agreement (as defined in the Company Purchase Agreement) and
the Flemings Conversion Agreement.
TSP: shall mean Technical Service Partners L.P., a Delaware limited
---
partnership.
Voting Agreements: shall mean the Voting Agreements, dated as of the
-----------------
date hereof, by and among each of (i) Xxxxxxx, TSP and Purchasers and (ii)
Flemings and Purchasers, substantially in the forms of Exhibit D-1 and Exhibit
----------- -------
D-2.
---
Voting and Option Agreement: shall mean the Voting and Option
---------------------------
Agreement, dated as of the date hereof, among Purchasers and TSP, substantially
in the form of Exhibit E hereto.
---------
9.2. Directly or Indirectly
----------------------
Where any provision in this Agreement refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person.
9.3. Governing Law
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.
9.4. Paragraph and Section Headings
------------------------------
The headings of the sections and subsections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
thereof.
SECTION 10. MISCELLANEOUS
-------------
10.1. Survival of Representations and Warranties
------------------------------------------
All statements contained in any certificate or other instrument
executed and delivered by any party pursuant to this
-17-
Agreement or in connection with the transactions contemplated hereby shall be
deemed representations and warranties of such Person hereunder. All
representations and warranties made by the parties hereto in this Agreement or
pursuant hereto shall survive the Closing hereunder and any investigation at any
time made by or on behalf of such party; provided, however, that no party shall
-------- -------
commence any action against the other parties hereto in respect of any provision
of this Agreement at any time subsequent to the date eighteen (18) months after
the Closing Date. All covenants and agreements set forth in this Agreement shall
survive the Closing in accordance with their terms.
10.2. Notices
-------
(a) All communications under this Agreement shall be in writing and
shall be delivered by hand or facsimile or mailed by overnight courier or by
registered mail or certified mail, postage prepaid, in each case to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice, except that notices of changes of address shall be
effective upon receipt):
(1) if to any of Purchasers:
Warburg, Xxxxxx Equity Partners, L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
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(2) if to the Stockholder:
Technical Services Partners, L.P.
c/o Steinhardt Partners
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Facsimile:
With copies to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
and
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-2007
Attention: Xxxx X. Xxxxxxx, Esq. and
Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) Any notice so addressed shall be deemed to be given: if
delivered by hand or facsimile, on the date of such delivery; if mailed by
courier, on the first business day following the date of such mailing; and if
mailed by registered or certified mail, on the third business day after the date
of such mailing.
(c) Any approvals or consents required to be granted by Purchasers
under this Agreement may be granted by Xxxxx X. Xxxxxxxx acting on behalf of,
and with full authority with respect to, Purchasers.
10.3. Fees; Expenses
--------------
All costs, fees and expenses incurred in connection with the
Stockholder Transaction Documents and the transactions contemplated thereby
shall be paid by the party incurring such costs and expenses.
-19-
10.4. Publicity
---------
So long as this Agreement is in effect, Purchasers and the Stockholder
shall consult with each other and the Company (which is an express third party
beneficiary of this section) in issuing any press release or otherwise making
any public statement with respect to the transactions contemplated by this
Agreement, and neither of them shall issue any press release or make any public
statement prior to such consultation, except as may be required by law or
applicable stock exchange rules. The commencement of litigation relating to this
Agreement or the transactions contemplated hereby or any proceedings in
connection therewith shall not be deemed a violation of this Section 10.4.
10.5. Specific Performance
--------------------
The parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any state or federal court sitting in the
State of New York, this being in addition to any other remedy to which they are
entitled at law or in equity.
10.6. Submission to Jurisdiction
--------------------------
With respect to any suit, action or proceeding initiated by a party to
this Agreement arising out of, under or in connection with this Agreement or any
of the other Transaction Documents, the Stockholder and Purchasers each hereby
submit to the exclusive jurisdiction of any state or federal court sitting in
the State of New York and irrevocably waive, to the fullest extent permitted by
law, any objection that they may now have or hereafter obtain to the laying of
venue in any such court in any such suit, action or proceeding. The Stockholder
and each Purchaser agree that, within 14 days of the date of this Agreement, it
will appoint and designate CT Corporation System in the City of New York, New
York located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, or such other Person as may
be satisfactory to the other party, as its agent to receive process in any such
suit, action or proceeding and agrees that service of process on such agent
shall be deemed to be in every respect effective
-20-
service of process on it in any such suit, action or proceeding and waives all
claim of error by reason of such service.
10.7. Reproduction of Documents
-------------------------
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by Purchasers on the Closing Date (except for
the certificates evidencing the Subject Shares themselves), and (c) any
certificates and other information previously or hereafter furnished to
Purchasers, may be reproduced by Purchasers by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process and
Purchasers may destroy any original document so reproduced. Each party hereto
agrees and stipulates that any such reproduction shall be admissible in evidence
as the original itself in any judicial or administrative proceeding (whether or
not the original is in existence and whether or not such reproduction was made
by Purchasers in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
10.8. Successors and Assigns
----------------------
Neither this Agreement nor any of the rights or obligations of any
party may be assigned without the prior written consent of the other parties,
except that Purchasers may, without such consent, assign this Agreement and any
of such rights and obligations to one or more of their affiliates unless such
assignment causes any representation or warranty to be untrue or incorrect in
any material respect or unless such assignment shall materially delay the
Closing. Any such assignment shall not, however, act as a release of the
assigning Person. Subject to the foregoing, this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, and no other Person shall have any right, benefit or obligation
hereunder.
10.9. Entire Agreement; Amendment and Waiver
--------------------------------------
This Agreement and the other Stockholder Transaction Documents
constitute the entire understandings of the parties hereto and supersede all
prior agreements or understandings with respect to the subject matter hereof
among such parties. This
-21-
Agreement may be amended, and the xx xxxxxxxx of any term of this Agreement may
be waived, with (and only with) the written consent of the Stockholder and
Purchasers .
10.10. Severability
------------
In the event that any part or parts of this Agreement shall be held
illegal or unenforceable by any court or administrative body of competent
jurisdiction, such determination shall not effect the remaining provisions of
this Agreement which shall remain in full force and effect.
10.11. Limitation on Enforcement of Remedies
-------------------------------------
Each party hereby agrees that it will not assert against the limited
partners of the other party any claim it may have under this Agreement or any
other Stockholder Transaction Document by reason of any failure or alleged
failure by such other party to meet its obligations hereunder or thereunder.
10.12. Simultaneous Effectiveness
--------------------------
This Agreement and each of the other Transaction Documents shall (i)
be executed simultaneously and at such time shall be valid and binding
obligations of each of the parties and signatories thereto and (ii)
simultaneously be consummated at the Closing.
10.13. Counterparts
------------
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which together shall be considered
one and the same agreement.
[The remainder of this page is intentionally left blank.]
-22-
IN WITNESS WHEREOF, Purchasers and the Stockholder have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
WARBURG, XXXXXX EQUITY PARTNERS, L.P.
By: Warburg, Xxxxxx & Co.,
General Partner
By:___________________________________
Name:
Title:
WARBURG, XXXXXX NETHERLANDS EQUITY
PARTNERS I, C.V.
By: Warburg, Xxxxxx & Co.,
General Partner
By:____________________________________
Name:
Title:
WARBURG, XXXXXX NETHERLANDS EQUITY
PARTNERS II, C.V.
By: Warburg, Xxxxxx & Co.
General Partner
By:____________________________________
Name:
Title:
S-1
WARBURG, XXXXXX NETHERLANDS EQUITY
PARTNERS III, C.V.
By: Warburg, Xxxxxx & Co.,
General Partner
By:___________________________________
Name:
Title:
TECHNICAL SERVICES PARTNERS, L.P.
By: Technical Service Holding
By:_____________________________________
Name:
Title:
S-2
