TERMINATION OF AGREEMENT AND MUTUAL RELEASE
TERMINATION
OF AGREEMENT AND MUTUAL RELEASE
This
Termination of Agreement and Mutual Release (this “Agreement”) is made and
entered into as of the 5th
day of
September 2007 by and between, on the one hand, AVP, Inc. (“AVP”) and, on the
other hand, Shamrock Capital Growth Fund II, L.P. (“Shamrock Capital”), AVP
Holdings, Inc. (“AVP Holdings”) and AVP Acquisition Corp. (“AVP Acquisition” and
together with AVP Holdings and Shamrock Capital, collectively “Shamrock”).
A.AVP,
AVP
Holdings and AVP Acquisition are parties to that certain Agreement and Plan
of
Merger dated April 5, 2007 (the “Merger Agreement”); and
B. The
Parties wish to fully and finally terminate all obligations each has to the
other under the Merger Agreement and to release all claims that they may have
against each other.
NOW,
THEREFORE, based on the foregoing and in consideration for the covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties, and each of them,
agree as follows:
1. Definitions.
As used
in this Agreement, the following terms shall have the meanings
indicated:
a. “AVP
Releasees” refers to and includes AVP and each and every one of its past and
present officers, directors, stockholders, shareholders, partners, members,
affiliates, independent contractors, agents, representatives, employees,
attorneys, fiduciaries, trustees, administrators and successors.
b. “AVP
Releasors” refers to and includes AVP and each and every one of its past and
present officers, directors, stockholders, shareholders, partners, members,
affiliates, independent contractors, agents, representatives, employees,
attorneys, fiduciaries, trustees, administrators and successors.
c. “Claims”
refers to and includes all claims, demands, rights, causes of action, rights
of
action, rights of subrogation, rights of indemnity, rights to reimbursement,
rights to payment, damages, liens and remedies of every kind or nature
whatsoever, whether at law, in equity, or otherwise, and whether the same are
or
any of the same is known or unknown to the Parties at the time of their
execution of this Agreement.
d. “Obligations”
refers to and includes all obligations, duties, liabilities, damages, costs,
fees (including, but without limitation thereto, attorneys' fees), expenses
and
debts of every kind and nature whatsoever, whether the same are or any of the
same is known or unknown to the Parties at the time of their execution of this
Agreement.
e. “Parties”
refers to AVP and Shamrock.
f. “Party”
refers to any of AVP or Shamrock.
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g. “Released
Parties” refers to the AVP Releasees and the Shamrock Releasees.
h. “Releasors”
refers to the AVP Releasors and the Shamrock Releasors.
i. “Shamrock
Releasees” refers to and includes Shamrock Capital, AVP Holdings and AVP
Acquisition and each and every one of their respective past and present
officers, directors, stockholders, shareholders, partners, members, affiliates,
independent contractors, agents, representatives, employees, attorneys,
fiduciaries, trustees, administrators and successors.
j. “Shamrock
Releasors” refers to and includes Shamrock Capital, AVP Holdings and AVP
Acquisition and each and every one of their respective past and present
officers, directors, stockholders, shareholders, partners, members, affiliates,
independent contractors, agents, representatives, employees, attorneys,
fiduciaries, trustees, administrators and successors.
2. General.
a. It
is
understood that this Agreement does not constitute an admission by any of the
Parties of any wrongdoing whatsoever.
b. The
Parties have agreed to enter into this Agreement for the purpose of fully and
finally (i) terminating the Merger Agreement and all Obligations each Party
has
to the other arising out of, resulting from or relating to the Merger Agreement
or the transaction contemplated therein (ii) releasing all Claims each Party
may
have against the other arising out of, resulting from or relating to the Merger
Agreement or the transaction contemplated therein.
3. Termination.
a. The
Parties hereby terminate in all respects the Merger Agreement and all
Obligations each Party has to the other arising out of, resulting from or
relating to the Merger Agreement or the transaction contemplated
therein.
b. AVP
shall
pay to Shamrock Capital upon the execution of this Agreement the sum of Two
Hundred Forty Thousand Dollars ($240,000) in cash, wired to an account to be
designated by Shamrock Capital.
c. Upon
the
earlier of (i) the date one year after the date hereof, (ii) the date upon
which
AVP consummates a transaction or series of related transactions pursuant to
which AVP raises at least Five Million Dollars ($5,000,000) and (iii) any
transaction or series of related transactions pursuant to or as a consequence
of
which any person or group of related persons in the aggregate acquire(s) (x)
capital stock of AVP possessing the voting power to elect a majority of the
board of directors of AVP (whether by merger, consolidation, reorganization,
combination, sale or transfer of AVP’s capital stock), or (y) all or
substantially all of AVP’s assets determined on a consolidated basis. AVP shall
pay to Shamrock Capital One Hundred Fifty Thousand Dollars ($150,000) in cash,
wired to an account to be designated by Shamrock Capital. If AVP does not pay
when due the amount required by this Section 3(c), then interest (calculated
on
the basis of a 360-day year and the actual number of days elapsed) will accrue
at the rate of twenty percent (20%) per annum, compounded quarterly, on the
unpaid amount.
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d. Shamrock
shall upon the execution of this Agreement immediately cease all uses of the
name “AVP” and shall, within ten (10) days of the execution of this Agreement,
cause AVP Holdings and AVP Acquisition to change their respective names to
eliminate the use of “AVP”.
4. Releases.
a. The
AVP
Releasors do hereby fully, finally and forever release and discharge the
Shamrock Releasees, and each of them, from any and all Claims, known or unknown,
at law or in equity, which the AVP Releasors, or any of them, may have or
claimed to have had, against the Shamrock Releasees, and each of them, arising
at any time in the unlimited past to and including the date of this Agreement,
arising out of, resulting from or relating to the Merger Agreement or the
transaction contemplated therein.
b. The
Shamrock Releasors do hereby fully, finally and forever release and discharge
the AVP Releasees, and each of them, from any and all Claims, known or unknown,
at law or in equity, which the Shamrock Releasors, or any of them, may have
or
claimed to have had, against the AVP Releasees, and each of them, arising at
any
time in the unlimited past to and including the date of this Agreement, arising
out of, resulting from or relating to the Merger Agreement or the transaction
contemplated therein.
c. The
Releasors, and each of them, acknowledge that they have been advised by legal
counsel and are familiar with the provision of Section 1542 of the California
Civil Code, which provides as follows:
A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH
THE DEBTORS.
Being
aware of said Code section, the Releasors hereby expressly waive and relinquish
any rights or benefits they may have thereunder, as well as under any other
state or federal statutes or common law principles of similar
effect.
d. The
Releasors, and each of them, represent and warrant that they have not filed
any
action, charge, or Claim of any type against any of the Released Parties. The
Releasors, and each of them, also represent and warrant that they have not
and
will not assign any Claim that they might have or might have had against any
of
the Released Parties.
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e. Except
as
specifically set forth herein, the Parties, and each of them, represent and
warrant that they are not relying, and have not relied, on any statement,
representation, omission, warranty or promise of any kind or nature whatsoever
in entering into this Agreement and giving the releases contained herein.
f. The
releases contained herein shall not be deemed to release any of the Obligations
of the Parties specifically created by this Agreement.
5. Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors and assigns.
6. Amendment.
This
Agreement may not be amended or modified except by a writing signed by each
of
the Parties.
7. Applicable
Law.
This
Agreement shall in all respects be interpreted, construed and governed by and
under the laws of the State of Delaware, irrespective of its conflict of laws
rules.
8. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original and all of which taken together shall constitute one and
the
same instrument. Signatures by facsimile are as effective as original
signatures.
9. Competency
of Parties.
The
Parties, and each of them, acknowledge, warrant, represent and agree that in
executing and delivering this Agreement, they do so freely, knowingly and
voluntarily, that they had an opportunity to and did discuss its terms and
the
implications thereof with legal counsel, that they are fully aware of the
contents and effect thereof and that such execution and delivery is not the
result of any fraud, duress, mistake or undue influence whatsoever.
10. Authority.
Any
person or entity purporting to have the authority to enter into this Agreement
on behalf of or for the benefit of any other person or entity hereby warrants
that it has such authority.
11. Unknown
or Mistake in Facts.
It is
acknowledged and understood by the Parties that the facts with respect to this
Agreement as known or given at this time may hereafter turn out to be other
than
or different from such facts. The Parties therefore expressly assume the risk
of
the facts being different and agree that this Agreement shall be in all respects
effective and not subject to modification, termination or rescission,
notwithstanding any such difference in facts.
12. Non-Publicity
/ Non-Disparagement.
Each
Party shall not, orally or in writing, state or express anything disparaging
or
denigrating about the other Party to any other person, or state or express
to
any person anything disparaging or denigrating regarding their relationship
with
each other, the termination of that relationship, the Merger Agreement or
otherwise. Except as required by applicable federal or state law, neither Party
shall make any press or other public release respecting this Agreement or the
Merger Agreement without the prior written approval of the other Party, which
approval will not be unreasonably withheld or delayed. The Parties hereby agree
that AVP will promptly issue the press release attached as Exhibit
A
hereto.
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13. Entire
Agreement.
The
Parties, and each of them, acknowledge that this Agreement constitutes and
contains the entire agreement and understanding of the Parties concerning the
subject matter hereof and supersedes and replaces all prior negotiations,
understandings and proposed agreements, whether written or oral. The Parties,
and each of them, warrant that no other party or agent, representative or
attorney of any other Party has made any promise, representation or warranty
whatsoever not contained herein to induce them to execute this
Agreement.
14. Construction.
The
Parties acknowledge that the language of this Agreement shall be construed
as a
whole according to its fair meaning and not strictly for or against any of
the
Parties.
15. Headings.
The
headings in this Agreement are inserted for convenience only and shall not
be
deemed a part of or in any manner affect this Agreement or any provision
hereof.
16. Enforcement.
Should
any action be brought to enforce any of the terms or conditions of this
Agreement, the Parties and each of them agree that such action will be filed
in
the Court of Chancery of the State of Delaware. Upon the conclusion of the
dispute, the prevailing parties shall be entitled to recover all costs and
expenses incurred in the prosecution or defense of that action and in the
collection of any judgment obtained, including, but not limited to, attorneys'
fees. Except as provided in this paragraph, the parties shall bear their own
attorneys' fees and costs.
17. Severability.
Should
any part, term or provision of this Agreement be declared or determined by
any
court or other tribunal to be illegal, invalid or unenforceable, any illegal,
invalid or unenforceable part, term or provision shall be deemed stricken from
this Agreement and all of the other parts, terms and provisions of this
Agreement shall remain in full force and effect to the fullest extent permitted
by law.
18. Further
Assurances.
The
Parties shall perform in good faith such acts and to prepare and execute such
documents and stipulations as are reasonably required to perform the covenants
and satisfy the provisions of this Agreement.
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AVP,
INC.
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||
|
By:
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/s/ Xxxxxxx X. Benz | |
|
Name:
|
Xxxxxxx X. Benz | |
|
Title:
|
Executive Vice President and General Counsel | |
|
SHAMROCK
CAPITAL GROWTH FUND II, L.P.
|
||
|
By:
|
Shamrock Capital Partners II, L.L.C. | |
|
Its:
|
General Partner | |
|
By:
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/s/ Xxxxxx X. Xxxxxxx
|
|
|
Name:
|
Xxxxxx X. Xxxxxxx | |
|
Title:
|
Executive Vice President | |
|
AVP
HOLDINGS, INC.
|
||
|
By:
|
/s/ Xxxxxx X. Xxxxxxx | |
|
Name:
|
Xxxxxx X. Xxxxxxx | |
|
Title:
|
President | |
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AVP
ACQUISITION CORP.
|
||
|
By:
|
/s/ Xxxxxx X. Xxxxxxx | |
|
Name:
|
Xxxxxx X. Xxxxxxx | |
|
Title:
|
President | |
6
Exhibit
A
Press
Release
See
attached.
AVP
AND SHAMROCK TERMINATE MERGER AGREEMENT
LOS
ANGELES, CA (September 6, 2007) — AVP, Inc. (OTC Bulletin Board: AVPI) (“AVP”)
and AVP Holdings, Inc. (the “Shamrock Affiliate”), an affiliate of Shamrock
Capital Growth Fund II, L.P. (“Shamrock”), announced today that because of
strong opposition from many of the stockholders of AVP they are mutually
terminating their agreement under which the Shamrock Affiliate would acquire
all
of the outstanding stock of AVP and take AVP private.
“While
we
are disappointed that we were unable to conclude this transaction, we are very
optimistic about the future of the AVP and the tremendous opportunities
available to enhance AVP shareholder value,” said Xxxxxxx Xxxxxx, CEO of AVP.
“Many shareholders let us know that they felt the price to be received by the
shareholders did not accurately reflect what they saw as the true potential
of
AVP, and we listened. With our tremendous fan support and viewership, as well
as
strong sponsor support, our new winter tour, and a number of other exciting
new
projects, we will continue to increase the value and reach of AVP as the
preeminent volleyball organization and a top lifestyle brand, and do so as
a
public company.”
“We
have
had a strong start to the year with substantial revenue growth for the first
six
months. We have increased the number of Tour events and sponsorship
relationships and invested in the infrastructure necessary to support our growth
opportunities. We believe these results highlight the growth opportunities
that
exist for AVP and we look forward to growing the company in the future,”
concluded Xxxxxx.
On
April
5, 2007, AVP entered into an Agreement and Plan of Merger (the "Merger
Agreement") with the Shamrock Affiliate and AVP Acquisition Corp. (another
affiliate of Shamrock). Under the terms of the Merger Agreement, AVP Acquisition
Corp. was to be merged with and into AVP, with AVP continuing as the surviving
corporation. The transaction was expected to close in late September 2007 but
was subject to certain customary terms and conditions, including stockholder
approval. It had become apparent to both Shamrock and AVP that a substantial
number of the stockholders of AVP would not vote their shares to approve the
transaction. As a result, both parties decided to terminate the Merger Agreement
rather than risk substantial additional expenses related to proceeding with
the
transaction. AVP will not pay any “breakup fee” to Shamrock or any Shamrock
affiliates. It was agreed, however, that AVP will reimburse certain expenses
related to the transaction incurred by the Shamrock Affiliate.
Xxxxxx
X.
Xxxxxxx, a Managing Director of Shamrock, said, "We are disappointed that this
transaction will not close, but in light of the strong opposition from major
stockholders of AVP, it no longer made sense for AVP to assume the costs and
risks of moving forward." Xx. Xxxxxxx continued, "We wish the AVP and its
management great success in the future."
About
AVP, Inc.
AVP/Crocs
Pro Beach Volleyball Tour, Inc. is a leading lifestyle sports entertainment
company focused on the production, marketing and distribution of professional
beach volleyball events worldwide. AVP operates the industry’s most prominent
national touring series, the AVP/Crocs Pro Beach Volleyball Tour, which was
organized in 1983. Featuring more than 150 of the top American men and women
competitors in the sport, AVP is set to stage 18 events throughout the United
States in 2007. In 2004, AVP athletes successfully represented the United States
during the Olympics in Athens, Greece, winning gold and bronze medals, the
first
medals won by U.S. women in professional beach volleyball. For more information,
please visit xxx.xxx.xxx.
All
above-mentioned trademarks are the property of their respective
owners.
Some
of
the information in this press release may contain projections or other
forward-looking statements regarding future events or the future financial
performance of the Company. We wish to caution you that these statements involve
risks and uncertainties and actual results might differ materially from those
in
the forward-looking statements, if we receive less sponsorship and advertising
revenue than anticipated, or if attendance is adversely affected by unfavorable
weather. Event-related expenses, such as for the stadium, transportation and
accommodations, or security might be greater than expected; or marketing or
administrative costs might be increased by our hiring, not currently planned,
of
a particularly qualified prospect. Additional factors have been detailed in
the
Company’s filings with the Securities and Exchange Commission, including our
recent filings on Forms 10-KSB and 10-QSB.
Investor
Contacts:
MKR
Group, Inc.
Xxxxxxx
Xxxxxxx, Xxxxx Xxxxxxxx
(000)
000-0000
xxxx@xxx-xxxxx.xxx
