Exhibit 10.73
HTG CORP.
0000 Xxxxxxxx Xxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
November 29, 2001
WestPoint Xxxxxxx Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Re: HTG Falcon LLC
Gentlemen:
HTG Corp., a Georgia corporation ("HTG Corp.") and WestPoint
Xxxxxxx Inc., a Delaware corporation ("WXS"), are parties to that certain
Membership Interest Purchase Agreement dated February 4, 2000 ("Membership
Agreement") concerning HTG Falcon LLC, a Georgia limited liability company (the
"LLC").
Inasmuch as the Falcon 2000 aircraft described in the
Membership Agreement has been sold, HTG Corp. and WXS have agreed to cause the
LLC to dispose of the remaining assets of the LLC, and WXS has requested that
HTG Corp. acknowledge its agreement to restore a negative balance in its capital
account in the LLC and to make certain other payments to the LLC (such negative
balance and such other payments, in the aggregate, the "Account Balance"). HTG
Corp. acknowledges and agrees that the Account Balance is $4,541,692. HTG Corp.
further acknowledges and agrees that any and all payments made to reduce such
Account Balance, together with interest paid thereon, shall be immediately
distributed to WXS. The parties acknowledge that any proceeds received by the
LLC upon the disposition of its remaining assets, including the shares of
Aviation Properties, Incorporated (or the hangar property leased by it) (the
"API Asset"), shall be paid to WXS and, upon such payment, shall reduce the
Account Balance by one-half of the full amount of such proceeds paid to WSX.
Upon the sale or other disposition of the API Asset or any other asset of the
LLC, one half of the loss of the API Asset (based on a $1.5 million basis) or
any other asset shall be added to increase the amount of the Account Balance at
the time of such sale or disposition. The parties hereto agree that any proceeds
received by HTG Corp. or the LLC in respect of the Aircraft Purchase Agreement
(Number 2000-00-12121), dated January 25, 2001, by and between Dassault Falcon
Jet Corp. and the LLC relating to a Falcon 2000EX shall be paid to WXS and, upon
such payment, shall reduce the Account Balance by the full amount of such
proceeds.
HTG Corp. agrees to pay the principal sum equal to the Account
Balance together with interest on so much thereof as is from time to time
outstanding and unpaid, from the date hereof, at the prime rate of interest in
effect from time to time plus three and one-half percent
WestPoint Xxxxxxx Inc.
November 29, 2001
Page 2
(3.5%) per annum. HTG Corp. agrees to pay the Account Balance in installments,
with $1 million due on the first anniversary of the date of this agreement, $2
million due on the second anniversary of the date of this agreement and the
balance of the Account Balance due on the third anniversary date of this
agreement. Any credits or prepayments to the Account Balance will be applied to
reduce ratably the then remaining installments. Interest shall accrue and be
payable on each anniversary of the date hereof.
To assure payment of all sums due hereunder and the
performance of all other obligations to be performed hereunder, Vytech Holdings,
Inc., a Delaware corporation ("Vytech"), has agreed to irrevocably and
unconditionally guarantee the prompt payment when due, whether by acceleration
or otherwise, of the sums due hereunder, and the unpaid interest due thereon,
and the performance of all obligations to be performed hereunder, pursuant to a
certain Guaranty Agreement, of even date herewith.
Xxxxxxxx X. Xxxxx, Xx. is the sole shareholder of both HTG
Corp. and Vytech. Vytech is the record and beneficial holder of all of the
outstanding capital securities of Vytech Midco, Inc., a Delaware corporation
("Midco"), and Midco is the sole shareholder of Vytech Industries, Incorporated,
a Delaware corporation ("Vytech Industries," and together with Vytech and Midco,
the "Vytech Entities"). Vytech Industries does not have any subsidiaries. HTG
Corp. has provided WXS with a business appraisal dated October 12, 2001 (the
"Appraisal") by Xxxxxxxx Xxxxx Xxxxxx & Zurkin ("Xxxxxxxx") of Vytech, which
takes into account all of the existing debt of the Vytech Entities. HTG Corp.
covenants and agrees that, until the entire Account Balance and all unpaid
interest accrued thereon has been paid and all other obligations to be performed
hereunder have been performed, it will provide WXS, within fifteen (15) days
after the end of each of WXS's fiscal quarters beginning with the fiscal quarter
ending December 31, 2001 an update to the Appraisal (an "Update"). HTG Corp.,
Vytech, Vytech Midco, Inc. and Vytech Industries, Inc. each covenants and agrees
to permit WXS, so long as the Account Balance or any portion thereof remains
outstanding, from time to time at its option, to conduct business appraisals of
Vytech. If any appraisal conducted by WXS pursuant to the preceding sentence
reflects a value of Vytech that is less than the Required Value (defined below),
and HTG Corp. disputes this appraisal, each of WXS and HTG Corp. shall select an
independent investment banking or appraisal firm (the "Independent Appraiser"),
which firm shall conduct an appraisal of Vytech within fifteen (15) days after
its selection, and which shall determine the value of Vytech for the purposes
described herein.
In the event that an Update or an appraisal conducted by an
Independent Appraiser reflects a value of Vytech that is less than the Required
Value, Xxxxxxxx X. Xxxxx, Xx., as the sole shareholder of Vytech, hereby agrees
to provide support to the extent necessary, and to include without limitation,
contributions to the capital of Vytech in cash or property, within fifteen (15)
days after any such appraisal, so as to permit Vytech to maintain the Required
Value. As used herein, the Required Value means two times the then outstanding
Account Balance and all accrued but unpaid interest thereon. Until the entire
Account Balance and all
WestPoint Xxxxxxx Inc.
November 29, 2001
Page 3
unpaid interest accrued thereon has been paid and all other obligations to be
performed hereunder have been performed, Xxxxxxxx X. Xxxxx, Xx. shall deliver to
WXS, within fifteen (15) days after the end of each of WXS's fiscal quarters
beginning with the fiscal quarter ending December 31, 2001, a certificate
certifying that Vytech, Midco and Vytech Industries are each in compliance with
the covenants contained in the Guaranty Agreement of even date herewith (the
"Guaranty") made by Vytech in favor of WXS. On the date hereof, counsel to HTG
Corp. shall deliver to WXS an opinion to the effect that (i) the Vytech Entities
have the corporate power and authority to enter into this Agreement and the
Guaranty, (ii) this Agreement and the Guaranty have been duly authorized by all
necessary corporate action on the part of each of the Vytech Entities and have
been duly executed and delivered and are valid and binding agreements of the
Vytech Entities, enforceable in accordance with their terms, and (iii) the
performance of this Agreement and the Guaranty and the consummation of the
transactions herein and therein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any agreement or instrument to which any of the Vytech Entities is a party or by
which their properties are bound. The parties hereto expressly agree that (i)
upon the breach of any covenant contained in this Agreement or the Guaranty or
(ii) if Xxxxxxxx X. Xxxxx, Xx. does not provide support to restore the Required
Value as provided above, then the entire amount of the Account Balance then
outstanding, including all unpaid interest accrued thereon, shall become due and
payable, upon a demand by WXS for payment. WXS agrees to release Vytech from its
guarantee provided herein upon the substitution therefor with other financial
assurances deemed sufficient by WXS in its sole discretion.
Further, WXS agrees that the Account Balance, or any interest
thereon, may be paid, at the election of HTG Corp., by the surrender by Xxxxxxxx
X. Xxxxx, Xx. of shares of common stock of WXS, valued at the then current
market price for such shares, or options to acquire shares of common stock of
WXS, valued using an option valuation method then approved by WXS for this
purpose. In addition, WXS agrees that the Account Balance, or any interest
thereon, may be paid by surrender by Xxxxxxxx X. Xxxxx, Xx. of any vested
amounts contained in any retirement plans or accounts of Xx. Xxxxx valued using
an actuarial methodology reasonably approved by WXS for this purpose.
In addition, to assure payment of all sums due hereunder,
should Xx. Xxxxx retire his principal personal financial obligations which
currently restrict his ability to provide WXS with a first security interest in
property to secure adequately the Account Balance, and is thereupon able to
grant such a security interest, he will do so immediately. Xx. Xxxxx hereby
represents and agrees that he will use his best efforts to have such obligations
retired and to grant such a security interest to WXS expeditiously.
On the date hereof, HTG Corp. and Xxxxxxxx X. Xxxxx, Xx. will
deliver, and will cause each of their affiliates and employees to deliver, to
WXS all books and records relating to the LLC, which books and records will
remain in the possession of, and be kept by, WXS from and after the date hereof.
HTG Corp. and Xxxxxxxx X. Xxxxx, Xx. agree and acknowledge that
WestPoint Xxxxxxx Inc.
November 29, 2001
Page 4
on and after the date hereof, only an officer of WXS designated by the WXS Board
of Directors will be authorized to sign on behalf of WXS any consent action,
agreement or other document authorizing or approving any action by the LLC.
Please indicate your agreement below.
Sincerely,
HTG CORP.
By: /s/ Xxxxxxxx X. Xxxxx, Xx.
------------------------------------
Xxxxxxxx X. Xxxxx, Xx., President
Agreed and Acknowledged:
WESTPOINT XXXXXXX INC.
By: /s/ Xxxxxx Xxxxx Sears
---------------------------------
VYTECH HOLDINGS, INC.
By: /s/ Xxxxxxxx X. Xxxxx, Xx.
---------------------------------
Xxxxxxxx X. Xxxxx, Xx., President
VYTECH MIDCO, INC.
By: /s/ Xxxxxxxx X. Xxxxx, Xx.
---------------------------------
Xxxxxxxx X. Xxxxx, Xx., President
VYTECH INDUSTRIES, INC.
By: /s/ Xxxxxxxx X. Xxxxx, Xx.
---------------------------------
Xxxxxxxx X. Xxxxx, Xx., President
/s/ Xxxxxxxx X. Xxxxx, Xx.
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XXXXXXXX X. XXXXX, XX., individually
