EXHIBIT 10.46
AGREEMENT
This AGREEMENT ("Agreement") is made and entered into as of this 17th
day of June, 1997 by and among EMPIRE OF CAROLINA, INC., a Delaware corporation
("Empire"), and WPG CORPORATE DEVELOPMENT ASSOCIATES IV, L.P. ("CDA IV"), WPG
CORPORATE DEVELOPMENT ASSOCIATES IV (OVERSEAS), LTD. ("CDA IV Overseas"), XXXXX,
XXXX & XXXXX, as trustee under Xxxxx Xxxxxxx XXX, Xxxxx X. Pfister, WEISS, XXXX
& XXXXX, as Trustee under Xxxx Xxxxxxxx XXX, WESTPOOL INVESTMENT TRUST PLC,
XXXXXX X. XXXXXXXX, XX., XXXXXXX XXXXXXX and GLENBROOK PARTNERS, L.P. (each a
"Releasor" and, collectively, the "Releasors").
RECITALS
A. Empire and the Releasors are parties to a Debenture Purchase
Agreement dated December 22, 1994 ("Debenture Purchase Agreement") and a
Registration Rights Agreement dated December 22, 1994 ("Registration Rights
Agreement"). The Debenture Purchase Agreement and the Registration Rights
Agreement are sometimes collectively referred to herein as the "WPG Agreements."
B. Pursuant to the WPG Agreements, Releasors are entitled, among other
things, to certain payments and registration rights.
C. Releasors desire to release Empire of its obligations and
liabilities under the WPG Agreements and to exchange their currently outstanding
9% convertible debentures in return for non-voting Class C Series Preferred
Stock of Empire in the event that Empire issues at least $11 million of Series A
Preferred Stock (the "Issuance") as contemplated by that certain Securities
Purchase Agreement, dated as of May 5, 1997, by and between HPA Associates, LLC,
EMP Associates LLC and Empire (the "Securities Purchase Agreement").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Upon the closing of the Issuance, Empire shall immediately deliver
to Releasors a certificate representing $15 million of newly issued, Class C
Series Preferred Stock of Empire pursuant to the form of Certificate of
Designation attached hereto as Exhibit 1 ("Class C Series Preferred Stock");
2. Upon receipt of, and in exchange for, the Class C Preferred Stock
set forth in paragraph 1 herein:
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a) Releasors will deliver to the Company all of the
convertible debentures issued pursuant to the
Debenture Purchase Agreement;
b) Releasors, for themselves and on behalf of their
agents, representatives, attorneys, successors or
assigns (collectively, "WPG Releasors"), hereby
fully and forever release and discharge Empire and
each and every one of its successors, predecessors
and assigns, as well as each and every one of their
past and present directors, officers, agents,
employees, attorneys, partners, trustees, divisions,
subsidiaries, and their successors, predecessors,
heirs and assigns from all manner of actions,
causes, causes of action, complaints, suits,
litigation, debts, liens, sums of money, accounts,
reckonings, bills, contracts, agreements, promises,
liabilities, damages, losses, costs, judgments,
attorneys' fees, claims and demands, whatsoever, in
law or in equity, whether known or unknown, which
Releasors now have, had or may hereafter have
arising out of, resulting from, relating to or based
upon facts, circumstances or events occurring in
connection with the WPG Agreements (except as set
forth in Section 2(c) below) or any of the
transactions or other matters expressly provided for
therein or expressly contemplated thereby;
including, but not limited to:
(i) any and all payments to Releasors
due pursuant to Section 2.5 of the
Debenture Purchase Agreement or the
convertible debentures issued
pursuant to the Debenture Purchase
Agreement;
(ii) any and all approval rights of
Releasors pursuant to Section 5.2 or
5.4 of the Debenture Purchase
Agreement;
(iii) any and all demand and "piggyback"
registration rights granted pursuant
to Section 1 of the Registration
Rights Agreement;
(iv) any and all rights to limit
registration rights or subsequent
registration rights granted pursuant
to Section 1 or 2 of the
Registration Rights Agreement; and
(v) any and all notice rights under the
WPG Agreements; and
c) Notwithstanding anything to the contrary set forth
herein, the indemnification provisions set forth in
Section 9.5.2 of the Debenture Purchase Agreement
shall survive and shall not be released by the
provisions of this Agreement except that the
provisions of such Section 9.5.2 shall not apply or
be applicable to any and all losses, claims,
damages, liabilities and expenses (including,
without limitation, reasonable fees and
disbursements of counsel) that arise (i) out of the
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transactions set forth in this Agreement or (ii) are
contemplated by the Securities Purchase Agreement.
3. Empire, for itself and on behalf of its agents, representatives,
attorneys, successors or assigns (collectively, "Empire Releasors"), hereby
fully and forever releases and discharges the Releasors and each and every one
of its successors, predecessors and assigns, as well as each and every one of
their past and present directors, officers, partners, trustees, agents,
employees, attorneys, divisions, subsidiaries, and their successors,
predecessors, heirs and assigns from all manner of actions, causes, causes of
action, complaints, suits, litigation, debts, liens, sums of money, accounts,
reckonings, bills, contracts, agreements, promises, liabilities, damages,
losses, costs, judgments, attorneys' fees, claims and demands, whatsoever, in
law or in equity, whether known or unknown, which Releasors now have, had or may
hereafter have arising out of, resulting from, relating to or based upon facts,
circumstances or events occurring in connection with the WPG Agreements or any
of the transactions or other matters expressly provided for therein or expressly
contemplated thereby.
4. The Company represents and warrants to the Releasors, after giving
effect to the transactions contemplated by this Agreement, each share of Class C
Series Preferred Stock will be duly authorized and validly issued fully paid and
nonassessable, and free and clear of any security interest, lien, pledge, or
adverse claim imposed by the Company.
5. This Agreement contains the entire agreement and understanding
concerning the subject matters hereof between the parties, and supersedes and
replaces all prior negotiations, proposed agreements and agreements, whether
written or oral, between the parties hereto with respect to the subject matter
hereof.
6. No change, amendment, alteration, modification, waiver or
termination of this Agreement, or any part thereof, shall be valid unless set
forth in writing and signed by or on behalf of all parties hereto.
7. This Agreement shall inure to the benefit of and be binding upon
Empire's and Releasors' respective successors and assigns.
8. From time to time, at the request of either of the parties to this
Agreement, without further consideration and within a reasonable period of time
after request hereunder is made, the other party hereby agrees to execute and
deliver any and all further documents and instruments and to do all other acts
that any of the parties to this Agreement may reasonably request which may be
necessary or appropriate to fully implement the provisions of this Agreement.
9. This Agreement may be executed in one or more counterparts, all of
which, when taken together, shall constitute one original Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
as of the date first above written.
WPG CORPORATE DEVELOPMENT EMPIRE OF CAROLINA, INC.
ASSOCIATES IV, L.P.
By: WPG PRIVATE EQUITY PARTNERS,
L.P., its sole General Partner By: /s/ Xxxxxxxx Xxxxxx
-----------------------------------
By: /s/ Xxxxxx Xxxxxxxxxx By: Xxxxxxxx Xxxxxx
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Its: Its: Vice President-General Counsel
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XXXXX, XXXX & XXXXX, as Trustee under WPG CORPORATE DEVELOPMENT
Xxxxx Xxxxxxx XXX ASSOCIATES IV (OVERSEAS), LTD.
WPG CDA IV (OVERSEAS) LTD.,
By: /s/ Xxxxxx Xxxxxxxxx GENERAL PARTNER
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Its:
-------------------------
By: /s/ illegible
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Its: Director
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XXXXX, XXXX & XXXXX, as Trustee under WESTPOOL INVESTMENT TRUST PLC
Xxxx Xxxxxxxx XXX
By: /s/ Xxxxxx Xxxxx
-----------------------------------
By: /s/ Xxxxxx Xxxxxxxxx Its: Investment Director
----------------------------- ------------------------------
Its:
-------------------------
GLENBROOK PARTNERS, L.P.
/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxx
By: /s/ Pico Xxxxx
-----------------------------
Its: Executive Vice President /s/ Xxxxxx X. Xxxxxxxx, Xx.
------------------------ -----------------------------------
Xxxxxx X. Xxxxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx Xxxxxxx
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