EXHIBIT 99.1
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AGREEMENT FOR PURCHASE AND SALE OF SHARES
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This Agreement for Purchase and Sale of Shares (the
"Agreement") is made and entered into as of the 21st day of April, 2003, by and
between Xxxxxxx Xxxxx and Xxxxx Xxxxxxx, as Co-Trustees of the Xxxxx Family
Trust ("Seller"), Xxxxxxx Xxxxx and Xxxxx Xxxxxxx, individually (collectively,
"Xxxxx"), and Xxxxxxx Xxxxxx ("Buyer"), a key employee of Signature Eyewear,
Inc., a California corporation (the "Company"), with reference to the following
facts and objectives:
(i) Seller owns 2,075,337 shares of the common stock of the
Company, which represents approximately 37.3% of the issued and outstanding
common stock of the Company, and the largest block of shares owned by a single
shareholder of the Company;
(ii) The Company is a publicly-held corporation, the shares of
which are traded on the Over the Counter Bulletin Board, but the Shares held by
Seller are unregistered;
(iii) The Company is insolvent, and is materially delinquent
in its obligations to many of its creditors, including its principal lender,
City National Bank;
(iv) The Company is in the process of arranging a financial
reorganization in order to forestall a bankruptcy filing by it or its creditors.
That reorganization includes, inter alia, renegotiating its outstanding trade
debt for immediate cash payment at a substantial discount, borrowing working
capital from unaffiliated third parties, arranging for a take-out lender to pay
off the Company's debt to City National Bank and to provide a debt structure
that the Company can perform, obtaining an infusion of new capital through the
issuance of convertible preferred stock, and obtaining investors to purchase the
control block of shares owned by Seller as part of installing new management
(collectively, the "Reorganization");
(v) Buyer is a participant in the foregoing reorganization as
a facilitator and as a key employee of the Company, and Buyer has agreed to
participate in the new management of the Company;
(vi) As a part of the Reorganization, Buyer has offered to
purchase 475,337 shares from Seller (the "Shares"), and Seller is willing to
sell the Shares to Buyer in order to facilitate the reorganization of the
Company and to incentivize Buyer to continue to assist in the management of the
Company, on the terms and conditions contained in this Agreement; and
(vii) The parties have agreed that, as additional
consideration for the transaction contemplated hereby, they will enter into a
mutual release relating to any claims arising from or in connection with the
Reorganization.
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
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1. PURCHASE AND SALE OF SHARES. On the terms and conditions
set forth herein, Seller hereby agrees to sell, transfer and deliver the Shares
to Buyer, and Buyer hereby agrees to purchase the Shares from Seller.
2. PURCHASE PRICE; PAYMENT OF PURCHASE PRICE. The purchase
price for the Shares shall be Five Thousand Seven Hundred Twenty Five Dollars
($5,725), payable in full by cashiers check on the execution hereof.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to Buyer as follows:
3.1 OWNERSHIP. Seller has good and marketable title to the
Shares, which are free and clear of all liens and encumbrances, and has the
right to sell, assign, transfer, and deliver the Shares to Buyer without
obtaining the consent of any other person or governmental authority. Xxxxxxx
Xxxxx, acting alone, has all requisite power, legal capacity, and authority to
execute this Agreement and to transfer and deliver the Shares on behalf of
Seller.
3.2 NO ASSIGNMENT. Seller has not previously assigned or
transferred, nor entered into any agreement to assign or transfer, to any party
all or any portion of its right, title, or interest in and to the Shares.
3.3 COMPLIANCE. Except for consents required under the
Company's license agreements, this Agreement and the consummation of the
transactions it contemplates have not and will not result in any breach or
violation of any term or provision of, or constitute a default under, any
agreement, indenture, mortgage, deed of trust, judgment, order, law, or
regulation to which Seller is a party or by which Seller is bound.
3.4 OMISSIONS. No representations or warranties by Seller
contained in this Agreement contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements and facts
contained therein not misleading.
3.5 NO OTHER REPRESENTATIONS. Except as specifically set
forth herein, Seller has made and is making no representations and warranties to
Buyer regarding the Company, its assets, liabilities, business or prospects, or
the value of the Shares, and Buyer must rely entirely on Buyer's own diligence
with respect to such matters in consummating the transactions contemplated
hereby. Seller acknowledges that, due to pressures from City National Bank based
upon numerous forbearance agreements, as well as additional substantial
collection pressures and litigation from numerous material creditors of the
Company, very few alternative methods remain available other than this
transaction in order to avoid the Company's bankruptcy.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby
represents and warrants to Seller as follows:
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4.1 AUTHORITY. Buyer has the full right, power, legal
capacity, and authority to consummate all the transactions contemplated by this
Agreement.
4.2 NO VIOLATION. This Agreement and the consummation of
the transactions it contemplates have not and will not result in any breach or
violation of any term or provision of, or constitute a default under, any
agreement, indenture, mortgage, deed of trust, judgment, order, law, or
regulation to which the Buyer is a party or by which Buyer is bound.
4.3 NO RELIANCE. Buyer acknowledges that he is solely
responsible for his own diligence and investigation of the Company, that he has
been given the right to conduct and has conducted such diligence as Buyer has
deemed appropriate in connection with his purchase of the Shares, including, but
not limited to, the right to inspect the assets, liabilities, books of account,
and business of the Company, and all documentation and other relevant
information relating thereto. Buyer has conducted his own diligence and review
in connection with the transactions contemplated by this Agreement, and is not
relying on any representations or warranties of Seller or the Company with
respect to the business, operations, or prospects of the Company or the value of
the Shares. In connection therewith, Buyer acknowledges that he is aware of the
dire financial circumstances of the Company, including the potential bankruptcy
of the Company, and the financial and management reorganization of the Company,
as referenced in the recitals of this Agreement. Buyer further acknowledges that
he, together with his financial advisors, has determined the price at which
Buyer is willing to purchase the Shares.
4.4 SUITABILITY; RULE 144. Buyer has sufficient business or
financial experience to have the capacity to protect his own interests in
connection with his purchase of the Shares. Buyer understands that the Shares
are unregistered "restricted securities" within the meaning of Rule 144
promulgated under the Securities Act of 1933 and, accordingly, the Shares cannot
be sold or transferred unless they are subsequently registered, or sold pursuant
to Rule 144 or another applicable exemption from registration. Further, Buyer
understands and acknowledges that the Company has no present plans to register
the Shares, and that Buyer has no rights to require that the Shares be
registered. Buyer is aware that his purchase of the Shares involves certain
financial risk, and Buyer is financially able to sustain the lack of liquidity
of the Shares for an indefinite period of time, and can afford a complete loss
of its investment in the Shares.
4.5 OMISSIONS. No representations or warranties by Buyer
contained in this Agreement contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements and facts
contained therein not misleading.
5. CONDITIONS TO CLOSING. The consummation of the purchase and
sale of the Shares as contemplated by this Agreement is conditioned upon (i) the
approval of the Board of Directors of the Company to this and all other
transactions contemplated by the financial and management reorganization of the
Company referenced in the recitals hereof (it being understood that Xxxxxxx
Xxxxx will have an interest in such transactions and that the transactions must
be approved by independent directors in accordance with California law), (ii)
the simultaneous consummation of all of those other transactions, and (iii) the
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resignation of Xxxxxxx Xxxxx as the Chief Executive Officer and Director of the
Company. The parties shall signify their satisfaction that all conditions have
been satisfied by their execution and delivery of this Agreement.
6. CLOSING; DELIVERIES. The transactions contemplated by this
Agreement shall be consummated on April 21, 2003, at the offices of Jeffer,
Mangels, Xxxxxx & Xxxxxxx, 1900 Avenue of the Stars, Xxxxxxx Xxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, or at such other time and place as the parties hereto shall
mutually agree. At the closing Seller shall deliver to Buyer the original stock
certificate(s) representing the Shares, duly endorsed to Buyer; and Buyer shall
deliver to Seller a cashiers check in the full amount of the purchase price.
Alternatively, the Seller shall prepare suitable transfer instructions to the
transfer agent or registrar of the Company, together with any evidence or
documentary support, all as requested by the Company or such transfer agent or
registrar, in order to effect the due transfer of the Shares to Buyer as
contemplated herein. In this regard, Seller agrees to deliver the actual
certificates representing the Shares, stock powers separate from the
certificates, or any documents executed or notarized as directed by the Company
or the transfer agent or registrar.
7. TERMINATION. This Agreement shall terminate and be of no
further force and effect if the transactions contemplated hereby are not
consummated on or before April 30, 2003, other than by reason of a failure of
either party hereto to perform its obligations hereunder.
8. MUTUAL GENERAL RELEASE.
8.1 RELEASE. Seller, Buyer and Xxxxx, for and on behalf of
themselves and each and all of their respective past, present and future
partners, officers, directors, shareholders, agents, employees, attorneys,
parent corporations, affiliates, subsidiaries, representatives, family members,
heirs, executors, administrators, successors, transferees, and assigns
(collectively, the respective "Related Parties"), hereby fully and forever
release one another and their respective Related Parties from all claims,
demands, debts, obligations, liabilities, costs, expenses, rights of action,
causes of action or judgments of any kind or character whatsoever, whether known
or unknown, suspected or unsuspected, contingent or absolute, direct or
indirect, arising prior to the date hereof or that may hereafter be claimed to
arise out of any action, inaction, event or matter occurring prior to the date
hereof, which were, might, or could have been asserted against the other parties
hereto or their respective Related Parties in connection with, arising out of,
resulting from, or in any way relating to the negotiations, terms, planning or
implementation leading to this Agreement and the Reorganization, or any
documents, agreements, contracts, conduct, representations, business judgments,
valuations, understandings or promises relating thereto, all of which are
hereinafter sometimes called the "Released Claims"; provided, however, that the
Released Claims specifically do not include the parties' obligations under this
Agreement
The parties understand and agree that the Released Claims
include all claims of any nature and kind whatsoever, whether known or unknown,
suspected or unsuspected, and hereby expressly waive all rights under Section
1542 of the Civil Code of California, which provides as follows:
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A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his settlement
with the debtor.
The parties, on behalf of themselves and their respective
Related Parties, acknowledge that they may hereafter discover facts different
from or in addition to those that they now know or believe to be true with
respect to the Released Claims and agree that this Release shall be and remain
effective in all respects notwithstanding such different or additional facts or
the discovery thereof.
8.2 NO PRIOR ASSIGNMENTS. The parties, on behalf of
themselves and their respective Related Parties, hereby represent to each other
that they have not heretofore assigned or transferred or purported to assign or
transfer to any person or entity whatsoever, any of the Released Claims.
8.3 INDEMNITY. The parties hereby agree to indemnify and
hold harmless each other and their respective Related Parties from and against
any and all claims, demands, causes of action, obligations, liabilities, costs,
and expenses, including actual attorneys' fees, based on, arising out of, or in
connection with, any assignment, transfer or purported assignment or transfer of
any of the Released Claims.
9. NOTICES. All notices, demands and other communications
required, desired, or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been given immediately if personally
delivered or sent by telecopier, cable, telex or other electronic transmitting
device; twenty-four hours after being delivered to overnight delivery couriers;
or five days after mailing by registered or certified mail, postage prepaid,
return receipt requested, addressed in accordance with the addresses set forth
below, or to such other addresses of which notice is given pursuant to this
Section 7.
If to Seller The Xxxxx Family Trust
000 Xxxxxxxx Xxxx
Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxxx Xxxxx, Co-Trustee
Telephone: (000) 000-0000
with a copy to: Spolin, Silverman, Xxxxx & Xxxxxxxx
0000 00xx Xxxxxx
Xxxxx 0000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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If to Buyer: Xxxxxxx Xxxxxx
000 Xxxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
10. MISCELLANEOUS. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes any prior oral or written agreements, arrangements, understandings,
representations, warranties and covenants between the parties. No supplement,
amendment, or modification hereof shall be valid unless it is in writing and
signed by the parties. If any portion of this Agreement is for any reason
declared invalid or unenforceable by any court of competent jurisdiction, the
remaining portions shall not be affected thereby and such remaining portions
shall remain in full force and effect as if this Agreement had been executed
with such invalid portion eliminated. This Agreement shall be governed by and
construed in accordance with the laws of the State of California in effect from
time to time. The parties agree that proper venue will be in Los Angeles County.
In any action to enforce this Agreement (a) prior to the Closing to compel the
purchase and sale of the Shares or (b) for a violation of the express warranties
set forth herein, the prevailing party shall be entitled to recover as an
element of its costs of the action, and not as damages, all attorneys' fees
actually incurred in bringing the action and in enforcing any judgment or award
therein. In any other action to enforce this Agreement the parties shall bear
their own attorneys' fees. All of the terms, provisions, and obligations of this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, representatives, successors and assigns. All
written representations and warranties set forth in this Agreement will survive
the consummation of the transactions contemplated by this Agreement and any
investigations, inspections, examinations, or audits made by or on behalf of the
parties. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, and all of which taken together shall constitute one
and the same instrument. Each party shall execute and deliver all
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such further instruments, documents or similar materials, and shall perform any
and all acts necessary, to give full force and effect to all of the terms and
provisions of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed as of the day and year first set forth above.
SELLER: BUYER:
/s/ Xxxxxxx Xxxxxx
THE XXXXX FAMILY TRUST ------------------------------
Xxxxxxx Xxxxxx
By: /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx, Co-Trustee
XXXXX
By: /s/ Xxxxx Xxxxxxx /s/ Xxxxxxx Xxxxx
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Xxxxx Xxxxxxx, Co-Trustee Xxxxxxx Xxxxx, individually
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx, individually
