EXHIBIT 10.7
EXECUTION COPY
STOCK AND WARRANT PURCHASE
AND REDEMPTION AGREEMENT
This STOCK AND WARRANT PURCHASE AND REDEMPTION AGREEMENT, dated as of
February 12, 2002 (the "AGREEMENT"), is entered into by and among THANE
INTERNATIONAL, INC., a Delaware corporation (the "COMPANY"), PARIBAS NORTH
AMERICA, INC. ("PARIBAS NORTH America"), PARIBAS CAPITAL FUNDING LLC ("PARIBAS
CAPITAL FUNDING" and, together with Paribas North America, the "PARIBAS
ENTITIES"), and H.I.G. DIRECT MARKETING HOLDINGS, INC. (f/k/a H.I.G. Infomercial
Company), a Cayman Islands company ("H.I.G.").
W I T N E S S E T H:
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WHEREAS, in connection with (i) that certain Credit Agreement, dated as
of June 10, 1999 (as amended, the "CREDIT Agreement"), by and among the Company,
the banks party thereto and BNP Paribas (f/k/a Paribas), an affiliate of the
Paribas Entities, as Agent, and (ii) that certain Senior Subordinated Loan
Agreement, dated as of June 10, 1999 (as amended, the "SUBORDINATED LOAN
AGREEMENT"), by and among the Company, Paribas Capital Funding and the banks
party thereto, the Company issued to the Paribas Entities certain common stock
purchase warrants (the "PARIBAS WARRANTS") to purchase, in the aggregate,
123,889 shares of the Company's Class B Common Stock, par value $.0001 per share
(the "CLASS B COMMON STOCK"); and
WHEREAS, the Paribas Entities wish for the Company and its affiliates
to enter into certain financing arrangements with Congress Financial Corporation
(Florida) (the "REFINANCING ARRANGEMENTS"), pursuant to which all outstanding
debt obligations of the Company and its affiliates under the Credit Agreement
and the Subordinated Loan Agreement will be paid in full in advance of maturity;
and
WHEREAS, as an inducement to the Company to enter into the Refinancing
Arrangements, the Paribas Entities have agreed to sell, and the Company has
agreed to purchase, all of the Paribas Warrants in exchange for the
consideration set forth herein; and
WHEREAS, H.I.G. currently owns 707,994 shares of the Company's Class A
Common Stock, par value $.0001 per share (the "CLASS A COMMON STOCK"), of
which 123,889 shares are subject to that certain Redemption Agreement, dated as
of June 10, 1999 (the "REDEMPTION AGREEMENT"), by and between
the Company and H.I.G.; and
WHEREAS, as an inducement to the Company to enter into the Refinancing
Arrangements and in satisfaction in full of its obligations under the Redemption
Agreement, H.I.G. has agreed to allow the Company to redeem 99,111 of its shares
of Class A Common Stock.
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement, the adequacy and sufficiency of which are hereby acknowledged,
the Parties hereby agree as follows:
ARTICLE I
PURCHASE OF THE PARIBAS WARRANTS
1.1 PURCHASE OF THE PARIBAS WARRANTS. Subject to the terms and conditions
set forth in this Agreement, at the Closing (as hereinafter defined):
(a) Paribas North America agrees to sell to the Company, and the Company
agrees to purchase from Paribas North America, all of the Paribas Warrants that
were issued or issuable to Paribas North America pursuant to that certain
Warrant Agreement, dated as of June 10, 1999 (as amended, the "PARIBAS NORTH
AMERICA WARRANT AGREEMENT"), by and between the Company and Paribas North
America.
(b) Paribas Capital Funding agrees to sell to the Company, and the Company
agrees to purchase from Paribas Capital Funding, all of the Paribas Warrants
that were issued or issuable to Paribas Capital Funding pursuant to that certain
Warrant Agreement, dated as of June 10, 1999 (as amended, the "PARIBAS CAPITAL
FUNDING WARRANT AGREEMENT" and, together with the Paribas North America Warrant
Agreement, the "WARRANT AGREEMENTS"), by and between the Company and Paribas
Capital Funding.
1.2 PURCHASE PRICE. In full consideration for the sale of all of the
Paribas Warrants to the Company by the Paribas Entities:
(a) The Company shall pay to the Paribas Entities a cash amount equal to
$4,000,000 (the "CASH PURCHASE PRICE"). The Cash Purchase Price shall be payable
on the date of the Closing by wire transfer of immediately available funds to an
account or accounts specified by the Paribas Entities. The Cash Purchase Price
shall be allocated $2,886,656 to Paribas North America and $1,113,344 to Paribas
Capital Funding.
(b) The Company shall issue to the Paribas Entities certain common stock
purchase warrants (the "NEW WARRANTS") to purchase, in the aggregate, 24,778
shares of Class B Common Stock. The New Warrants shall be issued pursuant to
that certain Warrant Agreement, substantially in the form attached hereto as
EXHIBIT A (the "NEW WARRANT AGREEMENT"), and shall be subject to all of the
rights and obligations pertaining to the New Warrants set forth therein. The New
Warrants shall be allocated 17,881 to Paribas North America and 6,897 to Paribas
Capital Funding. The Company anticipates completing a 32 for 1 stock split
immediately prior to its acquisition of Reliant Interactive Media Corp.
("RELIANT"), and the number of shares of Class B Common Stock issuable upon the
exercise of the New Warrants shall be adjusted in number to reflect such stock
split. In addition, the Company has filed a registration statement on Form S-4
with the Securities and Exchange Commission in connection with the acquisition
of Reliant, a copy of which is attached hereto as EXHIBIT B. Upon the closing of
the acquisition of Reliant, the Company will (i) complete a reorganization of
its capital stock pursuant to which all of its shares of Class A Common Stock
and Class B Common Stock will become shares of the Company's Common Stock, par
value $.001 per share (the "COMMON STOCK"), and all securities, options or
warrants that prior to such reorganization were convertible into, or represented
the right to acquire, shares of Class A Common Stock or Class B Common Stock
will become convertible into, or represent the right to acquire, shares of
Common Stock, and (ii) become subject to the reporting requirements of the
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Securities Exchange Act of 1934, as amended. The Paribas Entities hereby agree
that upon the consummation of the aforementioned reorganization, the New
Warrants and the New Warrant Agreement shall be replaced with warrants and a
warrant agreement with identical terms except that they shall reflect the right
to receive Common Stock in lieu of Class B Common Stock so long as, at the time
of such reorganization, the Paribas Entities shall hold less than five percent
(5%) of the Common Stock, and the Paribas Entities will not be prohibited from
holding Common Stock by Regulation Y of the Board of Governors of the Federal
Reserve Board or any other law, statute, regulation or rule of any governmental
authority.
1.3 TERMINATION OF THE PARIBAS WARRANTS AND THE WARRANT AGREEMENTS. Upon
the payment of the Purchase Price and the issuance of the New Warrants on the
date of the Closing, the Company and the Paribas Entities hereby agree that (a)
the Paribas Warrants shall be terminated and of no further force and effect, (b)
the certificates representing the Paribas Warrants shall be cancelled, whether
or not such certificates have been surrendered to the Company, and (c) the
Warrant Agreements shall be terminated and of no further force or effect, and
the Company and the Paribas Entities waive all of their respective rights and
claims thereunder.
1.4 CLOSING. The purchase and sale referred to in Section 1.1 (the
"CLOSING") shall take place simultaneously with, and at the same location as,
the consummation of the transactions contemplated by the Refinancing
Arrangements.
ARTICLE II
STOCK REDEMPTION
2.1 STOCK REDEMPTION. Subject to the terms and conditions set forth in this
Agreement, at the Closing H.I.G. shall transfer 99,111 of its shares of Class A
Common Stock (the "H.I.G. STOCK") to the Company, and the Company shall redeem
the H.I.G. Stock from H.I.G. in exchange for the Redemption Price (as
hereinafter defined). The redeemed shares of H.I.G. Stock shall be held as
treasury stock of the Company in full satisfaction of H.I.G.'s obligations under
the Redemption Agreement.
2.2 REDEMPTION PRICE. In full consideration for the redemption of the
H.I.G. Stock, the Company shall pay to H.I.G. a cash amount equal to $0.0001 per
share of H.I.G. Stock redeemed hereunder (the "REDEMPTION PRICE"). Such amount
shall be payable on the date of the Closing by wire transfer of immediately
available funds to an account or accounts specified by H.I.G.
2.3 TERMINATION OF THE REDEMPTION AGREEMENT. Upon the payment of the
Redemption Price on the date of the Closing, the Company and H.I.G. hereby agree
that the Redemption Agreement will be terminated and of no further force or
effect, and the Company and H.I.G. hereby waive all of their respective rights
thereunder.
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ARTICLE III
CONDITIONS TO THE OBLIGATIONS
OF THE COMPANY, THE PARIBAS ENTITIES AND H.I.G.
3.1 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY, THE PARIBAS ENTITIES AND
H.I.G. The obligations of the Company, the Paribas Entities and H.I.G. hereunder
are conditioned upon the consummation of the transactions contemplated by the
Refinancing Arrangements on or prior to March 15, 2002.
ARTICLE IV
MISCELLANEOUS
4.1 GOVERNING LAW. The interpretation and construction of this Agreement,
and all matters relating hereto, shall be governed by the laws of the State of
Delaware applicable to agreements executed and to be performed solely within
such State.
4.2 CAPTIONS. The Article and Section captions used herein are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
4.3 NOTICES. Any notice or other communication required or permitted under
this Agreement shall be sufficiently given if delivered in person or sent by
telecopy or by registered or certified mail, postage prepaid, addressed to each
of the parties hereto at the address set forth next to their name on the
signature pages hereto or such other address or number as shall be furnished in
writing by any such party, and such notice or communication shall be deemed to
have been given as of the date so delivered, sent by facsimile or mailed.
4.4 PARTIES IN INTEREST. This Agreement may not be transferred, assigned,
pledged or hypothecated by any party hereto, other than by operation of law.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.
4.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
4.6 ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties hereto with respect to the subject matter contained herein and
therein and this Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
4.7 AMENDMENTS. This Agreement may not be changed orally, but only by an
agreement in writing signed by the Company, the Paribas Entities and H.I.G.
4.8 SEVERABILITY. In case any provision in this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof will not in any way be affected or impaired
thereby.
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4.9 THIRD PARTY BENEFICIARIES. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any Person other than the parties hereto.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Stock and
Warrant Purchase and Redemption Agreement to be duly executed by their
respective officers thereunto duly authorized as of the day and year first above
written.
NOTICE ADDRESS: THANE INTERNATIONAL, INC.
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00-000 Xxxxx Xxxxxxx
Xx Xxxxxx, XX 00000 By:_______________________________
Attention: Xxxxxxx X. Xxx Name:
Xxxxx Xxx Xxxxx, Esq. Title:
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
H.I.G. Direct Marketing Holdings, Inc.
c/o HIG Capital Management, L.L.C.
0000 Xxxxxxxx Xxx Xxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and a copy to:
White & Case LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
NOTICE ADDRESS: PARIBAS NORTH AMERICA, INC.
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000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 By_____________________________
Attention: Xxxxxx Xxxxx Name:
Telephone: (000) 000-0000 Title:
Facsimile: (000) 000-0000
with a copy to:
O'Melveny & Xxxxx LLP
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
NOTICE ADDRESS: PARIBAS CAPITAL FUNDING LLC
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000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 By_____________________________
Attention: Xxxxxxx Xxxxxxxx Name:
Telephone: (000) 000-0000 Title:
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
NOTICE ADDRESS: H.I.G. DIRECT MARKETING HOLDINGS, INC.
--------------
c/o HIG Capital Management, L.L.C.
0000 Xxxxxxxx Xxx Xxxxx, 00xx Floor By:_________________________________
Xxxxx, Xxxxxxx 00000 Name:
Attention: Xxxxxx Xxxxxxxx Title:
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
White & Case LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
