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EXHIBIT 10.5
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT, dated as of April 30, 1996 (this
"Agreement"), is made by and among Collectible Champions, Inc., a Delaware
corporation (the "Company"), Xxxxxx Xxxxx & Partners, L.P., a Delaware limited
partnership ("Xxxxxx Xxxxx"), Xxxxx Capital Partners II Limited Partnership, a
Wisconsin limited partnership ("Baird"), BCP II Affiliates Fund Limited
Partnership, a Wisconsin limited partnership ("BCP II"), Nassau Capital
Partners L.P., a Delaware limited partnership ("Nassau"), NAS Partners I
L.L.C., a Delaware limited liability company ("NAS"), Xxxx Xxxxxxxxx
("Xxxxxxxxx"), Xxxx Xxxxx ("Xxxxx"), Xxxxx Xxxxxxxx ("Xxxxxxxx") and Xxxxx Xxxx
("Camp"). Xxxxxx Xxxxx, Baird, BCP II, Nassau, NAS, Stoelting, Olsen, Xxxxxxxx
and Camp are referred to herein collectively as the "Purchasers," and each
individually as a "Purchaser." Certain capitalized terms used herein are
defined in Section 5 below.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
1. Authorization and Closing.
(a) Authorization of the Securities. The Company shall authorize the
issuance and sale to the Purchasers of (i) 563,998 shares of its Common Stock,
par value $.01 per share (the "Common"), (ii) 51,083.08 shares of its Series A
Preferred Stock, par value $.01 per share (the "Series A Preferred"), each
having the rights and preferences set forth in Exhibit A attached hereto, and
(iii) Series A Junior Subordinated Promissory Notes in the form set forth in
Exhibit B attached hereto (the "Notes") in the aggregate principal amount of
$21,570,569. The Common and the Series A Preferred are collectively referred
to herein as the "Stock." The Stock and the Notes are collectively referred to
herein as the "Securities."
(b) Purchase and Sale of the Securities. At the Closing, the Company
shall sell to each Purchaser and, subject to the terms and conditions set forth
herein, each Purchaser shall purchase from the Company (i) the number of shares
of Common set forth opposite such Purchaser's name on the Schedule of
Purchasers attached hereto at a price of $1.00 per share, (ii) the number of
shares of Series A Preferred set forth opposite such Purchaser's name on the
Schedule of Purchasers at a price of $100.00 per share, and (iii) a Note in the
principal amount set forth opposite such Purchaser's name on the Schedule of
Purchasers at a price equal to face.
(c) The Closing. The closing of the purchase and sale of the
Securities (the "Closing") shall take place at the same time and place as the
closing of the transactions contemplated by the Acquisition Agreement. At the
Closing, the Company shall deliver to each Purchaser (i) stock certificates
evidencing the Stock to be purchased by such Purchaser, each registered in such
Purchaser's or its nominee's name, and (ii) a Note in the principal amount to
be purchased by such
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Purchaser upon payment of the purchase price thereof by a cashier's or
certified check, or by wire transfer of immediately available funds to an
account designated by the Company.
2. Representations and Warranties of the Company. As a material
inducement to each Purchaser to enter into this Agreement and purchase the
Securities, the Company hereby represents and warrants that:
(a) Organization and Corporate Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of
Delaware and is qualified to do business in every jurisdiction in which its
ownership of property or conduct of business requires it to qualify. The
Company has all requisite corporate power and authority to carry out the
transactions contemplated by this Agreement.
(b) Authorization; No Breach. The execution, delivery and
performance of this Agreement has been duly authorized by the Company. This
Agreement constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms. The execution and delivery by the
Company of this Agreement, the offering, sale and issuance of the Securities
hereunder and the fulfillment of and compliance with the respective terms
hereof and thereof by the Company, do not and shall not (i) conflict with or
result in a breach of the terms, conditions or provisions of, (ii) constitute a
default under, (iii) result in the creation of any lien, security interest,
charge or encumbrance upon the Company's capital stock or assets pursuant to,
(iv) give any third party the right to modify, terminate or accelerate any
obligation under, (v) result in a violation of, or (vi) require any
authorization, consent, approval, exemption or other action by or notice to any
court or administrative or governmental body pursuant to the charter or bylaws
of the Company, or any law, statute, rule or regulation to which the Company is
subject, or any agreement, instrument, order, judgment or decree to which the
Company is subject.
(c) Conduct of Business; Liabilities. Prior to the Closing, the
Company has not conducted any business, incurred any expenses, obligations or
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise,
whether or not known to the Company, and whether due or to become due),
violated any laws or governmental rules or regulations, or entered into any
contracts or agreements other than this Agreement, the Acquisition Agreement
and any other agreements contemplated by such agreements. In addition, prior
to the Closing, the Company has not violated any laws or governmental rules or
regulations.
3. Transfer of Restricted Securities.
(a) Restricted Securities are transferable only pursuant to (i)
public offerings registered under the Securities Act, (ii) Rule 144 or Rule
144A of the Securities and Exchange Commission (or any similar rule or rules
then in force) if such rule is available and (iii) subject to the conditions
specified in Section 3(b) below, any other legally available means of transfer.
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(b) In connection with the transfer of any Restricted Securities
(other than a transfer described in clause (i) or (ii) of Section 3(a) above),
the holder thereof shall deliver written notice to the Company describing in
reasonable detail the transfer or proposed transfer, together with an opinion
of counsel reasonably satisfactory to the Company to the effect that such
transfer of Restricted Securities may be effected without registration of such
Restricted Securities under the Securities Act. In addition, if the holder of
the Restricted Securities delivers to the Company an opinion of counsel
reasonably satisfactory to the Company that no subsequent transfer of such
Restricted Securities shall require registration under the Securities Act, the
Company shall promptly upon such contemplated transfer deliver new certificates
for such Restricted Securities which do not bear the Securities Act legend set
forth in Section 4(d) below. If the Company is not required to deliver new
certificates for such Restricted Securities not bearing such legend, the holder
thereof shall not transfer the same until the prospective transferee has
confirmed to the Company in writing its agreement to be bound by the conditions
contained in this Section 3 and Section 4 below.
(c) Upon the request of any Purchaser, the Company shall promptly
supply to such Purchaser or its prospective transferees all information
regarding the Company required to be delivered in connection with a transfer
pursuant to Rule 144A of the Securities and Exchange Commission.
(d) Upon the request of any holder of Restricted Securities, the
Company shall remove the foregoing legend from the certificates for such
holder's Restricted Securities; provided that such Restricted Securities are
eligible for sale pursuant to Rule 144(k) of the Securities and Exchange
Commission.
4. Purchasers' Investment Representations.
(a) Each of Xxxxxx Xxxxx, Xxxxx, Nassau, and NAS hereby represents
that it is an accredited investor as defined in Rule 501(a) of the Securities
Act and that the Securities to be acquired by such Purchaser pursuant to this
Agreement shall be acquired for such Purchaser's own account and not with a
view to, or intention of, distribution thereof in violation of the Securities
Act, or any applicable state securities laws, and that the Securities shall not
be disposed of in contravention of the Securities Act or any applicable state
securities laws; provided that nothing contained herein shall prevent such
Purchasers and subsequent holders of Restricted Securities from transferring
such securities in compliance with the provisions of Section 4 hereof.
(b) Each of Stoelting, Olsen, Xxxxxxxx and Camp (each, an
"Executive") hereby represents that:
(i) the Securities to be acquired by such
Executive pursuant to this Agreement shall be acquired for such
Executive's own account and not with a view to, or intention of,
distribution thereof in violation of the Securities Act, or any
applicable state securities laws, and the Securities shall not be
disposed of in contravention of the Securities Act or any applicable
state securities laws; provided that nothing contained herein shall
pre-
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vent the Executives and subsequent holders of Restricted Securities
from transferring such securities in compliance with the provisions of
Section 4 hereof;
(ii) such Executive is an executive officer of the
Company, is sophisticated in financial matters and is able to evaluate
the risks and benefits of the investment in the Securities;
(iii) such Executive is able to bear the economic
risk of his investment in the Securities for an indefinite period of
time because the Securities have not been registered under the
Securities Act and, therefore, cannot be sold unless subsequently
registered under the Securities Act or an exemption from such
registration is available; and
(iv) such Executive has had an opportunity to ask
questions and receive answers concerning the terms and conditions of
the offering of Securities and has had full access to such other
information concerning the Company as he has requested.
(c) As an inducement to the Company to issue the
Securities to each Executive, as a condition thereto, such Executive
acknowledges and agrees that neither the issuance of the Securities to such
Executive nor any provision contained herein shall entitle such Executive to
remain in the employment of the Company and its Subsidiaries or affect the
right of the Company to terminate such Executive's employment at any time.
(d) Each certificate for Restricted Securities shall be
imprinted with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON APRIL 30, 1996, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THE TRANSFER OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE
SECURITIES PURCHASE AGREEMENT, DATED AS OF APRIL 30, 1996, BETWEEN THE
ISSUER (THE "COMPANY") AND CERTAIN INVESTORS. A COPY OF SUCH
CONDITIONS SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON
WRITTEN REQUEST AND WITHOUT CHARGE."
5. Definitions. For the purposes of this Agreement, the
following terms have the meanings set forth below:
"Acquisition Agreement" means the Asset and Stock Purchase
Agreement, dated as of the date hereof, by and among the Company, Racing
Champions, Inc., Xxxx-Xxxxx, Ltd., Racing Champions Limited, Xxxxxxx Services,
Inc., Hosten Investment Limited, the Founders and Banerjan Company Limited.
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"Affiliate" of any particular Person or entity means any other Person
or entity controlling, controlled by or under common control with such
particular Person or entity and, in the case of a limited partnership,
"Affiliate" includes limited partners of such limited partnership.
"Certificate of Incorporation" means the Company's certificate of
incorporation, as amended from time to time.
"Person" means any individual, partnership, corporation, limited
liability company, association, joint stock company, trust, joint venture,
unincorporated organization and any governmental entity or any department,
agency or political subdivision thereof.
"Restricted Securities" means (i) the Securities issued hereunder and
(ii) any securities issued with respect to the securities referred to in clause
(i) above by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Restricted Securities, such securities
shall cease to be Restricted Securities when they have (a) been effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them, (b) become eligible for sale pursuant to
Rule 144 (or any similar provision then in force) under the Securities Act or
(c) been otherwise transferred and new certificates for them not bearing the
Securities Act legend set forth in Section 4(d) have been delivered by the
Company in accordance with Section 3(b). Whenever any particular securities
cease to be Restricted Securities, the holder thereof shall be entitled to
receive from the Company, without expense, new securities of like tenor not
bearing a Securities Act legend of the character set forth in Section 4(d).
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal law then in force.
"Securities and Exchange Commission" includes any governmental body or
agency succeeding to the functions thereof.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a partnership, association
or other business entity, a majority of the partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more Subsidiaries of that Person or a
combination thereof. For purposes hereof, a Person or Persons shall be deemed
to have a majority ownership interest in a partnership, association or other
business entity if such Person or Persons shall be allocated a majority of
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partnership, association or other business entity gains or losses or shall be
or control any managing director or general partner of such partnership,
association or other business entity.
6. Miscellaneous.
(a) Expenses. The Company agrees to pay and hold each Purchaser
harmless from and against liability for the payment of all fees and expenses
incurred in connection with the transactions contemplated by this Agreement and
each of the agreements contemplated hereby, including (i) reasonable
attorneys', consultants', and accountants' fees and expenses arising in
connection with the negotiation, execution and consummation of the transactions
contemplated by this Agreement and each of the agreements contemplated hereby,
(ii) reasonable fees and expenses incurred with respect to any amendments or
waivers (whether or not the same become effective) under or in respect of this
Agreement, the agreements contemplated hereby or the Certificate of
Incorporation, (iii) stamp and other taxes which may be payable in respect of
the execution and delivery of this Agreement, (iv) reasonable fees and expenses
incurred in respect of the enforcement of the rights granted under this
Agreement, the agreements contemplated hereby and the Certificate of
Incorporation, and (v) fees and expenses incurred by any Purchaser in filing
with any governmental agency with respect to its investment in the Company or
any other filing with any governmental agency with respect to the Company which
mentions any Purchaser.
(b) Remedies. The Purchasers shall have all rights and remedies
set forth in this Agreement and the Certificate of Incorporation and all rights
and remedies which the Purchasers has been granted at any time under any other
agreement or contract and all of the rights which the Purchasers has under any
law. The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that any
Person having any rights under this Agreement may in its sole discretion apply
to any court of law or equity of competent jurisdiction (without posting any
bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(c) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express
assignment has been made, the provisions of this Agreement which are for the
benefit of purchasers or holders of Securities are also for the benefit of, and
enforceable by, any subsequent holder of Securities.
(d) Consent to Amendments. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the Purchasers unless such modification,
amendment or waiver is approved in writing by the Company and Purchasers
holding at least a majority of the Common issued hereunder; provided that no
such amendment or action which materially adversely affects any one Purchaser,
as such, vis-a-vis the other Purchasers, as such, shall be effective against
such Purchaser without the prior written consent of such Purchaser. No other
course of dealing between the Company and any
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Purchaser or any delay in exercising any rights hereunder or under the
Certificate of Incorporation shall operate as a waiver of any rights of such
Purchaser.
(e) Survival of Representations and Warranties. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby,
regardless of any investigation made by the Purchasers or on their behalf.
(f) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
(g) Entire Agreement. Except as otherwise expressly set forth
herein, this document embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way.
(h) Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
(i) Governing Law. The corporate laws of the State of Delaware
will govern all questions concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity and
interpretation of this Agreement will be governed by and construed in
accordance with the domestic laws of the State of Illinois, without giving
effect to any choice of law or conflict of law provision or rule (whether of
the State of Illinois or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Illinois.
(j) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this
Securities Purchase Agreement on the day and year first above written.
COLLECTIBLE CHAMPIONS, INC.
By: /s/ Xxxxxx X. Xxxx
----------------------------------------------
Its: President
---------------------------------------------
XXXXXX XXXXX & PARTNERS, L.P.
By: Xxxxxx Xxxxx & Partners, L.L.C.
Its: General Partner
By: /s/ Avy X. Xxxxx
--------------------------------
Its: Managing Director
XXXXX CAPITAL PARTNERS II LIMITED PARTNERSHIP
By: Xxxxxx X. Xxxxx & Co. Incorporated
Its: General Partner
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Its: Managing Director
-------------------------------
BCP II AFFILIATES FUND LIMITED PARTNERSHIP
By: Xxxxxx X. Xxxxx & Co. Incorporated
Its: General Partner
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Its: Managing Director
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NASSAU CAPITAL PARTNERS L.P.
By: Nassau Capital L.L.C.
Its: General Partner
By: /s/ Xxxxxxxxx Xxxxxxx
--------------------------------
Its: Member
-------------------------------
NAS PARTNERS I L.L.C.
By: /s/ Xxxxxxxxx Xxxxxxx
----------------------------------------------
Its: Member
---------------------------------------------
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[CONTINUATION OF SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
/s/ Xxxxxx x. Xxxxxxxxx
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Xxxx Xxxxxxxxx
/s/ Xxxx X. Xxxxx
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Xxxx Xxxxx
/s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
/s/ Xxxxx Xxxx
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Xxxxx Xxxx
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SCHEDULE OF PURCHASERS
Shares of Initial Principal
Aggregate Shares of Series A Amount of Series A
Purchaser Purchase Price Common Stock Preferred Stock Junior Sub Notes
------------- -------------- ------------ --------------- -----------------
Xxxxxx Xxxxx $18,276,813 378,377 34,270.84 $14,471,352
Xxxxx Capital 3,855,000 79,808 7,228.51 3,052,341
BCP II 1,145,000 23,704 2,146.99 906,597
Nassau Capital 2,976,309 61,617 5,580.87 2,356,604
NAS 23,691 490 44.42 18,758
Xxxxxxxxx 603,789 12,500 1,132.16 478,073
Xxxxx 120,758 2,500 226.43 95,615
Xxxxxxxx 120,758 2,500 226.43 95,615
Camp 120,758 2,500 226.43 95,615
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TOTAL $27,242,875 563,998 51,083.08 $21,570,570
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