Exhibit 3
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SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT, dated October 16, 2005 (this "Agreement"),
by and among KKR 1996 Fund L.P., a Delaware limited partnership (the "Seller"),
and D. E. Shaw Laminar Portfolios, L.L.C. (the "Purchaser"), and, solely for
purposes of Sections 5 and 6 of this Agreement, The Boyds Collection, Ltd, a
Maryland corporation (the "Company").
WHEREAS, the Seller owns of record and beneficially 11,795,725 shares of
the common stock, par value $.0001 per share (the "Common Stock"), of the
Company, representing 19.99% of the issued and outstanding shares of Common
Stock as of the date hereof (the "Common Shares"); and
WHEREAS, the Seller desires to sell, transfer, assign and convey to the
Purchaser, and the Purchaser desires to purchase from the Seller, upon the terms
and subject to the conditions set forth herein, the Common Shares, together with
such additional securities, property or payments which accrue, are paid or
payable on, or received or receivable with respect to the Common Shares
(collectively, the "Securities");
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties hereto hereby agree as follows:
1. PURCHASE AND SALE OF SECURITIES
Upon the terms and subject to the conditions set forth herein, on the date
hereof, the Seller shall sell, transfer, assign and convey the Securities to the
Purchaser, and the Purchaser shall purchase the Securities from the Seller, at a
purchase price of $0.01 per share, for an aggregate cash purchase price of $100
(the "Purchase Price").
2. CLOSING
(a) The closing of the purchase and sale of the Securities (the "Closing")
shall take place at the offices of Xxxxxxx Xxxx & Xxxxxxxxx LLP, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the date hereof.
(b) At the Closing, such sale and purchase shall be effected by the
Purchaser delivering to the Seller the Purchase Price. At the Closing, or as
promptly as practicable thereafter (the "Settlement Date"), the Seller shall
deliver duly executed certificates or other instruments evidencing the
Securities purchased on the date hereof, in each case with appropriate
instruments of transfer attached (duly endorsed or otherwise in form sufficient
for transfer). All such certificates and other instruments shall be satisfactory
to counsel to the Purchaser. The Purchase Price shall be paid in cash.
3. REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE SELLER
The Seller represents and warrants to, and covenants with, the Purchaser
that:
(a) The Seller is duly formed, validly existing and in good standing under
the laws of its jurisdiction of organization.
(b) The Seller has full legal right, power and authority to execute,
deliver, and perform its obligations under this Agreement in accordance with
their terms, and the execution, delivery and performance of this Agreement by
the Seller and the consummation by the Seller of the transactions contemplated
hereby have been duly authorized by all necessary action on behalf of the
Seller. This Agreement has been duly executed and delivered by the Seller and
constitutes a legally valid and binding agreement of the Seller, enforceable
against the Seller in accordance with its terms.
(c) The Seller has good and marketable title to the Securities, and the
Securities are owned by the Seller free and clear of any security interest,
lien, claim or other encumbrance or any restriction on transfer or voting
(collectively, "Encumbrances"). Upon delivery of the Securities to the Purchaser
at the Closing, against payment therefor as contemplated hereby, the Seller will
deliver the Securities to the Purchaser free and clear of any Encumbrance.
(d) No consent, approval, authorization or order or permit of any court,
governmental agency or body or arbitrator having jurisdiction over the Seller is
required for the execution, delivery or performance by the Seller of its
obligations hereunder including, without limitation, the sale, transfer,
assignment and conveyance of the Securities.
(e) Neither execution and delivery of this Agreement nor the sale of the
Securities nor the performance of the Seller's other obligations hereunder will
violate, conflict with, result in a breach of, or constitute a default (or an
event that, with the giving of notice or the lapse of time, or both, would
constitute a default) under (i) the organizational documents of the Seller, or
(ii) any decree, judgment, order, law, rule, regulation or determination of any
court, governmental agency or body or arbitrator having jurisdiction over the
Seller or any of its assets or properties.
(f) The Seller is aware that the Purchaser may possess material non-public
information regarding the Company or the Securities. In addition, the Purchaser
has received historical financial information regarding the Company through the
date hereof. The Purchaser has received financial and other projections in
connection with the Company, provided to the Purchaser by the Company or their
financial advisors, during the months of September and October 2005, including
without limitation those contained in the (i) email sent on September 26, 2005,
11:41 AM by Xxxx Xxxxxx of Xxxxxxxx Xxxxx Xxxxxx & Zurkin ("HLHZ") to Xxxxxx
Xxxxxx containing earnings projections, (ii) email sent on October 5, 2005,
11:06 AM by Xxxxxx Xxxxxxxxx of the Company to Xxxxxx Xxxxxxxxx containing a
weekly sales report, (iii) email sent on October 5, 2005, 8:09 PM by Xxxxxxx
Xxxxx of the Company to Xxxxxx Xxxxxxxxx containing a weekly cash flow update,
(iv) email sent on October 9, 2005, 5:56 PM by Xxxx Xxxxxx of HLHZ to Xxxxxx
Xxxxxxxxx containing a cash flow forecast, (v) email sent on October 12, 2005,
3:50 PM by Xxxxxxx Xxxxx to Xxxxxx Xxxxxxxxx containing a weekly cash flow
update and (vi) email sent on October 12, 2005, 3:36 PM by Xxxx Xxxxxx of HLHZ
to Xxxxxx Xxxxxxxxx containing a cash flow forecast, all of which projections,
emails and information the Purchaser has reviewed and fully understands (the
"Additional Information"). The Seller has received the Additional Information
via email. The Seller hereby waives any and all claims it may have or
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may hereafter acquire against the Purchaser relating to any failure by the
Purchaser to disclose any material non-public information to the Seller in
connection with the Seller's sale of the Securities. The Seller hereby
represents and warrants that it is financially sophisticated; it beneficially
owns over 50% of the equity in the Company prior to this transaction and is
represented on the board of directors of the Company; it is capable of obtaining
all information that it deems material to this transaction from its records, its
agents, and/or the Company; it has been afforded the opportunity to ask such
questions of the Company as it deems material to this transaction and such
questions have been addressed to its satisfaction; and it acknowledges that no
representations have been made by the Purchaser in respect of this transaction
or the Company except as expressly set forth in this Agreement.
(g) There is no investment banker, broker, finder or other intermediary who
might be entitled to any fee or commission upon consummation of the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Seller.
4. REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE PURCHASER
The Purchaser represents and warrants to, and covenants with, the Seller
that:
(a) The Purchaser is duly formed, validly existing and in good standing
under the laws of its jurisdiction of organization.
(b) The Purchaser has full legal right, power and authority to execute,
deliver, and perform its obligations under this Agreement in accordance with
their terms, and the execution, delivery and performance of this Agreement by
the Purchaser and the consummation by the Purchaser of the transactions
contemplated hereby have been duly authorized by all necessary action on behalf
of the Purchaser. This Agreement has been duly executed and delivered by the
Purchaser and constitutes a legally valid and binding agreement of the
Purchaser, enforceable against the Purchaser in accordance with its terms.
(c) No consent, approval, authorization or order or permit of any court,
governmental agency or body or arbitrator having jurisdiction over the Purchaser
is required for the execution, delivery or performance by the Purchaser of its
obligations hereunder, including without limitation the purchase of the
Securities.
(d) Neither execution and delivery of this Agreement nor the acquisition of
the Securities or the performance of the Purchaser's other obligations hereunder
will violate, conflict with, result in a breach of, or constitute a default (or
an event that, with the giving of notice or the lapse of time, or both, would
constitute a default) under (i) the organizational documents of the Purchaser,
or (ii) any decree, judgment, order, law, rule, regulation or determination of
any court, governmental agency or body or arbitrator having jurisdiction over
the Purchaser or any of its assets or properties.
(e) The Purchaser is aware that the Seller may possess material non-public
information regarding the Company or the Securities. The Purchaser hereby waive
any and all claims it may have or may hereafter acquire against the Seller
relating to any failure by the Seller to disclose any material non-public
information to the Purchaser in connection with the Seller'
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sale of the Securities. The Purchaser acknowledges that no representations have
been made by the Seller in respect of this transaction or the Company except as
expressly set forth in this Agreement.
(f) There is no investment banker, broker, finder or other intermediary who
might be entitled to any fee or commission upon consummation of the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Purchaser.
5. ADDITIONAL COVENANTS OF THE PARTIES
(a) From and after the date hereof, each party hereto (including the
Company) shall execute all certificates, instruments, documents or agreements
and shall take any other action which it is reasonably requested to execute or
take by any other party hereto to further effectuate the respective rights and
obligations of the parties hereto under, and as contemplated by, this Agreement.
(b) As an integral part of this transaction and the consideration herein,
each of the Purchaser and the Seller (for itself and its affiliates (other than
the Company)) hereby mutually releases any claims, counterclaims, offsets,
causes of action, damages and liabilities, whether known or unknown, that it may
have as of the date hereof against the other or the other's directors, officers,
managers, attorneys, advisors and affiliates (other than the Company) with
respect to the Company and its holdings of (1) debt claims against the Company
and/or any of its subsidiaries and/or (2) equity securities in the Company;
provided that this release shall not apply to any obligations under this
Agreement, to the extent such obligations survive.
6. COMPANY MATTERS
(a) The Company hereby represents and warrants to, and covenants with, the
Purchaser and the Seller that:
(i) the Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Maryland;
(ii) the Company has full legal right, power and authority to execute,
deliver, and perform its obligations under this Agreement in accordance
with their terms, and the execution, delivery and performance of its
obligations under this Agreement by the Company have been duly authorized
by all necessary action on behalf of the Company;
(iii) this Agreement has been duly executed and delivered by the
Company and constitutes a legally valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms;
(iv) no consent, approval, authorization or order or permit of any
court, governmental agency or body or arbitrator having jurisdiction over
the Company is required for the execution, delivery or performance by the
Company of its obligations hereunder, except for any such consents,
approvals, authorizations, orders or permits
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which the failure to obtain would not have or is not reasonably likely to have a
material adverse effect on the Company;
(v) neither the execution and delivery of this Agreement by the
Company nor the performance of the Company's obligations hereunder will
violate, conflict with, result in a breach of, or constitute a default (or
an event that, with the giving of notice or the lapse of time, or both,
would constitute a default) under (A) the articles of incorporation, bylaws
or other organizational documents of the Company, or (B) any decree,
judgment, order, law, rule, regulation or determination of any court,
governmental agency or body or arbitrator having jurisdiction over the
Company or any of its assets or properties, except for such violations,
conflicts, breaches or defaults that would not have or are not reasonably
likely to have a material adverse effect on the Company;
(vi) the board of directors of the Company has heretofore taken all
necessary action for purposes of Sections 3-601 through 3-605 of the
Maryland General Corporation Law (including any successor statutes ,
together, the "MBCA") to (A) irrevocably approve and has so approved this
Agreement and the transactions contemplated hereby such that neither
Purchaser nor its affiliates or associates (together, the "Purchaser
Parties") shall be deemed to be an "interested party" as defined in Section
3-601(j) of the MBCA and (B) resolve that, from and after the date of such
resolution, Section 3-602 of the MBCA shall not be applicable to any
"business combination" within the meaning of the MBCA that may take place
between the Purchaser Parties, on the one hand, and the Company, on the
other, as a result of the transactions contemplated by this Agreement or
otherwise; and
(vii) 59,008,133 shares of Common Stock are issued and outstanding.
(b) The Company acknowledges the receipt of adequate consideration for the
performance of its obligations under this Agreement.
7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The respective agreements, representations, warranties, covenants and other
statements made by or on behalf each party hereto pursuant to this Agreement
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any party, and shall survive delivery of and payment for the
Securities; provided, that the representations and warranties of the Seller and
the Purchaser (other than the representations and warranties set forth in
Section 3(f) and Section 4(e), respectively) shall not survive after the
Settlement Date.
8. GENERAL PROVISIONS
(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.
(b) Jurisdiction; Service of Process; No Jury Trial. With respect to any
claim arising out of this Agreement, the Seller and the Purchaser each
irrevocably submit to the exclusive jurisdiction of the courts of the State of
New York and the United States District Court located in
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the Borough of Manhattan in New York City and agree that any disputes that may
arise out of this Agreement shall be litigated in such courts. The Seller and
the Purchaser each irrevocably waive any objection which they may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement brought in any such court, irrevocably waive any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum and further irrevocably waive the right to
object, with respect to any such suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party. The Seller
and the Purchaser agree that service of process upon them in any such suit,
action or proceeding shall be deemed in every respect effective service of
process upon them if given in the manner set forth in Section 8(d). The Seller
and the Purchaser waive the right to a trial by jury in connection with any
dispute arising out of this Agreement.
(c) Interpretation. The headings of the sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.
(d) Notices. All communications under this Agreement shall be in writing
and shall be delivered by hand or facsimile or mailed by overnight courier or by
registered or certified mail, postage prepaid, as follows:
(i) if to the Purchaser:
D.E. Shaw Laminar Portfolios, L.L.C.
39th Floor, Tower 45
000 Xxxx 00xx Xx.
Xxx Xxxx, XX 00000
Attention:
Fax No.: 000-000-0000
with a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxx, Esq.
Fax No.: 000-000-0000
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(ii) if to the Seller:
KKR 1996 Fund L.P.
c/o Kohlberg Kravis Xxxxxxx & Co. L.P.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Fax No.: 000-000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Fax No.: 000-000-0000
(iii) if to the Company:
The Boyds Collection, Ltd
000 Xxxxx Xxxxxx
XxXxxxxxxxxxx, XX 00000
Attention: Xxx Xxxxxx
Fax No.: 000-000-0000
with a copy to:
Xxxxxxxx & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Fax No.: 000-000-0000
Any party hereto may from time to time change its address or fax number for
notices under this Section 8(d) by giving notice of such changed address to the
other parties hereto. Any notice addressed in accordance with this Section 8(d)
shall be deemed to be given: if delivered by hand or facsimile, on the date of
such delivery; if mailed by courier, on the first business day following the
date of such mailing; and if mailed by registered or certified mail, on the
third business day after the date of such mailing.
(e) Expenses and Taxes. All fees, costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such fees, costs or expenses.
(f) Publicity. The parties agree to consult with each other to coordinate
the issuance of any press release or similar public announcement or
communication relating to the execution or performance of this Agreement or to
the transactions contemplated hereby.
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(g) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties.
(h) Entire Agreement; Amendment. This Agreement constitutes the entire
understanding of the parties hereto and supersedes all prior understandings
among such parties. This Agreement may be amended with (and only with) the
written consent of the Seller and the Purchaser.
(i) Severability. If any term or provision of this Agreement or the
application of any such term or provision to any person or circumstance shall be
held invalid, illegal, void or unenforceable in any respect by a court of
competent jurisdiction, the remaining terms and provisions of this Agreement
shall remain in full force and effect, unless such invalidity, illegality,
voidness or unenforceability would substantially impair the benefits of such
remaining provisions of any party hereto.
(j) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed as of the date first written above.
PURCHASER
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D. E. SHAW LAMINAR PORTFOLIOS, L.L.C.
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: Authorized Signatory
KKR 1996 FUND L.P.
By: KKR Associates 1996, L.P.,
its general partner
By: KKR 1996 GP L.L.C.,
its general partner.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Member
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed as of the date first written above.
COMPANY
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THE BOYDS COLLECTION, LTD
By: /s/ Xxx X. Xxxxxx
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Name: Xxx X. Xxxxxx
Title: CEO
