EXHIBIT 99.3
STOCK PURCHASE AGREEMENT
dated as of October 1, 1998
among
TOY BIZ, INC.
and
BUYERS
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TABLE OF CONTENTS
Page
ARTICLE I
AUTHORIZATION AND SALE OF STOCK..........................................................................2
1.1. Authorization of Preferred Stock..............................................................2
1.2. The Sale......................................................................................2
1.3. Use of Proceeds...............................................................................2
1.4. Purchase Price................................................................................2
1.5. Closing.......................................................................................3
1.6. Deliveries by Toy Biz.........................................................................3
1.7. Deliveries by the Xxxxxxxxx Parties...........................................................4
1.8. Deliveries by Object Trading..................................................................4
1.9. Deliveries by Whippoorwill....................................................................5
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF TOY BIZ................................................................5
2.1. Corporate Organization; Etc...................................................................5
2.2. Corporate Authority...........................................................................5
2.3. Consents and Approvals; No Violations.........................................................6
2.4. The Shares....................................................................................7
2.5. Brokers and Finders...........................................................................7
2.6. SEC Documents.................................................................................7
2.7. Disclosure Statement..........................................................................7
2.8. No Litigation.................................................................................7
2.9. Capitalization................................................................................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE XXXXXXXXX
PARTIES..................................................................................................8
3.1. Organization; Etc.............................................................................8
3.2. Authority.....................................................................................8
3.3. Consents and Approvals; No Violations.........................................................8
3.4. Investor Representations......................................................................9
3.5. Brokers and Finders...........................................................................9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF OBJECT TRADING........................................................10
4.1. Corporate Organization; Etc..................................................................10
4.2. Corporate Authority..........................................................................10
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4.3. Consents and Approvals; No Violations........................................................10
4.4. Investor Representations.....................................................................11
4.5. Brokers and Finders..........................................................................11
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF WHIPPOORWILL..........................................................11
5.1. Corporate Organization; Etc..................................................................11
5.2. Authority....................................................................................11
5.3. Consents and Approvals; No Violations........................................................12
5.4. Investor Representations.....................................................................12
5.5. Brokers and Finders..........................................................................12
ARTICLE VI
COVENANTS OF THE PARTIES................................................................................13
6.1. Conduct of Business of Toy Biz...............................................................13
6.2. Inspection Rights............................................................................13
6.3. Restricted Stock.............................................................................13
6.4. Consents and Approvals.......................................................................14
6.5. Public Announcements.........................................................................14
6.6. Consummation of the Plan of Reorganization...................................................14
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE AGREEMENT.............................................................14
7.1. Conditions to Each Party's Obligations to Consummate the
Agreement....................................................................................14
7.2. Further Conditions to Toy Biz's Obligations to Sell the Xxxxxxxxx
Shares.......................................................................................15
7.3. Further Conditions to Toy Biz's Obligations to Sell the Object
Trading Shares...............................................................................16
7.4. Further Conditions to Toy Biz's Obligations to Sell the Whippoorwill
Shares.......................................................................................16
7.5. Further Conditions to the Xxxxxxxxx Parties' Obligations.....................................17
7.6. Further Conditions to Object Trading's Obligations...........................................18
7.7. Further Conditions to Whippoorwill's Obligations.............................................18
ARTICLE VIII
TERMINATION AND ABANDONMENT.............................................................................19
8.1. Termination..................................................................................19
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ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION.........................................................................................20
9.1. Survival.....................................................................................20
9.2. Indemnification..............................................................................20
9.3. Procedure for Indemnification................................................................20
ARTICLE X
MISCELLANEOUS PROVISIONS................................................................................21
10.1. Amendment and Modification...................................................................21
10.2. Extension; Waiver............................................................................21
10.3. Entire Agreement; Enforceability.............................................................22
10.4. Assignment...................................................................................22
10.5. Validity.....................................................................................22
10.6. Further Assurances...........................................................................22
10.7. Certain Payment to Xxxxxxxxx.................................................................23
10.8. Notices......................................................................................23
10.9. Governing Law................................................................................23
10.10. Descriptive Headings.........................................................................23
10.11. Counterparts.................................................................................24
10.12. Expenses.....................................................................................24
10.13. Parties in Interest..........................................................................24
10.14. No Waivers...................................................................................24
10.15. Specific Performance.........................................................................24
10.16. Transfer Taxes...............................................................................24
10.17. Whippoorwill Obligations Several and Not Joint...................................................24
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EXHIBITS
Exhibit A Restated Certificate of Incorporation
Exhibit B Registration Rights Agreement
Exhibit C Stockholders' Agreement
SCHEDULES
Schedule 1 Buyers and Number of Shares Purchased
Schedule 2.8 Pending Litigation Against Toy Biz relating to the Plan of
Reorganization
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of October 1, 1998, (this
"Agreement"), by and among TOY BIZ, INC., a Delaware corporation ("Toy Biz"),
and the parties set forth on Schedule 1 hereto (collectively, the "Buyers").
RECITALS:
WHEREAS, certain bankruptcy cases of Marvel Entertainment
Group, Inc., a Delaware corporation ("Marvel"), and various subsidiaries of
Marvel are presently pending in the United States District Court for the
District of Delaware (the "District Court");
WHEREAS, the District Court entered an order confirming the
Fourth Amended Joint Plan of Reorganization Under Chapter 11 of the United
States Bankruptcy Code, on July 31, 1998 (as such plan may hereafter be amended,
restated or otherwise modified, the "Plan of Reorganization"), filed by certain
of the secured lenders of Marvel and its subsidiaries and by Toy Biz;
WHEREAS, pursuant to the Plan of Reorganization, (i) Xxxxxxxxx
Partners, Inc., a Delaware corporation ("Xxxxxxxxx"), has agreed to purchase, or
cause its affiliates to purchase (such affiliates, identified on Schedule 1
hereto as the Xxxxxxxxx Parties, hereinafter referred to as the "Xxxxxxxxx
Parties"), from Toy Biz 3,000,000 shares of Preferred Stock, the "Xxxxxxxxx
Shares"), at a price of $10.00 per share of 8% Cumulative Convertible
Exchangeable Preferred Stock (the "Preferred Stock"), and (ii) Object Trading
Corp., a Delaware corporation ("Object Trading"), has agreed to purchase from
Toy Biz 6,000,000 shares of Preferred Stock at a price of $10.00 per share of
Preferred Stock (as reduced by the number of shares of Preferred Stock to be
purchased by Whippoorwill/Marvel Obligations Trust - 1997 (as described below)
and as reduced by the number of shares (not to exceed 4,000,000) of Preferred
Stock actually pur chased by the Senior Marvel Lenders, the "Object Trading
Shares");
WHEREAS, pursuant to Section 4.2(b)(i)(A)(6) of the Plan of
Reorganization, Toy Biz will offer up to 4,000,000 shares of Preferred Stock to
the holders of Allowed Fixed Senior Secured Claims (the "Senior Marvel Lenders")
prior to the consummation of the Plan of Reorganization;
WHEREAS, Object Trading has agreed to assign the right to
purchase 500,000 shares of Preferred Stock to Whippoorwill/Marvel Obligations
Trust - 1997 and such right has been exercised by certain beneficiaries of such
Trust listed on Schedule 1 (each, a "Whippoorwill Account" and collectively,
"Whippoorwill") and Whippoorwill has agreed to purchase 500,000 shares of
Preferred Stock at a price of $10.00 per share of Preferred Stock (the
"Whippoorwill Shares" and together with the Xxxxxxxxx Shares and the Object
Trading Shares, the "Shares");
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WHEREAS, pursuant to the Plan of Reorganization, Toy Biz and
Marvel have entered into an Agreement and Plan of Merger, dated as of August 12,
1998, which provides for the merger (the "Merger") of MEG Acquisition Corp., a
Delaware corporation ("Acquisi tion"), a newly formed, wholly-owned subsidiary
of Toy Biz, with and into Marvel, with Marvel continuing as the surviving
corporation and as a wholly-owned subsidiary of Toy Biz (by change of name
Marvel Enterprises, Inc.); and
WHEREAS, the Buyers desire to purchase, and Toy Biz desires to
sell, the Shares, upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the respective covenants,
representations and warranties herein contained, and intending to be legally
bound by the covenants and agreements contained herein, the parties hereto agree
as follows:
ARTICLE I
AUTHORIZATION AND SALE OF STOCK
1.1. Authorization of Preferred Stock. Toy Biz has, or before
the Closing Date (as defined in Section 1.5) will have, duly authorized the
issuance and sale of 16,900,000 shares of Preferred Stock, having the rights,
restrictions, privileges and preferences set forth in the restated certificate
of incorporation of Toy Biz (the "Restatement") in the form attached hereto as
Exhibit A and will have authorized the issuance and delivery of the shares of
Common Stock, par value $0.01 per share, of Toy Biz (the "Common Stock")
issuable upon conversion of the Preferred Stock. Toy Biz has, or on or before
the Closing Date will have, filed the Restatement with the Secretary of State of
the State of Delaware. The shares of Common Stock issuable upon the conversion
of the Preferred Stock have been or will be reserved prior to the Closing Date
for issuance.
1.2. The Sale. Upon the terms and subject to the conditions of
this Agreement, at the closing (the "Closing"), Toy Biz will sell, convey,
assign, transfer and deliver to Object Trading, the Xxxxxxxxx Parties and
Whippoorwill, and Object Trading, the Xxxxxxxxx Parties and Whippoorwill will
each purchase, acquire and accept from Toy Biz, the Object Trading Shares, the
Xxxxxxxxx Shares and the Whippoorwill Shares, respectively.
1.3. Use of Proceeds. Toy Biz shall use the net proceeds from
the sale of the Preferred Stock for the purposes set forth in the Plan of
Reorganization.
1.4. Purchase Price. In consideration of the sale, conveyance,
assignment, transfer and delivery of the Shares to Object Trading, the Xxxxxxxxx
Parties and Whippoorwill on the Closing Date pursuant to Section 1.2 hereof, (i)
the Xxxxxxxxx Parties shall, on the Closing Date, in full payment for the
Xxxxxxxxx Shares pay to Toy Biz, by wire transfer in
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immediately available funds, an amount equal to the product of (w) $10.00 and
(x) the number of Xxxxxxxxx Shares, (ii) Object Trading shall, on the Closing
Date, in full payment for the Object Trading Shares, pay to Toy Biz, by wire
transfer in immediately available funds, an amount equal to the product of (y)
$10.00 and (z) the number of Object Trading Shares and (iii) Whippoorwill shall,
on the Closing Date, in full payment of the Whippoorwill Shares, pay to Toy Biz,
by wire transfer in immediately available funds, an amount equal to the product
of (y) $10.00 and (z) the number of Whippoorwill Shares. (the "Purchase Price").
1.5. Closing. Upon the terms and subject to the conditions
contained in this Agreement, the Closing will take place at 10:00 a.m. at the
offices of Battle Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on
the date of the consummation of the Plan of Reorganization (the "Closing Date").
1.6. Deliveries by Toy Biz. At the Closing, Toy Biz will
deliver the following to the Buyers:
(a) Certificates representing the Shares registered in the
names of the Buyers representing the Shares subscribed to by each Buyer, free
and clear of any claim, security interest, lien or encumbrance whatsoever with
respect thereto and without any restrictive legend other than with respect to
applicable securities laws and as otherwise provided in this Agreement or the
Stockholders' Agreement;
(b) The duly executed officer's certificate provided for in
Sections 7.5(c), 7.6(c) and 7.7(c);
(c) Certified copies of the resolutions, duly adopted by the
Board of Directors of Toy Biz, that will be in full force and effect at the time
of delivery, authorizing the execution, delivery and performance of this
Agreement, that certain registration rights agreement relating to the Shares
(the "Registration Rights Agreement") in the form attached hereto as Exhibit B
and that certain stockholders' agreement among Toy Biz, Xxx Xxxx, the Xxxxxxxxx
Parties, Xxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxxxx T.A., Object Trading, Zib, Inc. and
the holders of senior secured indebtedness of Marvel (the "Stockholders'
Agreement") in the form attached hereto as Exhibit C;
(d) The Registration Rights Agreement, executed on behalf of
Toy Biz;
(e) The Stockholders' Agreement, executed on behalf of Toy
Biz; and
(f) All other documents, instruments and writings required to
be delivered by Toy Biz at or prior to the Closing Date pursuant to this
Agreement, the Stockholders' Agreement and the Registration Rights Agreement.
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1.7. Deliveries by the Xxxxxxxxx Parties. At the Closing, the
Xxxxxxxxx Parties will deliver the following:
(a) By wire transfer, in immediately available funds, the
portion of the Purchase Price attributable to the Xxxxxxxxx Shares by the
Xxxxxxxxx Parties;
(b) The duly executed officer's certificate provided for in
Section 7.2(c);
(c) Certified copies of duly adopted resolutions or other
similar evidence of partnership, limited liability or trust authority and
authorization for each of the Xxxxxxxxx Parties which is an entity, that will be
in full force and effect at the time of delivery, authorizing the execution,
delivery and performance of this Agreement, the Stockholders' Agreement and the
Registration Rights Agreement;
(d) The Registration Rights Agreement executed on behalf of
each of the Xxxxxxxxx Parties;
(e) The Stockholders' Agreement executed on behalf of each of
the Xxxxxxxxx Parties; and
(f) All other documents, instruments and writings required to
be delivered by the Xxxxxxxxx Parties at or prior to the Closing Date pursuant
to this Agreement and the Registration Rights Agreement.
1.8. Deliveries by Object Trading. At the Closing, Object
Trading will deliver the following:
(a) By wire transfer, in immediately available funds, the
portion of the Purchase Price attributable to the Object Trading Shares;
(b) The duly executed officer's certificate provided for in
Section 7.3(c);
(c) Certified copies of the resolutions, duly adopted by the
Board of Directors of Object Trading, that will be in full force and effect at
the time of delivery, authorizing the execution, delivery and performance of
this Agreement, the Stockholders' Agreement and the Registration Rights
Agreement;
(d) The Registration Rights Agreement executed on behalf of
Object Trading;
(e) The Stockholders' Agreement executed on behalf of Object
Trading; and
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(f) All other documents, instruments and writings required to
be delivered by Object Trading at or prior to the Closing Date pursuant to this
Agreement and the Registration Rights Agreement.
1.9. Deliveries by Whippoorwill. At the Closing, Whippoorwill
will deliver the following:
(a) By wire transfer, in immediately available funds, the
portion of the Purchase Price attributable to the Whippoorwill Shares;
(b) The duly executed officer's certificate provided for in
Section 7.4(c);
(c) Certified copies of duly adopted resolutions or other
similar evidence of authority for Whippoorwill, that will be in full force and
effect at the time of delivery authorizing the execution, delivery and
performance of this Agreement and the Registration Rights Agreement;
(d) The Registration Rights Agreement executed on behalf of
Whippoorwill; and
(e) All other documents, instruments and writings required to
be delivered by Whippoorwill at or prior to the Closing Date pursuant to this
Agreement and the Registration Rights Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF TOY BIZ
Toy Biz hereby represents and warrants to the Buyers as follows:
2.1. Corporate Organization; Etc. Toy Biz is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite power and authority to
own, lease and operate its properties and to carry on its business as now being
conducted, except where the failure to have such power and authority would not
have a material adverse effect on Toy Biz.
2.2. Corporate Authority. Toy Biz has all requisite corporate
authority and power to execute and deliver this Agreement, the Stockholders'
Agreement and the Registration Rights Agreement and to consummate the
transactions contemplated hereby, including, without limitation, the issuance of
the Preferred Stock and, upon the conversion thereof, the Common Stock issuable
upon such conversion. As of the Closing, the execution and delivery of this
Agreement, the Stockholders' Agreement and the Registration Rights Agreement and
the consummation of the transactions contemplated hereby by Toy Biz, including,
without
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limitation, the issuance of the Preferred Stock and, upon the conversion
thereof, the Common Stock issuable upon such conversion, will have been duly and
validly authorized by all required corporate action on the part of Toy Biz, and
no other corporate proceedings on the part of Toy Biz are necessary to authorize
this Agreement, the Stockholders' Agreement and the Registration Rights
Agreement or to consummate the transactions contemplated hereby including,
without limitation, the issuance of the Preferred Stock and, upon the conversion
thereof, the Common Stock issuable upon such conversion. This Agreement has
been, and at the time of Closing, the Stockholders' Agreement and the
Registration Rights Agreement will have been, duly and validly executed and
delivered by Toy Biz and, assuming this Agreement has been, and at the Closing
the Stockholders' Agreement and the Registration Rights Agreement will have
been, duly authorized, executed and delivered by each of the Buyers, such
agreements constitute the valid and binding agreements of Toy Biz, enforceable
against Toy Biz in accordance with their terms, except as such enforceability
may be limited by (i) bankruptcy, insolvency, moratorium, reorganization and
other similar laws affecting creditors' rights generally and (ii) the general
principles of equity, regardless of whether asserted in a proceeding in equity
or at law; provided, however, that each of the parties hereto acknowledges that
Toy Biz is involved in litigation with Marvel concerning the status of Toy Biz's
class B common stock and its stockholders' agreement and this representation is
qualified by such litigation.
2.3. Consents and Approvals; No Violations. No filing with,
and no permit, authorization, consent or approval of any public body or
governmental authority, domestic or foreign, is necessary for the consummation
by Toy Biz of the transactions contemplated by this Agreement, the Stockholders'
Agreement or the Registration Rights Agreement, including, without limitation,
the issuance of the Preferred Stock and, upon the conversion thereof, the Common
Stock issuable upon such conversion, other than those which have been made, will
have been made prior to Closing, or have been obtained. Neither the execution
and delivery of this Agreement, the Stockholders' Agreement or the Registration
Rights Agreement by Toy Biz nor the consummation by Toy Biz of the transactions
contemplated hereby including, without limitation, the issuance of the Preferred
Stock and, upon the conversion thereof, the Common Stock issuable upon such
conversion, nor compliance by Toy Biz with any of the provisions hereof will (i)
conflict with or result in any breach of any provision of the Restatement or
ByLaws of Toy Biz, (ii) violate any provision of law, statute, rule or
regulation, or any ruling, writ, injunction, order, judgment or decree of any
court, administrative agency or other governmental body applicable to Toy Biz
which could have any material adverse effect on the business of Toy Biz, or
(iii) conflict with or result in a breach of any of the terms, conditions or
provisions of, or constitute (with due notice or lapse of time or both) a
default under any note, indenture, mortgage, lease, purchase or sales order or
other material contract, agreement or instrument to which Toy Biz is a party or
by which it or any of its property is bound which could have any material
adverse effect on the business of Toy Biz.
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2.4. The Shares. The Shares will, when issued and delivered to
the Buyers in accordance with this Agreement, be duly authorized, validly
issued, fully paid and nonassessable and the shares of Common Stock issuable
upon conversion of the Preferred Stock, when issued upon such conversion, will
be duly authorized, validly issued, fully paid and nonassessable. None of the
Shares, when issued in accordance with this Agreement, nor the shares of Common
Stock issuable upon the conversion of the Shares, will be subject to preemptive
rights.
2.5. Brokers and Finders. Except for SBC Warburg Dillon Read
Inc., Toy Biz has not employed any broker or finder nor incurred any liability
for any investment banking fees, brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement.
2.6. SEC Documents. Toy Biz has timely made all filings with
the Securities and Exchange Commission (the "Commission") it has been required
to make under the Securities Act of 1933, as amended (the "Securities Act"), and
the Exchange Act of 1934, as amended (the "Exchange Act") (such filings, the
"SEC Documents"). Each of the SEC Documents filed with the Commission complied
with the applicable disclosure requirements of the Securities Act and the
Exchange Act in all material respects on the date of filing. None of the SEC
Documents, as of their respective dates, contained any untrue statement of
material fact or omitted to state a material fact necessary in order to make the
statements made therein, in light of the circumstances in which they were made,
not misleading.
2.7. Disclosure Statement. The Third Amended Disclosure
Statement of Toy Biz relating to the Plan of Reorganization (the "Disclosure
Statement") filed with the United States District Court for the District of
Delaware on March 12, 1998 complied with the applicable disclosure requirements
of title 11, United States Code, in all material respects on the date of filing.
The Disclosure Statement did not, as of the date thereof, and does not, as of
the date hereof, contain any untrue statement of material fact or omit to state
a material fact necessary in order to make the statements made therein, in light
of the circumstances in which they were made, not misleading.
2.8. No Litigation. Except as set forth on Schedule 2.8
hereto, there is no action, suit or proceeding pending (or, to the knowledge of
Toy Biz, currently threatened) against Toy Biz, or its existing or proposed
business or activities, properties or assets relating to the Plan of
Reorganization or the transactions contemplated thereby.
2.9. Capitalization. Immediately after giving effect to the
transactions contemplated by the Plan of Reorganization and this Agreement, the
authorized capital stock of Toy Biz will consist of (i) 250,000,000 shares of
Common Stock, of which 40,846,127 shares will be issued and outstanding, fully
paid and nonassessable, 117,500,000 shares will be reserved for issuance upon
the exercise of the Class A Warrants, the Class C Warrants and the Plan
Warrants, and for issuance upon the conversion of the Preferred Stock and for
Common
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Stock to be issued under any employee benefit plan, and (ii) 75,000,000 shares
of Preferred Stock, of which 16,900,000 shares will be issued and outstanding,
fully paid and nonassessable, and 58,100,000 shares will be reserved for
issuance upon the exercise of the Class B Warrants and to pay dividends in kind
on the Preferred Stock.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE XXXXXXXXX PARTIES
Each of Xxxxxxxxx, as to itself and the Xxxxxxxxx Parties, and each of
the Xxxxxxxxx Parties severally as to itself only, hereby represents and
warrants to Toy Biz as follows:
3.1. Organization; Etc. Xxxxxxxxx and each of the Xxxxxxxxx
Parties which is an entity is an entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its formation and has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as now being conducted, except where the failure to have
such power and authority would not have a material adverse effect on such
Xxxxxxxxx Party.
3.2. Authority. Xxxxxxxxx and each Xxxxxxxxx Party has all
requisite authority and power to execute and deliver this Agreement, the
Stockholders' Agreement and the Registration Rights Agreement and to consummate
the transactions contemplated hereby. As of the Closing, the execution and
delivery of this Agreement, the Stockholders' Agreement and the Registration
Rights Agreement and the consummation of the transactions contemplated hereby by
the Xxxxxxxxx Parties will have been duly and validly authorized by all required
action on the part of the Xxxxxxxxx Parties, and no other corporate,
partnership, trust or other proceedings on the part of the Xxxxxxxxx Parties or
Xxxxxxxxx are necessary to authorize this Agreement, the Stockholders' Agreement
and the Registration Rights Agreement or to consummate the transactions
contemplated hereby. This Agreement, the Stockholders' Agreement and the
Registration Rights Agreement have been duly and validly executed and delivered
by Xxxxxxxxx and each of the Xxxxxxxxx Parties and, assuming this Agreement, the
Stockholders' Agreement and the Registration Rights Agreement have been duly
authorized, executed and delivered by Toy Biz, constitute valid and binding
agreements of Xxxxxxxxx and the Xxxxxxxxx Parties, enforceable against Xxxxxxxxx
and the Xxxxxxxxx Parties in accordance with their terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization and other similar laws affecting creditors' rights generally and
(ii) the general principles of equity, regardless of whether asserted in a
proceeding in equity or at law.
3.3. Consents and Approvals; No Violations. No filing with,
and no permit, authorization, consent or approval of any public body or
governmental authority, domestic or foreign, is necessary for the consummation
by Xxxxxxxxx and the Xxxxxxxxx Parties of the
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transactions contemplated by this Agreement, the Stockholders' Agreement or the
Registration Rights Agreement other than those which have been made, will have
been made prior to Closing, or have been obtained. Neither the execution and
delivery of this Agreement, Stockholders' Agreement or the Registration Rights
Agreement by Xxxxxxxxx and the Xxxxxxxxx Parties nor the consummation by
Xxxxxxxxx and the Xxxxxxxxx Parties of the transactions contemplated hereby nor
compliance by Xxxxxxxxx and the Xxxxxxxxx Parties with any of the provisions
hereof will conflict with or result in any breach of any provision of such
entity's charter or other formative documents.
3.4. Investor Representations. (a) Each of the Xxxxxxxxx
Parties represents and warrants to Toy Biz that it is either (i) (A) an
"accredited investor" as such term is defined in the rules promulgated under the
Securities Act; and (B) has such knowledge and experience in business and
financial matters as to be capable of evaluating the merits and risks of an
investment in the Shares and has the capacity to protect its interest in
connection with the acquisition of the Xxxxxxxxx Shares, or (ii) a trust or
charitable foundation that (A) together with its trustees has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of its investment in the Shares and (B) has received the
Company's 1997 Annual Report to Stockholders and Forms 10Q for the quarters
ended June 30, 1998 and March 31, 1998, the Current Report on Form 8-K, dated
July 31, 1998, and all other information required by Rule 502 under the
Securities Act. Each of the Xxxxxxxxx Parties acknowledges that the Xxxxxxxxx
Shares and the Common Stock into which such Shares are convertible will be
subject to transfer restrictions as more fully set forth in Section 6.3 hereof.
(b) Each of the Xxxxxxxxx Parties represents that it is
purchasing the Xxxxxxxxx Shares and the Common Stock into which such Shares are
convertible for its own account for investment and not with a view to, or for
sale in connection with, any distribution of the Xxxxxxxxx Shares or shares of
Common Stock into which such Shares are convertible. Each of the Xxxxxxxxx
Parties acknowledges that the Xxxxxxxxx Shares and the Common Stock into which
such Shares are convertible have not been registered under the Securities Act,
or applicable state securities laws and agrees to comply fully with such laws in
connection with any resale or transfer thereof.
3.5. Brokers and Finders. Neither the Xxxxxxxxx Parties nor
Xxxxxxxxx has employed any broker or finder nor incurred any liability for any
investment banking fees, brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF OBJECT TRADING
Object Trading hereby represents and warrants to Toy Biz as follows:
4.1. Corporate Organization; Etc. Object Trading is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to have such power and
authority would not have a material adverse effect on Object Trading.
4.2. Corporate Authority. Object Trading has all requisite
corporate authority and power to execute and deliver this Agreement, the
Stockholders' Agreement and the Registration Rights Agreement and to consummate
the transactions contemplated hereby. As of the Closing, the execution and
delivery of this Agreement, the Stockholders' Agreement and the Registration
Rights Agreement and the consummation of the transactions contemplated hereby by
Object Trading will have been duly and validly authorized by all required
corporate action on the part of Object Trading and no other corporate
proceedings on the part of Object Trading are necessary to authorize this
Agreement, the Stockholders' Agreement and the Registration Rights Agreement or
to consummate the transactions contemplated hereby. This Agreement has been, and
at the time of Closing the Stockholders' Agreement and the Registration Rights
Agreement will have been, duly and validly executed and delivered by Object
Trading and, assuming this Agreement has been, and at the Closing the
Stockholders' Agreement and the Registration Rights Agreement will have been,
duly authorized, executed and delivered by Toy Biz, constitute valid and binding
agreements of Object Trading, enforceable against Object Trading in accordance
with their terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, moratorium, reorganization and other similar laws
affecting creditors' rights generally and (ii) the general principles of equity,
regardless of whether asserted in a proceeding in equity or at law.
4.3. Consents and Approvals; No Violations. No filing with,
and no permit, authorization, consent or approval of any public body or
governmental authority, domestic or foreign, is necessary for the consummation
by Object Trading of the transactions contemplated by this Agreement, the
Stockholders' Agreement or the Registration Rights Agreement other than those
which have been made, will have been made prior to Closing, or have been
obtained. Neither the execution and delivery of this Agreement, the
Stockholders' Agreement or the Registration Rights Agreement by Object Trading
nor the consummation by Object Trading of the transactions contemplated hereby
nor compliance by Object Trading with any of the provisions hereof will conflict
with or result in any breach of any provision of the Certificate of
Incorporation or By-Laws of Object Trading.
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4.4. Investor Representations. (a) Object Trading represents
and warrants to Toy Biz that it is (A) an "accredited investor" as such term is
defined in the rules promulgated under the Securities Act; and (B) has such
knowledge and experience in business and financial matters as to be capable of
evaluating the merits and risks of an investment in the Shares and has the
capacity to protect its interest in connection with the acquisition of the
Object Trading Shares. Object Trading acknowledges that the Object Trading
Shares and the Common Stock into which such Shares are convertible will be
subject to transfer restrictions as more fully set forth in Section 6.3 hereof.
(b) Object Trading represents that it is purchasing the Object
Trading Shares and the Common Stock into which such Shares are convertible for
its own account for investment and not with a view to, or for sale in connection
with, any distribution of the Object Trading Shares or shares of Common Stock.
Object Trading acknowledges that the Object Trading Shares and the Common Stock
into which such Shares are convertible have not been registered under the
Securities Act, or applicable state securities laws and agrees to comply fully
with such laws in connection with any resale or transfer thereof.
4.5. Brokers and Finders. Object Trading has not employed any
broker or finder nor incurred any liability for any investment banking fees,
brokerage fees, commissions or finders' fees in connection with the transactions
contemplated by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF WHIPPOORWILL
Whippoorwill hereby represents and warrants to Toy Biz as follows:
5.1. Corporate Organization; Etc. Each Whippoorwill Account is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and has all requisite power and authority to own
and use its properties and to carry on its business as now being conducted,
except where the failure to have such power and authority would not have a
material adverse effect on such Whippoorwill Account.
5.2. Authority. Whippoorwill Associates, Incorporated has all
requisite authority and power to execute and deliver this Agreement and the
Registration Rights Agreement on behalf of each Whippoorwill Account and to
consummate the transactions contemplated hereby. As of the Closing, the
execution and delivery of this Agreement and the Registration Rights Agreement
and the consummation of the transactions contemplated hereby by Whippoorwill
will have been duly and validly authorized by all required action on the part of
Whippoorwill and no other proceedings on the part of Whippoorwill are necessary
to authorize this Agreement and the Registration Rights Agreement or to
consummate the transactions contemplated hereby. This Agreement has been, and at
the time of Closing the Registration Rights Agreement will have been, duly and
validly executed and delivered by
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Whippoorwill and, assuming this Agreement has been, and at the Closing the
Registration Rights Agreement will have been, duly authorized, executed and
delivered by Toy Biz, constitute valid and binding agreements of each
Whippoorwill Account, enforceable against each Whippoorwill Account in
accordance with their terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, moratorium, reorganization and other similar laws
affecting creditors' rights generally and (ii) the general principles of equity,
regardless of whether asserted in a proceeding in equity or at law.
5.3. Consents and Approvals; No Violations. No filing with,
and no permit, authorization, consent or approval of any public body or
governmental authority, domestic or foreign, is necessary for the consummation
by Whippoorwill of the transactions contemplated by this Agreement or the
Registration Rights Agreement other than those which have been made, will have
been made prior to Closing, or have been obtained. Neither the execution and
delivery of this Agreement or the Registration Rights Agreement by any
Whippoorwill Account nor the consummation by any Whippoorwill Account of the
transactions contemplated hereby nor compliance by any Whippoorwill Account with
any of the provisions hereof will conflict with or result in any breach of any
provision of such Whippoorwill Account's formative documents.
5.4. Investor Representations. (a) Each Whippoorwill Account
represents and warrants to Toy Biz that it is (A) an "accredited investor" as
such term is defined in the rules promulgated under the Securities Act; and (B)
has such knowledge and experience in business and financial matters as to be
capable of evaluating the merits and risks of an investment in the Shares and
has the capacity to protect its interest in connection with the acquisition of
the Whippoorwill Shares. Each Whippoorwill Account acknowledges that the
Whippoorwill Shares and the Common Stock into which such Shares are convertible
will be subject to transfer restrictions as more fully set forth in Section 6.3
hereof.
(b) Each Whippoorwill Account represents that it is purchasing
the Whippoorwill Shares and the Common Stock into which such Shares are
convertible for its own account for investment and not with a view to, or for
sale in connection with, any distribution of the Whippoorwill Shares or shares
of Common Stock. Each Whippoorwill Account acknowledges that the Whippoorwill
Shares and the Common Stock into which such Shares are convertible have not been
registered under the Securities Act, or applicable state securities laws and
agrees to comply fully with such laws in connection with any resale or transfer
thereof.
5.5. Brokers and Finders. Whippoorwill has not employed any
broker or finder nor incurred any liability for any investment banking fees,
brokerage fees, commissions or finders' fees in connection with the transactions
contemplated by this Agreement.
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ARTICLE VI
COVENANTS OF THE PARTIES
6.1. Conduct of Business of Toy Biz. From the date hereof
through the Closing Date, Toy Biz will not take any actions which can reasonably
be expected to cause the representations and warranties contained in Article II
hereof to be untrue. Consistent with the foregoing, Toy Biz shall use its
reasonable efforts to preserve intact the current business organization of Toy
Biz, keep available the services of the current officers, employees, and agents
of Toy Biz, maintain the relations and good will with suppliers, customers,
landlords, creditors, employees, agents, and others having business
relationships with Toy Biz and otherwise conduct its business in the ordinary
course consistent with past practice, except to the extent otherwise set forth
in the Disclosure Statement.
6.2. Inspection Rights. At any time during normal business
hours and upon reasonable prior notice to Toy Biz, the Buyers or any of them or
their designated representatives' or agents may, at the cost and expense of such
Buyer, (a) visit and inspect the premises and any of the properties of Toy Biz,
including, without limitation, its records and books of account (and make copies
thereof and take extracts therefrom) and (b) discuss the affairs, finances, and
accounts of Toy Biz with its officers, directors, employees and accountants. Toy
Biz will provide Buyers with copies of all SEC Documents filed by it with the
Commission and provided to the holders of its Common Stock from and after the
date hereof.
6.3. Restricted Stock. The Buyers severally acknowledge and
agree that they shall not sell, transfer or otherwise dispose of any or all of
the Shares, the shares of Common Stock issuable upon the conversion of such
Shares, or any interest therein, unless such transaction is registered under the
Securities Act, or an exemption from such registration is available and such
Buyer provides to Toy Biz an opinion of counsel to such effect (which counsel
and opinion shall be reasonably acceptable to Toy Biz). The Buyers severally
acknowledge that there will be placed on the certificates of the Shares issued
to the Buyers a legend stating in substance:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR
ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR ANY EXEMPTION THEREFROM UNDER THE ACT
OR SUCH LAWS AND THE RULES AND REGULATIONS THEREUNDER."
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6.4. Consents and Approvals. Each party to this agreement
shall use its reasonable best efforts to make all filings, obtain all permits,
authorizations, consents or approvals from any public body or governmental
authority, domestic or foreign, that is necessary for the consummation of the
transactions contemplated herein, including, without limitation, the filing by
the Company and each other party which is required to do so of a Notification
and Report Form under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended ("HSR Act") with the Federal Trade Commission (the "FTC") and the
Antitrust Division of the Department of Justice (the "Antitrust Division") with
respect to the purchase of Preferred Stock and the Common Stock issuable upon
the conversion thereof and shall use their respective best efforts to respond as
promptly as practicable to all inquiries received from the FTC or the Antitrust
Division, including any request for additional information or documentary
material.
6.5. Public Announcements. Toy Biz and the Buyers will consult
with each other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this Agreement, and,
except as may be required by law or by any listing agreement with a national
securities exchange or trading market, shall not issue any such press release or
make any such public statement without the exercise of reasonable efforts to
consult with Toy Biz or the Buyers, as the case may be. Toy Biz shall not issue
any press release or make any public statement with respect to the transactions
contemplated by this Agreement which refers to any of the Buyers without the
consent of such Buyers. None of the Buyers shall issue any press release or make
any public statement with respect to the transactions contemplated by this
Agreement which refers to Toy Biz or any of the other Buyers without the consent
of Toy Biz or such Buyers, as the case may be.
6.6. Consummation of the Plan of Reorganization. Toy Biz will
use its reasonable best efforts to satisfy all conditions and to take all such
other action, as promptly as practicable, to effect the consummation of the Plan
of Reorganization.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE AGREEMENT
7.1. Conditions to Each Party's Obligations to Consummate the
Agreement. The respective obligations of each party to consummate this Agreement
is subject to the satisfaction or waiver of the following conditions on or
before the Closing Date:
(a) No statute, rule, regulation, executive order, decree, or
injunction shall have been enacted, entered, promulgated, enforced or threatened
by any court or governmental entity which prohibits or restricts the
consummation of this Agreement, the Stockholders' Agreement and the Registration
Rights Agreement or the transactions contemplated hereby and thereby;
671666.15
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(b) The Merger and the other transactions contemplated by the
Master Agreement and the Plan of Reorganization shall have been consummated upon
substantially the terms set forth therein without any waiver or other
modification of any material term thereof;
(c) The execution and delivery of the Stockholders' Agreement
by Toy Biz, Object Trading and the Xxxxxxxxx Parties and the other parties
thereto and the execution and delivery of the Registration Rights Agreement by
Toy Biz and by each of the Buyers and the other parties thereto;
(d) All applicable waiting periods required by the HSR Act
shall have expired or have been terminated by the FTC and the Antitrust
Division;
(e) The Restatement shall have been approved by the requisite
vote of the stockholders of Toy Biz, and the Restatement shall have been filed
with the Secretary of State of the State of Delaware;
(f) All authorizations, approvals, consents and waivers
required to be obtained from and notices and filings required to be given to or
made with any governmental agency or third party shall have been obtained, given
or made; and
(g) The Buyers and the Senior Marvel Lenders shall have
purchased an aggregate of 9,000,000 Shares as contemplated herein.
7.2. Further Conditions to Toy Biz's Obligations to Sell the
Xxxxxxxxx Shares. The obligations of Toy Biz to sell, convey, assign, transfer
and deliver the Xxxxxxxxx Shares at the Closing is further subject to
satisfaction or waiver by Toy Biz of the following conditions on or before the
Closing Date:
(a) The representations and warranties of Xxxxxxxxx and the
Xxxxxxxxx Parties contained herein shall be true and correct in all material
respects as of the Closing Date as though such representations and warranties
were made at and as of the date;
(b) Xxxxxxxxx and the Xxxxxxxxx Parties shall have performed
and complied in all material respects with all agreements, obligations,
covenants and conditions required by this Agreement, the Stockholders' Agreement
and the Registration Rights Agreement to be performed or complied with by it on
or prior to the Closing;
(c) Toy Biz shall have received a duly executed certificate of
an authorized officer of Xxxxxxxxx to the effect that the conditions in Sections
7.2(a) and (b) have been satisfied; and
(d) All deliveries to Toy Biz by Xxxxxxxxx and the Xxxxxxxxx
Parties required under Section 1.7 hereof shall have been delivered by them.
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7.3. Further Conditions to Toy Biz's Obligations to Sell the
Object Trading Shares. The obligations of Toy Biz to sell, convey, assign,
transfer and deliver the Object Trading Shares at the Closing is further subject
to satisfaction or waiver by Toy Biz of the following conditions on or before
the Closing Date:
(a) The representations and warranties of Object Trading
contained herein shall be true and correct in all material respects as of the
Closing Date as though such repre sentations and warranties were made at and as
of the date;
(b) Object Trading shall have performed and complied in all
material respects with all agreements, obligations, covenants and conditions
required by this Agreement, the Stockholders' Agreement and the Registration
Rights Agreement to be performed or complied with by it on or prior to the
Closing;
(c) Toy Biz shall have received a duly executed certificate of
an authorized officer of Object Trading to the effect that the conditions in
Sections 7.3(a) and (b) have been satisfied;
(d) All deliveries to Toy Biz by Object Trading required under
Section 1.8 hereof shall have been delivered by Object Trading.
7.4. Further Conditions to Toy Biz's Obligations to Sell the
Whippoorwill Shares. The obligations of Toy Biz to sell, convey, assign,
transfer and deliver the Whippoorwill Shares at the Closing is further subject
to satisfaction or waiver by Toy Biz of the following conditions on or before
the Closing Date:
(a) The representations and warranties of Whippoorwill
contained herein shall be true and correct in all material respects as of the
Closing Date as though such repre sentations and warranties were made at and as
of the date;
(b) Whippoorwill shall have performed and complied in all
material respects with all agreements, obligations, covenants and conditions
required by this Agreement and the Registration Rights Agreement to be performed
or complied with by it on or prior to the Closing;
(c) Toy Biz shall have received a duly executed certificate of
an authorized officer of Whippoorwill to the effect that the conditions in
Sections 7.4(a) and (b) have been satisfied;
(d) All deliveries to Toy Biz by Whippoorwill required under
Section 1.9 hereof shall have been delivered by Whippoorwill.
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7.5. Further Conditions to the Xxxxxxxxx Parties' Obligations.
The obligations of the Xxxxxxxxx Parties to consummate the transactions
contemplated hereby at the Closing is further subject to the satisfaction or
waiver of the following conditions on or before the Closing Date:
(a) The representations and warranties of Toy Biz contained
herein shall be true and correct in all material respects as of the Closing Date
as though such representations and warranties were made at and as of the date;
(b) Toy Biz shall have performed and complied in all material
respects with all agreements, obligations, covenants and conditions required by
this Agreement, the Stockholders' Agreement and the Registration Rights
Agreement to be performed or complied with by them on or prior to the Closing;
(c) Xxxxxxxxx shall have received a duly executed certificate
from Toy Biz to the effect that the conditions in Sections 7.5(a) and (b) have
been satisfied;
(d) Toy Biz shall have obtained the Term Loan Facility and the
Working Capital Facility (both as defined in the Plan of Reorganization) on
terms and conditions reasonably acceptable to Xxxxxxxxx. The Term Loan Facility
and the Working Capital Facility shall not, in the aggregate, have an effective
interest rate of more than thirteen percent (13%) per annum.
(e) The sum of the allowed DIP Claims (as defined in the Plan
of Reorganization) and the allowed Administrative Expense Claims (as defined in
the Plan of Reorganization) shall not exceed, or reasonably be expected to
exceed, $147,000,000, unless one or more other Buyers have transferred to the
Xxxxxxxxx Parties, in proportion to the number of Xxxxxxxxx Shares purchased by
each of them, for no additional consideration, an aggregate number of additional
shares of Preferred Stock equal to:
N - N
--------------------------------------------
1 - [(D + A - 127,000,000) x .002/1,000,000]
where:
D = the amount of allowed DIP Claims
A = the amount of allowed Administrative
Expense Claims (including for this purpose
all of the professional fees, costs and
expenses of professionals engaged by The
Chase Manhattan Bank pursuant to Section
4.2(b)(i)(A) of the Plan of Reorganization)
N = the number of Xxxxxxxxx Shares.
Because the amount of the allowed Administrative Expense Claims is unlikely to
have been determined as of the Closing Date, this condition shall be deemed to
be satisfied if Object
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Trading negotiates in good faith with Xxxxxxxxx to agree upon an estimate of the
maximum amount of the Administrative Expense Claims reasonably likely to be
allowed, and Object Trading places in escrow the number of shares of Preferred
Stock, if any, that would be required to be transferred to the Xxxxxxxxx Parties
if that estimate was realized. The escrow arrangements shall provide for the
distribution of the escrowed shares as the aggregate of the allowed DIP Claims
and the allowed Administrative Expense Claims become determined. The amounts set
forth above will be appropriately adjusted if Marvel or any of its affiliated
debtors sells assets outside of the ordinary course of business and uses the
proceeds thereof to repay DIP Claims;
(f) All deliveries by Toy Biz to Xxxxxxxxx required under
Section 1.6 hereof shall have been delivered to Xxxxxxxxx.
7.6. Further Conditions to Object Trading's Obligations. The
obligations of Object Trading to consummate the transactions contemplated hereby
at the Closing is further subject to the satisfaction or waiver of the following
conditions on or before the Closing Date:
(a) The representations and warranties of Toy Biz contained
herein shall be true and correct in all material respects as of the Closing Date
as though such representations and warranties were made at and as of the date;
(b) Toy Biz shall have performed and complied in all material
respects with all agreements, obligations, covenants and conditions required by
this Agreement, the Stockholders' Agreement and the Registration Rights
Agreement to be performed or complied with by them on or prior to the Closing;
(c) Object Trading shall have received a duly executed
certificate from Toy Biz to the effect that the conditions in Sections 7.6(a)
and (b) have been satisfied;
(d) Toy Biz shall have obtained the Term Loan Facility and the
Working Capital Facility (both as defined in the Plan of Reorganization) on
terms and conditions reasonably acceptable to Object Trading. The Term Loan
Facility and the Working Capital Facility shall not, in the aggregate, have an
effective interest rate of more than thirteen percent (13%) per annum; and
(e) All deliveries by Toy Biz to Object Trading required under
Section 1.6 hereof shall have been delivered to Object Trading.
7.7. Further Conditions to Whippoorwill's Obligations. The
obligations of Whippoorwill to consummate the transactions contemplated hereby
at the Closing is further subject to the satisfaction or waiver of the following
conditions on or before the Closing Date:
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(a) The representations and warranties of Toy Biz contained
herein shall be true and correct in all material respects as of the Closing Date
as though such representations and warranties were made at and as of the date;
(b) Toy Biz shall have performed and complied in all material
respects with all agreements, obligations, covenants and conditions required by
this Agreement and the Registration Rights Agreement to be performed or complied
with by them on or prior to the Closing;
(c) Whippoorwill shall have received a duly executed
certificate from Toy Biz to the effect that the conditions in Sections 7.7(a)
and (b) have been satisfied;
(d) Toy Biz shall have obtained the Term Loan Facility and the
Working Capital Facility (both as defined in the Plan of Reorganization) on
terms and conditions reasonably acceptable to Whippoorwill. The Term Loan
Facility and the Working Capital Facility shall not, in the aggregate, have an
effective interest rate of more than thirteen percent (13%) per annum; and
(e) All deliveries by Toy Biz to Whippoorwill required under
Section 1.6 hereof shall have been delivered to Whippoorwill.
ARTICLE VIII
TERMINATION AND ABANDONMENT
8.1. Termination. Upon the earlier of (x) the termination of
the Master Agreement or the Plan of Reorganization, (y) a Final Change in
Control (as defined below) or (z) the delivery by Xxxxxxxxx or Object Trading of
a written notice terminating this Agreement following such time as persons
designated by Marvel and not approved by Xxxxxxxxx or Object Trading, as the
case may be, become a majority of the directors of Toy Biz (a "Marvel Board
Change"), this Agreement and the obligations of the parties hereunder shall
terminate. In no event shall Toy Biz have any obligations under this Agreement
(including any obligations under Section 7.2(a) hereof) after the occurrence of
a Final Change in Control, whether that Final Change in Control occurs before or
after the termination of this Agreement. The term "Final Change in Control"
means a Change in Control (as defined in the Amended and Restated Master
Agreement (the "Master Agreement"), dated as of November 19, 1997, as amended,
by and among Toy Biz, the secured creditors of Marvel and various subsidiaries
of Marvel, and the Panini Lenders (as defined in the Plan)) that is final and
not subject to appeal or which results in a change in the identity of a majority
of the directors of Toy Biz.
671666.15
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ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
9.1. Survival. The representations and warranties of Toy Biz
set forth in Article II hereof and the representations and warranties of
Xxxxxxxxx and the Xxxxxxxxx Parties set forth in Article III hereof, the
representations and warranties of Object Trading set forth in Article IV hereof
and the representations and warranties of Whippoorwill set forth in Article V
hereof shall survive the Closing for one (1) year (other than the
representations and warranties of Toy Biz under Section 2.4 which shall survive
indefinitely).
9.2. Indemnification. (a) Toy Biz, for itself, its successors,
legal representatives and assigns, agrees, subject to the terms of this Article
IX, to indemnify and hold harmless the Buyers and their successors and assigns
from any Costs (as defined in clause (c) below) resulting from or by reason of
(i) any inaccuracy of or in any of the representations and warranties made by
Toy Biz in this Agreement and (ii) any failure of Toy Biz to perform any
covenant or agreement set forth in this Agreement which failure is not cured
within fifteen days after notice of such failure.
(b) Each of the Buyers, severally, for itself, its successors,
legal representatives and assigns, agrees, subject to the terms of this Article
IX, to indemnify and hold harmless Toy Biz and the other Buyers and each of
their successors and assigns from any Costs (as defined in clause (c) below)
resulting from or by reason of (i) any inaccuracy of or in any of the
representations and warranties made by such Buyer in this Agreement and (ii) any
failure of such Buyer to perform any covenant or agreement set forth in this
Agreement which failure is not cured within fifteen days after notice of such
failure.
(c) As used in this Article IX, "Costs" means all losses,
liabilities, damages, judgments, assessments, fines, interest, penalties, costs
and expenses (including, without limitation, reasonable settlement costs and
reasonable legal, accounting, experts' and other fees, costs and expenses)
incurred in connection with or resulting from any claims, actions, suits,
proceedings, demands or judgments.
9.3. Procedure for Indemnification. (a) If the person seeking
indemnification under this Article IX (the "Indemnitee") shall claim
indemnification hereunder arising from any claim or demand of a third party, the
Indemnitee shall promptly notify the party from which indemnification is sought
(the "Indemnitor") in writing of the basis for such claim or demand, setting
forth the nature of the claim or demand in reasonable detail, and if such claim
is founded upon a written document, a copy of such writing shall accompany the
notice; provided, however, that failure to give such notice will not prejudice
such Indemnitee's right to indemnification from the Indemnitor, except as to any
losses suffered by such Indemnitee which are attributable to such Indemnitee's
failure to promptly give such notice to the Indemnitor.
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The Indemnitor shall have the right to compromise or, if appropriate, defend at
its own cost and through counsel of its own choosing, any claim or demand of any
third party giving rise to such claim for indemnification. Such notice and said
opportunity to compromise or defend, if applicable, shall be conditions
precedent to any asserted liability under this Article IX. In the event the
Indemnitor undertakes to compromise or defend any such claim or demand, it shall
promptly notify the Indemnitee in writing of its intention to do so. The
Indemnitee shall fully cooperate with the Indemnitor and its counsel in the
defense or compromise of such claim or demand. After the assumption of the
defense by the Indemnitor, the Indemnitor shall not be liable for any legal or
other expenses subsequently incurred by the Indemnitee in connection with such
defense, other than reasonable costs of investigation, but the Indemnitee may
participate in such defense at its own expense. No settlement of a third party
claim or demand or consent to entry of a judgment defended by the Indemnitee
shall be made without the written consent of the Indemnitor, which consent shall
not be unreasonably withheld. The Indemnitor shall not, except with the written
consent of the Indemnitee, consent to the entry of a judgment or settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to the Indemnitee of an unconditional release from all
liability in respect of such third party claim or demand.
(b) If the Indemnitee shall claim indemnification hereunder
for any claim other than a third party claim, the Indemnitee shall promptly
notify the Indemnitor of the nature and amount of the claim; and unless such
claim is disputed, payment therefor shall be made by the Indemnitor forthwith
upon receipt of such notice. If such claim is disputed by the Indemnitor, the
Indemnitor shall notify the Indemnitee of the basis for such dispute with
reasonable particularity within twenty (20) business days after its receipt of
notice of claim for indemnification. If the Indemnitor fails to notify the
Indemnitee of such dispute within such twenty (20) business days, the Indemnitor
shall automatically be deemed to have waived any right to dispute such claim if
no notice for the basis of such dispute is given to the Indemnitee within
fifteen (15) business days after notice from the Indemnitee to the Indemnitor of
the expiration of such twenty (20) business day period. If proper notice of
dispute is given by the Indemnitor and the Indemnitee disagrees therewith, then
the Indemnitee may file a lawsuit to recover the amount claimed with the
District Court.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Amendment and Modification. This Agreement may be
amended or modified at any time by the parties hereto, pursuant to an instrument
in writing signed by each of Toy Biz, the Xxxxxxxxx Parties, Whippoorwill, and
Object Trading.
10.2. Extension; Waiver. At any time prior to the Closing
Date, the party entitled to the benefit of any respective term or provision
hereof may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document, certificate
or writing delivered pursuant hereto or (c) waive compliance with any
obligation, covenant, agreement or condition contained herein. Any agreement on
the part of a party to
671666.15
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any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party entitled to the benefits of such extended or
waived term or provision. The representations, warranties and agreements of any
of the parties provided for in this Agreement, and the parties, obligations
hereunder, shall continue in effect notwithstanding any investigation made by
the other party hereto.
10.3. Entire Agreement; Enforceability. This Agreement,
together with its Exhibits, constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, between the parties hereto
with respect to the subject matter hereof. Notwithstanding the foregoing, the
commitment letter to purchase the Preferred Stock, dated November 19, 1997, by
and between Toy Biz, Zib, Inc., a Delaware corporation, and Xxxxxxxxx (the
"Commitment Letter") shall remain in effect except to the extent expressly
superceded hereby.
10.4. Assignment. This Agreement (and the Buyers' commitments
hereunder) shall not be assignable by Toy Biz nor shall it be assignable, in
whole or in part, by the Xxxxxxxxx Parties or Object Trading without the consent
of Toy Biz and Buyers having committed to purchase 80% of the shares of
Preferred Stock to be purchased by the Buyers, provided that no such consent
shall be required for (i) assignments by Object Trading of its rights to
purchase any or all of the shares of Preferred Stock it is committed to purchase
under this Agreement, (ii) assignments by any Buyer of its rights under this
Agreement to any entity which is controlling, controlled by or under common
control with such Buyer and (iii) assignments by any Xxxxxxxxx Party of its
rights under this Agreement to an investment fund controlled or managed by it.
Any assignee shall be required to deliver to Toy Biz and the Buyers its written
agreement to be bound by this Agreement and, upon agreeing to be so bound, shall
thereupon be deemed to have become a Buyer. No assignment, however, shall
relieve the assignor of its obligations under this Agreement. Any such purported
assignment without such consents shall be null and void.
10.5. Validity. The invalidity or unenforceability of any term
or provision of this Agreement in any situation or jurisdiction shall not affect
the validity or enforceability of the other terms or provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. Any such provision shall be deemed to be
modified to the extent necessary to render it legal, valid and enforceable.
10.6. Further Assurances. Each of the Buyers and Toy Biz shall
use all commercially reasonable efforts to take all action and to do all things
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement. Following the Closing, the parties hereto shall
furnish to each other and their respective representatives such necessary and
available information as may reasonably be requested in connection with tax,
accounting and similar matters relating to the purchase of the Preferred Stock.
671666.15
22
10.7. Certain Payment to Xxxxxxxxx. (a) If a Qualifying
Transaction (as defined in the Plan of Reorganization) occurs, Xxxxxxxxx will be
entitled to receive a fee of $8 million, which fee shall constitute the Break-up
Fee referred to in the Plan of Reorganization and which shall be paid to
Xxxxxxxxx by wire transfer of immediately available funds upon payment of the
Toy Biz distribution pursuant to the Plan of Reorganization.
(b) Toy Biz shall reimburse Xxxxxxxxx for its reasonable
professional fees, costs and out-of-pocket expenses as provided in the
Commitment Letter (as defined in Section 10.3) and the Plan of Reorganization.
10.8. Notices. Unless otherwise provided herein, all notices
and other communications hereunder shall be in writing and shall be deemed given
upon receipt by the other parties at the following addresses or facsimile
numbers:
(a) if to a Buyer, to its address set forth on Schedule 1
hereto;
(b) if to Toy Biz, to
Toy Biz, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, President
and Chief Executive Officer
Facsimile No.: 212-682-5272
with a copy to
Battle Xxxxxx LLP
Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxx, Esq.
Facsimile No.: 000-000-0000
10.9. Governing Law. This Agreement shall be governed by the
laws of the State of Delaware (regardless of the laws that might otherwise
govern under applicable Delaware principles of conflicts of law) as to all
matters, including but not limited to matters of validity, construction, effect,
performance and remedies.
10.10. Descriptive Headings. The descriptive headings herein
are inserted for convenience of reference only and shall in no way be construed
to define, limit, describe, explain, modify, amplify, or add to the
interpretation, construction or meaning of any provision of, or scope or intent
of, this Agreement or in any way affect this Agreement.
671666.15
23
10.11. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
10.12. Expenses. Whether or not this Agreement and the
transactions contemplated hereby are consummated, and except as otherwise
expressly set forth in the Master Agreement or the Commitment Letter, all costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses.
10.13. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto and its permitted
assigns and nothing in this Agreement, express or implied, is intended by or
shall confer upon any other person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
10.14. No Waivers. Except as otherwise expressly provided
herein, no failure to exercise, delay in exercising or single or martial
exercise of any right, power or remedy by any party, and no course of dealing
between the parties, shall constitute a waiver of any such right, power or
remedy.
10.15. Specific Performance. The parties hereto agree that if
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached, irreparable damage would occur,
no adequate remedy at law would exist and damages would be difficult to
determine, and that the parties shall be entitled to specific performance of the
terms hereof and immediate injunctive relief, in addition to any other remedy at
law or equity.
10.16. Transfer Taxes. Toy Biz shall be responsible for, and
pay, all sales, use, transfer, filing, conveyance, recording, and other similar
taxes and fees, arising out of or in connection with the sale of Preferred Stock
pursuant to this Agreement.
10.17. Whippoorwill Obligations Several and Not Joint. With
respect to any obligations hereunder assumed by any Whippoorwill Account, such
obligations shall be several and not joint and shall be limited to the
percentage held by such Whippoorwill Account of the total Shares held by all
such Whippoorwill Accounts, and no such Whippoorwill Account shall be liable for
any obligation of any other Whippoorwill Account.
671666.15
24
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly signed as of the date first above written.
TOY BIZ, INC.
By:
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
XXXXXXXXX PARTNERS, INC.
By:
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXXXXXXX & CO., L.P.
By: Xxxxxxxxx Partners, L.P.
By: Xxxxxxxxx Partners, Inc.
By:
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXXXXXXX FOCUS FUND L.P.
By: Xxxxxxxxx Partners, L.P.
By: Xxxxxxxxx Partners Inc.
By:
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXXXXXXX INTERNATIONAL LIMITED
By: Xxxxxxxxx Partners, Inc.
By:
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
671666.15
XXXXXX XXXXXXXXX, XXXXXXX XXXXXXX
AND XXXX XXXXXX AS TRUSTEES
U/T/A/D 12/27/88, XXXX XXXXXXXXX,
GRANTOR
By:
------------------------------------------
Xxxx X. Xxxxxx
Trustee
XXXX XXXXXXXXX AND XXXXXX
XXXXXXXXX, AS TRUSTEES OF THE
XXXX AND XXXXXX XXXXXXXXX
FOUNDATION
By:
------------------------------------------
Xxxx Xxxxxxxxx
Trustee
------------------------------------------
Xxxxxx Xxxxxxxxx
OBJECT TRADING CORP.
By:
------------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: President
WHIPPOORWILL ASSOCIATES, INCORPORATED, as agent for and/or general partner of
the accounts listed on Schedule 1 hereto
By:
------------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Managing Director
671666.15
Schedule 1
Shares of Total
Name and Address Preferred Stock Purchase Price
Xxxxxxxxx Parties:
XXXXXXXXX & CO., L.P. 1,900,000 $19,000,000
c/x Xxxxxxxxx Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
XXXXXXXXX FOCUS FUND L.P. 200,000 2,000,000
c/x Xxxxxxxxx Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
XXXXXXXXX INTERNATIONAL 700,000 7,000,000
LIMITED
c/x Xxxxxxxxx Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
ELYSSA XXXXXXXXX, XXXXXXX 50,000 500,000
XXXXXXX AND XXXX XXXXXX AS
TRUSTEES U/T/A/D 12/27,88,
XXXX XXXXXXXXX, GRANTOR
c/x Xxxxxxxxx Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
XXXX XXXXXXXXX AND XXXXXX 10,000 100,000
XXXXXXXXX, AS TRUSTEES OF THE
XXXX AND XXXXXX XXXXXXXXX
FOUNDATION
c/x Xxxxxxxxx Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
Xxxxxx Xxxxxxxxx 140,000 1,400,000
c/x Xxxxxxxxx Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
OBJECT TRADING CORP. 3,492,852 34,928,520
c/o Toy Biz, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
000000.00
Shares of Total
Name and Address Preferred Stock Purchase Price
WHIPPOORWILL ASSOCIATES, 500,000 5,000,000
INCORPORATED, as agent for or general
partner of the accounts or partnerships listed on
the Addendum to Schedule 1
c/o Whippoorwill Associates, Inc.
00 Xxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Total: 6,992,852 69,928,520
========= ===========
671666.15
Addendum to Schedule 1
Fund/Account Preferred Shares
Purchased
President and Fellows of Harvard College 26,000
The Rockefeller Foundation 68,000
Xxxx Partners II, L.P. 76,000
Xxxx Partners III, L.P. 177,000
Xxxx Partners IV, L.P. 112,000
Xxxx Offshore Fund Trust 40,000
Whippoorwill Profit Sharing Plan 1,000
Total 500,000
671666.15
Schedule 2.8
NONE
671666.15
