Exhibit A
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STOCK PURCHASE AGREEMENT
dated as of November 20, 1996
by and among
▇▇▇▇▇▇▇ GROUP INCORPORATED,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, T.A.
and
ZIB INC.
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................... 1
1.1 Defined Terms......................................... 1
1.2 Other Definitional Provisions......................... 3
ARTICLE II SALE AND PURCHASE OF THE SHARES....................... 3
2.1 Purchase and Sale of the Shares....................... 3
2.2 Consideration......................................... 3
2.3 Closing............................................... 3
2.4 Deliveries by the Stockholders........................ 4
2.5 Deliveries by Purchaser............................... 4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS.... 4
3.1 Right to Sell Shares; Approvals; Binding Effect....... 4
3.2 Title to Shares....................................... 5
3.3 SEC Documents and Other Reports....................... 5
3.4 Brokers............................................... 5
3.5 Promissory Note
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER........... 6
4.1 Organization.......................................... 6
4.2 Authority; Enforceability............................. 6
4.3 Brokers............................................... 7
ARTICLE V COVENANTS............................................. 7
5.1 Reasonable Best Efforts............................... 7
5.2 No Public Announcement; Confidentiality............... 7
5.3 No Disposition of Shares; No Liens.................... 8
5.4 Agreement Relating to Rights Under Stockholders'
Agreement............................................. 8
5.5 Expenses.............................................. 8
5.6 Additional Payment......................................8
5.7 Further Assurances.................................... 8
ARTICLE VI CONDITIONS TO THE CLOSING............................. 8
6.1 Conditions to the Obligations of Each Party........... 9
6.2 Additional Conditions to the Obligations of Purchaser. 9
6.3 Additional Conditions to the Obligations of the
Stockholders.......................................... 10
ARTICLE VII TERMINATION........................................... 10
7.1 Termination........................................... 10
7.2 Effect of Termination................................. 11
ARTICLE VIII INDEMNIFICATION BY STOCKHOLDERS....................... 11
8.1 Indemnification With Respect to Representations and
Warranties............................................ 11
8.2 Indemnification With Respect to Formation and Con-
tribution Agreement................................... 11
ARTICLE IX MISCELLANEOUS......................................... 11
9.1 Survival of Representations and Warranties............ 11
9.2 Notices............................................... 12
9.3 Interpretation........................................ 12
9.4 No Third Party Beneficiaries.......................... 13
9.5 Amendment............................................. 13
9.6 Extension; Waiver..................................... 13
9.7 Specific Performance.................................. 13
9.8 Entire Agreement...................................... 13
9.9 Successors and Assigns................................ 14
9.10 Governing Law......................................... 14
9.11 Counterparts.......................................... 14
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of November 20, 1996, by and
among ▇▇▇▇▇▇▇ GROUP INCORPORATED, a Delaware corporation ("Purchaser"),
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ T.A., a
Florida Trust ("Trust"), and ZIB INC., a Delaware corporation ("Zib" and
together with ▇▇▇▇▇▇▇▇▇▇ and Trust, the "Stockholders").
WHEREAS, the Stockholders are the record and beneficial owners of
9,506,000 shares (the "Shares") of Class A common stock, par value $.01 per
share (the "Class A Common Stock"), of Toy Biz, Inc., a Delaware
corporation (the "Company"); and
WHEREAS, the Stockholders desire to sell to Purchaser, and
Purchaser desires to purchase from the Stockholders, the Shares on the
terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, intending to be legally bound
thereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement (including the
schedules hereto), the terms defined in this Agreement shall have the
respective meanings specified in the Preamble hereof, and in addition, the
following terms shall have the following meanings:
"Agreement": this Stock Purchase Agreement, as amended,
modified or supplemented from time to time.
"business day": any day other than a Saturday or Sunday on
which banks in New York are required to be open for the conduct of
business.
"Cash Component": the $133,084,000 cash portion of the
Purchase Price, as set forth in Section 2.2.
"Closing": the Closing of the sale of the Shares, as set
forth in Section 2.3.
"Closing Date": the date of the Closing, as set forth in
Section 2.3.
"Damages": any and all losses, liabilities, damages, costs
and expenses.
"Exchange Act": the Securities Exchange Act of 1934, as
amended.
"Formation and Contribution Agreement": the Formation and
Contribution Agreement, dated as of March 19, 1993, among Zib
(formerly known as Toy Biz, Inc.), ▇▇▇▇▇▇▇▇▇▇, the Trust, Marvel, ▇▇▇
▇▇▇▇, and the Company (formerly known as Toy Biz Acquisition, Inc.).
"GAAP": generally accepted accounting principles in the
United States of America in effect from time to time.
"Governmental Authority": any nation or government, any
state or other political subdivision thereof and any entity
(including, without limitation, a court) exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge
or other security interest or any preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever and any restriction on the Shares pursuant to a voting,
stockholders or similar agreement or any other restriction on the
Shares of any kind, other than those imposed by applicable securities
laws.
"Marvel": Marvel Entertainment Group, Inc., a Delaware
corporation.
"person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Promissory Note": the note from Purchaser in the
principal amount of $27,844,171, in the form attached hereto as
Exhibit A, with blanks appropriately completed, representing partial
payment of the Purchase Price, as set forth in Section 2.2.
"Purchase Price": the $160,928,171 payable for the Shares,
consisting of the Cash Component and the Promissory Note, as set
forth in Section 2.2.
"SEC": the Securities and Exchange Commission.
"SEC Documents": any documents required to be filed by the
Company with the SEC since February 1995, as set forth in Section
3.3.
"Securities Act": the Securities Act of 1933, as amended.
"Stockholders' Agreement": the Stockholders' Agreement,
dated as of March 2, 1995, by and among ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, the
Trust, Marvel, the Company, and Zib.
"Voting Trust Agreement": the Voting Trust Agreement,
dated as of March 2, 1995, by and among Marvel, ▇▇▇▇▇▇▇▇▇▇ and the
Company.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein" and "hereunder" and other words of similar import when used in
this Agreement shall refer to this Agreement and the Exhibits, Schedules
and the Disclosure Schedule as a whole and not to any particular part or
subdivision thereof, and Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms, and the
words of any gender shall include each other gender where appropriate.
ARTICLE II
SALE AND PURCHASE OF THE SHARES
2.1 Purchase and Sale of the Shares. Upon the terms and subject to
the conditions of this Agreement, at the Closing (as defined in Section 2.3
hereof), the Stockholders shall sell, assign, transfer, convey and deliver
to Purchaser, and Purchaser shall purchase, acquire and accept from the
Stockholders, all of the Shares free and clear of any and all Liens.
2.2 Consideration. Upon the terms and subject to the conditions of
this Agreement, in consideration of the aforesaid sale, conveyance,
assignment, transfer and delivery of the Shares, Purchaser shall pay to the
Stockholders the Purchase Price.
2.3 Closing. The transactions contemplated herein shall be
consummated at the Closing. The Closing will take place at such time and
date specified by the parties hereto (the "Closing Date"), subject in to
the satisfaction or waiver of the conditions set forth in Article VI
hereof, at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
2.4 Deliveries by the Stockholders. At the Closing, the
Stockholders will deliver or cause to be delivered (unless previously
delivered) to Purchaser, the following:
(a) A stock certificate or stock certificates represent-
ing the Shares accompanied by stock powers duly endorsed in blank or
accompanied by duly executed instruments of transfer, and any other
documents that are necessary to transfer to Purchaser good and valid
title to the Shares free and clear of all Liens, with all necessary
transfer tax stamps affixed or accompanied by evidence that all stock
transfer taxes have been paid.
(b) All other documents, instruments and writings
required to be delivered by the Stockholders at the Closing.
2.5 Deliveries by Purchaser. At the Closing, Purchaser will
deliver or cause to be delivered (unless previously delivered) to the
Stockholders, the following:
(a) (i) the Cash Component, in immediately available
funds by wire transfer to an account designated by the Stockholders to
Purchaser at least two business days prior to the Closing, and (ii)
the Promissory Note, duly executed by Purchaser and dated the date of
the Closing.
(b) All other documents, instruments and writings required
to be delivered by Purchaser at the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
The Stockholders hereby represent and warrant to Purchaser as
follows:
3.1 Right to Sell Shares; Approvals; Binding Effect. The
Stockholders have the requisite power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby and
to sell to Purchaser the Shares. This Agreement has been duly executed and
delivered by the Stockholders and constitutes a valid and binding
obligation of the Stockholders, enforceable against them in accordance with
its terms, except (i) as such enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization and other similar laws affecting
creditors' rights generally, and (ii) as such enforceability may be limited
by general principles of equity, regardless of whether asserted in a
proceeding in equity or law.
3.2 Title to Shares. The Stockholders have good, valid and
marketable title to the Shares, free and clear of all Liens. At the
Closing, the Stockholders will transfer to Purchaser and Purchaser will
acquire from the Stockholders good, valid and marketable title to the
Shares, free and clear of all Liens.
3.3 SEC Documents and Other Reports. To the actual knowledge of
the Stockholders: (i) the Company has filed all of the SEC Documents; (ii)
as of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act,
as the case may be, and none of the SEC Documents contained any untrue
statement of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; provided,
however, that this subsection 3.3 (ii) shall not apply to any information
relating to Marvel, Marvel Studios or any of Marvel's affiliates (other
than the Company); (iii) the consolidated financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with the applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared
in accordance with GAAP consistently applied throughout the period involved
(except as may be indicated therein or in the notes thereto) and fairly
present the consolidated financial position, results of operations and cash
flows of the Company and its consolidated subsidiary as of the dates or for
the periods indicated therein, subject, in the case of the unaudited
statements, to normal year-end adjustments (which are not, individually or
in the aggregate, material) and the absence of footnote disclosure; and
(iv) since February 1995, the Company has not made any change in the
accounting practices or policies applied in the preparation of its
financial statements.
3.4 Brokers. No person is or will be entitled to any
broker's, finder's, investment banker's, financial advisor's or similar
fee from the Stockholders in connection with this Agreement or the
transactions contemplated hereby or thereby.
3.5 Promissory Note. (a) The Stockholders understand that the
Promissory Note has not been registered under the Securities Act, and that
there is no existing public market for the Promissory Note and that there
can be no assurance that the Stockholders will be able to sell or dispose
of the Promissory Note.
(b) The Stockholders are "accredited investors" (as defined in
Rule 501 of Regulation D under the Securities Act) purchasing for their own
accounts and are acquiring the Promissory Note for investment purposes and
not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act and they have such
knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of their investment in the Promissory
Note, including a complete loss of their investment, or the Stockholders
have been advised by a representative possessing such knowledge and experi-
ence.
(c) The Stockholders have had the opportunity to ask questions
of and receive answers from Purchaser concerning the terms and conditions
of the Promissory Note and other related matters. The Stockholders further
acknowledge that Purchaser has made available to the Stockholders or their
representatives all documents and information relating to an investment in
the Promissory Note requested by or on behalf of the Stockholders.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Stockholders as
follows:
4.1 Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own all of
its properties and assets and to carry on its business as it is now being
conducted, except where the failure to have such power or authority would
not have a material adverse effect on the ability of Purchaser to
consummate the transactions contemplated hereby.
4.2 Authority; Enforceability. Purchaser has the corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery by Purchaser
of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by the Board of Directors of Purchaser and
no other proceedings on the part of Purchaser are necessary to authorize
the execution and delivery of this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Purchaser and constitutes a legal, valid and binding agreement
of Purchaser, enforceable against it in accordance with its terms, except
(i) as such enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization and other similar laws affecting creditors'
rights generally, and (ii) as such enforceability may be limited by general
principles of equity, regardless of whether asserted in a proceeding in
equity or law.
4.3 Brokers. No person is or will be entitled to any broker's,
finder's, investment banker's, financial advisor's or similar fee from
Purchaser in connection with this Agreement or the transactions
contemplated hereby or thereby.
ARTICLE V
COVENANTS
5.1 Reasonable Best Efforts. (a) Upon the terms and subject to
the conditions of this Agreement, each of the parties hereto agrees to use
its reasonable best efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement as promptly as practicable
including, but not limited to, (i) the preparation and filing of all forms,
registrations and notices required to be filed to consummate the
transactions contemplated by this Agreement and the taking of such actions
as are necessary to obtain any requisite approvals, consents, orders,
exemptions or waivers by any third party or Governmental Authority, and
(ii) causing the satisfaction of all conditions to the Closing.
(b) Each party shall promptly consult with the others with respect
to, provide any necessary information that is not subject to legal
privilege with respect to, and provide the others (or their counsel) copies
of, all filings made by such party with any Governmental Authority or any
other information supplied by such party to a Governmental Authority in
connection with this Agreement and the transactions contemplated by this
Agreement. Each party hereto shall promptly inform the others of any
communication from any Governmental Authority regarding any of the
transactions contemplated by this Agreement. If any party receives a
request for additional information or documentary material from any such
Governmental Authority with respect to the transactions contemplated by
this Agreement, then such party will endeavor in good faith to make, or
cause to be made, as soon as reasonably practicable and after consultation
with the other parties, an appropriate response in compliance with such
request.
5.2 No Public Announcement; Confidentiality. None of the parties
hereto shall make any public announcement concerning this Agreement or the
transactions contemplated hereby without the prior approval of the other
parties, which approval shall not be unreasonably withheld, except as such
announcement may be required by law or the rules and regulations of a stock
exchange, in which case the party required to make the announcement shall
use all reasonable efforts to provide the other parties with reasonable
time under the circumstances to comment on such announcement in advance of
such announcement.
5.3 No Disposition of Shares; No Liens. The Stockholders shall
not, until and including the earlier of the Closing and the termination of
this Agreement pursuant to Section 7.1, sell, assign, transfer, or
otherwise dispose of or convey the Shares, or permit the Shares to become
subject to any Lien.
5.4 Agreement Relating to Rights Under Stockholders' Agreement.
Until and including the earlier of the Closing and the termination of this
Agreement pursuant to Section 7.1 hereof, without the consent of Purchaser,
the Stockholders shall not grant any consent under Section 3.2 of the
Stockholders' Agreement.
5.5 Expenses. Whether or not the transactions contemplated hereby
are consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses.
5.6 Additional Payment. If, within one year after the Closing,
either (x) Purchaser and its affiliates shall sell or otherwise transfer
for value (including by way of merger) all or substantially all of the
shares of capital stock which are then beneficially owned by Purchaser and
its affiliates of the Company, Marvel or any affiliate of Purchaser which
has succeeded to the business of the Company or (y) the Company or any such
successor shall dispose of all or substantially all of its assets (other
than, in the case of either (x) or (y), pursuant to an order of a court of
competent jurisdiction or as a consequence of the exercise of creditors'
remedies), Purchaser shall thereupon pay to Stockholders an amount equal to
the product of (i) the Shares and (ii) the excess, if any, of (x) the price
per share for Class A Common Stock paid by Purchaser or any of its
affiliates to the stockholders of the Company other than the Stockholders
and ▇▇▇ ▇▇▇▇ in connection with the acquisition of the Company described in
Section 6.2(c) over (y) the Purchase Price divided by the number of Shares.
5.7 Further Assurances. From time to time after the Closing,
without additional consideration, each party shall execute and deliver such
further instruments and take such other action as may be necessary to make
effective the transactions contemplated by this Agreement.
ARTICLE VI
CONDITIONS TO THE CLOSING
6.1 Conditions to the Obligations of Each Party. The respective
obligations of each party to effect the Closing are subject to the
fulfillment at or prior to the Closing Date of each of the following
conditions precedent:
(a) No Injunction or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the
transactions contemplated hereby shall be in effect, nor shall any
proceeding by any Governmental Authority seeking any of the foregoing
be pending. There shall not be in effect any statute, rule,
regulation or order of any court, governmental or regulatory body
which prohibits or makes illegal the transactions contemplated by
this Agreement.
(b) Consulting Agreement. A consulting agreement between
the Company and ▇▇▇▇▇▇▇▇▇▇ shall have been duly authorized, executed
and delivered by the Company and executed and delivered by
▇▇▇▇▇▇▇▇▇▇.
(c) Performance Bonus Agreement. A performance bonus
agreement between the Company and the Stockholders, providing for the
opportunity for the Stockholders to receive a bonus payment based
upon the future performance of the Company, shall have been duly
authorized, executed and delivered by the Company and executed and
delivered by the Stockholders.
6.2 Additional Conditions to the Obligations of Purchaser. The
obligations of Purchaser are also subject to fulfillment (or waiver by
Purchaser) at or prior to the Closing Date of each of the following
conditions precedent:
(a) Representations and Warranties. The representations
and warranties of the Stockholders contained in Article III of this
Agreement shall be true and correct in all material respects as of
the Closing Date as though made at and as of the Closing Date, except
to the extent that they expressly refer to an earlier time, in which
case they shall be true and correct as of such time.
(b) Performance of Covenants. The Stockholders shall have
duly performed and complied in all respects with each covenant,
agreement and condition required by this Agreement to be performed or
complied with by them prior to or on the Closing Date.
(c) Marvel--Toy Biz Agreement. Marvel, an affiliate
thereof, or an affiliate of Purchaser shall have entered into an
agreement with the Company pursuant to which it would acquire the
Company and all conditions to closing thereunder shall have been
satisfied.
(d) Voting Trust Agreement. The Voting Trust Agreement
shall have terminated.
(e) Entertainment Change of Control. There shall not have
been an "Entertainment Change of Control", as defined in the
Stockholders' Agreement.
6.3 Additional Conditions to the Obligations of the
Stockholders. The obligations of the Stockholders are also subject to
fulfillment (or waiver by the Stockholders) at or prior to the Closing
Date of each of the following conditions precedent:
(a) Representations and Warranties. The representations
and warranties of Purchaser contained in Article IV of this Agreement
shall be true and correct in all material respects as of the Closing
Date as though made at and as of the Closing Date, except to the
extent they expressly refer to an earlier time, in which case they
shall be true and correct as of such time.
(b) Performance of Covenants. Purchaser shall have duly
performed and complied in all respects with each covenant, agreement
and condition required by this Agreement to be performed or complied
with by it prior to or on the Closing Date.
ARTICLE VII
TERMINATION
7.1 Termination. This Agreement may be terminated at
any time prior to the Closing:
(a) by mutual agreement of the Stockholders and Purchaser;
(b) by Purchaser, on the one hand, or the Stockholders, on
the other hand, upon notice given to the other or others if the
Closing shall not have taken place on or before June 30, 1997;
provided that the failure of the Closing to occur on or before such
date is not the result of the breach of the covenants, agreements,
representations or warranties hereunder of the party seeking such
termination; or
(c) by Purchaser, on the one hand, or the Stockholders on
the other hand, upon notice given to the other if any Governmental
Authority of competent jurisdiction shall have issued a final
permanent order enjoining or otherwise prohibiting the transactions
contemplated by this Agreement.
7.2 Effect of Termination. In the event of the termination of this
Agreement as provided in Section 7.1 hereof, the obligations of the parties
hereto shall terminate, except that the provisions of Sections 5.5 and 7.2
hereof shall survive and no party shall be relieved of any liability for
any breach of any provision contained in this Agreement.
ARTICLE VIII
INDEMNIFICATION BY STOCKHOLDERS
8.1 Indemnification With Respect to Representations and
Warranties. The Stockholders shall indemnify, defend and hold harmless
Purchaser against any Damages relating to, arising out of or resulting from
any breach of any representation, warranty, covenant or agreement made by
the Stockholders in this Agreement or any document delivered pursuant
hereto, provided, however, that the maximum amount of Damages the
Stockholders shall be liable for relating to a breach of the
representations contained in Section 3.3 shall be equal to the Purchase
Price.
8.2 Indemnification With Respect to Formation and Contribution
Agreement. The Stockholders reaffirm their indemnification obligations
under Section 8.05 of the Formation and Contribution Agreement, and, in
particular, reaffirm their obligation to indemnify, defend and hold
harmless Purchaser against any Damages relating to, arising out of or
resulting from the actions entitled G.D.L. Management Inc. v. Toy Biz,
Inc., No. 601000/95 (N.Y. Sup. Ct., filed December 28, 1995) and McDarren
v. Marvel, No. 94 Civ. 0910 (S.D.N.Y., filed February 14, 1994).
ARTICLE IX
MISCELLANEOUS
9.1 Survival of Representations and Warranties. The
representations and warranties made by the parties in this Agreement shall
survive the Closing, and the covenants shall survive the Closing to the
extent that by their terms they are to be performed thereafter.
9.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or
transmitted by facsimile or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
if to Purchaser, to:
▇▇▇▇▇▇▇ Group Incorporated
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
MacAndrews & Forbes Holdings Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with an additional copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
if to ▇▇▇▇▇▇▇▇▇▇, the Trust or Zib, to:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Battle ▇▇▇▇▇▇ LLP
Park Avenue Tower
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
9.3 Interpretation. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.4 No Third Party Beneficiaries. Nothing herein express or
implied shall confer upon any person other than the parties hereto any
rights, benefits or remedies of any nature or kind under or by reason of
this Agreement.
9.5 Amendment. This Agreement may be amended by the parties
hereto, but may not be amended except by an instrument or instruments in
writing signed and delivered on behalf of each of the parties hereto.
9.6 Extension; Waiver. At any time prior to the Closing Date or
the termination of this Agreement pursuant to Section 7.1, any party hereto
which is entitled to the benefits hereof may (a) extend the time for the
performance of any of the obligations or other acts of the other parties,
(b) waive any inaccuracy in the representations and warranties of the other
parties contained herein or in any schedule hereto or in any document
delivered pursuant hereto, or (c) waive compliance with any of the
agreements of the other parties hereto or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver
shall be valid if set forth in an instrument in writing signed and
delivered on behalf of such party.
9.7 Specific Performance. The parties hereto acknowledge that any
failure on the part of any of them to comply with the terms of this
Agreement shall cause the other parties hereto immediate and irreparable
harm that cannot be adequately compensated by the remedies at law, and that
in the event of such breach or violation, or threatened breach or
violation, the other parties hereto shall have such provisions of this
Agreement specifically enforced by preliminary and permanent injunctive
relief without having to prove the inadequacy of the available remedies at
law or any actual damages and without posting bond or other security. Any
remedy sought or obtained by a party hereto shall not be considered either
exclusive or a waiver of the rights of a party hereto or any other person
to assert any other remedies they have in law or equity. In any proceeding
upon a motion for any such injunctive relief, the ability of a party to
answer in damages shall not be a bar, or be interposed as a defense, to the
granting of such injunctive relief.
9.8 Entire Agreement. This Agreement, including the schedules,
exhibits, documents and instruments referred to herein, constitutes the
entire agreement and supersedes all other prior agreements and
understandings, both written and oral, between or among the parties with
respect to the subject matter hereof.
9.9 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Notwithstanding the foregoing, this
Agreement shall not be assignable by any party hereto (other than by
operation of law) without the prior written consent of the other parties
hereto; provided, that Purchaser may assign its rights and obligations
hereunder to any of its subsidiaries.
9.10 Governing Law. This Agreement shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of New York.
9.11 Counterparts. This Agreement may be executed by facsimile and
in counterparts, all of which for all purposes shall be deemed to be an
original and all of which shall, taken together, constitute the same
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed or have
caused this Agreement to be executed by their duly authorized officers or
representatives, all as of the date first written above.
▇▇▇▇▇▇▇ GROUP INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ T.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title:
ZIB INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title:
Exhibit A - Form of Promissory Note
PROMISSORY NOTE
$27,844,171 ____________, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ Group Incorporated, a Delaware corporation (the
"Company"), for value received, hereby promises to pay to the Holders, as
hereinafter defined, the principal sum of $27,844,171. This Note shall bear
interest on the unpaid principal balance outstanding at a rate per annum
equal to ___%.(1) The principal amount of this Note shall be payable in full
on , 2001.(2) Interest shall be payable on March 31, June 30, September 30
and December 31 of each year, commencing on the first such date after the
date of this Note. Payment of the principal of and interest on this Note
will be made to the Holders by wire transfer in same day or next day funds
to the account set forth on Annex I hereto, or to such other account as may
be designated in writing by the Holders not less than 30 days prior to
payment, in such coin or currency of the United States of America as at the
time of payment is legal tender for the payment of public and private
debts. This Note may be pre-paid by the Company at any time without penalty
or premium at an amount equal to the unpaid principal thereof plus accrued
interest to the date of pre-payment.
_________________________
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE
REOFFERED, SOLD ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION
IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
This Note is subject to the following additional terms and
conditions:
--------
(1) To be equal to five-year treasury ▇▇▇▇ rate at the time of issuance.
(2) To be the first business day after the fifth anniversary of the date
of this Note.
ARTICLE 1
DEFINITIONS
As used in this Note, the following terms, where used with an
initial capital letter, have the following meanings:
1.1 Company. The "Company" means ▇▇▇▇▇▇▇ Group Incorporated, a Delaware
corporation, and will also include its successors and assigns.
1.2 Control. "Control" shall have the meaning set forth in Rule 12b-2 of
the Securities Exchange Act of 1934, as amended, and any successor
regulation thereto.
1.3 Event of Default. "Event of Default" shall have the meaning set
forth in Section 2.1.
1.4 Holders. "Holders" means ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ T.A. and
Zib Inc., a Delaware corporation.
1.5 Person. "Person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
1.6 Stock Purchase Agreement. "Stock Purchase Agreement" means the Stock
Purchase Agreement, dated as of November 20, 1996, as amended from
time to time, by and among the Company and the Holders.
1.7 Toy Biz. "Toy Biz" Means Toy Biz, Inc., A Delaware corporation, and
shall also include its successors and assigns.
ARTICLE 2
DEFAULT
2.1 Events of Default. Any one or more of the following events, if
they occur and are continuing, will be deemed to be Events of Default under
this Note, without notice, except as expressly provided below:
(a) default in the payment in full of any installment of interest on
this Note as and when the same becomes due and payable;
(b) default in the payment in full of the principal of this Note as
and when the same becomes due and payable at maturity, by declaration
or otherwise;
(c) the Company or its affiliates no longer Controls, directly or
indirectly, Toy Biz, Inc. or the Company disposes of all or
substantially all of its common stock of Toy Biz, Inc. other than to
an affiliate;
(d) the net worth of the Company, without taking into account this
Note and a similar note issued to ▇▇▇ ▇▇▇▇, computed in accordance
with generally accepted accounting principles, shall be less than
$100,000,000;
(e) the Company, within 50 days after the end of each of its first
three fiscal quarters, shall fail to deliver to the Holders its
Quarterly Report on Form 10-Q, or, in the event that the Company is
no longer required to file periodic reports with the Securities and
Exchange Commission ("SEC"), shall fail within such 50-day period to
deliver to the Holders unaudited consolidated financial statements
prepared in accordance with Regulation S-X;
(f) the Company, within 105 days after the end of its fiscal year,
shall fail to deliver to the Holders its Annual Report on Form 10-K,
or, in the event that the Company is no longer required to file
periodic reports with the SEC, shall fail within such 105-day period
to deliver to the Holders audited consolidated financial statements
prepared in accordance with Regulation S-X;
(g) entry by a court having jurisdiction of a decree or order for
relief concerning the Company in an involuntary case under any ap-
plicable bankruptcy, insolvency, reorganization, or other similar
law, or appointment of a receiver, liquidator, trustee, assignee,
custodian, sequestrator (or other similar official) of the Company or
of its property, or ordering of the winding up or liquidation of its
affairs; or
(h) institution by the Company of a voluntary case under any
applicable bankruptcy, insolvency, reorganization, or other similar
law, or consent by the Company to the entry of an order for relief in
an involuntary case under such law, or consent of the Company to the
appointment of or taking possession by a receiver, liquidator,
trustee, assignee, custodian, sequestrator (or other similar
official) of the Company or of its property, or making by the Company
of an assignment for the benefit of creditors, or admission in writ-
ing by the Company of its inability to pay its debts generally as
they become due, or taking by the Company or any corporate action
furthering any of the above purposes.
A default under clause (a), (c), (d), (e) or (f) shall not be an
Event of Default until the Holders notify the Company in writing of such
default and the Company does not cure such default within, in the case of
clause(a), 15 days, or in the case of clauses (c), (d), (e) or (f), 30 days,
after such notice.
2.2 Rights on Default. If a default described in clause (a), (c),
(d), (e) or (f) of Section 2.1 above occurs and has continued for 15 days,
in the case of clause (a), or 30 days, in the case of clauses (c), (d), (e)
and (f), in each case following written notice by the Holders of such
default to the Company, the Holders may declare the principal of this Note,
together with any accrued and unpaid interest, to be due and payable
immediately. Upon any such declaration, such principal and interest will
become due and payable immediately, anything contained in this Note
notwithstanding. If an Event of Default described in paragraph (e) or (f)
occurs, the principal of this Note, together with any accrued and unpaid
interest, if not already due, shall automatically become immediately due
and payable, without any declaration, presentment, demand, protest or other
requirement of any kind, all of which are hereby expressly waived by the
Company. The Holders may rescind an acceleration and its consequences if
the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of such accelera-
tion. No such rescission shall affect any subsequent default or impair any
right consequent thereto. Any delay or omission by the Holders in exercis-
ing any right or remedy arising upon an Event of Default shall not impair
such right or remedy or constitute a waiver of or an acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by
law. Upon and following any acceleration of the principal and interest of
this Note pursuant to this Section 2.2, any unpaid principal and accrued
interest on this Note shall bear interest at a rate equal to the rate
stated in the second sentence of this Note plus 3%.
2.3 Waiver of Past Defaults. The Holders may waive an existing
default and its consequences by notice to the Company. When a default is
waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other default or impair any consequent rights.
2.4 Enforcement. If the Holders declare the principal of this
Note, together with all accrued and unpaid interest on this Note, due and
payable immediately, the Holders may proceed to protect and enforce their
rights by an action at law, suit in equity, or other appropriate
proceeding.
ARTICLE 3
MISCELLANEOUS
3.1 Restriction on Transfer. This Note is transferrable, in whole
but not in part, subject to compliance with applicable securities laws.
3.2 Immunity. This Note is solely a corporate obligation of the
Company, and no personal liability whatever shall attach to, or is or will
be incurred by, the shareholders, officers or directors, as such, of the
Company or any of its successors, because of the creation of the
indebtedness under this Note, or under or by reason of the obligations,
covenants or agreements contained in or implied from this Note. This Sec-
tion 3.2 is not intended to modify or otherwise affect the common law and
statutory rights and obligations of shareholders, directors and officers of
the Company as of the date hereof.
3.3 Notices. All notices, request, demands and payments of
principal and interest given to or made under this Note will, except as
otherwise specified in this Note, be in writing and will be effective upon
the earlier of (a) receipt or (b) the fifth day following the date such
notice was mailed properly addressed, first class, registered or certified
mail, return receipt requested, postage prepaid, to the other party at the
following addresses (which may be changed at any time by notice under this
Section 3.3):
The Company: ▇▇▇▇▇▇▇ Group Incorporated
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: MacAndrews & Forbes Holdings Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with an additional
copy to: Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
The Holders: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: Battle ▇▇▇▇▇▇ LLP
Park Avenue Tower
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
3.4 Headings. The headings in this Note are inserted for
convenience only and will not affect the meaning or interpretation of all
or any part of this Note.
3.5 Representations and Warranties of the Holders. The Holders, by
accepting this Note, represent and warrant that:
(a) The Holders understand that this Note has not been regis-
tered under the Securities Act of 1933, as amended (the "Securities
Act"), and that there is no existing public market for this Note and
that there can be no assurance that the Holders will be able to sell
or dispose of this Note.
(b) The Holders are "accredited investors" (as defined in Rule
501 of Regulation D under the Securities Act) purchasing for their
own accounts and are acquiring this Note for investment purposes and
not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act and they have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of their investment in
this Note, including a complete loss of their investment, or the
Holders have been advised by a representative possessing such knowledge
and experience.
(c) The Holders have had the opportunity to ask questions of
and receive answers from the Company concerning the terms and condi-
tions of this Note and other related matters. The Holders further
acknowledge that the Company has made available to the Holders or
their representatives all documents and information relating to an
investment in this Note requested by or on behalf of the Holders.
3.6 Payment Date. In any case where the date specified in this
Note for the occurrence of any event (including the giving of notice and
the making of a payment) is not a business day, then such event shall occur
on the next succeeding date that is a business day with the same force and
effect as if such event had occurred on the date originally specified, and,
if such event is a payment in respect of this Note, no interest, if any,
shall accrue for the intervening period.
3.7 Costs of Collection. The Company shall reimburse the Holders
upon their written request for all reasonable expenses incurred by them in
connection with the collection of payment of principal of or interest on
the Note, following a default with respect thereto.
3.8 Construction. Wherever possible, each provision of this Note
will be interpreted in such a manner as to be effective and valid under
applicable law but if any provision of this Note is prohibited by or
invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Note.
3.9 Amendments. This Note may not be modified, amended, rescinded,
canceled or waived, in whole or in part, except by written instruments
signed by the Company and the Holders. Upon any modification, amendment or
supplement of or to the terms hereof, the Holders shall surrender this Note
to the Company within 10 days of written notice by the Company, and the
Company shall immediately thereafter issue a new Note to the Holders as
modified, amended or supplemented in accordance with the terms hereof.
3.10 Governing Law. This Note is made subject to and shall be
construed under the laws of the State of New York, without giving effect to
the principles of conflicts of law thereof.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed as of the day and year first set forth above.
▇▇▇▇▇▇▇ Group Incorporated,
a Delaware corporation
By:________________________
Name:
Title: