Exhibit 1.2
INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (this "Agreement") is dated as of June 27, 2002,
between Ares Management, L.P. ("Ares") and Artemis S.A. ("Artemis" and, together
with Ares, the "Major Parties").
WHEREAS, Ares and Artemis have considered making a joint proposal to the
special committee of the board of directors of Samsonite Corporation (the
"Company") for a transaction to recapitalize the Company (the
"Recapitalization"), the principal terms of which would be as set forth in this
Agreement and the letter attached hereto as Attachment 1;
NOW THEREFORE, as a condition to the willingness of the Major Parties to
make such a joint proposal and pursue the Recapitalization the Major Parties
hereby agree as follows:
1. Stockholders Agreement. In connection with the Recapitalization and
their acquisition of the voting convertible preferred stock of the Company ("New
Preferred" and, together with all shares of Common Stock of the Company ("Common
Stock") into which such New Preferred shall have been converted, but
specifically excluding the Pre-Existing Securities, the "Securities"), Ares and
its affiliates and certain other initial investors in the New Preferred acting
as a group with Ares (the "Ares Group" or "Group") and Artemis and its
affiliates ("Artemis Group" or "Group") shall (i) negotiate and, upon the
consummation of the Recapitalization, enter into a Stockholders Agreement with
the Company, the other holders of the New Preferred and certain other security
holders of the Company (the "Stockholders Agreement") and (ii) amend the
Company's certificate of incorporation, in each case on the terms set forth
below and such other terms and provisions as are mutually agreed upon by the
Major Parties. The term "Pre-Existing Securities" means the existing equity
securities of the Company held by the members of the Groups prior to
consummation of the Recapitalization (and any shares of Common Stock received by
such members in exchange therefor).
(A) Veto Rights. The Major Parties agree that in connection with, and
as a condition to, the Recapitalization, the Company's certificate of
incorporation shall be amended to provide that no Significant Action may be
authorized by the board of directors except upon the receipt of the
approval of each of the Major Parties, provided, that such approval will
only be required of a Major Party so long as such Major Party's Group
beneficially owns Securities constituting at least 51% on an as-converted
basis of the number of shares of Common Stock underlying the Securities
such group held immediately after consummation of the Recapitalization. The
term "Significant Action" will be defined to include (a) any merger,
consolidation, sale, lease or other conveyance of assets of the Company or
its subsidiaries with a fair market value in excess of $25 million or any
purchase, lease or other acquisition of assets (including securities of
another person) with a fair market value or purchase price in excess of $25
million by the Company or its subsidiaries; (b) (i) any issuance of
preferred securities by the Company, (ii) any issuance of equity securities
by the Company (other than in connection with the Approved IPO or in
connection with a previously approved management incentive plan) with a
fair market value in excess of $20 million in any 12 month period, (iii)
any
issuance of equity securities by any of the Company's subsidiaries and
(iv) any guarantee of or incurrence of debt in excess of $20 million in any
12 month period (other than trade debt in the ordinary course of business
or ordinary incurrences of debt under the Company's revolving credit
facilities, the terms of which have been previously approved pursuant to
the provisions hereof) by the Company and its subsidiaries, and the
entering into of any agreements to do any of the foregoing; (c) declaring
or paying dividends or making distributions with respect to securities
(other than dividends on the New Preferred in accordance with the terms of
the New Preferred) or repurchasing, redeeming or otherwise retiring any
securities, other than repayments or redemptions of debt securities
previously approved pursuant to clause (b) in accordance with their terms
or repurchases of securities held by employees of the Company upon
termination of employment; (d) any transactions between the Company and any
Major Party or any affiliate of a Major Party; (e) prior to the third
anniversary of the Recapitalization, (i) the filing of any registration
statement under the Securities Act of 1933, as amended, registering the
sale of capital stock of the Company or (ii) the non-U.S. public offering
and sale of capital stock of the Company (in each case, other than the
Approved IPO); (f) changing the composition, or materially changing the
compensation, of the Company's senior management; (g) changes to, or
waivers of any of the provisions in, the organizational documents of the
Company or any of its subsidiaries; (h) commencement of any liquidation,
dissolution or voluntary bankruptcy or reorganization; and (i) significant
changes to the scope or nature of the Company's business and operations.
The term "Approved IPO" will mean (x) prior to the fifth anniversary of the
consummation of the Recapitalization, the first firm commitment
underwritten public offering (i) pursuant to an effective registration
statement under the Securities Act of 1933, as amended, covering an offer
and sale of Common Stock for the account of the Company to the public, or
(ii) in accordance with applicable non-U.S. laws, rules and regulations in
connection with the non-U.S. public offering and sale of capital stock of
the Company, in each case (A) the public offering price of which is not
less than 200% of the then-applicable conversion price of the New
Preferred, (B) will result in net proceeds to the Company and/or its
stockholders of not less than $100 million and (C) would result in (x) a
sale of not less than 17.5% of the shares of Common Stock then held by each
Group (on an as converted basis) or (y) an issuance of newly issued shares
of Common Stock that, when aggregated with the sales of Common Stock by
each Group in such public offering, would result in each Group's aggregate
beneficial ownership of the total issued and outstanding shares of Common
Stock of the Company (on an as converted basis), when expressed as a
percentage thereof, being reduced by not less than 17.5% of such
percentage, and (z) thereafter, the first firm commitment underwritten
public offering (i) pursuant to an effective registration statement under
the Securities Act of 1933, as amended, or (ii) in accordance with
applicable non-U.S. laws, rules and regulations in connection with the
non-U.S. public offering and sale of capital stock of the Company, in each
case under this clause (y) filed or commenced no earlier than 30 days
following delivery by the Company to the Major Parties of its intention to
file such registration statement and covering an offer and sale of Common
Stock for the account of the Company to the public, provided that in the
event either Major Party elects to exercise its rights described in
paragraph 1(G) below during such 30 day period, any such underwritten
public
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offering shall not constitute an Approved IPO and shall be discontinued
unless otherwise approved in accordance with the above.
(B) Board Composition. The Major Parties intend that the board of
directors will consist of 9 directors. Of the 9 directors, 4 of the
directors will be nominated by the Ares Group (of which at least 1 will be
independent), 4 of the directors will be nominated by the Artemis Group (of
which at least 1 will be independent), and 1 of the directors will be the
CEO; provided that the number of directors each Group is entitled to
nominate will be reduced to (w) 3 directors at any time such Group owns
less than 51% of the Securities held by it immediately after consummation
of the Recapitalization, (x) 2 directors at any time such Group owns less
than 30% of the Securities held by it immediately after consummation of the
Recapitalization, (y) 1 director at any time such Group owns less than 20%
of the Securities held by it immediately after consummation of the
Recapitalization, and (z) 0 directors at any time such Group owns less than
10% of the Securities held by it immediately after consummation of the
Recapitalization. The Major Parties agree that each of their Groups shall
have the right to have at least one of its nominees as a member of each
committee of the Board of Directors and that neither Group will be
permitted to have a larger proportion of its nominees on any committee of
the board of directors than the other Group without such other Group's
consent. The Major Parties agree to, and agree to cause their nominees of
their respective Groups to, cast such votes as may be necessary to
effectuate the foregoing, including to vote, and to cause such nominees to
the board of directors to vote, in favor of the other Group's nominees
(including in connection with the filling of any vacancies among the other
Major Party's nominees).
(C) Right of First Offer. If any party to the Stockholders Agreement
other than a member of the Ares Group or a member of the Artemis Group
proposes to sell all or any portion of the equity securities of the Company
held by such party ("Subject Securities") to a third party, such party
("Offeror") shall be obligated to offer the Subject Securities first to the
Groups ("Offerees") on a pro rata basis based on their relative percentage
ownership of Securities (and excluding Pre-Existing Securities) at a price
per share ("Offered Price") designated by the Offeror. The Offerees will
have 30 days to elect to purchase all or any portion of the Subject
Securities at the Offered Price. If the Offerees do not elect to purchase
all or any portion of the Subject Securities at the Offered Price prior to
the end of such 30-day period, the Offeror will have the right to sell such
unpurchased Subject Securities for a period of 90 days at not less than the
Offered Price.
(D) Tag-Along. Not less than 30 days prior to a sale by a Group or any
member thereof to any third party of Securities of the Company constituting
more than 20% of the Common Stock of the Company on a fully-diluted basis,
each selling member of such Group shall provide written notice to the other
Group. Such other Group shall have not less than 30 days after receipt of
such notice to elect to participate on substantially the same terms
(without paying any portion of the transactions costs associated with the
sale except for their own legal expense and selling commissions) in any
such sale, such participation to be pro rata as between Groups based on the
number of Securities and Pre-Existing Securities held by each Group.
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(E) Demand Registration Rights. The aggregate amount of demand
registration rights granted to each Group will be 6, which demand
registration rights may not be exercised prior to the earlier of (x) the
first anniversary of the consummation of the Approved IPO and (y) the third
anniversary of the consummation of the Recapitalization. The demand
registration rights will be divided as follows: (i) the Ares Group will
have the right to exercise two demand registrations in its sole discretion
("Individual Demand") in which it will have priority and will be entitled
to include on the same priority basis Common Stock held by certain initial
investors in the New Preferred as it shall determine in its discretion;
(ii) the Artemis Group will have the right to exercise two demand
registrations with respect to any Common Stock held by the Artemis Group,
whether issued on conversion of the New Preferred or otherwise, in its sole
discretion ("Individual Demand") in which it will have priority; and (iii)
the two remaining demand registration rights will be exercised jointly by
both Groups ("Collective Demand"). If a Group elects to exercise an
Individual Demand ("Exercising Party"), the other Group ("Non-Exercising
Party") may elect to include its Common Stock in the related registration
on a pari passu basis, in which case such demand will cease to be an
Individual Demand and will constitute a Collective Demand; provided, that
no Group may elect to include its Common Stock in an Individual Demand of
the other Group on a pari passu basis more than one time. If the
Non-Exercising Party does not elect to include its Common Stock in an
Individual Demand of the other Exercising Party on a pari passu basis, it
may elect to include its Common Stock in such Individual Demand on a
subordinate basis. In the event that a Group is cut-back below 75% of the
Common Stock proposed to be registered by such Group in any of its
Individual Demands, such registration shall not constitute an Individual
Demand.
(F) Piggy-Back Registration Rights. Commencing with the first
registration of Common Stock for sale by the Company or any Exercising
Party, the parties to the Stockholders Agreement will be entitled to
unlimited "piggy-back" registration rights on Company registrations and
demand registrations, subject to cutbacks in favor of newly-issued shares,
in the case of Company registrations, and newly-issued shares and Common
Stock being registered by the Exercising Party, in the case of a demand
registration (which cutbacks may be 100% if requested by the underwriters
for such offering).
(G) Sale After Five Years. On and after the fifth anniversary of the
consummation of the Recapitalization, if either Major Party wishes to cause
a sale of the Company, the Company shall take all reasonably necessary or
advisable actions to pursue such a sale (whether by stock sale, asset sale
or merger) at the maximum price attainable, including without limitation
hiring one or more financial advisors to identify potential purchasers
(including using an auction process) in connection with, and to otherwise
facilitate, such a sale. Any Major Party or member of its Group may
participate as a potential purchaser or bidder in any such sale on the same
terms and conditions as other potential purchasers and bidders, but in such
case shall be excluded from the sale process other than in its capacity as
a potential purchaser or bidder. In the event that any offer received in
connection with such proposed sale that is acceptable to at least one Major
Party, including a sale to a Major Party or member of its Group, that would
provide each Major Party with a minimum of 20% internal rate of return on
their investments in the
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Recapitalization or an equivalent return on capital or such higher return
as mutually agreed to by the Major Parties from time to time, then the
Company, each Major Party and each other party to the Stockholders
Agreement shall be required to take all necessary action to consummate a
sale of the Company to the offering or bidding party that offers the
greatest amount of consideration to the Company or its stockholders, as
applicable, including, in the case of the Company stockholders, selling
their Company equity securities to the purchaser in such sale or otherwise
approving or consenting to such sale, as required in connection with such
sale.
(H) Assignment of Rights. No Major Party nor any transferee thereof
will be permitted to transfer its rights specific to it under the
Stockholders Agreement (including the rights set forth in paragraph 1(A)
hereof) other than to an affiliate of such Major Party.
(I) Approved IPO. Each Major Party agrees that at any time the other
Major Party desires to pursue an Approved IPO, it will, and will cause its
Group to, support and do all things necessary to approve, and to cause the
board of directors to approve, the Approved IPO. To the extent required by
the managing underwriter in connection with the Approved IPO, the Major
Parties shall do all things necessary to cause the terms of the
Stockholders Agreement as shall be designated by the managing underwriter
as materially unfavorable to the marketing of the Approved IPO (but
excluding those terms described in paragraphs 1(C), (D), (E), (F) and (H)
above and paragraph 2 below) to be modified or terminated; provided, that
the terms described in paragraph 1(B) above shall only be modified or
terminated to the extent necessary to meet applicable listing requirements.
2. Standstill. Neither Major Party nor any member of its Group shall
acquire beneficial ownership of any equity securities of the Company, whether in
the Recapitalization or otherwise, without the prior written consent of the
other Major Party, except that, in the Recapitalization and at any time prior to
the Approved IPO, either Major Party or member of its Group may acquire capital
stock of the Company to the extent that the aggregate beneficial ownership by
such Group of the voting power of the Company's capital stock (the "Voting
Power") and of the economic ownership of the Company does not exceed 40%. Any
such securities so acquired shall be subject to the terms of the Stockholder
Agreement. The Stockholders Agreement will contain a provision substantially
similar to this paragraph 2.
3. Voting Rights/Absence of Voting Agreements. Each Group represents that
it is not party to, and covenants not to enter into (without the other Major
Party's prior written consent), any agreement, arrangement, understanding or
relationship, whether formal or informal, with any holder of Company securities
(other than other members of its Group, its affiliates or the other Major Party)
relating to the voting of any Company securities held by unrelated holders.
4. Funding Commitment; Equity Equalization. Subject to the satisfaction of
all conditions set forth in Attachment 1 and in any definitive documentation
relating to the Recapitalization, in each case to the satisfaction of each Major
Party at the consummation of the Recapitalization, (a) Ares agrees that the Ares
Group and its co-investors will purchase $100
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million (based on liquidation preference) of New Preferred Stock and (b) Artemis
agrees that the Artemis Group will purchase $60 million (based on liquidation
preference) of New Preferred Stock. The Major Parties acknowledge and agree that
it is their intent that the Ares Group and the Artemis Group shall beneficially
own the same proportion of the Voting Power and will work together in good faith
to accomplish such intent.
5. Fees. Each Major Party agrees that all restructuring and similar fees
received by such party from the Company in connection with the Recapitalization
and all management, financial advisory or similar fees received from the Company
after the Recapitalization shall be split equally between the Major Parties.
6. Support of the Recapitalization. Each Major Party agrees (a) to use all
reasonable efforts to cause the Recapitalization to occur, (b) to vote, and to
cause its affiliates to vote, all of their respective shares of capital stock
(i) in favor of (or to consent to) the Recapitalization and any part thereof
requiring stockholder approval, and (ii) against any other proposal which is an
alternative to, or would render more difficult the completion of, the
Recapitalization (a "Competing Proposal") and (c) that it will not cause any
other security holder of the Company (i) to not support, vote in favor of or
consent to the Recapitalization or (ii) to support, vote in favor of or consent
to any Competing Proposal, in each case subject to the satisfaction of all
conditions set forth in Attachment 1 or in any definitive documentation relating
to the Recapitalization.
7. Definitive Agreements. The Major Parties shall have no legal obligation
to engage in or consummate the Recapitalization unless and until the Major
Parties enter into definitive agreements relating thereto, and no Major Party
shall have any liability for failure to enter into any such definitive
agreements.
8. Exclusivity. Each Major Party agrees that prior to the Termination Date,
it will not, without the consent of the other Major Party, directly or
indirectly seek, solicit, support or encourage any restructuring,
recapitalization, sale, liquidation or merger of, or similar transaction with
respect to, the Company or any of its subsidiaries other than the
Recapitalization as described in this Agreement and Attachment 1 hereto.
9. Termination. This Agreement shall terminate and shall be of no further
force and effect on the earlier of (a) the Termination Date and (b) the date on
which definitive documentation with respect to the Recapitalization is executed
by the Major Parties hereto and the Company. The term "Termination Date" means
(x) if the proposal attached as Attachment 1 hereto is executed by the Company
on or prior to July 10, 2002 (or such later date as agreed to in writing by the
Major Parties), the date that is sixty (60) calendar days following such
execution by the Company and (y) otherwise, July 10, 2002 (or such later date as
agreed to in writing by the Major Parties.
10. Binding Agreement; No Third Party Beneficiaries. This letter shall not
be binding upon or enforceable against any Major Party unless and until executed
by each Major Parties in the spaces provided below, at which time it shall
become binding upon and enforceable against each Major Party. Neither this
letter nor any provision hereof is intended to or shall confer upon any person
other than the Major Parties any rights, powers of enforcement or remedies
hereunder.
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11. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to the conflict
of laws provisions thereof and may be amended, modified or waived only by a
separate writing executed by each of the Major Parties hereto. This Agreement
may be executed in two or more counterparts, all of which taken together will
constitute one binding agreement. Each of the Major Parties hereto agrees that
any action or proceeding based hereon shall be brought and maintained
exclusively in the courts of the State of New York located in the city and
county of New York or in the United States District Court for the Southern
District of New York. Each of the Major Parties hereto hereby irrevocably
submits to the jurisdiction of the foregoing courts for the purpose of any such
action or proceeding and irrevocably agrees to be bound by any judgment rendered
thereby in connection with such action or proceeding. Each of the Major Parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, any
objection which it may have or hereafter may have to the laying of venue of any
such action or proceeding brought in any of the foregoing courts and any claim
that any such action or proceeding has been brought in an inconvenient forum.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
ARES MANAGEMENT, L.P.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
ARTEMIS S.A.
By: /s/ ▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
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