EXHIBIT 99.2
AGREEMENT
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AGREEMENT made and entered into as of this 16th day of December,
2003 (the "Agreement"), by and between Everlast Worldwide Inc., a Delaware
corporation ("Everlast"), and ▇▇▇ ▇▇▇▇▇▇ ("Nadorf").
WITNESSETH:
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WHEREAS, Nadorf is the record and beneficial owner of 31,500 shares
of Series A Redeemable Participating Preferred Stock, stated value of $1,000.00
per share of Everlast (the "Preferred Shares"); and
WHEREAS, pursuant to the certain "Certificate of The Designations,
Powers, Preferences and Rights," issued by Everlast Worldwide Inc. the pro-rata
redemption of 45,000 shares of Series A Redeemable Preferred Stock ( of which
40,500 shares was issued to ▇▇. ▇▇▇ ▇▇▇▇▇▇ as his proportionate interest) is
mandated over a period of nine (9) years, commencing on December 31, 2001
through December 31, 2009, payable to each of the Preferred stockholders as
their interest may appear, in equal installments totaling $5 Million each year (
of which $4,500,000 is paid annually to ▇▇. ▇▇▇ ▇▇▇▇▇▇ as his proportionate
interest); and
WHEREAS, on the fifth anniversary of its closing date and pursuant
to the "Agreement and Plan of Merger" (Section 1.10) (the "Merger Agreement")
between Everlast World's Boxing Headquarters Inc and Everlast Worldwide
Inc.[formerly known as Active apparel Group Inc.], known as the "Make-Whole
Adjustment," Everlast is obligated to issue pro-rata ( in accordance with
Schedule I of the "Agreement and Plan of Merger",) to the former stockholders of
Everlast World's Boxing Headquarters Inc. a sufficient number of additional
shares of common stock or the cash equivalent thereof, which in addition to the
market value of the 380,000 shares of common stock issued as "additional shares"
under the merger agreement, aggregate $5 Million; and
WHEREAS, the parties hereto have agreed to amend and or modify their
mutual obligations with respect to the aforesaid redemption and "Make Whole
Adjustment" set forth above, and in consideration of the premises and of the
mutual covenants and agreements of the parties herein contained, Everlast and
Nadorf, hereby agree as follows:
1. In lieu of a cash payment for the redemption of a portion of the
Series A Preferred Stock owned by ▇▇▇ ▇▇▇▇▇▇ ($2,000,000) for
each of the four years commencing December 14, 2003, through
December 14, 2006, ▇▇▇ ▇▇▇▇▇▇ shall issue four interest only
term loans to Everlast. The loans shall be secured by four $2
million Promissory Notes from Everlast which shall provide for
the payment of interest only, in the sum of 9.5% per annum
during the years 2004 through 2007 and 10% during 2008, upon the
unpaid balance. The promissory notes shall continue to be
collateralized by the trademarks and licenses on the Everlast
name plus all other collaborational protection for the lender,
▇▇▇ ▇▇▇▇▇▇, pursuant to the Merger Agreement.
2. Each of the loans shall mature on December 14, 2008 and shall
aggregate $8,000,000. Everlast shall have the right to pre-pay
the promissory note in full prior to December 14, 2008 together
with all unpaid interest due at the time of pre-payment.
3. Interest on the loans will be payable annually on December 14th
of each year commencing 2004.
4. With the exception of the above, all of the other terms and
conditions of the "Certificate of The Designations, Powers,
Preferences and Rights" shall remain unchanged and in full force
and effect.
5. The date of the "Make Whole Adjustment" shall be extended to
October 24, 2007, the seventh anniversary of the closing of the
merger.
6. ▇▇▇ ▇▇▇▇▇▇ will become an employee of Everlast Worldwide, Inc.
commencing January 1, 2004 through December 31, 2014. Her annual
salary will be $40,000, payable in 26 installments coinciding
with the Company's payroll processing, together with all
benefits provided to other full-time employees.
7. A special dividend on the outstanding Preferred Shares in the
amount of $800,000 shall be paid to Nadorf on December 14, 2003.
Representations and Warranties.
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Nadorf represents that all of the Series A Preferred Stock which are
the subject of this Agreement are solely owned by him and/or a trust to be
created by him, and are free and clear of any and all liens, encumbrances,
claims, charges and assessments and subject to no options, agreements, or
restrictions with respect to transferability.
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Nadorf further represents that upon the issuance of the four $2
million Promissory Notes, 8,000 Preferred Shares shall be deemed redeemed and
retired. Further, upon Nadorf's annual receipt of the payment of $2,500,000 for
each year commencing December 14, 2003 through December 14, 2006, and $4,500,000
from December 14, 2007 through December 14, 2009 from Everlast, he shall deliver
stock certificate(s) representing the balance of the Preferred Shares then due
upon the Mandatory Redemption Date(s) set forth in the Certificate of the
Designation, duly endorsed for transfer or accompanied by appropriate stock
powers duly executed, in either case in favor of Everlast.
Everlast hereby represents and warrants to Nadorf as follows:
1. AUTHORIZATION. Everlast has all requisite power, legal capacity
and authority to enter into, and acquire the Shares pursuant to, this Agreement,
to issue the Promissory Note and to assume and perform its obligations
hereunder. This Agreement, when duly executed and delivered by Everlast, will
constitute a legal, valid and binding obligation of Everlast, enforceable
against Everlast in accordance with its terms
2. APPROVALS AND CONSENTS. No action, approval, consent or
authorization, including, but not limited to, any action, approval, consent or
authorization by any governmental or quasi-governmental agency, commission,
board, bureau or instrumentality is necessary or required as to Everlast in
connection with the execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby.
Conditions to Closing.
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1. PROMISSORY NOTE. The Promissory Notes shall have been duly
executed and delivered by Everlast to Nadorf.
2. STOCK CERTIFICATE. Nadorf shall deliver a stock certificate
representing the Shares duly endorsed for transfer or accompanied by appropriate
stock powers duly executed, in either case in favor of Everlast.
3. CONSULTING AGREEMENT. Everlast shall have entered into a
consulting agreement with ▇▇▇ ▇▇▇▇▇▇ pursuant to the terms and conditions of the
Consulting Agreement attached hereto.
4. CERTIFICATE OF DESIGNATION. The Certificate of Designations shall
remain unchanged and in full force and effect.
General Provisions.
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1. ENTIRE AGREEMENT; AMENDMENT AND WAIVER. This Agreement
constitutes the entire agreement between the parties hereto with respect to the
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subject matter contained herein and supersedes all prior oral or written
agreements, if any, between the parties hereto with respect to such subject
matter and, except as otherwise expressly provided herein or therein, are not
intended to confer upon any other person any rights or remedies hereunder or
thereunder. Any amendments hereto or modifications hereof must be made in
writing and executed by each of the parties hereto. Any failure by Nadorf or
Everlast to enforce any rights hereunder shall not be deemed a waiver of such
rights.
2. NOTICES. All notices, requests, demands and other communications
given or made hereunder shall be in writing and shall be deemed to have been
duly given when delivered personally or by facsimile transmission, in either
case with receipt acknowledged, or one day after being sent by overnight courier
to Everlast or Nadorf at their respective addresses set forth on the signature
page of this Agreement, and, in each case, to such other address as either party
shall have given to the other party by similar notice.
3. GOVERNING LAW; CONSENT TO JURISDICTION. This agreement shall be
governed by, and construed in accordance with, the law of the State of New York.
Each party hereto hereby irrevocably submits to the exclusive personal and
subject matter jurisdiction of the United States District Court for the Southern
District of New York and the Supreme Court of the State of New York located in
the borough of Manhattan over any suit, action or proceeding arising out of or
relating to this agreement. each party hereby irrevocably waives to the fullest
extent permitted by law, (a) the right to trial by jury; (b) any objection that
they may now or hereafter have to the venue of any such suit, action or
proceeding brought in any such court; and (c) any claim that any such suit,
action or proceeding has been brought in an inconvenient forum. Final judgment
in any suit, action or proceeding brought in any such court shall be conclusive
and binding upon each party duly served with process therein and may be enforced
in the courts of the jurisdiction of which either party or any of their property
is subject, by a suit upon such judgment.
4. BINDING EFFECT; ASSIGNMENT. This Agreement and the various rights
and obligations arising hereunder shall inure to the benefit of and be binding
upon Nadorf and Everlast and their respective heirs, successors and assigns.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be transferred or assigned (by operation of law or otherwise) by any of
the parties hereto without the prior written consent of the other party hereto.
Any transfer or assignment of any of the rights, interests or obligations
hereunder in violation of the terms hereof shall be void and of no force or
effect.
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5. SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by virtue of any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
/s/ ▇▇▇ ▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
EVERLAST WORLDWIDE INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
By /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
President and CEO
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