Notes Purchase Agreement - Marvel Enterprises Inc. and Isaac Perlmutter
EXECUTION COPY
NOTES PURCHASE AGREEMENT
THIS NOTES PURCHASE AGREEMENT (this "Agreement"), dated as of November
30, 2001, is made by and between Marvel Enterprises, Inc., a Delaware
corporation (the "Company") and Mr. Isaac Perlmutter, an individual residing in
Florida ("Perlmutter").
Preliminary Statement
WHEREAS, Perlmutter has acquired 100% interest in the 12% Senior Notes
due 2009 of the Company listed on Schedule 1 attached hereto in the aggregate
face amount of $42.968 million (the "Notes"). The Company desires to purchase
from Perlmutter, and Perlmutter desires to sell to the Company, the Notes;
NOW THEREFORE, in consideration of the foregoing, the parties hereto
agree as follows:
SECTION 1. Definitions.
(a) "Agreement" has the meaning ascribed to such term in the
introductory paragraph hereof.
(b) "Board of Directors" means the board of directors of the Company.
(c) "Business Day" means a day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.
(d) "By-laws" means the by-laws of the Company, as amended.
(e) "Certificate of Incorporation" means the certificate of
incorporation of the Company, as amended.
(f) "Closing" has the meaning ascribed to such term in Section 2(b)
hereof.
(g) "Closing Date" means the date of Closing as provided in Section 2(b)
hereof.
(h) "Company" has the meaning ascribed to such term in the introductory
paragraph hereof.
(i) "Credit Agreement" means the credit agreement, dated as of the date
hereof, to be entered into among the Company, the various financial institutions
and other persons from time to time parties thereto, HSBC Bank USA, as
administrative agent for the Lenders and HSBC Securities (USA), Inc., as sole
lead arranger and sole bookrunner.
(j) "Governmental Authority" means federal, provincial, state, local,
foreign or other governmental or quasi-governmental agency or body or any other
type of regulatory authority or body, including without limitation the New York
Stock Exchange.
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(k) "Indemnified Person" has the meaning ascribed to such term in
Section 9(b)(iv) hereof.
(l) "Indemnifying Person" has the meaning ascribed to such term in
Section 9(b)(iv) hereof.
(m) "Indenture" means the Indenture dated as of February 25, 1999 among
the Company, MEI Holding Company F Corp., a Delaware corporation, MEI Holding
Company S Corp., a Delaware corporation, MEI Holding Company FHF Corp., a
Delaware corporation, MRV, Inc. a Delaware corporation, Malibu Comics
Entertainment, Inc., a California corporation, Marvel Characters, Inc., a
Delaware corporation, Marvel Entertainment Group, Inc., a Delaware corporation,
and Marvel Restaurant Venture Corp., a Delaware corporation, as guarantors, and
IBJ Whitehall Bank & Trust Company, as trustee.
(n) "Note Closing Date" means the date of the Closing.
(o) "Notes" has the meaning ascribed to such term in the recitals
hereof.
(p) "Perlmutter" has the meaning ascribed to such term in the
introductory paragraph hereof.
(q) "Person" means any individual, corporation, partnership, firm, joint
venture, association, joint-stock company, trust, unincorporated organization,
Governmental Authority or other entity.
(r) "Purchase Price" means the sum total of all of the adjusted purchase
prices for each Note. The adjusted purchase price for each Note, other than
Notes purchased by Perlmutter in the original issuance of such Notes by the
Company, shall be the price originally paid by Perlmutter as purchase price for
the Note (excluding any amount paid in respect of accrued interest on the Note)
plus (A) the product of (a) such amount, times (b) a fraction, the numerator of
which shall be the product of (x) .07 times (y) the actual number of days
elapsed between Perlmutter's purchase of such note and the Note Closing Date,
and the denominator of which shall be 365 and (B) the amount of any accrued
interest paid by Perlmutter in respect of the Note at the time of its purchase.
The adjusted purchase price of each such Note shall be reduced by the amount of
any interest on the Note that has been paid or is payable to Permutter as the
holder of the Note. The adjusted purchase price for each Note purchased by
Perlmuter in the original issuance of such Notes by the Company shall be 53% of
the price originally paid by Perlmutter as purchase price for the Note.
(s) "Registrar" has the meaning ascribed to such term in the Indenture.
(t) "Security Register" has the meaning ascribed to such term in the
Indenture.
SECTION 2. Note Purchase and Sale.
(a) Purchase and Sale. Upon the terms and subject to the conditions
contained in this Agreement, Perlmutter hereby agrees to sell to the Company,
and the Company hereby agrees to purchase from Perlmutter, the Notes for the
Purchase Price.
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(b) Closing. Subject to Sections 6 and 7 hereof, the consummation of the
purchase and sale of the Notes (the "Closing") shall occur at the principal
executive offices of the Company in New York, New York, or such other place as
the parties shall otherwise agree, on a Business Day no later than December 31,
2001 which is agreed upon by the parties or, if the parties cannot agree on such
a Business Day, then on December 31, 2001.
(c) Note Closing Deliveries. At the Closing, Perlmutter shall deliver to
the Company a letter of instruction, reasonably satisfactory to the Company,
irrevocably instructing the Registrar to transfer the Notes to the Company in
the Security Register and any other documents or instruments required by the
Indenture to transfer the Notes to the Company against delivery of the Purchase
Price. At the Closing, the Company shall pay the Purchase Price to Perlmutter by
certified check or, at Perlmutter's election, by wire transfer in immediately
available funds to an account specified by Perlmutter to the Company in writing
no less than two Business Days prior to the Closing.
SECTION 3. Representations and Warranties of Perlmutter. Perlmutter
represents and warrants to the Company that the following representations and
warranties are, as of the date hereof, and will be, as of the Closing Date, true
and correct with respect to Perlmutter:
(a) Authorization. This Agreement has been duly executed and delivered
by Perlmutter and constitutes a legal, valid and binding obligation of
Perlmutter, enforceable in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium and similar laws affecting
creditors' rights generally and to general principals of equity.
(b) No Conflict. The execution, delivery and performance by Perlmutter
of this Agreement and the consummation of the transactions contemplated hereby
and thereby will not: (i) 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 Authority applicable to
Perlmutter; (ii) conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute (with due notice or lapse of time, or
both) a default (or give rise to any right of termination, cancellation or
acceleration) under any material contract or instrument to which Perlmutter is a
party or by which he or any of his property is bound or affected; or (iii)
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of Perlmutter.
(c) Title to the Notes; No Consent Required. Perlmutter has good and
valid title to the Notes, free and clear of any legal or equitable claims,
security interests, liens and encumbrances in favor of any other Person. By
transfer of the Notes pursuant to the exercise of the Option, Perlmutter is
passing good title to the Notes and to all rights thereunder of the holder
thereto free and clear of any claims, security interests, liens and encumbrances
whatsoever. No consent of any Person is required for the sale, transfer and
delivery of the Notes by Perlmutter which has not been obtained.
(d) Accuracy of Note Information. The acquisition date, acquisition
price and amount of accrued interest paid at the time of acquisition, as set
forth opposite each Note on
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Schedule 1 attached hereto is the true, complete and accurate date of
acquisition, price and amount of accrued interest paid, respectively, by
Perlmutter in respect of such Note.
(e) No Broker. Perlmutter has not employed any broker or finder in
connection with the transactions contemplated by this Agreement.
SECTION 4. Representations and Warranties of the Company. The Company
represents and warrants to Perlmutter that the following representations and
warranties are, as of the date hereof, and will be, as of the Closing Date, true
and correct with respect to the Company:
(a) Authorization. The execution, delivery and performance by the
Company of this Agreement has been duly authorized by all requisite corporate
action by the Company, and this Agreement has been duly executed and delivered
by the Company and constitutes a legal, valid and binding obligation of the
Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium and similar laws affecting
creditors' rights generally and to general principals of equity.
(b) No Conflict. The execution, delivery and performance by the Company
of this Agreement and the consummation of the transactions contemplated hereby
and thereby will not: (i) 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 Authority applicable to the
Company; (ii) conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute (with due notice or lapse of time, or
both) a default (or give rise to any right of termination, cancellation or
acceleration) under, the Certificate of Incorporation or By-laws, or under any
material contract or instrument to which the Company is a party or by which it
or any of its property is bound or affected; or (iii) result in the creation of
any lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company.
(c) No Consent or Approval Required. No permit, consent, approval or
authorization of, or declaration to, or filing with, any Person is required for
the valid authorization, execution, delivery and performance by the Company of
this Agreement, or the carrying out by the Company of the transactions
contemplated hereby.
(d) No Broker. The Company has not employed any broker or finder in
connection with the transactions contemplated by this Agreement.
SECTION 5. Best Efforts. Each of the Company and Perlmutter shall use
their respective reasonable best efforts to cause the conditions in Sections 6
and 7 hereof to be satisfied on a timely basis.
SECTION 6. Conditions Precedent to the Company's Obligation to Close.
Each obligation of the Company under this Agreement required to be fulfilled on
or before the Closing is subject to the satisfaction, on or before the Closing,
of each of the following conditions, unless waived by the Company, in whole or
in part:
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(i) Representations and Warranties. The representations and warranties
of Perlmutter contained in this Agreement shall be true and correct when made
and on the Closing Date, with the same effect as though made on the Closing
Date.
(ii) Availability of Payment. The Company shall have the funds
immediately available under its line of credit under the Credit Agreement to pay
the Purchase Price.
(iii) Financial Conditions. (1) Trading generally shall not have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Trade, (2) trading of any
securities of the Company shall not have been suspended on any exchange or in
any over-the-counter market, (3) a general moratorium on commercial on
commercial banking activities in New York shall not have been declared by either
Federal or New York State authorities, and (4) there shall not have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the Company's judgment is material and adverse.
(iv) Performance. (1) All of the covenants and obligations that
Perlmutter is required to perform or comply with pursuant to this Agreement on
or before the Closing must have been duly performed and complied with in all
material respects, and (2) each document required to be delivered by Perlmutter
pursuant to Section 2(c) hereof must have been delivered.
(v) Delivery of Additional Documents. Perlmutter shall have executed and
delivered to the Company such other documents, certificates and instruments as
the Company may reasonably require to effectuate, or otherwise facilitate the
consummation of the purchase and sale of the Notes.
(vi) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other legal restraint or prohibition
preventing the consummation of the transactions contemplated by the purchase and
sale of the Notes shall be in effect.
SECTION 7. Conditions Precedent to Perlmutter's Obligation to Close.
Each obligation of Perlmutter under this Agreement required to be fulfilled on
or before the Closing is subject to the satisfaction, on or before the Closing,
of each of the following conditions, unless waived by Perlmutter, in whole or in
part:
(i) Representations and Warranties. The representations and warranties
of the Company contained in this Agreement shall be true and correct when made
and on the Closing Date, with the same effect as though made on the Closing
Date.
(ii) The Company's Performance. All of the covenants and obligations
that the Company is required to perform or comply with pursuant to this
Agreement on or before the Closing must have been duly performed and complied
with in all material respects.
(iii) Delivery of Additional Documents. The Company shall have executed
and delivered to Perlmutter such other documents, certificates and instruments
as the Company may reasonably require to effectuate, or otherwise facilitate the
consummation of the purchase and sale of the Notes.
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(iv) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other legal restraint or prohibition
preventing the consummation of the transactions contemplated by the purchase and
sale of the Notes shall be in effect.
SECTION 8. Termination.
(a) Termination Events. This Agreement may, by notice given prior to or
at the Closing, be terminated:
(i) by either the Company or Perlmutter if a material breach of any
provision of this Agreement has been committed by the other party and such
breach has not been waived;
(ii) (1) by the Company if any of the conditions in Section 6 has
not been satisfied as of December 31, 2001 or if satisfaction of such a
condition is or becomes impossible (other than through failure of the Company to
comply with its obligations under this Agreement) and the Company has not waived
such condition on or before December 31, 2001; or (2) by Perlmutter if any of
the conditions in Section 7 has not been satisfied as of December 31, 2001 or if
satisfaction of such a condition is or becomes impossible (other than through
failure of Perlmutter to comply with his obligations under this Agreement) and
Perlmutter has not waived such condition on or before December 31, 2001; or
(iii) by mutual consent of the Company and Perlmutter.
(b) Effect of Termination. Each party's right of termination under
Section 8(a) hereof is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of a right of termination will not be
an election of remedies. If this Agreement is terminated pursuant to Section
8(a) hereof, all further obligations of the parties under this Agreement will
terminate other than under Section 9; provided, however, that if this Agreement
is terminated by a party because of the breach of this Agreement by the other
party, the terminating party's right to pursue all legal remedies will survive
such termination unimpaired.
SECTION 9. Miscellaneous.
(a) Survival of Representations and Warranties. The representations and
warranties of the Company and Perlmutter contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and shall
in no way be affected by any investigation of the subject matter thereof made by
or on behalf of Perlmutter or the Company.
(b) Indemnification.
(i) Indemnification by the Company. The Company shall indemnify,
defend and hold Perlmutter harmless from and against any and all liabilities,
losses or damages, together with all reasonable costs and expenses related
thereto or incurred in defending against same (including legal and accounting
fees and expenses), arising from, relating to, or connected with any untruth,
inaccuracy or breach of any representations, warranties or covenants of the
Company contained in this Agreement.
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(ii) Indemnification by Perlmutter. Perlmutter shall indemnify, defend
and hold Perlmutter harmless the Company against any and all liabilities, losses
or damages, together with all reasonable costs and expenses related thereto or
incurred in defending the same (including legal and accounting fees and
expenses), arising from, relating to, or connected with any untruth, inaccuracy
or breach of any representations, warranties or covenants of Perlmutter
contained in this Agreement.
(iii) Indemnification for Finder's Fees. Each party hereto agrees to
indemnify and to hold harmless each other party hereto from any liability for
any commission or compensation in the nature of a finders' fee (and the costs
and expenses (including reasonable attorney's fees) of defending against such
liability or asserted liability) for which such party or any of its officers,
partners, employees, or representatives is responsible.
(iv) Indemnification Procedures. Any Person seeking indemnification
hereunder (an "Indemnified Person") shall notify the Person from whom it is
seeking indemnification (the "Indemnifying Person") of a commencement of an
indemnifiable action or claim promptly after such Indemnified Person becomes
aware of such commencement and shall consult in good faith with the Indemnifying
Person as to the conduct of the defense of such action or claim, which defense
shall be reasonable under the circumstances. The Indemnifying Person shall be
entitled to participate in such defense and, to the extent that it wishes,
assume the defense thereof with counsel reasonably acceptable to the Indemnified
Person, provided that the Indemnified Person shall have the right to participate
in the defense of such action with counsel of its own selection. After notice
from the Indemnifying Person to the Indemnified Person of its election to assume
the defense of such claim or action, the Indemnifying Person shall not be liable
to the Indemnified Person under this Section 9(b) for any legal or other
expenses subsequently incurred by the Indemnified Person in connection with the
defense thereof. No Indemnified Person shall compromise or settle any action or
claim without the consent of the Indemnifying Person which shall not be
unreasonably withheld.
(c) Successors and Assigns.
(i) This Agreement and the rights hereunder shall not be assignable
or transferable by Perlmutter or the Company except in the case of the Company
by operation of law in connection with a merger, consolidation or sale of
substantially all the assets of the Company. Subject to the preceding sentence,
this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.
(ii) Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
(d) Governing Law; Submission to Jurisdiction . This Agreement shall be
governed by and construed under the laws of the State of New York, exclusive of
the provisions thereof governing conflicts of laws. The parties hereby
irrevocably and unconditionally consent to submit to the exclusive jurisdiction
of the courts of the State of New York or the United States of America located
in the State of New York for any actions, suits or proceedings arising out of or
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relating to this Agreement and the transactions contemplated hereby (and the
parties agree not to commence any action, suit or proceeding relating hereto
except in such courts), and further agree that service of any process, summons,
notice or documents by United States registered mail to either party in
accordance with Section 9(g) hereof shall be effective service of process for
any action, suit or proceeding brought against the other party in any such court
and, absent any statute, rule or order to the contrary, that each party shall
have thirty (30) days from actual receipt of any complaint to answer or
otherwise plead with respect thereto. In such event, the parties hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of New York or the United States
of America located in the State of New York, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.
(e) 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.
(f) Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(g) Notices. Any notice, request, demand or other communication required
or permitted hereunder shall be given in writing and shall be deemed effectively
given when received by the addressee, if sent by a nationally recognized
overnight delivery service, with postage and fees prepaid, return receipt
requested, and addressed to the appropriate addresses set forth below (or to
such other addresses as a party may designate by notice to the other party):
(i) if to the Company, Marvel Enterprises, Inc., 10 East 40th
Street, New York, New York 10016, attention to Allen Lipson, Esq., with copies
to Paul, Hastings, Janofsky & Walker LLP, 1055 Washington Boulevard, 9th Floor,
Stamford, Connecticut 06901, attention to John Turitzin, Esq.; and
(ii) if to Perlmutter, P.O. Box 1028, Lake Worth, Florida 33460,
with a copy to Shipman & Sosensky, LLC, 363 Main Street, Hartford, Connecticut
06106, attention to Mark Shipman, Esq., or at such other address designated by
an Investor to the Company and the other Investors in writing.
(h) Expenses. Each of the parties hereto shall pay all costs and
expenses incurred or to be incurred by it in negotiating, executing, delivering
and preparing this Agreement and in closing and carrying out the transactions
contemplated hereby and thereby.
(i) Amendments, Waivers and Consents. For the purposes of this Agreement
and all agreements executed pursuant hereto, no course of dealing between or
among any of the parties hereto and no delay on the part of any party hereto in
exercising any rights hereunder or thereunder shall operate as a waiver of the
rights hereof and thereof. Except as set forth herein, no provision hereof may
be waived other than by a written instrument signed by the party or
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parties so waiving such covenant or other provision as contemplated herein. This
Agreement may be amended only with the written consent of the Company and
Perlmutter.
(j) Remedies; Severability. It is specifically understood and agreed
that any breach of the provisions of this Agreement by any person subject hereto
will result in irreparable injury to the other parties hereto, that the remedy
at law alone will be an inadequate remedy for such breach, and that, in addition
to any other remedies which they may have, such other parties may enforce their
respective rights by actions for specific performance (to the extent permitted
by law). Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be deemed prohibited or invalid
under such applicable law, such provision shall be ineffective to the extent of
such prohibition or invalidity, and such prohibition or invalidity shall not
invalidate the remainder of such provision or the other provisions of this
Agreement.
(k) Entire Agreement. This Agreement, together with all exhibits,
documents and instruments referred to herein, constitutes the entire agreement
among the parties with respect to the subject matter hereof and thereof, and no
party shall be liable or bound to any other party in any manner by any
warranties, representations, or covenants except as specifically set forth
herein or therein.
(Signature Pages Follow)
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
MARVEL ENTERPRISES, INC.
By:
----------------------------------
Name:
Title:
/s/ ISAAC PERLMUTTER
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ISAAC PERLMUTTER
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SCHEDULE 1
NOTES
<TABLE>
<CAPTION>
Date of Purchase by Face Value of Perlmutter's Amount of Accrued Interest
Perlmutter Notes Purchase Price Paid at Time of Purchase
---------- ----- -------------- ------------------------
<S> <C> <C> <C>
July 11, 2001 $12,306,000 $6,460,650 $106,652
August 16, 2001 $1,627,000 $890,783 $33,082
August 28, 2001 $10,960,000 $6,028,000 $266,693
September 25, 2001 $4,000,000 $2,100,000 $133,333
September 28, 2001 $7,075,000 $3,608,250 $242,908
September 28, 2001 $2,000,000 $1,035,000 $68,667
Original Issuance $5,000,000 $2,650,000 $327,123
</TABLE>