Exhibit 10.6
AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT
AGREEMENT entered into as of the 27th day of September, 1999, by and
between HF Holdings, Inc., a Delaware corporation (the "COMPANY"), and Credit
Suisse First Boston Corporation, a Massachusetts corporation ("CSFB").
WHEREAS, the Company and ICON Healthy & Fitness, Inc. ("HEALTH &
FITNESS") have made an exchange offer, pursuant to the Exchange Offer and
Consent Solicitation, dated July 30, 1999, as supplemented (the "EXCHANGE
Offer"), for all outstanding 13% Senior Subordinated Notes due 2002 of Health &
Fitness ("13% NOTES"), 15% Senior Secured Discount Notes due 2004 of IHF
Holdings, Inc. ("15% NOTES"), and 14% Senior Discount Notes due 2006 of ICON
Fitness Corporation ("14% NOTES");
WHEREAS, pursuant to that certain term sheet, dated July 8, 1999, as
amended and attached to the Exchange Offer as Annex C (the "TERM SHEET"), CSFB
wishes to purchase from the Company, and the Company wishes to sell and issue to
CSFB, (i) shares of the Company's common stock, par value $.001 per share
("COMMON STOCK"), and (ii) convertible promissory notes of the Company, in each
case upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties to this Agreement,
intending to be legally bound, mutually agree as follows:
ARTICLE I.
PURCHASE AND SALE OF SECURITIES
1.1. SALE AND ISSUANCE OF SHARES. Subject to the terms and conditions
of this Agreement, CSFB does hereby subscribe for and agrees to purchase at the
Closing (as defined below), and the Company does hereby agree to sell to CSFB at
the Closing, 643,754 shares (the "SHARES") of Common Stock.
1.2. PURCHASE OF CONVERTIBLE NOTES. Subject to the terms and conditions
of this Agreement, CSFB does hereby agree to purchase at the Closing (as defined
below), and the Company does hereby agree to sell to CSFB at the Closing,
$7,500,000 principal amount of the Company's 0% Convertible Subordinated Notes
Due September 27, 2011 (the "NOTES"). The Notes shall have the terms and
provisions prescribed by the Amended and Restated Note Agreement ("NOTE
AGREEMENT"), the form of which is attached to this Agreement as Exhibit A.
1.3. PURCHASE PRICE. In consideration for the sale of the Shares and
the Notes by the Company to CSFB hereunder, CSFB shall pay to the Company an
amount (the "PURCHASE PRICE") equal to ten million dollars ($10,000,000).
1.4. CLOSING. The purchase, sale and issuance of the Shares and the
Notes shall occur at a closing (the "CLOSING") to be held simultaneously with
the closing of the transactions contemplated by the Term Sheet (the "ICON
RESTRUCTURING"). At the Closing, and upon payment of the Purchase Price, the
Company shall issue and deliver to CSFB, or its nominee, one or more
certificates representing the Shares and one or more Notes in the form
prescribed by the Note Agreement. Payment of the Purchase Price shall be made at
the Closing by wire transfer of same day funds denominated in U.S. dollars,
unless otherwise mutually agreed in writing with the Company.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1. ORGANIZATION AND STANDING. The Company represents and warrants
that it 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 carry on its business as now conducted and as proposed to be
conducted.
2.2. AUTHORIZATION. The Company represents and warrants that all
corporate action on the part of the Company necessary for the authorization,
execution, delivery and performance of this Agreement by the Company, and for
the authorization, issuance and delivery of the Shares and Notes being sold
under this Agreement, has been taken. This Agreement, when executed and
delivered by all parties hereto, shall constitute the valid and legally binding
obligation of the Company, except to the extent the enforceability thereof may
be limited by bankruptcy laws, insolvency laws, reorganization laws, moratorium
laws or other laws affecting creditors' rights generally or by general equitable
principles.
2.3. VALIDITY OF SHARES. The Company represents and warrants that the
Shares, when sold, issued and delivered in accordance with the terms of this
Agreement, shall be duly and validly issued, fully paid and nonassessable, and
free and clear of all liens, encumbrances and restrictions of any kind, except
as contemplated hereunder and under the Stockholders Agreement ("STOCKHOLDERS
AGREEMENT"), attached as Annex C to the Exchange Offer.
2.4. ENFORCEABILITY OF NOTES. The Note Agreement and the Notes, when
executed and delivered by the parties thereto, shall constitute the valid and
legally binding obligations of the Company, except to the extent the
enforceability thereof may be limited by bankruptcy laws, insolvency laws,
reorganization laws, moratorium laws or other laws affecting creditors' rights
generally or by general equitable principles.
ARTICLE III.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF CSFB
3.1. ORGANIZATION AND STANDING. CSFB represents and warrants that it is
a corporation duly organized, validly existing and in good standing under the
laws of
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the Commonwealth of Massachusetts and has all requisite power and authority to
carry on its business as now conducted and as proposed to be conducted.
3.2. AUTHORIZATION. CSFB represents and warrants that all action on the
part of CSFB necessary for the authorization, execution, delivery and
performance of this Agreement by CSFB has been taken, and that this Agreement,
when executed and delivered by all parties hereto, shall constitute the valid
and legally binding obligation of CSFB, except to the extent the enforceability
thereof may be limited by bankruptcy laws, insolvency laws, reorganization laws,
moratorium laws or other laws affecting creditors' rights generally or by
general equitable principles.
3.3. INVESTMENT REPRESENTATIONS AND UNDERTAKINGS.
(a) CSFB hereby represents that (i) the Shares and the Notes
will be acquired by it for investment for its own account, not as a
nominee or agent, and not with a view to the sale or distribution of
any part thereof in violation of applicable federal and state
securities laws, and (ii) it has no current intention of selling or
otherwise distributing the same in violation of applicable federal and
state securities laws. By executing this Agreement, CSFB further
represents that it does not have any contract, undertaking, agreement
or arrangement with any person to sell or otherwise transfer to such
person, or to any other person, any of the Shares or the Notes in
violation of applicable federal and state securities laws;
(b) CSFB understands that the Shares and the Notes have not
been registered under the Securities Act of 1933, as amended (the "1933
ACT") on the basis that the sale provided for in this Agreement and the
issuance of securities hereunder is exempt from registration under the
1933 Act pursuant to Section 4(2) thereof and regulations issued
thereunder, and that the Company's reliance on such exemption is in
part predicated on representations of CSFB set forth in this Agreement;
(c) CSFB represents that it has such knowledge in financial
and business matters as to be capable of evaluating the merits and
risks of its investment and that it is an "ACCREDITED INVESTOR" as such
term is defined in Regulation D promulgated pursuant to Section 4(2) of
the 1933 Act. CSFB further represents that it has had access, during
the course of the transactions contemplated hereby and prior to its
purchase of Shares and the Notes, to the same kind of information that
is specified in Part I of a registration statement under the 1933 Act
and that it has had, during the course of the transactions contemplated
hereby and prior to its purchase of the Shares and the Notes, the
opportunity to ask questions of, and receive answers from, the Company
(and Health & Fitness) concerning the terms and conditions of the
Exchange Offer and to obtain additional information (to the extent the
Company (and Health & Fitness) possessed such information or could
acquire it without unreasonable effort or expense) necessary to verify
the accuracy of any information furnished to it or to
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which it had access. CSFB understands that no federal or state agency
has passed upon this investment or upon the Company, no has any such
agency made any finding or determination as to the fairness of this
investment;
(d) CSFB understands that the Shares and the Notes may not be
sold, transferred or otherwise disposed of without registration under
the 1933 Act or an exemption therefrom and, in the absence of an
effective registration statement covering the Shares and the Notes or
an available exemption from registration under the 1933 Act, that the
Shares and the Notes may have to be held indefinitely and, as a
consequence, that CSFB must be prepared to bear the economic risk of
this investment for an indefinite period of time. In that regard, CSFB
understands and acknowledges that, except as may be provided in the
Stockholders Agreement, the Company is under no duty or obligation,
contractual or otherwise, to register the Shares or the Notes under the
1933 Act or to comply with the terms of any exemption thereunder. In
particular, CSFB acknowledges that it is aware that the Shares and the
Notes may not be sold pursuant to Rule 144 promulgated under the 1933
Act unless all of the conditions of that Rule are met. Among the
current conditions for use of Rule 144 by certain holders is the
availability to the public of current information about the Company.
Such information is not now available, and the Company has no current
plans to make such information available. CSFB represents that, in the
absence of an effective registration statement covering the Shares, it
will sell, transfer or otherwise dispose of the Shares and the Notes
only in a manner consistent with its representations set forth herein
and then only in accordance with the Stockholders Agreement; and
(e) CSFB also understands and acknowledges that the
Stockholders Agreement imposes certain obligations with respect to, and
additional restrictions on transferability of, the Shares and that as a
party to the Stockholders Agreement the certificates issued to it
evidencing the Shares will bear certain legends restricting
transferability of the Shares, all as required by the Stockholders'
Agreement.
ARTICLE IV.
CONDITIONS TO OBLIGATIONS OF CSFB AT CLOSING
The obligations of the CSFB under Article I of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions:
4.1. REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company contained in Article II hereof shall be true and correct on and
as of the Closing with the same force and effect as if they had been made at the
Closing.
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4.2. PERFORMANCE. The Company shall have performed and complied with
all agreements and conditions contained in this Agreement required to be
performed or complied with by it on or before the Closing.
4.3. RESTRUCTURING CONDITIONS. All conditions to the obligation of CSFB
to consummate the ICON Restructuring under the Term Sheet shall have been
satisfied or waived.
ARTICLE V.
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AT CLOSING
The obligations of the Company under Article I of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions:
5.1. REPRESENTATIONS AND WARRANTIES. The representations and warranties
of CSFB contained in Article III hereof shall be true and correct on and as of
the Closing Date with the same force and effect as if they had been made at the
Closing.
5.2. PERFORMANCE. CSFB shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed
or complied with by it on or before the Closing.
5.3. RESTRUCTURING CONDITIONS. CSFB shall have executed and delivered a
counterpart copy of the Stockholders Agreement, and all other conditions to the
obligation of the Company to consummate the Icon Restructuring under the Term
Sheet shall have been satisfied or waived.
ARTICLE VI.
MUTUAL CONDITIONS PRECEDENT
The obligations of the Company and CSFB under Article I of this
Agreement are subject to the fulfillment on or before the closing of each of the
following conditions:
6.1. QUALIFICATIONS. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Shares and the Notes pursuant to this Agreement shall have been duly obtained
and shall be effective.
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ARTICLE VII.
MISCELLANEOUS
7.1. PAYMENT OF FEES. The Company hereby agrees to:
(a) pay to CSFB (or an affiliate of CSFB designated by it) a
fee in the amount of $881,000 in connection with the structuring of the
ICON Restructuring, such fee being payable by the Company at the
Closing of the ICON Restructuring or, if the ICON Restructuring is not
consummated, promptly after the time the Company has abandoned the ICON
Restructuring;
(b) subject to the terms of the Senior Credit Facility (as
defined in the Note Agreement) from time to time in effect, during the
Term (as defined in the Management Agreement (the "MANAGEMENT
AGREEMENT"), dated as of September 27, 1999, entered into among Health
& Fitness, the Company, Bain Capital Partners IV, L.P., IHF Holdings,
Inc. and IHF Capital, Inc.), pay to CSFB (or an affiliate of CSFB
designated by it) a management fee in an amount not to exceed $366,500
per annum in exchange for strategic advisory services to be provided to
the Company by CSFB, such fee being payable by the Company quarterly in
arrears, with each payment being made sixty (60) days after the end of
each fiscal quarter of the Company; provided, however, that the
management fees payable with respect to fiscal year 2000 of the Company
shall be payable in one installment of $274,875 on April 30, 2000 and
one installment of $91,625 on July 31, 2000; and
(c) during the Term, allow CSFB to participate in the
negotiation and consummation of any Liquidity Event (as defined in the
Stockholders Agreement) by the Company, and pay (or cause to be paid)
to CSFB (or an affiliate of CSFB designated by it) a fee in connection
therewith equal to one half of one percent (0.5%) of the gross purchase
price of the transaction (including all liabilities assumed or
otherwise included in the transaction), such fee to be due and payable
for the foregoing services at the closing of such transaction. This fee
is the same fee contemplated to be paid to CSFB pursuant to Section
2(c) of the Management Agreement, and is not intended to be in addition
thereto.
7.2. INDEMNITY AND LIABILITY. In consideration of the execution and
delivery of this Agreement by CSFB, the Company hereby agrees to indemnify,
exonerate and hold each of CSFB, and each of its affiliates, directors,
officers, fiduciaries, employees and agents and each of the partners,
shareholders, affiliates, directors, officers, fiduciaries, employees and
agents, advisors and attorneys of each of the foregoing (collectively, the
"INDEMNITEES") free and harmless from and against any and all actions, causes of
action, suits, liabilities and damages, and expenses in connection therewith,
including without limitation attorneys' fees and disbursements (collectively,
"LIABILITIES"), incurred by the Indemnitees or any of
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them as a result of, or arising out of, or relating to the ICON Restructuring,
the execution, delivery, performance, enforcement or existence of this Agreement
or the transactions contemplated hereby (including but not limited to any
indemnification obligations assumed or incurred by any Indemnitee)
(collectively, the "INDEMNIFIED LIABILITIES"), except for any such Indemnified
Liabilities arising on account of such Indemnitee's willful misconduct, and if
and to the extent that the foregoing undertaking may be unenforceable for any
reason, the Company hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
7.3. NO WAIVER; MODIFICATIONS IN WRITING. This Agreement sets forth the
entire understanding of the parties, and supersedes all prior agreements,
arrangements and communications, whether oral or written, with respect to the
subject matter hereof. No waiver of or consent to any departure from any
provision of this Agreement shall be effective unless signed in writing by the
party entitled to the benefit thereof. Except as otherwise provided herein, no
amendment, modification or termination of any provision of this Agreement shall
be effective unless signed in writing by or on behalf of the Company and CSFB.
7.4. TAXES. The Company shall pay any and all stamp, transfer and other
similar taxes payable or determined to be payable in connection with the
execution and delivery of this Agreement and the original issuance of the Shares
and the Notes, but excluding all federal, state and local income or similar
taxes, and shall save and hold CSFB harmless from and against any and all
liabilities with respect to or resulting from any delay in paying, or omission
to pay, such taxes.
7.5. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, but all of which taken together shall constitute one and the same
Agreement.
7.6. BINDING EFFECT; ASSIGNMENT. The rights and obligations of CSFB
under this Agreement may not be assigned to any other person. Except as
expressly provided in this Agreement, this Agreement shall not be construed so
as to confer any right or benefit upon any person other than the parties to this
Agreement, and their respective successor and permitted assigns. This Agreement
shall be binding upon the Company and CSFB, and their respective successors and
permitted assigns.
7.7. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the domestic substantive laws of the State of Delaware as to
all matters including but not limited to matters of validity, construction,
effect, performance and remedies, but without giving effect to any choice or
conflict of laws provision or rule that would cause the application of the
domestic substantive laws of any other jurisdiction.
7.8. SEVERABILITY OF PROVISIONS. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be
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ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
7.9. HEADINGS. The Article and Section headings used or contained in
this Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.
7.10. INJUNCTIVE RELIEF. Each of the parties to this Agreement hereby
acknowledges that in the event of a breach by any of them of any material
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. Each of the parties therefore agrees that, in the event of a
breach of any material provision of this Agreement, the aggrieved party may
elect to institute and prosecute proceedings to enforce specific performance or
to enjoin the continuing breach of such provision, as well as to obtain damages
for breach of this Agreement. By seeking or obtaining any such relief, the
aggrieved party will not be precluded from seeking or obtaining any other relief
to which it may be entitled.
7.11. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES. All
agreements, representations and warranties contained herein or made in writing
by or on behalf of the Company or CSFB, as the case may be, in connection with
the transactions contemplated by this Agreement shall survive the execution and
delivery of this Agreement and the sale and purchase of the Shares and payment
therefor.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
HF HOLDINGS, INC.
By:________________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON
CORPORATION
By:________________________________
Name:
Title:
[Signature page to the Securities Purchase Agreement]