Item 1.01 Entry Into a Material Definitive Agreement.
On
Consideration; Treatment of Common Stock and Equity Awards; Credit Party Closing Payment
At the Effective Time, each share of the Company's common stock, par value
At the Effective Time, each Company option that is outstanding immediately prior to the Effective Time, whether or not then vested or exercisable, shall be, by virtue of the Merger and without any action on the part of the holder thereof, cancelled without payment therefor and shall have no further force or effect.
At the Effective Time, each restricted stock unit covering shares of Common
Stock (each, a "Company RSU") that is outstanding immediately prior to the
Effective Time, whether or not then vested, will vest in full and be canceled
and converted into the right to receive an amount in cash, without interest,
equal to the product of (A) the aggregate number of shares of Common Stock
subject to such Company RSU; multiplied by (B)
At the Effective Time, in full satisfaction of all outstanding principal and
interest due under subordinated notes held by the Credit Parties (estimated to
be approximately
Representations, Warranties and Covenants
The Merger Agreement contains customary representations, warranties, and covenants.
Certain Closing Conditions
Parent's obligation to effect the Merger is subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, including (i) the accuracy of the representations and warranties of the Company contained in the Merger Agreement, subject to customary exceptions; (ii) the Company's compliance in all material respects with its covenants and obligations contained in the Merger Agreement; (iii) there not having been a Material Adverse Effect with respect to the Company; (iv) the Merger Agreement's adoption by the Requisite Company Vote; (v) the absence of any restraining order, preliminary or permanent injunction or other order or decree issued by any court of competent jurisdiction or other legal restraint or prohibition in effect that would prohibit or make illegal or otherwise prohibit the consummation of the Merger; (vi) the number of Dissenting Shares shall not exceed 10% of the issued and outstanding shares of Company Common Stock; (vii) the Seventh Amendment shall not have been terminated by Callodine in writing or amended in a manner that is adverse to the Company or Parent, (viii) Callodine shall not have notified the Company of its intent to terminate the Seventh Amendment, (ix) neither Callodine nor any other Lender has taken any actions to enforce their respective rights or remedies under the Seventh Amendment and the other Loan Documents; and (x) other customary conditions.
Takeover Proposals; Termination Fees
The Company has agreed (i) to immediately cease any and all existing activities, solicitations, discussions or negotiations with any Person with respect to any Takeover Proposal (ii) not to initiate, or knowingly take any action
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to facilitate or encourage the submission of any Takeover Proposal or the making of any inquiry or proposal that could reasonably be expected to lead to any Takeover Proposal, and (iii) to certain restrictions on its ability to respond to such proposals, subject to fulfillment of certain fiduciary requirements of the board of directors of the Company.
The Merger Agreement contains certain termination rights in favor of each the
Company and Parent, including under certain circumstances, the requirement for
the Company to pay to Parent a termination fee of
The Company's board of directors has unanimously (i) determined that it is in the best interests of the Company and its stockholders to enter into, and approved and declared advisable, the Merger Agreement, (ii) approved the execution and delivery by the Company of the Merger Agreement, the performance by the Company of its obligations contained in the Merger Agreement and the consummation of the Merger, and (iii) that a special meeting of the stockholders of the Company be held for the purpose of approving the Merger Agreement.
The foregoing description of the Merger Agreement is not complete and is
qualified in its entirety by reference to the Merger Agreement, which is
attached to this report as Exhibit 2.1 and incorporated herein by reference. The
Merger Agreement and the foregoing description of such agreement have been
included to provide investors and stockholders with information regarding the
terms of such agreement. They are not intended to provide any other factual
information about the Company. The representations, warranties and covenants
contained in the Merger Agreement were made only as of specified dates for the
purposes of such agreement, were solely for the benefit of the parties to such
agreement and may be subject to qualifications and limitations agreed upon by
such parties. In particular, in reviewing the representations, warranties and
covenants contained in the Merger Agreement, it is important to bear in mind
that such representations, warranties and covenants were negotiated with the
principal purpose of allocating risk between the parties, rather than
establishing matters as facts. Such representations, warranties and covenants
may also be subject to a contractual standard of materiality different from
those generally applicable to stockholders and reports and documents filed with
the
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
Reference is made to the disclosure regarding the Seventh Amendment under Item 1.01 above, which is incorporated herein by this reference.
Item 7.01 Regulation FD Disclosure
On
The information contained in this Item 7.01 and in Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
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Item 9.01 Financial Statements and Exhibits
Exhibit No.Description
2.1 Agreement and Plan of Merger, dated as ofFebruary 16, 2021 , by and amongApex Global Brands Inc. ,Galaxy Universal LLC ,Galaxy Apex Merger Sub, Inc. , a wholly owned subsidiary of Parent, andEugene Robin , solely in his capacity as representative, agent and attorney-in-fact . 10.1 Seventh Amendment to Financing Agreement and Forbearance Agreement, dated as ofFebruary 16, 2021 with retroactive effect as ofDecember 31, 2020 , by and among theApex Global Brands Inc. ,Irene Acquisition Company B.V. , each Guarantor party thereto, the Lenders party thereto, andCallodine Commercial Finance, LLC (as successor toGordon Brothers Finance Company ). 10. 2 Credit Party Representative Agreement, dated as ofFebruary 16, 2021 , by and amongApex Global Brands Inc. , the Credit Parties,Eugene Robin ,Galaxy Universal LLC andGalaxy Apex Merger Sub, Inc. 99.1 Press Release, datedFebruary 16, 2021 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
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