Item 1.01
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Entry Into a Material Definitive Agreement
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On August 10, 2017, Vince Holding Corp.
(Vince, we, us or our) entered into an Investment Agreement (the Investment Agreement) with Sun Cardinal, LLC and SCSF Cardinal, LLC (collectively, the Sun Cardinal Investors),
in connection with the previously announced proposed non-transferable rights offering (the Rights Offering). Pursuant to the Investment Agreement, we have agreed to issue and sell to the Sun Cardinal Investors, and the Sun Cardinal
Investors have agreed to purchase, an aggregate number of shares of our common stock equal to (x) $30.0 million minus (y) the aggregate proceeds of the Rights Offering, at the Rights Offering subscription price per share of $0.45, subject
to the terms and conditions set forth in the Investment Agreement (the Backstop Commitment). The Investment Agreement supersedes the Rights Offering Commitment Letter, dated May 18, 2017, from Sun Capital Partners V, L.P., which was
previously disclosed in Vinces Current Report on Form 8-K filed with the Securities and Exchange Commission on May 19, 2017. A summary of the material terms and conditions of the Investment Agreement is set forth below.
Closing Conditions
The closing of the transactions
contemplated by the Investment Agreement is subject to the satisfaction or waiver of customary conditions, including (i) receipt of all applicable regulatory approvals, (ii) compliance with covenants, (iii) the accuracy of
representations and warranties provided in the Investment Agreement, (iv) the absence of a material adverse effect on the Company with respect to our financial condition, business, properties, assets, liabilities or results of operations or the
Sun Cardinal Investors ability to perform their obligations under the Investment Agreement, (v) the effectiveness of the registration statement related to the Rights Offering, (vi) consummation of the Rights Offering and
(vii) approval for listing on the New York Stock Exchange of shares of common stock to be issued in the Rights Offering.
Termination
The Investment Agreement may be terminated at any time prior to the closing of the transactions contemplated by the Investment Agreement as follows:
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by mutual written agreement of the Sun Cardinal Investors and us;
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by any party, in the event the closing of the transactions to be contemplated by the Investment Agreement does not occur by September 30, 2017;
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by any party, if any governmental entity shall have taken action prohibiting any of the contemplated transactions;
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by the Sun Cardinal Investors, if we breach any of our representations, warranties, covenants or agreements set forth in the Investment Agreement that would result in the applicable condition to closing not being
satisfied, and such breach is not cured within 10 days of receipt of written notice by the Sun Cardinal Investors;
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by us, if the Sun Cardinal Investors breach any of their representations, warranties, covenants or agreements set forth in the Investment Agreement that would result in the applicable condition to closing not being
satisfied, and such breach is not cured within 10 days of receipt of written notice by us; or
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by either party if we enter into a definitive agreement with respect to a Superior Transaction.
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In general, a
Superior Transaction is defined in the Investment Agreement as (1) a debt or equity financing transaction (other than the Rights Offering and the Backstop Commitment) or (2) a transaction involving the sale of 50% or more of our total
voting power or of all or substantially all of our consolidated assets, that, in either case, our board of directors (or a committee thereof consisting only of disinterested directors) determines in good faith is in the best interests of our
stockholders, including, in the case of a debt or equity financing transaction, a determination that such transaction would provide us with liquidity in an amount in excess of that expected to result from the Rights Offering and the Backstop
Commitment or result in more favorable economic terms for us than the Rights Offering and the Backstop Commitment.
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Expense Reimbursement
Regardless of whether the transactions contemplated by the Investment Agreement are consummated, we have agreed to reimburse the Sun Cardinal Investors for all
reasonable out-of-pocket fees and expenses (including attorneys fees and expenses) incurred by them in connection with the Investment Agreement and the transactions contemplated thereby, other than in the event the Investment Agreement is
terminated due to a breach by the Sun Cardinal Investors.
Indemnification
We have agreed to indemnify the Sun Cardinal Investors and their affiliates and each of their respective officers, directors, partners, employees, agents and
representatives for losses arising out of the Rights Offering and the related registration statement and prospectus (other than with respect to statements made in reliance on information provided to us in writing by the Sun Cardinal Investors for
use herein) and claims, suits or proceedings challenging the authorization, execution, delivery, performance or termination of the Rights Offering, the Investment Agreement and certain ancillary agreements and/or any of the transactions to be
contemplated thereby, other than losses arising out of or related to any breach by the Sun Cardinal Investors of the Investment Agreement.
The Sun
Cardinal Investors have agreed to indemnify the Company and its affiliates and each of their respective officers, directors, partners, employees, agents and representatives for losses arising out of or relating to statements or omissions in the
registration statement or prospectus for the Rights Offering (or any amendment or supplement thereto) made in reliance on or in conformity with written information relating to such Sun Cardinal Investor furnished to us by or on behalf of such Sun
Cardinal Investor expressly for use therein.
The foregoing is only a summary of the material terms of the Investment Agreement and does not purport to be
complete, and is qualified in its entirety by reference to the Investment Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein.