0001011438-01-500233.txt : 20011019
0001011438-01-500233.hdr.sgml : 20011019
ACCESSION NUMBER: 0001011438-01-500233
CONFORMED SUBMISSION TYPE: SC 13D
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 20011017
GROUP MEMBERS: ANDREW A. WIEDERHORN
GROUP MEMBERS: TIFFANY WIEDERHORN
GROUP MEMBERS: TTMM,L.P.
GROUP MEMBERS: WM STARLIGHT INVESTMENTS, LLC
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: WIEDERHORN ANDREW
CENTRAL INDEX KEY: 0001033016
STANDARD INDUSTRIAL CLASSIFICATION: []
FILING VALUES:
FORM TYPE: SC 13D
BUSINESS ADDRESS:
STREET 1: C/O WILSHIRE FINANCIAL SERVICES GROUP
STREET 2: 1776 SW MADISON STREET
CITY: PORTLAND
STATE: OR
ZIP: 97205
BUSINESS PHONE: 5032235600
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: FOG CUTTER CAPITAL GROUP INC
CENTRAL INDEX KEY: 0001048566
STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798]
IRS NUMBER: 522081138
STATE OF INCORPORATION: MD
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-54067
FILM NUMBER: 1761089
BUSINESS ADDRESS:
STREET 1: 1631 SW COLUMBIA STREET
CITY: PORTLAND
STATE: OR
ZIP: 97201
BUSINESS PHONE: 5037216500
MAIL ADDRESS:
STREET 1: 1310 S W 17TH ST
CITY: PORTLAND
STATE: OR
ZIP: 97201
FORMER COMPANY:
FORMER CONFORMED NAME: WILSHIRE REAL ESTATE INVESTMENT TRUST INC
DATE OF NAME CHANGE: 19971027
SC 13D
1
form_sc13d.txt
SCHEDULE 13D
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 3)
FOG CUTTER CAPITAL GROUP INC.
--------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.0001 PER SHARE
--------------------------------------------------------------------------------
(Title of Class of Securities)
971892104
--------------------------------------------------------------------------------
(CUSIP Number)
ANDREW A. WIEDERHORN
C/O FOG CUTTER CAPITAL GROUP INC.
1410 SW JEFFERSON ST.
PORTLAND, OREGON 97205
(503) 721-6500
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
OCTOBER 16, 2001
--------------------------------------------------------------------------------
(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [_].
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.
(Continued on following pages)
CUSIP No. 971892104 13D Page 2 of 13 Pages
________________________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
ANDREW A. WIEDERHORN
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
PF
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 0 (See Response to Items 4 and 5)
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
2,837,715 (See Response to Items 4 and 5)
OWNED BY
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 50,000 (See Response to Items 4 and 5)
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
1,742,955 (See Response to Items 4 and 5)
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,837,715
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
27.01% (See Response to Items 4 and 5)
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 971892104 13D Page 3 of 13 Pages
________________________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
TIFFANY WIEDERHORN
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
N/A
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 619,175 (See Response to Items 4 and 5)
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
2,218,540 (See Response to Items 4 and 5)
OWNED BY
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 619,175 (See Response to Items 4 and 5)
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
1,173,780 (See Response to Items 4 and 5)
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,837,715
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
27.01%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 971892104 13D Page 4 of 13 Pages
________________________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
TTMM, L.P.
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
N/A
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 100,000
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 100,000
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
100,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.95% (See Response to Items 4 and 5)
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
PN
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 971892104 13D Page 5 of 13 Pages
________________________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WM STARLIGHT INVESTMENTS, LLC
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
N/A
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 13,826
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 13,826
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,826
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.13% (See Response to Items 4 and 5)
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
OO
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to the Common Stock, par value $0.0001 per
share (the "Common Stock"), of Fog Cutter Capital Group Inc., a Maryland
corporation (formerly known as "Wilshire Real Estate Investment Trust Inc.")
(the "Issuer"). The principal executive offices of the Issuer are located at
1410 SW Jefferson St., Portland, Oregon 97205.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed by: Andrew Wiederhorn, Tiffany Wiederhorn
and TTMM, L.P. (the "Reporting Persons"). Andrew Wiederhorn has been the
Chairman of the Board of Directors, Chief Executive Officer, Secretary and
Treasurer of Fog Cutter Capital Group Inc., formerly known as Wilshire Real
Estate Investment Inc. and Wilshire Real Estate Investment Trust Inc., since
its formation in 1997. Tiffany Wiederhorn is Mr. Wiederhorn's spouse. TTMM,
L.P. is a California limited partnership which is engaged in making
investments. Ivy Capital Partners, L.P., a California limited partnership,
is the general partner of TTMM, L.P. The Wiederhorn Family Limited
Partnership, a California limited partnership, is the general partner of Ivy
Capital Parnters, L.P. Tiffany Wiederhorn is the general partner of the
Wiederhorn Family Limited Partnership. WM Starlight Investments, LLC is a
Delaware limited liability company which is engaged in making investments.
Tiffany Wiederhorn is the managing member and majority owner of WM Starlight
Investments, LLC. Schedule A annexed hereto and incorporated by reference
herein sets forth the addresses of the Reporting Persons.
None of the Reporting Persons has, during the last five years, been
convicted in any criminal proceeding (excluding traffic violations or similar
misdemeanors). None of the Reporting Persons has, during the last five years,
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and, as a result of such proceeding, was or is subject to
a judgement, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to federal or state securities laws,
or finding any violations with respect to such laws.
Information with respect to each of the Reporting Persons is given solely
by such Reporting Person and no Reporting Person is responsible for the accuracy
or completeness of information supplied by another Reporting Person.
The filing of this Schedule 13D (including all amendments thereto) does
not constitute an admission by any of the persons making this filing that such
persons are a "group" for purposes of Section 13(d)(3) of the Securities
Exchange Act of 1934 (the "Act"). The Reporting Persons deny that they should be
deemed to be such a "group", and such persons are making this filing only
because they may be deemed to constitute a "group" for purposes of Section
13(d)(3) of the Act.
Page 6 of 13 Pages
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The source and amount of funds (including commissions) used by each of the
Reporting Persons to acquire the shares of Common Stock reported below is as
follows:
NAME AMOUNT SOURCE OF FUNDS
------------------------------ ------------ ---------------
Andrew Wiederhorn $100,995.401 Personal funds
Tiffany Wiederhorn N/A N/A
TTMM, L.P. N/A N/A
WM Starlight Investments, LLC N/A N/A
ITEM 4. PURPOSE OF THE TRANSACTION.
The purpose of this Amendment No. 3 to Schedule 13D is to report changes
in certain information reported by the Reporting Persons on its previous
Schedule 13D and the amendments thereto.
The Reporting Persons originally acquired the shares of Common Stock of
the Issuer for investment purposes. Item 4 is hereby amended to report that, the
Reporting Persons have acquired voting and economic interests in additional
Common Stock and intend to vote their Common Stock to change the composition of
the board of directors of the Issuer (the "Board of Directors").
On October 16, 2001, Andrew A Wiederhorn entered into a series of separate
but substantially identical Put/Call Option and Voting Agreements (the "Put/Call
Option Agreements") with each of Boston Provident Partners, L.P., B.P.
Institutional Partners, L.P., Orin Kramer, the Leon & Toby Cooperman Foundation,
Watchung Road Associates, L.P., and Cobalt Capital Management, Inc. (each a
"Stockholder" and collectively, the "Stockholders") and Andrew A. Wiederhorn.
Pursuant to each of the Put/Call Option Agreements each
--------------------------
1 Pursuant to the Put/Call Option and Voting Agreements entered into on
October 16, 2001 and described in Item 4 below, Andrew Wiederhorn
purchased call options from the following shareholders at $0.10 per share,
for a total cost of $100,995.40:
SHAREHOLDER SHARES
-------------------------------- ---------
Leon & Toby Cooperman Foundation 85,000
Watchhung Road Associates, L.P. 275,000
Cobalt Capital Management Inc. 290,000
Boston Provident Partners, L.P. 324,054
BP Institutional Partners, L.P. 21,300
Orin Kramer 14,600
Page 7 of 13 Pages
Stockholder granted to Mr. Wiederhorn a Call Option (as defined in the Put/Call
Option Agreements) to purchase all of the shares of Common Stock of each
Stockholder, numbering 1,009,944 in the aggregate (the "Subject Shares") at the
Call Option Price Per Share (as defined in the Put/Call Option Agreements). In
addition, the Stockholders granted to Mr. Wiederhorn, in his absolute, sole and
binding discretion, the ability to vote or direct the vote of all of the Subject
Shares. In consideration for granting the Call Option to Mr. Wiederhorn, Mr.
Wiederhorn paid to each Stockholder ten cents ($0.10) per share for each of such
Subject Shares. Pursuant to the same Put/Call Option Agreements, Mr. Wiederhorn
also granted each of the Stockholders a Put Option (as defined in the Put/Call
Option Agreements) whereby, in the event of a preferential repurchase of Common
Stock by the Issuer, each Stockholder may require Mr. Wiederhorn to purchase up
to a specified number of each Stockholder's Subject Shares at a predetermined
price.
Also on October 16, 2001, Andrew Wiederhorn also entered into a Stock
Option and Voting Agreement (the "Mendelsohn Agreement") by and among Mr.
Wiederhorn and Lawrence A. Mendelsohn ("Mr. Mendelsohn"), Joyce Mendelsohn,
MFLP, L.P., RPM Capital, LLC, AIM Capital, LLC, S&S Investors, LLC (the
"Mendelsohn Agreement Stockholders") and Lawrence A. Mendelsohn, as Agent for
the Mendelsohn Agreement Stockholders. The Mendelsohn Agreement grants Mr.
Wiederhorn the right to vote or direct the vote of all of the shares held by
each such Mendelsohn Agreement Stockholders numbering 1,044,760 in the
aggregate. The Mendelsohn Agreement requires that Mr. Wiederhorn vote, for a
specified duration extending at least until the annual meeting of the Issuer
that occurs on or before April 30, 2003, all of the shares for which Mr.
Wiederhorn has voting power, in favor of nominating and appointing Mr.
Mendelsohn to the Board of Directors. Mr. Mendelsohn is currently President of
Issuer and a member of the Board of Directors. In exchange for the voting rights
over the Common Stock held by the Mendelsohn Agreement Stockholders, Mr.
Wiederhorn granted each Mendelsohn Agreement Stockholder a Put Option (as
defined in the Mendelsohn Agreement) whereupon each Mendelsohn Agreement
Stockholder may require Mr. Wiederhorn to purchase such Mendelsohn Agreement
Stockholder's shares in a specified time period at a price determined from the
book value of the Issuer at the month end prior to the time of exercise of the
Put Option.
Mr. Wiederhorn and the Issuer are in discussions about the nomination of
directors for election at the 2001 Annual Meeting of stockholders. Mr.
Wiederhorn may nominate a slate of directors for election to each of the
positions on the Board of Directors at the 2001 Annual Meeting. If he does so,
Mr. Wiederhorn expects to nominate himself, Mr. Mendelsohn and three other
independent directors, of which at least one is expected to be a current
independent director of the Board of Directors, and the other two would not be
current members of the Board of Directors. At the 2001 Annual Meeting, the
Reporting Persons will attempt to elect those nominated directors to the
Issuer's Board of Directors, If successful in electing at least three of such
directors, Mr. Wiederhorn's nominees will constitute a majority of the Board of
Directors and will control the Issuer.
Other than as described above, none of the Reporting Persons or, to the
best knowledge of TTMM, L.P., its general partner has any present plans or
proposals which would related to or would result in (a) the acquisition by any
Reporting Person of additional securities of the Issuer, (b) an extraordinary
corporate transaction, such as a merger, reorganization, or liquidation
Page 8 of 13 Pages
involving the Issuer, (c) a sale or transfer of a material amount of the assets
of the Issuer, (d) any change in the present board of directors or to fill any
existing vacancies on the Issuer's board of directors, (e) any material change
in the present capitalization or dividend policy of the Issuer, (f) any other
material change in the Issuer's charter, by-laws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Issuer by any person, (h) causing a class of securities of the Issuer to be
delisted from a national securities exchange or to cease to be authorized to be
quoted in an inter-dealer quotation system of a registered national securities
association, (i) a class of equity securities of the Issuer becoming eligible
for termination of registration pursuant to Section 12(g)(4) of the Act, or (j)
any action similar to any of those enumerated above. Item 4 disclosure
provisions regarding any plans or proposals to make any changes in a company's
investment policy for which a vote is required by Section 13 of the Investment
Company Act of 1940 are inapplicable.
Notwithstanding anything contained herein, each of the Reporting Persons
reserves the right, depending on other relevant factors, to purchase additional
shares of Common Stock or to dispose of all or a portion of his or her holdings
of Common Stock or change his or her intention with respect to any and all of
the matters referred to in this Item 4.
Page 9 of 13 Pages
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The ownership by the Reporting Persons of shares of Common Stock and the
percentage of the outstanding shares of Common Stock represented thereby is as
follows:
PERCENTAGE OF
NUMBER OF SHARES COMMON STOCK
BENEFICIALLY OWNED OUTSTANDING
------------------ -------------
Andrew Wiederhorn 2,837,7152 27.01%
Tiffany Wiederhorn 2,837,7153 27.01%
TTMM, L.P. 100,000 0.95%
WM Starlight Investments, LLC 13,826 0.13%
-------------------
2 Includes 733,001 shares of Common Stock owned by the other Reporting
Persons. Andrew Wiederhorn shares voting and dispositive power with
respect to the shares of Common Stock owned by the other Reporting Persons
and may be deemed to be the beneficial owner of all such shares. Andrew
Wiederhorn disclaims beneficial ownership of any of the shares of Common
Stock owned by the other Reporting Persons. Also includes 1,009,954 shares
of Common Stock with respect to which Mr. Wiederhorn has shared voting
power and the option to purchase pursuant to the Put/Call Option and
Voting Agreements entered into with each of Orin Kramer, B.P.
Institutional Partners, L.P., Boston Provident Partners, L.P., Leon & Toby
Cooperman Foundation, Watchung Road Associates, L.P., and Cobalt Capital
Management, Inc. on October 16, 2001, and 1,044,760 shares of Common Stock
which Mr. Wiederhorn has shared voting power over pursuant to the Stock
Option and Voting Agreement he entered into with Lawrence A. Mendelsohn,
MFLP, L.P., RPM Capital, LLC, AIM Capital, LLC, S&S Investors, LLC, and
Joyce Mendelsohn (the "Stockholders") and Lawrence A. Mendelsohn, as Agent
for the Stockholders, on October 16, 2001. Andrew Wiederhorn shares voting
and/or dispositive power with respect to such shares of Common Stock and
may be deemed to be the beneficial owner of such shares. Of the 2,837,715
shares, Andrew Wiederhorn (i) shared power to vote or to direct the vote
of 2,837,715 shares, but did not have any sole power to vote or direct the
vote of any of the shares, (ii) had sole power to dispose or to direct the
disposition of 50,000 of these shares, and (iii) shared power to dispose
or to direct the disposition of 1,742,955 shares.
3 Includes 163,826 shares of Common Stock owned by other Reporting Persons.
Tiffany Wiederhorn shares voting and dispositive power with respect to the
shares of Common Stock owned by TTMM, L.P. and may be deemed to be the
beneficial owner of such shares. Tiffany Wiederhorn disclaims beneficial
ownership of such shares of Common Stock. Also includes 1,009,954 shares
of Common Stock with respect to which Mr. Wiederhorn has shared voting
power and the option to purchase pursuant to the Put/Call Option and
Voting Agreements Mr. Wiederhorn entered into with each of Orin Kramer,
B.P. Institutional Partners, L.P., Boston Provident Partners, L.P., Leon &
Toby Cooperman Foundation, Watchung Road Associates, L.P., and Cobalt
Capital Management, Inc. on October 16, 2001, and 1,044,760 shares of
Common Stock which Mr. Wiederhorn has shared voting power over pursuant to
the Stock Option and Voting Agreement he entered into with Lawrence A.
Mendelsohn, MFLP, L.P., RPM Capital, LLC, AIM Capital, LLC, S&S Investors,
LLC, and Joyce Mendelsohn (the "Stockholders") and Lawrence A. Mendelsohn,
as Agent for the Stockholders, on October 16, 2001. Tiffany Wiederhorn
shares voting and/or dispositive power with respect to such shares of
Common Stock and may be deemed to be the beneficial owner of such shares.
Tiffany Wiederhorn disclaims beneficial ownership of such shares. Of these
shares, Tiffany Wiederhorn (i) had sole power to vote or to direct the
vote of 619,175 shares, (ii) shared power to vote or to direct the vote of
2,218,540 shares, (iii) had sole power to dispose or to direct the
disposition of 619,175 of these shares, and (iv) shared power to dispose
or to direct the disposition of 1,173,780 shares.
Page 10 of 13 Pages
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The responses to Item 6 contained in the Reporting Persons' initial filing
on this Schedule 13D and all prior amendments thereto are incorporated herein by
this reference.
The description of the Put/Call Option Agreements and the Mendelsohn
Agreement are included in Item 4 above and are incorporated herein by reference.
Other than the agreements described in Item 4, there are no recent
contracts, arrangements, understandings or relationships with respect to
securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Put/Call Option and Voting Agreement dated as of October 16, 2001 by and
between Boston Provident Partners, L.P., a Delaware limited partnership
and Andrew A. Wiederhorn.
2. Put/Call Option and Voting Agreement dated as of October 16, 2001 by and
between B.P. Institutional Partners, L.P., a Delaware limited partnership
and Andrew A. Wiederhorn.
3. Put/Call Option and Voting Agreement dated as of October 16, 2001 by and
between Orin Kramer and Andrew A. Wiederhorn.
4. Put/Call Option and Voting Agreement dated as of October 16, 2001 by and
between the Leon & Toby Cooperman Foundation and Andrew A. Wiederhorn.
5. Put/Call Option and Voting Agreement dated as of October 16, 2001 by and
between the Watchung Road Associates, L.P., a Delaware limited partnership
and Andrew A. Wiederhorn.
6. Put/Call Option and Voting Agreement dated as of October 16, 2001 by and
between Cobalt Capital Management, Inc., a Delaware corporation and Andrew
A. Wiederhorn.
7. Stock Option and Voting Agreement by and among Lawrence A. Mendelsohn, an
individual, MFLP, L.P., RPM Capital, LLC, AIM Capital, LLC, S&S Investors,
LLC, and Joyce Mendelsohn (together, the "Stockholders"), Lawrence A.
Mendelsohn, as Agent for the Stockholders, Andrew A. Wiederhorn, and
Tiffany Wiederhorn solely with respect to certain payment obligations.
Page 11 of 13 Pages
SIGNATURES AND POWER OF ATTORNEY
After reasonable inquiry and to the best of knowledge and belief of each
person or entity set forth below, each such person or entity certifies that the
information set forth in this Statement is true, complete and correct.
October 17, 2001 /S/ ANDREW WIEDERHORN
-----------------------------
Andrew Wiederhorn
October 17, 2001 /S/ TIFFANY WIEDERHORN
-----------------------------
Tiffany Wiederhorn
October 17, 2001 TTMM, L.P.
By: IVY CAPITAL
PARTNERS,
L.P., its general partner
By: WIEDERHORN FAMILY LIMITED
PARTNERSHIP, its general
partner
By: /S/ TIFFANY WIEDERHORN
--------------------------
Tiffany Wiederhorn, its
general partner
October 17, 2001 WM STARLIGHT INVESTMENTS, LLC
By: /S/ TIFFANY WIEDERHORN
--------------------------
Tiffany Wiederhorn, its
managing member
Page 12 of 13 Pages
SCHEDULE A
ADDRESSES OF REPORTING PERSONS
Andrew Wiederhorn
c/o Fog Cutter Capital Group Inc.
1410 SW Jefferson St.
Portland, OR 97205
Tiffany Wiederhorn
c/o Fog Cutter Capital Group Inc.
1410 SW Jefferson St.
Portland, OR 97205
TTMM, L.P.
1410 SW Jefferson St.
Portland, OR 97205
WM Starlight Investments, LLC
1410 SW Jefferson St.
Portland, OR 97205
Page 13 of 13 Pages
EXHIBIT 1
PUT/CALL OPTION AND VOTING AGREEMENT
PUT/CALL OPTION AND VOTING AGREEMENT, dated as of October 16, 2001 (this
"Agreement"), by and between the individual or entity indicated on the signature
page(s) and listed on Schedule 1 hereto (the "Stockholder"), a stockholder of
Fog Cutter Capital Group Inc., a Maryland corporation (the "Company"), and
Andrew A. Wiederhorn, an individual ("Wiederhorn"), who is also a stockholder of
the Company.
WHEREAS, the Stockholder is the owner of the shares of common stock, par
value $.0001 per share ("Company Common Stock"), of the Company set forth on
Schedule 1 hereto (the "Subject Shares"); and
WHEREAS, Wiederhorn wishes, during the term of this Agreement, to direct
the voting of the Subject Shares at any annual and special meetings of
stockholders of the Company, or pursuant to any written actions taken in lieu of
such a meeting, and Stockholder is willing to so vote and to execute an
irrevocable proxy in favor of Wiederhorn for the Subject Shares; and
WHEREAS, as a condition precedent and inducement to Stockholder's entry
into such voting arrangements and execution of the proxy contemplated thereby,
Stockholder has requested that Wiederhorn agree, and Wiederhorn has agreed, to
grant Stockholder the Put Option (as defined below) and to enter into this
Agreement; and
WHEREAS, Wiederhorn desires to purchase an option (as further defined
below, the "Call Option") to acquire all (but not less than all) of the Subject
Shares at the exercise price and during the exercise period specified in Section
1 below, and Stockholder is willing to grant the Call Option to Wiederhorn in
exchange for the consideration and on the terms set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, Stockholder and Wiederhorn agree as
follows:
1. CALL OPTION.
(a) GRANT OF CALL OPTION. Subject to the terms and conditions set forth in
this Agreement, the Stockholder hereby grants to Wiederhorn the option (the
"Call Option") to purchase, during the Call Option Exercise Period (as defined
below), all (but not less than all) of the Subject Shares (as the same may be
adjusted as provided herein, the "Call Option Shares") at the Call Option Price
Per Share (as defined below).
(b) EXERCISE PRICE. The price per share at which the Call Option shall be
exercisable (the "Call Option Price Per Share") shall equal Three Dollars and
Forty Cents ($3.40) per share, less any dividends paid by the Company and
received by the Stockholder between the date hereof and the Call Option Closing
(as defined below), payable in U.S. dollars and immediately available funds.
(c) EXERCISE PERIOD. Wiederhorn's right to purchase the Call Option Shares
will commence upon the Stockholder's receipt of the consideration provided for
in Section 1(g)
Page 1
below, and will terminate and expire on January 15, 2002 (such period, the "Call
Option Exercise Period").
(d) EXERCISE OF CALL OPTION.
(i) At any time during the Call Option Exercise Period, Wiederhorn may
exercise the Call Option as to all (but not less than all) of the Call Option
Shares by delivering to the Stockholder a written notice in substantially the
form attached hereto as Exhibit A (the "Call Option Exercise Notice").
(ii) Wiederhorn shall not be under any obligation to exercise the Call
Option, and may allow the Call Option to expire without purchasing any Call
Option Shares hereunder.
(e) CLOSING. The closing for the purchase and sale, if any, of the Call
Option Shares (the "Call Option Closing") shall occur in New York City or such
other location as the parties may agree, as promptly as practicable, and in any
event within three (3) business days, after the Stockholder's receipt of the
Call Option Exercise Notice. Thereupon, the Stockholder will cause to be
executed and delivered to Wiederhorn a stock certificate or certificates
representing Stockholder's Call Option Shares, duly endorsed for transfer or
accompanied by duly executed (and, if required, guaranteed) stock powers.
Purchased Call Option Shares shall be free and clear of all liens, claims,
charges and encumbrances of any kind whatsoever. Wiederhorn shall, against
delivery of the Call Option Shares, pay to Stockholder an amount equal to the
product of the number of Stockholder's Call Option Shares and the Call Option
Price Per Share (Stockholder's "Total Call Option Price"), in U.S. dollars and
immediately available funds, by wire transfer to such account as the Stockholder
directs in writing on or prior to the Call Option Closing date.
(f) FRACTIONAL SHARES. Stockholder will not be required to sell, and
Wiederhorn will not be required to purchase, any fractional Call Option Shares
upon exercise of the Call Option.
(g) CONSIDERATION. In consideration for granting the Call Option to
Wiederhorn, Wiederhorn shall, immediately upon execution of this Agreement,
deliver to Stockholder, in U.S. dollars and immediately available funds, an
amount equal to ten cents ($0.10) per share for each of Stockholder's Subject
Shares.
2. CONDITIONAL PUT OPTION.
(a) GRANT OF PUT OPTION. Wiederhorn hereby grants to Stockholder an option
(the "Put Option"), exercisable by the Stockholder at any time or from time to
time during the Put Option Exercise Period (as defined below), in the event that
the Company redeems, repurchases or otherwise acquires any shares of Company
Common Stock other than by means of a redemption, repurchase or acquisition
available to Stockholder on terms at least as favorable to Stockholder as the
most favorable terms available to the other stockholders of the Company (such
redemption, repurchase or acquisition, a "Preferential Repurchase"), to require
Weiderhorn to purchase, at Stockholder's option, any or all of Stockholder's
Subject Shares (the "Put Option
Page 2
Shares"), up to 90.027% of the number of shares of Company Common Stock acquired
by the Company in such Preferential Repurchase.
(b) EXERCISE PRICE. The price per share at which the Put Option shall be
exercisable (the "Put Option Price Per Share") shall equal Three Dollars and
Forty Cents ($3.40) per share, less any dividends paid by the Company and
received by the Stockholder between the date hereof and the Put Option Closing
(as defined below), payable in U.S. dollars and immediately available funds.
(c) EXERCISE PERIOD. Stockholder's right to require Wiederhorn to purchase
the Put Option Shares will commence upon the date hereof, and will terminate and
expire on January 15, 2002 (such period, the "Put Option Exercise Period").
(d) EXERCISE OF PUT OPTION.
(i) At any time or from time to time during the Put Option Exercise Period,
Stockholder may exercise the Put Option to require Wiederhorn to purchase the
number of Put Option Shares (such number, the "Put Option Purchased Shares")
specified in a written notice (the "Put Option Exercise Notice") specifying in
reasonable detail the facts of the Preferential Repurchase and the number of Put
Option Shares that Stockholder desires to sell pursuant to the Put Option.
(ii) NEGOTIATION; MEDIATION. The parties agree to make all reasonable
efforts to settle any dispute arising under this Agreement relating to the Put
Option or the facts of a Preferential Repurchase through good-faith negotiation.
In the event that negotiation between the parties is unsuccessful, the parties
agree to attempt to settle outstanding issues through mediation. The mediator
will act in a neutral capacity as a facilitator or intermediary, to assist the
parties in arriving at a mutually acceptable resolution of the dispute. The
mediator shall not have the power to render a binding decision or to serve as
arbitrator, decisionmaker or fact-finder. The mediator will be chosen by mutual
agreement of Stockholder and Wiederhorn. If the parties, within thirty days from
the date of the Put Option Exercise Notice, cannot reach an agreement on a
mediator or if mediation fails to resolve the dispute(s) within thirty days
after appointment of the mediator, the parties agree to submit the dispute(s) to
binding arbitration in New York City pursuant to the rules of JAMS-Endispute.
(iii) Stockholder shall not be under any obligation to exercise the Put
Option, and may allow the Put Option to expire without selling any Put Option
Shares hereunder.
(e) CLOSING. The closing for each purchase and sale, if any, of Put Option
Purchased Shares (each, a "Put Option Closing") shall occur in New York City or
such other location as the parties may agree, as promptly as practicable, and in
any event within three (3) business days, after Wiederhorn's receipt of the
respective Put Option Exercise Notice. Thereupon, Stockholder will cause to be
executed and delivered to Wiederhorn a stock certificate or certificates
representing Stockholder's Put Option Purchased Shares, duly endorsed for
transfer or accompanied by duly executed (and, if required, guaranteed) stock
powers. Such Put Option Purchased Shares shall be free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever. Wiederhorn shall,
against delivery of the Put Option Purchased Shares,
Page 3
pay to the Stockholder an amount equal to the product of the number of such Put
Option Purchased Shares and the Put Option Price Per Share (such Stockholder's
"Total Put Option Price"), in U.S. dollars and immediately available funds, by
wire transfer to such account as Stockholder directs in writing on or prior to
the Put Option Closing date.
(f) FRACTIONAL SHARES. Wiederhorn will not be required to purchase any
fractional Put Option Shares upon exercise of the Put Option.
3. VOTING OF THE SUBJECT SHARES; PROXY.
(a) The Stockholder agrees during the term of this Agreement:
(i) to vote its Subject Shares on all matters as to which Stockholder is
entitled to vote at any meeting of the stockholders of the Company, including,
without limitation, with respect to the election of directors, in the manner
specified by Wiederhorn in a written notice to Stockholder (PROVIDED, THAT such
notice shall be delivered to, and received by, Stockholder on or prior to the
date on which such votes, consents or dissents are to be cast), which manner
shall be determined in Wiederhorn's absolute, sole and binding discretion; and
(ii) to express consent or dissent to corporate action in writing, if
without a meeting, on all of its Subject Shares in the manner specified by
Wiederhorn in a written notice to Stockholder (PROVIDED, THAT such notice shall
be delivered to, and received by, Stockholder on or prior to the date on which
such votes, consents or dissents are to be cast), which manner shall be
determined in Wiederhorn's absolute, sole and binding discretion.
(b) Stockholder hereby irrevocably grants to and appoints Andrew A.
Wiederhorn with full power of substitution (such individual and his substitutes,
if any, being referred to herein as the "Proxy"), as attorneys and proxies to
vote all of Stockholder's Subject Shares on all matters as to which Stockholder
is entitled to vote at a meeting of the stockholders of the Company or to which
Stockholder is entitled to express consent or dissent to corporate action in
writing without a meeting, in the Proxy's absolute, sole and binding discretion.
Stockholder agrees that the Proxy may, in Stockholder's name and stead, (i)
attend any annual or special meeting of the stockholders of the Company and vote
all of Stockholder's Subject Shares at any such annual or special meeting, and
(ii) execute with respect to all of Stockholder's Subject Shares any written
consent to, or dissent from, corporate action respecting any matter to which the
stockholders of the Company are entitled to express such consent or dissent
without a meeting. Stockholder agrees to refrain from (a) voting at any annual
or special meeting of the stockholders of the Company, (b) executing any written
consent in lieu of a meeting of the stockholders of the Company, (c) exercising
any rights of dissent with respect to Stockholder's Subject Shares, (d) granting
any proxy or authorization to any individual, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or any agency or political subdivision
thereof) or other entity of any kind (hereinafter, "Person") with respect to the
voting of Stockholder's Subject Shares, and (e) taking any other action, in each
case if and to the extent contrary to or inconsistent with the terms of this
Agreement. Stockholder further agrees that the Person designated as the Proxy
pursuant hereto may at any time name any other Person as their substituted Proxy
to act pursuant hereto, either as to a specific matter or as to all matters.
Page 4
Stockholder further agrees to execute all additional writings, consents and
authorizations as may be reasonably required by the Proxy to evidence the powers
granted to the Proxy hereby or to enable the Proxy to exercise those powers. In
discharging his, her or its powers under this Agreement, the Proxy may rely upon
the advice of counsel, and any vote made or action taken by the Proxy in
reliance upon such advice of counsel shall be deemed to have been made in good
faith by the Proxy.
(c) Stockholder represents that any proxies given prior to this Agreement
regarding any Company Common Stock held by Stockholder are revocable, and such
proxies are hereby revoked.
(d) Stockholder affirms that the irrevocable proxy set forth in this
Section 3 is given in connection with the Put Option. Stockholder further
affirms that such irrevocable proxy is coupled with an interest and may under no
circumstances be revoked (except as expressly provided in this Agreement).
Stockholder ratifies and confirms all actions that the Proxy may lawfully take
or cause to be taken by virtue hereof.
(e) Notwithstanding anything to the contrary contained in this Agreement,
the Proxy shall be revoked, terminate and expire on January 15, 2002, whereupon
all of Stockholder's rights (including, without limitation, its voting rights)
with respect to any Subject Shares still owned by Stockholder shall be fully
restored, and the provisions of paragraphs (a) through (d) of this Section 3
shall be deemed null and void and of no further force or effect whatsoever.
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder hereby
represents and warrants to Wiederhorn as follows:
(a) OWNERSHIP. Stockholder beneficially owns the shares of Company Common
Stock set forth opposite Stockholder's name on Schedule 1 hereto.
(b) DUE AUTHORIZATION. Stockholder has all necessary power and authority
(or, if an individual, capacity), to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. Stockholder beneficially owns
all of its Subject Shares with no restrictions on Stockholder's voting rights or
rights of disposition pertaining thereto; such Subject Shares constitute all
shares of Company Common Stock beneficially owned by Stockholder; and upon
exercise of the Put Option or the Call Option (collectively, the "Options"),
Stockholder will deliver good and marketable title to the Put Option Purchased
Shares or the Call Option Shares (collectively, the "Option Shares") free and
clear of liens, claims, encumbrances or rights or interests of others. Assuming
this Agreement has been duly and validly authorized, executed and delivered by
Wiederhorn, this Agreement constitutes a valid and binding agreement of
Stockholder, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights generally or by the principles governing the
availability of equitable remedies.
(c) NO CONFLICTS. Neither the execution and delivery of this Agreement, nor
the consummation by Stockholder of the transactions contemplated hereby, will
conflict with or
Page 5
constitute a violation of or default under any contract, commitment, agreement,
arrangement or restriction of any kind to which Stockholder is a party or by
which Stockholder is bound.
(d) KNOWLEDGE OF STOCKHOLDER; NO OTHER REPRESENTATIONS. Stockholder has
independently acquired all of the necessary information that Stockholder
requires in order to make an informed decision to enter into this Agreement and
to grant the Call Option. Additionally, Stockholder is an experienced investor,
well and independently informed of the Company's business, financial condition
and prospects, and has not, in deciding to enter into this Agreement and to
grant the Call Option, relied on any representations or warranties by Wiederhorn
other than those contained in this Agreement, and Wiederhorn has not made any
such additional representations or warranties.
5. REPRESENTATIONS AND WARRANTIES OF WIEDERHORN. Wiederhorn hereby
represents and warrants to Stockholder as follows:
(a) DUE AUTHORIZATION. Wiederhorn has the requisite capacity to enter into
and perform this Agreement. Assuming this Agreement has been duly and validly
authorized, executed and delivered by Stockholder, this Agreement constitutes a
valid and binding agreement of Wiederhorn, enforceable against Wiederhorn in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting creditors'
rights generally or by the principles governing the availability of equitable
remedies.
(b) NO CONFLICTS. Neither the execution and delivery of this Agreement, nor
the consummation by Wiederhorn of the transactions contemplated hereby, will
conflict with or constitute a violation of or default under any contract,
commitment, agreement, arrangement or restriction of any kind to which
Wiederhorn is a party or by which Wiederhorn is bound.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in the outstanding shares of Company Common
Stock by reason of a stock dividend, stock split, split-up, recapitalization,
combination, exchange of shares or similar transaction, the type and number of
Subject Shares, and the Option Price Per Share therefor, shall be adjusted
appropriately.
(b) In the event that the Company shall (i) enter into an agreement to
consolidate with or merge into any Person, other one of its subsidiaries or
affiliates, and shall not be the continuing or surviving corporation of such
consolidation or merger, or (ii) enter into an agreement to permit any Person,
other than Wiederhorn or one of its subsidiaries or affiliates, to merge into
the Company and the Company shall be the continuing or surviving corporation,
but, in connection with such merger, the then outstanding shares of Company
Common Stock shall be changed into or exchanged for stock or other securities of
the Company or any other Person or cash or any other property, or (iii)
liquidate, then, and in each such case, Wiederhorn shall thereafter, during the
term of this Agreement, be entitled to receive, upon exercise of the Options,
the securities or properties which a holder of the number of the Subject Shares
or the Option Shares then deliverable upon the exercise thereof will be entitled
to receive upon such consolidation, merger or liquidation, and Stockholder and
Wiederhorn shall use their best efforts
Page 6
to assure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be practicable, in relation to any securities or property
thereafter deliverable upon exercise of the Options.
7. TERMINATION. This Agreement, and all rights and obligations of the
parties hereunder, shall terminate on January 15, 2002, or the earlier exercise
of the Options with respect to all of the Subject Shares (but in no event sooner
than three (3) business days following due and timely delivery hereunder of a
Call Option Exercise Notice or a Put Option Exercise Notice).
8. TRANSFER OF THE SHARES.
(a) Prior to the termination of this Agreement, except as otherwise
provided herein, Stockholder shall not: (i) transfer, sell, gift-over, pledge or
otherwise dispose of, or consent to any of the foregoing ("Transfer"), any or
all of the Subject Shares or any interest therein; (ii) enter into any contract,
option or other agreement or understanding with respect to any Transfer; (iii)
grant any proxy, power-of-attorney or other authorization or consent with
respect to any of the Subject Shares; (iv) deposit any of the Subject Shares
into a voting trust, or enter into a voting agreement or arrangement with
respect to any of the Subject Shares; (v) convert the Subject Shares into shares
of Company Common Stock; or (vi) take any other action, in each case if the same
would in any way restrict, limit or interfere with the performance of
Stockholder's obligations hereunder or the transactions contemplated hereby.
(b) Notwithstanding Subsection (a) above, Stockholder may make transfers of
Subject Shares to Stockholder's spouse or lineal descendants, to any trust for
the benefit of such holder or the benefit of such spouse and/or lineal
descendants, to any corporation or partnership in which Stockholder, or the
spouse and/or the lineal descendants of Stockholder, are the direct and
beneficial owners of all of the equity interests for estate planning purposes
(provided that Stockholder, such spouse and/or descendants agree in writing to
remain the beneficial owners of all such interests until termination of this
Agreement), or to the personal representative of Stockholder upon Stockholder's
death for purposes of administration of Stockholder's estate or upon such
holder's incompetency for purposes of the protection and management of the
assets of Stockholder; PROVIDED that any such transferee shall, prior to such
transfer, consent in a writing delivered to Wiederhorn to be bound by this
Agreement and deliver to Wiederhorn an irrevocable power of attorney with
respect to the transferred Subject Shares.
9. NO SOLICITATION. Stockholder shall not, nor shall it permit any of its
subsidiaries or any of its affiliates to, nor shall it authorize or permit any
agent, officer, director or employee of, or any investment banker, attorney or
other advisor or representative of, Stockholder or any of their subsidiaries or
any of Stockholder's affiliates to, directly or indirectly, solicit, initiate,
or encourage any inquiries or proposals from, discuss or negotiate with, or
provide any non-public information to, any Person (other than Wiederhorn)
relating to any transaction involving the sale of any of the assets of the
Company, or any of the capital stock of the Company, or any merger,
consolidation, business combination, or similar transaction involving the
Company or any of its subsidiaries.
Page 7
10. MISCELLANEOUS.
(a) STOCKHOLDER CAPACITY. Neither of the parties to this Agreement shall be
deemed to have made any agreement or understanding in his or her capacity as a
director or officer of the Company and no action taken by any of the parties in
his or her capacity as a director or officer of the Company shall be deemed a
breach of this Agreement. Each of the parties executes this Agreement solely in
his or her capacity as the beneficial owner, where applicable, of Company Common
Stock.
(b) EXPENSES. Each of the parties hereto shall bear and pay all of its own
costs and expenses, incurred by it or on its behalf, in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
(c) WAIVER AND AMENDMENT. Any provision of this Agreement may be waived at
any time, in writing, by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(d) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY; SEVERABILITY. This
Agreement (i) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof and (ii) is not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder. If any
term or provision of this Agreement is held by a court of competent jurisdiction
or a federal or state regulatory agency to be invalid, void or unenforceable,
the remainder of the terms or provisions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable. If for any
reason such court or regulatory agency determines that the Options do not permit
Stockholder to sell the full number of shares of Company Common Stock as
provided in Sections 1(a) and 2(a) it is the express intention of Wiederhorn to
allow Stockholder to sell such lesser number of shares as may be permissible
without any amendment or modification hereof.
(e) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, applicable to contracts made
between residents of that state, entered into and to be wholly performed within
that state, except for corporate matters mandatorily governed by Maryland
corporation law, which corporation law shall, to that extent only, govern.
(f) HEADINGS. The headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.
(g) NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed duly given if delivered personally, by facsimile
transmission (with confirmation), or if mailed by registered or certified mail
(return receipt requested) or by Federal
Page 8
Express or other recognized overnight delivery service, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If to Stockholder, to:
The address set forth under Stockholder's name on Schedule 1
hereto.
If to Wiederhorn, to:
Andrew A. Wiederhorn
c/o Fog Cutter Capital Group Inc.
1410 S.W. Jefferson Street
Portland, Oregon 97201
Telecopier no.: (503) 553-7401
with a copy to:
V. Joseph Stubbs, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
2029 Century Park East, Suite 2400
Los Angeles, California 90067
Telecopier no.: (310) 229-1001
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
(i) ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder or under the Options shall be assigned by either of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by,
the parties hereto and their respective successors, assigns, heirs, executors,
administrators and other legal representatives.
(j) FURTHER ASSURANCES. Stockholder and Wiederhorn shall execute and
deliver all other documents and instruments and take all other action that may
be reasonably necessary in connection with the matters provided for hereby.
(k) SPECIFIC PERFORMANCE. The parties acknowledge that it would be
impossible to fix money damages for violations of this Agreement and that such
violations will cause irreparable injury for which adequate remedy at law is not
available and, therefore, this Agreement must be enforced by specific
performance or injunctive relief. The parties hereto agree that either party
may, in its sole discretion, apply to any court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in
Page 9
order to enforce this Agreement or prevent any violation hereof and, to the
extent permitted by applicable law, each party waives any objection or defense
to the imposition of such relief. Nothing herein shall be construed to prohibit
either party from bringing any action for damages in addition to an action for
specific performance or an injunction for a breach of this Agreement.
(l) SURVIVAL. The representations, warranties and agreements in this
Agreement shall survive any Closing hereunder.
(m) INDEPENDENT COUNSEL. Each of the parties acknowledges that it has been
represented, or has had the opportunity to be represented, by independent
counsel of such party's choice throughout all negotiations that have preceded
the execution of this Agreement and that, to the extent applicable to such
party, has executed the same with consent and upon the advice of said
independent counsel. Each party and its counsel, as applicable, cooperated in
the drafting and preparation of this Agreement and the documents referred to
herein, and any and all drafts relating thereto shall be deemed the work product
of the parties and may not be construed against either party by reason of its
preparation. Accordingly, any rule of law or any legal decision that would
require interpretation of any ambiguities in this Agreement against the party
that drafted it is of no application and is hereby expressly waived. The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intentions of the parties and this Agreement.
[SIGNATURE PAGE FOLLOWS]
Page 10
IN WITNESS WHEREOF, Stockholder and Wiederhorn have executed this Put/Call
Option and Voting Agreement, each as of the day and year first written above.
WIEDERHORN:
By: /S/ ANDREW A. WIEDERHORN
------------------------------------
Name: Andrew A. Wiederhorn
STOCKHOLDER:
BOSTON PROVIDENT PARTNERS, L.P.,
a Delaware limited partnership
By: KRAMER SPELLMAN, L.P.
Managing Partner
By: /S/ ORIN KRAMER
-----------------------------
Name: Orin Kramer
Title: Managing Partner
Page 11
SCHEDULE 1
STOCKHOLDER
STOCKHOLDER SUBJECT SHARES
BOSTON PROVIDENT PARTNERS, L.P. 324,054
Orin Kramer, Managing Partner of the General Partner
237 Park Avenue, Suite 900
New York, New York 10017
Telecopier no.: (212) 808-3406
Page 12
EXHIBIT A
NOTICE OF CALL OPTION EXERCISE
[Name and address of Stockholder]
Dear [Name]:
Reference is made to that certain Put/Call Option and Voting Agreement (the
"OPTION AGREEMENT") dated as of October 16, 2001, by and between you and Andrew
A. Wiederhorn ("Wiederhorn"). Capitalized terms used in this notice, but not
otherwise defined, will have the meanings assigned to such terms in the Option
Agreement.
1. EXERCISE OF OPTIONS. Wiederhorn hereby elects to exercise his option
to purchase all of the Call Option Shares at the Call Option Price Per
Share.
2. TENDER OF THE PURCHASED SHARES. You will cause the Call Option Shares
to be delivered to Wiederhorn at the Call Option Closing, which will
take place at [time and place].
3. TENDER OF PURCHASE PRICE. Wiederhorn will tender the Total Call Option
Price at the Call Option Closing.
IN WITNESS WHEREOF, Wiederhorn has caused this Call Option Exercise Notice
to be executed as of the ____ day of _________, 200__.
By: /S/ ANDREW A. WIEDERHORN
--------------------------------------
Name: Andrew Wiederhorn
Page 13
EXHIBIT 2
PUT/CALL OPTION AND VOTING AGREEMENT
PUT/CALL OPTION AND VOTING AGREEMENT, dated as of October 16, 2001 (this
"Agreement"), by and between the individual or entity indicated on the signature
page(s) and listed on Schedule 1 hereto (the "Stockholder"), a stockholder of
Fog Cutter Capital Group Inc., a Maryland corporation (the "Company"), and
Andrew A. Wiederhorn, an individual ("Wiederhorn"), who is also a stockholder of
the Company.
WHEREAS, the Stockholder is the owner of the shares of common stock, par
value $.0001 per share ("Company Common Stock"), of the Company set forth on
Schedule 1 hereto (the "Subject Shares"); and
WHEREAS, Wiederhorn wishes, during the term of this Agreement, to direct
the voting of the Subject Shares at any annual and special meetings of
stockholders of the Company, or pursuant to any written actions taken in lieu of
such a meeting, and Stockholder is willing to so vote and to execute an
irrevocable proxy in favor of Wiederhorn for the Subject Shares; and
WHEREAS, as a condition precedent and inducement to Stockholder's entry
into such voting arrangements and execution of the proxy contemplated thereby,
Stockholder has requested that Wiederhorn agree, and Wiederhorn has agreed, to
grant Stockholder the Put Option (as defined below) and to enter into this
Agreement; and
WHEREAS, Wiederhorn desires to purchase an option (as further defined
below, the "Call Option") to acquire all (but not less than all) of the Subject
Shares at the exercise price and during the exercise period specified in Section
1 below, and Stockholder is willing to grant the Call Option to Wiederhorn in
exchange for the consideration and on the terms set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, Stockholder and Wiederhorn agree as
follows:
1. CALL OPTION.
(a) GRANT OF CALL OPTION. Subject to the terms and conditions set forth in
this Agreement, the Stockholder hereby grants to Wiederhorn the option (the
"Call Option") to purchase, during the Call Option Exercise Period (as defined
below), all (but not less than all) of the Subject Shares (as the same may be
adjusted as provided herein, the "Call Option Shares") at the Call Option Price
Per Share (as defined below).
(b) EXERCISE PRICE. The price per share at which the Call Option shall be
exercisable (the "Call Option Price Per Share") shall equal Three Dollars and
Forty Cents ($3.40) per share, less any dividends paid by the Company and
received by the Stockholder between the date hereof and the Call Option Closing
(as defined below), payable in U.S. dollars and immediately available funds.
(c) EXERCISE PERIOD. Wiederhorn's right to purchase the Call Option Shares
will commence upon the Stockholder's receipt of the consideration provided for
in Section 1(g)
Page 1
below, and will terminate and expire on January 15, 2002 (such period, the "Call
Option Exercise Period").
(d) EXERCISE OF CALL OPTION.
(i) At any time during the Call Option Exercise Period, Wiederhorn may
exercise the Call Option as to all (but not less than all) of the Call Option
Shares by delivering to the Stockholder a written notice in substantially the
form attached hereto as Exhibit A (the "Call Option Exercise Notice").
(ii) Wiederhorn shall not be under any obligation to exercise the Call
Option, and may allow the Call Option to expire without purchasing any Call
Option Shares hereunder.
(e) CLOSING. The closing for the purchase and sale, if any, of the Call
Option Shares (the "Call Option Closing") shall occur in New York City or such
other location as the parties may agree, as promptly as practicable, and in any
event within three (3) business days, after the Stockholder's receipt of the
Call Option Exercise Notice. Thereupon, the Stockholder will cause to be
executed and delivered to Wiederhorn a stock certificate or certificates
representing Stockholder's Call Option Shares, duly endorsed for transfer or
accompanied by duly executed (and, if required, guaranteed) stock powers.
Purchased Call Option Shares shall be free and clear of all liens, claims,
charges and encumbrances of any kind whatsoever. Wiederhorn shall, against
delivery of the Call Option Shares, pay to Stockholder an amount equal to the
product of the number of Stockholder's Call Option Shares and the Call Option
Price Per Share (Stockholder's "Total Call Option Price"), in U.S. dollars and
immediately available funds, by wire transfer to such account as the Stockholder
directs in writing on or prior to the Call Option Closing date.
(f) FRACTIONAL SHARES. Stockholder will not be required to sell, and
Wiederhorn will not be required to purchase, any fractional Call Option Shares
upon exercise of the Call Option.
(g) CONSIDERATION. In consideration for granting the Call Option to
Wiederhorn, Wiederhorn shall, immediately upon execution of this Agreement,
deliver to Stockholder, in U.S. dollars and immediately available funds, an
amount equal to ten cents ($0.10) per share for each of Stockholder's Subject
Shares.
2. CONDITIONAL PUT OPTION.
(a) GRANT OF PUT OPTION. Wiederhorn hereby grants to Stockholder an option
(the "Put Option"), exercisable by the Stockholder at any time or from time to
time during the Put Option Exercise Period (as defined below), in the event that
the Company redeems, repurchases or otherwise acquires any shares of Company
Common Stock other than by means of a redemption, repurchase or acquisition
available to Stockholder on terms at least as favorable to Stockholder as the
most favorable terms available to the other stockholders of the Company (such
redemption, repurchase or acquisition, a "Preferential Repurchase"), to require
Weiderhorn to purchase, at Stockholder's option, any or all of Stockholder's
Subject Shares (the "Put Option
Page 2
Shares"), up to 5.917% of the number of shares of Company Common Stock acquired
by the Company in such Preferential Repurchase.
(b) EXERCISE PRICE. The price per share at which the Put Option shall be
exercisable (the "Put Option Price Per Share") shall equal Three Dollars and
Forty Cents ($3.40) per share, less any dividends paid by the Company and
received by the Stockholder between the date hereof and the Put Option Closing
(as defined below), payable in U.S. dollars and immediately available funds.
(c) EXERCISE PERIOD. Stockholder's right to require Wiederhorn to purchase
the Put Option Shares will commence upon the date hereof, and will terminate and
expire on January 15, 2002 (such period, the "Put Option Exercise Period").
(d) EXERCISE OF PUT OPTION.
(i) At any time or from time to time during the Put Option Exercise Period,
Stockholder may exercise the Put Option to require Wiederhorn to purchase the
number of Put Option Shares (such number, the "Put Option Purchased Shares")
specified in a written notice (the "Put Option Exercise Notice") specifying in
reasonable detail the facts of the Preferential Repurchase and the number of Put
Option Shares that Stockholder desires to sell pursuant to the Put Option.
(ii) NEGOTIATION; MEDIATION. The parties agree to make all reasonable
efforts to settle any dispute arising under this Agreement relating to the Put
Option or the facts of a Preferential Repurchase through good-faith negotiation.
In the event that negotiation between the parties is unsuccessful, the parties
agree to attempt to settle outstanding issues through mediation. The mediator
will act in a neutral capacity as a facilitator or intermediary, to assist the
parties in arriving at a mutually acceptable resolution of the dispute. The
mediator shall not have the power to render a binding decision or to serve as
arbitrator, decisionmaker or fact-finder. The mediator will be chosen by mutual
agreement of Stockholder and Wiederhorn. If the parties, within thirty days from
the date of the Put Option Exercise Notice, cannot reach an agreement on a
mediator or if mediation fails to resolve the dispute(s) within thirty days
after appointment of the mediator, the parties agree to submit the dispute(s) to
binding arbitration in New York City pursuant to the rules of JAMS-Endispute.
(iii) Stockholder shall not be under any obligation to exercise the Put
Option, and may allow the Put Option to expire without selling any Put Option
Shares hereunder.
(e) CLOSING. The closing for each purchase and sale, if any, of Put Option
Purchased Shares (each, a "Put Option Closing") shall occur in New York City or
such other location as the parties may agree, as promptly as practicable, and in
any event within three (3) business days, after Wiederhorn's receipt of the
respective Put Option Exercise Notice. Thereupon, Stockholder will cause to be
executed and delivered to Wiederhorn a stock certificate or certificates
representing Stockholder's Put Option Purchased Shares, duly endorsed for
transfer or accompanied by duly executed (and, if required, guaranteed) stock
powers. Such Put Option Purchased Shares shall be free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever. Wiederhorn shall,
against delivery of the Put Option Purchased Shares,
Page 3
pay to the Stockholder an amount equal to the product of the number of such Put
Option Purchased Shares and the Put Option Price Per Share (such Stockholder's
"Total Put Option Price"), in U.S. dollars and immediately available funds, by
wire transfer to such account as Stockholder directs in writing on or prior to
the Put Option Closing date.
(f) FRACTIONAL SHARES. Wiederhorn will not be required to purchase any
fractional Put Option Shares upon exercise of the Put Option.
3. VOTING OF THE SUBJECT SHARES; PROXY.
(a) The Stockholder agrees during the term of this Agreement:
(i) to vote its Subject Shares on all matters as to which Stockholder is
entitled to vote at any meeting of the stockholders of the Company, including,
without limitation, with respect to the election of directors, in the manner
specified by Wiederhorn in a written notice to Stockholder (PROVIDED, THAT such
notice shall be delivered to, and received by, Stockholder on or prior to the
date on which such votes, consents or dissents are to be cast), which manner
shall be determined in Wiederhorn's absolute, sole and binding discretion; and
(ii) to express consent or dissent to corporate action in writing, if
without a meeting, on all of its Subject Shares in the manner specified by
Wiederhorn in a written notice to Stockholder (PROVIDED, THAT such notice shall
be delivered to, and received by, Stockholder on or prior to the date on which
such votes, consents or dissents are to be cast), which manner shall be
determined in Wiederhorn's absolute, sole and binding discretion.
(b) Stockholder hereby irrevocably grants to and appoints Andrew A.
Wiederhorn with full power of substitution (such individual and his substitutes,
if any, being referred to herein as the "Proxy"), as attorneys and proxies to
vote all of Stockholder's Subject Shares on all matters as to which Stockholder
is entitled to vote at a meeting of the stockholders of the Company or to which
Stockholder is entitled to express consent or dissent to corporate action in
writing without a meeting, in the Proxy's absolute, sole and binding discretion.
Stockholder agrees that the Proxy may, in Stockholder's name and stead, (i)
attend any annual or special meeting of the stockholders of the Company and vote
all of Stockholder's Subject Shares at any such annual or special meeting, and
(ii) execute with respect to all of Stockholder's Subject Shares any written
consent to, or dissent from, corporate action respecting any matter to which the
stockholders of the Company are entitled to express such consent or dissent
without a meeting. Stockholder agrees to refrain from (a) voting at any annual
or special meeting of the stockholders of the Company, (b) executing any written
consent in lieu of a meeting of the stockholders of the Company, (c) exercising
any rights of dissent with respect to Stockholder's Subject Shares, (d) granting
any proxy or authorization to any individual, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or any agency or political subdivision
thereof) or other entity of any kind (hereinafter, "Person") with respect to the
voting of Stockholder's Subject Shares, and (e) taking any other action, in each
case if and to the extent contrary to or inconsistent with the terms of this
Agreement. Stockholder further agrees that the Person designated as the Proxy
pursuant hereto may at any time name any other Person as their substituted Proxy
to act pursuant hereto, either as to a specific matter or as to all matters.
Page 4
Stockholder further agrees to execute all additional writings, consents and
authorizations as may be reasonably required by the Proxy to evidence the powers
granted to the Proxy hereby or to enable the Proxy to exercise those powers. In
discharging his, her or its powers under this Agreement, the Proxy may rely upon
the advice of counsel, and any vote made or action taken by the Proxy in
reliance upon such advice of counsel shall be deemed to have been made in good
faith by the Proxy.
(c) Stockholder represents that any proxies given prior to this Agreement
regarding any Company Common Stock held by Stockholder are revocable, and such
proxies are hereby revoked.
(d) Stockholder affirms that the irrevocable proxy set forth in this
Section 3 is given in connection with the Put Option. Stockholder further
affirms that such irrevocable proxy is coupled with an interest and may under no
circumstances be revoked (except as expressly provided in this Agreement).
Stockholder ratifies and confirms all actions that the Proxy may lawfully take
or cause to be taken by virtue hereof.
(e) Notwithstanding anything to the contrary contained in this Agreement,
the Proxy shall be revoked, terminate and expire on January 15, 2002, whereupon
all of Stockholder's rights (including, without limitation, its voting rights)
with respect to any Subject Shares still owned by Stockholder shall be fully
restored, and the provisions of paragraphs (a) through (d) of this Section 3
shall be deemed null and void and of no further force or effect whatsoever.
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder hereby
represents and warrants to Wiederhorn as follows:
(a) OWNERSHIP. Stockholder beneficially owns the shares of Company Common
Stock set forth opposite Stockholder's name on Schedule 1 hereto.
(b) DUE AUTHORIZATION. Stockholder has all necessary power and authority
(or, if an individual, capacity), to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. Stockholder beneficially owns
all of its Subject Shares with no restrictions on Stockholder's voting rights or
rights of disposition pertaining thereto; such Subject Shares constitute all
shares of Company Common Stock beneficially owned by Stockholder; and upon
exercise of the Put Option or the Call Option (collectively, the "Options"),
Stockholder will deliver good and marketable title to the Put Option Purchased
Shares or the Call Option Shares (collectively, the "Option Shares") free and
clear of liens, claims, encumbrances or rights or interests of others. Assuming
this Agreement has been duly and validly authorized, executed and delivered by
Wiederhorn, this Agreement constitutes a valid and binding agreement of
Stockholder, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights generally or by the principles governing the
availability of equitable remedies.
(c) NO CONFLICTS. Neither the execution and delivery of this Agreement, nor
the consummation by Stockholder of the transactions contemplated hereby, will
conflict with or
Page 5
constitute a violation of or default under any contract, commitment, agreement,
arrangement or restriction of any kind to which Stockholder is a party or by
which Stockholder is bound.
(d) KNOWLEDGE OF STOCKHOLDER; NO OTHER REPRESENTATIONS. Stockholder has
independently acquired all of the necessary information that Stockholder
requires in order to make an informed decision to enter into this Agreement and
to grant the Call Option. Additionally, Stockholder is an experienced investor,
well and independently informed of the Company's business, financial condition
and prospects, and has not, in deciding to enter into this Agreement and to
grant the Call Option, relied on any representations or warranties by Wiederhorn
other than those contained in this Agreement, and Wiederhorn has not made any
such additional representations or warranties.
5. REPRESENTATIONS AND WARRANTIES OF WIEDERHORN. Wiederhorn hereby
represents and warrants to Stockholder as follows:
(a) DUE AUTHORIZATION. Wiederhorn has the requisite capacity to enter into
and perform this Agreement. Assuming this Agreement has been duly and validly
authorized, executed and delivered by Stockholder, this Agreement constitutes a
valid and binding agreement of Wiederhorn, enforceable against Wiederhorn in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting creditors'
rights generally or by the principles governing the availability of equitable
remedies.
(b) NO CONFLICTS. Neither the execution and delivery of this Agreement, nor
the consummation by Wiederhorn of the transactions contemplated hereby, will
conflict with or constitute a violation of or default under any contract,
commitment, agreement, arrangement or restriction of any kind to which
Wiederhorn is a party or by which Wiederhorn is bound.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in the outstanding shares of Company Common
Stock by reason of a stock dividend, stock split, split-up, recapitalization,
combination, exchange of shares or similar transaction, the type and number of
Subject Shares, and the Option Price Per Share therefor, shall be adjusted
appropriately.
(b) In the event that the Company shall (i) enter into an agreement to
consolidate with or merge into any Person, other one of its subsidiaries or
affiliates, and shall not be the continuing or surviving corporation of such
consolidation or merger, or (ii) enter into an agreement to permit any Person,
other than Wiederhorn or one of its subsidiaries or affiliates, to merge into
the Company and the Company shall be the continuing or surviving corporation,
but, in connection with such merger, the then outstanding shares of Company
Common Stock shall be changed into or exchanged for stock or other securities of
the Company or any other Person or cash or any other property, or (iii)
liquidate, then, and in each such case, Wiederhorn shall thereafter, during the
term of this Agreement, be entitled to receive, upon exercise of the Options,
the securities or properties which a holder of the number of the Subject Shares
or the Option Shares then deliverable upon the exercise thereof will be entitled
to receive upon such consolidation, merger or liquidation, and Stockholder and
Wiederhorn shall use their best efforts
Page 6
to assure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be practicable, in relation to any securities or property
thereafter deliverable upon exercise of the Options.
7. TERMINATION. This Agreement, and all rights and obligations of the
parties hereunder, shall terminate on January 15, 2002, or the earlier exercise
of the Options with respect to all of the Subject Shares (but in no event sooner
than three (3) business days following due and timely delivery hereunder of a
Call Option Exercise Notice or a Put Option Exercise Notice).
8. TRANSFER OF THE SHARES.
(a) Prior to the termination of this Agreement, except as otherwise
provided herein, Stockholder shall not: (i) transfer, sell, gift-over, pledge or
otherwise dispose of, or consent to any of the foregoing ("Transfer"), any or
all of the Subject Shares or any interest therein; (ii) enter into any contract,
option or other agreement or understanding with respect to any Transfer; (iii)
grant any proxy, power-of-attorney or other authorization or consent with
respect to any of the Subject Shares; (iv) deposit any of the Subject Shares
into a voting trust, or enter into a voting agreement or arrangement with
respect to any of the Subject Shares; (v) convert the Subject Shares into shares
of Company Common Stock; or (vi) take any other action, in each case if the same
would in any way restrict, limit or interfere with the performance of
Stockholder's obligations hereunder or the transactions contemplated hereby.
(b) Notwithstanding Subsection (a) above, Stockholder may make transfers of
Subject Shares to Stockholder's spouse or lineal descendants, to any trust for
the benefit of such holder or the benefit of such spouse and/or lineal
descendants, to any corporation or partnership in which Stockholder, or the
spouse and/or the lineal descendants of Stockholder, are the direct and
beneficial owners of all of the equity interests for estate planning purposes
(provided that Stockholder, such spouse and/or descendants agree in writing to
remain the beneficial owners of all such interests until termination of this
Agreement), or to the personal representative of Stockholder upon Stockholder's
death for purposes of administration of Stockholder's estate or upon such
holder's incompetency for purposes of the protection and management of the
assets of Stockholder; PROVIDED that any such transferee shall, prior to such
transfer, consent in a writing delivered to Wiederhorn to be bound by this
Agreement and deliver to Wiederhorn an irrevocable power of attorney with
respect to the transferred Subject Shares.
9. NO SOLICITATION. Stockholder shall not, nor shall it permit any of its
subsidiaries or any of its affiliates to, nor shall it authorize or permit any
agent, officer, director or employee of, or any investment banker, attorney or
other advisor or representative of, Stockholder or any of their subsidiaries or
any of Stockholder's affiliates to, directly or indirectly, solicit, initiate,
or encourage any inquiries or proposals from, discuss or negotiate with, or
provide any non-public information to, any Person (other than Wiederhorn)
relating to any transaction involving the sale of any of the assets of the
Company, or any of the capital stock of the Company, or any merger,
consolidation, business combination, or similar transaction involving the
Company or any of its subsidiaries.
Page 7
10. MISCELLANEOUS.
(a) STOCKHOLDER CAPACITY. Neither of the parties to this Agreement shall be
deemed to have made any agreement or understanding in his or her capacity as a
director or officer of the Company and no action taken by any of the parties in
his or her capacity as a director or officer of the Company shall be deemed a
breach of this Agreement. Each of the parties executes this Agreement solely in
his or her capacity as the beneficial owner, where applicable, of Company Common
Stock.
(b) EXPENSES. Each of the parties hereto shall bear and pay all of its own
costs and expenses, incurred by it or on its behalf, in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
(c) WAIVER AND AMENDMENT. Any provision of this Agreement may be waived at
any time, in writing, by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(d) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY; SEVERABILITY. This
Agreement (i) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof and (ii) is not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder. If any
term or provision of this Agreement is held by a court of competent jurisdiction
or a federal or state regulatory agency to be invalid, void or unenforceable,
the remainder of the terms or provisions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable. If for any
reason such court or regulatory agency determines that the Options do not permit
Stockholder to sell the full number of shares of Company Common Stock as
provided in Sections 1(a) and 2(a) it is the express intention of Wiederhorn to
allow Stockholder to sell such lesser number of shares as may be permissible
without any amendment or modification hereof.
(e) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, applicable to contracts made
between residents of that state, entered into and to be wholly performed within
that state, except for corporate matters mandatorily governed by Maryland
corporation law, which corporation law shall, to that extent only, govern.
(f) HEADINGS. The headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.
(g) NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed duly given if delivered personally, by facsimile
transmission (with confirmation), or if mailed by registered or certified mail
(return receipt requested) or by Federal
Page 8
Express or other recognized overnight delivery service, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If to Stockholder, to:
The address set forth under Stockholder's name on Schedule 1
hereto.
If to Wiederhorn, to:
Andrew A. Wiederhorn
c/o Fog Cutter Capital Group Inc.
1410 S.W. Jefferson Street
Portland, Oregon 97201
Telecopier no.: (503) 553-7401
with a copy to:
V. Joseph Stubbs, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
2029 Century Park East, Suite 2400
Los Angeles, California 90067
Telecopier no.: (310) 229-1001
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
(i) ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder or under the Options shall be assigned by either of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by,
the parties hereto and their respective successors, assigns, heirs, executors,
administrators and other legal representatives.
(j) FURTHER ASSURANCES. Stockholder and Wiederhorn shall execute and
deliver all other documents and instruments and take all other action that may
be reasonably necessary in connection with the matters provided for hereby.
(k) SPECIFIC PERFORMANCE. The parties acknowledge that it would be
impossible to fix money damages for violations of this Agreement and that such
violations will cause irreparable injury for which adequate remedy at law is not
available and, therefore, this Agreement must be enforced by specific
performance or injunctive relief. The parties hereto agree that either party
may, in its sole discretion, apply to any court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection or defense to the imposition of such relief.
Page 9
Nothing herein shall be construed to prohibit either party from bringing any
action for damages in addition to an action for specific performance or an
injunction for a breach of this Agreement.
(l) SURVIVAL. The representations, warranties and agreements in this
Agreement shall survive any Closing hereunder.
(m) INDEPENDENT COUNSEL. Each of the parties acknowledges that it has been
represented, or has had the opportunity to be represented, by independent
counsel of such party's choice throughout all negotiations that have preceded
the execution of this Agreement and that, to the extent applicable to such
party, has executed the same with consent and upon the advice of said
independent counsel. Each party and its counsel, as applicable, cooperated in
the drafting and preparation of this Agreement and the documents referred to
herein, and any and all drafts relating thereto shall be deemed the work product
of the parties and may not be construed against either party by reason of its
preparation. Accordingly, any rule of law or any legal decision that would
require interpretation of any ambiguities in this Agreement against the party
that drafted it is of no application and is hereby expressly waived. The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intentions of the parties and this Agreement.
[SIGNATURE PAGE FOLLOWS]
Page 10
IN WITNESS WHEREOF, Stockholder and Wiederhorn have executed this Put/Call
Option and Voting Agreement, each as of the day and year first written above.
WIEDERHORN:
By: /S/ ANDREW A. WIEDERHORN
------------------------------------
Name: Andrew A. Wiederhorn
STOCKHOLDER:
BP INSTITUTIONAL PARTNERS, L.P.,
a Delaware limited partnership
By: KRAMER SPELLMAN, L.P.
Managing Partner
By: /S/ ORIN KRAMER
----------------------------
Name: Orin Kramer
Title: Managing Partner
Page 11
SCHEDULE 1
STOCKHOLDER
STOCKHOLDER SUBJECT SHARES
BP INSTITUTIONAL PARTNERS, L.P. 21,300
Orin Kramer, Managing Partner of the General Partner
237 Park Avenue, Suite 900
New York, New York 10017
Telecopier no.: (212) 808-3406
Page 12
EXHIBIT A
NOTICE OF CALL OPTION EXERCISE
[Name and address of Stockholder]
Dear [Name]:
Reference is made to that certain Put/Call Option and Voting Agreement (the
"OPTION AGREEMENT") dated as of October 16, 2001, by and between you and Andrew
A. Wiederhorn ("Wiederhorn"). Capitalized terms used in this notice, but not
otherwise defined, will have the meanings assigned to such terms in the Option
Agreement.
1. EXERCISE OF OPTIONS. Wiederhorn hereby elects to exercise his option
to purchase all of the Call Option Shares at the Call Option Price Per
Share.
2. TENDER OF THE PURCHASED SHARES. You will cause the Call Option Shares
to be delivered to Wiederhorn at the Call Option Closing, which will
take place at [time and place].
3. TENDER OF PURCHASE PRICE. Wiederhorn will tender the Total Call Option
Price at the Call Option Closing.
IN WITNESS WHEREOF, Wiederhorn has caused this Call Option Exercise Notice
to be executed as of the ____ day of _________, 200__.
By: /S/ ANDREW A. WIEDERHORN
---------------------------------------
Name: Andrew Wiederhorn
Page 13
EXHIBIT 3
PUT/CALL OPTION AND VOTING AGREEMENT
PUT/CALL OPTION AND VOTING AGREEMENT, dated as of October 16, 2001 (this
"Agreement"), by and between the individual or entity indicated on the signature
page(s) and listed on Schedule 1 hereto (the "Stockholder"), a stockholder of
Fog Cutter Capital Group Inc., a Maryland corporation (the "Company"), and
Andrew A. Wiederhorn, an individual ("Wiederhorn"), who is also a stockholder of
the Company.
WHEREAS, the Stockholder is the owner of the shares of common stock, par
value $.0001 per share ("Company Common Stock"), of the Company set forth on
Schedule 1 hereto (the "Subject Shares"); and
WHEREAS, Wiederhorn wishes, during the term of this Agreement, to direct
the voting of the Subject Shares at any annual and special meetings of
stockholders of the Company, or pursuant to any written actions taken in lieu of
such a meeting, and Stockholder is willing to so vote and to execute an
irrevocable proxy in favor of Wiederhorn for the Subject Shares; and
WHEREAS, as a condition precedent and inducement to Stockholder's entry
into such voting arrangements and execution of the proxy contemplated thereby,
Stockholder has requested that Wiederhorn agree, and Wiederhorn has agreed, to
grant Stockholder the Put Option (as defined below) and to enter into this
Agreement; and
WHEREAS, Wiederhorn desires to purchase an option (as further defined
below, the "Call Option") to acquire all (but not less than all) of the Subject
Shares at the exercise price and during the exercise period specified in Section
1 below, and Stockholder is willing to grant the Call Option to Wiederhorn in
exchange for the consideration and on the terms set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, Stockholder and Wiederhorn agree as
follows:
1. CALL OPTION.
(a) GRANT OF CALL OPTION. Subject to the terms and conditions set forth in
this Agreement, the Stockholder hereby grants to Wiederhorn the option (the
"Call Option") to purchase, during the Call Option Exercise Period (as defined
below), all (but not less than all) of the Subject Shares (as the same may be
adjusted as provided herein, the "Call Option Shares") at the Call Option Price
Per Share (as defined below).
(b) EXERCISE PRICE. The price per share at which the Call Option shall be
exercisable (the "Call Option Price Per Share") shall equal Three Dollars and
Forty Cents ($3.40) per share, less any dividends paid by the Company and
received by the Stockholder between the date hereof and the Call Option Closing
(as defined below), payable in U.S. dollars and immediately available funds.
(c) EXERCISE PERIOD. Wiederhorn's right to purchase the Call Option Shares
will commence upon the Stockholder's receipt of the consideration provided for
in Section 1(g)
Page 1
below, and will terminate and expire on January 15, 2002 (such period, the "Call
Option Exercise Period").
(d) EXERCISE OF CALL OPTION.
(i) At any time during the Call Option Exercise Period, Wiederhorn may
exercise the Call Option as to all (but not less than all) of the Call Option
Shares by delivering to the Stockholder a written notice in substantially the
form attached hereto as Exhibit A (the "Call Option Exercise Notice").
(ii) Wiederhorn shall not be under any obligation to exercise the Call
Option, and may allow the Call Option to expire without purchasing any Call
Option Shares hereunder.
(e) CLOSING. The closing for the purchase and sale, if any, of the Call
Option Shares (the "Call Option Closing") shall occur in New York City or such
other location as the parties may agree, as promptly as practicable, and in any
event within three (3) business days, after the Stockholder's receipt of the
Call Option Exercise Notice. Thereupon, the Stockholder will cause to be
executed and delivered to Wiederhorn a stock certificate or certificates
representing Stockholder's Call Option Shares, duly endorsed for transfer or
accompanied by duly executed (and, if required, guaranteed) stock powers.
Purchased Call Option Shares shall be free and clear of all liens, claims,
charges and encumbrances of any kind whatsoever. Wiederhorn shall, against
delivery of the Call Option Shares, pay to Stockholder an amount equal to the
product of the number of Stockholder's Call Option Shares and the Call Option
Price Per Share (Stockholder's "Total Call Option Price"), in U.S. dollars and
immediately available funds, by wire transfer to such account as the Stockholder
directs in writing on or prior to the Call Option Closing date.
(f) FRACTIONAL SHARES. Stockholder will not be required to sell, and
Wiederhorn will not be required to purchase, any fractional Call Option Shares
upon exercise of the Call Option.
(g) CONSIDERATION. In consideration for granting the Call Option to
Wiederhorn, Wiederhorn shall, immediately upon execution of this Agreement,
deliver to Stockholder, in U.S. dollars and immediately available funds, an
amount equal to ten cents ($0.10) per share for each of Stockholder's Subject
Shares.
2. CONDITIONAL PUT OPTION.
(a) GRANT OF PUT OPTION. Wiederhorn hereby grants to Stockholder an option
(the "Put Option"), exercisable by the Stockholder at any time or from time to
time during the Put Option Exercise Period (as defined below), in the event that
the Company redeems, repurchases or otherwise acquires any shares of Company
Common Stock other than by means of a redemption, repurchase or acquisition
available to Stockholder on terms at least as favorable to Stockholder as the
most favorable terms available to the other stockholders of the Company (such
redemption, repurchase or acquisition, a "Preferential Repurchase"), to require
Weiderhorn to purchase, at Stockholder's option, any or all of Stockholder's
Subject Shares (the "Put Option
Page 2
Shares"), up to 4.056% of the number of shares of Company Common Stock acquired
by the Company in such Preferential Repurchase.
(b) EXERCISE PRICE. The price per share at which the Put Option shall be
exercisable (the "Put Option Price Per Share") shall equal Three Dollars and
Forty Cents ($3.40) per share, less any dividends paid by the Company and
received by the Stockholder between the date hereof and the Put Option Closing
(as defined below), payable in U.S. dollars and immediately available funds.
(c) EXERCISE PERIOD. Stockholder's right to require Wiederhorn to purchase
the Put Option Shares will commence upon the date hereof, and will terminate and
expire on January 15, 2002 (such period, the "Put Option Exercise Period").
(d) EXERCISE OF PUT OPTION.
(i) At any time or from time to time during the Put Option Exercise Period,
Stockholder may exercise the Put Option to require Wiederhorn to purchase the
number of Put Option Shares (such number, the "Put Option Purchased Shares")
specified in a written notice (the "Put Option Exercise Notice") specifying in
reasonable detail the facts of the Preferential Repurchase and the number of Put
Option Shares that Stockholder desires to sell pursuant to the Put Option.
(ii) NEGOTIATION; MEDIATION. The parties agree to make all reasonable
efforts to settle any dispute arising under this Agreement relating to the Put
Option or the facts of a Preferential Repurchase through good-faith negotiation.
In the event that negotiation between the parties is unsuccessful, the parties
agree to attempt to settle outstanding issues through mediation. The mediator
will act in a neutral capacity as a facilitator or intermediary, to assist the
parties in arriving at a mutually acceptable resolution of the dispute. The
mediator shall not have the power to render a binding decision or to serve as
arbitrator, decisionmaker or fact-finder. The mediator will be chosen by mutual
agreement of Stockholder and Wiederhorn. If the parties, within thirty days from
the date of the Put Option Exercise Notice, cannot reach an agreement on a
mediator or if mediation fails to resolve the dispute(s) within thirty days
after appointment of the mediator, the parties agree to submit the dispute(s) to
binding arbitration in New York City pursuant to the rules of JAMS-Endispute.
(iii) Stockholder shall not be under any obligation to exercise the Put
Option, and may allow the Put Option to expire without selling any Put Option
Shares hereunder.
(e) CLOSING. The closing for each purchase and sale, if any, of Put Option
Purchased Shares (each, a "Put Option Closing") shall occur in New York City or
such other location as the parties may agree, as promptly as practicable, and in
any event within three (3) business days, after Wiederhorn's receipt of the
respective Put Option Exercise Notice. Thereupon, Stockholder will cause to be
executed and delivered to Wiederhorn a stock certificate or certificates
representing Stockholder's Put Option Purchased Shares, duly endorsed for
transfer or accompanied by duly executed (and, if required, guaranteed) stock
powers. Such Put Option Purchased Shares shall be free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever. Wiederhorn shall,
against delivery of the Put Option Purchased Shares,
Page 3
pay to the Stockholder an amount equal to the product of the number of such Put
Option Purchased Shares and the Put Option Price Per Share (such Stockholder's
"Total Put Option Price"), in U.S. dollars and immediately available funds, by
wire transfer to such account as Stockholder directs in writing on or prior to
the Put Option Closing date.
(f) FRACTIONAL SHARES. Wiederhorn will not be required to purchase any
fractional Put Option Shares upon exercise of the Put Option.
3. VOTING OF THE SUBJECT SHARES; PROXY.
(a) The Stockholder agrees during the term of this Agreement:
(i) to vote its Subject Shares on all matters as to which Stockholder is
entitled to vote at any meeting of the stockholders of the Company, including,
without limitation, with respect to the election of directors, in the manner
specified by Wiederhorn in a written notice to Stockholder (PROVIDED, THAT such
notice shall be delivered to, and received by, Stockholder on or prior to the
date on which such votes, consents or dissents are to be cast), which manner
shall be determined in Wiederhorn's absolute, sole and binding discretion; and
(ii) to express consent or dissent to corporate action in writing, if
without a meeting, on all of its Subject Shares in the manner specified by
Wiederhorn in a written notice to Stockholder (PROVIDED, THAT such notice shall
be delivered to, and received by, Stockholder on or prior to the date on which
such votes, consents or dissents are to be cast), which manner shall be
determined in Wiederhorn's absolute, sole and binding discretion.
(b) Stockholder hereby irrevocably grants to and appoints Andrew A.
Wiederhorn with full power of substitution (such individual and his substitutes,
if any, being referred to herein as the "Proxy"), as attorneys and proxies to
vote all of Stockholder's Subject Shares on all matters as to which Stockholder
is entitled to vote at a meeting of the stockholders of the Company or to which
Stockholder is entitled to express consent or dissent to corporate action in
writing without a meeting, in the Proxy's absolute, sole and binding discretion.
Stockholder agrees that the Proxy may, in Stockholder's name and stead, (i)
attend any annual or special meeting of the stockholders of the Company and vote
all of Stockholder's Subject Shares at any such annual or special meeting, and
(ii) execute with respect to all of Stockholder's Subject Shares any written
consent to, or dissent from, corporate action respecting any matter to which the
stockholders of the Company are entitled to express such consent or dissent
without a meeting. Stockholder agrees to refrain from (a) voting at any annual
or special meeting of the stockholders of the Company, (b) executing any written
consent in lieu of a meeting of the stockholders of the Company, (c) exercising
any rights of dissent with respect to Stockholder's Subject Shares, (d) granting
any proxy or authorization to any individual, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or any agency or political subdivision
thereof) or other entity of any kind (hereinafter, "Person") with respect to the
voting of Stockholder's Subject Shares, and (e) taking any other action, in each
case if and to the extent contrary to or inconsistent with the terms of this
Agreement. Stockholder further agrees that the Person designated as the Proxy
pursuant hereto may at any time name any other Person as their substituted Proxy
to act pursuant hereto, either as to a specific matter or as to all matters.
Page 4
Stockholder further agrees to execute all additional writings, consents and
authorizations as may be reasonably required by the Proxy to evidence the powers
granted to the Proxy hereby or to enable the Proxy to exercise those powers. In
discharging his, her or its powers under this Agreement, the Proxy may rely upon
the advice of counsel, and any vote made or action taken by the Proxy in
reliance upon such advice of counsel shall be deemed to have been made in good
faith by the Proxy.
(c) Stockholder represents that any proxies given prior to this Agreement
regarding any Company Common Stock held by Stockholder are revocable, and such
proxies are hereby revoked.
(d) Stockholder affirms that the irrevocable proxy set forth in this
Section 3 is given in connection with the Put Option. Stockholder further
affirms that such irrevocable proxy is coupled with an interest and may under no
circumstances be revoked (except as expressly provided in this Agreement).
Stockholder ratifies and confirms all actions that the Proxy may lawfully take
or cause to be taken by virtue hereof.
(e) Notwithstanding anything to the contrary contained in this Agreement,
the Proxy shall be revoked, terminate and expire on January 15, 2002, whereupon
all of Stockholder's rights (including, without limitation, its voting rights)
with respect to any Subject Shares still owned by Stockholder shall be fully
restored, and the provisions of paragraphs (a) through (d) of this Section 3
shall be deemed null and void and of no further force or effect whatsoever.
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder hereby
represents and warrants to Wiederhorn as follows:
(a) OWNERSHIP. Stockholder beneficially owns the shares of Company Common
Stock set forth opposite Stockholder's name on Schedule 1 hereto.
(b) DUE AUTHORIZATION. Stockholder has all necessary power and authority
(or, if an individual, capacity), to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. Stockholder beneficially owns
all of its Subject Shares with no restrictions on Stockholder's voting rights or
rights of disposition pertaining thereto; such Subject Shares constitute all
shares of Company Common Stock beneficially owned by Stockholder; and upon
exercise of the Put Option or the Call Option (collectively, the "Options"),
Stockholder will deliver good and marketable title to the Put Option Purchased
Shares or the Call Option Shares (collectively, the "Option Shares") free and
clear of liens, claims, encumbrances or rights or interests of others. Assuming
this Agreement has been duly and validly authorized, executed and delivered by
Wiederhorn, this Agreement constitutes a valid and binding agreement of
Stockholder, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights generally or by the principles governing the
availability of equitable remedies.
(c) NO CONFLICTS. Neither the execution and delivery of this Agreement, nor
the consummation by Stockholder of the transactions contemplated hereby, will
conflict with or
Page 5
constitute a violation of or default under any contract, commitment, agreement,
arrangement or restriction of any kind to which Stockholder is a party or by
which Stockholder is bound.
(d) KNOWLEDGE OF STOCKHOLDER; NO OTHER REPRESENTATIONS. Stockholder has
independently acquired all of the necessary information that Stockholder
requires in order to make an informed decision to enter into this Agreement and
to grant the Call Option. Additionally, Stockholder is an experienced investor,
well and independently informed of the Company's business, financial condition
and prospects, and has not, in deciding to enter into this Agreement and to
grant the Call Option, relied on any representations or warranties by Wiederhorn
other than those contained in this Agreement, and Wiederhorn has not made any
such additional representations or warranties.
5. REPRESENTATIONS AND WARRANTIES OF WIEDERHORN. Wiederhorn hereby
represents and warrants to Stockholder as follows:
(a) DUE AUTHORIZATION. Wiederhorn has the requisite capacity to enter into
and perform this Agreement. Assuming this Agreement has been duly and validly
authorized, executed and delivered by Stockholder, this Agreement constitutes a
valid and binding agreement of Wiederhorn, enforceable against Wiederhorn in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting creditors'
rights generally or by the principles governing the availability of equitable
remedies.
(b) NO CONFLICTS. Neither the execution and delivery of this Agreement, nor
the consummation by Wiederhorn of the transactions contemplated hereby, will
conflict with or constitute a violation of or default under any contract,
commitment, agreement, arrangement or restriction of any kind to which
Wiederhorn is a party or by which Wiederhorn is bound.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in the outstanding shares of Company Common
Stock by reason of a stock dividend, stock split, split-up, recapitalization,
combination, exchange of shares or similar transaction, the type and number of
Subject Shares, and the Option Price Per Share therefor, shall be adjusted
appropriately.
(b) In the event that the Company shall (i) enter into an agreement to
consolidate with or merge into any Person, other one of its subsidiaries or
affiliates, and shall not be the continuing or surviving corporation of such
consolidation or merger, or (ii) enter into an agreement to permit any Person,
other than Wiederhorn or one of its subsidiaries or affiliates, to merge into
the Company and the Company shall be the continuing or surviving corporation,
but, in connection with such merger, the then outstanding shares of Company
Common Stock shall be changed into or exchanged for stock or other securities of
the Company or any other Person or cash or any other property, or (iii)
liquidate, then, and in each such case, Wiederhorn shall thereafter, during the
term of this Agreement, be entitled to receive, upon exercise of the Options,
the securities or properties which a holder of the number of the Subject Shares
or the Option Shares then deliverable upon the exercise thereof will be entitled
to receive upon such consolidation, merger or liquidation, and Stockholder and
Wiederhorn shall use their best efforts
Page 6
to assure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be practicable, in relation to any securities or property
thereafter deliverable upon exercise of the Options.
7. TERMINATION. This Agreement, and all rights and obligations of the
parties hereunder, shall terminate on January 15, 2002, or the earlier exercise
of the Options with respect to all of the Subject Shares (but in no event sooner
than three (3) business days following due and timely delivery hereunder of a
Call Option Exercise Notice or a Put Option Exercise Notice).
8. TRANSFER OF THE SHARES.
(a) Prior to the termination of this Agreement, except as otherwise
provided herein, Stockholder shall not: (i) transfer, sell, gift-over, pledge or
otherwise dispose of, or consent to any of the foregoing ("Transfer"), any or
all of the Subject Shares or any interest therein; (ii) enter into any contract,
option or other agreement or understanding with respect to any Transfer; (iii)
grant any proxy, power-of-attorney or other authorization or consent with
respect to any of the Subject Shares; (iv) deposit any of the Subject Shares
into a voting trust, or enter into a voting agreement or arrangement with
respect to any of the Subject Shares; (v) convert the Subject Shares into shares
of Company Common Stock; or (vi) take any other action, in each case if the same
would in any way restrict, limit or interfere with the performance of
Stockholder's obligations hereunder or the transactions contemplated hereby.
(b) Notwithstanding Subsection (a) above, Stockholder may make transfers of
Subject Shares to Stockholder's spouse or lineal descendants, to any trust for
the benefit of such holder or the benefit of such spouse and/or lineal
descendants, to any corporation or partnership in which Stockholder, or the
spouse and/or the lineal descendants of Stockholder, are the direct and
beneficial owners of all of the equity interests for estate planning purposes
(provided that Stockholder, such spouse and/or descendants agree in writing to
remain the beneficial owners of all such interests until termination of this
Agreement), or to the personal representative of Stockholder upon Stockholder's
death for purposes of administration of Stockholder's estate or upon such
holder's incompetency for purposes of the protection and management of the
assets of Stockholder; PROVIDED that any such transferee shall, prior to such
transfer, consent in a writing delivered to Wiederhorn to be bound by this
Agreement and deliver to Wiederhorn an irrevocable power of attorney with
respect to the transferred Subject Shares.
9. NO SOLICITATION. Stockholder shall not, nor shall it permit any of its
subsidiaries or any of its affiliates to, nor shall it authorize or permit any
agent, officer, director or employee of, or any investment banker, attorney or
other advisor or representative of, Stockholder or any of their subsidiaries or
any of Stockholder's affiliates to, directly or indirectly, solicit, initiate,
or encourage any inquiries or proposals from, discuss or negotiate with, or
provide any non-public information to, any Person (other than Wiederhorn)
relating to any transaction involving the sale of any of the assets of the
Company, or any of the capital stock of the Company, or any merger,
consolidation, business combination, or similar transaction involving the
Company or any of its subsidiaries.
Page 7
10. MISCELLANEOUS.
(a) STOCKHOLDER CAPACITY. Neither of the parties to this Agreement shall be
deemed to have made any agreement or understanding in his or her capacity as a
director or officer of the Company and no action taken by any of the parties in
his or her capacity as a director or officer of the Company shall be deemed a
breach of this Agreement. Each of the parties executes this Agreement solely in
his or her capacity as the beneficial owner, where applicable, of Company Common
Stock.
(b) EXPENSES. Each of the parties hereto shall bear and pay all of its own
costs and expenses, incurred by it or on its behalf, in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
(c) WAIVER AND AMENDMENT. Any provision of this Agreement may be waived at
any time, in writing, by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(d) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY; SEVERABILITY. This
Agreement (i) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof and (ii) is not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder. If any
term or provision of this Agreement is held by a court of competent jurisdiction
or a federal or state regulatory agency to be invalid, void or unenforceable,
the remainder of the terms or provisions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable. If for any
reason such court or regulatory agency determines that the Options do not permit
Stockholder to sell the full number of shares of Company Common Stock as
provided in Sections 1(a) and 2(a) it is the express intention of Wiederhorn to
allow Stockholder to sell such lesser number of shares as may be permissible
without any amendment or modification hereof.
(e) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, applicable to contracts made
between residents of that state, entered into and to be wholly performed within
that state, except for corporate matters mandatorily governed by Maryland
corporation law, which corporation law shall, to that extent only, govern.
(f) HEADINGS. The headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.
(g) NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed duly given if delivered personally, by facsimile
transmission (with confirmation), or if mailed by registered or certified mail
(return receipt requested) or by Federal
Page 8
Express or other recognized overnight delivery service, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If to Stockholder, to:
The address set forth under Stockholder's name on Schedule 1
hereto.
If to Wiederhorn, to:
Andrew A. Wiederhorn
c/o Fog Cutter Capital Group Inc.
1410 S.W. Jefferson Street
Portland, Oregon 97201
Telecopier no.: (503) 553-7401
with a copy to:
V. Joseph Stubbs, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
2029 Century Park East, Suite 2400
Los Angeles, California 90067
Telecopier no.: (310) 229-1001
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
(i) ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder or under the Options shall be assigned by either of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by,
the parties hereto and their respective successors, assigns, heirs, executors,
administrators and other legal representatives.
(j) FURTHER ASSURANCES. Stockholder and Wiederhorn shall execute and
deliver all other documents and instruments and take all other action that may
be reasonably necessary in connection with the matters provided for hereby.
(k) SPECIFIC PERFORMANCE. The parties acknowledge that it would be
impossible to fix money damages for violations of this Agreement and that such
violations will cause irreparable injury for which adequate remedy at law is not
available and, therefore, this Agreement must be enforced by specific
performance or injunctive relief. The parties hereto agree that either party
may, in its sole discretion, apply to any court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection or defense to the imposition of such relief.
Page 9
Nothing herein shall be construed to prohibit either party from bringing any
action for damages in addition to an action for specific performance or an
injunction for a breach of this Agreement.
(l) SURVIVAL. The representations, warranties and agreements in this
Agreement shall survive any Closing hereunder.
(m) INDEPENDENT COUNSEL. Each of the parties acknowledges that it has been
represented, or has had the opportunity to be represented, by independent
counsel of such party's choice throughout all negotiations that have preceded
the execution of this Agreement and that, to the extent applicable to such
party, has executed the same with consent and upon the advice of said
independent counsel. Each party and its counsel, as applicable, cooperated in
the drafting and preparation of this Agreement and the documents referred to
herein, and any and all drafts relating thereto shall be deemed the work product
of the parties and may not be construed against either party by reason of its
preparation. Accordingly, any rule of law or any legal decision that would
require interpretation of any ambiguities in this Agreement against the party
that drafted it is of no application and is hereby expressly waived. The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intentions of the parties and this Agreement.
[SIGNATURE PAGE FOLLOWS]
Page 10
IN WITNESS WHEREOF, Stockholder and Wiederhorn have executed this Put/Call
Option and Voting Agreement, each as of the day and year first written above.
WIEDERHORN:
By: /S/ ANDREW A. WIEDERHORN
--------------------------------
Name: Andrew A. Wiederhorn
STOCKHOLDER:
ORIN KRAMER
/S/ ORIN KRAMER
-----------------------------------
Name: Orin Kramer
Page 11
SCHEDULE 1
STOCKHOLDER
STOCKHOLDER SUBJECT SHARES
ORIN KRAMER 14,600
c/o Kramer Spellman, L.P.
237 Park Avenue, Suite 900
New York, New York 10017
Telecopier no.: (212) 808-3406
Page 12
EXHIBIT A
NOTICE OF CALL OPTION EXERCISE
[Name and address of Stockholder]
Dear [Name]:
Reference is made to that certain Put/Call Option and Voting Agreement (the
"OPTION AGREEMENT") dated as of October 16, 2001, by and between you and Andrew
A. Wiederhorn ("Wiederhorn"). Capitalized terms used in this notice, but not
otherwise defined, will have the meanings assigned to such terms in the Option
Agreement.
1. EXERCISE OF OPTIONS. Wiederhorn hereby elects to exercise his option
to purchase all of the Call Option Shares at the Call Option Price Per
Share.
2. TENDER OF THE PURCHASED SHARES. You will cause the Call Option Shares
to be delivered to Wiederhorn at the Call Option Closing, which will
take place at [time and place].
3. TENDER OF PURCHASE PRICE. Wiederhorn will tender the Total Call Option
Price at the Call Option Closing.
IN WITNESS WHEREOF, Wiederhorn has caused this Call Option Exercise Notice
to be executed as of the ____ day of _________, 200__.
By: /S/ ANDREW A. WIEDERHORN
--------------------------------------
Name: Andrew Wiederhorn
Page 13
EXHIBIT 4
PUT/CALL OPTION AND VOTING AGREEMENT
PUT/CALL OPTION AND VOTING AGREEMENT, dated as of October 16, 2001 (this
"Agreement"), by and between the individual or entity indicated on the signature
page(s) and listed on Schedule 1 hereto (the "Stockholder"), a stockholder of
Fog Cutter Capital Group Inc., a Maryland corporation (the "Company"), and
Andrew A. Wiederhorn, an individual ("Wiederhorn"), who is also a stockholder of
the Company.
WHEREAS, the Stockholder is the owner of the shares of common stock, par
value $.0001 per share ("Company Common Stock"), of the Company set forth on
Schedule 1 hereto (the "Subject Shares"); and
WHEREAS, Wiederhorn wishes, during the term of this Agreement, to direct
the voting of the Subject Shares at any annual and special meetings of
stockholders of the Company, or pursuant to any written actions taken in lieu of
such a meeting, and Stockholder is willing to so vote and to execute an
irrevocable proxy in favor of Wiederhorn for the Subject Shares; and
WHEREAS, as a condition precedent and inducement to Stockholder's entry
into such voting arrangements and execution of the proxy contemplated thereby,
Stockholder has requested that Wiederhorn agree, and Wiederhorn has agreed, to
grant Stockholder the Put Option (as defined below) and to enter into this
Agreement; and
WHEREAS, Wiederhorn desires to purchase an option (as further defined
below, the "Call Option") to acquire all (but not less than all) of the Subject
Shares at the exercise price and during the exercise period specified in Section
1 below, and Stockholder is willing to grant the Call Option to Wiederhorn in
exchange for the consideration and on the terms set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, Stockholder and Wiederhorn agree as
follows:
1. CALL OPTION.
(a) GRANT OF CALL OPTION. Subject to the terms and conditions set forth in
this Agreement, the Stockholder hereby grants to Wiederhorn the option (the
"Call Option") to purchase, during the Call Option Exercise Period (as defined
below), all (but not less than all) of the Subject Shares (as the same may be
adjusted as provided herein, the "Call Option Shares") at the Call Option Price
Per Share (as defined below).
(b) EXERCISE PRICE. The price per share at which the Call Option shall be
exercisable (the "Call Option Price Per Share") shall equal Three Dollars and
Forty Cents ($3.40) per share, less any dividends paid by the Company and
received by the Stockholder between the date hereof and the Call Option Closing
(as defined below), payable in U.S. dollars and immediately available funds.
(c) EXERCISE PERIOD. Wiederhorn's right to purchase the Call Option Shares
will commence upon the Stockholder's receipt of the consideration provided for
in Section 1(g)
Page 1
below, and will terminate and expire on January 15, 2002 (such period, the "Call
Option Exercise Period").
(d) EXERCISE OF CALL OPTION.
(i) At any time during the Call Option Exercise Period, Wiederhorn may
exercise the Call Option as to all (but not less than all) of the Call Option
Shares by delivering to the Stockholder a written notice in substantially the
form attached hereto as Exhibit A (the "Call Option Exercise Notice").
(ii) Wiederhorn shall not be under any obligation to exercise the Call
Option, and may allow the Call Option to expire without purchasing any Call
Option Shares hereunder.
(e) CLOSING. The closing for the purchase and sale, if any, of the Call
Option Shares (the "Call Option Closing") shall occur in New York City or such
other location as the parties may agree, as promptly as practicable, and in any
event within three (3) business days, after the Stockholder's receipt of the
Call Option Exercise Notice. Thereupon, the Stockholder will cause to be
executed and delivered to Wiederhorn a stock certificate or certificates
representing Stockholder's Call Option Shares, duly endorsed for transfer or
accompanied by duly executed (and, if required, guaranteed) stock powers.
Purchased Call Option Shares shall be free and clear of all liens, claims,
charges and encumbrances of any kind whatsoever. Wiederhorn shall, against
delivery of the Call Option Shares, pay to Stockholder an amount equal to the
product of the number of Stockholder's Call Option Shares and the Call Option
Price Per Share (Stockholder's "Total Call Option Price"), in U.S. dollars and
immediately available funds, by wire transfer to such account as the Stockholder
directs in writing on or prior to the Call Option Closing date.
(f) FRACTIONAL SHARES. Stockholder will not be required to sell, and
Wiederhorn will not be required to purchase, any fractional Call Option Shares
upon exercise of the Call Option.
(g) CONSIDERATION. In consideration for granting the Call Option to
Wiederhorn, Wiederhorn shall, immediately upon execution of this Agreement,
deliver to Stockholder, in U.S. dollars and immediately available funds, an
amount equal to ten cents ($0.10) per share for each of Stockholder's Subject
Shares.
2. CONDITIONAL PUT OPTION.
(a) GRANT OF PUT OPTION. Wiederhorn hereby grants to Stockholder an option
(the "Put Option"), exercisable by the Stockholder at any time or from time to
time during the Put Option Exercise Period (as defined below), in the event that
the Company redeems, repurchases or otherwise acquires any shares of Company
Common Stock other than by means of a redemption, repurchase or acquisition
available to Stockholder on terms at least as favorable to Stockholder as the
most favorable terms available to the other stockholders of the Company (such
redemption, repurchase or acquisition, a "Preferential Repurchase"), to require
Weiderhorn to purchase, at Stockholder's option, any or all of Stockholder's
Subject Shares (the "Put Option
Page 2
Shares"), up to 13.077% of the number of shares of Company Common Stock acquired
by the Company in such Preferential Repurchase.
(b) EXERCISE PRICE. The price per share at which the Put Option shall be
exercisable (the "Put Option Price Per Share") shall equal Three Dollars and
Forty Cents ($3.40) per share, less any dividends paid by the Company and
received by the Stockholder between the date hereof and the Put Option Closing
(as defined below), payable in U.S. dollars and immediately available funds.
(c) EXERCISE PERIOD. Stockholder's right to require Wiederhorn to purchase
the Put Option Shares will commence upon the date hereof, and will terminate and
expire on January 15, 2002 (such period, the "Put Option Exercise Period").
(d) EXERCISE OF PUT OPTION.
(i) At any time or from time to time during the Put Option Exercise Period,
Stockholder may exercise the Put Option to require Wiederhorn to purchase the
number of Put Option Shares (such number, the "Put Option Purchased Shares")
specified in a written notice (the "Put Option Exercise Notice") specifying in
reasonable detail the facts of the Preferential Repurchase and the number of Put
Option Shares that Stockholder desires to sell pursuant to the Put Option.
(ii) NEGOTIATION; MEDIATION. The parties agree to make all reasonable
efforts to settle any dispute arising under this Agreement relating to the Put
Option or the facts of a Preferential Repurchase through good-faith negotiation.
In the event that negotiation between the parties is unsuccessful, the parties
agree to attempt to settle outstanding issues through mediation. The mediator
will act in a neutral capacity as a facilitator or intermediary, to assist the
parties in arriving at a mutually acceptable resolution of the dispute. The
mediator shall not have the power to render a binding decision or to serve as
arbitrator, decisionmaker or fact-finder. The mediator will be chosen by mutual
agreement of Stockholder and Wiederhorn. If the parties, within thirty days from
the date of the Put Option Exercise Notice, cannot reach an agreement on a
mediator or if mediation fails to resolve the dispute(s) within thirty days
after appointment of the mediator, the parties agree to submit the dispute(s) to
binding arbitration in New York City pursuant to the rules of JAMS-Endispute.
(iii) Stockholder shall not be under any obligation to exercise the Put
Option, and may allow the Put Option to expire without selling any Put Option
Shares hereunder.
(e) CLOSING. The closing for each purchase and sale, if any, of Put Option
Purchased Shares (each, a "Put Option Closing") shall occur in New York City or
such other location as the parties may agree, as promptly as practicable, and in
any event within three (3) business days, after Wiederhorn's receipt of the
respective Put Option Exercise Notice. Thereupon, Stockholder will cause to be
executed and delivered to Wiederhorn a stock certificate or certificates
representing Stockholder's Put Option Purchased Shares, duly endorsed for
transfer or accompanied by duly executed (and, if required, guaranteed) stock
powers. Such Put Option Purchased Shares shall be free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever. Wiederhorn shall,
against delivery of the Put Option Purchased Shares,
Page 3
pay to the Stockholder an amount equal to the product of the number of such Put
Option Purchased Shares and the Put Option Price Per Share (such Stockholder's
"Total Put Option Price"), in U.S. dollars and immediately available funds, by
wire transfer to such account as Stockholder directs in writing on or prior to
the Put Option Closing date.
(f) FRACTIONAL SHARES. Wiederhorn will not be required to purchase any
fractional Put Option Shares upon exercise of the Put Option.
3. VOTING OF THE SUBJECT SHARES; PROXY.
(a) The Stockholder agrees during the term of this Agreement:
(i) to vote its Subject Shares on all matters as to which Stockholder is
entitled to vote at any meeting of the stockholders of the Company, including,
without limitation, with respect to the election of directors, in the manner
specified by Wiederhorn in a written notice to Stockholder (PROVIDED, THAT such
notice shall be delivered to, and received by, Stockholder on or prior to the
date on which such votes, consents or dissents are to be cast), which manner
shall be determined in Wiederhorn's absolute, sole and binding discretion; and
(ii) to express consent or dissent to corporate action in writing, if
without a meeting, on all of its Subject Shares in the manner specified by
Wiederhorn in a written notice to Stockholder (PROVIDED, THAT such notice shall
be delivered to, and received by, Stockholder on or prior to the date on which
such votes, consents or dissents are to be cast), which manner shall be
determined in Wiederhorn's absolute, sole and binding discretion.
(b) Stockholder hereby irrevocably grants to and appoints Andrew A.
Wiederhorn with full power of substitution (such individual and his substitutes,
if any, being referred to herein as the "Proxy"), as attorneys and proxies to
vote all of Stockholder's Subject Shares on all matters as to which Stockholder
is entitled to vote at a meeting of the stockholders of the Company or to which
Stockholder is entitled to express consent or dissent to corporate action in
writing without a meeting, in the Proxy's absolute, sole and binding discretion.
Stockholder agrees that the Proxy may, in Stockholder's name and stead, (i)
attend any annual or special meeting of the stockholders of the Company and vote
all of Stockholder's Subject Shares at any such annual or special meeting, and
(ii) execute with respect to all of Stockholder's Subject Shares any written
consent to, or dissent from, corporate action respecting any matter to which the
stockholders of the Company are entitled to express such consent or dissent
without a meeting. Stockholder agrees to refrain from (a) voting at any annual
or special meeting of the stockholders of the Company, (b) executing any written
consent in lieu of a meeting of the stockholders of the Company, (c) exercising
any rights of dissent with respect to Stockholder's Subject Shares, (d) granting
any proxy or authorization to any individual, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or any agency or political subdivision
thereof) or other entity of any kind (hereinafter, "Person") with respect to the
voting of Stockholder's Subject Shares, and (e) taking any other action, in each
case if and to the extent contrary to or inconsistent with the terms of this
Agreement. Stockholder further agrees that the Person designated as the Proxy
pursuant hereto may at any time name any other Person as their substituted Proxy
to act pursuant hereto, either as to a specific matter or as to all matters.
Page 4
Stockholder further agrees to execute all additional writings, consents and
authorizations as may be reasonably required by the Proxy to evidence the powers
granted to the Proxy hereby or to enable the Proxy to exercise those powers. In
discharging his, her or its powers under this Agreement, the Proxy may rely upon
the advice of counsel, and any vote made or action taken by the Proxy in
reliance upon such advice of counsel shall be deemed to have been made in good
faith by the Proxy.
(c) Stockholder represents that any proxies given prior to this Agreement
regarding any Company Common Stock held by Stockholder are revocable, and such
proxies are hereby revoked.
(d) Stockholder affirms that the irrevocable proxy set forth in this
Section 3 is given in connection with the Put Option. Stockholder further
affirms that such irrevocable proxy is coupled with an interest and may under no
circumstances be revoked (except as expressly provided in this Agreement).
Stockholder ratifies and confirms all actions that the Proxy may lawfully take
or cause to be taken by virtue hereof.
(e) Notwithstanding anything to the contrary contained in this Agreement,
the Proxy shall be revoked, terminate and expire on January 15, 2002, whereupon
all of Stockholder's rights (including, without limitation, its voting rights)
with respect to any Subject Shares still owned by Stockholder shall be fully
restored, and the provisions of paragraphs (a) through (d) of this Section 3
shall be deemed null and void and of no further force or effect whatsoever.
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder hereby
represents and warrants to Wiederhorn as follows:
(a) OWNERSHIP. Stockholder beneficially owns the shares of Company Common
Stock set forth opposite Stockholder's name on Schedule 1 hereto.
(b) DUE AUTHORIZATION. Stockholder has all necessary power and authority
(or, if an individual, capacity), to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. Stockholder beneficially owns
all of its Subject Shares with no restrictions on Stockholder's voting rights or
rights of disposition pertaining thereto; such Subject Shares constitute all
shares of Company Common Stock beneficially owned by Stockholder; and upon
exercise of the Put Option or the Call Option (collectively, the "Options"),
Stockholder will deliver good and marketable title to the Put Option Purchased
Shares or the Call Option Shares (collectively, the "Option Shares") free and
clear of liens, claims, encumbrances or rights or interests of others. Assuming
this Agreement has been duly and validly authorized, executed and delivered by
Wiederhorn, this Agreement constitutes a valid and binding agreement of
Stockholder, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights generally or by the principles governing the
availability of equitable remedies.
(c) NO CONFLICTS. Neither the execution and delivery of this Agreement, nor
the consummation by Stockholder of the transactions contemplated hereby, will
conflict with or
Page 5
constitute a violation of or default under any contract, commitment, agreement,
arrangement or restriction of any kind to which Stockholder is a party or by
which Stockholder is bound.
(d) KNOWLEDGE OF STOCKHOLDER; NO OTHER REPRESENTATIONS. Stockholder has
independently acquired all of the necessary information that Stockholder
requires in order to make an informed decision to enter into this Agreement and
to grant the Call Option. Additionally, Stockholder is an experienced investor,
well and independently informed of the Company's business, financial condition
and prospects, and has not, in deciding to enter into this Agreement and to
grant the Call Option, relied on any representations or warranties by Wiederhorn
other than those contained in this Agreement, and Wiederhorn has not made any
such additional representations or warranties.
5. REPRESENTATIONS AND WARRANTIES OF WIEDERHORN. Wiederhorn hereby
represents and warrants to Stockholder as follows:
(a) DUE AUTHORIZATION. Wiederhorn has the requisite capacity to enter into
and perform this Agreement. Assuming this Agreement has been duly and validly
authorized, executed and delivered by Stockholder, this Agreement constitutes a
valid and binding agreement of Wiederhorn, enforceable against Wiederhorn in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting creditors'
rights generally or by the principles governing the availability of equitable
remedies.
(b) NO CONFLICTS. Neither the execution and delivery of this Agreement, nor
the consummation by Wiederhorn of the transactions contemplated hereby, will
conflict with or constitute a violation of or default under any contract,
commitment, agreement, arrangement or restriction of any kind to which
Wiederhorn is a party or by which Wiederhorn is bound.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in the outstanding shares of Company Common
Stock by reason of a stock dividend, stock split, split-up, recapitalization,
combination, exchange of shares or similar transaction, the type and number of
Subject Shares, and the Option Price Per Share therefor, shall be adjusted
appropriately.
(b) In the event that the Company shall (i) enter into an agreement to
consolidate with or merge into any Person, other one of its subsidiaries or
affiliates, and shall not be the continuing or surviving corporation of such
consolidation or merger, or (ii) enter into an agreement to permit any Person,
other than Wiederhorn or one of its subsidiaries or affiliates, to merge into
the Company and the Company shall be the continuing or surviving corporation,
but, in connection with such merger, the then outstanding shares of Company
Common Stock shall be changed into or exchanged for stock or other securities of
the Company or any other Person or cash or any other property, or (iii)
liquidate, then, and in each such case, Wiederhorn shall thereafter, during the
term of this Agreement, be entitled to receive, upon exercise of the Options,
the securities or properties which a holder of the number of the Subject Shares
or the Option Shares then deliverable upon the exercise thereof will be entitled
to receive upon such consolidation, merger or liquidation, and Stockholder and
Wiederhorn shall use their best efforts
Page 6
to assure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be practicable, in relation to any securities or property
thereafter deliverable upon exercise of the Options.
7. TERMINATION. This Agreement, and all rights and obligations of the
parties hereunder, shall terminate on January 15, 2002, or the earlier exercise
of the Options with respect to all of the Subject Shares (but in no event sooner
than three (3) business days following due and timely delivery hereunder of a
Call Option Exercise Notice or a Put Option Exercise Notice).
8. TRANSFER OF THE SHARES.
(a) Prior to the termination of this Agreement, except as otherwise
provided herein, Stockholder shall not: (i) transfer, sell, gift-over, pledge or
otherwise dispose of, or consent to any of the foregoing ("Transfer"), any or
all of the Subject Shares or any interest therein; (ii) enter into any contract,
option or other agreement or understanding with respect to any Transfer; (iii)
grant any proxy, power-of-attorney or other authorization or consent with
respect to any of the Subject Shares; (iv) deposit any of the Subject Shares
into a voting trust, or enter into a voting agreement or arrangement with
respect to any of the Subject Shares; (v) convert the Subject Shares into shares
of Company Common Stock; or (vi) take any other action, in each case if the same
would in any way restrict, limit or interfere with the performance of
Stockholder's obligations hereunder or the transactions contemplated hereby.
(b) Notwithstanding Subsection (a) above, Stockholder may make transfers of
Subject Shares to Stockholder's spouse or lineal descendants, to any trust for
the benefit of such holder or the benefit of such spouse and/or lineal
descendants, to any corporation or partnership in which Stockholder, or the
spouse and/or the lineal descendants of Stockholder, are the direct and
beneficial owners of all of the equity interests for estate planning purposes
(provided that Stockholder, such spouse and/or descendants agree in writing to
remain the beneficial owners of all such interests until termination of this
Agreement), or to the personal representative of Stockholder upon Stockholder's
death for purposes of administration of Stockholder's estate or upon such
holder's incompetency for purposes of the protection and management of the
assets of Stockholder; PROVIDED that any such transferee shall, prior to such
transfer, consent in a writing delivered to Wiederhorn to be bound by this
Agreement and deliver to Wiederhorn an irrevocable power of attorney with
respect to the transferred Subject Shares.
9. NO SOLICITATION. Stockholder shall not, nor shall it permit any of its
subsidiaries or any of its affiliates to, nor shall it authorize or permit any
agent, officer, director or employee of, or any investment banker, attorney or
other advisor or representative of, Stockholder or any of their subsidiaries or
any of Stockholder's affiliates to, directly or indirectly, solicit, initiate,
or encourage any inquiries or proposals from, discuss or negotiate with, or
provide any non-public information to, any Person (other than Wiederhorn)
relating to any transaction involving the sale of any of the assets of the
Company, or any of the capital stock of the Company, or any merger,
consolidation, business combination, or similar transaction involving the
Company or any of its subsidiaries.
Page 7
10. MISCELLANEOUS.
(a) STOCKHOLDER CAPACITY. Neither of the parties to this Agreement shall be
deemed to have made any agreement or understanding in his or her capacity as a
director or officer of the Company and no action taken by any of the parties in
his or her capacity as a director or officer of the Company shall be deemed a
breach of this Agreement. Each of the parties executes this Agreement solely in
his or her capacity as the beneficial owner, where applicable, of Company Common
Stock.
(b) EXPENSES. Each of the parties hereto shall bear and pay all of its own
costs and expenses, incurred by it or on its behalf, in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
(c) WAIVER AND AMENDMENT. Any provision of this Agreement may be waived at
any time, in writing, by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(d) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY; SEVERABILITY. This
Agreement (i) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof and (ii) is not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder. If any
term or provision of this Agreement is held by a court of competent jurisdiction
or a federal or state regulatory agency to be invalid, void or unenforceable,
the remainder of the terms or provisions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable. If for any
reason such court or regulatory agency determines that the Options do not permit
Stockholder to sell the full number of shares of Company Common Stock as
provided in Sections 1(a) and 2(a) it is the express intention of Wiederhorn to
allow Stockholder to sell such lesser number of shares as may be permissible
without any amendment or modification hereof.
(e) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, applicable to contracts made
between residents of that state, entered into and to be wholly performed within
that state, except for corporate matters mandatorily governed by Maryland
corporation law, which corporation law shall, to that extent only, govern.
(f) HEADINGS. The headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.
(g) NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed duly given if delivered personally, by facsimile
transmission (with confirmation), or if mailed by registered or certified mail
(return receipt requested) or by Federal
Page 8
Express or other recognized overnight delivery service, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If to Stockholder, to:
The address set forth under Stockholder's name on Schedule 1
hereto.
If to Wiederhorn, to:
Andrew A. Wiederhorn
c/o Fog Cutter Capital Group Inc.
1410 S.W. Jefferson Street
Portland, Oregon 97201
Telecopier no.: (503) 553-7401
with a copy to:
V. Joseph Stubbs, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
2029 Century Park East, Suite 2400
Los Angeles, California 90067
Telecopier no.: (310) 229-1001
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
(i) ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder or under the Options shall be assigned by either of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by,
the parties hereto and their respective successors, assigns, heirs, executors,
administrators and other legal representatives.
(j) FURTHER ASSURANCES. Stockholder and Wiederhorn shall execute and
deliver all other documents and instruments and take all other action that may
be reasonably necessary in connection with the matters provided for hereby.
(k) SPECIFIC PERFORMANCE. The parties acknowledge that it would be
impossible to fix money damages for violations of this Agreement and that such
violations will cause irreparable injury for which adequate remedy at law is not
available and, therefore, this Agreement must be enforced by specific
performance or injunctive relief. The parties hereto agree that either party
may, in its sole discretion, apply to any court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection or defense to the imposition of such relief.
Page 9
Nothing herein shall be construed to prohibit either party from bringing any
action for damages in addition to an action for specific performance or an
injunction for a breach of this Agreement.
(l) SURVIVAL. The representations, warranties and agreements in this
Agreement shall survive any Closing hereunder.
(m) INDEPENDENT COUNSEL. Each of the parties acknowledges that it has been
represented, or has had the opportunity to be represented, by independent
counsel of such party's choice throughout all negotiations that have preceded
the execution of this Agreement and that, to the extent applicable to such
party, has executed the same with consent and upon the advice of said
independent counsel. Each party and its counsel, as applicable, cooperated in
the drafting and preparation of this Agreement and the documents referred to
herein, and any and all drafts relating thereto shall be deemed the work product
of the parties and may not be construed against either party by reason of its
preparation. Accordingly, any rule of law or any legal decision that would
require interpretation of any ambiguities in this Agreement against the party
that drafted it is of no application and is hereby expressly waived. The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intentions of the parties and this Agreement.
[SIGNATURE PAGE FOLLOWS]
Page 10
IN WITNESS WHEREOF, Stockholder and Wiederhorn have executed this Put/Call
Option and Voting Agreement, each as of the day and year first written above.
WIEDERHORN:
By: /S/ ANDREW A. WIEDERHORN
--------------------------------
Name: Andrew A. Wiederhorn
STOCKHOLDER:
LEON & TOBY COOPERMAN FOUNDATION
By: /S/ LEON COOPERMAN
---------------------------------
Name: Leon Cooperman
Title: Trustee
Page 11
SCHEDULE 1
STOCKHOLDER
STOCKHOLDER SUBJECT SHARES
LEON & TOBY COOPERMAN FOUNDATION 85,000
Leon Cooperman, Trustee
45 Watchung Road
Short Hills, New Jersey 07078
Telecopier no.: (212) 495-5236
(973) 376-2090
Page 12
EXHIBIT A
NOTICE OF CALL OPTION EXERCISE
[Name and address of Stockholder]
Dear [Name]:
Reference is made to that certain Put/Call Option and Voting Agreement (the
"OPTION AGREEMENT") dated as of October 16, 2001, by and between you and Andrew
A. Wiederhorn ("Wiederhorn"). Capitalized terms used in this notice, but not
otherwise defined, will have the meanings assigned to such terms in the Option
Agreement.
1. EXERCISE OF OPTIONS. Wiederhorn hereby elects to exercise his option
to purchase all of the Call Option Shares at the Call Option Price Per
Share.
2. TENDER OF THE PURCHASED SHARES. You will cause the Call Option Shares
to be delivered to Wiederhorn at the Call Option Closing, which will
take place at [time and place].
3. TENDER OF PURCHASE PRICE. Wiederhorn will tender the Total Call Option
Price at the Call Option Closing.
IN WITNESS WHEREOF, Wiederhorn has caused this Call Option Exercise Notice
to be executed as of the ____ day of _________, 200__.
By: /S/ ANDREW A. WIEDERHORN
---------------------------------------
Name: Andrew Wiederhorn
Page 13
EXHIBIT 5
PUT/CALL OPTION AND VOTING AGREEMENT
PUT/CALL OPTION AND VOTING AGREEMENT, dated as of October 16, 2001 (this
"Agreement"), by and between the individual or entity indicated on the signature
page(s) and listed on Schedule 1 hereto (the "Stockholder"), a stockholder of
Fog Cutter Capital Group Inc., a Maryland corporation (the "Company"), and
Andrew A. Wiederhorn, an individual ("Wiederhorn"), who is also a stockholder of
the Company.
WHEREAS, the Stockholder is the owner of the shares of common stock, par
value $.0001 per share ("Company Common Stock"), of the Company set forth on
Schedule 1 hereto (the "Subject Shares"); and
WHEREAS, Wiederhorn wishes, during the term of this Agreement, to direct
the voting of the Subject Shares at any annual and special meetings of
stockholders of the Company, or pursuant to any written actions taken in lieu of
such a meeting, and Stockholder is willing to so vote and to execute an
irrevocable proxy in favor of Wiederhorn for the Subject Shares; and
WHEREAS, as a condition precedent and inducement to Stockholder's entry
into such voting arrangements and execution of the proxy contemplated thereby,
Stockholder has requested that Wiederhorn agree, and Wiederhorn has agreed, to
grant Stockholder the Put Option (as defined below) and to enter into this
Agreement; and
WHEREAS, Wiederhorn desires to purchase an option (as further defined
below, the "Call Option") to acquire all (but not less than all) of the Subject
Shares at the exercise price and during the exercise period specified in Section
1 below, and Stockholder is willing to grant the Call Option to Wiederhorn in
exchange for the consideration and on the terms set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, Stockholder and Wiederhorn agree as
follows:
1. CALL OPTION.
(a) GRANT OF CALL OPTION. Subject to the terms and conditions set forth in
this Agreement, the Stockholder hereby grants to Wiederhorn the option (the
"Call Option") to purchase, during the Call Option Exercise Period (as defined
below), all (but not less than all) of the Subject Shares (as the same may be
adjusted as provided herein, the "Call Option Shares") at the Call Option Price
Per Share (as defined below).
(b) EXERCISE PRICE. The price per share at which the Call Option shall be
exercisable (the "Call Option Price Per Share") shall equal Three Dollars and
Forty Cents ($3.40) per share, less any dividends paid by the Company and
received by the Stockholder between the date hereof and the Call Option Closing
(as defined below), payable in U.S. dollars and immediately available funds.
(c) EXERCISE PERIOD. Wiederhorn's right to purchase the Call Option Shares
will commence upon the Stockholder's receipt of the consideration provided for
in Section 1(g)
Page 1
below, and will terminate and expire on January 15, 2002 (such period, the "Call
Option Exercise Period").
(d) EXERCISE OF CALL OPTION.
(i) At any time during the Call Option Exercise Period, Wiederhorn may
exercise the Call Option as to all (but not less than all) of the Call Option
Shares by delivering to the Stockholder a written notice in substantially the
form attached hereto as Exhibit A (the "Call Option Exercise Notice").
(ii) Wiederhorn shall not be under any obligation to exercise the Call
Option, and may allow the Call Option to expire without purchasing any Call
Option Shares hereunder.
(e) CLOSING. The closing for the purchase and sale, if any, of the Call
Option Shares (the "Call Option Closing") shall occur in New York City or such
other location as the parties may agree, as promptly as practicable, and in any
event within three (3) business days, after the Stockholder's receipt of the
Call Option Exercise Notice. Thereupon, the Stockholder will cause to be
executed and delivered to Wiederhorn a stock certificate or certificates
representing Stockholder's Call Option Shares, duly endorsed for transfer or
accompanied by duly executed (and, if required, guaranteed) stock powers.
Purchased Call Option Shares shall be free and clear of all liens, claims,
charges and encumbrances of any kind whatsoever. Wiederhorn shall, against
delivery of the Call Option Shares, pay to Stockholder an amount equal to the
product of the number of Stockholder's Call Option Shares and the Call Option
Price Per Share (Stockholder's "Total Call Option Price"), in U.S. dollars and
immediately available funds, by wire transfer to such account as the Stockholder
directs in writing on or prior to the Call Option Closing date.
(f) FRACTIONAL SHARES. Stockholder will not be required to sell, and
Wiederhorn will not be required to purchase, any fractional Call Option Shares
upon exercise of the Call Option.
(g) CONSIDERATION. In consideration for granting the Call Option to
Wiederhorn, Wiederhorn shall, immediately upon execution of this Agreement,
deliver to Stockholder, in U.S. dollars and immediately available funds, an
amount equal to ten cents ($0.10) per share for each of Stockholder's Subject
Shares.
2. CONDITIONAL PUT OPTION.
(a) GRANT OF PUT OPTION. Wiederhorn hereby grants to Stockholder an option
(the "Put Option"), exercisable by the Stockholder at any time or from time to
time during the Put Option Exercise Period (as defined below), in the event that
the Company redeems, repurchases or otherwise acquires any shares of Company
Common Stock other than by means of a redemption, repurchase or acquisition
available to Stockholder on terms at least as favorable to Stockholder as the
most favorable terms available to the other stockholders of the Company (such
redemption, repurchase or acquisition, a "Preferential Repurchase"), to require
Weiderhorn to purchase, at Stockholder's option, any or all of Stockholder's
Subject Shares (the "Put Option
Page 2
Shares"), up to 42.308% of the number of shares of Company Common Stock acquired
by the Company in such Preferential Repurchase.
(b) EXERCISE PRICE. The price per share at which the Put Option shall be
exercisable (the "Put Option Price Per Share") shall equal Three Dollars and
Forty Cents ($3.40) per share, less any dividends paid by the Company and
received by the Stockholder between the date hereof and the Put Option Closing
(as defined below), payable in U.S. dollars and immediately available funds.
(c) EXERCISE PERIOD. Stockholder's right to require Wiederhorn to purchase
the Put Option Shares will commence upon the date hereof, and will terminate and
expire on January 15, 2002 (such period, the "Put Option Exercise Period").
(d) EXERCISE OF PUT OPTION.
(i) At any time or from time to time during the Put Option Exercise Period,
Stockholder may exercise the Put Option to require Wiederhorn to purchase the
number of Put Option Shares (such number, the "Put Option Purchased Shares")
specified in a written notice (the "Put Option Exercise Notice") specifying in
reasonable detail the facts of the Preferential Repurchase and the number of Put
Option Shares that Stockholder desires to sell pursuant to the Put Option.
(ii) NEGOTIATION; MEDIATION. The parties agree to make all reasonable
efforts to settle any dispute arising under this Agreement relating to the Put
Option or the facts of a Preferential Repurchase through good-faith negotiation.
In the event that negotiation between the parties is unsuccessful, the parties
agree to attempt to settle outstanding issues through mediation. The mediator
will act in a neutral capacity as a facilitator or intermediary, to assist the
parties in arriving at a mutually acceptable resolution of the dispute. The
mediator shall not have the power to render a binding decision or to serve as
arbitrator, decisionmaker or fact-finder. The mediator will be chosen by mutual
agreement of Stockholder and Wiederhorn. If the parties, within thirty days from
the date of the Put Option Exercise Notice, cannot reach an agreement on a
mediator or if mediation fails to resolve the dispute(s) within thirty days
after appointment of the mediator, the parties agree to submit the dispute(s) to
binding arbitration in New York City pursuant to the rules of JAMS-Endispute.
(iii) Stockholder shall not be under any obligation to exercise the Put
Option, and may allow the Put Option to expire without selling any Put Option
Shares hereunder.
(e) CLOSING. The closing for each purchase and sale, if any, of Put Option
Purchased Shares (each, a "Put Option Closing") shall occur in New York City or
such other location as the parties may agree, as promptly as practicable, and in
any event within three (3) business days, after Wiederhorn's receipt of the
respective Put Option Exercise Notice. Thereupon, Stockholder will cause to be
executed and delivered to Wiederhorn a stock certificate or certificates
representing Stockholder's Put Option Purchased Shares, duly endorsed for
transfer or accompanied by duly executed (and, if required, guaranteed) stock
powers. Such Put Option Purchased Shares shall be free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever. Wiederhorn shall,
against delivery of the Put Option Purchased Shares,
Page 3
pay to the Stockholder an amount equal to the product of the number of such Put
Option Purchased Shares and the Put Option Price Per Share (such Stockholder's
"Total Put Option Price"), in U.S. dollars and immediately available funds, by
wire transfer to such account as Stockholder directs in writing on or prior to
the Put Option Closing date.
(f) FRACTIONAL SHARES. Wiederhorn will not be required to purchase any
fractional Put Option Shares upon exercise of the Put Option.
3. VOTING OF THE SUBJECT SHARES; PROXY.
(a) The Stockholder agrees during the term of this Agreement:
(i) to vote its Subject Shares on all matters as to which Stockholder is
entitled to vote at any meeting of the stockholders of the Company, including,
without limitation, with respect to the election of directors, in the manner
specified by Wiederhorn in a written notice to Stockholder (PROVIDED, THAT such
notice shall be delivered to, and received by, Stockholder on or prior to the
date on which such votes, consents or dissents are to be cast), which manner
shall be determined in Wiederhorn's absolute, sole and binding discretion; and
(ii) to express consent or dissent to corporate action in writing, if
without a meeting, on all of its Subject Shares in the manner specified by
Wiederhorn in a written notice to Stockholder (PROVIDED, THAT such notice shall
be delivered to, and received by, Stockholder on or prior to the date on which
such votes, consents or dissents are to be cast), which manner shall be
determined in Wiederhorn's absolute, sole and binding discretion.
(b) Stockholder hereby irrevocably grants to and appoints Andrew A.
Wiederhorn with full power of substitution (such individual and his substitutes,
if any, being referred to herein as the "Proxy"), as attorneys and proxies to
vote all of Stockholder's Subject Shares on all matters as to which Stockholder
is entitled to vote at a meeting of the stockholders of the Company or to which
Stockholder is entitled to express consent or dissent to corporate action in
writing without a meeting, in the Proxy's absolute, sole and binding discretion.
Stockholder agrees that the Proxy may, in Stockholder's name and stead, (i)
attend any annual or special meeting of the stockholders of the Company and vote
all of Stockholder's Subject Shares at any such annual or special meeting, and
(ii) execute with respect to all of Stockholder's Subject Shares any written
consent to, or dissent from, corporate action respecting any matter to which the
stockholders of the Company are entitled to express such consent or dissent
without a meeting. Stockholder agrees to refrain from (a) voting at any annual
or special meeting of the stockholders of the Company, (b) executing any written
consent in lieu of a meeting of the stockholders of the Company, (c) exercising
any rights of dissent with respect to Stockholder's Subject Shares, (d) granting
any proxy or authorization to any individual, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or any agency or political subdivision
thereof) or other entity of any kind (hereinafter, "Person") with respect to the
voting of Stockholder's Subject Shares, and (e) taking any other action, in each
case if and to the extent contrary to or inconsistent with the terms of this
Agreement. Stockholder further agrees that the Person designated as the Proxy
pursuant hereto may at any time name any other Person as their substituted Proxy
to act pursuant hereto, either as to a specific matter or as to all matters.
Page 4
Stockholder further agrees to execute all additional writings, consents and
authorizations as may be reasonably required by the Proxy to evidence the powers
granted to the Proxy hereby or to enable the Proxy to exercise those powers. In
discharging his, her or its powers under this Agreement, the Proxy may rely upon
the advice of counsel, and any vote made or action taken by the Proxy in
reliance upon such advice of counsel shall be deemed to have been made in good
faith by the Proxy.
(c) Stockholder represents that any proxies given prior to this Agreement
regarding any Company Common Stock held by Stockholder are revocable, and such
proxies are hereby revoked.
(d) Stockholder affirms that the irrevocable proxy set forth in this
Section 3 is given in connection with the Put Option. Stockholder further
affirms that such irrevocable proxy is coupled with an interest and may under no
circumstances be revoked (except as expressly provided in this Agreement).
Stockholder ratifies and confirms all actions that the Proxy may lawfully take
or cause to be taken by virtue hereof.
(e) Notwithstanding anything to the contrary contained in this Agreement,
the Proxy shall be revoked, terminate and expire on January 15, 2002, whereupon
all of Stockholder's rights (including, without limitation, its voting rights)
with respect to any Subject Shares still owned by Stockholder shall be fully
restored, and the provisions of paragraphs (a) through (d) of this Section 3
shall be deemed null and void and of no further force or effect whatsoever.
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder hereby
represents and warrants to Wiederhorn as follows:
(a) OWNERSHIP. Stockholder beneficially owns the shares of Company Common
Stock set forth opposite Stockholder's name on Schedule 1 hereto.
(b) DUE AUTHORIZATION. Stockholder has all necessary power and authority
(or, if an individual, capacity), to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. Stockholder beneficially owns
all of its Subject Shares with no restrictions on Stockholder's voting rights or
rights of disposition pertaining thereto; such Subject Shares constitute all
shares of Company Common Stock beneficially owned by Stockholder; and upon
exercise of the Put Option or the Call Option (collectively, the "Options"),
Stockholder will deliver good and marketable title to the Put Option Purchased
Shares or the Call Option Shares (collectively, the "Option Shares") free and
clear of liens, claims, encumbrances or rights or interests of others. Assuming
this Agreement has been duly and validly authorized, executed and delivered by
Wiederhorn, this Agreement constitutes a valid and binding agreement of
Stockholder, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights generally or by the principles governing the
availability of equitable remedies.
(c) NO CONFLICTS. Neither the execution and delivery of this Agreement, nor
the consummation by Stockholder of the transactions contemplated hereby, will
conflict with or
Page 5
constitute a violation of or default under any contract, commitment, agreement,
arrangement or restriction of any kind to which Stockholder is a party or by
which Stockholder is bound.
(d) KNOWLEDGE OF STOCKHOLDER; NO OTHER REPRESENTATIONS. Stockholder has
independently acquired all of the necessary information that Stockholder
requires in order to make an informed decision to enter into this Agreement and
to grant the Call Option. Additionally, Stockholder is an experienced investor,
well and independently informed of the Company's business, financial condition
and prospects, and has not, in deciding to enter into this Agreement and to
grant the Call Option, relied on any representations or warranties by Wiederhorn
other than those contained in this Agreement, and Wiederhorn has not made any
such additional representations or warranties.
5. REPRESENTATIONS AND WARRANTIES OF WIEDERHORN. Wiederhorn hereby
represents and warrants to Stockholder as follows:
(a) DUE AUTHORIZATION. Wiederhorn has the requisite capacity to enter into
and perform this Agreement. Assuming this Agreement has been duly and validly
authorized, executed and delivered by Stockholder, this Agreement constitutes a
valid and binding agreement of Wiederhorn, enforceable against Wiederhorn in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting creditors'
rights generally or by the principles governing the availability of equitable
remedies.
(b) NO CONFLICTS. Neither the execution and delivery of this Agreement, nor
the consummation by Wiederhorn of the transactions contemplated hereby, will
conflict with or constitute a violation of or default under any contract,
commitment, agreement, arrangement or restriction of any kind to which
Wiederhorn is a party or by which Wiederhorn is bound.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in the outstanding shares of Company Common
Stock by reason of a stock dividend, stock split, split-up, recapitalization,
combination, exchange of shares or similar transaction, the type and number of
Subject Shares, and the Option Price Per Share therefor, shall be adjusted
appropriately.
(b) In the event that the Company shall (i) enter into an agreement to
consolidate with or merge into any Person, other one of its subsidiaries or
affiliates, and shall not be the continuing or surviving corporation of such
consolidation or merger, or (ii) enter into an agreement to permit any Person,
other than Wiederhorn or one of its subsidiaries or affiliates, to merge into
the Company and the Company shall be the continuing or surviving corporation,
but, in connection with such merger, the then outstanding shares of Company
Common Stock shall be changed into or exchanged for stock or other securities of
the Company or any other Person or cash or any other property, or (iii)
liquidate, then, and in each such case, Wiederhorn shall thereafter, during the
term of this Agreement, be entitled to receive, upon exercise of the Options,
the securities or properties which a holder of the number of the Subject Shares
or the Option Shares then deliverable upon the exercise thereof will be entitled
to receive upon such consolidation, merger or liquidation, and Stockholder and
Wiederhorn shall use their best efforts
Page 6
to assure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be practicable, in relation to any securities or property
thereafter deliverable upon exercise of the Options.
7. TERMINATION. This Agreement, and all rights and obligations of the
parties hereunder, shall terminate on January 15, 2002, or the earlier exercise
of the Options with respect to all of the Subject Shares (but in no event sooner
than three (3) business days following due and timely delivery hereunder of a
Call Option Exercise Notice or a Put Option Exercise Notice).
8. TRANSFER OF THE SHARES.
(a) Prior to the termination of this Agreement, except as otherwise
provided herein, Stockholder shall not: (i) transfer, sell, gift-over, pledge or
otherwise dispose of, or consent to any of the foregoing ("Transfer"), any or
all of the Subject Shares or any interest therein; (ii) enter into any contract,
option or other agreement or understanding with respect to any Transfer; (iii)
grant any proxy, power-of-attorney or other authorization or consent with
respect to any of the Subject Shares; (iv) deposit any of the Subject Shares
into a voting trust, or enter into a voting agreement or arrangement with
respect to any of the Subject Shares; (v) convert the Subject Shares into shares
of Company Common Stock; or (vi) take any other action, in each case if the same
would in any way restrict, limit or interfere with the performance of
Stockholder's obligations hereunder or the transactions contemplated hereby.
(b) Notwithstanding Subsection (a) above, Stockholder may make transfers of
Subject Shares to Stockholder's spouse or lineal descendants, to any trust for
the benefit of such holder or the benefit of such spouse and/or lineal
descendants, to any corporation or partnership in which Stockholder, or the
spouse and/or the lineal descendants of Stockholder, are the direct and
beneficial owners of all of the equity interests for estate planning purposes
(provided that Stockholder, such spouse and/or descendants agree in writing to
remain the beneficial owners of all such interests until termination of this
Agreement), or to the personal representative of Stockholder upon Stockholder's
death for purposes of administration of Stockholder's estate or upon such
holder's incompetency for purposes of the protection and management of the
assets of Stockholder; PROVIDED that any such transferee shall, prior to such
transfer, consent in a writing delivered to Wiederhorn to be bound by this
Agreement and deliver to Wiederhorn an irrevocable power of attorney with
respect to the transferred Subject Shares.
9. NO SOLICITATION. Stockholder shall not, nor shall it permit any of its
subsidiaries or any of its affiliates to, nor shall it authorize or permit any
agent, officer, director or employee of, or any investment banker, attorney or
other advisor or representative of, Stockholder or any of their subsidiaries or
any of Stockholder's affiliates to, directly or indirectly, solicit, initiate,
or encourage any inquiries or proposals from, discuss or negotiate with, or
provide any non-public information to, any Person (other than Wiederhorn)
relating to any transaction involving the sale of any of the assets of the
Company, or any of the capital stock of the Company, or any merger,
consolidation, business combination, or similar transaction involving the
Company or any of its subsidiaries.
Page 7
10. MISCELLANEOUS.
(a) STOCKHOLDER CAPACITY. Neither of the parties to this Agreement shall be
deemed to have made any agreement or understanding in his or her capacity as a
director or officer of the Company and no action taken by any of the parties in
his or her capacity as a director or officer of the Company shall be deemed a
breach of this Agreement. Each of the parties executes this Agreement solely in
his or her capacity as the beneficial owner, where applicable, of Company Common
Stock.
(b) EXPENSES. Each of the parties hereto shall bear and pay all of its own
costs and expenses, incurred by it or on its behalf, in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
(c) WAIVER AND AMENDMENT. Any provision of this Agreement may be waived at
any time, in writing, by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(d) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY; SEVERABILITY. This
Agreement (i) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof and (ii) is not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder. If any
term or provision of this Agreement is held by a court of competent jurisdiction
or a federal or state regulatory agency to be invalid, void or unenforceable,
the remainder of the terms or provisions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable. If for any
reason such court or regulatory agency determines that the Options do not permit
Stockholder to sell the full number of shares of Company Common Stock as
provided in Sections 1(a) and 2(a) it is the express intention of Wiederhorn to
allow Stockholder to sell such lesser number of shares as may be permissible
without any amendment or modification hereof.
(e) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, applicable to contracts made
between residents of that state, entered into and to be wholly performed within
that state, except for corporate matters mandatorily governed by Maryland
corporation law, which corporation law shall, to that extent only, govern.
(f) HEADINGS. The headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.
(g) NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed duly given if delivered personally, by facsimile
transmission (with confirmation), or if mailed by registered or certified mail
(return receipt requested) or by Federal
Page 8
Express or other recognized overnight delivery service, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If to Stockholder, to:
The address set forth under Stockholder's name on Schedule 1
hereto.
If to Wiederhorn, to:
Andrew A. Wiederhorn
c/o Fog Cutter Capital Group Inc.
1410 S.W. Jefferson Street
Portland, Oregon 97201
Telecopier no.: (503) 553-7401
with a copy to:
V. Joseph Stubbs, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
2029 Century Park East, Suite 2400
Los Angeles, California 90067
Telecopier no.: (310) 229-1001
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
(i) ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder or under the Options shall be assigned by either of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by,
the parties hereto and their respective successors, assigns, heirs, executors,
administrators and other legal representatives.
(j) FURTHER ASSURANCES. Stockholder and Wiederhorn shall execute and
deliver all other documents and instruments and take all other action that may
be reasonably necessary in connection with the matters provided for hereby.
(k) SPECIFIC PERFORMANCE. The parties acknowledge that it would be
impossible to fix money damages for violations of this Agreement and that such
violations will cause irreparable injury for which adequate remedy at law is not
available and, therefore, this Agreement must be enforced by specific
performance or injunctive relief. The parties hereto agree that either party
may, in its sole discretion, apply to any court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in
Page 9
order to enforce this Agreement or prevent any violation hereof and, to the
extent permitted by applicable law, each party waives any objection or defense
to the imposition of such relief. Nothing herein shall be construed to prohibit
either party from bringing any action for damages in addition to an action for
specific performance or an injunction for a breach of this Agreement.
(l) SURVIVAL. The representations, warranties and agreements in this
Agreement shall survive any Closing hereunder.
(m) INDEPENDENT COUNSEL. Each of the parties acknowledges that it has been
represented, or has had the opportunity to be represented, by independent
counsel of such party's choice throughout all negotiations that have preceded
the execution of this Agreement and that, to the extent applicable to such
party, has executed the same with consent and upon the advice of said
independent counsel. Each party and its counsel, as applicable, cooperated in
the drafting and preparation of this Agreement and the documents referred to
herein, and any and all drafts relating thereto shall be deemed the work product
of the parties and may not be construed against either party by reason of its
preparation. Accordingly, any rule of law or any legal decision that would
require interpretation of any ambiguities in this Agreement against the party
that drafted it is of no application and is hereby expressly waived. The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intentions of the parties and this Agreement.
[SIGNATURE PAGE FOLLOWS]
Page 10
IN WITNESS WHEREOF, Stockholder and Wiederhorn have executed this Put/Call
Option and Voting Agreement, each as of the day and year first written above.
WIEDERHORN:
By: /S/ ANDREW A. WIEDERHORN
--------------------------------
Name: Andrew A. Wiederhorn
STOCKHOLDER:
WATCHUNG ROAD ASSOCIATES, L.P.,
a Delaware limited partnership
By: /S/ LEON COOPERMAN
--------------------------------
Name: Leon Cooperman
Title: General Partner
Page 11
SCHEDULE 1
STOCKHOLDER
STOCKHOLDER SUBJECT SHARES
WATCHUNG ROAD ASSOCIATES, L.P. 275,000
Leon Cooperman, General Partner
45 Watchung Road
Short Hills, New Jersey 07078
Telecopier no.: (212) 495-5236
(973) 376-2090
Page 12
EXHIBIT A
NOTICE OF CALL OPTION EXERCISE
[Name and address of Stockholder]
Dear [Name]:
Reference is made to that certain Put/Call Option and Voting Agreement (the
"OPTION AGREEMENT") dated as of October 16, 2001, by and between you and Andrew
A. Wiederhorn ("Wiederhorn"). Capitalized terms used in this notice, but not
otherwise defined, will have the meanings assigned to such terms in the Option
Agreement.
1. EXERCISE OF OPTIONS. Wiederhorn hereby elects to exercise his option
to purchase all of the Call Option Shares at the Call Option Price Per
Share.
2. TENDER OF THE PURCHASED SHARES. You will cause the Call Option Shares
to be delivered to Wiederhorn at the Call Option Closing, which will
take place at [time and place].
3. TENDER OF PURCHASE PRICE. Wiederhorn will tender the Total Call Option
Price at the Call Option Closing.
IN WITNESS WHEREOF, Wiederhorn has caused this Call Option Exercise Notice
to be executed as of the ____ day of _________, 200__.
By: /S/ ANDREW A. WIEDERHORN
---------------------------------------
Name: Andrew Wiederhorn
Page 13
EXHIBIT 6
PUT/CALL OPTION AND VOTING AGREEMENT
PUT/CALL OPTION AND VOTING AGREEMENT, dated as of October 16, 2001 (this
"Agreement"), by and between the individual or entity indicated on the signature
page(s) and listed on Schedule 1 hereto (the "Stockholder"), a stockholder of
Fog Cutter Capital Group Inc., a Maryland corporation (the "Company"), and
Andrew A. Wiederhorn, an individual ("Wiederhorn"), who is also a stockholder of
the Company.
WHEREAS, the Stockholder is the owner of the shares of common stock, par
value $.0001 per share ("Company Common Stock"), of the Company set forth on
Schedule 1 hereto (the "Subject Shares"); and
WHEREAS, Wiederhorn wishes, during the term of this Agreement, to direct
the voting of the Subject Shares at any annual and special meetings of
stockholders of the Company, or pursuant to any written actions taken in lieu of
such a meeting, and Stockholder is willing to so vote and to execute an
irrevocable proxy in favor of Wiederhorn for the Subject Shares; and
WHEREAS, as a condition precedent and inducement to Stockholder's entry
into such voting arrangements and execution of the proxy contemplated thereby,
Stockholder has requested that Wiederhorn agree, and Wiederhorn has agreed, to
grant Stockholder the Put Option (as defined below) and to enter into this
Agreement; and
WHEREAS, Wiederhorn desires to purchase an option (as further defined
below, the "Call Option") to acquire all (but not less than all) of the Subject
Shares at the exercise price and during the exercise period specified in Section
1 below, and Stockholder is willing to grant the Call Option to Wiederhorn in
exchange for the consideration and on the terms set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, Stockholder and Wiederhorn agree as
follows:
1. CALL OPTION.
(a) GRANT OF CALL OPTION. Subject to the terms and conditions set forth in
this Agreement, the Stockholder hereby grants to Wiederhorn the option (the
"Call Option") to purchase, during the Call Option Exercise Period (as defined
below), all (but not less than all) of the Subject Shares (as the same may be
adjusted as provided herein, the "Call Option Shares") at the Call Option Price
Per Share (as defined below).
(b) EXERCISE PRICE. The price per share at which the Call Option shall be
exercisable (the "Call Option Price Per Share") shall equal Three Dollars and
Forty Cents ($3.40) per share, less any dividends paid by the Company and
received by the Stockholder between the date hereof and the Call Option Closing
(as defined below), payable in U.S. dollars and immediately available funds.
(c) EXERCISE PERIOD. Wiederhorn's right to purchase the Call Option Shares
will commence upon the Stockholder's receipt of the consideration provided for
in Section 1(g)
Page 1
below, and will terminate and expire on January 15, 2002 (such period, the "Call
Option Exercise Period").
(d) EXERCISE OF CALL OPTION.
(i) At any time during the Call Option Exercise Period, Wiederhorn may
exercise the Call Option as to all (but not less than all) of the Call Option
Shares by delivering to the Stockholder a written notice in substantially the
form attached hereto as Exhibit A (the "Call Option Exercise Notice").
(ii) Wiederhorn shall not be under any obligation to exercise the Call
Option, and may allow the Call Option to expire without purchasing any Call
Option Shares hereunder.
(e) CLOSING. The closing for the purchase and sale, if any, of the Call
Option Shares (the "Call Option Closing") shall occur in New York City or such
other location as the parties may agree, as promptly as practicable, and in any
event within three (3) business days, after the Stockholder's receipt of the
Call Option Exercise Notice. Thereupon, the Stockholder will cause to be
executed and delivered to Wiederhorn a stock certificate or certificates
representing Stockholder's Call Option Shares, duly endorsed for transfer or
accompanied by duly executed (and, if required, guaranteed) stock powers.
Purchased Call Option Shares shall be free and clear of all liens, claims,
charges and encumbrances of any kind whatsoever. Wiederhorn shall, against
delivery of the Call Option Shares, pay to Stockholder an amount equal to the
product of the number of Stockholder's Call Option Shares and the Call Option
Price Per Share (Stockholder's "Total Call Option Price"), in U.S. dollars and
immediately available funds, by wire transfer to such account as the Stockholder
directs in writing on or prior to the Call Option Closing date.
(f) FRACTIONAL SHARES. Stockholder will not be required to sell, and
Wiederhorn will not be required to purchase, any fractional Call Option Shares
upon exercise of the Call Option.
(g) CONSIDERATION. In consideration for granting the Call Option to
Wiederhorn, Wiederhorn shall, immediately upon execution of this Agreement,
deliver to Stockholder, in U.S. dollars and immediately available funds, an
amount equal to ten cents ($0.10) per share for each of Stockholder's Subject
Shares.
2. CONDITIONAL PUT OPTION.
(a) GRANT OF PUT OPTION. Wiederhorn hereby grants to Stockholder an option
(the "Put Option"), exercisable by the Stockholder at any time or from time to
time during the Put Option Exercise Period (as defined below), in the event that
the Company redeems, repurchases or otherwise acquires any shares of Company
Common Stock other than by means of a redemption, repurchase or acquisition
available to Stockholder on terms at least as favorable to Stockholder as the
most favorable terms available to the other stockholders of the Company (such
redemption, repurchase or acquisition, a "Preferential Repurchase"), to require
Weiderhorn to purchase, at Stockholder's option, any or all of Stockholder's
Subject Shares (the "Put Option
Page 2
Shares"), up to 44.615% of the number of shares of Company Common Stock acquired
by the Company in such Preferential Repurchase.
(b) EXERCISE PRICE. The price per share at which the Put Option shall be
exercisable (the "Put Option Price Per Share") shall equal Three Dollars and
Forty Cents ($3.40) per share, less any dividends paid by the Company and
received by the Stockholder between the date hereof and the Put Option Closing
(as defined below), payable in U.S. dollars and immediately available funds.
(c) EXERCISE PERIOD. Stockholder's right to require Wiederhorn to purchase
the Put Option Shares will commence upon the date hereof, and will terminate and
expire on January 15, 2002 (such period, the "Put Option Exercise Period").
(d) EXERCISE OF PUT OPTION.
(i) At any time or from time to time during the Put Option Exercise Period,
Stockholder may exercise the Put Option to require Wiederhorn to purchase the
number of Put Option Shares (such number, the "Put Option Purchased Shares")
specified in a written notice (the "Put Option Exercise Notice") specifying in
reasonable detail the facts of the Preferential Repurchase and the number of Put
Option Shares that Stockholder desires to sell pursuant to the Put Option.
(ii) NEGOTIATION; MEDIATION. The parties agree to make all reasonable
efforts to settle any dispute arising under this Agreement relating to the Put
Option or the facts of a Preferential Repurchase through good-faith negotiation.
In the event that negotiation between the parties is unsuccessful, the parties
agree to attempt to settle outstanding issues through mediation. The mediator
will act in a neutral capacity as a facilitator or intermediary, to assist the
parties in arriving at a mutually acceptable resolution of the dispute. The
mediator shall not have the power to render a binding decision or to serve as
arbitrator, decisionmaker or fact-finder. The mediator will be chosen by mutual
agreement of Stockholder and Wiederhorn. If the parties, within thirty days from
the date of the Put Option Exercise Notice, cannot reach an agreement on a
mediator or if mediation fails to resolve the dispute(s) within thirty days
after appointment of the mediator, the parties agree to submit the dispute(s) to
binding arbitration in New York City pursuant to the rules of JAMS-Endispute.
(iii) Stockholder shall not be under any obligation to exercise the Put
Option, and may allow the Put Option to expire without selling any Put Option
Shares hereunder.
(e) CLOSING. The closing for each purchase and sale, if any, of Put Option
Purchased Shares (each, a "Put Option Closing") shall occur in New York City or
such other location as the parties may agree, as promptly as practicable, and in
any event within three (3) business days, after Wiederhorn's receipt of the
respective Put Option Exercise Notice. Thereupon, Stockholder will cause to be
executed and delivered to Wiederhorn a stock certificate or certificates
representing Stockholder's Put Option Purchased Shares, duly endorsed for
transfer or accompanied by duly executed (and, if required, guaranteed) stock
powers. Such Put Option Purchased Shares shall be free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever. Wiederhorn shall,
against delivery of the Put Option Purchased Shares,
Page 3
pay to the Stockholder an amount equal to the product of the number of such Put
Option Purchased Shares and the Put Option Price Per Share (such Stockholder's
"Total Put Option Price"), in U.S. dollars and immediately available funds, by
wire transfer to such account as Stockholder directs in writing on or prior to
the Put Option Closing date.
(f) FRACTIONAL SHARES. Wiederhorn will not be required to purchase any
fractional Put Option Shares upon exercise of the Put Option.
3. VOTING OF THE SUBJECT SHARES; PROXY.
(a) The Stockholder agrees during the term of this Agreement:
(i) to vote its Subject Shares on all matters as to which Stockholder is
entitled to vote at any meeting of the stockholders of the Company, including,
without limitation, with respect to the election of directors, in the manner
specified by Wiederhorn in a written notice to Stockholder (PROVIDED, THAT such
notice shall be delivered to, and received by, Stockholder on or prior to the
date on which such votes, consents or dissents are to be cast), which manner
shall be determined in Wiederhorn's absolute, sole and binding discretion; and
(ii) to express consent or dissent to corporate action in writing, if
without a meeting, on all of its Subject Shares in the manner specified by
Wiederhorn in a written notice to Stockholder (PROVIDED, THAT such notice shall
be delivered to, and received by, Stockholder on or prior to the date on which
such votes, consents or dissents are to be cast), which manner shall be
determined in Wiederhorn's absolute, sole and binding discretion.
(b) Stockholder hereby irrevocably grants to and appoints Andrew A.
Wiederhorn with full power of substitution (such individual and his substitutes,
if any, being referred to herein as the "Proxy"), as attorneys and proxies to
vote all of Stockholder's Subject Shares on all matters as to which Stockholder
is entitled to vote at a meeting of the stockholders of the Company or to which
Stockholder is entitled to express consent or dissent to corporate action in
writing without a meeting, in the Proxy's absolute, sole and binding discretion.
Stockholder agrees that the Proxy may, in Stockholder's name and stead, (i)
attend any annual or special meeting of the stockholders of the Company and vote
all of Stockholder's Subject Shares at any such annual or special meeting, and
(ii) execute with respect to all of Stockholder's Subject Shares any written
consent to, or dissent from, corporate action respecting any matter to which the
stockholders of the Company are entitled to express such consent or dissent
without a meeting. Stockholder agrees to refrain from (a) voting at any annual
or special meeting of the stockholders of the Company, (b) executing any written
consent in lieu of a meeting of the stockholders of the Company, (c) exercising
any rights of dissent with respect to Stockholder's Subject Shares, (d) granting
any proxy or authorization to any individual, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or any agency or political subdivision
thereof) or other entity of any kind (hereinafter, "Person") with respect to the
voting of Stockholder's Subject Shares, and (e) taking any other action, in each
case if and to the extent contrary to or inconsistent with the terms of this
Agreement. Stockholder further agrees that the Person designated as the Proxy
pursuant hereto may at any time name any other Person as their substituted Proxy
to act pursuant hereto, either as to a specific matter or as to all matters.
Page 4
Stockholder further agrees to execute all additional writings, consents and
authorizations as may be reasonably required by the Proxy to evidence the powers
granted to the Proxy hereby or to enable the Proxy to exercise those powers. In
discharging his, her or its powers under this Agreement, the Proxy may rely upon
the advice of counsel, and any vote made or action taken by the Proxy in
reliance upon such advice of counsel shall be deemed to have been made in good
faith by the Proxy.
(c) Stockholder represents that any proxies given prior to this Agreement
regarding any Company Common Stock held by Stockholder are revocable, and such
proxies are hereby revoked.
(d) Stockholder affirms that the irrevocable proxy set forth in this
Section 3 is given in connection with the Put Option. Stockholder further
affirms that such irrevocable proxy is coupled with an interest and may under no
circumstances be revoked (except as expressly provided in this Agreement).
Stockholder ratifies and confirms all actions that the Proxy may lawfully take
or cause to be taken by virtue hereof.
(e) Notwithstanding anything to the contrary contained in this Agreement,
the Proxy shall be revoked, terminate and expire on January 15, 2002, whereupon
all of Stockholder's rights (including, without limitation, its voting rights)
with respect to any Subject Shares still owned by Stockholder shall be fully
restored, and the provisions of paragraphs (a) through (d) of this Section 3
shall be deemed null and void and of no further force or effect whatsoever.
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder hereby
represents and warrants to Wiederhorn as follows:
(a) OWNERSHIP. Stockholder beneficially owns the shares of Company Common
Stock set forth opposite Stockholder's name on Schedule 1 hereto.
(b) DUE AUTHORIZATION. Stockholder has all necessary power and authority
(or, if an individual, capacity), to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. Stockholder beneficially owns
all of its Subject Shares with no restrictions on Stockholder's voting rights or
rights of disposition pertaining thereto; such Subject Shares constitute all
shares of Company Common Stock beneficially owned by Stockholder; and upon
exercise of the Put Option or the Call Option (collectively, the "Options"),
Stockholder will deliver good and marketable title to the Put Option Purchased
Shares or the Call Option Shares (collectively, the "Option Shares") free and
clear of liens, claims, encumbrances or rights or interests of others. Assuming
this Agreement has been duly and validly authorized, executed and delivered by
Wiederhorn, this Agreement constitutes a valid and binding agreement of
Stockholder, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights generally or by the principles governing the
availability of equitable remedies.
(c) NO CONFLICTS. Neither the execution and delivery of this Agreement, nor
the consummation by Stockholder of the transactions contemplated hereby, will
conflict with or
Page 5
constitute a violation of or default under any contract, commitment, agreement,
arrangement or restriction of any kind to which Stockholder is a party or by
which Stockholder is bound.
(d) KNOWLEDGE OF STOCKHOLDER; NO OTHER REPRESENTATIONS. Stockholder has
independently acquired all of the necessary information that Stockholder
requires in order to make an informed decision to enter into this Agreement and
to grant the Call Option. Additionally, Stockholder is an experienced investor,
well and independently informed of the Company's business, financial condition
and prospects, and has not, in deciding to enter into this Agreement and to
grant the Call Option, relied on any representations or warranties by Wiederhorn
other than those contained in this Agreement, and Wiederhorn has not made any
such additional representations or warranties.
5. REPRESENTATIONS AND WARRANTIES OF WIEDERHORN. Wiederhorn hereby
represents and warrants to Stockholder as follows:
(a) DUE AUTHORIZATION. Wiederhorn has the requisite capacity to enter into
and perform this Agreement. Assuming this Agreement has been duly and validly
authorized, executed and delivered by Stockholder, this Agreement constitutes a
valid and binding agreement of Wiederhorn, enforceable against Wiederhorn in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting creditors'
rights generally or by the principles governing the availability of equitable
remedies.
(b) NO CONFLICTS. Neither the execution and delivery of this Agreement, nor
the consummation by Wiederhorn of the transactions contemplated hereby, will
conflict with or constitute a violation of or default under any contract,
commitment, agreement, arrangement or restriction of any kind to which
Wiederhorn is a party or by which Wiederhorn is bound.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in the outstanding shares of Company Common
Stock by reason of a stock dividend, stock split, split-up, recapitalization,
combination, exchange of shares or similar transaction, the type and number of
Subject Shares, and the Option Price Per Share therefor, shall be adjusted
appropriately.
(b) In the event that the Company shall (i) enter into an agreement to
consolidate with or merge into any Person, other one of its subsidiaries or
affiliates, and shall not be the continuing or surviving corporation of such
consolidation or merger, or (ii) enter into an agreement to permit any Person,
other than Wiederhorn or one of its subsidiaries or affiliates, to merge into
the Company and the Company shall be the continuing or surviving corporation,
but, in connection with such merger, the then outstanding shares of Company
Common Stock shall be changed into or exchanged for stock or other securities of
the Company or any other Person or cash or any other property, or (iii)
liquidate, then, and in each such case, Wiederhorn shall thereafter, during the
term of this Agreement, be entitled to receive, upon exercise of the Options,
the securities or properties which a holder of the number of the Subject Shares
or the Option Shares then deliverable upon the exercise thereof will be entitled
to receive upon such consolidation, merger or liquidation, and Stockholder and
Wiederhorn shall use their best efforts
Page 6
to assure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be practicable, in relation to any securities or property
thereafter deliverable upon exercise of the Options.
7. TERMINATION. This Agreement, and all rights and obligations of the
parties hereunder, shall terminate on January 15, 2002, or the earlier exercise
of the Options with respect to all of the Subject Shares (but in no event sooner
than three (3) business days following due and timely delivery hereunder of a
Call Option Exercise Notice or a Put Option Exercise Notice).
8. TRANSFER OF THE SHARES.
(a) Prior to the termination of this Agreement, except as otherwise
provided herein, Stockholder shall not: (i) transfer, sell, gift-over, pledge or
otherwise dispose of, or consent to any of the foregoing ("Transfer"), any or
all of the Subject Shares or any interest therein; (ii) enter into any contract,
option or other agreement or understanding with respect to any Transfer; (iii)
grant any proxy, power-of-attorney or other authorization or consent with
respect to any of the Subject Shares; (iv) deposit any of the Subject Shares
into a voting trust, or enter into a voting agreement or arrangement with
respect to any of the Subject Shares; (v) convert the Subject Shares into shares
of Company Common Stock; or (vi) take any other action, in each case if the same
would in any way restrict, limit or interfere with the performance of
Stockholder's obligations hereunder or the transactions contemplated hereby.
(b) Notwithstanding Subsection (a) above, Stockholder may make transfers of
Subject Shares to Stockholder's spouse or lineal descendants, to any trust for
the benefit of such holder or the benefit of such spouse and/or lineal
descendants, to any corporation or partnership in which Stockholder, or the
spouse and/or the lineal descendants of Stockholder, are the direct and
beneficial owners of all of the equity interests for estate planning purposes
(provided that Stockholder, such spouse and/or descendants agree in writing to
remain the beneficial owners of all such interests until termination of this
Agreement), or to the personal representative of Stockholder upon Stockholder's
death for purposes of administration of Stockholder's estate or upon such
holder's incompetency for purposes of the protection and management of the
assets of Stockholder; PROVIDED that any such transferee shall, prior to such
transfer, consent in a writing delivered to Wiederhorn to be bound by this
Agreement and deliver to Wiederhorn an irrevocable power of attorney with
respect to the transferred Subject Shares.
9. NO SOLICITATION. Stockholder shall not, nor shall it permit any of its
subsidiaries or any of its affiliates to, nor shall it authorize or permit any
agent, officer, director or employee of, or any investment banker, attorney or
other advisor or representative of, Stockholder or any of their subsidiaries or
any of Stockholder's affiliates to, directly or indirectly, solicit, initiate,
or encourage any inquiries or proposals from, discuss or negotiate with, or
provide any non-public information to, any Person (other than Wiederhorn)
relating to any transaction involving the sale of any of the assets of the
Company, or any of the capital stock of the Company, or any merger,
consolidation, business combination, or similar transaction involving the
Company or any of its subsidiaries.
Page 7
10. MISCELLANEOUS.
(a) STOCKHOLDER CAPACITY. Neither of the parties to this Agreement shall be
deemed to have made any agreement or understanding in his or her capacity as a
director or officer of the Company and no action taken by any of the parties in
his or her capacity as a director or officer of the Company shall be deemed a
breach of this Agreement. Each of the parties executes this Agreement solely in
his or her capacity as the beneficial owner, where applicable, of Company Common
Stock.
(b) EXPENSES. Each of the parties hereto shall bear and pay all of its own
costs and expenses, incurred by it or on its behalf, in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
(c) WAIVER AND AMENDMENT. Any provision of this Agreement may be waived at
any time, in writing, by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(d) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY; SEVERABILITY. This
Agreement (i) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof and (ii) is not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder. If any
term or provision of this Agreement is held by a court of competent jurisdiction
or a federal or state regulatory agency to be invalid, void or unenforceable,
the remainder of the terms or provisions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable. If for any
reason such court or regulatory agency determines that the Options do not permit
Stockholder to sell the full number of shares of Company Common Stock as
provided in Sections 1(a) and 2(a) it is the express intention of Wiederhorn to
allow Stockholder to sell such lesser number of shares as may be permissible
without any amendment or modification hereof.
(e) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, applicable to contracts made
between residents of that state, entered into and to be wholly performed within
that state, except for corporate matters mandatorily governed by Maryland
corporation law, which corporation law shall, to that extent only, govern.
(f) HEADINGS. The headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.
(g) NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed duly given if delivered personally, by facsimile
transmission (with confirmation), or if mailed by registered or certified mail
(return receipt requested) or by Federal
Page 8
Express or other recognized overnight delivery service, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If to Stockholder, to:
The address set forth under Stockholder's name on Schedule 1
hereto.
If to Wiederhorn, to:
Andrew A. Wiederhorn
c/o Fog Cutter Capital Group Inc.
1410 S.W. Jefferson Street
Portland, Oregon 97201
Telecopier no.: (503) 553-7401
with a copy to:
V. Joseph Stubbs, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
2029 Century Park East, Suite 2400
Los Angeles, California 90067
Telecopier no.: (310) 229-1001
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
(i) ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder or under the Options shall be assigned by either of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by,
the parties hereto and their respective successors, assigns, heirs, executors,
administrators and other legal representatives.
(j) FURTHER ASSURANCES. Stockholder and Wiederhorn shall execute and
deliver all other documents and instruments and take all other action that may
be reasonably necessary in connection with the matters provided for hereby.
(k) SPECIFIC PERFORMANCE. The parties acknowledge that it would be
impossible to fix money damages for violations of this Agreement and that such
violations will cause irreparable injury for which adequate remedy at law is not
available and, therefore, this Agreement must be enforced by specific
performance or injunctive relief. The parties hereto agree that either party
may, in its sole discretion, apply to any court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection or defense to the imposition of such relief.
Page 9
Nothing herein shall be construed to prohibit either party from bringing any
action for damages in addition to an action for specific performance or an
injunction for a breach of this Agreement.
(l) SURVIVAL. The representations, warranties and agreements in this
Agreement shall survive any Closing hereunder.
(m) INDEPENDENT COUNSEL. Each of the parties acknowledges that it has been
represented, or has had the opportunity to be represented, by independent
counsel of such party's choice throughout all negotiations that have preceded
the execution of this Agreement and that, to the extent applicable to such
party, has executed the same with consent and upon the advice of said
independent counsel. Each party and its counsel, as applicable, cooperated in
the drafting and preparation of this Agreement and the documents referred to
herein, and any and all drafts relating thereto shall be deemed the work product
of the parties and may not be construed against either party by reason of its
preparation. Accordingly, any rule of law or any legal decision that would
require interpretation of any ambiguities in this Agreement against the party
that drafted it is of no application and is hereby expressly waived. The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intentions of the parties and this Agreement.
[SIGNATURE PAGE FOLLOWS]
Page 10
IN WITNESS WHEREOF, Stockholder and Wiederhorn have executed this Put/Call
Option and Voting Agreement, each as of the day and year first written above.
WIEDERHORN:
By: /S/ ANDREW A. WIEDERHORN
--------------------------------
Name: Andrew A. Wiederhorn
STOCKHOLDER:
COBALT CAPITAL MANAGEMENT INC.,
a Delaware corporation
By: /S/ WAYNE COOPERMAN
--------------------------------
Name: Wayne Cooperman
Title: President
Page 11
SCHEDULE 1
STOCKHOLDER
STOCKHOLDER SUBJECT SHARES
COBALT CAPITAL MANAGEMENT INC. 290,000
Wayne Cooperman, President
237 Park Avenue
New York, New York 10017
Telecopier no.: (212) 808-3737
Page 12
EXHIBIT A
NOTICE OF CALL OPTION EXERCISE
[Name and address of Stockholder]
Dear [Name]:
Reference is made to that certain Put/Call Option and Voting Agreement (the
"OPTION AGREEMENT") dated as of October 16, 2001, by and between you and Andrew
A. Wiederhorn ("Wiederhorn"). Capitalized terms used in this notice, but not
otherwise defined, will have the meanings assigned to such terms in the Option
Agreement.
1. EXERCISE OF OPTIONS. Wiederhorn hereby elects to exercise his option
to purchase all of the Call Option Shares at the Call Option Price Per
Share.
2. TENDER OF THE PURCHASED SHARES. You will cause the Call Option Shares
to be delivered to Wiederhorn at the Call Option Closing, which will
take place at [time and place].
3. TENDER OF PURCHASE PRICE. Wiederhorn will tender the Total Call Option
Price at the Call Option Closing.
IN WITNESS WHEREOF, Wiederhorn has caused this Call Option Exercise Notice
to be executed as of the ____ day of _________, 200__.
By: /S/ ANDREW A. WIEDERHORN
-------------------------------------
Name: Andrew Wiederhorn
Page 13
EXHIBIT 7
STOCK OPTION AND VOTING AGREEMENT
STOCK OPTION AND VOTING AGREEMENT, dated as of October 16, 2001 (this
"Agreement"), by and among Lawrence A. Mendelsohn, ("Mendelsohn"), an
individual, MFLP, L.P. ("MFLP"), RPM Capital, LLC ("RPM"), AIM Capital, LLC
("AIM"), S&S Investors, LLC ("SS"), and Joyce Mendelsohn (together with
Mendelsohn, MFLP, RPM, AIM and S&S, each, a "Stockholder"), each of whom is a
stockholder of Fog Cutter Capital Group Inc., a Maryland corporation (the
"Company"), Lawrence A Mendelsohn, as Agent for the Stockholders ("Agent"),
Andrew A. Wiederhorn, an individual, ("Grantor") and a stockholder of the
Company and Tiffany Wiederhorn ("Guarantor"), solely with respect to the payment
and guarantee obligations set forth in Sections 1(g) and 1(h) hereof.
WHEREAS, Stockholders are the owners of the shares (collectively, the
"Subject Shares") of common stock, par value $.0001 per share ("Company Common
Stock"), of the Company set forth on Schedule 1 hereto;
WHEREAS, Grantor wishes to direct the voting of the shares of the Subject
Shares at his discretion at any annual and special meetings of stockholders of
the Company and in written consents of stockholders in lieu of a meeting of
stockholders, and Stockholders are willing to so vote and to execute an
irrevocable proxy in favor of Grantor for such shares; and
WHEREAS, as a condition and inducement to each Stockholder's entry into
such voting arrangements and execution of the proxy contemplated thereby,
Stockholders have requested that Grantor agree, and Grantor has agreed, to grant
Stockholders the Put Option (as defined below) and to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, Stockholders, the Agent and Grantor agree
as follows:
1. PUT OPTION.
(a) EXERCISE PRICE. The price per share at which the Put Option shall be
exercisable (the "Option Price Per Share") shall equal eighty percent (80%) of
the book value per share of the Company as of the date (the "Evaluation Date")
at the end of the most recent calendar month preceding the delivery of the
Exercise Notice (as defined below). The book value per share of the Company on
the Evaluation Date shall be determined, on a date no later than ten (10)
business days after delivery of the Exercise Notice (the "Determination Date"),
subject to post-closing adjustment of the Option Price Per Share as set forth
herein, from the regular month-end balance sheet of the Company as of the
Evaluation Date. The Option Price Per Share (including any subsequent
adjustments thereof) shall be reduced by any dividends paid, or declared with a
record date, on each Purchased Share after the Evaluation Date but before the
Closing (as defined below).
(b) NUMBER OF OPTION SHARES. Subject to the terms and conditions set forth
in this Agreement, Grantor hereby grants to Stockholders the option (the "Put
Option") to require Grantor to purchase from time to time all or a portion of
the Subject Shares at the Option Price
Page 1
Per Share (such number of shares of Subject Shares as may be adjusted as
provided herein, the "Option Shares").
(c) EXERCISE PERIOD. Each Stockholder's right to require Grantor to
purchase the Option Shares will commence upon January 15, 2002 and will expire
on the fifth anniversary of the date hereof (such period, the "Exercise
Period").
(d) AGENT FOR THE STOCKHOLDERS.
(i) Each Stockholder, hereby appoints Lawrence A. Mendelsohn as agent (the
"Agent") for such Stockholder, and the Agent hereby accepts such appointment, to
exercise the Put Option to receive the Option Price Per Share and to take all
other action on the behalf of or for the benefit of such Stockholder.
(ii) The Agent in such capacity shall not be liable to any of the
Stockholders for any action taken or omitted to be taken by the Agent in good
faith in reliance upon the advice of counsel, independent public accountants or
other experts selected by the Agent, and the Agent in such capacity shall be
entitled to rely upon any notice, consent, certificate, statement or other
document (including any telegram, cable, telex, facsimile or telephone
transmission) believed by it to be genuine and correct and to have been signed
and/or sent by a proper individual, corporation, partnership, limited liability
company, trust, incorporated or unincorporated association, joint venture, joint
stock company, government (or any agency or political subdivision thereof) or
other entity of any kind (hereinafter, "Person").
(e) EXERCISE OF PUT OPTION. At any time during the Exercise Period, Agent
may exercise the Put Option to require Grantor to purchase any number of Option
Shares (such number of Option Shares specified in an Exercise Notice as being
purchased, the "Purchased Shares") by delivering to Grantor a written notice in
substantially the form attached hereto as Exhibit A (the "Exercise Notice"). In
the event that an Exercise Notice is delivered, the Put Option shall lapse with
respect to any Option Shares not specified as Purchased Shares in such Exercise
Notice. Agent shall give each Stockholder reasonable notice of the intent by
other Stockholders to deliver any Exercise Notice, and opportunity for each
Stockholder to exercise the Put Option with respect to its Option Shares by
inclusion in the Exercise Notice.
(f) Stockholders shall not be under any obligation to exercise the Put
Option, and may allow the Put Option to terminate without selling any Option
Shares hereunder to Grantor.
(g) CLOSING. The closing for the purchase and sale of the Purchased Shares
(the "Closing") shall occur as promptly as practicable, and in any event no
later than thirty (30) days after the Determination Date, or such later date as
the parties hereto may agree. Each Stockholder will cause to be executed and
delivered to Grantor a stock certificate or certificates representing such
Stockholder's pro rata number of the Purchased Shares, duly endorsed for
transfer or accompanied by duly executed (and, if required, guaranteed) stock
powers. Purchased certificates representing the Purchased Shares shall be free
and clear of all liens, claims, charges and encumbrances of any kind whatsoever.
Grantor shall, against delivery of the Purchased Shares, pay to Agent for the
benefit of each Stockholder an amount equal to the product of the
Page 2
number of such Stockholder's Purchased Shares and Option Price Per Share (such
Stockholder's "Total Option Price"), of which one-third of the Total Option
Price for each Stockholder that has exercised the Put Option shall be paid in
immediately available funds (the "Cash Portion of the Option Price") by wire
transfer to such account as Agent shall direct in writing at least two business
days prior to the Closing; Grantor shall deliver to Agent a note in the form
attached hereto as Exhibit B (each, a "Note") in the name of each selling
Stockholder in the principal amount of the remaining two-thirds of the Total
Option Price for such Stockholder's Purchased Shares. The Note(s) shall be joint
and several obligations of Grantor and Guarantor, for good and valuable
consideration, the receipt and sufficiency of which are herein acknowledged.
(h) GUARANTEE; PLEDGE. (i) Guarantor hereby unconditionally and
irrevocably guarantees to each of the Stockholders the full and prompt payment
when due of the Cash Portion of the Option Price to such Stockholder; (ii) The
performance of the obligations of Grantor and Guarantor under each Note shall be
secured by a pledge agreement, in form and substance reasonably acceptable to
Agent, pledging to the Agent two-thirds of the Purchased Shares purchased from
the relevant Stockholder.
(i) POST-CLOSING ADJUSTMENT OF OPTION PRICE.
(i) If the Evaluation Date falls on a month that ends a fiscal quarter, a
revised Option Price Per Share shall be determined from the financial statements
of the Company as set forth in the Company's reports on Form 10-K or Form 10-Q
under the Securities Exchange Act of 1934, as Amended (the "Exchange Act") for
the period ending on the Evaluation Date, no later than three (3) business days
after the public filing of such form.
(ii) Subsection 1(i)(i) above notwithstanding, if reasonably requested by
Grantor or by the Agent on behalf of the Stockholders, a revised Option Price
Per Share shall be determined from a special audit (the "Special Audit") of the
assets and liabilities of the Company conducted in accordance with generally
accepted accounting principles in the United States consistently applied
substantially in accordance with past practices by the independent auditors of
the Company or such other accounting firm as may be reasonably acceptable to
both Grantor and the Agent (the "Auditors"), such audit to be at Grantor's
expense, and the determination to be finalized promptly upon completion of the
Special Audit by the Auditors and approval thereof by the Grantor and Agent.
(iii) In the event that the Option Price Per Share is changed as a result
of the new determinations set forth in subsections 1(i)(i) or 1(i)(ii) above,
the principal amount outstanding under each Note shall be adjusted to equal (a)
the product of the revised Option Price Per Share multiplied by the number of
such Stockholder's Purchased Shares less (b) the Cash Portion of the Option
Price paid to such Stockholder. In the event that the Option Price Per Share
increases by more than five percent (5%), then one third of such increase will
be paid in cash within ten days of the determination of the revised Option Price
Per Share, and the remaining two thirds of such increase will be reflected as
the revised Option Price Per Share pursuant to the first sentence of this
paragraph. Any cash payments described in the preceding sentence are subject to
the obligations set forth in Section 1(h).
Page 3
2. VOTING OF THE SUBJECT SHARES; PROXY.
(a) Each Stockholder agrees, during the term of this Agreement:
(i) to vote its Subject Shares on all matters as to which such Stockholder
is entitled to vote at any meeting of the stockholders of the Company,
including, without limitation, with respect to the election of directors, in the
manner specified in writing by Grantor (which notice shall be delivered on or
prior to the date on which such votes, consents or dissents are to be cast),
which manner shall be determined in Grantor's absolute, sole and binding
discretion; and
(ii) to express consent or dissent to corporate action in writing, without
a meeting, on all of its Subject Shares in the manner specified in writing by
Grantor (which notice shall be delivered on or prior to the date on which such
votes, consents or dissents are to be cast), which manner shall be determined in
Grantor's absolute, sole and binding discretion.
(b) Each Stockholder hereby irrevocably grants to and appoints Andrew A.
Wiederhorn, with full power of substitution (such individual and his substitutes
each being referred to herein as the "Proxy"), as attorneys and proxies to vote
all of such Stockholder's Subject Shares on all matters as to which such
Stockholder is entitled to vote at a meeting of the stockholders of the Company
or to which such Stockholder is entitled to express consent or dissent to
corporate action in writing without a meeting, in the Proxy's absolute, sole and
binding discretion. Each Stockholder agrees that the Proxy may, in such
Stockholder's name and stead, (i) attend any annual or special meeting of the
stockholders of the Company and vote all of such Stockholder's Subject Shares at
any such annual or special meeting, and (ii) execute with respect to all of such
Stockholder's Subject Shares any written consent to, or dissent from, corporate
action respecting any matter to which the stockholders of the Company are
entitled to express such consent or dissent without a meeting. Each Stockholder
agrees to refrain from (a) voting at any annual or special meeting of the
stockholders of the Company, (b) executing any written consent in lieu of a
meeting of the stockholders of the Company, (c) exercising any rights of dissent
with respect to such Stockholder's Subject Shares, (d) granting any proxy or
authorization to any Person (other than the Proxy) with respect to the voting of
such Stockholder's Subject Shares, and (e) taking any action contrary to or in
any manner inconsistent with the terms of this Agreement. Each Stockholder
agrees that the Persons designated as the Proxy pursuant hereto may at any time,
pursuant to an assignment of this Agreement permitted by Section 9(i) hereof,
name any such other Person to whom this Agreement is so assigned, or such
Person's designee (assignment to such a designee being subject to the approval
of Agent, such approval not to be unreasonably withheld), as their substituted
Proxy to act pursuant hereto as to all matters. Except as set forth in the
preceding sentence, Grantor shall not appoint any other person as Proxy without
the prior written consent of Agent, such consent to be granted in Agent's sole
and absolute discretion. Each Stockholder further agrees to execute all
additional writings, consents and authorizations as may be reasonably requested
by the Proxy to evidence the powers granted to the Proxy hereby or to enable the
Proxy to exercise those powers. In discharging his, her or its powers under this
Agreement, the Proxy may rely upon the advice of counsel (which may be Grantor's
counsel), and any vote made or action taken by the Proxy in reliance upon such
advice of counsel shall be deemed to have been made in good faith by the Proxy.
Page 4
(c) Each Stockholder represents that any proxies given prior to this
Agreement regarding any Company Common Stock held by such Stockholder are
revocable, and Stockholder covenants to revoke any such proxies.
(d) Each Stockholder affirms that the irrevocable proxy set forth in this
Section 2 is given in connection with the Put Option. Each Stockholder further
affirms that such irrevocable proxy is coupled with an interest and may under no
circumstances be revoked. Each Stockholder ratifies and confirms all actions
that the Proxy may lawfully take or cause to be taken by virtue hereof.
3. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Each Stockholder, hereby
represents and warrants, severally and not jointly, to Grantor as follows:
(a) OWNERSHIP. Such Stockholder beneficially owns the shares of Company
Common Stock set forth opposite such Stockholder's name on Schedule 1 hereto.
(b) DUE AUTHORIZATION. Such Stockholder has all necessary power and
authority (or, if an individual) capacity, to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. Such Stockholder
beneficially owns all of the Subject Shares set forth opposite such
Stockholder's name on Schedule 1 hereto with no contractual restrictions on such
Stockholder's voting rights or rights of disposition pertaining thereto; such
Subject Shares constitute all shares of Company Common Stock beneficially owned
by such Stockholder, and upon exercise of the Put Option, such Stockholder will
deliver good and marketable title to the Option Shares free and clear of liens,
claims, encumbrances or rights or interests, other than liens, claims,
encumbrances or rights in favor of Grantor. Assuming this Agreement has been
duly and validly authorized, executed and delivered by Grantor, and assuming
that this Agreement constitutes a valid and binding agreement of Grantor, this
Agreement constitutes a valid and binding agreement of such Stockholder,
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting
creditors' rights generally or by the principles governing the availability of
equitable remedies.
(c) NO CONFLICTS. Neither the execution and delivery of this Agreement,
nor the consummation by any Stockholder of the transactions contemplated hereby,
will conflict with or constitute a violation of or default under any contract,
commitment, agreement, arrangement or restriction of any kind to which such
Stockholder is a party or by which such Stockholder is bound.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF GRANTOR. Grantor hereby
represents, warrants and covenants to each Stockholder as follows:
(a) DUE AUTHORIZATION. Grantor has the requisite capacity to enter into
and perform this Agreement. Assuming this Agreement has been duly and validly
authorized, executed and delivered by each Stockholder, and assuming that this
Agreement constitutes a valid and binding agreement of each Stockholder, this
Agreement constitutes a valid and binding agreement of Grantor, enforceable
against Grantor in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar laws
Page 5
affecting creditors' rights generally or by the principles governing the
availability of equitable remedies.
(b) NO CONFLICTS. Neither the execution and delivery of this Agreement,
nor the consummation by Grantor of the transactions contemplated hereby, will
conflict with or constitute a violation of or default under any contract,
commitment, agreement, arrangement or restriction of any kind to which Grantor
is a party or by which Grantor is bound.
(c) ACCREDITED INVESTOR. Grantor either (i) has an individual net worth
(or joint net worth with such person's spouse) in excess of $1,000,000, (ii) had
an individual income in excess of $200,000 in each of the two most recent years
and who reasonably expects to have an individual income in excess of $200,000 in
the current year, or (iii) had joint income, including any income attributable
to his spouse or to property owned by his spouse, in excess of $300,000 in each
of the two most recent years and who reasonably expects to have such joint
income in excess of $300,000 in the current year.
(d) GOVERNMENTAL FILINGS. Grantor, Agent and Stockholders shall cooperate
in making all required filings (and amendments thereto) with the Securities and
Exchange Commission and other governmental authorities as a result of this
Agreement that are to be filed by or with respect to both Grantor and one or
more of Agent or the Stockholders, including but not limited to any filing
required by Section 13 of the Securities Exchange Act of 1934, as amended, and
the rules or regulations promulgated thereunder (any "Section 13 Filing").
Grantor shall prepare at its own expense a draft of any Section 13 Filing
listing Grantor and one or more of Agent or the Stockholders, shall provide such
draft to Agent with a reasonable opportunity to review and comment and shall
include therein any information reasonably requested to be included therein by
Agent in the form provided. Grantor shall not make any Section 13 Filing until
Agent approves of the information concerning the Stockholders contained therein,
unless and until required to meet applicable filing deadlines. Grantor shall pay
any filing fee with respect to such Section 13 Filings. Each party hereto shall
bear their own costs, including fees and expenses of counsel, with respect to
all filings. Notwithstanding anything in this Section 4(d), Grantor shall be
solely responsible for preparing and filing amendments to any Section 13 Filing
dated before the date hereof and naming Grantor, and no Stockholder, as a
reporting person.
(e) VOTING MATTERS. Grantor hereby acknowledges that it is seeking from
certain third parties the power to vote shares of Company Common Stock. Grantor
hereby agrees that during the term of this Agreement, so long as Mendelsohn is
an employee of the Company, and in any event until the latest annual meeting of
the stockholders of the Company that occurs on or before April 30, 2003: (i) at
each election of directors of the Company (whether by annual or special meetings
of stockholders, written consents of stockholders in lieu of a meeting or
otherwise) Grantor shall vote all shares of Common Stock to which it has voting
rights, including but not limited to the Subject Shares and any shares of Common
Stock to which it has voting rights, pursuant to proxies, agreements,
understandings or arrangements with third parties, to nominate and appoint
Mendelsohn as a director of the Company; (ii) it will not in any way transfer,
rescind, revoke, amend or vote such proxies or act in any manner inconsistent
with the provisions of this Section 4(e). Grantor covenants not to enter into
any other voting agreement with respect the Subject Shares that is inconsistent
with this Section 4(e).
Page 6
5. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in the outstanding shares of Company Common
Stock by reason of a stock dividend, stock split, split-up, recapitalization,
combination, exchange of shares or similar transaction, the type and number of
Subject Shares, and the Option Price Per Share therefor, shall be adjusted
appropriately.
(b) In the event that the Company shall (i) enter into an agreement to
consolidate with or merge into any Person, other than one of its subsidiaries or
affiliates, and shall not be the continuing or surviving corporation of such
consolidation or merger, or (ii) enter into an agreement to permit any Person,
other than Grantor or one of its subsidiaries or affiliates, to merge into the
Company and the Company shall be the continuing or surviving corporation, but,
in connection with such merger, the then outstanding shares of Company Common
Stock shall be changed into or exchanged for stock or other securities of the
Company or any other Person or cash or any other property or (iii) liquidate,
then, and in each such case, Grantor shall thereafter be entitled to receive
upon exercise of the Put Option the securities or properties to which a holder
of the number of the Subject Shares or the Option Shares then deliverable upon
the exercise thereof will be entitled to receive upon such consolidation, merger
or liquidation, and Stockholder and Grantor shall use their best efforts to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be practicable, in relation to any securities or property
thereafter deliverable upon exercise of the Put Option.
6. TERMINATION. This Agreement, and all rights and obligations of the
parties hereunder (excluding any obligations of the parties under the Notes),
shall terminate immediately upon the earliest to occur of (i) January 15, 2002,
if on or prior to such date all of the directors of the Company shall not have
been elected in an election in which Grantor voted for at least a majority of
the directors elected, (ii) termination of the Exercise Period, or (iii) the
Closing date for the Put Option.
7. TRANSFER OF THE SHARES.
(a) Prior to the termination of this Agreement, except as otherwise
provided herein, no Stockholder shall, and the Agent shall not for any
Stockholder: (i) transfer, sell, gift-over, pledge or otherwise dispose of, or
consent to any of the foregoing ("Transfer"), any or all of the Subject Shares
or any interest therein; (ii) enter into any contract, option or other agreement
or understanding with respect to any Transfer; (iii) grant any proxy,
power-of-attorney or other authorization or consent with respect to any of the
Subject Shares; (iv) deposit any of the Subject Shares into a voting trust, or
enter into a voting agreement or arrangement with respect to any of the Subject
Shares; or (v) take any other action that would in any way restrict, limit or
interfere with the performance of such Stockholder's obligations hereunder or
the transactions contemplated hereby.
(b) Notwithstanding Subsection (a) above, a Stockholder may make transfers
of Subject Shares to the spouse or lineal descendants of such Stockholder, to
any trust for the benefit of such holder or the benefit of the spouse and/or
lineal descendants of such Stockholder, to any corporation, partnership, limited
liability company or other entity in which such Stockholder, the spouse and/or
the lineal descendants of such Stockholder are the direct and
Page 7
beneficial owners of all of the equity interests for estate planning purposes
(provided that Stockholder, spouse and/or descendants agree in writing to remain
the beneficial owners of all such interests), or to the personal representative
of such Stockholder upon such Stockholder's death for purposes of administration
of such Stockholder's estate or upon such holder's incompetency for purposes of
the protection and management of the assets of such Stockholder; PROVIDED that
any such transferee shall, prior to such transfer, consent in a writing
delivered to Grantor to be bound by this Agreement and deliver to Grantor an
irrevocable power of attorney with respect to the transferred Subject Shares.
(c) Each Stockholder agrees to cause to be placed on any and all certificates
evidencing such Stockholder's Subject Shares the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO A VOTING AGREEMENT, INCLUDING AN IRREVOCABLE PROXY, AND
CERTAIN RESTRICTIONS ON TRANSFER, PURSUANT TO THAT CERTAIN STOCK
OPTION AND VOTING AGREEMENT, DATED AS OF OCTOBER 16, 2001, BY AND
AMONG ANDREW A. WIEDERHORN, TIFFANY WIEDERHORN, LAWRENCE A.
MENDELSOHN, MFLP, RPM CAPITAL, LLC, AIM CAPITAL, LLC, S&S INVESTORS,
LLC AND JOYCE MENDELSOHN.
8. NO SOLICITATION. No Stockholder shall, nor shall it permit any of its
subsidiaries or any of its affiliates to, nor shall it authorize or permit any
agent, officer, director or employee of, or any investment banker, attorney or
other advisor or representative of, any Stockholder or any of their subsidiaries
or any of such Stockholder's affiliates to, directly or indirectly, solicit,
initiate, or encourage any inquiries or proposals from, discuss or negotiate
with, or provide any non-public information to, any Person (other than Grantor)
relating to any transaction involving the sale of any of the assets of the
Company, or any of the capital stock of the Company, or any merger,
consolidation, business combination, or similar transaction involving the
Company or any of its subsidiaries.
9. MISCELLANEOUS.
(a) STOCKHOLDER CAPACITY. None of the parties to this Agreement shall be
deemed to have made any agreement or understanding in his or her capacity as a
director or officer of the Company and no action taken by any of the parties in
his or her capacity as a director or officer of the Company shall be deemed a
breach of this Agreement. Each of the parties executes this Agreement solely in
his or her capacity as the beneficial owner, where applicable, of Company Common
Stock.
(b) EXPENSES. Except as otherwise expressly provided herein, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder, including
fees and expenses of its own financial consultants, investment bankers,
accountants and counsel.
(c) WAIVER AND AMENDMENT. Any provision of this Agreement may be waived at
any time by the party that is entitled to the benefits of such provision. This
Agreement
Page 8
may not be modified, amended, altered or supplemented except upon the execution
and delivery of a written agreement executed by Grantor and Agent.
(d) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY; SEVERABILITY. This
Agreement (i) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and (ii) is not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder. If any
term or provision of this Agreement is held by a court of competent jurisdiction
or a federal or state regulatory agency to be invalid, void or unenforceable,
the remainder of the terms or provisions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. If
for any reason such court or regulatory agency determines that the Put Option
does not permit each Stockholder to sell the full number of shares of Company
Common Stock as provided in Section 1(b) (as adjusted pursuant to Section 1(b)),
it is the express intention of Grantor to allow each Stockholder to sell such
lesser number of shares as may be permissible without any amendment or
modification hereof.
(e) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with laws of the State of Maryland.
(f) HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(g) NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopies (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to a Stockholder to:
The address set forth under such Stockholder's name on
Schedule 1 hereto.
If to Grantor, to:
Andrew A. Wiederhorn
c/o Fog Cutter Capital Group Inc.
1410 S.W. Jefferson Street
Portland, Oregon 97201
Telecopier no.: (503) 553-7401
with a copy to:
V. Joseph Stubbs, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
2029 Century Park East, Suite 2400
Los Angeles, California 90067
Telecopier no.: (310) 229-1001
Page 9
If to Agent, to:
Lawrence A. Mendelsohn, as Agent
c/o James L. Sanders, Esq. and Mark J. Mihanovic, Esq.
McDermott, Will & Emery
2049 Century Park East, 34th Floor
Los Angeles, California 90067-3208
Telecopier no.: (310) 277-4730
with a copy to:
Linda Johannsen, Esq.
Preston, Gates & Ellis, LLP
222 S.W. Columbia Street
Suite 1400
Portland, Oregon 97201-6632
Telecopier no.: (503) 248-9085
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
(i) ASSIGNMENT; DELEGATION. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties except that: (i) the rights of Grantor under this
agreement may be assigned to the spouse or lineal descendants of Grantor, to any
trust for the benefit of Grantor or the benefit of the spouse and/or lineal
descendants of Grantor, to any corporation, partnership, limited liability
company or other entity in which Grantor, the spouse and/or the lineal
descendants of Grantor are the direct and beneficial owners of all of the equity
interests for estate planning purposes (provided that Grantor, spouse and/or
descendants agree in writing to remain the beneficial owners of all such
interests), or to the personal representative of Grantor upon such Grantor's
death for purposes of administration of Grantor's estate or upon such Grantor's
incompetency for purposes of the protection and management of the assets of
Grantor; provided that any such assignee shall, prior to such transfer, consent
in a writing delivered to Agent to be bound by this Agreement; and (ii) the
obligations of Grantor under Section 1 hereto may be delegated to the Company to
the extent that such obligations are permitted to be delegated to the Company
pursuant to applicable law. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their respective
permitted successors, assigns, heirs, executors, administrators and other legal
representatives.
(j) FURTHER ASSURANCES. Each Stockholder, the Agent and Grantor shall
execute and deliver all other documents and instruments and take all other
action that may be reasonably necessary in connection with the matters provided
for hereby.
(k) SPECIFIC PERFORMANCE. The parties acknowledge that it would be
impossible to fix money damages for violations of this Agreement and that such
violations will
Page 10
cause irreparable injury for which adequate remedy at law is not available and,
therefore, this Agreement must be enforced by specific performance or injunctive
relief. The parties hereto agree that any party may, in its sole discretion,
apply to any court of competent jurisdiction for specific performance or
injunctive or such other relief as such court may deem just and proper in order
to enforce this Agreement or prevent any violation hereof and, to the extent
permitted by applicable law, each party waives any objection or defense to the
imposition of such relief. Nothing herein shall be construed to prohibit any
party from bringing any action for damages in addition to an action for specific
performance or an injunction for a breach of this Agreement.
(l) SURVIVAL. The representations, warranties, covenants and agreements in
this Agreement (other than the obligations of the parties under the Notes) shall
terminate upon termination of this Agreement.
(m) INDEPENDENT COUNSEL. Each of the parties acknowledges that it has been
represented, or has had the opportunity to be represented, by independent
counsel of such party's choice throughout all negotiations that have preceded
the execution of this Agreement and that, to the extent applicable to such
party, has executed the same with consent and upon the advice of said
independent counsel. Each party and its counsel, as applicable, cooperated in
the drafting and preparation of this Agreement and the documents referred to
herein, and any and all drafts relating thereto shall be deemed the work product
of the parties and may not be construed against any party by reason of its
preparation. Accordingly, any rule of law or any legal decision that would
require interpretation of any ambiguities in this Agreement against the party
that drafted it is of no application and is hereby expressly waived. The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intentions of the parties and this Agreement.
[SIGNATURE PAGE FOLLOWS]
Page 11
IN WITNESS WHEREOF, Stockholders, Agent, Grantor and Guarantor have
executed this Stock Option and Voting Agreement all as of the day and year first
written above.
GRANTOR:
/S/ ANDREW A. WIEDERHORN
---------------------------------------
Andrew A. Wiederhorn
GUARANTOR:
/S/ TIFFANY WIEDERHORN
---------------------------------------
Tiffany Wiederhorn, solely with respect
to the obligations set forth in Sections
1(g) and 1(h)
STOCKHOLDERS:
/S/ LAWRENCE A. MENDELSOHN
---------------------------------------
Lawrence A. Mendelsohn
/S/ LAWRENCE A. MENDELSOHN
---------------------------------------
Joyce Mendelsohn,
by Lawrence A. Mendelsohn as
Attorney-in-Fact
S&S Investors, LLC
By: /S/ LAWRENCE A. MENDELSOHN
------------------------------------
Name: Eric Shuhandler
Title: Managing Member,
by Lawrence A. Mendelsohn as
Attorney-in-Fact
Page 12
MFLP, L.P.
By: /S/ LAWRENCE A. MENDELSOHN
------------------------------------
Name: Lawrence A. Mendelsohn
Title: General Partner
RPM Capital, LLC
By: /S/ LAWRENCE A. MENDELSOHN
------------------------------------
Name: Joyce Mendelsohn
Title: Managing Member,
by Lawrence A. Mendelsohn as
Attorney-in-Fact
AIM Capital, LLC
By: /S/ LAWRENCE A. MENDELSOHN
------------------------------------
Name: Joyce Mendelsohn
Title: Managing Member,
by Lawrence A. Mendelsohn as
Attorney-in-Fact
AGENT:
/S/ LAWRENCE A. MENDELSOHN
---------------------------------------
Lawrence A. Mendelsohn, as Agent
Page 13
SCHEDULE 1
STOCKHOLDERS
STOCKHOLDER SUBJECT SHARES
Lawrence A. Mendelsohn 25,000
c/o James L. Sanders, Esq. and Mark J. Mihanovic, Esq.
McDermott, Will & Emery
2049 Century Park East, 34th Floor
Los Angeles, California 90067-3208
Telecopier no.: 310-277-4730
Joyce Mendelsohn 17,158
c/o Linda Johannsen, Esq.
Preston, Gates & Ellis, LLP
222 S.W. Columbia Street
Suite 1400
Portland, Oregon 97201-6632
Telecopier no.: (503) 248-9085
S&S Investors, LLC 519,500
Linda Johannsen, Esq.
Preston, Gates & Ellis, LLP
222 S.W. Columbia Street
Suite 1400
Portland, Oregon 97201-6632
Telecopier no.: (503) 248-9085
MFLP, L.P. 80,000
Linda Johannsen, Esq.
Preston, Gates & Ellis, LLP
222 S.W. Columbia Street
Suite 1400
Portland, Oregon 97201-6632
Telecopier no.: (503) 248-9085
Page 14
RPM Capital, LLC 252,301
Linda Johannsen, Esq.
Preston, Gates & Ellis, LLP
222 S.W. Columbia Street
Suite 1400
Portland, Oregon 97201-6632
Telecopier no.: (503) 248-9085
AIM Capital, LLC 150,801
Linda Johannsen, Esq.
Preston, Gates & Ellis, LLP
222 S.W. Columbia Street
Suite 1400
Portland, Oregon 97201-6632
Telecopier no.: (503) 248-9085
Page 15
EXHIBIT A
NOTICE OF EXERCISE
Andrew Wiederhorn
[Address]
[Address]
Dear ____________:
Reference is made to that certain Stock Option and Voting Agreement (the
"OPTION AGREEMENT"), dated as of October [16], 2001, by and among Andrew A.
Wiederhorn, Tiffany Wiederhorn, Lawrence A. Mendelsohn, MFLP, RPM Capital, LLC,
AIM Capital, LLC, S&S Investors, LLC and Joyce Mendelsohn. Capitalized terms
used in this notice, but not otherwise defined, will have the meanings assigned
to such terms in the Option Agreement.
1. EXERCISE OF OPTIONS. Agent, on behalf of the Stockholders, hereby
elects to exercise its option to require Grantor to purchase _______ Option
Shares (such shares, the "PURCHASED SHARES") at the Option Price Per Share.
2. TENDER OF SHARES. Agent, on behalf of the several Stockholders, will
cause the Purchased Shares to be delivered to Grantor at the Closing.
3. TENDER OF PURCHASE PRICE. The Total Option Price will be determined,
and Grantor will tender the Total Option Price, in the manner provided in
SECTION 1(G) of the Option Agreement.
IN WITNESS WHEREOF, Agent, on behalf of each Stockholder, has caused this
Notice of Exercise to be executed as of the ____ day of _________, 200__.
--------------------
as Agent for the Stockholders
By:
---------------------------------------------
Name:
Title:
Page 16
EXHIBIT B
FORM OF
PROMISSORY NOTE
$-------
[City], [State]
______, 200_
PROMISSORY NOTE, (this "NOTE"), by and between Andrew A. Wiederhorn and
Tiffany Wiederhorn, jointly and severally (each an "OBLIGOR" and together, the
"OBLIGORS") and _____________("STOCKHOLDER") or assigns.
WHEREAS, Stockholder is the owner of the shares of common stock, par value
$.0001 per share, of Fog Cutter Capital Group, Inc., a Maryland corporation (the
"Company");
WHEREAS, Stockholder, Andrew A. Wiederhorn ("GRANTOR") and certain other
owners of stock of the Company are parties to that certain Stock Option and
Voting Agreement (the "Voting Agreement") dated as of October 16, 2001 wherein,
as a condition and inducement to Stockholder's entry into such voting
arrangements and execution of the proxy contemplated thereby, Grantor granted
Stockholder the Put Option (as defined in the Voting Agreement);
WHEREAS, pursuant to Section 1(g) of the Voting Agreement, Grantor has
agreed to deliver this Note, in the principal reflected herein as payment for
two-thirds of the Total Option Price (as defined in the Voting Agreement) for
Stockholder's Subject Shares in the name of the Stockholder.
NOW, THEREFORE, the Obligors do hereby promise to pay to the order of
Stockholder or assigns, at such place as Stockholder shall designate, the
principal sum of $______ in lawful money of the United States of America,
according to the terms and subject to the conditions set forth in this Note,
subject to adjustment as set forth in Section 1(i) of the Voting Agreement.
1. INTEREST.
This Note shall not bear any interest until a date ninety (90) days after
the date hereof; from and after that date, the unpaid principal balance of this
Note shall bear interest at the rate of Twelve Per Cent (12%) per annum, such
interest to be computed on the basis of a 360 day year and actual days elapsed
from such date. Interest shall accrue and be payable monthly until the Maturity
Date (as defined below).
Page 1
2. PAYMENT SCHEDULE.
(a) All outstanding principal and accrued interest thereon, shall be due
and payable on the date that is the same day of the month eleven months after
the date of this Note (the "MATURITY DATE"), PROVIDED that if the Maturity Date
does not fall on a day that is a day on which banks in New York City, New York
are open to receive wire transfers (a "Business Day"), the Maturity Date shall
be the next Business Day.
3. PREPAYMENT.
(b) All payments shall be first applied to interest and the balance to the
principal. The Obligors may, at their option, at any time and from time to time,
prepay all or any part of the balance of this Note, without penalty or premium.
4. EVENTS OF DEFAULT.
(a) EVENTS OF DEFAULT. The occurrence of any of the following events or
conditions shall constitute an event of default (an "EVENT OF DEFAULT") with
respect to the Obligors under this Note: (i) any amounts due under this Note,
whether principal, interest or otherwise, are not paid when due; (ii) any
involuntary petition is filed against the Obligors seeking to subject the
Obligors to any bankruptcy, insolvency or similar laws and such petition shall
remain unstayed or not be withdrawn within 30 days thereafter; (iii) the
Obligors (a) are unable to, or admit in writing their inability to pay such
debts belonging to such Obligors as they mature; (b) make a general assignment
for the benefit of creditors; (c) file a voluntary petition in bankruptcy or a
petition or an answer seeking reorganization or an arrangement for the benefit
of creditors or take advantage of any insolvency law in its capacity as a
debtor; (d) take any action that would have the effect of dissolving the
Obligors; or (e) take any action for the purpose of effecting any of the
foregoing.
(b) REMEDIES. At any time upon the occurrence of, and/or any time after, an
Event of Default until such time as the Event of Default is cured and no longer
existing: (i) Stockholder may without any demand, presentment, protest or other
notice to the Obligors, or other statutory right or other rights of redemption,
or any other action by the Stockholder, all of which are hereby expressly waived
by the Obligors, declare the entire amount of this Note, and all interest
accrued thereon, immediately due and payable; and (ii) the Obligors will pay to
Stockholder upon demand all costs and expenses (including, without limitation,
attorneys' fees and expenses) incurred by Stockholder in connection with the
collection, realization and enforcement of this Note. It is expressly understood
and agreed that Stockholder may pursue either Obligor, or both, in the Event of
Default.
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5. MISCELLANEOUS.
(a) WAIVER. Failure or delay on the part of Stockholder to enforce any
provision of this Note shall not be deemed a waiver of any such provision, nor
shall Stockholder be estopped from enforcing any such provision at a later time.
(b) MODIFICATION. This Note may not be changed, modified or terminated
orally, but only by an agreement in writing signed by both parties.
(c) BINDING AGREEMENT. The Obligors and all other parties to this Note,
whether as endorsers, guarantors, sureties or otherwise, severally agree to
remain fully bound until this Note shall be fully paid and waive demand,
presentment, notice of dishonor, notice of acceleration of the maturity hereof,
diligence in collection, grace period, notice period, the right to plead any
statute of limitations as a defense to any demand hereunder and right of protest
and consent to all extensions which from time to time may be granted by the
Stockholder.
(d) GOVERNING LAW. This Note shall be governed by, and construed in
accordance with, the laws of the State of Maryland.
[Signatures appear on next page]
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IN WITNESS WHEREOF, each Obligor has caused this Note to be executed as of
the day and year first above written.
OBLIGORS:
-----------------------------------
Andrew A. Wiederhorn
-----------------------------------
Tiffany Wiederhorn
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