Check the appropriate
box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (
see
General Instruction A.2. below):
GARNERO GROUP ACQUISITION COMPANY (“GGAC”) INTENDS TO
HOLD PRESENTATIONS FOR CERTAIN OF ITS SHAREHOLDERS, AS WELL AS OTHER PERSONS WHO MIGHT BE INTERESTED IN PURCHASING GGAC SECURITIES,
REGARDING ITS BUSINESS COMBINATION WITH Q1 COMERCIAL DE ROUPAS S.A. (THE “COMPANY”), AS DESCRIBED IN THE CURRENT REPORTS
ON FORM 8-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 27, 2015 AND DECEMBER 21, 2015. THIS CURRENT REPORT ON
FORM 8-K, INCLUDING THE EXHIBIT ATTACHED HERETO, MAY BE DISTRIBUTED TO PARTICIPANTS AT SUCH PRESENTATIONS.
EARLYBIRDCAPITAL, INC. (“EBC”), THE MANAGING UNDERWRITER
OF GGAC’S INITIAL PUBLIC OFFERING (“IPO”) CONSUMMATED IN JULY 2014, IS ASSISTING GGAC IN THESE EFFORTS, FOR WHICH
EBC WILL RECEIVE A FEE OF US$4,600,000 IF THE BUSINESS COMBINATION IS SUCCESSFULLY CONSUMMATED. GGAC, ITS DIRECTORS AND EXECUTIVE
OFFICERS AND EBC MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES FOR THE EXTRAORDINARY GENERAL MEETING OF GGAC
SHAREHOLDERS TO BE HELD TO APPROVE THE BUSINESS COMBINATION.
Item 1.01
|
Entry into a Material Definitive Agreement.
|
On June 10, 2016, Garnero Group Acquisition Company,
a Cayman Islands exempted company (“
GGAC
”), entered into Amendment No.1 (the “
Amendment
”)
to the First Amended and Restated Investment Agreement (the “
Investment Agreement
”) by and among GGAC, Q1 Comercial
de Roupas S.A., a Brazilian company (the “
Company
”), Alvaro Jabur Maluf Junior and Paulo Jabur Maluf (the “
Controlling
Persons
”) and the persons listed under the caption “Optionholder” on the signature pages thereto (the “
Optionholders
”).
Except as the context otherwise requires, references to the “Investment Agreement” are to the Investment Agreement
as amended by the Amendment.
The Amendment was prompted in part by the Company’s
entry into its previously announced financial restructuring plan (the “
Debt Plan
”). Upon consummation of the
Debt Plan, the Company’s outstanding unsecured debt will be replaced by either discounted debt with extended payment terms,
equity, debentures or convertible debentures, at the option of each unsecured creditor. The debentures will earn a percentage of
the Company’s profits (or 0.5% simple interest per annum, if greater). The Debt Plan has been approved by approximately 64%
of the Company’s unsecured creditors and, upon confirmation by a Brazilian court, will be applicable to all of the Company’s
unsecured creditors. Under the terms of the Debt Plan, the transactions contemplated by the Investment Agreement must be approved
by 60% of the debenture holders, with silence constituting consent. Upon confirmation of the Debt Plan, Warley Pimentel will assume
the role as the new Chief Executive Officer of the Company; the current Chief Executive Officer, Alvaro Jabur Maluf Jr., will take
an advisory role to the senior management.
The Amendment effectuated the
following changes, among others, to the Investment Agreement:
|
●
|
The
Controlling Persons committed to purchase, directly or through other entities acting
at their direction, $10 million of GGAC ordinary shares in the public market. Under the
Investment Agreement as it existed prior to the Amendment, the Controlling Persons were
required to use their best efforts to purchase, directly or indirectly, $30 million of
GGAC ordinary shares in the public market.
|
|
|
|
|
●
|
The
outside date for completing the transactions contemplated by the Investment Agreement
was extended from March 31, 2016 to June 25, 2016 (or to July 22, 2016 if GGAC obtains
an extension of the date by which it must complete an initial business combination).
|
|
|
|
|
●
|
The
Company committed to obtain, or to use its commercially reasonable best efforts to obtain,
certain necessary consents and approvals, including the court approval of the Debt Plan,
certain necessary amendments to the Debt Plan and the consent of the debenture holders.
|
|
|
|
|
●
|
The
Company made certain additional representations and warranties concerning the Debt Plan.
|
|
|
|
|
●
|
GGAC’s
obligations under the Investment Agreement were made subject to the following additional
conditions: (i) the Company having obtained the consent of the debenture holders, and
(ii) the necessary amendments to the Debt Plan being in full force and effect.
|
|
|
|
|
●
|
The
Company agreed to pay certain fees and expenses incurred by GGAC if GGAC is required
to obtain an extension of the date by which it must complete an initial business combination.
|
|
|
|
|
●
|
Certain
other changes were made to reflect the terms of the Debt Plan.
|
Except as set forth above, the material terms
of the Investment Agreement and the other agreements to be entered into by the parties in connection with the business combination,
as described in the Current Reports on Form 8-K filed by GGAC on August 27, 2015 and December 21, 2015 (the “
Prior 8-Ks
”),
have not changed, and the description of such terms is incorporated herein by reference. The summaries of the Amendment, the Investment
Agreement and the other agreements to be entered into by the parties in connection with the business combination are qualified
in their entirety by reference to the text of the agreements, certain of which are attached as exhibits to this report or to the
Prior 8-Ks, and are incorporated herein by reference.
Item 7.01
|
Regulation FD Disclosure.
|
GGAC is furnishing the press release attached
hereto as Exhibit 99.1 as Regulation FD Disclosure material.
The information under this Item 7.01, including
the exhibits attached hereto, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), or otherwise subject to the liabilities
of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or
the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01
|
Financial Statements, Pro Forma Financial Information and Exhibits.
|
Exhibit
|
|
Description
|
2.1
|
|
Amendment No. 1 to First Amended and Restated Investment Agreement, dated as of June 10, 2016, by and among Garnero Group Acquisition Company, Q1 Comercial de Roupas S.A., Alvaro Jabur Maluf Junior and Paulo Jabur Maluf, and the optionholders listed on the signature page thereto.*
|
|
|
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99.1
|
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Press release.
|
* Certain exhibits and schedules to this Exhibit have
been omitted in accordance with Regulation S-K Item 601(b)(2). GGAC agrees to furnish supplementally a copy of all omitted exhibits
and schedules to the Securities and Exchange Commission upon its request.
SIGNATURE
Pursuant to the requirements
of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
GARNERO GROUP ACQUISITION COMPANY
|
|
|
|
Dated: June 15, 2016
|
By:
|
/s/ Mario Garnero
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Name: Mario Garnero
|
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|
Title:Chief Executive Officer
|
Exhibit 2.1
AMENDMENT NO. 1 TO
FIRST AMENDED AND RESTATED INVESTMENT
AGREEMENT
This Amendment No. 1 (this “
Amendment
”)
to the First Amended and Restated Investment Agreement (the “
Investment Agreement
”), is entered into as of June
10, 2016 by and among Garnero Group Acquisition Company, a Cayman Islands exempted company (“
GGAC
”), Q1 Comercial
de Roupas S.A., a Brazilian company (the “
Company
”), Alvaro Jabur Maluf Junior and Paulo Jabur Maluf (the “
Controlling
Persons
”) and the persons listed under the caption “Optionholder” on the signature pages hereto (the “
Optionholders
”).
Capitalized terms used in this Amendment and not otherwise defined herein shall have the meaning ascribed to such terms in the
Investment Agreement.
WHEREAS, the parties hereto entered
into the Investment Agreement on December 17, 2015, which agreement provides for, among other things, the Controlling Persons to
contribute and assign all of the Outstanding Shares to GGAC, free and clear of any Liens, in exchange for certain consideration
as described therein; and
WHEREAS, following the execution
of the Investment Agreement, the Company filed an extrajudicial reorganization plan on June 10, 2016, under Law No. 11101, of February
9, 2005, a copy of which plan is attached hereto as Exhibit A (the “
Debt Plan
”), and pursuant to which plan
the Company and its main creditors have agreed to restructure the Company’s outstanding debt in accordance with the terms
and conditions provided for in the Debt Plan; and
WHEREAS, as a result of the Debt
Plan, the parties desire to amend the Investment Agreement in accordance with Section 10.10 thereof.
NOW, THEREFORE, the parties hereto
hereby agree as follows:
1.
The Investment Agreement is hereby amended as follows:
(a) Section 1.2(a) of the Investment Agreement is hereby amended by replacing the first sentence in its entirety with the following:
“The closing of the
Contributions and the other transactions contemplated by this Agreement (“
Closing
”) shall take place at the
offices of Graubard Miller, the Chrysler Building, 405 Lexington Avenue, 11th Floor, New York, New York 10174, at 10:00 a.m., New
York City time, not later than the third (3
rd
) business day after the satisfaction or waiver of the conditions set forth
in Article VI (other than conditions that by their nature can only be satisfied or waived as of the Closing Date), but in any event
not later than the Termination Date (or the first business day prior thereto, in the event the Termination Date is a Saturday,
Sunday or holiday), or at such other time, date and location as the parties hereto agree in writing (the “
Closing Date
”).”
(b) Section 2.3(e) of the Investment Agreement is hereby amended by replacing it in its entirety with the following:
“(e) Except as
described in
Section 2.3(a)
hereof and except for the issuance of debt securities of the Company in accordance with the
Debt Plan and the issuance of GGAC Ordinary Shares in accordance with the Debt Plan or upon conversion of any debt securities issued
in accordance with the Debt Plan, no shares, warrants, options or other securities of the Company are issuable and no rights in
connection with any shares, warrants, options or other securities of the Company accelerate or otherwise become triggered (whether
as to vesting, exercisability, convertibility or otherwise) as a result of the consummation of the transactions contemplated hereby.”
(c) Section 2.5(b) of the Investment Agreement is hereby amended by replacing it in its entirety with the following:
“(b) The execution
and delivery of this Agreement by the Company does not, and the performance of its obligations hereunder will not, require any
consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity or other third party
(including, without limitation, lenders and lessors), except (i) for applicable requirements, if any, of the Securities Act, the
Exchange Act or Blue Sky Laws, and the rules and regulations thereunder, and appropriate documents received from or filed with
the relevant authorities of other jurisdictions in which the Company is licensed or qualified to do business, (ii) for the consents,
approvals, authorizations and permits described in Section 2.5 of the Company Schedule, (iii) for the approval of certain creditors
of the Company as required by the Debt Plan, and (iv) where the failure to obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company or prevent consummation of the Contributions or otherwise prevent the parties hereto from performing
their respective obligations under this Agreement.”
(d) Section 2.7 is hereby amended by inserting the following as new paragraphs (e), (f) and (g):
“(e) The Company
has provided to GGAC a correct and complete copy of the audited consolidated financial statements (including any related notes
thereto) of the Company for the fiscal years ended on December 31, 2015, 2014 and 2013 (the “
New Audited Financial Statements
”).
The New Audited Financial Statements and the audited consolidated financial statements (including related notes thereto) of the
Company included in the Proxy Statement were prepared in accordance with U.S. GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto), and each fairly presents in all material respects the financial
position of the Company at the respective dates thereof and the results of its operations and cash flows for the periods indicated.
“(f) The Company
has provided to GGAC a correct and complete copy of the unaudited consolidated financial statements (including any related notes
thereto) of the Company for the three month period ended March 31, 2016 (the “
New Unaudited Financial Statements
”
and together with the New Audited Financial Statements, the “
New Financial Statements
”). The New Unaudited Financial
Statements and the unaudited consolidated financial statements (including related notes thereto) of the Company included in the
Proxy Statement comply as to form in all material respects, and were prepared in accordance with U.S. GAAP applied on a consistent
basis throughout the period involved and in a manner consistent with the preparation of the New Audited Financial Statements, and
each fairly presents in all material respects the financial position of the Company at the date thereof and the results of its
operations and cash flows for the period indicated, except that such statements are subject to normal audit adjustments that are
not expected to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole and do not include all footnotes.
“(g) Except as
otherwise noted in the Financial Statements or the New Financial Statements, the accounts and notes receivable of the Company reflected
on the balance sheets included in the respective financial statements: (i) arose from bona fide sales transactions in the ordinary
course of business and are payable on ordinary trade terms, (ii) are legal, valid and binding obligations of the respective debtors
enforceable in accordance with their terms, except as such may be limited by bankruptcy, insolvency, reorganization, or other similar
laws affecting creditors’ rights generally, and by general equitable principles, (iii) are not subject to any valid set-off
or counterclaim except to the extent set forth in such balance sheet contained therein other than possible back charges which to
the Company’s knowledge do not exist at this time, which back charges, to the Company’s knowledge, either individually
or in the aggregate, would not reasonably be expected to have a Material Adverse Effect upon the Company and its Subsidiaries taken
as a whole, (iv) are collectible in the ordinary course of business consistent with past practice in the aggregate recorded amounts
thereof, net of any applicable reserve reflected in such balance sheet referenced above, and (v) are not the subject of any actions
or proceedings brought by or on behalf of the Company.”
(e) Section 2.9 of the Investment Agreement is hereby amended by inserting “, other than pursuant to the Debt Plan,” at
the end of clause (ix).
(f) The Investment Agreement is hereby amended by inserting the following as new Section 2.25 and renumbering the subsequent sections:
“2.25
Debt
Plan
. The Company has provided to GGAC a correct and complete copy the Debt Plan. The Debt Plan has been approved by all
necessary corporate action of the Company and its Subsidiaries and by the holders of at least 60% of the unsecured credits of the
Company, and has been filed with a court of competent jurisdiction. To the Company’s knowledge, the requirements for court
confirmation of the Debt Plan have been satisfied and there are no facts or circumstances that would prevent such court confirmation.
Upon court confirmation by such court, the Debt Plan will be enforceable against all unsecured creditors of the Company.
Section
2.25
of the Company Schedule sets forth the unsecured creditors of the Company who have signed an instrument of adhesion to
the Debt Plan. Notwithstanding anything else to the contrary in this Agreement, neither the Debt Plan nor the transactions contemplated
thereby shall in any way limit or adversely affect (i) the enforceability of this Agreement against the Company, the Controlling
Persons and the Optionholders, or the rights and remedies available to GGAC hereunder, or (ii) except to the extent of payment
provisions with respect to unsecured credits covered by the Debt Plan, the enforceability of any Company Contract by the Company
or its Subsidiaries, or the rights and remedies available to the Company or its Subsidiaries under any such contract.”
(g) Section 4.1(f) of the Investment Agreement is hereby amended by replacing it in its entirety with the following:
“(f) except as permitted
by
Section 5.2
hereof and except for the issuance of GGAC Ordinary Shares in accordance with the Debt Plan or upon conversion
of any debt securities issued in accordance with the Debt Plan, issue, deliver, sell, authorize, pledge or otherwise encumber,
or agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable
for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities
convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating
it to issue any such shares or convertible or exchangeable securities;”
(h) Section 4.1(j) of the Investment Agreement is hereby amended by replacing it in its entirety with the following:
“(j) except in
the ordinary course of business consistent with past practices and except for the issuance of debt securities of the Company in
accordance with the Debt Plan, incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person or
Persons, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of GGAC,
the Company or any of its Subsidiaries, as applicable, enter into any “keep well” or other agreement to maintain any
financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;”
(i) Section 4.1(l) of the Investment Agreement is hereby amended by replacing it in its entirety with the following:
“(j) except in
the ordinary course of business consistent with past practices and except for the issuance of debt securities of the Company in
accordance with the Debt Plan, incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person or
Persons, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of GGAC,
the Company or any of its Subsidiaries, as applicable, enter into any “keep well” or other agreement to maintain any
financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;”
(j) Section 5.1(f) of the Investment Agreement is hereby amended by replacing it in its entirety with the following:
“(f) No amendment
or supplement to the Proxy Statement will be made by GGAC without the approval of the Company which shall not be unreasonably withheld
and GGAC shall promptly transmit any such amendment or supplement to its shareholders, if at any time prior to the Extraordinary
General Meeting there shall be discovered any information that should be set forth in an amendment or supplement to the Proxy Statement.
Any amendment or supplement that reflects the comments of the Company, as well as any amendment or supplement that the Company
has not commented upon after a reasonable opportunity to comment, shall be deemed to have been approved by the Company.”
(k) Section 5.7 of the Investment Agreement is hereby amended by:
(i) re-titling such section as “Commercial Reasonable Best Efforts; Commitment to Obtain Consents”;
(ii) replacing clause (iii) of such section with the following:
“the obtaining of
court confirmation of the Debt Plan, the consummation of the transactions contemplated by the Debt Plan, and the obtaining of
consent of certain creditors of the Company, as provided for in the Debt Plan, in connection with the consummation of the transactions
contemplated hereby”
; and
(iii) inserting the following at the end of such section:
“The Company shall
obtain all consents, approvals or waivers from third parties required as a result of the transactions contemplated in this Agreement,
including the consents referred to in
Section 2.5
of the Company Schedule, and shall obtain an amendment to the Debt Plan,
upon terms and conditions reasonably satisfactory to GGAC, providing that GGAC Ordinary Shares shall be issued pursuant thereto,
and upon conversion or exchange of the debentures issued pursuant thereto, in lieu of the issuance of Company Ordinary Shares,
provided that the Contributions are consummated by the Outside Date (the “
Debt Plan Amendment
”).”
(l) Section 5.25 of the Investment Agreement is hereby amended by replacing it in its entirety with the following:
“5.25
Open
Market Purchases
. The Controlling Persons commit to purchase, directly or through any other Persons acting at the direction
or under the instructions of the Controlling Persons,, at least $10 million of GGAC Ordinary Shares in the open market, prior to
June 20, 2016 (“
Open Market Purchases
”). Any such Open Market Purchases would be effected either (i) pursuant
to a 10b-5 1 trading plan or (ii) at a time when the Company and the buyer is not aware of any material nonpublic information regarding
the Company or its securities. The Controlling Persons hereby agree that, with respect to any GGAC Ordinary Shares purchased by
the Controlling Persons hereunder, (a) they will vote such shares in favor of all proposals set forth in Section 5.1(b) that are
to be presented at the Extraordinary General Meeting and will not exercise their right to convert their GGAC Ordinary Shares into
a pro rata share of the Trust Fund in accordance with GGAC’s Charter Documents, and (b) the GGAC Ordinary Shares purchased
by the Controlling Persons hereunder shall not be subject to the Lock-Up Agreement (as defined in
Section 1.9
hereof).”
(m) Section 5.30 of the Investment Agreement is hereby amended by replacing it in its entirety with the following:
“5.30
Conversion
into Capital of Debts with Controlling Persons
. As provided for in the Debt Plan, the Controlling Persons shall convert
into capital of the Company the loans made by such Controlling Persons and any other amount owed by the Company to such Persons
at or prior to the Closing Date.”
(n) Section 5.33 of the Investment Agreement is hereby amended by replacing references to the “2015 fiscal year” with the
“2016 fiscal year”.
(o) Section 5.34 of the Investment Agreement is hereby amended by replacing it in its entirety with the following:
“5.34
Capital
Contributions
. Immediately following the Closing, GGAC shall contribute to the Company the amount in the Trust Fund, less
amounts paid and to be paid pursuant to
Section 5.19
hereof, which proceeds must be deposited by the Company into an escrow
account as provided for in the Debt Plan.”
(p) The Investment Agreement is hereby amended by inserting the following as new Section 5.35:
“5.35
Company
Board of Directors
. From and after the Closing, GGAC shall cause the Company’s Board of Directors to be comprised
of members so as to comply with the corporate governance requirements as provided for in the Debt Plan.”
(q)
Section 6.2(a) of the Investment Agreement is hereby amended by replacing “on and as of the date hereof” with “when
made”.
(r) Section 6.2(h) of the Investment Agreement is hereby amended by replacing it in its entirety with the following:
“(h)
Trust
Fund
. GGAC shall have made appropriate arrangements to have the Trust Fund, less amounts paid and to be paid pursuant to
Section 5.19 hereof, disbursed upon the Closing and contributed to the Company as provided for in this Agreement.”
(s) Section 6.3(a) of the Investment Agreement is hereby amended by replacing “on and as of the date hereof” with “when
made”.
(t) Section 6.3(h) of the Investment Agreement is hereby amended by replacing it in its entirety with the following:
“(h)
Creditor
Approval
. The Company shall have obtained the consent of certain creditors of the Company, as provided for in the Debt
Plan, in connection with the consummation of the transactions contemplated hereby.”
(u) Section 6.3(o) of the Investment Agreement is hereby amended by replacing it in its entirety with the following:
“(o)
Reorganization
.
The Reorganization shall have been effected, in accordance with the steps set forth in
Schedule 5.3
hereto, as a result
of which the Company shall not have incurred any indebtedness or other liabilities such that the aggregate indebtedness and other
liabilities of the Company exceed the amount set forth in the Debt Plan, and the Company shall have accrued goodwill amortizable
under applicable Tax law in the amount of R$200,000,000.”
(v) The Investment Agreement is hereby amended by inserting the following as new Section 6.3(q):
“(q)
Debt
Plan Amendment
. The Debt Plan Amendment shall be in full force and effect.”
(w) Section 7.1(a) of the Investment Agreement is hereby amended by replacing “but only to the extent of the Company Indemnity
Cap (as defined in Section 7.4(d) hereof)” with “but subject to the provisions of this Article VII, including Section
7.4 hereof”.
(x)
Section 7.1(b) of the Investment Agreement is hereby amended by replacing “but only to the extent of the GGAC Indemnity Cap
(as defined in Section 7.4(d) hereof)” with “but subject to the provisions of this Article VII, including Section 7.4
hereof”.
(y) Section 8.1(b) of the Investment Agreement is hereby amended by replacing it in its entirety with the following:
“(b) by either
GGAC or the Controlling Persons if the Contributions shall not have been consummated for any reason by June 25, 2016 (or by such
later date that has been approved by the shareholders of GGAC as of which GGAC shall automatically wind up, dissolve and liquidate
pursuant to the terms of its Charter Documents if it has not consummated an initial business combination, but in no event later
than July 22, 2016) (“
Outside Date
”); provided, however, that the right to terminate this Agreement under this
Section 8.1(b) shall not be available to any party whose action or failure to act has been a principal cause of or resulted in
the failure of the Contributions to occur on or before such date and such action or failure to act constitutes a breach of this
Agreement;”
(z) Section 8.3 of the Investment Agreement is hereby amended by replacing it in its entirety with the following:
“8.3
Fees
and Expenses
. Except as otherwise specifically provided in this Agreement, all fees and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses whether or not
the transactions contemplated hereby are effected and consummated. Notwithstanding the foregoing sentence, (i) in the event the
acts or omissions of the Company, the Controlling Persons or the Optionholders are the principal cause of or resulted in the failure
of the Contributions to occur by June 25, 2016, the Company shall pay the reasonable and documented out of pocket fees and expenses
incurred by GGAC or its affiliates in connection with any extension of the date by which GGAC must complete an initial business
combination under its Charter Documents, and all reasonable and documented out of pocket fees and expenses incurred by GGAC after
June 25, 2016 and prior to the Closing in the event such an extension is obtained, including without limitation any fees and expenses
incurred in connection with the audit of GGAC’s financial statements for the fiscal year ended June 30, 2016 and the filing
of any Additional GGAC SEC Reports after June 25, 2016, and (ii) in the event the Agreement is terminated by GGAC, and at the time
of such termination there is no state of facts or circumstances that would reasonably be expected to cause the conditions set forth
in
Section 6.1(a)
to
(c)
and
Section 6.2
not to be satisfied on or prior to the Outside Date (other than
a state of facts or circumstances caused by or arising out of the acts or omissions of the Company, the Controlling Persons or
the Optionholders), the Company or the Controlling Persons shall pay all reasonable and documented out of pocket fees and expenses
incurred by GGAC in connection with this Agreement and the transactions contemplated thereby (including, without limitation, all
the fees and expenses identified under clause (i) of this Section 8.3), up to a maximum of $1,000,000.”
(aa) Article IX of the Investment Agreement is hereby amended by inserting the following defined terms in alphabetical order:
|
Term
|
|
Section
|
|
Debt Plan
|
|
Preamble to Amendment No. 1
|
|
Debt Plan Amendment
|
|
Section 5.7
|
|
New Financial Statements
|
|
Section 2.7(f)
|
|
New Audited Financial Statements
|
|
Section 2.7(f)
|
|
New Unaudited Financial Statements
|
|
Section 2.7(e)
|
(bb) The Company Schedule is hereby amended by inserting Schedule 2.25 hereto as new Section 2.25 thereof.
(cc) Any reference to the Investment Agreement in the Investment Agreement or any other agreement, document, instrument or certificate
entered into or issued in connection therewith shall hereinafter be deemed to be a reference to the Investment Agreement, as amended
by this Amendment (or as the Investment Agreement may be further amended or modified after the date hereof in accordance with the
terms thereof).
2.
After giving effect to this Amendment, the representations and warranties of each party contained in the Investment Agreement are
true and correct on and as of the date hereof (except for any representations and warranties made as of a specified date, which
shall be so true and correct as of the specified date).
3.
Except as specifically provided in this Amendment, no provision of the Investment Agreement is modified, changed, waived, discharged
or otherwise terminated and the Investment Agreement shall continue to be in full force and effect. The execution, delivery and
effectiveness of this Amendment shall not operate as a consent to, or waiver of any right, power or remedy of any party under the
Investment Agreement for, any inaccuracy or breach of any representation or warranty, or any nonfulfillment, breach or failure
to comply with any agreement or covenant, contained in the Investment Agreement as in effect prior to the date hereof. This Amendment
shall be governed in all respects in accordance with the provisions of Section 10.7 of the Investment Agreement. This Amendment
may be executed in counterparts (including, without limitation, by facsimile, .pdf or other electronic document transmission),
each of which shall constitute an original, and each of which taken together shall constitute one and the same agreement.
[
Signature Page Follows
]
IN WITNESS WHEREOF, each of the
parties has caused this Amendment to be executed as of the date first written above by their respective officers thereunto duly
authorized.
|
GARNERO GROUP ACQUISITION COMPANY
|
|
|
|
By:
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/s/ Mario Garnero
|
|
|
Name:
|
Mario Garnero
|
|
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Title:
|
CEO
|
|
|
|
|
|
Q1 COMERCIAL DE ROUPAS S.A.
|
|
|
|
|
|
By:
|
/s/ Alvaro Jabur Maluf Jr.
|
|
|
Name:
|
Alvaro Jabur Maluf Jr.
|
|
|
Title:
|
Diretor Presidente
|
|
|
|
|
|
By:
|
/s/ Paulo Jabur Maluf
|
|
|
Name:
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Paulo Jabur Maluf
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Title:
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Vice Presidente
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CONTROLLING PERSONS:
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/s/ Alvaro Jabur Maluf, Jr.
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Alvaro Jabur Maluf, Jr.
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/s/ Paulo Jabur Maluf
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Paulo Jabur Maluf
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OPTIONHOLDERS:
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/s/ Thiago Chaves Ribeiro
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Thiago Chaves Ribeiro
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/s/ Denis Nieto Piovezan
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Denis Nieto Piovezan
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/s/ Marina Balaban Spiero
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Marina Balaban Spiero
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[
Signature Page to Amendment
No. 1 to First Amended and Restated Investment Agreement
]
Exhibit 99.1
Garnero
Group Announces Amendment to Terms of Merger with Grupo Colombo
NEW
YORK, June 15, 2016 - Garnero Group Acquisition Company (NASDAQ: GGAC) (“GGAC”), a public investment vehicle
formed for the purpose of effecting a merger, acquisition or similar business combination, and Q1 Comercial de Roupas S.A. ("Grupo
Colombo" or "GC"), a leading apparel retailer in Brazil, announced today that they have entered into an amendment
to the definitive investment agreement (“Amendment”) related to their previously announced proposed merger.
The
Amendment was prompted in part by Grupo Colombo’s entry into its previously disclosed financial restructuring. As announced
on June 10, 2016, Grupo Colombo’s restructuring plan provides capital structure equalization and a balanced cash flow for
operations going forward. The restructuring plan has been approved by approximately 64% of Grupo Colombo’s unsecured creditors
and, upon confirmation by the Brazilian courts, will be applicable to all of Grupo Colombo’s unsecured creditors. In place
of their current debts, unsecured creditors will receive either a discounted debt with extended payment terms, equity, debentures
or convertible debentures. The debentures will earn a percentage of Grupo Colombo’s profits (or 0.5% simple interest per
annum, if greater). Under the terms of the restructuring plan, the transactions contemplated by the investment agreement must
be approved by 60% of the debenture holders, with silence constituting consent. Upon confirmation of the debt reorganization,
Warley Pimentel will assume the role as the new CEO of Grupo Colombo; the current CEO, Alvaro Jabur Jr., will take an advisory
role to the senior management.
Key
changes to the investment agreement include the following:
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●
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The
shareholders of GC have now committed to purchase, directly or through other entities
acting at their direction, $10 million of GGAC shares in the public market.
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●
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The
date by which the transactions must be completed pursuant to the investment agreement
has been extended to June 25, 2016 (or July 22, 2016 if GGAC obtains an extension of
the date by which it must complete an initial business combination).
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●
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Grupo
Colombo has committed to obtain, or to use its commercially reasonable best efforts to
obtain, certain necessary consents and approvals, including the court approval of the
restructuring plan, certain necessary amendments to the restructuring plan and the consent
of the debenture holders.
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●
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Grupo
Colombo will pay the fees and expenses incurred by GGAC if GGAC is required to obtain
an extension of the date by which it must complete an initial business combination.
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●
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Other
changes necessary to reflect the terms of the restructuring plans.
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The
description of the transaction contained herein is only a summary and is qualified in its entirety by reference to the definitive
agreement relating to the transaction, a copy of which will be filed by GGAC with the SEC as an exhibit to a Current Report on
Form 8-K. Interested parties should visit the SEC website at www.sec.gov.
About
Grupo Colombo
Founded
in 1917, Grupo Colombo is one of Brazil's leading retailers with a focus on menswear, with approximately 400 stores throughout
the country. GC has strong brand awareness for its clothing and is known for its high quality products at competitive prices.
Basic pieces that don't go out of fashion which consumers wear day-to-day for business or leisure are found throughout the year
in its stores. Beyond the basics, GC also has a premium line that brings fresh ideas every season. For more information, please
visit
www.grupocolombo.com.br/investors
.
About
Garnero Group Acquisition Company
GGAC
was incorporated in the Cayman Islands on February 11, 2014 as a blank check company whose objective is to acquire, through a
merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination,
one or more businesses or entities.
Forward
Looking Statements
This
press release includes certain forward-looking statements, including statements regarding future financial performance, future
growth and future acquisitions. These statements are based on Grupo Colombo's and GGAC's managements' current expectations or
beliefs and are subject to risk, uncertainty and changes in circumstances. Actual results may vary materially from those expressed
or implied by the statements herein due to changes in economic, business, competitive and/or regulatory factors, and other risks
and uncertainties affecting the operation of Grupo Colombo's business. These risks, uncertainties and contingencies include: business
conditions; changing interpretations of GAAP; fluctuations in customer demand; management of rapid growth; intensity of competition
from other providers of products and services; general economic conditions; geopolitical events and regulatory changes; the possibility
that the transactions do not close, including due to the failure to receive required shareholder approvals or the failure of other
closing conditions, such as receipt of necessary governmental or regulatory approvals; and other factors set forth in GGAC's filings
with the Securities and Exchange Commission. The information set forth herein should be read in light of such risks. Neither GGAC
nor Grupo Colombo is under any obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements,
whether as a result of new information, future events, changes in assumptions or otherwise.