1
Exhibit 1.1
DESIGNER HOLDINGS LTD.
(a Delaware corporation); and
DESIGNER FINANCE TRUST
(a Delaware statutory business trust)
2,000,000
___% Convertible Trust
Originated Preferred Securities SM
("Convertible TOPrS SM")
PURCHASE AGREEMENT
Dated: ____________, 1996
--------------------
SM "Convertible Trust Originated Preferred Securities" and
"Convertible TOPrS" are service marks of ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., Inc.
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TABLE OF CONTENTS
Page
PURCHASE AGREEMENT .................................................. 1
SECTION 1. Representations and Warranties ...................... 4
(a) Representations and Warranties by the
Company and the Trust ............................. 4
(i) Compliance with Registration Requirements ..... 4
(ii) Independent Accountants ....................... 5
(iii) Financial Statements .......................... 6
(iv) No Material Adverse Change in Business ........ 6
(v) Good Standing of the Company .................. 6
(vi) Good Standing of Subsidiaries ................. 7
(vii) Capitalization; Descriptions .................. 7
(viii) Existence of Trust ............................ 8
(ix) Common Securities ............................. 8
(x) Capital Stock ................................. 8
(xi) Authorization of Declaration .................. 9
(xii) Guarantee Agreements .......................... 9
(xiii) Preferred Securities .......................... 9
(xiv) Authorization of Indenture .................... 10
(xv) Authorization of Convertible Debentures ....... 10
(xvi) Authorization of Agreement .................... 10
(xvii) Absence of Defaults and Conflicts ............. 10
(xviii) Absence of Labor Dispute ...................... 11
(xix) Absence of Proceedings ........................ 12
(xx) Accuracy of Exhibits .......................... 12
(xxi) ▇▇▇▇▇ Karan License Agreement ................. 12
(xxii) Possession of Intellectual Property ........... 13
(xxiii) Absence of Further Requirements ............... 13
(xxiv) Possession of Licenses and Permits ............ 14
(xxv) Title to Property ............................. 14
(xxvi) Compliance with Cuba Act ...................... 14
(xxvii) Investment Company Act ........................ 15
(xxviii) Environmental Laws ............................ 15
(xxix) Registration Rights ........................... 16
(xxx) Taxes ......................................... 16
(xxxi) Statistical Information ....................... 16
SECTION 2. Sale and Delivery to Underwriters;
Closing .......................................... 16
(a) Initial Preferred Securities ........................ 16
(b) Optional Preferred Securities ....................... 17
(c) Payment ............................................. ▇▇
-▇-
▇
▇▇▇▇
(▇) Denominations; Registration ......................... 18
SECTION 3. Covenants ........................................... 18
(a) Compliance with Securities Regulations and
Commission Requests .............................. 19
(b) Filing of Amendments ................................ 19
(c) Delivery of Registration Statements.................. 19
(d) Delivery of Prospectuses ............................ 20
(e) Continued Compliance with Securities Laws ........... 20
(f) Blue Sky Qualifications ............................. 21
(g) Rule 158 ............................................ 21
(h) Use of Proceeds ..................................... 21
(i) Listing ............................................. 22
(j) Restriction on Sale of Securities ................... 22
(k) Reporting Requirements .............................. 22
(l) Reports on Form SR .................................. 23
(m) Furnish Reports ..................................... 23
(n) Interim Financials .................................. 23
SECTION 4. Payment of Expenses ................................. 23
(a) Expenses ............................................ 23
(b) Termination of Agreement ............................ 24
SECTION 5. Conditions of Underwriters' Obligations ............. 24
(a) Effectiveness of Registration Statement ............. 25
(b) Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ ............................................. 25
(c) Opinion of General Counsel for
Company .......................................... 25
(d) Opinion of Counsel for Property Trustee
and Guarantee Trustee ............................ 25
(e) Opinion of Counsel for Delaware Trustee ............. 26
(f) Opinion of Counsel for Underwriters ................. 26
(g) Officers' Certificates .............................. 26
(h) Officer's Certificates of Licensors ................. 27
(i) Accountant's Comfort Letter ......................... 27
(j) Bring-down Comfort Letter ........................... 27
(k) Amendment of Credit Agreement ....................... 28
(l) Approval of Listing ................................. 28
(m) No Objection ........................................ 28
(n) Lock-up Agreements .................................. 28
(o) Conditions to Purchase of Optional
Preferred Securities ............................. 28
(p) Additional Documents ................................ 29
(q) Termination of Agreement ............................ 30
SECTION 6. Indemnification ..................................... 30
(a) Indemnification of Underwriters ..................... 30
-ii-
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Page
(b) Indemnification of Trust, Company,
Directors and Officers ........................... 31
(c) Actions Against Parties; Notification ............... 32
(d) Settlement Without Consent if Failure to
Reimburse ........................................ 33
SECTION 7. Contribution ........................................ 33
SECTION 8. Representations, Warranties and Agreements
to Survive Delivery .............................. 35
SECTION 9. Termination of Agreement ............................ 35
(a) Termination; General ................................ 35
(b) Liabilities ......................................... 36
SECTION 10. Default by One or More of the Underwriters........... 36
SECTION 11. Notices ............................................. 37
SECTION 12. Parties ............................................. 37
SECTION 13. GOVERNING LAW AND TIME .............................. 38
SECTION 14. Effect of Headings .................................. 38
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5
DESIGNER HOLDINGS LTD.
(a Delaware corporation); and
DESIGNER FINANCE TRUST
(a Delaware statutory business trust)
2,000,000
___% Convertible Trust
Originated Preferred Securities SM
("Convertible TOPrS SM")
(Liquidation Amount $50 Per Convertible Preferred Security)
PURCHASE AGREEMENT
_____________, 1996
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Designer Finance Trust (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12 of the Delaware Code, 12 Del. C. {{ 3801 et
seq.), confirms its agreement with you, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated (together, the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), with
respect to the issuance and sale by the Trust, and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of __%
Convertible Trust Originated Preferred Securities (liquidation amount $50 per
preferred security) set forth in Schedule A hereto and the grant by the Trust to
the Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 300,000 additional Preferred
Securities to cover overallotments, if any. The aforesaid 2,000,000 preferred
securities (the
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"Initial Preferred Securities") to be purchased by the Underwriters and all or
any part of the 300,000 preferred securities subject to the option described in
Section 2(b) hereof (the "Optional Preferred Securities") are hereinafter
called, collectively, the "Preferred Securities." The Preferred Securities will
be convertible at the option of the holder thereof into shares of common stock,
par value $.01 per share (shares of which class of stock are herein referred to
as "Common Stock"), of Designer Holdings Ltd. (the "Company"). The Preferred
Securities are more fully described in the Prospectus (as defined below).
The Preferred Securities will be guaranteed by the Company, to the
extent set forth in the Prospectus (as defined below), with respect to
distributions and amounts payable upon liquidation or redemption (the "Preferred
Securities Guarantee") pursuant to the Preferred Securities Guarantee Agreement
(the "Preferred Securities Guarantee Agreement") to be dated as of Closing Time
(as defined below) executed and delivered by the Company and IBJ ▇▇▇▇▇▇▇▇ Bank &
Trust Company (the "Guarantee Trustee"), a New York banking corporation not in
its individual capacity but solely as trustee, for the benefit of the holders
from time to time of the Preferred Securities. The Company and the Trust each
understand that the Underwriters propose to make a public offering of the
Preferred Securities as soon as they deem advisable after this Agreement has
been executed and delivered, and the Declaration (as defined herein), the
Indenture (as defined herein), and the Preferred Securities Guarantee Agreement
have been qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). The entire proceeds from the sale of the Preferred Securities will be
combined with the entire proceeds from the sale by the Trust to the Company of
its common securities (the "Common Securities") guaranteed by the Company, to
the extent set forth in the Prospectus, with respect to distributions and
amounts payable upon liquidation or redemption (the "Common Securities
Guarantee" and, together with the Preferred Securities Guarantee, the
"Guarantees") pursuant to the Common Securities Guarantee Agreement (the "Common
Securities Guarantee Agreement" and, together with the Preferred Securities
Guarantee Agreement, the "Guarantee Agreements"), to be dated as of Closing
Time, executed and delivered by the Company for the benefit of the holders from
time to time of the Common Securities, and will be used by the Trust to purchase
the ____% Convertible Subordinated Debentures due 2016 (the "Convertible
Debentures") issued by the Company. The Preferred Securities and the Common
Securities will be issued pursuant to the Amended and Restated
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Declaration of Trust of the Trust, to be dated as of Closing Time (the
"Declaration"), among the Company, as Sponsor, IBJ ▇▇▇▇▇▇▇▇ Bank & Trust
Company, as property trustee (the "Property Trustee"), and Delaware Trust
Capital Management, Inc., as Delaware trustee (the "Delaware Trustee"), and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as regular trustees (the "Regular
Trustees" and together with the Property Trustee and the Delaware Trustee, the
"Trustees"), and the holders from time to time of undivided beneficial interests
in the assets of the Trust. The Convertible Debentures will be issued pursuant
to an Indenture, to be dated as of Closing Time (the "Indenture"), between the
Company and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as trustee (the "Indenture
Trustee"). The Preferred Securities, the Preferred Securities Guarantee, the
Convertible Debentures and the shares of Common Stock of the Company initially
issuable upon conversion of the Convertible Debentures (the "Conversion
Shares") are collectively referred to herein as the "Securities." Capitalized
terms used herein without definition have the respective meanings specified in
the Prospectus.
The Company and the Trust have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1 (No.
333-13097) covering the registration of the Securities under the Securities Act
of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus. Promptly after execution and delivery of this Agreement, the Company
will either (i) prepare and file a prospectus in accordance with the provisions
of Rule 430A ("Rule 430A") of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations or (ii) if the Company and the Trust have
elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare
and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
434 and Rule 424(b). The information included in such prospectus or in such Term
Sheet, as the case may be, that was omitted from such registration statement at
the time it became effective but that is deemed to be part of such registration
statement at the time it became effective (a) pursuant to paragraph (b) of Rule
430A is referred to as "Rule 430A Information" or (b) pursuant to paragraph (d)
of Rule 434 is referred to as "Rule 434 Information." Each prospectus used
before such registration statement became effective, and any prospectus that
omitted, as applicable, the Rule 430A Information or the Rule 434 Information
that was used after such effectiveness and prior to the execution and delivery
of this Agreement, is herein called a "preliminary prospectus." Such
registration statement, including
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the exhibits thereto and schedules thereto, if any, at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement" and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus in the form first furnished to the Underwriters
for use in connection with the offering of the Preferred Securities is herein
called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall
refer to the preliminary prospectus dated October 22, 1996 together with the
Term Sheet and all references in this Agreement to the date of the Prospectus
shall mean the date of the Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
Prospectus or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company and the Trust. The
Company and the Trust jointly and severally represent and warrant to each
Underwriter as of the date hereof, as of the Closing Time referred to in Section
2(c) hereof, and as of each Date of Delivery (if any) referred to in Section
2(b) hereof, and agree with each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Optional Preferred
Securities are
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purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement, if any, and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither the Prospectus nor any
amendments or supplements thereto, at the time the Prospectus or any such
amendment or supplement was issued and at the Closing Time (and, if any
Optional Preferred Securities are purchased, at the Date of Delivery),
included or will include an untrue statement of a material fact or omitted
or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. If Rule 434 is used, the Company will comply
with the requirements of Rule 434 and the Prospectus shall not be
"materially different," as such term is used in Rule 434, from the
prospectus include in the Registration Statement at the time it became
effective. The representations and warranties in this subsection shall not
apply (A) to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Trust or the Company in writing by any Underwriter
through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration Statement or
Prospectus and (B) that part of the Registration Statement which shall
constitute the Statement of Eligibility (Form T-1) under the 1939 Act.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the 1933 Act Regulations and, if
applicable, each preliminary prospectus and the Prospectus delivered to
the Underwriters for use in connection with this offering was
substantively identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(ii) Independent Accountants. Coopers & ▇▇▇▇▇▇▇ L.L.P., the
accountants who certified the financial state ments and supporting
schedules of the Company included in the Registration Statement and
Deloitte & Touche L.L.P.,
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the accountants who certified the financial statements and supporting
schedules of Rio Sportswear, Inc. and affiliated companies included in the
Registration Statement, are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statement
of operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement.
(iv) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business (a "Material Adverse Effect"), (B) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
(v) Good Standing of the Company. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the state of Delaware and has corporate power and
authority to own,
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lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each subsidiary of the Company
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each such subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock of any subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of
such subsidiary. The only subsidiaries of the Company are the subsidiaries
listed in Exhibit 21.1 to the Registration Statement.
(vii) Capitalization; Descriptions. The authorized, issued and
outstanding capital stock of the Company is as set forth in the Prospectus
in the column entitled "Actual" under the caption "Capitalization"; and
the Preferred Securities, the Common Securities, the Conversion Shares,
the Convertible Debentures, the Declaration, the Preferred Securities
Guarantee Agreement and the Indenture conform in all material respects to
the descriptions thereof in the Prospectus under the captions "Description
of the Preferred Securities," "Description of the Guarantee," "Description
of the Convertible Debentures," "Effect
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of Obligations Under the Convertible Debentures and the
Guarantee" and "Description of Capital Stock".
(viii) Existence of Trust. The Trust has been duly created and is
validly existing in good standing as a business trust under the Delaware
Act with the power and authority to own property and to conduct its
business as described in the Prospectus and to enter into and perform its
obligations under this Agreement, the Preferred Securities, the Common
Securities and the Declaration; the Trust is duly qualified to transact
business as a foreign corporation in good standing in each jurisdiction in
which such qualification is necessary, except to the extent that the
failure to so qualify would not have a Material Adverse Effect on the
Trust; and the Trust is not a party to or otherwise bound by any agreement
other than those described in the Prospectus.
(ix) Common Securities. The Common Securities have been duly
authorized by the Declaration and, when issued and delivered by the Trust
to the Company in accordance with the terms of the Declaration and against
payment therefor as described in the Prospectus, will be validly issued
and (subject to the terms of the Declaration) fully paid and nonassessable
undivided beneficial interests in the assets of the Trust; the issuance of
the Common Securities is not subject to preemptive or other similar
rights; no holder thereof will be subject to personal liability by reason
of being such a holder; and at the Closing Time, all of the issued and
outstanding Common Securities of the Trust will be directly owned by the
Company free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(x) Capital Stock. All of the outstanding shares of capital stock of
the Company have been duly authorized and validly issued and are fully
paid and nonassessable; no holder thereof is or will be subject to
personal liability by reason of being such a holder; and none of the
outstanding shares of capital stock of the Company was issued in violation
of the preemptive rights of any stockholder of the Company.
(xi) Authorization of Declaration. The Declaration
has been duly authorized by the Company and, when validly
executed and delivered by the Company and the Regular
Trustees, and assuming the due authorization, execution
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and delivery of the Declaration by the Delaware Trustee and the Property
Trustee, the Declaration will constitute a valid and binding obligation of
the Company and the Regular Trustees, enforceable against the Company and
the Regular Trustees in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(xii) Guarantee Agreements. Each of the Common Securities Guarantee
Agreement and the Preferred Securities Guarantee Agreement has been duly
authorized by the Company and, when validly executed and delivered by the
Company, and assuming due authorization, execution and delivery of the
Preferred Securities Guarantee Agreement by the Guarantee Trustee, will
constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(xiii) Preferred Securities. The Preferred Securities have been duly
authorized by the Declaration and, when authenticated in the manner
provided for in the Declaration and issued and delivered pursuant to this
Agreement against payment of the consideration set forth herein, will be
validly issued and (subject to the terms of the Declaration) fully paid
and nonassessable undivided beneficial interests in the assets of the
Trust; the issuance of the Preferred Securities is not subject to
preemptive or other similar rights; and holders of Preferred Securities
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit incorporated under the
General Corporation Law of the State of Delaware.
(xiv) Authorization of Indenture. The Indenture has
been duly authorized by the Company, and, when validly
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executed and delivered by the Company, and assuming the due authorization,
execution and delivery of the Indenture by the Indenture Trustee, will
constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(xv) Authorization of Convertible Debentures. The Convertible
Debentures have been duly authorized by the Company, and when executed,
authenticated, issued and delivered in the manner provided for in the
Indenture and sold and paid for as provided in this Agreement, the
Convertible Debentures will constitute valid and binding obligations of
the Company entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(xvi) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and the Trust.
(xvii) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract (including, without
limitation, the License Agreement dated August 4, 1994 and as amended
through April 22, 1996 between ▇▇▇▇▇▇ ▇▇▇▇▇ International ("CKI") and
▇▇▇▇▇▇ ▇▇▇▇▇ Jeanswear Company ("CKJC") (the "▇▇▇▇▇▇ ▇▇▇▇▇ License
Agreement")), indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of
them may be bound, or to which any of the
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property or assets of the Company or any subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults that
would not result in a Material Adverse Effect; and the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement (including the
issuance and sale of the Preferred Securities and the use of the proceeds
from the sale of the Preferred Securities as described in the Prospectus
under the caption "Use of Proceeds") and compliance by the Company with
its obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any subsidiary pursuant to
the Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any subsidiary
or any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any subsidiary or any of
their assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any
subsidiary.
(xviii) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any subsidiary exists or, to the knowledge of the Company,
is imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its or any subsidiary's
principal suppliers, manufacturers, customers or contractors, which, in
either case, may reasonably be expected to result in a Material Adverse
Effect.
(xix) Absence of Proceedings. Except as described in the Registration
Statement and the Prospectus, there is no action, suit, proceeding,
inquiry or investigation before
16
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or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened,
against or affecting the Company or any subsidiary, which is required to
be disclosed in the Registration Statement (other than as disclosed
therein), or which could reasonably be expected to result in a Material
Adverse Effect, or which could reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of
the transactions contemplated in this Agreement or the performance by the
Company of its obligations hereunder; the aggregate of all pending legal
or governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(xx) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto which have not been so
described and filed as required.
(xxi) ▇▇▇▇▇ Karan License Agreement. The License Agreement dated
September 27, 1996 (the "▇▇▇▇▇ Karan License Agreement") among ▇▇▇▇▇ Karan
Studio ("DKS"), Broadway Jeanswear Holdings, Inc. ("BJHI"), Broadway
Jeanswear Company, Inc. ("BJCI") and Broadway Jeanswear Sourcing, Inc.
("BJSI" and, together with BJHI and BJCI, the "Jeanswear Subs") has been
duly authorized, executed and delivered by the Jeanswear Subs and is
enforceable by the Jeanswear Subs against DKS in accordance with its
terms, except to the extent that enforcement thereof may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (b)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity). The Jeanswear Subs have
fulfilled and performed all of their material obligations with respect to
the ▇▇▇▇▇ Karan License Agreement and the ▇▇▇▇▇ Karan License Agreement
remains in full force and effect; and to the best of the Company's
knowledge, no event has occurred with respect to the ▇▇▇▇▇ Karan License
Agreement which would result in a Material Adverse Effect.
17
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(xxii) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or are licensed or otherwise have the full
legal right to utilize, the patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks (including, without limitation, (A) the exclusive
right to use the marks "▇▇▇▇▇▇ ▇▇▇▇▇" and "CK/▇▇▇▇▇▇ ▇▇▇▇▇" upon the terms
and conditions set forth in the ▇▇▇▇▇▇ ▇▇▇▇▇ License Agreement and (B) the
exclusive right to use the ▇▇▇▇ "DKNY JEANS" upon the terms and conditions
set forth in the ▇▇▇▇▇ Karan License Agreement, in each case as described
in the Prospectus), service marks, trade names and other intangible
property (collectively, the "Intellectual Property Rights") presently
employed by them in connection with the business now operated by them
except where the failure to so own or possess such legal right could not
reasonably be expected to have a Material Adverse Effect, and neither the
Company nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any patent or proprietary rights which, singularly
or in the aggregate, if the subject of an unfavorable final determination,
could reasonably be expected to result in any Material Adverse Effect.
(xxiii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree ("Authorizations") of, any court or governmental
authority or agency is necessary or required for the performance by the
Company of its obligations hereunder, in connection with the offering,
issuance or sale of the Preferred Securities hereunder or the consummation
of the transactions contemplated by this Agreement, except such as have
been already obtained or as may be required under the 1933 Act or the 1933
Act Regulations or state securities law.
(xxiv) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and
its subsidiaries are in compliance with the terms and conditions of all
such Governmental
18
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Licenses, except where the failure so to comply would not, singly or in
the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xxv) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (A) are
described in the Prospectus or (B) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and currently proposed to be made of such property by the Company
or any of its subsidiaries; and all of the leases and subleases material
to the business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries holds
properties described in the Prospectus, are in full force and effect, and
neither the Company nor any subsidiary has any notice of any material
claim of any sort that has been asserted by anyone adverse to the rights
of the Company or any subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company or
such subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xxvi) Investment Company Act. Neither the Company nor the Trust is,
and upon the issuance and sale of the Preferred Securities as herein
contemplated and the application of the net proceeds therefrom as
described in the Prospectus neither will be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended (the "1940 Act").
19
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(xxvii) Environmental Laws. Except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or rule
of common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
ground- water, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively "Environmental Laws"), (B) the Company
and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or, to the
best knowledge of the Company, threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices
of noncompliance or violation, investigation or proceedings relating to
any Environmental Law against the Company or any of its subsidiaries and
(D) there are no events or circumstances to the best knowledge of the
Company that might reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xxviii) Registration Rights. There are no persons with registration
rights or other similar rights to have any security registered pursuant to
the Registration Statement or otherwise registered by the Company under
the 1933 Act.
(xxix) Taxes. The Company and each of its subsidiaries have filed all
federal or state income and franchise tax returns required to be filed and
have paid all taxes shown thereon as due, and there is no material tax
deficiency which has been or is reasonably likely to be asserted against
the Company or any of its subsidiaries; all
20
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material tax liabilities of the Company and its subsidiar ies are
adequately provided for on the books of the Company and its subsidiaries.
SECTION 2. Sale and Delivery to
Underwriters; Closing.
(a) Initial Preferred Securities. On the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Trust agrees to sell to each Underwriter,
severally and not jointly, and each Underwriter, severally and not jointly,
agrees to purchase from the Trust, at the purchase price of $50 per Initial
Preferred Security, the number of Initial Preferred Securities set forth in
Schedule A opposite the name of such Underwriter, plus any additional number of
Initial Preferred Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof, subject, in each case,
to such adjustments among the Underwriters as they in their sole discretion
shall make to eliminate any sales or purchases of fractional securities. As
compensation to the Underwriters for their commitments hereunder and in view of
the fact that the proceeds of the sale of the Preferred Securities will be used
to purchase the Convertible Debentures, the Company hereby agrees to pay at the
Closing Time and at any Date of Delivery to the Underwriters a commission of $[
] per Preferred Security purchased by the Underwriters.
(b) Optional Preferred Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Trust hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to 300,000 Optional
Preferred Securities at the price per share set forth in the immediately
preceding paragraph. The option hereby granted will expire 30 days after the
date hereof and may be exercised in whole or in part from time to time only for
the purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Preferred Securities upon notice by the
Underwriters to the Trust setting forth the number of Optional Preferred
Securities as to which the Underwriters are then exercising the option and the
time and date of payment and delivery for such Optional Preferred Securities.
Any such time and date of delivery (a "Date of Delivery") shall be determined by
the Underwriters, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time. If the
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-17-
option is exercised as to all or any portion of the Optional Preferred
Securities, each of the Underwriters, acting severally and not jointly, will
purchase and the Trust agrees to sell to the Underwriters that proportion of the
total number of Optional Preferred Securities to be sold by the Trust which the
number of Initial Preferred Securities set forth in Schedule A opposite the name
of such Underwriter bears to the total number of Initial Preferred Securities,
subject in each case to such adjustments as the Underwriters in their discretion
shall make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Preferred Securities shall be made at the offices
of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such
other place as shall be agreed upon by the Underwriters, the Company and the
Trust, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs
after 4:30 P.M. (Eastern time) on any given day) business day after the date
hereof (unless postponed in accordance with the provisions of Section 10
hereof), or such other time not later than ten business days after such date as
shall be agreed upon by the Underwriters, the Company and the Trust (such time
and date of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Optional Preferred
Securities are purchased by the Underwriters, payment of the purchase price for,
and delivery of certificates for, such Optional Preferred Securities shall be
made at the above-mentioned offices, or at such other place as shall be agreed
upon by the Underwriters, the Company and the Trust, on each Date of Delivery as
specified in the notice from the Underwriters to the Company and the Trust.
Payment shall be made to the Trust by wire transfer of immediately
available funds to the order of the Trust against delivery to the Underwriters
of certificates for the Preferred Securities to be purchased by them. It is
understood that each Underwriter has authorized ▇▇▇▇▇▇▇ ▇▇▇▇▇, for its account,
to accept delivery of, receipt for, and make payment of the purchase price for
the Initial Preferred Securities and the Optional Preferred Securities, if any,
which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Initial Preferred Securities or the
Optional Preferred Securities, if any, to be purchased by any Underwriter whose
funds have not been received
22
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by the Closing Time or the relevant Date of Delivery, as the case may be, but
such payment shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Preferred Securities and the Optional Preferred Securities, if any, shall be in
such denominations and registered in such names as the Underwriters may request
in writing at least two full business days before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
Preferred Securities and the Optional Preferred Securities, if any, will be made
available for examination and packaging by the Underwriters in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
At Closing Time or each Date of Delivery, as the case may be, the
Company will pay, or cause to be paid, the commission payable at such time under
this Section 2 to ▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of the Underwriters by wire transfer
of immediately available funds.
SECTION 3. Covenants. The Company and the Trust jointly and
severally covenant with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company and the Trust, subject to Section 3(b) hereof, will comply
with the requirements of Rule 430A or Rule 434, as applicable, and will
notify the Underwriters immediately, and confirm the notice in writing,
(i) when any post-effective amendment to the Registration Statement shall
become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from
the Commission, (iii) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Preferred Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes.
The Company and the Trust will promptly effect the
23
-19-
filings necessary pursuant to Rule 424(b) and will take such steps as it
deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company and the Trust will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is issued,
to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company and the Trust will give the
Underwriters notice of their intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)), any
Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act or
otherwise, will furnish the Underwriters with copies of any such documents
a reasonable amount of time prior to such proposed filing or use, as the
case may be, and will not file or use any such document to which the
Underwriters or counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the Underwriters and counsel for the Underwriters,
without charge, two signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
Underwriters, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will be
substantively identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company and the Trust
hereby consent to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each
24
-20-
Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the Securities Exchange Act
of 1934 (the "1934 Act"), such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be substantively identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company and the
Trust will comply with the 1933 Act and the 1933 Act Regulations so as to
permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time when
a prospectus is required by the 1933 Act to be delivered in connection
with sales of the Preferred Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with
the requirements of the 1933 Act or the 1933 Act Regulations, the Company
and the Trust will promptly prepare and file with the Commission, subject
to Section 3(b) hereof, such amendment or supplement as may be necessary
to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company
will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company and the Trust will each use
its best efforts, in cooperation with the Underwriters, to qualify the
Preferred Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions as the Underwriters may
reasonably designate and to maintain such qualifications in effect for a
period of not less than one year
25
-21-
from the later of the effective date of the Registration Statement and any
Rule 462(b) Registration Statement; provided, however, that neither the
Company nor the Trust shall be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer
in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction
in which the Preferred Securities have been so qualified, the Company and
the Trust will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Trust will use the proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds." The Company will use the net proceeds received by
it from the sale of the Convertible Debentures in the manner specified in
the Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Preferred Securities on the New York Stock Exchange. If the
Convertible Debentures are distributed on the occurrence of a Tax Event
(as defined in the Prospectus), the Company will use its best efforts to
effect the listing of the Convertible Debentures on the New York Stock
Exchange on such other exchange where the Preferred Securities are listed.
(j) Restriction on Sale of Securities. During a period of [90] days
from the date of the Prospectus, neither the Company nor the Trust will,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or
indirectly, offer, sell, or enter into any agreement to sell, or otherwise
dispose of (a) any trust certificates or other securities of the Trust
(other than the Preferred Securities offered hereby and the Common
Securities), (b) any preferred stock or any other security of the Company
that is substantially similar to the Preferred Securities, (c) any shares
of any class of common stock of the Company, other than (i) shares of
Common Stock issuable upon conversion of the Preferred Securities or
pursuant to the exercise of options or warrants outstanding on the date of
the Underwriting Agreement; and (ii) the grant of stock options or other
stock-based awards (and the exercise thereof) to directors, officers and
employees of the Company; and (iii) shares of Common Stock to CKI upon the
conversion of the non-voting common stock owned by it.
26
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(k) Reporting Requirements. The Company and the Trust, during the
period when the Prospectus is required to be delivered under the 1933 Act
or the 1934 Act, will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the
time periods required by the 1934 Act and the 1934 Act Regulations.
(l) Furnish Reports. For and during the period ending two years
after the effective date of the Registration Statement, the Company will
furnish to the Underwriters copies of all reports and other communications
(financial or otherwise) furnished by the Company to its securityholders
generally and copies of any reports or financial statements furnished to
or filed by the Company with the Commission or any national securities
exchange on which any class of securities of the Company may be listed.
(m) Interim Financials. Prior to the Closing Date and any Delivery
Date, as the case may be, the Company will furnish to the Underwriters, as
soon as they have been prepared and are available, a copy of any unaudited
interim consolidated financial statements of the Company for any period
subsequent to the period covered by its most recent financial statements
included in the Registration Statement and the Prospectus.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its and the Trust's obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Preferred Securities, (iii) the preparation,
issuance and delivery of the certificates for the Preferred Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Preferred Securities
to the Underwriters, (iv) the reasonable fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Preferred
Securities under securities laws in accordance
27
-23-
with the provisions of Section 3(f) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vi) the printing and delivery to the Underwriters of copies
of each preliminary prospectus, any Term Sheets and of the Prospectus and any
amendments or supplements thereto, (vii) the preparation, printing and delivery
to the Underwriters of copies of the Blue Sky Survey and any supplement thereto,
if any, (viii) the fees and expenses of any transfer agent or registrar for the
Preferred Securities, (ix) the filing fees incident to, and the reasonable fees
and disbursements of counsel to the Underwriters in connection with, the review
by the National Association of Securities Dealers, Inc. (the "NASD") of the
terms of the sale of the Preferred Securities, (x) the fees and expenses
incurred in connection with the listing of the Preferred Securities and, if
applicable, the Convertible Debentures on the New York Stock Exchange, (xi) the
fees and expenses of the Indenture Trustee, including the fees and disbursements
of counsel for the Indenture Trustee in connection with the Indenture and the
Convertible Debentures, (xii) the fees and expenses of the Delaware Trustee and
the Property Trustee, including the reasonable fees and disbursements of counsel
for the Delaware Trustee and Property Trustee in connection with the Declaration
and the Certificate of Trust, (xiii) the fees and expenses of the Guarantee
Trustee, (xiv) any fees payable in connection with the rating of the Preferred
Securities and the Convertible Debentures and (xv) the cost and charges of
qualifying the Preferred Securities with the Depositary Trust Company.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5, Section 9(a)(i) or
Section 11 hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Trust contained in Section
1 hereof or in certificates of any officer of the Company or any subsidiary of
the Company or any Trustee delivered pursuant to the provisions hereof, to the
performance by the Company and the Trust of their respective covenants and other
obligations hereunder, and to the following further conditions:
28
-24-
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall
have been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rule 430(A)
or, if the Company has elected to rely upon Rule 434, a Term Sheet shall
have been filed with the Commission in accordance with Rule 424(b)).
(b) Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP. At Closing
Time, the Underwriters shall have received the favorable opinion, dated as
of Closing Time, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for
the Company and the Trust, in form and substance satisfactory to counsel
for the Underwriters, together with signed or reproduced copies of such
letter for each of the Underwriters to the effect set forth in Exhibit A
hereto and to such further effect as counsel to the Underwriters may
reasonably request.
(c) Opinion of General Counsel for Company. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of the
Closing Time, of ▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Vice President, General Counsel and
Secretary for the Company, in form and substance satisfactory to counsel
for the Underwriters, together with signed or reproduced copies of such
letter for each of the Underwriters to the effect set forth in Exhibit B
hereto and to such further effect as counsel to the Underwriters may
reasonably request.
(d) Opinion of Counsel for Property Trustee, the Delaware Trustee
and Guarantee Trustee. At Closing Time, the Underwriters shall have
received the favorable opinion, dated as of the Closing Time, of ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Finger, counsel for the Property Trustee, the Delaware Trustee
and the Guarantee Trustee, together with signed or reproduced copies of
such letter for each of the
29
-25-
Underwriters to the effect set forth in Exhibit C hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(e) Opinion of Counsel for Underwriters. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of
Closing Time, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
Underwriters with respect to the validity of the Preferred Securities, the
Registration Statement, the Prospectus and other related matters as the
Underwriters may reasonably request.
(f) Officers' Certificates. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, (A) any material adverse change in
the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business, and the Underwriters shall have received a certificate
of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company, dated as of Closing
Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1 hereof are
true and correct in all material respects with the same force and effect
as though expressly made at and as of Closing Time, (iii) the Company has
complied in all material respects with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or are pending or are contemplated by the Commission;
or (B) any material adverse change in the condition, financial or
otherwise, or in the earnings or business affairs of the Trust, and the
Underwriters shall have received a certificate of a Regular Trustee of the
Trust, dated as of Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in
Section 1 hereof are true and correct with the same force and effect as
though expressly made at and as of Closing time, (iii) the Trust has
complied with all agreements and satisfied all conditions on its part to
be performed or
30
-26-
satisfied at or prior to Closing Time, and (iv) to the best of its
knowledge after due inquiry, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been initiated or threatened by the Commission.
(g) Officer's Certificates of Licensors. At the Closing Time the
Underwriters shall have received a certificate from an executive officer
of DKS dated as of a date within two days prior to the Closing Time, to
the effect that, to the best of such officer's knowledge after due
inquiry, as of the date thereof, the Company and the Jeanswear Subs are in
compliance with all the terms and provisions of the ▇▇▇▇▇ Karan License
Agreement and that no event has occurred that would (with or without
notice or the passage of time, or both) constitute a default under the
▇▇▇▇▇ Karan License Agreement. In addition, at the Closing Time, the
Underwriters shall have received a certificate from an executive officer
of CKI dated as of a date within two days prior to the Closing Time, to
the effect that, to the best of such officer's knowledge after due
inquiry, as of the date thereof, the Company and CKJC are in compliance
with all the terms and provisions of the ▇▇▇▇▇▇ ▇▇▇▇▇ License Agreement
and that no event has occurred that will (with or without notice or the
passage of time, or both) constitute a default under the ▇▇▇▇▇▇ ▇▇▇▇▇
License Agreement.
(h) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Underwriters shall have received from Coopers &
▇▇▇▇▇▇▇ L.L.P. a letter dated such date, in the form attached hereto as
Exhibit E together with signed or reproduced copies of such letter for
each of the Underwriters.
(i) Bring-down Comfort Letter. At Closing Time, the Underwriters
shall have received from Coopers & ▇▇▇▇▇▇▇ L.L.P. a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letters furnished pursuant to subsection (h) of this Section, except that
the "specified date" referred to shall be a date not more than five days
prior to Closing Time.
(j) Amendment of Credit Agreement. The Company will have amended the
terms of its bank credit facility to allow for the consummation of the
transactions contemplated by this Agreement.
31
-27-
(k) Approval of Listing. At the Closing Time, the Preferred
Securities shall have been approved for listing on the New York Stock
Exchange, subject only to official notice of issuance.
(l) No Objection. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(m) Lock-up Agreements. At the date of this Agreement, the
Underwriters shall have received agreements substantially in the form of
Exhibit [ ] hereto signed by the Company, the Trust and the parties listed
in Schedule [ ] hereto.
(n) Conditions to Purchase of Optional Preferred Securities. In the
event that the Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the Optional Preferred
Securities, the representations and warranties of the Company and the
Trust contained herein and the statements in any certificates furnished by
the Company and any Trustee hereunder shall be true and correct as of each
Date of Delivery and, at the relevant Date of Delivery, the Underwriters
shall have received:
(i) Officers' Certificates. Certificates, dated such Date of
Delivery, of (a) the President or a Vice President of the Company
and of the chief financial or chief accounting officer of the
Company and (b) a Regular Trustee of the Trust confirming that the
certificates delivered at the Closing Time pursuant to Section 5(g)
hereof remain true and correct as of such Date of Delivery.
(ii) Opinions of Counsel for Company. The favorable opinions of
each of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, and ▇▇▇▇ ▇. ▇▇▇▇▇,
Esq., the General Counsel for the Company, each in form and
substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Optional Preferred Securities to
be purchased on such Date of Delivery and otherwise to the same
effect as the opinions required by Sections 5(b) and (c) hereof.
(iii) Opinions of Counsel for the Trustees. The favorable
opinions of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger,
32
-28-
counsel for the Property Trustee, the Delaware Trustee and Guarantee
Trustee in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Optional
Preferred Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinions required by Section
5(d).
(iv) Opinion of Counsel for Underwriters. The favorable opinion
of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Underwriters, dated such
Date of Delivery, relating to the Optional Preferred Securities to
be purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(f) hereof.
(v) Bring-down Comfort Letter. A letter from Coopers & ▇▇▇▇▇▇▇
L.L.P., in form and substance satisfactory to the Underwriters and
dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Underwriters pursuant to
Section 5(e) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than
five days prior to such Date of Delivery.
(o) Additional Documents. At Closing Time and at each Date of
Delivery counsel for the Underwriters shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Preferred
Securities as herein contemplated, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company and
the Trust in connection with the issuance and sale of the Preferred
Securities as herein contemplated shall be reasonably satisfactory in form
and substance to the Underwriters and counsel for the Underwriters.
(p) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of Optional Preferred Securities on a Date of Delivery which is
after the Closing Time, the obligations of the Underwriters to purchase
the relevant Optional Preferred Securities, may
33
-29-
be terminated by the Underwriters by notice to the Company at any time at
or prior to Closing Time or such Date of Delivery, as the case may be, and
such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof and except that Sections 1,
6, 7 and 8 hereof shall survive any such termination and remain in full
force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably
incurred in
34
-30-
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that (x) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto). The
foregoing indemnity with respect to any untrue statement or alleged untrue
statement contained in or omission or alleged omission from a preliminary
prospectus shall not inure to the benefit of the Underwriter (or any person
controlling such Underwriter) from whom the person asserting any loss,
liability, claim, damage or expense purchased any of the Preferred Securities
which are the subject thereof if the Company shall sustain the burden of proving
that such person was not sent or given a copy of the Prospectus (or the
Prospectus as amended or supplemented) at or prior to the written confirmation
of the sale of such Securities to such person and the untrue statement contained
in or omission from such preliminary prospectus was corrected in the Prospectus
(or the Prospectus as amended or supplemented) and the Company had previously
furnished copies thereof to such Underwriter.
(b) Indemnification of Trust, Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Trust, each of
the Trustees of the Trust, the Company, its directors, each of its officers who
signed the Registration Statement, and each person, if any, who controls the
Trust, any of the Trustees or the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434
35
-31-
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through ▇▇▇▇▇▇▇
▇▇▇▇▇ expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 6(a)
above, counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
36
-32-
(d) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Trust on the one hand and the Underwriters on the other hand
from the offering of the Preferred Securities pursuant to this Agreement or (ii)
if the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Trust on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions, or in connection with any failure
of the nature referred to in Section 6(f) hereof, which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Trust on the
one hand and the Underwriters on the other hand in connection with the offering
of the Preferred Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Preferred Securities pursuant to this Agreement (before deducting expenses)
received by the Trust and the total underwriting commission received by the
Underwriters, in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet bear to the
37
-33-
aggregate initial public offering price of the Securities as
set forth on such cover.
The relative fault of the Company and the Trust on the one hand and
the Underwriters on the other hand shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company and the Trust or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
each director of
38
-34-
the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company and each Trustee of the Trust shall have the same
rights to contribution as the Trust. The Underwriters' respective obligations
to contribute pursuant to this Section 7 are several in proportion to the number
of Initial Preferred Securities set forth opposite their respective names in
Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or the Trustees of the
Trust submitted pursuant hereto shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or controlling person, or by or on behalf of the Company or the Trust, and shall
survive delivery of the Preferred Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Underwriters may terminate this
Agreement, by notice to the Company and the Trust, at any time at or prior to
Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crises or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Underwriters,
impracticable to market the Preferred Securities or to enforce contracts for the
sale of the Preferred Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or
39
-35-
maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the NASD or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof; and provided, further, that
Sections 1, 6 and 7 hereof shall survive such termination and remain in full
force and effect.
SECTION 10. Default by One or More of the Underwriters. If one of
the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the remaining Underwriter shall have the right,
within 24 hours thereafter, to make arrangements, to purchase all, but not less
than all, of the Defaulted Securities in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, such Underwriter shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Preferred Securities to be purchased on such date, the
non-defaulting Underwriter shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of the non-defaulting Underwriter, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Preferred Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing Time,
the obligation of the Underwriters to purchase and of the Company to sell
the Optional Preferred Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of the
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
40
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In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the Underwriters to purchase and the Company to sell the relevant Optional
Preferred Securities, as the case may be, either the Underwriters or the Company
shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Managing
Director; notices to the Trust shall be directed to it at IBJ ▇▇▇▇▇▇▇▇ Bank &
Trust Company, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of
Corporate Trust and Agency Administration; notices to the Company shall be
directed to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇
▇. ▇▇▇▇▇, Chief Executive Officer, and ▇▇▇▇ ▇. ▇▇▇▇▇▇, Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
SECTION 12. Parties. This Agreement shall each inure to the benefit
of and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 hereof and
their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
41
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SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
42
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Trust counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement among the Underwriters, the Company and the Trust in
accordance with its terms.
Very truly yours,
DESIGNER HOLDINGS LTD.
By:
---------------------------
Name:
Title:
DESIGNER FINANCE TRUST
By:
---------------------------
Name:
Title: Regular Trustee
By:
---------------------------
Name:
Title: Regular Trustee
CONFIRMED AND ACCEPTED, as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: ________________________________
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Authorized Signatory
44
SCHEDULE A
Number of
Initial
Preferred
Name of Underwriter Securities
------------------- ----------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated .............................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ....................
Total ................................................ ----------
2,000,000
==========
Sch A-1
45
Exhibit A
Form of opinion, dated as of Closing Time, of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP ("Skadden"), counsel for the Company and the Trust,
substantially to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and to enter into and perform its obligations under
this Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing under the laws of the States of
New York, Delaware, [New Jersey, South Carolina, Pennsylvania, California
and the Commonwealth of Massachusetts] and in each jurisdiction where such
qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure to so
qualify or to be in good standing would not result in a Material Adverse
Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column entitled "Actual"
under the caption "Capitalization"; the shares of issued and outstanding
Common Stock have been duly authorized and validly issued and are fully
paid and nonassessable; and none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
(v) This Agreement has been duly authorized, executed and delivered
by each of the Company and the Trust.
(vi) The Indenture has been duly authorized, executed and delivered
by the Company and, when authorized, executed and delivered by the
Indenture Trustee, will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of
46
-2-
creditors' rights generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(vii) The Convertible Debentures have been duly authorized by the
Company and when the Convertible Debentures have been duly authenticated
by the Indenture Trustee in accordance with the Indenture and paid for by
the Trust, the Convertible Debentures will be duly executed, issued and
delivered by the Company and constitute valid and binding obligations of
the Company entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(viii) The Declaration has been duly authorized, executed and delivered
by the Company; and, assuming the due authorization, execution and
delivery of the Declaration by IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company
(Delaware), IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company and the Regular Trustees,
the Declaration constitutes a valid and binding obligation of the Company
and is enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(ix) Each of the Guarantee Agreements has been duly authorized,
executed and delivered by the Company, and is a valid and binding
agreement of the Company.
(x) The Conversion Shares issuable upon conversion of the
Convertible Debentures have been duly authorized by the Company, reserved
for issuance upon conversion and, if and when issued in accordance with
the Indenture at conversion prices at or in excess of the par value of
such
47
-3-
Conversion Shares, will be validly issued, fully paid and nonassessable;
and no holder thereof will be subject to personal liability by reason of
being such a holder.
(xi) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12
Del. C. { 3801, et seq. (the "Delaware Act").
(xii) Under the Delaware Act and the Declaration, the Trust has the
power and authority to (a) execute and deliver, and to perform its
obligations under, this Agreement, (b) issue and perform its obligations
under the Preferred Securities and the Common Securities and (c) purchase
and hold the Convertible Debentures.
(xiii) The Preferred Securities have been duly authorized by the
Declaration and when issued, delivered and paid for in accordance with
this Agreement will represent, subject to the qualifications set forth in
paragraph [(xix)] below, fully paid and nonassessable undivided beneficial
interests in the assets of the Trust and will entitle the holders thereof
to the benefits of the Declaration, subject to the effect upon the
Declaration of (a) bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation, fraudulent conveyance and other similar laws
relating to or affecting the rights and remedies of creditors generally,
(b) general principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a
proceeding in equity or at law), and (c) the effect to applicable public
policy on the enforceability of provisions relating to indemnification or
contribution.
(xiv) The holders of outstanding shares of capital stock of the
Company are not entitled to any preemptive rights under the Certificate of
Incorporation or By-Laws of the Company or the law of Delaware to
subscribe for the Preferred Securities, the Convertible Debentures or the
Conversion Shares.
(xv) The statements made in the Prospectus under the captions
"Description of the Preferred Securities", "Description of the Guarantee",
"Description of the Convertible Debentures", "Effect of Obligations Under
the Convertible Debentures and the Guarantee", and "Description of Capital
Stock", insofar as such statements purport
48
-4-
to summarize certain provisions of the Preferred Securities, the Common
Securities, the Convertible Debentures, the Preferred Securities
Guarantee, the Indenture, the Declaration and the Certificate of
Incorporation of the Company, to the extent that they constitute matters
of law or legal conclusions, have been reviewed by such counsel and fairly
summarize the information required to be disclosed therein.
(xvi) The issuance, sale and delivery by the Trust of the Preferred
Securities and of the Common Securities, the execution and delivery by the
Trust of this Agreement, the purchase by the Trust of the Convertible
Debentures and the performance by the Trust of its obligations thereunder
does not (a) result in any violation of the Declaration or any Delaware
statute, order, rule or regulation of any Delaware court or other Delaware
governmental agency or body having jurisdiction over the Trust or any of
its properties or assets which are normally applicable to transactions of
the type contemplated by this Agreement, or (b) require the approval of
any such Delaware court or Delaware governmental agency or body pursuant
to applicable laws.
(xvii) Neither the Company nor the Trust is required to be registered
under the Investment Company Act of 1940, as amended.
(xviii) Such counsel has been orally advised by the Commission that the
Registration Statement was declared effective under the 1933 Act on
November __, 1996; any required filing of the Prospectuses pursuant to
Rule 424(b) under the 1933 Act has been made in the manner and within the
time period required by Rule 424(b) and, such counsel has been orally
advised by the Commission that no stop order suspending the effectiveness
of the Registration Statement has been issued by the Commission and, to
such Counsel's knowledge, no proceeding for that purpose is pending or
threatened by the Commission.
(xix) The Registration Statement, as of its effective date, and the
Prospectus, as of its date, appeared on their face to be appropriately
responsive in all material respects to the requirements of the 1933 Act
and the 1933 Act Regulations, except that in each case such counsel need
not express an opinion as to the financial statements, schedules and other
financial and statistical data
49
-5-
included therein or excluded therefrom or the exhibits to the Registration
Statement, and such counsel need not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus except for those made under the
captions "Preferred Securities", "Description of the Guarantee",
"Description of the Convertible Debentures", "Effect of Obligation Under
the Convertible Debentures and the Guarantee", and "Description of Common
Stock" in the Prospectus insofar as they relate to provisions of documents
therein described.
(xx) No filing with, authorization, approval, consent, license,
registration, qualification, decree or order of any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act
and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states, as
to which we need express no opinion) is required in connection with the
issuance and sale of the Preferred Securities by the Trust to the
Underwriters pursuant to this Agreement, the performance by the Company
and the Trust of their respective obligations pursuant to this Agreement,
the Indenture, the Convertible Debentures, the Guarantees, the Declaration
or the Preferred Securities, except that such counsel need not express any
opinion as to (i) the rules and regulations of the NASD and (ii) laws
other than those that, in such counsel's experience, are normally
applicable to transactions of the type contemplated by this Agreement. The
execution, delivery and performance of this Agreement, the Declaration,
the Indenture, the Guarantee Agreements, the consummation by the Company
and the Trust of the transactions contemplated hereby and thereby and in
the Prospectus, the filing of the certificate of trust with the Secretary
of State of the State of Delaware, compliance by the Company and the Trust
with the terms of the foregoing and the application of the sale of the
Preferred Securities as contemplated by the Prospectus do not and will not
conflict with or constitute a breach of, or a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries or the Trust
pursuant to, any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company or any of its subsidiaries
or the Trust is a party or by which it or any of them may be bound, or to
which any of
50
-6-
the property or assets of the Company or any of its subsidiaries or the
Trust is subject, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any of its
subsidiaries, or the Declaration, or any applicable law, administrative
regulation or administrative or court decree.
(xxi) To the best of our knowledge, there are no persons with written
registration or other similar rights to have any securities registered by
the Company under the Registration Statement.
Additionally, in giving its opinion required by subsections (b)(1)
of this Section, such counsel shall state that such counsel has participated in
conferences with representatives of the Underwriters, officers and other
representatives of the Company and representatives of the independent certified
public accountants of the Company, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed,
and although such counsel does not pass upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus (except and only to
the extent as set forth in paragraphs [ ] above), on the basis of the foregoing
(relying as to materiality to a large extent upon the discussions with and
representations and opinions of officers and other representatives of the
Company), no facts have come to the attention of such counsel which lead such
counsel to believe that the Registration Statement at the time it became
effective contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, at the Representation Date
(unless the term "Prospectus" refers to a prospectus which has been provided to
the Underwriters by the Company for use in connection with the offering of the
Securities which differs from the Prospectus on file at the Commission at the
Representation Date, in which case at the time it is first provided to the
Underwriters for such use) or at the Closing Time, included an untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that such counsel does not express any
comment with respect to the financial statements including the notes thereto and
supporting schedules, or any other financial and statistical data set
51
-7-
forth or referred to in the Registration Statement or the Prospectus.
52
Exhibit B
Form of Opinion, dated as of Closing Time, of ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.,
Vice President, General Counsel and Secretary for the Company, substantially to
the effect that:
(i) Each subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, except where the
failure to so qualify or to be in good standing would not have a Material
Adverse Effect; except as described in the Registration Statement and
Prospectus, all of the issued and outstanding capital stock of each such
subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company directly, free and clear of any
security interest, mortgage, pledge, lien, option, claim or other
encumbrance. None of the outstanding shares of capital stock of any
subsidiary was issued in violation of the preemptive or similar rights of
any securityholder of such subsidiary.
(ii) Except as disclosed in or specifically contemplated by the
Prospectus, to such counsel's knowledge, there are no outstanding options,
warrants or other rights calling for the issuance of, and no commitments,
obligations, plans or arrangements to issue, any shares of capital stock
of the Company or any security convertible into or exchangeable for
capital stock of the Company. All issued and outstanding stock options, if
any, relating to the Company's Common Stock have been duly authorized and
validly issued and the description thereof contained in the Prospectus is
accurate in all material respects.
(iii) To the best of such counsel's knowledge no default exists in the
due performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so described or referred to in
the Registration Statement or to be filed as exhibits thereto.
(iv) To the best of such counsel's knowledge, there
are no material legal or governmental proceedings pending
53
-2-
or threatened which are required to be disclosed in the Registration
Statement, other than those disclosed therein, and all pending legal or
governmental proceedings to which the Company or any subsidiary is a party
or to which any of their property is subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not
material.
(v) The ▇▇▇▇▇ Karan License Agreement has been duly authorized,
executed and delivered by the Jeanswear Subs and is enforceable against
DKS in accordance with its terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or in
equity). The Jeanswear Subs have the exclusive right to use the trademark
"DKNY Jeans" upon the terms, conditions, and subject to the limitations
set forth in the ▇▇▇▇▇ Karan License Agreement and as described in the
Prospectus.
54
Exhibit C
Form of opinion, dated as of Closing Time, of [ ], counsel for the
Property Trustee, the Guarantee Trustee and the Indenture Trustee, to the effect
that:
(i) The Trustee is a banking corporation duly incorporated and
validly existing under the laws of the State of New York.
(ii) The execution, delivery and performance by the Property Trustee
of the Declaration, the execution, delivery and performance by the
Guarantee Trustee of the Guarantee Agreement and the execution, delivery
and performance by the Indenture Trustee of the Indenture have been duly
authorized by all necessary corporate action on the part of the Property
Trustee, the Guarantee Trustee and the Indenture Trustee, respectively.
The Declaration, the Guarantee Agreement and the Indenture have been duly
executed and delivered by the Property Trustee, the Guarantee Trustee and
the Indenture Trustee, respectively, and constitute the legal, valid and
binding obligations of the Property Trustee, the Guarantee Trustee and the
Indenture Trustee, respectively, enforceable against the Property Trustee,
the Guarantee Trustee and the Indenture Trustee, respectively, in
accordance with their terms, except as enforcement thereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to the enforcement of creditors' rights generally,
and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(iii) The execution, delivery and performance of the Declaration, the
Guarantee Agreement and the Indenture by the Property Trustee, the
Guarantee Trustee and the Indenture Trustee, respectively, do not conflict
with or constitute a breach of the Organization Certificate or Bylaws of
the Property Trustee, the Guarantee Trustee or the Indenture Trustee,
respectively, or the terms of any indenture or other agreement or
instrument known to such counsel and to which the Property Trustee, the
Guarantee Trustee or the Indenture Trustee, respectively, is a party or is
bound or any judgment, order or decree known to such counsel to be
applicable to the Property Trustee, the Guarantee Trustee or the Indenture
Trustee, respectively, of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over the
55
-2-
Property Trustee, the Guarantee Trustee or the Indenture
Trustee, respectively.
(iv) No consent, approval or authorization of, or registration with
or notice to, any federal or New York State banking authority is required
for the execution, delivery or performance by the Property Trustee, the
Guarantee Trustee or the Indenture Trustee of the Declaration, the
Guarantee Agreement or the Indenture, respectively.
56
Exhibit D
Form of Opinion, dated as of Closing Time, of [ ], counsel to
the Delaware Trustee, substantially to the effect that:
(i) The Delaware Trustee is duly organized and validly existing
under the laws of the State of Delaware and has the corporate power to act
as Trustee of a Delaware Business Trust under the laws of the State of
Delaware, 12 Del.C. SECTION 3801 et seq.
(ii) The Delaware Trustee has the power, authority and legal right to
execute, deliver and perform on behalf of the Trust this Agreement and the
other documents to which the Trust is a party.
(iii) The Declaration has been duly authorized and, when duly executed
and delivered by the Delaware Trustee on behalf of the Trust, and assuming
due authorization, execution and delivery by the Company, will be a valid
and binding obligation of the Trustee enforceable against the Delaware
Trustee in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to creditors or affecting the rights of creditors
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(iv) The Preferred Securities and the Common Securities have been
duly authorized by the Trust and when issued will entitle the holders
thereof to the benefits of the Declaration and will not be subject to any
preemptive or similar rights.
(v) The issuance, sale and delivery of the Preferred Securities will
not (A) result in any violation of the Declaration or any statute, order,
rule or regulation of any court or other governmental agency or body
having jurisdiction over the Trust or any of its properties or assets, (B)
require the approval of any such court or governmental agency or body, or
(C) conflict with or result in a breach or violation of any of the
provisions of or constitute a default under any contract, indenture,
mortgage, loan agreement, deed of trust, note, lease or other instrument
known to such counsel to which the Trust is a party or to which any of its
property or assets is subject.
57
-2-
(vi) The Trust has been duly organized and is validly existing as a
business trust under the Delaware Business Trust Act, 12 Del.C. SECTION
3801, et seq. (the "Act").
(vii) To the knowledge of such counsel, the Trust is not in violation
of the Declaration, or, except where such default would not have a
material adverse effect on the issuance or validity of the securities or
the consummation of the transactions contemplated by this Agreement or the
Declaration, in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which it is a party or by which it may be bound, or to which any of its
property or assets is subject.
(viii) The Declaration is not required to be qualified under the Trust
Indenture Act and the Trust is not required to be registered as an
"investment company" under the Investment Company Act.
(ix) The holders of the Preferred Securities and the Common
Securities will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
In addition, such counsel shall state that each of the Underwriters,
the Company, the Trust and counsel to the foregoing may rely, for purposes of
their respective obligations hereunder, upon such opinion.