EXHIBIT 1.1
WF&G DRAFT
9/30/97
3,600,000 Shares
▇▇▇▇▇ APPAREL GROUP, INC.,
(a Pennsylvania corporation)
Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
[October __, 1997]
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
as U.S. Representatives of the several U.S. Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
▇▇▇▇▇ Apparel Group, Inc., a Pennsylvania corporation (the
"Company"), Bristol ▇▇▇▇▇▇▇▇▇▇▇ Investments, L.P., a Delaware limited
partnership (the "Selling Shareholder") and ▇▇▇▇▇▇ ▇▇▇▇▇▇, the sole general
partner of the Selling Sharholder (the "General Partner"), confirm their
respective agreements with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), and each of the other Underwriters
named in Schedule A hereto (collectively, the "U.S. Underwriters," which term
shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, Bear, ▇▇▇▇▇▇▇ & Co. Inc. and
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. are acting as representatives (in such capacity, the
"U.S. Representatives"), with respect to (i) the sale by the Selling
Shareholder of 3,600,000 shares of Common Stock, par value $.01 per share,
of the Company ("Common Stock") and the purchase by the U.S. Underwriters,
acting severally and not jointly, of the respective number of shares of
Common Stock set forth in said Schedule A; and (ii) the grant by the Selling
Shareholder to the U.S. Underwriters, acting severally and not jointly, of
the option described in Section 2(b) hereof to purchase all or any part of
540,000 additional shares of Common Stock solely to cover over-allotments, if
any. The 3,600,000 shares Of Common Stock (the "Initial U.S. Securities")
and all or any part of the 540,000 shares of Common Stock subject to the
option described in Section 2(b) hereof (the "U.S. Option Securities") to be
purchased by the U.S.
Underwriters are collectively hereinafter called the "U.S. Securities."
It is understood that the Company, the Selling Shareholder and the
General Partner are concurrently entering into an agreement dated the date
hereof (the "International Purchase Agreement") providing for the offering by
the Selling Shareholder of 900,000 shares of Common Stock (the "Initial
International Securities") through arrangements with certain managers outside
the United States and Canada (the "International Managers") for which ▇▇▇▇▇▇▇
▇▇▇▇▇ International, Bear, ▇▇▇▇▇▇▇ International Limited and ▇▇▇▇▇▇▇ ▇▇▇▇▇
International are acting as lead managers (the "Lead Managers") and the grant
by the Selling Shareholder to the International Managers, acting severally
and not jointly, of an option to purchase all or any part of the
International Managers' pro rata portion of the 135,000 additional shares of
Common Stock solely to cover over-allotments, if any (the "International
Option Securities" and, together with the U.S. Option Securities, the "Option
Securities"). The Initial International Securities and the International
Option Securities are hereinafter called the "International Securities." It
is understood that the Selling Shareholder is not obligated to sell, and the
U.S. Underwriters are not obligated to purchase, any Initial U.S. Securities
unless all of the Initial International Securities are contemporaneously
purchased by the International Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters," the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities," and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities."
The Company, the Selling Shareholder and the General Partner understand
that the Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of ▇▇▇▇▇▇▇ ▇▇▇▇▇ (in such capacity, the "Global Coordinator").
The Company, the Selling Shareholder and the General Partner understand
that the U.S. Underwriters propose to make a public offering of the U.S.
Securities as soon as the U.S. Representatives deem advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-36213) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
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
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paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if
the Company has 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). Two forms of prospectus are to be
used in connection with the offering and sale of the Securities: one relating
to the U.S. Securities (the "Form of U.S. Prospectus") and one relating to the
International Securities (the "Form of International Prospectus"). The Form of
International Prospectus is identical to the Form of U.S. Prospectus, except for
the front cover and back cover pages and the information under the caption
"Underwriting." The information included in any such prospectus or in any 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 Form
of U.S. Prospectus and Form of International 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 the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, 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 Form of U.S.
Prospectus and the final Form of International Prospectus, including the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the forms first furnished to the Underwriters for use in
connection with the offering of the Securities are herein called the "U.S.
Prospectus" and the "International Prospectus," respectively, and collectively,
the "Prospectuses." If Rule 434 is relied on, the terms "U.S. Prospectus" and
"International Prospectus" shall refer to the preliminary U.S. Prospectus dated
[_____, 1997] and preliminary International Prospectus dated [____, 1997,]
respectively, each together with the applicable Term Sheet and all references in
this Agreement to the date of such Prospectuses shall mean the date of the
applicable Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the U.S. Prospectus, the
International 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
("▇▇▇▇▇").
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All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus (including the Form of U.S.
Prospectus and Form of International Prospectus) or the Prospectuses (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus
(including the Form of U.S. Prospectus and Form of International Prospectus) or
the Prospectuses, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectuses shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectuses, as the case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES. (a) The Company represents and
warrants to each U.S. 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 agrees with each U.S. Underwriter, as
follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets the
requirements for use of Form S-3 under the 1933 Act. 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 U.S. Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement 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 of the Prospectuses nor any amendments or
supplements thereto, at the time the Prospectuses or any amendments or
supplements thereto were issued and at the Closing Time (and, if any U.S.
Option Securities are purchased, at the Date of Delivery), included or will
include
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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. The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or the U.S.
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any U.S. Underwriter through the
U.S. Representatives expressly for use in the Registration Statement or the
U.S. Prospectus.
Each preliminary prospectus and the prospectuses 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 each
preliminary prospectus and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectuses, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Prospectuses, at the time the
Registration Statement became effective, at the time the Prospectuses were
issued and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), 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.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements included in the
Registration Statement and the Prospectuses, together with the related
schedules and notes, present fairly the financial position of the Company
and its subsidiaries as of the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
subsidiaries for the periods specified; except as otherwise stated in the
Registration Statement,
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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 Prospectuses
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.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, 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.
(vi) 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 Commonwealth of Pennsylvania with corporate power and
authority to own, lease and operate its properties and to conduct its
business as now being conducted and as described in the Prospectuses 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 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 to so qualify or be in good
standing would not have a Material Adverse Effect.
(vii) GOOD STANDING OF SUBSIDIARIES. Each of the operating
subsidiaries 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 Prospectuses 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
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property or the conduct of business, except where the failure to so qualify
or be in good standing would not have a Material Adverse Effect; all of the
issued and outstanding capital stock of each such operating subsidiary has
been duly authorized and validly issued, is fully paid and non-assessable;
the capital stock of each of the operating subsidiaries owned by the
Company, directly or through subsidiaries, is owned free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity;
and none of the outstanding securities 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 (a) the subsidiaries
(the "Operating Subsidiaries") listed on Schedule B hereto and (b) certain
other subsidiaries which, considered in the aggregate as a single
Subsidiary, do not constitute a "significant subsidiary" as defined in Rule
1-02 of Regulation S-X.
(viii) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectuses under
"Capitalization" (except for subsequent issuances, if any, pursuant to
reservations, agreements or employee benefit plans); the shares of issued
and outstanding capital stock of the Company including the Securities to be
purchased by the U.S. Underwriters and the International Managers from the
Selling Shareholder, have been duly authorized and validly issued and are
fully paid and non-assessable; none of the outstanding shares of capital
stock, including the Securities to be purchased by the U.S. Underwriters,
of the Company was issued in violation of the preemptive or other similar
rights of any security holder of the Company; the Common Stock conforms to
all statements relating thereto contained in the Prospectuses and such
description conforms to the rights set forth in the instruments defining
the same; the outstanding stock options relating to the Company's Common
Stock have been duly authorized and validly issued and the description
thereof contained in the Registration Statement and the Prospectuses is
true and accurate; no holder of the Securities will be subject to personal
liability by reason of being such a holder.
(ix) AUTHORIZATION OF AGREEMENT. This Agreement and the International
Purchase Agreement have been duly authorized, executed and delivered by the
Company.
(x) 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, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other instrument or agreement to
which the Company or any of
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its subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any of its
subsidiaries 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 International Purchase Agreement and the consummation of the
transactions contemplated in this Agreement and the International Purchase
Agreement and in the Registration Statement 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 of its
subsidiaries 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 of its subsidiaries 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 of its subsidiaries 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 of its subsidiaries.
(xi) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees of
the Company or any of its subsidiaries 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 of its
subsidiaries' principal suppliers, manufacturers, customers or contractors
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xii) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding, inquiry or investigation before 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 of its subsidiaries, that is required to be disclosed in the
Registration Statement, or that might result in a Material Adverse Effect,
or that might materially and adversely affect the properties or assets
thereof or that might materially and adversely affect the consummation of
the transactions contemplated by this Agreement and the International
Purchase Agreement or the performance by the
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Company of its obligations hereunder or thereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any of
its subsidiaries is a party or of which any of their respective properties
or assets is the subject that 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.
(xiii) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xiv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, 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, service marks, trade names and other intellectual property
presently employed by them in connection with the business now operated by
them or necessary in order to conduct such business, and neither the
Company nor any of its subsidiaries has received any notice of infringement
of or conflict with asserted rights of others with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(xv) ABSENCE OF FURTHER REQUIREMENTS. No filing with,
authorization, approval, consent, license, order, registration,
qualification or decree of any court or governmental authority or agency is
necessary or required for the performance by the Company or any of its
subsidiaries in connection with the offering or sale of the Securities
under this Agreement and the International Purchase Agreement or the
transactions contemplated by this Agreement and the International Purchase
Agreement, except such as may be required under the 1933 Act or the 1933
Act Regulations and foreign or state securities or blue sky laws.
(xvi) POSSESSION OF LICENSES AND PERMITS. The Company and its
subsidiaries possess such authorizations, approvals, consents, licenses,
orders, registrations, qualifications, decrees or permits (collectively,
"Governmental Licenses") issued by the appropriate state, federal or
foreign regulatory agencies or bodies, necessary to conduct the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any
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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.
(xvii) NO REGISTRATION RIGHTS. No holder of securities of the
Company has rights to the registration of securities of the Company because
of the filing of the Registration Statement.
(xviii) ACCOUNTING CONTROLS. The Company and its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xix) COMPLIANCE WITH CUBA ACT. The Company has complied with,
and is and will be in compliance with, the provisions of that certain
Florida act relating to disclosure of doing business with Cuba, codified as
Section 517.075 of the Florida statutes, and the rules and regulations
thereunder (collectively, the "Cuba Act") or is exempt therefrom.
(xx) INVESTMENT COMPANY ACT. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not 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").
(b) The Selling Shareholder and the General Partner, jointly and
severally, represent and warrant to, and agree with, each U.S. Underwriter
as of the date hereof, as of the Closing Time and as of each Date of
Delivery, each of subparagraphs (i) through (xx), inclusive, of subsection
(a) of this Section 1 and each of subparagraphs (i) through (vii), inclusive,
of this subsection (b) as follows:
(i) For a period 90 days from the date of the Prospectuses, such
Selling Shareholder or General Partner, as the case may be, will not,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ (i) offer, pledge,
sell, contract to sell, sell any option or contract to
-▇▇-
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii)
enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to the Securities to be sold
hereunder or under the International Purchase Agreement.
(ii) The execution and delivery of this Agreement and the
International Purchase Agreement and the consummation of the transactions
contemplated hereby and thereby will not result in a breach by such Selling
Shareholder or General Partner, as the case may be, of, or constitute a
default by such Selling Shareholder or General Partner, as the case may be,
under,any material indenture, deed or trust, contract or other agreement or
instrument or any decree, judgment or order to which such Selling
Shareholder or General Partner, as the case may be, is a party or by
which such Selling Shareholder or General Partner, as the case may be,
may be bound.
(iii) Such Selling Shareholder has and will have, at the Closing
Time and on each Date of Delivery, good and marketable title to the U.S.
Securities to be sold by such Selling Shareholder hereunder, free and clear
of any pledge, lien, security interest, encumbrance, claim or equity,
created by or arising through the Selling Shareholder other than pursuant
to this Agreement; such Selling Shareholder has full right, power and
authority to sell, transfer and deliver the U.S. Securities to be sold by
such Selling Shareholder hereunder; and upon delivery of the U.S.
Securities to be sold by such Selling Shareholder hereunder and payment of
the purchase price therefor as herein contemplated, each of the U.S.
Underwriters will receive good and marketable title to its ratable share of
the U.S. Securities purchased by it from such Selling Shareholder, free and
clear of any pledge, lien, security interest, encumbrance, claim or equity.
(iv) Such Selling Shareholder has duly executed and delivered in the
form heretofore furnished to the U.S. Underwriters, a power of attorney and
custody agreement (the "U.S. Power of Attorney and Custody Agreement") with
▇▇▇ ▇▇▇▇▇▇, as the attorney-in-fact and the custodian (the "Attorney-in-
Fact" and the "Custodian," respectively); the Attorney-in-Fact is authorized
to execute and deliver this Agreement, and the certificates referred to in
Section 5(d) or that may be required pursuant to Section 5(j) on behalf of
such Selling
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Shareholder, to determine the purchase price to be paid by the U.S.
Underwriters to such Selling Shareholder as provided in Section 2(a)
hereof, to authorize the delivery of the U.S. Securities to be sold by such
Selling Shareholder hereunder, to duly endorse (in blank or otherwise) the
certificate or certificates representing such U.S. Securities, to accept
payment therefor, and otherwise to act on behalf of such Selling
Shareholder in connection with this Agreement.
(v) All authorizations, approvals, consents, licenses, orders,
registrations, qualifications, decrees or permits necessary for the
execution and delivery by such Selling Shareholder of the U.S. Power of
Attorney and Custody Agreement and the International Power of Attorney and
Custody Agreement, the execution and delivery by or on behalf of such
Selling Shareholder or General Partner, as the case may be, of this
Agreement and the International Purchase Agreement, and the sale and
delivery of the Securities to be sold by such Selling Shareholder
hereunder and thereunder (other than, at the time of the execution hereof,
the issuance of the order of the Commission declaring the Registration
Statement effective and such authorizations, approvals, consents, licenses,
orders, registrations, qualifications, decrees or permits as may be
necessary under state securities laws), have been obtained and are in full
force and effect; and such Selling Shareholder or General Partner, as the
case may be, has the full right, power and authority to enter into this
Agreement and the International Purchase Agreement and such U.S. Power of
Attorney and Custody Agreement and International Power of Attorney and
Custody Agreement to sell, transfer and deliver the Securities to be sold
by such Selling Shareholder hereunder.
(vi) Such Selling Shareholder or General Partner, as the case may
be, has not taken, and will not take, directly or indirectly,
any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security or the Company to facilitate
the sale or resale of the Securities.
(vii) Certificates in negotiable form for all Securities to be sold by
such Selling Shareholder hereunder and under the International Purchase
Agreement have been placed in custody with the Custodian by or for the
benefit of such Selling Shareholder with irrevocable conditional
instructions for the purposes of effecting delivery by such Selling
Shareholder hereunder and under the International Purchase Agreement.
(c) Any certificate signed by any officer of the Company or any of its
subsidiaries and delivered to the Global Coordinator, U.S. Representatives or to
counsel for the U.S. Underwriters shall be deemed a representation and warranty
by the Company to each U.S. Underwriter as to the matters covered thereby; and
any
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certificate signed by or on behalf of the Selling Shareholder or General
Partner, as the case may be, and delivered to the Global Coordinator, U.S.
Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by such Selling Shareholder or General Partner, as
the case may be, to each U.S. Underwriter as to matters covered thereby.
SECTION 2 SALE AND DELIVERY TO U.S. UNDERWRITERS; CLOSING.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Selling Shareholder agrees to sell to each U.S. Underwriter,
severally and not jointly, and each U.S. Underwriter, severally and not jointly,
agrees to purchase from the Selling Shareholder, at the price per share set
forth in Schedule C, the number of Initial U.S. Securities set forth in Schedule
A opposite the name of such U.S. Underwriter, plus any additional number of
Initial U.S. Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
(b) OPTION SECURITIES. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Selling Shareholder hereby grants an option to the U.S.
Underwriters, severally and not jointly, to purchase up to an additional 540,000
shares of Common Stock at the price per share set forth in Schedule C, less an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial U.S. Securities but not payable on the U.S. Option
Securities. 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 U.S. Securities upon notice by the Global
Coordinator to the Company and the Selling Shareholder setting forth the number
of U.S. Option Securities as to which the several U.S. Underwriters are then
exercising the option and the time and date of payment and delivery for such
U.S. Option Securities. Any such time and date of delivery for the U.S. Option
Securities (a "Date of Delivery") shall be determined by the Global Coordinator,
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, as hereinafter defined. If
the option is exercised as to all or any portion of the U.S. Option Securities,
each of the U.S. Underwriters, acting severally and not jointly, will purchase
that proportion of the total number of U.S. Option Securities then being
purchased which the number of Initial U.S. Securities set forth in Schedule A
opposite the name of such U.S. Underwriter bears to the total number of Initial
U.S. Securities, subject in each case to such adjustments as the Global
Coordinator in its discretion shall make to eliminate any sales or purchases of
fractional shares.
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(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, 153 East 53rd Street, New York, New York, or at such other
place as shall be agreed upon by the Global Coordinator and the Company and the
Selling Shareholder, 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), or such other time not later than ten business days after such date
as shall be agreed upon by the Global Coordinator, the Company and the Selling
Shareholder (such time and date of payment and delivery being herein called
"Closing Time").
In addition, in the event that any or all of the U.S. Option Securities are
purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator, the Company and the Selling Shareholder, on each Date of
Delivery as specified in the notice from the Global Coordinator to the Company
and the Selling Shareholder.
Payment shall be made to the Selling Shareholder by wire transfer of
immediately available funds to a bank account designated by the Selling
Shareholder or the Custodian pursuant to the Selling Shareholder's U.S. Power of
Attorney and Custody Agreement, as the case may be, against delivery to the U.S.
Representatives for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. It is understood
that each U.S. Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial U.S. Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such U.S. Underwriter from
its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives 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.
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SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each U.S.
Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable and will notify the Global Coordinator
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 Prospectuses or any amended Prospectuses 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 Prospectuses 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 Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any such purposes. The Company will promptly effect the
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 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 will give the Global
Coordinator notice of its 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
the Prospectuses, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Global Coordinator 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
U.S. Representatives or counsel for the U.S. Underwriters shall reasonably
object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company will deliver to
the U.S. Representatives and counsel for the U.S. Underwriters, without
charge, signed copies of the Registration Statement as originally filed and
of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to
be incorporated by reference therein) and signed copies of all consents and
certificates of experts;
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and will also deliver to the U.S. Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of
each amendment thereto (without exhibits) for each of the U.S.
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the U.S. Representatives or counsel for the U.S.
Underwriters will be 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 U.S.
Underwriter, without charge, as many copies of each preliminary prospectus
as such U.S. Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act.
The Company will furnish to each U.S. Underwriter, without charge, during
the period when the U.S. Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the U.S. Prospectus (as
amended or supplemented) as such U.S. Underwriter may reasonably request.
The U.S. Prospectus and any amendments or supplements thereto furnished to
the U.S. Underwriters will be 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 will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement, the International
Purchase Agreement and in the Prospectuses. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with
sales of the Securities, any event shall occur or condition shall exist as
a result of which it is necessary, in the opinion of counsel for the U.S.
Underwriters or for the Company, to amend the Registration Statement or
amend or supplement any Prospectus in order that the Prospectuses 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 any Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare
and file with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or to
make the Registration Statement or the Prospectuses comply with such
requirements, and the Company will furnish to the U.S.
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Underwriters such number of copies of such amendment or supplement as the
U.S. Underwriters may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts,
in cooperation with the U.S. Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Global Coordinator may
designate and to maintain such qualifications in effect for a period of not
less than one year from the later of the effective date of the Registration
Statement and any Rule 462(b) Registration Statement; provided, however,
that the Company shall not 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
Securities have been so qualified, the Company 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) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of the Global Coordinator, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of any share of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Securities to be sold hereunder or under the International
Purchase Agreement, (B) any shares of Common Stock issued by the Company
upon the exercise of an option or warrant or the
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conversion of a security outstanding on the date hereof and referred to in
the Prospectuses, (C) any shares of Common Stock issued or options to
purchase Common Stock granted pursuant to existing employee benefit plans
of the Company referred to in the Prospectuses or (D) any shares of Common
Stock issued pursuant to any non-employee director stock plan or dividend
reinvestment plan.
(i) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectuses are 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 the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
(j) LISTING. The Company will file with the New York Stock Exchange
all documents and notices required by the New York Stock Exchange of
companies that have securities listed on such exchange and will use every
reasonable effort to maintain the listing of the Securities on the New York
Stock Exchange.
SECTION 4. PAYMENT OF EXPENSES. (a) The Company, the Selling
Shareholder and the General Partner will pay all expenses incident to the
performance of the obligations of the Company and the Selling Shareholder
under this Agreement, including (i) the 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 Securities,
(iii) the preparation and delivery of the certificates for the U.S.
Securities to the U.S. Underwriters, including any stock or other transfer
taxes and any stamp or other duties payable upon the sale or delivery of the
Securities to the Underwriters and the transfer of the Securities between the
U.S. Underwriters and the International Managers, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(f), including filing fees and the fees and
disbursements of counsel for the U.S. Underwriters (which shall not exceed
$10,000) 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 Prospectuses 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, (viii) the fees and
expenses of any transfer agent or registrar for the Securities and the
Custodians, (ix) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review
by the
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National Association of Securities Dealers, Inc. (the "NASD") of the terms of
the sale of the Securities and (x) the fees and expenses incurred in connection
with the listing of the Securities on the New York Stock Exchange.
(b) EXPENSES OF THE SELLING SHAREHOLDER AND GENERAL PARTNER. The
Selling Shareholder and General Partner will pay all expenses incident to the
performance of his obligations under, and the consummation of the
transactions contemplated by this Agreement, including (i) any stamp duties,
capital duties and stock transfer taxes, if any, payable upon the sale of the
Securities to the Underwriters, and their transfer between the Underwriters
pursuant to an agreement between such Underwriters or between the U.S.
Underwriters and International Managers, and (ii) the fees and disbursements
of his counsel and accountants, if any.
(c) TERMINATION OF AGREEMENT. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11, the Company, the Selling Shareholder and General Partner shall
reimburse the U.S. Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the U.S.
Underwriters.
(d) ALLOCATION OF EXPENSES. The provisions of this Section shall not
affect any agreement that the Company, the Selling Shareholder and the
General Partner may make for the sharing of such costs and expenses.
SECTION 5. CONDITIONS OF THE U.S. UNDERWRITERS' OBLIGATIONS. The
obligations of the several U.S. Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company, the Selling
Shareholder and the General Partner herein contained or in certificates of
any officer of the Company or any of its subsidiaries or on behalf of the
Selling Shareholder or General Partner delivered pursuant to the provisions
hereof, to the performance by the Company, the Selling Shareholder and the
General Partner of their respective covenants and obligations hereunder, and
to the following further conditions:
(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 U.S. 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 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet
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shall have been filed with the Commission in accordance with Rule 424(b).
(b) At Closing Time, the U.S. Representatives shall have received:
(1) The favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & Ballon LLP, counsel for the Company, in form and
substance satisfactory to counsel for the U.S. Underwriters, together with
signed or reproduced copies of such letter for each of the other U.S.
Underwriters to the effect that:
(i) The Company is validly existing as a corporation in good
standing under the laws of the Commonwealth of Pennsylvania.
(ii) The Company has the corporate power and authority to own,
lease and operate its properties and to conduct its business as now
being conducted and as described in the Registration Statement and to
enter into and perform its obligations under this Agreement and the
International Purchase Agreement.
(iii) To the best of their knowledge and information, the
Company 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
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 Prospectuses under "Capitalization"
(except for subsequent issuances, if any, pursuant to reservations,
agreements, employee benefit plans referred to in the Prospectuses),
and the shares of issued and outstanding Common Stock, including the
Securities to be purchased by the U.S. Underwriters and the
International Managers from the Selling Shareholder have been duly
authorized and validly issued and are fully paid and nonassessable and
no holder of the Securities is or will be subject to personal
liability by reason of being such a holder.
(v) The outstanding stock options relating to the Company's
Common Stock have been duly authorized and validly issued and the
description thereof contained in the Registration Statement and the
Prospectuses is true and accurate.
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(vi) This Agreement and the International Purchase Agreement have
each been duly authorized, executed and delivered by the Company.
(vii) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933
Act; any required filing of the Prospectuses pursuant to Rule 424(b)
has been made in the manner and within the time period required by
Rule 424(b); and, to the best of their knowledge, 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
threatened by the Commission.
(viii) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectuses, excluding the documents
incorporated by reference therein, and each amendment or supplement to
the Registration Statement and the Prospectuses, excluding the
documents incorporated by reference therein, as of their respective
effective or issue dates (other than the financial statements and
supporting schedules included therein or omitted therefrom, as to
which we need express no opinion) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(ix) The documents incorporated by reference in the
Prospectuses (other than the financial statements and supporting
schedules included therein or omitted therefrom, as to which we need
express no opinion), when they were filed with the Commission complied
as to form in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder.
(x) To the best of their knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Company or any subsidiary is a party, or to which the
property of the Company or any subsidiary is subject, before or
brought by any court or governmental agency or body, domestic or
foreign, which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially
and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the U.S. Purchase
Agreement and International
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Purchase Agreement or the performance by the Company of its
obligations thereunder.
(xi) The Common Stock conforms to the description thereof
contained in the Prospectuses, and the form of certificate used to
evidence the Common Stock is in due and proper form and complies with
all applicable statutory requirements and the requirements of the New
York Stock Exchange.
(xii) Each of the Company's operating subsidiaries is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its organization, 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 it owns or leases real property except
where the failure to so qualify would not have a Material Adverse
Effect; all of the issued and outstanding capital stock of each such
corporate 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 mortgage, pledge, lien,
encumbrance, claim or equity.
(xiii) The information in the Prospectuses under the heading
"Certain United States Federal Tax Consequences to Non-U.S. Holders of
Common Stock" and the description of the Company's capital stock
incorporated by reference in the Registration Statement and in the
Registration Statement under Item 15 to the extent that it constitutes
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by them and is correct in all material
respects.
(xiv) To the best of their knowledge after due inquiry, there are
no contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments or agreements required to be described or referred
to in the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed as exhibits
thereto; the descriptions thereof or references thereto are correct;
and no default exists in the due performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument or agreement so described, referred to or filed, which
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default or defaults, singly or in the aggregate, are material to the
condition, financial or otherwise, or earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise.
(xv) No authorization, approval, consent or order of any court or
governmental authority or agency is required in connection with the
sale of the U.S. Securities to the U.S. Underwriters hereunder or the
International Securities to the International Managers under the
International Purchase Agreement, except such as may be required under
the 1933 Act or the 1933 Act Regulations or state securities law; and,
to the best of their knowledge and information, the execution and
delivery of this Agreement and the International Purchase Agreement
and the consummation of the transactions contemplated herein and
therein will not conflict with or constitute a breach of, or 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 pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument or agreement to which the
Company or any of its subsidiaries is a party or by which any of them
may be bound, or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such action result in
any violation of the provisions of the charter or by-laws of the
Company, or any applicable law, rule, regulation, order or
administrative or court decree.
In rendering the foregoing opinion, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ &
Ballon LLP may rely as to matters of law of the Commonwealth of
Pennsylvania upon the opinion of Mesirov, Gelman, Jaffe, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, which opinion shall state that ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ may
rely on such opinion. ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall render an opinion
relating to Vestamex S.A. de C.V. and Camisas de ▇▇▇▇▇▇ ▇.▇. de C.V.
as to matters of the laws of Mexico. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ shall
render an opinion relating to ▇▇▇▇▇ Apparel Group Canada, Inc. as to
matters of law of the Canadian province of Ontario. All such opinions
shall be satisfactory in form and in substance to counsel for the U.S.
Underwriters.
(2) The favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & Ballon LLP, counsel for the Selling Shareholder and
the General Partner, in form and substance satisfactory to counsel for the
U.S. Underwriters, to the effect that:
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(i) This Agreement and the International Purchase Agreement have
been duly authorized, executed and delivered by or on behalf of the
Selling Shareholder and the General Partner.
(ii) The U.S. Power of Attorney and Custody Agreement has been
duly authorized, executed and delivered by the Selling Shareholder and
constitutes the valid and binding obligation of the Selling
Shareholder in accordance with its terms.
(iii) The U.S. Securities to be purchased by the U.S.
Underwriters from the Selling Shareholder have been validly issued and
are fully paid and non-assessable.
(iv) To the best of their knowledge after due inquiry, the
Selling Shareholder has good and marketable title to the U.S.
Securities to be sold by such Selling Shareholder hereunder and full
power, right and authority to sell such U.S. Securities as herein
contemplated, each of the U.S. Underwriters will receive good and
marketable title to the U.S. Securities purchased by it from the
Selling Shareholder, free and clear of any mortgage, pledge, lien,
security interest, encumbrance, claim or equity created by or arising
through the Selling Shareholder. In rendering such opinion, counsel
may assume that the U.S. Underwriters are without notice of any defect
in the title of the Selling Shareholder to the Securities being
purchased from such Selling Shareholder.
(v) No authorization, approval, consent, or order of any court
or governmental authority or agency is required in connection with the
sale of the U.S. Securities from the Selling Shareholder to the U.S.
Underwriters, except such as may be required under the 1933 Act of the
1933 Act Regulations or state securities law.
(3) The favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇ ▇▇▇▇
& ▇▇▇▇▇▇▇▇▇, counsel for the U.S. Underwriters, with respect to the matters
set forth in (i), (vi) to (ix), inclusive, and (xi) of subsection (b)(1) of
this Section and (i) and (iii) of subsection (b)(2) of this Section. Such
counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon
certificates of the Company and its subsidiaries and certificates of public
officials. In addition, in rendering the foregoing opinion, ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ may rely as to matters of law of the Commonwealth of Pennsylvania
upon the opinion of Mesirov, Gelman, Jaffe, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇.
-24-
(4) In giving their opinions required by subsections (b) (1), (b) (2)
and (b) (3) of this Section, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & Ballon LLP and
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ shall each additionally state that nothing has
come to their attention that would lead them to believe that the
Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included or incorporated
by reference therein or omitted therefrom, as to they need make no
statement), at the time such Registration Statement or any such amendment
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 Prospectuses or
any amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by reference
therein or omitted therefrom, as to which they need make no statement), at
the time the Prospectuses were issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Time, included or
includes an untrue statement of a material fact or omitted or omits 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.
(c) 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 Registration
Statement and the Prospectuses, any Material Adverse Effect, and the U.S.
Representatives shall have received a certificate of the Chairman or 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 Effect, (ii) the representations and warranties in Section 1(a)
hereof are true and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Company has complied 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 initiated or threatened by the Commission.
(d) At the Closing Time the U.S. Representatives shall have received a
certificate of (x) the Attorney in Fact for the Selling Shareholder, dated as of
Closing Time, to the effect that (i) the representations and warranties of the
Selling Shareholder contained in Section 1(b) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time and
(ii) the Selling Shareholder has complied with all agreements and satisfied all
conditions on his part to be performed or satisfied hereunder at or prior to
Closing Time and (y) of the General Partner to the same effect, but with
respect to the General Partner.
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The Attorney in Fact shall be entitled to rely upon a certificate of the Selling
shareholder in giving its certificate.
(e) At the time of the execution of this Agreement, the U.S.
Representatives shall have received from BDO ▇▇▇▇▇▇▇, LLP a letter dated such
date, in form and substance satisfactory to the U.S. Representatives, together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectuses.
(f) At the Closing Time, the U.S. Representatives shall have received from
BDO ▇▇▇▇▇▇▇, LLP a letter, dated as of the Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection (e)
of this Section, except that the specified date referred to shall be a date not
more than three business days prior to Closing Time.
(g) At Closing Time, the Securities shall have been approved for listing
on the New York Stock Exchange, subject only to official notice of issuance.
(h) At the date of this Agreement, the U.S. Representatives shall have
received an agreement substantially in the form of Exhibit A hereto signed by
the persons listed on Schedule D hereto.
(i) In the event the U.S. Underwriters and the General Partner exercise
the option granted in Section 2(b) hereof to purchase all or any portion of
the U.S. Option Securities, the representations and warranties of the Company,
the Selling Shareholder and the General Partner contained herein and the
statements in any certificates furnished by the Company, the Selling
Shareholder or the General Partner hereunder shall be true and correct as
of the relevant Date of Delivery, and the U.S. Representatives shall have
received:
(1) A certificate, dated such Date of Delivery, of the Chairman or
President of the Company and of the chief financial or chief accounting
officer of the Company confirming that the certificate delivered at Closing
Time pursuant to Section 5(c) remains true as of the Date of Delivery.
(2) A certificate, dated such Date of Delivery, of an Attorney in
Fact on behalf of the Selling Shareholder confirming that the certificate
delivered at Closing Time pursuant to Section 5(d) remains true and correct
as of such Date of Delivery.
(3) The favorable opinions of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & Ballon
LLP, counsel for the Company, the Selling Shareholder and General
Partner, in the form and substance
-26-
reasonably satisfactory to counsel for the U.S. Underwriters, dated such
Date of Delivery, relating to the U.S. Option Securities and otherwise to
the same effect as the opinions required by Section 5(b)(1) and 5(b)(2).
(4) The favorable opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for
the U.S. Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities and otherwise to the same effect as the opinion required
by Section 5(b)(3).
(5) A letter from BDO ▇▇▇▇▇▇▇, LLP, in form and substance
satisfactory to the U.S. Underwriters and dated such Date of Delivery,
substantially the same in scope and substance as the letter furnished to
the U.S. Representatives pursuant to Section 5(f) except that any
"specified date" in the letter furnished pursuant to this Section (5)(i)(5)
shall be a date not more than three days prior to the Date of Delivery.
(j) At Closing Time and at each Date of Delivery, if any, counsel for
the U.S. Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as contemplated herein, in the
International Purchase Agreement and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the agreements or conditions, herein contained; and all
proceedings taken by the Company, the Selling Shareholder and the General
Partner in connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the U.S.
Representatives and counsel for the U.S. Underwriters.
(k) Contemporaneously with the purchase by the U.S. Underwriters of the
Initial U.S. Securities under this Agreement, the International Managers shall
have purchased the Initial International Securities under the International
Purchase Agreement.
(l) 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 U.S. Option Securities on a Date of Delivery
which is after the Closing Time, the obligations of the several U.S.
Underwriters to purchase the relevant U.S. Option Securities, may be terminated
by the U.S. Representatives 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 and except that Sections 1, 6, 7 and 8 hereof shall survive any such
termination and remain in full force and effect.
-27-
SECTION 6. INDEMNIFICATION. (a) The Company, the Selling Shareholder
and the General Partner agree to indemnify and hold harmless each U.S.
Underwriter, its directors, officers and employees, and each person, it any
who controls any U.S. Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act to the extent and in the manner set
forth in clauses (i), (ii) and (iii) below.
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arisingof 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 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 arisingof any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectuses (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, if 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 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 this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arisingof 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 U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if
-28-
applicable, or any preliminary prospectus or the U.S. Prospectus (or any
amendment or supplement thereto).
(b) Each U.S. Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, each of its officers
who signed the Registration Statement, the Selling Shareholder, the General
Partner 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 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 Information, if
applicable, or any preliminary U.S. prospectus or the U.S. Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such U.S. Underwriter through
the U.S. Representatives expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the U.S. Prospectus
(or any amendment or supplement thereto).
(c) 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 arisingof 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
-29-
settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arisingof 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.
(d) In the event of a claim for indemnity pursuant to the provisions
of this Section 6, each indemnified party severally agrees to seek such
indemnity in full from the Company. If, after seeking such indemnity, any
indemnified party is unable, for any reason, to obtain such indemnity from
the Company, such indemnified party may seek indemnity from the Selling
Shareholder and the General Partner, whose obligations hereunder shall be
joint and several, in accordance with the provisions of subsection (a) of
this Section.
(e) 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) 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.
(f) The provisions of this Section shall not affect any agreement
between the Company, the Selling Shareholder and General Partner with
respect to indemnification.
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, Selling Shareholder and the General Partner on the one hand and
the U.S. Underwriters on the other hand from the offering of the 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, the Selling Shareholder and the
General Partner on the one hand and of the U.S. Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
-30-
The relative benefits received by the Company, the Selling Shareholder
and the General Partner on the one hand and the U.S. Underwriters on the
other hand in connection with the offering of the 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 Securities pursuant to this
Agreement (before deducting expenses) received by the Company, the Selling
Shareholder and the General Partner and the total underwriting discount
received by the U.S. 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 aggregate initial public offering price of the
Securities as set forth on such cover. In addition, for purposes of this
section, the General Partner shall be deemed to have received any net proceeds
received by the Selling Shareholder.
The relative fault of the Company, the Selling Shareholder and the
General Partner on the one hand and the U.S. 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, the Selling Shareholder or the General Partner or by the U.S.
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholder, the General Partner and the U.S.
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 U.S. 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 U.S. 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.
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For purposes of this Section 7, each person, if any, who controls a U.S.
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 U.S.
Underwriter, and each director of 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. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial Securities set forth opposite
their respective names in Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement between
the Company, the Selling Shareholder and the General Partner with respect to
contribution.
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 any of its
subsidiaries or the Selling Shareholder or General Partner submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of any U.S. Underwriter or controlling
person, or by or on behalf of the Company, the Selling Shareholder or General
Partner and shall survive delivery of the Securities to the U.S. Underwriters.
SECTION 9. TERMINATION OF AGREEMENT. (a) The U.S. Representatives may
terminate this agreement, by notice to the Company and the Selling Shareholder,
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 U.S. 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 or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis 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 U.S. Representatives, impracticable
to market the Securities or to enforce contracts for the sale of the Securities,
or (iii) if trading in any of the securities of the Company has been suspended
or materially limited by the Commission or the New York Stock Exchange, or if
trading generally on either 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 maximum
ranges for prices have been required, by any of said Exchanges or by order of
the Commission,
-32-
the NASD or any governmental authority, or if a banking moratorium has been
declared by either Federal, New York or Pennsylvania authorities.
(b) 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, 7 and 8
hereof shall survive such termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE U.S. UNDERWRITERS. If one or
more of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery
to purchase the U.S. Securities which it or they are obligated to purchase under
this Agreement (the "Defaulted Securities"), the U.S. Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting U.S. Underwriters, or any other underwriters, 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, the U.S.
Representatives 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 U.S. Securities to be purchased on such date, each of the
non-defaulting U.S. Underwriters 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 all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of U.S. 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 U.S. Underwriters to purchase and of the Selling
Shareholder to sell the U.S. Option Securities to be purchased and sold on
such Date of Delivery, shall terminate without liability on the part of any
non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.
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 U.S.
Underwriters to purchase and the Selling Shareholder to sell the relevant U.S.
Option Securities, as the case may be, either the U.S. Representatives or the
Company shall have the right to postpone Closing Time or the relevant Date of
Delivery for a period not
-33-
exceeding seven days in order to effect any required changes in the Registration
Statement or the Prospectuses or in any other documents or arrangements. As used
herein, the term "U.S. Underwriter" includes any person substituted for a U.S.
Underwriter under this Section 10.
SECTION 11. DEFAULT BY THE SELLING SHAREHOLDER. If the Selling
Shareholder shall fail at Closing Time or a Date of Delivery to sell and deliver
the number of U.S. Securities which such Selling Shareholder is obligated to
sell hereunder, then the U.S. Representatives may, at their option, by notice to
the Company and the Selling Shareholder, terminate this Agreement without
liability on the part of any non-defaulting party except that the provisions of
Section 1, 4, 6, 7 and 8 shall remain in full force and effect.
In the event of a default by the Selling Shareholder as referred to in this
Section 11, the U.S. Underwriters shall have the right to postpone Closing Time
or a Date of Delivery for a period not exceeding seven days in order to effect
any required changes in the Registration Statement or the Prospectuses or in any
other documents or arrangements.
No action taken pursuant to this Section 11 shall relieve the Company or
the Selling Shareholder from liability, if any, in respect of such default.
SECTION 12. 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 U.S.
Underwriters shall be directed to the U.S. Representatives c/o Merrill ▇▇▇▇▇
& Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, North Tower, World
Financial Center, New York, N.Y. 10281-1201, attention of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
Managing Director; and notices to the Company, the Selling Shareholder and
the General Partner shall be directed to ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇.
SECTION 13. PARTIES. This Agreement shall each inure to the benefit of
and be binding upon the U.S. Underwriters, the Company, the Selling
Shareholder and the General Partner and their respective successors, heirs
and legal representatives. Nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any person, firm or corporation,
other than the U.S. Underwriters, the Company, the Selling Shareholder and
the General Partner and their respective successors, heirs and legal
representatives and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their respective successors, heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein or therein contained.
This Agreement and all conditions and provisions hereof are intended to be
for the sole and exclusive benefit of the U.S. Underwriters, the Company, the
Selling
-34-
Shareholder and the General Partner and their respective successors, heirs
and legal representatives, and said controlling persons and officers and
directors and their respective successors, heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
U.S. Securities from any U.S. Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Specified times of day refer
to New York City time.
SECTION 15. EFFECT OF HEADINGS. The section headings herein contained are
for convenience only and shall not affect the construction hereof.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to each of the Company, the Selling
Shareholder and the General Partner a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement
between the U.S. Underwriters, the Company, the Selling Shareholder and the
General Partner in accordance with its terms.
Very truly yours,
▇▇▇▇▇ APPAREL GROUP, INC.
By:_______________________
Name:
Title:
SELLING SHAREHOLDER
By:_______________________
Attorney in Fact, acting
on behalf of Bristol
▇▇▇▇▇▇▇▇▇▇▇ Investments, L.P.
GENERAL PARTNER
___________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: _________________________________
Authorized Signatory:
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.
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SCHEDULE A
NUMBER OF INITIAL U.S.
NAME OF THE U.S. UNDERWRITER SECURITIES TO BE
PURCHASED
Merrill, Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated. . . . . . . .
Bear, ▇▇▇▇▇▇▇ & Co. Inc. . . . . . . . .
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . 3,600,000
---------
---------
SCHEDULE B
List of subsidiaries
Melru Corporation
▇▇▇▇▇ Apparel Group Canada Inc.
▇▇▇▇▇ Investment Co., Inc.
▇▇▇▇▇ Holding Corporation
Camisas de ▇▇▇▇▇▇ ▇.▇. De C.V.
SCHEDULE C
▇▇▇▇▇ Apparel Group, Inc.
3,600,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the U.S. Securities,
determined as provided in said Section 2, shall be $[___].
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $__, being an amount equal to the initial public
offering price set forth above less $__ per share; provided that the purchase
price per share for any U.S. Option Securities purchased upon the exercise of
the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial U.S. Securities but not payable on the U.S. Option
Securities.
SCHEDULE D
NAME LOCK-UP PERIOD
▇▇▇▇▇ Apparel Group, Inc. 90 days
▇▇▇▇▇▇ ▇▇▇▇▇▇ 90 days
The ▇▇▇▇▇▇ ▇▇▇▇▇▇ Foundation 90 days
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 30 days
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 30 days
▇▇▇▇▇▇ ▇. Card 30 days
▇▇▇▇ ▇. ▇▇▇▇▇▇ 30 days
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 30 days
▇▇▇▇▇▇ ▇▇▇▇▇▇ 30 days
▇▇▇▇ ▇▇▇▇▇ 30 days
[Form of lock-up from directors, officers or other stockholders]
Exhibit A
[October ___, 1997]
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
Bear, ▇▇▇▇▇▇▇ International Limited
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
as Lead Managers of the several
International Managers to be named in the
within-mentioned International Purchase Agreement
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: PROPOSED PUBLIC OFFERING BY ▇▇▇▇▇ APPAREL GROUP, INC.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of ▇▇▇▇▇
Apparel Group, Inc., Pennsylvania corporation (the "Company"), understands
(i) that ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), Bear, ▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co., as U.S. Representatives of the several U.S. Underwriters to be named in
Schedule A to the U.S. Purchase Agreement (as defined herein), propose to
enter into a U.S. Purchase Agreement (the "U.S. Purchase Agreement") with the
Company, Bristol ▇▇▇▇▇▇▇▇▇▇▇ Investments, L.P., a Delaware limited
partnership (the "Selling Shareholder") and ▇▇▇▇▇▇ ▇▇▇▇▇▇, sole general
partner of the Selling Shareholder (the "General Partner") and (ii) that
▇▇▇▇▇▇▇ ▇▇▇▇▇ International, Bear, ▇▇▇▇▇▇▇ International Limited and ▇▇▇▇▇▇▇
▇▇▇▇▇ International, as Lead Managers of the several International Managers
to be named in Schedule A to the International Purchase Agreement (as defined
herein), propose to enter into an International Purchase Agreement (the
"International Purchase Agreement" and collectively with the U.S. Purchase
Agreement, the "Purchase Agreements") with the Company, the Selling
Shareholder and the General Partner, in each case providing for the public
offering of shares (the "Securities") of the Company's common stock, par
value $.01 per share (the "Common Stock"). The U.S. Underwriters and the
International Managers to be named in Schedule A to each of the U.S. Purchase
Agreement and the International Purchase Agreement, respectively, are
collectively referred to herein as the "Underwriters."
In recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder [and an officer and/or director] of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each of the
Underwriters that, during a period of [___________ days]
[SEE SCHEDULE D TO U.S. PURCHASE AGREEMENT FOR NUMBER OF DAYS] from the date
of the Purchase Agreements, the undersigned will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any share of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the 1933
Act with respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
Very truly yours,
Signature: _________________
Print Name:_________________
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