EXHIBIT 4.4
SUPREME INTERNATIONAL CORPORATION
(a Florida corporation)
Senior Subordinated Notes due 2006
PURCHASE AGREEMENT
Dated: March 31, 1999
TABLE OF CONTENTS
PAGE
SECTION 1. REPRESENTATIONS AND WARRANTIES.................................................................2
(a) Representations and Warranties by the Company and the Subsidiary Guarantors....................2
(i) Offering Memorandum...................................................................2
(ii) Independent Accountants...............................................................3
(iii) Financial Statements..................................................................3
(iv) No Material Adverse Change in Business................................................3
(v) Good Standing of the Company..........................................................4
(vi) Good Standing of Subsidiaries and of ▇▇▇▇▇ ▇▇▇▇▇......................................4
(vii) Capitalization........................................................................5
(viii) Authorization of Agreement............................................................5
(ix) Authorization of the Indenture........................................................5
(x) Authorization of the Securities.......................................................5
(xi) Authorization of the Registration Rights Agreement....................................6
(xii) Consummation of the ▇▇▇▇▇ ▇▇▇▇▇ Acquisition...........................................6
(xiii) Description of the Securities, the Indenture and the Registration Rights
Agreement.............................................................................6
(xiv) Absence of Defaults and Conflicts.....................................................7
(xv) Absence of Default Under Senior Indebtedness..........................................7
(xvi) Absence of Labor Dispute..............................................................8
(xvii) Absence of Proceedings; No Change in Import Regulations...............................8
(xviii) Possession of Intellectual Property...................................................8
(xix) Absence of Further Requirements.......................................................9
(xx) Possession of Licenses and Permits....................................................9
(xxi) Title to Property.....................................................................9
(xxii) Tax Returns..........................................................................10
(xxiii) Registration Rights..................................................................10
(xxiv) Environmental Laws...................................................................10
(xxv) Investment Company Act...............................................................11
(xxvi) Similar Offerings....................................................................11
(xxvii) Rule 144A Eligibility................................................................11
-i-
(xxviii) No General Solicitation..............................................................11
(xxix) No Registration Required.............................................................11
(xxx) Reporting Company....................................................................11
(xxxi) No Directed Selling Efforts..........................................................12
(xxxii) Solvency.............................................................................12
(xxxiii) Year 2000............................................................................12
(xxxiv) Internal Accounting Controls.........................................................12
(xxxv) Insurance............................................................................13
(xxxvi) No Stabilization or Manipulation.....................................................13
(xxxvii) No Undisclosed Relationships.........................................................13
(xxxviii) No Distribution of Unauthorized Materials...........................................13
(xxxix) No Cessation of Supply...............................................................13
(xl) No Additional Documents..............................................................13
(b) Officer's Certificates........................................................................14
SECTION 2. SALE AND DELIVERY TO INITIAL PURCHASERS; CLOSING..............................................14
(a) Securities....................................................................................14
(b) Payment.......................................................................................14
(c) Denominations; Registration...................................................................14
SECTION 3. COVENANTS OF THE COMPANY AND THE SUBSIDIARY GUARANTORS........................................14
(a) Offering Memorandum...........................................................................14
(b) Notice and Effect of Material Events..........................................................15
(c) Amendment to Offering Memorandum and Supplements..............................................15
(d) Qualification of Securities for Offer and Sale................................................15
(e) Rating of Securities..........................................................................15
(f) DTC...........................................................................................16
(g) Use of Proceeds...............................................................................16
(h) Restriction on Sale of Securities.............................................................16
(i) PORTAL Designation............................................................................16
(j) Reporting Requirements........................................................................16
-ii-
(k) ▇▇▇▇▇ ▇▇▇▇▇ Guarantee.........................................................................16
SECTION 4. PAYMENT OF EXPENSES...........................................................................16
(a) Expenses......................................................................................16
(b) Termination of Agreement......................................................................17
SECTION 5. CONDITIONS OF INITIAL PURCHASERS OBLIGATIONS..................................................17
(b) Opinion of Counsel for the Initial Purchasers.................................................17
(c) Officers Certificate..........................................................................17
(d) Accountants Comfort Letter....................................................................18
(e) Bring-down Comfort Letter.....................................................................18
(f) Maintenance of Rating.........................................................................18
(g) PORTAL........................................................................................18
(h) Registration Rights Agreement.................................................................18
(i) Additional Documents..........................................................................18
(j) Consummation of the ▇▇▇▇▇ ▇▇▇▇▇ Acquisition...................................................19
(k) Consent under Senior Credit Agreement and Amendment of Lease..................................19
(l) Lockup........................................................................................19
(m) Termination of Agreement......................................................................19
SECTION 6. SUBSEQUENT OFFERS AND RESALES OF THE SECURITIES...............................................19
(a) Offer and Sale Procedures.....................................................................19
(i) Offers and Sales Only to Qualified Institutional Buyers..............................19
(ii) No General Solicitation..............................................................20
(iii) Purchases by Non-Bank Fiduciaries....................................................20
(iv) Subsequent Purchaser Notification....................................................20
(v) Minimum Principal Amount.............................................................20
(vi) Restrictions on Transfer.............................................................20
(vii) Delivery of Offering Memorandum......................................................20
(b) Covenants of the Company and the Subsidiary Guarantors........................................20
(i) Integration..........................................................................20
(ii) Rule 144A Information................................................................21
(iii) Restriction on Resales...............................................................21
-iii-
(c) Qualified Institutional Buyer.................................................................21
(d) Resale Pursuant to Rule 903 of Regulation S or Rule 144A......................................21
(e) Additional Representations and Warranties of Initial Purchasers...............................22
SECTION 7. INDEMNIFICATION...............................................................................22
(a) Indemnification of Initial Purchasers.........................................................22
(b) Indemnification of the Company and the Subsidiary Guarantors..................................23
(c) Actions Against Parties; Notification.........................................................23
(d) Settlement Without Consent If Failure to Reimburse............................................23
SECTION 8. CONTRIBUTION..................................................................................24
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY................................25
SECTION 10. TERMINATION OF AGREEMENT......................................................................25
(a) Termination; General..........................................................................25
(b) Liabilities...................................................................................26
SECTION 11. DEFAULT BY ONE OR MORE OF THE INITIAL PURCHASERS..............................................26
SECTION 12. NOTICES.......................................................................................26
SECTION 13. PARTIES.......................................................................................26
SECTION 14. APPOINTMENT OF AGENT FOR SERVICE..............................................................27
SECTION 15. GOVERNING LAW AND TIME........................................................................27
SECTION 16. EFFECT OF HEADINGS............................................................................27
SCHEDULES
SCHEDULE A - LIST OF INITIAL PURCHASERS...........................................................SCH A-1
SCHEDULE B - PRICING INFORMATION..................................................................SCH B-1
SCHEDULE C - LIST OF SUBSIDIARIES.................................................................SCH C-1
EXHIBITS
EXHIBIT A - FORM OF OPINION OF COMPANY'S COUNSEL......................................................A-1
-iv-
SUPREME INTERNATIONAL CORPORATION
(a Florida corporation)
$100,000,000
Senior Subordinated Notes due 2006
PURCHASE AGREEMENT
March 31, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Securities, Inc.
Barington Capital Group, L.P.
as Representatives of the several Initial Purchasers
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Supreme International Corporation, a Florida corporation (the
"Company"), and each of Supreme Munsingwear Canada, Inc., a corporation
organized under the laws of Canada, Supreme International (Delaware), Inc., a
Delaware corporation, Supreme International (N.Y.), Inc., a New York
corporation, Supreme Acquisition Corporation, a Florida corporation, and Supreme
International Corporation de Mexico, S.A. de C.V., a corporation organized under
the laws of Mexico (collectively, the "Subsidiary Guarantors"), confirm their
agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other Initial Purchasers named in
Schedule A hereto (collectively, the "Initial Purchasers", which term shall also
include any initial purchaser substituted as hereinafter provided in Section 11
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc.,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Securities, Inc. and Barington Capital Group, L.P. are
acting as Representatives (in such capacity, the "Representatives"), with
respect to the issue and sale by the Company and the purchase by the Initial
Purchasers, acting severally and not jointly, of the respective principal
amounts set forth in said Schedule A of $100,000,000 aggregate principal amount
of the Company's Senior Subordinated Notes due 2006 (the "Securities"). The
Securities are to be issued pursuant to an indenture dated as of April 6, 1999
(the "Indenture") among the Company, each Subsidiary Guarantor and State Street
Bank and Trust Company, as trustee (the "Trustee"). The obligations of the
Company under the Indenture and the Securities will be guaranteed (the
"Subsidiary Guarantees") by each of the Subsidiary Guarantors, pursuant to the
Indenture.
Securities issued in book-entry form will be issued to Cede & Co. as
nominee of The Depository Trust Company ("DTC") pursuant to a letter agreement,
to be dated as of the Closing
Time (as defined in Section 2(b)) (the "DTC Agreement"), among the Company, the
Trustee and DTC.
The holders of Securities will be entitled to the benefits of a
Registration Rights Agreement, in form and substance reasonably satisfactory to
the Initial Purchasers (the "Registration Rights Agreement"), pursuant to which
the Company and the Subsidiary Guarantors will file a registration statement
with the Securities and Exchange Commission (the "Commission") registering the
Securities and/or Exchange Securities together with the related Subsidiary
Guarantees referred to in the Registration Rights Agreement under the Securities
Act of 1933, as amended (the "1933 Act").
The Company and each Subsidiary Guarantor understand that the Initial
Purchasers propose to make an offering of the Securities on the terms and in the
manner set forth herein and agree that the Initial Purchasers may resell,
subject to the conditions set forth herein, all or a portion of the Securities
to purchasers ("Subsequent Purchasers") at any time after this Agreement has
been executed and delivered. The Securities are to be offered and sold through
the Initial Purchasers without being registered under the 1933 Act, in reliance
upon exemptions therefrom. Pursuant to the terms of the Securities and the
Indenture, investors that acquire Securities may only resell or otherwise
transfer such Securities if such Securities are hereafter registered under the
1933 Act or if an exemption from the registration requirements of the 1933 Act
is available (including the exemption afforded by Rule 144A ("Rule 144A") or
Regulation S ("Regulation S") of the rules and regulations promulgated under the
1933 Act by the Commission).
The Company has prepared on behalf of itself and the Subsidiary
Guarantors and delivered to each Initial Purchaser copies of a preliminary
offering memorandum dated March 15, 1999 (the "Preliminary Offering Memorandum")
and has prepared and will deliver to each Initial Purchaser, on the date hereof
or the next succeeding day, copies of a final offering memorandum dated March
31, 1999 (the "Final Offering Memorandum"), each for use by such Initial
Purchaser in connection with its solicitation of purchases of, or offering of,
the Securities. "Offering Memorandum" means, with respect to any date or time
referred to in this Agreement, the most recent offering memorandum (whether the
Preliminary Offering Memorandum or the Final Offering Memorandum, or any
amendment or supplement to either such document), including exhibits thereto,
which has been prepared and delivered by the Company to the Initial Purchasers
in connection with their solicitation of purchases of, or offering of, the
Securities.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY AND THE SUBSIDIARY
GUARANTORS. The Company and each of the Subsidiary Guarantors, jointly and
severally, represent and warrant to each Initial Purchaser as of the date hereof
and as of the Closing Time referred to in Section 2(b) hereof, and agree with
each Initial Purchaser, as follows:
(i) OFFERING MEMORANDUM. The Offering Memorandum does not, and
at the Closing Time will not, include an untrue statement of a
material fact or 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; provided
2
that this representation, warranty and agreement shall not apply to
statements in or omissions from the Offering Memorandum made in
reliance upon and in conformity with information furnished to the
Company in writing by any Initial Purchaser through ▇▇▇▇▇▇▇ ▇▇▇▇▇
expressly for use in the Offering Memorandum.
(ii) INDEPENDENT ACCOUNTANTS. The accountants who certified
the financial statements and supporting schedules included in the
Offering Memorandum are independent public accountants with respect
to the Company and its subsidiaries within the meaning of
Regulation S-X under the 1933 Act.
(iii) FINANCIAL STATEMENTS. The financial statements, together
with the related schedules and notes, included in the Offering
Memorandum present fairly the financial position of the Company and
its consolidated subsidiaries, and of ▇▇▇▇▇ ▇▇▇▇▇ International,
Inc. ("▇▇▇▇▇ ▇▇▇▇▇") at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries, and of ▇▇▇▇▇ ▇▇▇▇▇ for the periods
specified; said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Offering Memorandum
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 Offering Memorandum present
fairly the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements
included in the Offering Memorandum. The pro forma financial
statements of the Company and its subsidiaries and the related
notes thereto included in the Offering Memorandum present fairly
the information shown therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro
forma financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and
circumstances referred to therein.
(iv) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the
respective dates as of which information is given in the Offering
Memorandum, 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, whether or not arising in the ordinary course of
business, of the Company and its subsidiaries considered as one
enterprise or of ▇▇▇▇▇ ▇▇▇▇▇ (a "Material Adverse Effect") and (B)
there have been no transactions entered into by the Company or any
of its subsidiaries or by ▇▇▇▇▇ ▇▇▇▇▇, other than those in the
ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise or with
respect to ▇▇▇▇▇ ▇▇▇▇▇, there has been no dividend or distribution
of any kind declared, paid or made by the Company or by ▇▇▇▇▇ ▇▇▇▇▇
on any class of their capital stock, except for the pre-acquisition
distribution of cash by ▇▇▇▇▇ ▇▇▇▇▇ pursuant to the terms of the
Stock Purchase Agreement (as defined in (xii) below).
3
(v) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Florida and has corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Offering Memorandum and to enter
into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vi) GOOD STANDING OF SUBSIDIARIES AND OF ▇▇▇▇▇ ▇▇▇▇▇. Each of
the Company's subsidiaries and ▇▇▇▇▇ ▇▇▇▇▇ has been duly organized
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 Offering Memorandum and is
duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material
Adverse Effect; except as otherwise disclosed in the Offering
Memorandum, all of the issued and outstanding capital stock of each
subsidiary of the Company has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of such
subsidiary was issued in violation of any preemptive or similar
rights of any securityholder of such subsidiary; all of the issued
and outstanding capital stock of ▇▇▇▇▇ ▇▇▇▇▇ has been duly
authorized and validly issued, is fully paid and non-assessable and
will at the Closing Time be owned by the Company, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim
or equity, except for any security interest, mortgage, pledge,
lien, encumbrance, claim or equity granted pursuant to the Amended
and Restated Loan and Security Agreement dated March 26, 1999 among
the Company and certain of its subsidiaries, as borrowers,
Nationsbank, N.A., as agent, and the banks party thereto from time
to time (the "Senior Credit Agreement") or the Master Agreement
dated August 28, 1997 among the Company, as lessee, SUP Joint
Venture, as lessor, Suntrust Bank, Miami, N.A., as agent, Atlantic
Financial Managers, Inc. and Atlantic Financial Group, Ltd. and
certain other financial institutions, as lenders, and the related
Lease Agreement (Land), Lease Agreement (Building), Loan Agreement,
Guaranty and Security Agreement and Financing Statement, as amended
(the "Lease"), and none of the outstanding shares of capital stock
of ▇▇▇▇▇ ▇▇▇▇▇ was issued in violation of any preemptive or similar
rights of any security holder of ▇▇▇▇▇ ▇▇▇▇▇. The only subsidiaries
of the Company are the subsidiaries listed on Schedule C hereto.
4
(vii) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company is:
(i) Preferred Stock-$.01 par value; 1,000,000 shares
authorized; no shares issued or outstanding;
(ii) Class A Common Stock-$.01 par value; 30,000,000
shares authorized; no shares issued or outstanding;
and
(iii) Common Stock-$.01 par value; 30,000,000 shares
authorized; 6,712,374 shares issued and outstanding
as of January 31, 1999;
(except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to reservations, agreements, employee benefit
plans referred to in the Offering Memorandum or pursuant to the
exercise of convertible securities or options referred to in the
Offering Memorandum). The shares of issued and outstanding capital
stock of the Company have been duly authorized and validly issued
and are fully paid and non-assessable; none of the outstanding
shares of capital stock of the Company was issued in violation of
the preemptive or other similar rights of any securityholder of the
Company.
(viii) AUTHORIZATION OF AGREEMENT. This Agreement has been
duly authorized, executed and delivered by the Company and each of
the Subsidiary Guarantors.
(ix) AUTHORIZATION OF THE INDENTURE. The Indenture has been
duly authorized by the Company and each Subsidiary Guarantor and,
when executed and delivered by the Company, each Subsidiary
Guarantor and the Trustee, will constitute a valid and binding
agreement of the Company and each Subsidiary Guarantor, enforceable
against the Company and each Subsidiary Guarantor in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles
of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(x) AUTHORIZATION OF THE SECURITIES. The Securities have been
duly authorized and, at the Closing Time, will have been duly
executed by the Company and, when authenticated, issued and
delivered in the manner provided for in the Indenture and delivered
against payment of the purchase price therefor as provided in this
Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers) reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles
5
of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the Indenture and
the Registration Rights Agreement.
(xi) AUTHORIZATION OF THE REGISTRATION RIGHTS AGREEMENT. The
Registration Rights Agreement has been duly authorized by the
Company and each Subsidiary Guarantor and, when executed and
delivered by the Company, each Subsidiary Guarantor and the
Representatives will constitute a valid and binding agreement of
the Company and each Subsidiary Guarantor, enforceable against the
Company and each Subsidiary Guarantor in accordance with its terms
except as enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
relating to or affecting enforcement of creditors' rights
generally, and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xii) CONSUMMATION OF THE ▇▇▇▇▇ ▇▇▇▇▇ ACQUISITION. On January
28, 1999, the Company entered into a stock purchase agreement (the
"Stock Purchase Agreement") to buy all of the equity stock of ▇▇▇▇▇
▇▇▇▇▇ for approximately $75.0 million in cash (the "▇▇▇▇▇ ▇▇▇▇▇
Acquisition"). At the Closing Time, there shall not be any pending
or threatened legal or governmental proceedings with respect to the
▇▇▇▇▇ ▇▇▇▇▇ Acquisition or to any of the transactions contemplated
in the Offering Memorandum under the heading "Use of Proceeds." The
Company and the Subsidiary Guarantors will provide the
Representatives and counsel for the Initial Purchasers the
opportunity to review all closing documents to be delivered by the
parties in connection with the ▇▇▇▇▇ ▇▇▇▇▇ Acquisition. The Stock
Purchase Agreement has been duly authorized, executed and delivered
by the Company and, to the best of the Company's and each of the
Subsidiary Guarantors' knowledge, by each of the other parties
thereto, and constitutes a valid and binding obligation of the
Company and, to the best of the Company's and each of the
Subsidiary Guarantors' knowledge, of each of the other parties
thereto, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles
of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law). The Stock Purchase Agreement is in
full force and effect and, as of the Closing Time, the Company will
have performed all of its obligations thereunder required to be
performed in order to consummate the ▇▇▇▇▇ ▇▇▇▇▇ Acquisition at or
prior to the Closing Time.
(xiii) DESCRIPTION OF THE SECURITIES, THE INDENTURE AND THE
REGISTRATION RIGHTS AGREEMENT. The Securities, the Indenture and
the Registration Rights Agreement will conform in all material
respects to the respective statements relating thereto contained in
the Offering Memorandum and will be in
6
substantially the respective forms last delivered to the Initial
Purchasers prior to the date of this Agreement.
(xiv) ABSENCE OF DEFAULTS AND CONFLICTS. None of the Company,
any of its subsidiaries or ▇▇▇▇▇ ▇▇▇▇▇ 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 agreement or instrument to which
the Company or any of its subsidiaries or ▇▇▇▇▇ ▇▇▇▇▇, as the case
may be, is a party or by which or any of them may be bound, or to
which any of the property or assets of the Company or any of its
subsidiaries or ▇▇▇▇▇ ▇▇▇▇▇, as the case may be, 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, the
Indenture, the Securities, the Registration Rights Agreement and
any other agreement or instrument entered into or issued or to be
entered into or issued by the Company or the Subsidiary Guarantors
in connection with the transactions contemplated hereby or thereby
or in the Offering Memorandum and the consummation of the
transactions contemplated herein and in the Offering Memorandum
(including the issuance and sale of the Securities, the
consummation of the ▇▇▇▇▇ ▇▇▇▇▇ Acquisition and the use of the
proceeds from the sale of the Securities as described in the
Offering Memorandum under the caption "Use of Proceeds") and
compliance by the Company and the Subsidiary Guarantors with their
obligations hereunder and thereunder 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 a 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, singly or in the
aggregate, 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.
(xv) ABSENCE OF DEFAULT UNDER SENIOR INDEBTEDNESS. No event of
default exists under any contract, indenture, mortgage, loan,
agreement, note, lease, or other agreement or instrument
constituting Senior Indebtedness (as defined in the Indenture).
7
(xvi) ABSENCE OF LABOR DISPUTE. No labor dispute with the
employees of the Company or any of its subsidiaries or of ▇▇▇▇▇
▇▇▇▇▇ exists or, to the knowledge of the Company or any Subsidiary
Guarantor, is imminent, and neither the Company nor any Subsidiary
Guarantor is aware of any existing or imminent labor disturbance by
the employees of any of its or any of its subsidiaries' or of ▇▇▇▇▇
▇▇▇▇▇' principal suppliers, manufacturers, customers or
contractors, which, in any case, may reasonably be expected to
result in a Material Adverse Effect.
(xvii) ABSENCE OF PROCEEDINGS; NO CHANGE IN IMPORT
REGULATIONS. Except as disclosed in the Offering Memorandum, 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 or any
Subsidiary Guarantor, threatened, against or affecting the Company,
any of its subsidiaries or ▇▇▇▇▇ ▇▇▇▇▇ which would be required to
be disclosed in the Offering Memorandum if it were a prospectus
filed as part of a registration statement on Form S-1 under the
1933 Act or 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 of the
Company or any of its subsidiaries or of ▇▇▇▇▇ ▇▇▇▇▇ or the
consummation of the transactions contemplated by this Agreement, or
the performance by the Company or the Subsidiary Guarantors of
their respective obligations hereunder, or under the ▇▇▇▇▇ ▇▇▇▇▇
Acquisition. The aggregate of all pending legal or governmental
proceedings to which the Company or any of its subsidiaries, or to
which ▇▇▇▇▇ ▇▇▇▇▇, is a party or of which any of their respective
property or assets is the subject which are not described in the
Offering Memorandum, including ordinary routine litigation
incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect. Since the respective dates as
of which information is given in the Offering Memorandum, there
have been no changes in the laws or regulations governing the
import of any products which the Company imports which would have a
Material Adverse Effect.
(xviii) POSSESSION OF INTELLECTUAL PROPERTY. The Company and
its subsidiaries own or possess, or can acquire on reasonable
terms, adequate 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 or
other intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and
neither the Company nor any of its subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest
of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or
in the aggregate, would result in a Material Adverse Effect. In
addition, upon consummation of the ▇▇▇▇▇ ▇▇▇▇▇ Acquisition, the
Company will own all of the Intellectual Property of ▇▇▇▇▇ ▇▇▇▇▇,
including the ▇▇▇▇▇ ▇▇▇▇▇ trademark, free and
8
clear of any security, interest, mortgage, pledge, lien,
encumbrance, claim or equity other than any security interest,
mortgage, pledge, lien, encumbrance, claim or equity pursuant to
(A) the Senior Credit Agreement, (B) the Lease or (C) existing
licenses or sub-licenses disclosed in the Stock Purchase Agreement.
(xix) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
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,
the Subsidiary Guarantors or ▇▇▇▇▇ ▇▇▇▇▇ of their respective
obligations hereunder, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement or under the Stock
Purchase Agreement, for the due execution, delivery or performance
of the Indenture and the Registration Rights Agreement by the
Company and the Subsidiary Guarantors or for the due execution,
delivery or performance of the Stock Purchase Agreement by the
parties thereto, except such as have been already obtained.
(xx) POSSESSION OF LICENSES AND PERMITS. The Company and its
subsidiaries and ▇▇▇▇▇ ▇▇▇▇▇ possess such permits, licenses,
approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct
the business now operated by them, except where the failure so to
possess would not, singly or in the aggregate, have a Material
Adverse Effect; the Company and its subsidiaries and ▇▇▇▇▇ ▇▇▇▇▇
are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except where the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force
and effect would not have a Material Adverse Effect; and none of
the Company, any of its subsidiaries or ▇▇▇▇▇ ▇▇▇▇▇ has received
any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xxi) TITLE TO PROPERTY. The Company and its subsidiaries have
good and marketable title to all real property owned by the Company
and its subsidiaries and good title to all other properties owned
by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of
any kind except such as (a) are described in the Offering
Memorandum or (b) do not, singly or in the aggregate, materially
affect the value of such property and do not interfere with the use
made or proposed to be made of such property by the Company or any
of its subsidiaries; and all of the leases and subleases material
to the business of the Company and its subsidiaries, considered as
one enterprise, and under which the Company or any of its
subsidiaries hold properties described in the Offering Memorandum,
are in full force and effect, and neither the Company nor any of
its subsidiaries have any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights
9
of the Company or any of its subsidiaries under any of the leases
or subleases mentioned above, or affecting or questioning the
rights of the Company or any of its subsidiaries to the continued
possession of the leased or subleased premises under any such lease
or sublease.
(xxii) TAX RETURNS. All United States federal income tax
returns of the Company and its subsidiaries required by law to be
filed have been filed and all taxes shown by such returns or
otherwise assessed, which are due and payable, have been paid,
except assessments against which appeals have been or will be
promptly taken and as to which adequate reserves have been
provided. The Company and its subsidiaries have filed all other tax
returns that are required to have been filed by them pursuant to
applicable foreign, state, local or other law except insofar as the
failure to file such returns would not result in a Material Adverse
Effect, and has paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Company and its
subsidiaries, except for such taxes, if any, as are being contested
in good faith and as to which adequate reserves have been provided.
The charges, accruals and reserves on the books of the Company in
respect of any income and corporation tax liability for any years
not finally determined are adequate to meet any assessments or
re-assessments for additional income tax for any years not finally
determined, except to the extent of any inadequacy that would not
result in a Material Adverse Effect.
(xxiii) REGISTRATION RIGHTS. Except as described in the
Offering Memorandum, there are no persons with registration rights
or other similar rights to have any debt securities or securities
convertible into, or exchangeable for, debt securities registered
by the Company or any Subsidiary Guarantor under the 1933 Act.
(xxiv) ENVIRONMENTAL LAWS. Except as described in the Offering
Memorandum and except such matters as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) none of the
Company, any of its subsidiaries or ▇▇▇▇▇ ▇▇▇▇▇ is in violation of
any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Company,
its subsidiaries and ▇▇▇▇▇ ▇▇▇▇▇ have all permits, authorizations
and approvals required under any applicable Environmental Laws and
are each in compliance with their requirements, (C) there are no
pending or, to the knowledge of the Company or any of the
Subsidiary Guarantors, threatened administrative, regulatory or
judicial actions,
10
suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating
to any Environmental Law against the Company, any of its
subsidiaries or ▇▇▇▇▇ ▇▇▇▇▇ and (D) there are no events or
circumstances that might reasonably be expected to form the basis
of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency,
against or affecting the Company, any of its subsidiaries or ▇▇▇▇▇
▇▇▇▇▇ relating to Hazardous Materials or Environmental Laws.
(xxv) INVESTMENT COMPANY ACT. Neither the Company nor any
Subsidiary Guarantor is, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Offering Memorandum will be,
an "investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "1940 Act").
(xxvi) SIMILAR OFFERINGS. None of the Company, any Subsidiary
Guarantor or any of their affiliates, as such term is defined in
Rule 501(b) under the 1933 Act (each, an "Affiliate"), has,
directly or indirectly, solicited any offer to buy, sold or offered
to sell or otherwise negotiated in respect of, or will solicit any
offer to buy, sell or offer to sell or otherwise negotiate in
respect of, in the United States or to any United States citizen or
resident, any security which is or would be integrated with the
sale of the Securities in a manner that would require the
Securities to be registered under the 1933 Act.
(xxvii) RULE 144A ELIGIBILITY. The Securities are eligible for
resale pursuant to Rule 144A and will not be, at the Closing Time,
of the same class as securities listed on a national securities
exchange registered under Section 6 of the 1934 Act, or quoted in a
U.S. automated interdealer quotation system.
(xxviii) NO GENERAL SOLICITATION. None of the Company, any
Subsidiary Guarantor or any of their Affiliates or any person
acting on its or any of their behalf (other than the Initial
Purchasers, as to whom the Company and the Subsidiary Guarantors
make no representation) has engaged or will engage, in connection
with the offering of the Securities, in any form of general
solicitation or general advertising within the meaning of Rule
502(c) under the 1933 Act.
(xxix) NO REGISTRATION REQUIRED. Subject to compliance by the
Initial Purchasers with the representations and warranties set
forth in Section 2 and the procedures set forth in Section 6
hereof, it is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers and to each
Subsequent Purchaser in the manner contemplated by this Agreement
and the Offering Memorandum to register the Securities under the
1933 Act or to qualify the Indenture under the Trust Indenture Act
of 1939, as amended (the "1939 Act").
(xxx) REPORTING COMPANY. The Company is subject to the
reporting requirements of Section 13 or Section 15(d) of the 1934
Act.
11
(xxxi) NO DIRECTED SELLING EFFORTS. With respect to those
Securities sold in reliance on Regulation S, (A) none of the
Company, any Subsidiary Guarantor or any of their Affiliates or any
person acting on its or their behalf (other than the Initial
Purchasers, as to whom the Company and the Subsidiary Guarantors
make no representation) has engaged or will engage in any directed
selling efforts within the meaning of Regulation S and (B) each of
the Company, the Subsidiary Guarantors and their Affiliates and any
person acting on its or their behalf (other than the Initial
Purchasers, as to whom the Company and the Subsidiary Guarantors
make no representation) has complied and will comply with the
offering restrictions requirement of Regulation S.
(xxxii) SOLVENCY. The Company and each of the Subsidiary
Guarantors are, and immediately after the Closing Time (after
giving effect to the ▇▇▇▇▇ ▇▇▇▇▇ Acquisition) will be, Solvent. As
used herein, the term "Solvent" means, with respect to the Company
and each Subsidiary Guarantor, on a particular date, that on such
date (A) the fair market value of the assets of the Company or such
Subsidiary Guarantor, as the case may be, is greater than the total
amount of liabilities (including contingent liabilities) of the
Company or such Subsidiary Guarantor, as the case may be, (B) the
present fair salable value of the assets of the Company or such
Subsidiary Guarantor, as the case may be, is greater than the
amount that will be required to pay the probable liabilities of the
Company or such Subsidiary Guarantor, as the case may be, on its
debts as they become absolute and matured, (C) the Company and such
Subsidiary Guarantor, as the case may be, is able to realize upon
its assets and pay its debts and other liabilities, including
contingent obligations, as they mature and (D) the Company and such
Subsidiary Guarantor, as the case may be, does not have an
unreasonably small capital.
(xxxiii) YEAR 2000. All disclosure regarding year 2000
compliance that is required to be described in a registration
statement on Form S-1 under the 1933 Act (including disclosures
required by Staff Legal Bulletin No. 6 and SEC Release No. 33-7558
(July 29, 1998)) has been included in the Offering Memorandum.
Other than as disclosed in the Offering Memorandum, none of the
Company, its subsidiaries or ▇▇▇▇▇ ▇▇▇▇▇ will incur operating
expenses or costs to ensure that their information systems will be
year 2000 compliant which would reasonably be expected to have a
Material Adverse Effect.
(xxxiv) INTERNAL ACCOUNTING CONTROLS. Each of the Company, the
Subsidiary Guarantors and ▇▇▇▇▇ ▇▇▇▇▇ maintains 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 GAAP 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.
12
(xxxv) INSURANCE. Each of the Company, the Subsidiary
Guarantors and ▇▇▇▇▇ ▇▇▇▇▇ carry or are entitled to the benefits
of, insurance with financially sound and reputable insurers, in
such amounts and covering such risks as is generally maintained by
companies of established repute engaged in the same or similar
business, and all such insurance is in full force and effect.
(xxxvi) NO STABILIZATION OR MANIPULATION. None of the Company,
the Subsidiary Guarantors or any of their respective officers,
directors or controlling persons has taken, directly or indirectly,
any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
(xxxvii) NO UNDISCLOSED RELATIONSHIPS. No relationship, direct
or indirect, exists between or among any of the Company, any
Subsidiary Guarantor or any of their Affiliates, on the one hand,
and any director, officer, stockholder, customer or supplier of any
of them, on the other hand, which is required by the 1933 Act or by
the 1933 Act Regulations to be described in a registration
statement on Form S-1 which is not so described, or is not
described as required, in the Offering Memorandum.
(xxxviii) NO DISTRIBUTION OF UNAUTHORIZED MATERIALS. The
Company and the Subsidiary Guarantors have not distributed and,
prior to the later to occur of (i) the Closing Time and (ii)
completion of the distribution of the Securities, will not
distribute any offering material in connection with the offering
and sale of the Securities other than the Offering Memorandum or
other materials, if any, permitted by the 1933 Act and approved by
the Representatives.
(xxxix) NO CESSATION OF SUPPLY. No supplier of merchandise to
the Company or any of the Subsidiary Guarantors (or any of their
subsidiaries) or to ▇▇▇▇▇ ▇▇▇▇▇ has ceased shipments of merchandise
to the Company, any of the Subsidiary Guarantors or ▇▇▇▇▇ ▇▇▇▇▇, as
the case may be, other than in the normal and ordinary course of
business consistent with past practices, which cessation would
result in a Material Adverse Effect.
(xl) NO ADDITIONAL DOCUMENTS. There are no contracts or
documents of a character that would be required to be described in
the Offering Memorandum if it were a prospectus filed as part of a
registration statement on Form S-1 under the 1933 Act that are not
described as would be so required. All such contracts to which the
Company or any of its subsidiaries is party have been duly
authorized, executed and delivered by the Company or such
subsidiaries, as the case may be, and constitute valid and binding
obligations of the Company or such subsidiaries, as the case may
be, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
13
(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of
the Company or any Subsidiary Guarantor delivered to the Representatives or to
counsel for the Initial Purchasers shall be deemed a representation and warranty
by the Company or such Subsidiary Guarantor to each Initial Purchaser as to the
matters covered thereby.
SECTION 2. SALE AND DELIVERY TO INITIAL PURCHASERS; CLOSING.
(a) SECURITIES. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Initial Purchaser, severally and not jointly, and
each Initial Purchaser, severally and not jointly, agrees to purchase from the
Company, at the price set forth in Schedule B, the aggregate principal amount of
Securities set forth in Schedule A opposite the name of such Initial Purchaser,
plus any additional principal amount of Securities which such Initial Purchaser
may become obligated to purchase pursuant to the provisions of Section 11
hereof.
(b) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the office of Shearman &
Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place
as shall be agreed upon by the Representatives and the Company, at 9:00 A.M.
(eastern time) on the third business day after the date hereof (unless postponed
in accordance with the provisions of Section 11), or such other time not later
than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called the "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Initial Purchasers of
certificates for the Securities to be purchased by them. It is understood that
each Initial Purchaser has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Securities which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not
as representative of the Initial Purchasers, may (but shall not be obligated to)
make payment of the purchase price for the Securities to be purchased by any
Initial Purchaser whose funds have not been received by the Closing Time, but
such payment shall not relieve such Initial Purchaser from its obligations
hereunder.
(c) DENOMINATIONS; REGISTRATION. Certificates for the Securities shall
be in such denominations ($100,000 or integral multiples of $1,000 in excess
thereof) and registered in such names as the Representatives may request in
writing at least one full business day before the Closing Time. The certificates
representing the Securities shall be made available for examination and
packaging by the Initial Purchasers in the City of New York not later than 10:00
A.M. on the last business day prior to the Closing Time.
SECTION 3. COVENANTS OF THE COMPANY AND THE SUBSIDIARY GUARANTORS. The
Company and each Subsidiary Guarantor, jointly and severally, covenant with each
Initial Purchaser as follows:
(a) OFFERING MEMORANDUM. The Company, as promptly as possible, will
furnish to each Initial Purchaser, without charge, such number of copies of the
Preliminary Offering
14
Memorandum, the Final Offering Memorandum and any amendments and supplements
thereto as such Initial Purchaser may reasonably request.
(b) NOTICE AND EFFECT OF MATERIAL EVENTS. The Company will immediately
notify each Initial Purchaser, and confirm such notice in writing, of (x) any
filing made by the Company of information relating to the offering of the
Securities with any securities exchange or any other regulatory body in the
United States or any other jurisdiction, and (y) prior to the completion of the
placement of the Securities by the Initial Purchasers as evidenced by a notice
in writing from the Initial Purchasers to the Company, any material changes in
or affecting the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise which (i) make any statement in the Offering Memorandum false or
misleading or (ii) are not disclosed in the Offering Memorandum. In such event
or if during such time any event shall occur as a result of which it is
necessary, in the reasonable opinion of any of the Company, its counsel, the
Initial Purchasers or counsel for the Initial Purchasers, to amend or supplement
the Final Offering Memorandum in order that the Final Offering Memorandum not
include any untrue statement 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 then existing, the Company will forthwith amend or supplement
the Final Offering Memorandum by preparing and furnishing to each Initial
Purchaser an amendment or amendments of, or a supplement or supplements to, the
Final Offering Memorandum (in form and substance satisfactory in the reasonable
opinion of counsel for the Initial Purchasers) so that, as so amended or
supplemented, the Final Offering Memorandum will not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing at the time
it is delivered to a Subsequent Purchaser, not misleading.
(c) AMENDMENT TO OFFERING MEMORANDUM AND SUPPLEMENTS. The Company will
advise each Initial Purchaser promptly of any proposal to amend or supplement
the Offering Memorandum and will not effect such amendment or supplement without
the consent of the Initial Purchasers. Neither the consent of the Initial
Purchasers, nor the Initial Purchaser's delivery of any such amendment or
supplement, shall constitute a waiver of any of the conditions set forth in
Section 5 hereof.
(d) QUALIFICATION OF SECURITIES FOR OFFER AND SALE. The Company will
use its best efforts, in cooperation with the Initial Purchasers, to qualify the
Securities for offering and sale under the applicable securities laws of such
states and other jurisdictions as the Representatives may designate and will
maintain such qualifications in effect as long as required for the sale of the
Securities; 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.
(e) RATING OF SECURITIES. The Company shall take all reasonable action
necessary to enable Standard & Poor's Ratings Services, a division of McGraw
Hill, Inc. ("S&P"), and ▇▇▇▇▇'▇ Investors Service Inc. ("Moody's") to provide
their respective credit ratings of the Securities.
15
(f) DTC. The Company will cooperate with the Representatives and use
its best efforts to permit the Securities to be eligible for clearance and
settlement through the facilities of DTC.
(g) USE OF PROCEEDS. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Offering
Memorandum under "Use of Proceeds".
(h) RESTRICTION ON SALE OF SECURITIES. During a period of 180 days from
the date of the Offering Memorandum, the Company will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, issue, sell, offer or
agree to sell, grant any option for the sale of, or otherwise dispose of, any
other debt securities of the Company or securities of the Company that are
convertible into, or exchangeable for, the Securities or such other debt
securities (other than registered notes to be exchanged for the Securities).
(i) PORTAL DESIGNATION. The Company will use its best efforts to permit
the Securities to be designated PORTAL securities in accordance with the rules
and regulations adopted by the National Association of Securities Dealers, Inc.
("NASD") relating to trading in the PORTAL Market.
(j) REPORTING REQUIREMENTS. The Company, during the period when the
Offering Memorandum is required to be delivered pursuant to Section 6(a)(vii)
hereof, 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.
(k) ▇▇▇▇▇ ▇▇▇▇▇ GUARANTEE. Immediately following the consummation of
the ▇▇▇▇▇ ▇▇▇▇▇ Acquisition, the Company shall cause ▇▇▇▇▇ ▇▇▇▇▇ International,
Inc. to execute and deliver to the Trustee a supplemental indenture in
accordance with the terms of the Indenture pursuant to which ▇▇▇▇▇ ▇▇▇▇▇
International, Inc. shall assume the obligations of a Subsidiary Guarantor (as
defined in the Indenture).
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, the Securities, the
Registration Rights Agreement and the Indenture including (i) the preparation,
printing, delivery to the Initial Purchasers and any filing of the Offering
Memorandum (including financial statements and any schedules or exhibits and any
document incorporated therein by reference) and of each amendment or supplement
thereto, (ii) the preparation, printing and delivery to the Initial Purchasers
of this Agreement, any Agreement among Initial Purchasers, the Indenture, the
Registration Rights Agreement and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Initial Purchasers, including any transfer taxes, any
stamp or other duties payable upon the sale, issuance and delivery of the
Securities to the Initial Purchasers and any charges of DTC in connection
therewith, (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(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the Initial
Purchasers in connection therewith
16
and in connection with the preparation of the Blue Sky Survey, and any
supplement thereto, (vi) the fees and expenses of the Trustee, including the
fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities, (vii) any fees payable in connection with the
rating of the Securities, and (viii) any fees and expenses payable in connection
with the initial and continued designation of the Securities as PORTAL
securities under the PORTAL Market Rules pursuant to NASD Rule 5322.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
10(a)(i) hereof, the Company and the Subsidiary Guarantors, jointly and
severally, shall reimburse the Initial Purchasers for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Initial Purchasers.
SECTION 5. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The
obligations of the several Initial Purchasers hereunder are subject to the
accuracy of the representations and warranties of the Company and the Subsidiary
Guarantors contained in Section 1 hereof or in certificates of any officer of
the Company or any of its subsidiaries delivered pursuant to the provisions
hereof, to the performance by each of the Company and the Subsidiary Guarantors
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) OPINION OF COUNSEL FOR THE COMPANY AND THE SUBSIDIARY GUARANTORS.
At the Closing Time, the Representatives shall have received the favorable
opinion, dated as of the Closing Time, of Broad and ▇▇▇▇▇▇, counsel for the
Company and the Subsidiary Guarantors, in form and substance satisfactory to
counsel for the Initial Purchasers, together with signed or reproduced copies of
such letter for each of the other Initial Purchasers to the effect set forth in
Exhibit A hereto and to such further effect as counsel for the Initial
Purchasers may reasonably request. Such opinion shall state that counsel for the
Initial Purchasers may rely on such opinion as to matters of Florida Law. 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 officers
of the Company and its subsidiaries and of ▇▇▇▇▇ ▇▇▇▇▇ and certificates of
public officials.
(b) OPINION OF COUNSEL FOR THE INITIAL PURCHASERS. At the Closing Time,
the Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Shearman & Sterling, counsel for the Initial Purchasers,
together with signed or reproduced copies of such letter for each of the other
Initial Purchasers with respect to certain matters set forth in Exhibit A
hereto. In giving such opinion such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the law of the State of New York and the
federal law of the United States, upon the opinions of counsel satisfactory to
the Representatives. 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 officers of the Company and its subsidiaries and of ▇▇▇▇▇ ▇▇▇▇▇
and certificates of public officials.
(c) OFFICERS' CERTIFICATE. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Representatives shall have received certificates of the President or a Vice
President of the
17
Company and each Subsidiary Guarantor and of the chief financial or chief
accounting officer of the Company and each Subsidiary Guarantor, dated as of the
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1 hereof are true and
correct with the same force and effect as though expressly made at and as of the
Closing Time, and (iii) the Company and each Subsidiary Guarantor have complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time.
(d) ACCOUNTANTS' COMFORT LETTER. At the time of the execution of this
Agreement, the Representatives shall have received from each of Deloitte &
Touche LLP and ▇▇▇▇ ▇. ▇▇▇▇ & Co., P.C. a letter dated such date, in form and
substance satisfactory to the Representatives, together with signed or
reproduced copies of such letter for each of the other Initial Purchasers
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to Initial Purchasers with respect to the
financial statements and certain financial information contained in the Offering
Memorandum.
(e) BRING-DOWN COMFORT LETTER. At the Closing Time, the Representatives
shall have received from each of Deloitte & Touche LLP and ▇▇▇▇ ▇. ▇▇▇▇ & Co.,
P.C. a letter, dated as of the Closing Time, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the specified date referred to shall be a date not more
than three business days prior to the Closing Time.
(f) MAINTENANCE OF RATING. At the Closing Time, the Securities shall be
rated at least B3 by Moody's and B- by S&P, and the Company shall have delivered
to the Representatives a letter dated the Closing Time, from each such rating
agency, or other evidence satisfactory to the Representatives, confirming that
the Securities have such ratings; and since the date of this Agreement, there
shall not have occurred a downgrading in the rating assigned to the Securities
or any of the Company's other debt securities by any "nationally recognized
statistical rating agency", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the 1933 Act, and no such securities rating
agency shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of the Securities or any of the
Company's other debt securities.
(g) PORTAL. At the Closing Time, the Securities shall have been
designated for trading on PORTAL.
(h) REGISTRATION RIGHTS AGREEMENT. At the Closing Time, the
Registration Rights Agreement, in form and substance reasonably satisfactory to
the Initial Purchasers, shall have been duly executed and delivered and be in
full force and effect.
(i) ADDITIONAL DOCUMENTS. At the Closing Time, counsel for the Initial
Purchasers 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 herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Representatives and counsel
for the Initial Purchasers.
18
(j) CONSUMMATION OF THE ▇▇▇▇▇ ▇▇▇▇▇ ACQUISITION. At the Closing Time,
the Company shall have consummated the ▇▇▇▇▇ ▇▇▇▇▇ Acquisition in accordance
with the terms of the Stock Purchase Agreement.
(k) CONSENT UNDER SENIOR CREDIT AGREEMENT AND AMENDMENT OF LEASE. At or
prior to the Closing Time, the Company shall have (i) provided satisfactory
evidence to the Initial Purchasers that the Securities constitute permitted
indebtedness under the Senior Credit Agreement and (ii) presented to the Initial
Purchasers an executed amendment to the Lease satisfactory to the Initial
Purchasers substantially upon the terms and conditions set forth in the letter
from Suntrust Bank to the Company dated the date hereof.
(l) LOCKUP. At the Closing Time, the Initial Purchasers shall have
received a letter from Carfel, Inc. ("Carfel") in form and substance
satisfactory to the Initial Purchasers whereby Carfel agrees not to dispose of
any Securities other than pursuant to transactions taking place not less than
160 days after the Issue Date in reliance on the Prospectus forming part of the
Shelf Registration Statement (as such terms are defined in the Registration
Rights Agreement).
(m) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Company at
any time at or prior to the Closing Time, 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, 7, 8 and 9 shall survive any such termination and remain
in full force and effect.
SECTION 6. SUBSEQUENT OFFERS AND RESALES OF THE SECURITIES.
(a) OFFER AND SALE PROCEDURES. Each of the Initial Purchasers and the
Company hereby establish and agree to observe the following procedures in
connection with the offer and sale of the Securities:
(i) OFFERS AND SALES ONLY TO QUALIFIED INSTITUTIONAL BUYERS.
Offers and sales of the Securities shall only be made (A) to
persons whom the offeror or seller reasonably believes to be
qualified institutional buyers, as defined in Rule 144A under the
1933 Act ("Qualified Institutional Buyers"), (B) to a limited
number of persons who are institutional accredited investors, as
such term is defined in Rule 501(a)(1), (2), (3) and (7) under the
1933 Act, that the offeror reasonable believes to be and, with
respect to sales and deliveries, that are such institutional
accredited investors ("Institutional Accredited Investors") or (C)
non-U.S. persons outside the United States, as defined in
Regulation S under the 1933 Act, to whom the offeror or seller
reasonably believes offers and sales of the Securities may be made
in reliance upon Regulation S under the 1933 Act. Each Initial
Purchaser severally agrees that it will not offer, sell or deliver
any of the Securities in any jurisdiction outside the United States
except under circumstances that will result in compliance with the
applicable laws thereof, and that it will take at its own expense
whatever action is required to permit its purchase and resale of
the Securities in such jurisdictions.
19
(ii) NO GENERAL SOLICITATION. No general solicitation or
general advertising (within the meaning of Rule 502(c) under the
▇▇▇▇ ▇▇▇) will be used in the United States in connection with the
offering or sale of the Securities.
(iii) PURCHASES BY NON-BANK FIDUCIARIES. In the case of a
non-bank Subsequent Purchaser of a Security acting as a fiduciary
for one or more third parties, each third party shall, in the
judgment of the applicable Initial Purchaser, be an Institutional
Accredited Investor or a Qualified Institutional Buyer or a
non-U.S. person outside the United States.
(iv) SUBSEQUENT PURCHASER NOTIFICATION. Each Initial Purchaser
will take reasonable steps to inform, and cause each of its U.S.
Affiliates to take reasonable steps to inform, persons acquiring
Securities from such Initial Purchaser or affiliate, as the case
may be, in the United States that the Securities (A) have not been
and will not be registered under the 1933 Act, (B) are being sold
to them without registration under the 1933 Act in reliance on Rule
144A or in accordance with another exemption from registration
under the 1933 Act, as the case may be, and (C) may not be offered,
sold or otherwise transferred except (1) to the Company, (2)
outside the United States in accordance with Regulation S, or (3)
inside the United States in accordance with (x) Rule 144A to a
person whom the seller reasonably believes is a Qualified
Institutional Buyer that is purchasing such Securities for its own
account or for the account of a Qualified Institutional Buyer to
whom notice is given that the offer, sale or transfer is being made
in reliance on Rule 144A or (y) pursuant to another available
exemption from registration under the 1933 Act.
(v) MINIMUM PRINCIPAL AMOUNT. No sale of the Securities to any
one Subsequent Purchaser will be for less than U.S. $100,000
principal amount and no Security will be issued in a smaller
principal amount. If the Subsequent Purchaser is a non-bank
fiduciary acting on behalf of others, each person for whom it is
acting must purchase at least U.S. $100,000 principal amount of the
Securities.
(vi) RESTRICTIONS ON TRANSFER. The transfer restrictions and
the other provisions set forth in the Offering Memorandum under the
heading "Notice to Investors", including the legend required
thereby, shall apply to the Securities except as otherwise agreed
by the Company and the Initial Purchasers.
(vii) DELIVERY OF OFFERING MEMORANDUM. Each Initial Purchaser
will deliver to each purchaser of the Securities from such Initial
Purchaser, in connection with its original distribution of the
Securities, a copy of the Offering Memorandum, as amended and
supplemented at the date of such delivery.
(b) COVENANTS OF THE COMPANY AND THE SUBSIDIARY GUARANTORS. The Company
and each Subsidiary Guarantor, jointly and severally, covenant with each Initial
Purchaser as follows:
(i) INTEGRATION. The Company and each Subsidiary Guarantor
agree that they will not and will cause their Affiliates not to,
directly or indirectly, solicit any offer to buy, sell or make any
offer or sale of, or otherwise negotiate in
20
respect of, securities of the Company or any Subsidiary Guarantor
of any class if, as a result of the doctrine of "integration"
referred to in Rule 502 under the 1933 Act, such offer or sale
would render invalid (for the purpose of (i) the sale of the
Securities by the Company and the Subsidiary Guarantors to the
Initial Purchasers, (ii) the resale of the Securities by the
Initial Purchasers to Subsequent Purchasers or (iii) the resale of
the Securities by such Subsequent Purchasers to others) the
exemption from the registration requirements of the 1933 Act
provided by Section 4(2) thereof or by Rule 144A or by Regulation S
thereunder or otherwise.
(ii) RULE 144A INFORMATION. The Company agrees that, in order
to render the Securities eligible for resale pursuant to Rule 144A
under the 1933 Act, while any of the Securities remain outstanding,
it will make available, upon request, to any holder of Securities
or prospective purchasers of Securities the information specified
in Rule 144A(d)(4), unless the Company furnishes information to the
Commission pursuant to Section 13 or 15(d) of the 1934 Act.
(iii) RESTRICTION ON RESALES. Until the expiration of two
years after the original issuance of the Securities, the Company
and the Subsidiary Guarantors will not, and each will cause their
Affiliates not to, resell any Securities which are "restricted
securities" (as such term is defined under Rule 144(a)(3) under the
1933 Act), whether as beneficial owner or otherwise (except as
agent acting as a securities broker on behalf of and for the
account of customers in the ordinary course of business in
unsolicited broker's transactions).
(c) QUALIFIED INSTITUTIONAL BUYER. Each Initial Purchaser severally and
not jointly represents and warrants to, and agrees with, the Company that it is
a "qualified institutional buyer" within the meaning of Rule 144A under the 1933
Act (a "Qualified Institutional Buyer") and an "accredited investor" within the
meaning of Rule 501(a) under the 1933 Act (an "Accredited Investor").
(d) RESALE PURSUANT TO RULE 903 OF REGULATION S OR RULE 144A. Each
Initial Purchaser understands that the Securities have not been and will not be
registered under the 1933 Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the 1933 Act or pursuant to an exemption from
the registration requirements of the 1933 Act. Each Initial Purchaser severally
represents and agrees, that, except as permitted by Section 6(a) above, it has
offered and sold Securities and will offer and sell Securities (i) as part of
their distribution at any time and (ii) otherwise until forty days after the
later of the date upon which the offering of the Securities commences and the
Closing Time, only in accordance with Rule 903 of Regulation S, Rule 144A under
the 1933 Act or another applicable exemption from the registration requirements
of the 1933 Act. Accordingly, neither the Initial Purchasers, their affiliates
nor any persons acting on their behalf have engaged or will engage in any
directed selling efforts with respect to Securities sold hereunder pursuant to
Regulation S, and the Initial Purchasers, their affiliates and any person acting
on their behalf have complied and will comply with the offering restriction
requirements of Regulation S. Each Initial Purchaser severally agrees that, at
or prior to confirmation of a sale of Securities pursuant to Regulation S it
will have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases
21
Securities from it or through it during the restricted period a confirmation or
notice to substantially the following effect:
"The Securities covered hereby have not been registered under
the United States Securities Act of 1933 (the "Securities Act") and may
not be offered or sold within the United States or to or for the
account or benefit of U.S. persons (i) as part of their distribution at
any time and (ii) otherwise until forty days after the later of the
date upon which the offering of the Securities commenced and the date
of closing, except in either case in accordance with Regulation S or
Rule 144A under the Securities Act. Terms used above have the meaning
given to them by Regulation S."
Terms used in the above paragraph have the meanings given to
them by Regulation S.
(e) ADDITIONAL REPRESENTATIONS AND WARRANTIES OF INITIAL PURCHASERS.
Each Initial Purchaser severally represents and agrees that it has not entered
and will not enter into any contractual arrangements with respect to the
distribution of the Securities, except with its affiliates or with the prior
written consent of the Company.
SECTION 7. INDEMNIFICATION.
(a) INDEMNIFICATION OF INITIAL PURCHASERS. The Company and each
Subsidiary Guarantor, jointly and severally, agree to indemnify and hold
harmless each Initial Purchaser and each person, if any, who controls any
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained
in any Preliminary Offering Memorandum or the Final Offering
Memorandum (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 7(d) below) any such
settlement is effected with the written consent of the Company and
the Subsidiary Guarantors; 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
22
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 arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Initial Purchaser through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Offering
Memorandum (or any amendment thereto).
(b) INDEMNIFICATION OF THE COMPANY AND THE SUBSIDIARY GUARANTORS. Each
Initial Purchaser severally agrees to indemnify and hold harmless the Company
and the Subsidiary Guarantors and each person, if any, who controls the Company
and the Subsidiary Guarantor 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 Offering Memorandum in
reliance upon and in conformity with written information furnished to the
Company by such Initial Purchaser through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Offering Memorandum.
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section 7(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section or Section 8
hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party
23
for fees and expenses of counsel, such indemnifying party agrees that it shall
be liable for any settlement of the nature contemplated by Section 7(a)(ii)
effected without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
SECTION 8. CONTRIBUTION. If the indemnification provided for in Section
7 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Subsidiary Guarantors on the one hand and the Initial Purchasers 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 and
the Subsidiary Guarantors on the one hand and of the Initial Purchasers 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.
The relative benefits received by the Company and the Subsidiary
Guarantors on the one hand and the Initial Purchasers 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 and the total underwriting discount received
by the Initial Purchasers, bear to the aggregate initial offering price of the
Securities.
The relative fault of the Company and the Subsidiary Guarantors on the
one hand and the Initial Purchasers 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 or any Subsidiary Guarantor
or by the Initial Purchasers and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company, the Subsidiary Guarantors and the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to this Section
were determined by pro rata allocation (even if the Initial Purchasers 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. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
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.
24
Notwithstanding the provisions of this Section, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities purchased and sold by it hereunder exceeds
the amount of any damages which such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls an
Initial Purchaser 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 Initial
Purchaser, and each person, if any, who controls the Company or any Subsidiary
Guarantor 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 or the
Subsidiary Guarantors, as the case may be. The Initial Purchasers' respective
obligations to contribute pursuant to this Section are several in proportion to
the principal amount of Securities set forth opposite their respective names in
Schedule A hereto and not joint.
SECTION 9. 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 submitted pursuant hereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any Initial
Purchaser or controlling person, or by or on behalf of the Company or any
Subsidiary Guarantor, and shall survive delivery of the Securities to the
Initial Purchasers.
SECTION 10. Termination of Agreement.
(a) TERMINATION; GENERAL. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to the 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 Offering
Memorandum, 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 Representatives, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the NASDAQ System, or if trading generally on the American Stock
Exchange or the New York Stock Exchange or in the NASDAQ System 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 such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal, New York or
Florida authorities.
25
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 7, 8 and 9 shall survive such termination and remain in full force and
effect.
SECTION 1. DEFAULT BY ONE OR MORE OF THE INITIAL PURCHASERS. If one or
more of the Initial Purchasers shall fail at the Closing Time to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Initial Purchasers, or any other initial purchasers, 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 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
aggregate principal amount of the Securities to be purchased hereunder, each of
the non-defaulting Initial Purchasers 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 Initial Purchasers, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities to be purchased hereunder, this Agreement
shall terminate without liability on the part of any non-defaulting Initial
Purchaser.
No action taken pursuant to this Section shall relieve any defaulting
Initial Purchaser from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representatives or the Company shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Offering Memorandum or in any other
documents or arrangements. As used herein, the term "Initial Purchaser" includes
any person substituted for an Initial Purchaser under this Section.
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 Initial
Purchasers shall be directed to the Representatives at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice
President, notices to the Company shall be directed to it at ▇▇▇▇ ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Chairman.
SECTION 13. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Initial Purchasers, the Company, the Subsidiary Guarantors
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Initial Purchasers, the Company, the Subsidiary
Guarantors and their respective successors and the controlling persons and
officers and directors referred to in Sections 7 and 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the
26
sole and exclusive benefit of the Initial Purchasers, the Company, the
Subsidiary Guarantors and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Initial Purchaser shall be deemed to be a successor by
reason merely of such purchase.
SECTION 14. APPOINTMENT OF AGENT FOR SERVICE. By the execution of this
Agreement, each of Supreme Munsingwear Canada, Inc. and Supreme International
Corporation de Mexico, S.A. de C. V. hereby designates the Company as its
authorized agent upon which process may be served in any legal action or
proceeding, including with respect to any state or federal securities laws, that
may be instituted in any federal court of the United States or the court of any
state thereof and arising out of or relating to this Agreement. Service of
process upon such agent at ▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ shall be deemed in every respect effective service
of process upon Supreme Munsingwear Canada, Inc. or Supreme International
Corporation de Mexico, S.A. de C.V., as applicable, in any such legal action or
proceeding and each of Supreme Munsingwear Canada, Inc. and Supreme
International Corporation de Mexico, S.A. de C.V. hereby submits to the
nonexclusive jurisdiction of any such court in which any such legal action or
proceeding is so instituted and waives, to the extent it may effectively do so,
any objection it may have now or hereafter to the laying of the venue of any
such legal action or proceeding. Such appointment shall be irrevocable so long
as the Initial Purchasers shall have any rights pursuant to the terms of this
Agreement. Each of Supreme Munsingwear Canada, Inc. and Supreme International
Corporation de Mexico, S.A. de C.V., further agrees to take any and all action,
including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment of
such agent.
SECTION 15. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 16. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Initial Purchasers, the Company and the Subsidiary Guarantors in
accordance with its terms.
Very truly yours,
SUPREME INTERNATIONAL CORPORATION
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President of Finance
27
SUPREME MUNSINGWEAR CANADA INC.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary/Treasurer
SUPREME INTERNATIONAL
(DELAWARE), INC.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary/Treasurer
SUPREME ACQUISITION CORPORATION
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary/Treasurer
SUPREME INTERNATIONAL (N.Y.), INC.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary/Treasurer
SUPREME INTERNATIONAL CORPORATION
DE MEXICO, S.A. de C.V.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
28
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
BANCBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SECURITIES, INC.
BARINGTON CAPITAL GROUP, L.P.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Authorized Signatory
For itself and as Representative of the other Initial Purchasers named
in Schedule A hereto.
29
SCHEDULE A
Principal
Amount of
NAMES OF INITIAL PURCHASERS SECURITIES
--------------------------- ----------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated $ 60,000,000
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. $ 30,000,000
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Securities, Inc. $ 5,000,000
Barington Capital Group, L.P $ 5,000,000
------------
Total $100,000,000
============
SCH A-1
SCHEDULE B
SUPREME INTERNATIONAL CORPORATION
$100,000,000 Senior Subordinated Notes due 2006
1. The initial public offering price of the Securities shall be 98.852%
of the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Initial Purchasers for the
Securities shall be 95.852% of the principal amount thereof.
3. The interest rate on the Securities shall be 12.25% per annum.
SCH B-1
SCHEDULE C
List of Subsidiaries of Supreme International Corporation
Supreme Munsingwear Canada, Inc.
Supreme International (Delaware), Inc.
Supreme International (N.Y.), Inc.
Supreme Acquisition Corporation
Supreme International Corporation de Mexico, S.A. de C.V.
SCH C-1
Exhibit A
FORM OF OPINION OF COMPANY'S AND
SUBSIDIARY GUARANTORS' COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Florida.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Offering
Memorandum and to enter into and perform its obligations under the Purchase
Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is:
1. Preferred Stock-$.01 par value; 1,000,000 shares authorized; no
shares issued or outstanding;
2. Class A Common Stock-$.01 par value; 30,000,000 shares
authorized; no shares issued or outstanding; and
3. Common Stock-$.01 par value; 30,000,000 shares authorized;
6,712,374 shares issued and outstanding as of January 31, 1999;
(except for subsequent issuances, if any, pursuant to the Purchase Agreement or
pursuant to reservations, agreements, employee benefit plans or the exercise of
convertible securities or options referred to in the Offering Memorandum); the
shares of issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was issued in violation
of the preemptive or other similar rights of any securityholder of the Company.
(v) Each Subsidiary Guarantor, other than Supreme International
Corporation de Mexico, S.A. de C.V., as to which we express no opinion, 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 Offering Memorandum and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect;
all of the issued and outstanding capital stock of each Subsidiary Guarantor,
other than Supreme International Corporation de Mexico, S.A. de C.V., as to
which we express no opinion, has been duly authorized and validly issued, is
fully paid and non-assessable and, to the best of our knowledge and information,
is owned by the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity, except
for any security interest, mortgage, pledge, lien,
A-1
encumbrance, claim or equity pursuant to the Senior Credit Agreement or the
Lease.
(vi) ▇▇▇▇▇ ▇▇▇▇▇ 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 Offering Memorandum
and is duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect; all of the issued and outstanding
capital stock of ▇▇▇▇▇ ▇▇▇▇▇ has been duly authorized and validly issued, is
fully paid and non-assessable and will, at the Closing Time, be owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity, except for any
security interest, mortgage, pledge, lien, encumbrance, claim or equity pursuant
to the Senior Credit Agreement or the Lease.
(vii) The Stock Purchase Agreement has been duly authorized, executed
and delivered by the Company and, to the best of our knowledge, each of the
other parties thereto, and constitutes a valid and binding obligation of the
Company and, to the best of our knowledge, of each of the parties thereto,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, or by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
(viii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company and the Subsidiary Guarantors.
(ix) The Indenture has been duly authorized, executed and delivered by
the Company and the Subsidiary Guarantors and (assuming the due authorization,
execution and delivery thereof by the Trustee) constitutes a valid and binding
agreement of the Company and the Subsidiary Guarantors, enforceable against the
Company and the Subsidiary Guarantors in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws relating to or affecting enforcement of
creditors' rights generally, or by general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
(x) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and the Subsidiary Guarantors and
(assuming the due authorization, execution and delivery thereof by the Initial
Purchasers) constitutes a valid and binding agreement of the Company and the
Subsidiary Guarantors, enforceable against the Company and the Subsidiary
Guarantors in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other similar
laws relating to or affecting enforcement of creditors' rights generally, or by
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
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(xi) The Securities are in the form contemplated by the Indenture, have
been duly authorized by the Company and, when executed by the Company and
authenticated by the Trustee in the manner provided in the Indenture (assuming
the due authorization, execution and delivery of the Indenture by the Trustee)
and issued and delivered against payment of the purchase price therefor will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium (including,
without limitation, all laws relating to fraudulent transfers), or other similar
laws relating to or affecting enforcement of creditor's rights generally, or by
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law), and will be entitled to the benefits of the
Indenture.
(xii) The Securities, the Indenture and the Registration Rights
Agreement conform in all material respects to the descriptions thereof contained
in the Offering Memorandum.
(xiii) There is not pending or, to the best of our knowledge,
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 thereof is subject, before or brought by any court or
governmental agency or body, 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 Purchase Agreement or by the ▇▇▇▇▇ ▇▇▇▇▇
Acquisition, or the performance by the Company or the Subsidiary Guarantors of
their obligations thereunder or the transactions contemplated by the Offering
Memorandum.
(xiv) The information in the Offering Memorandum under "Risk
Factors-Imports and Import Restrictions", "Business-Pending Acquisitions",
"Business-Facilities", "Business-Legal Proceedings", "Description of Other
Indebtedness", "Description of the Notes", "Exchange Offer; Registration
Rights", "Certain United States Federal Tax Considerations for Non-United States
Holders" and "Notice to Investors", to the extent that it constitutes matters of
law, summaries of legal matters, the Company's or the Subsidiary Guarantors'
charter and bylaws or legal proceedings, or legal conclusions, has been reviewed
by us and is correct in all material respects.
(xv) All descriptions in the Offering Memorandum of contracts and other
documents to which the Company or any of its subsidiaries or to which ▇▇▇▇▇
▇▇▇▇▇ are a party are accurate in all material respects; to the best of our
knowledge, there are no franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments that would be required to be
described in the Offering Memorandum if the Offering Memorandum were a
prospectus filed as part of a registration statement on Form S-1 under the 1933
Act that are not described or referred to in the Offering Memorandum other than
those described or referred to therein, and the descriptions thereof or
references thereto are correct in all material respects.
(xvi) To the best of our knowledge, none of the Company, any of its
subsidiaries or ▇▇▇▇▇ ▇▇▇▇▇ is in violation of its charter or by-laws and no
default by the Company, any of its subsidiaries or ▇▇▇▇▇ ▇▇▇▇▇ exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to in the
Offering Memorandum.
A-3
(xvii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than such as may be required
under the applicable securities laws of the various jurisdictions in which the
Securities will be offered or sold, as to which we need express no opinion) is
necessary or required in connection with (i) the due authorization, execution
and delivery of the Purchase Agreement or the due execution, delivery or
performance of the Indenture by the Company and the Subsidiary Guarantors or
(ii) the due authorization, execution and delivery of the Stock Purchase
Agreement by the parties thereto, or for the offering, issuance, sale or
delivery of the Securities to the Initial Purchasers or the resale by the
Initial Purchasers in accordance with the terms of the Purchase Agreement.
(xviii) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers and to each Subsequent
Purchaser in the manner contemplated by the Purchase Agreement and the Offering
Memorandum to register the Securities under the 1933 Act or to qualify the
Indenture under the Trust Indenture Act.
(xix) The execution, delivery and performance of the Purchase
Agreement, the DTC Agreement, the Indenture, the Registration Rights Agreement,
the Securities and the Stock Purchase Agreement and the consummation of the
transactions contemplated in the Purchase Agreement and in the Offering
Memorandum (including the consummation of the ▇▇▇▇▇ ▇▇▇▇▇ Acquisition and the
use of the proceeds from the sale of the Securities as described in the Offering
Memorandum under the caption "Use Of Proceeds") and compliance by the Company
and the Subsidiary Guarantors with their obligations under the Purchase
Agreement, the Indenture, the Registration Rights Agreement and, in the case of
the Company, the Securities and compliance by the parties to the Stock Purchase
Agreement of their obligations thereunder do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined in Section
1(a)(xiv) of the Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary thereof or of ▇▇▇▇▇ ▇▇▇▇▇ pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument, known to us, to which the Company or any of its
subsidiaries or to which ▇▇▇▇▇ ▇▇▇▇▇ 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
subsidiary thereof is subject (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not have 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 of ▇▇▇▇▇ ▇▇▇▇▇,
or any applicable law, statute, rule, regulation, judgment, order, writ or
decree, known to us, of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties, assets or operations.
(xx) Neither the Company nor any of the Subsidiary Guarantors is an
"investment company" or an entity "controlled" by an "investment company," as
such terms are defined in the 1940 Act.
Nothing has come to our attention that would lead us to believe that
the Offering Memorandum 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 we need make
no statement), at the time the Offering Memorandum was
A-4
issued, at the time any such amended or supplemented Offering Memorandum 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.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company, ▇▇▇▇▇ ▇▇▇▇▇ and public
officials. Such opinion shall not state that it is to be governed or qualified
by, or that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).
A-5