EXHIBIT 1.1
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BRYLANE INC.
(a Delaware corporation)
4,000,000 Shares of Common Stock
PURCHASE AGREEMENT
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Dated: February , 1997
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TABLE OF CONTENTS
PAGE
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PURCHASE AGREEMENT......................................................... 1
SECTION 1. Representations and Warranties........................... 5
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(a) Representations and Warranties by the Company............ 5
(i) Compliance with Registration Requirements....... 5
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(ii) Independent Accountants......................... 6
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(iii) Financial Statements............................ 6
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(iv) No Material Adverse Change in Business.......... 7
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(v) Good Standing of the Company, Holding, the General
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Partner, VLP and the Partnership................ 7
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(vi) Good Standing of Subsidiaries................... 7
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(vii) Capitalization of Holding....................... 8
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(viii) Securities Ownership of Partnership............. 8
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(ix) Authorization of Exchange Agreement............. 9
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(x) Authorization of Management Subscription
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Documents..................................... 9
(xi) Authorization of the Transaction Agreements..... 9
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(xii) Authorization of Registration Rights Agreement.. 10
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(xiii) Authorization of Stockholders Agreement......... 10
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(xiv) Restated Partnership Agreement.................. 10
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(xv) Capitalization of the Partnership and the
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Company....................................... 11
(xvi) Authorization of Agreement...................... 11
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(xvii) Authorization and Description of Securities..... 11
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(xviii) Absence of Defaults and Conflicts............... 11
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(xix) Absence of Labor Dispute........................ 12
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(xx) Absence of Proceedings.......................... 13
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(xxi) Accuracy of Exhibits............................ 13
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(xxii) Possession of Intellectual Property............. 13
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(xxiii) Absence of Further Requirements................. 14
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(xxiv) Possession of Licenses and Permits.............. 14
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(xxv) Title to Property............................... 15
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(xxvii) Environmental Laws.............................. 15
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(xxviii) Registration Rights......................... 16
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(xxix) Filings of Tax Returns.......................... 16
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(xxx) Maintenance of Internal Controls................ 17
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(xxxi) Maintenance of Insurance........................ 17
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(xxxii) No Violations of Regulations G, T, U or X 17
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(xxxiii) Exchange Agreement.......................... 17
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(xxxiv) Transaction Agreements...................... 17
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(b) Officer's Certificates................................... 17
SECTION 2. Sale and Delivery to Underwriters; Closing............... 18
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(a) Initial Securities....................................... 18
(b) Option Securities........................................ 18
(c) Payment.................................................. 18
(d) Denominations; Registration.............................. 19
(e) Appointment of Qualified Independent Underwriter......... 19
SECTION 3. Covenants of the Company................................. 19
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(a) Compliance with Securities Regulations and Commission
Requests................................................. 19
(b) Filing of Amendments..................................... 20
(c) Delivery of Registration Statements...................... 20
(d) Delivery of Prospectuses................................. 20
(e) Continued Compliance with Securities Laws................ 20
(f) Blue Sky Qualifications.................................. 21
(g) Rule 158................................................. 21
(h) Use of Proceeds.......................................... 21
(i) Listing.................................................. 21
(j) Restriction on Sale of Securities........................ 21
(k) Reporting Requirements................................... 22
(l) Compliance with NASD Rules............................... 22
(m) Compliance with Rule 463................................. 22
SECTION 4. Payment of Expenses...................................... 22
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(a) Expenses................................................. 22
(b) Termination of Agreement................................. 23
SECTION 5. Conditions of Underwriters' Obligations.................. 23
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(a) Effectiveness of Registration Statement.................. 23
(b) Opinion of Counsel for Company........................... 23
(c) Opinion of Counsel for Underwriters...................... 24
(d) Officers' Certificate.................................... 24
(e) Accountant's Comfort Letter.............................. 24
(f) Bring-down Comfort Letter................................ 25
(g) Approval of Listing...................................... 25
(h) No Objection............................................. 25
(i) Lock-up Agreements....................................... 25
(j) Receipt of Waivers....................................... 25
(k) Execution of Exchange Agreement.......................... 25
(l) Execution of Management Subscription Documents........... 25
(m) Execution of Transaction Agreements...................... 25
(p) Additional Documents..................................... 26
(q) Termination of Agreement................................. 27
SECTION 6. Indemnification.......................................... 27
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(a) Indemnification of Underwriters.......................... 27
(b) Indemnification of Company, Directors and Officers....... 28
(c) Actions against Parties; Notification.................... 29
(d) Settlement without Consent if Failure to Reimburse....... 29
(e) Indemnification for Reserved Securities.................. 30
SECTION 7. Contribution............................................. 30
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SECTION 8. Representations, Warranties and Agreements to Survive
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Delivery. 31
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SECTION 9. Termination of Agreement................................. 32
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(a) Termination; General..................................... 32
(b) Liabilities.............................................. 32
SECTION 10. Default by One or More of the Underwriters. ............ 32
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SECTION 11. Notices................................................. 33
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SECTION 12. Parties................................................. 33
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SECTION 13. GOVERNING LAW AND TIME.................................. 33
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SECTION 14. Effect of Headings...................................... 34
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SCHEDULE A.......................................................Sch A-1
SCHEDULE B.......................................................Sch B-1
SCHEDULE C.......................................................Sch C-1
Exhibit A............................................................A-1
Exhibit B............................................................B-1
Draft of January 28, 1997
BRYLANE INC.
(a Delaware corporation)
4,000,000 Shares of Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
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February , 1997
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▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
LAZARD FRERES & CO. LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Brylane Inc., a Delaware corporation (the "Company") and Brylane,
L.P., a Delaware limited partnership (the "Partnership"), confirm their
agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ Freres & Co. LLC ("Lazard Freres"),
▇.▇. ▇▇▇▇▇▇ Securities Inc. ("JPMSI") are acting as representatives (in such
capacity, the "Representatives"), with respect to the issue and sale by the
Company and the purchase by the Underwriters, acting severally and not jointly,
of the respective numbers of shares of Common Stock, par value $.01 per
share, of the Company ("Common Stock") set forth in said Schedule A, and with
respect to the grant by the Company to the Underwriters, acting severally and
not jointly, of the option described in Section 2(b) hereof to purchase all or
any part of 600,000 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 4,000,000 shares of Common Stock (the
"Initial Securities") to be purchased by the Underwriters and all or any part
of the 600,000 shares of Common Stock subject to the option described in
Section 2(b) hereof (the "Option Securities") are hereinafter called,
collectively, the "Securities".
1
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Company and the Underwriters agree that up to 200,000 shares of the
Securities to be purchased by the Underwriters (the "Reserved Securities")
shall be reserved for sale by the Underwriters to certain eligible employees
and persons having business relationships with the Company, as part of the
distribution of the Securities by the Underwriters, subject to the terms of
this Agreement, the applicable rules, regulations and interpretations of the
National Association of Securities Dealers, Inc. and all other applicable laws,
rules and regulations. To the extent that such Reserved Securities are not
orally confirmed for purchase by such eligible employees and persons having
business relationships with the Company by the end of the first business day
after the date of this Agreement, such Reserved Securities may be offered to
the public as part of the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 33-86154) covering the
registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
either (i) prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely
upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term
sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). The information included in such prospectus or in such Term Sheet, as
the case may be, that was omitted from such registration statement at the time
it became effective but that is deemed to be part of such registration
statement at the time it became effective (a) pursuant to paragraph (b) of Rule
430A is referred to as "Rule 430A Information" or (b) pursuant to paragraph (d)
of Rule 434 is referred to as "Rule 434 Information." Each prospectus used
before such registration statement became effective, and any prospectus that
omitted, as applicable, the Rule 430A Information or the Rule 434 Information,
that was used after such effectiveness and prior to the execution and delivery
of this Agreement, is herein called a "preliminary prospectus." Such
registration statement, including the exhibits thereto and schedules thereto at
the time it became effective and including the Rule 430A Information and the
Rule 434 Information, as applicable, is herein called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the
1933 Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final prospectus in the
form first furnished to the Underwriters for use in connection with the
offering of the Securities is herein called the "Prospectus." If Rule 434 is
relied on, the term "Prospectus" shall refer to the preliminary prospectus
dated January 29, 1997 together with the Term Sheet and all references in this
Agreement to the date of the Prospectus shall mean the date of the Term Sheet.
For purposes of this Agreement, all references to the Registration Statement,
any preliminary prospectus, the Prospectus or any Term Sheet or any amendment
or
2
supplement to any of the foregoing shall be deemed to include the copy filed by
the Company with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("▇▇▇▇▇").
Pursuant to the terms of that certain First Amended and Restated
Incorporation and Exchange Agreement, dated as of December 9, 1996 (the
"Exchange Agreement") among FS Equity Partners II, L.P. ("FSEP II"), FS Equity
Partners III, L.P. ("FSEP III"), FS Equity Partners International, L.P. ("FSEP
Int." and, together with FSEP II and FSEP III, the "FS Entities"), Lane ▇▇▇▇▇▇
Direct Holding, Inc. ("LBDHI"), The Limited Inc. ("The Limited"), WearGuard
Corporation ("WearGuard"), Leeway & Co., a Massachusetts partnership, as
nominee for the Long-Term Investment Trust, a trust governed by the laws of the
State of New York ("Leeway & Co."), NYNEX Master Trust, a trust governed by the
laws of the State of New York ("NYNEX"), Chadwicks, Inc. (the "TJX
Noteholder"), a wholly-owned subsidiary of the TJX Companies, Inc. ("TJX") and
the Company, prior to the Closing Time (as defined herein), (i) the Company
will issue 8,527,000 shares of its Common Stock in exchange for all the shares
of common stock of VP Holding Corporation, a Delaware corporation ("Holding")
held by the FS Entities; (ii) the Company will issue 5,000,000 shares of its
Common Stock in exchange for all the units of limited partnership interest in
the Partnership held by LBDHI; (iii) the Company will issue 399,778 shares of
its Common Stock in exchange for all the units of limited partnership interest
in the Partnership held by WearGuard; (iv) the Company will issue 500,000
shares of its Common Stock in exchange for all the units of limited partnership
interest in the Partnership held by Leeway & Co.; (v) the Company will issue
500,000 shares of its Common Stock in exchange for all the units of limited
partnership interest in the Partnership held by NYNEX; and (vi) assuming that
the TJX Noteholder does not convert the $20 million aggregate principal amount
of the 6% Convertible Subordinated Note Due 2006 issued by the Partnership in
favor of the TJX Noteholder (the "Partnership Note") into partnership units in
the Partnership, the Company and the Partnership will issue in exchange for the
Partnership Note a substitute Convertible Subordinated Note Due 2006 on
substantially the same terms and conditions as the Partnership Note. Pursuant
to the terms of the Exchange Agreement, in the event that the TJX Noteholder
converts all or a portion of the Partnership Note into partnership units in the
Partnership prior to the offering of the Securities, the Company will issue
shares of Common Stock to the TJX Noteholder in an amount equal to the number
of partnership units acquired pursuant to the conversion. In addition,
pursuant to the terms of the Brylane Inc. 1996 Senior Management Stock
Subscription Plan and the Brylane Inc. 1996 Stock Subscription Plan (the "Stock
Subscription Plans") adopted by the Company, the Company will enter into Stock
Subscription Agreements (the "Stock Subscription Agreements") pursuant to which
it will issue to certain individuals (who include certain members of management
of the Company (collectively, the "Management Investors")) an amount not to
exceed 653,000 shares of the Company's Common Stock in exchange for the
surrender to Holding by such individuals of the shares of Holding common stock
they hold. Pursuant to the Brylane Inc. 1996 Performance Stock Option Plan and
the Brylane Inc. 1996 Stock Option Plan (collectively, the "Stock Option Plans"
and, together with the Stock Subscription Plans and the Stock Subscription
Agreements, the "Management Subscription Documents") to be adopted by the
Company, the Company will issue to certain of the Management Investors options
to purchase an aggregate of 2,479,584 shares of
3
the Company's Common Stock in exchange for the surrender to the Partnership by
such individual of the options to purchase units of limited partnership
interest in the Partnership they hold.
Upon consummation of the foregoing transactions, (i) the General Partner
will own all the general partnership interests in the Partnership, (ii) VLP
Corporation, a Delaware corporation ("VLP") will own all the limited
partnership interests in the Partnership, (iii) Holding will own all the equity
of the General Partner and VLP, and (iv) the Company will own all the equity of
Holding. In addition, upon consummation of the offering of the Securities, the
parties to the Exchange Agreement will enter into a Registration Rights
Agreement (the "Registration Rights Agreement") and a Stockholders Agreement
(the "Stockholders Agreement") (copies of which are exhibits to the Exchange
Agreement) and will amend and restate the Agreement of Limited Partnership of
the Partnership dated as of August 30, 1993, as amended to date (the "Restated
Partnership Agreement"). The parties to the Exchange Agreement previously have
effected certain amendments to the Agreement of Limited Partnership of the
Partnership dated as of August 30, 1993, which amendments consist of Amendment
No. 1 dated November 22, 1993, Amendment No. 2 thereto dated January 28, 1994,
Amendment No. 3 thereto dated March 16, 1994, Amendment No. 4 thereto dated
October 14, 1994, Amendment No. 5 thereto dated September 22, 1995, Amendment
No. 6 thereto dated October 16, 1995, Amendment No. 7 thereto dated as of
October 14, 1996 and Amendment No. 8 thereto dated as of December 5, 1996 (as
so amended, the "Partnership Agreement").
On October 19, 1996, the Partnership entered into that certain
Asset Purchase Agreement with TJX and the TJX Noteholder, as amended by
Amendment No. 1 thereto dated as of December 9, 1996 (as amended, the "Asset
Purchase Agreement"). Pursuant to the Asset Purchase Agreement, the
Partnership purchased the assets (the "▇▇▇▇▇▇▇▇'▇ Acquisition") (excluding
substantially all of the accounts receivable) of the TJX Noteholder used in the
▇▇▇▇▇▇▇▇'▇ of Boston catalog business ("▇▇▇▇▇▇▇▇'▇"), for an aggregate purchase
price of $242.8 million (subject to certain post-closing adjustments).
Concurrently with the ▇▇▇▇▇▇▇▇'▇ Acquisition, the Partnership entered into: (i)
an asset purchase agreement with CDM Corp. (the "CDM Agreement"), (ii) an
agreement and license of trademarks agreement with TJX, the TJX Noteholder, and
CDM Corp. (the "CDM Trademark Agreement"), and (iii) a Trademark License
Agreement with TJX (the "TJX Trademark Agreement"), pursuant to which the
Partnership purchased or licensed certain trademarks and tradenames previously
used by ▇▇▇▇▇▇▇▇'▇. In addition, the Partnership entered into with TJX: (i) a
services agreement (the "Services Agreement") pursuant to which TJX agreed to
provide services relating to ▇▇▇▇▇▇▇▇'▇ for approximately one year, and (ii) an
inventory purchase agreement (the "Inventory Agreement") pursuant to which TJX
agreed to purchase certain excess inventory of ▇▇▇▇▇▇▇▇'▇ through January 29,
2000. In connection with the ▇▇▇▇▇▇▇▇'▇ Acquisition, the Partnership entered
into a Credit Facility (the "Bank Credit Facility") with ▇▇▇▇▇▇ Guaranty Trust
Company of New York, as administrative agent, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital
Corporation, as documentation agent, and certain lenders named therein which
consists of: (i) a $213 million five-year term loan, (ii) a $70 million
six-year and one-quarter term loan, and (iii) a $125 million five-year
revolving credit facility with a $75 million sublimit for letters of credit.
4
The Asset Purchase Agreement, the CDM Agreement, the CDM Trademark
Agreement, the TJX Trademark Agreement, the Services Agreement, the Inventory
Agreement, and the Bank Credit Facility (including the agreements creating
security interests in the assets of the Partnership for the benefit of the
holders of indebtedness arising thereunder) are sometimes referred to in this
Agreement, individually, as a "Transaction Agreement" and, collectively, as the
"Transaction Agreements."
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company and the
Partnership jointly and severally represent and warrant to each Underwriter as
of the date hereof, as of the Closing Time referred to in Section 2(c) hereof,
and as of each Date of Delivery (if any) referred to in Section 2(b) hereof,
and agrees with each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
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Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations and did not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither the Prospectus nor any
amendments or supplements thereto (including any prospectus wrapper), at
the time the Prospectus or any such amendment or supplement was issued
and at the Closing Time (and, if any Option Securities are purchased, at
the Date of Delivery), included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is
used, the Company will comply with the requirements of Rule 434 and the
Prospectus shall not be "materially different", as such term is used in
Rule 434, from the prospectus included in the Registration Statement at
the time it became effective. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration
Statement or Prospectus.
5
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed by the Company with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(ii) Independent Accountants. The accountants who certified
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the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The historical financial
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statements with respect to the Partnership and its predecessor (the
"Predecessor") included in the Registration Statement and the Prospectus
present fairly the financial position of the Partnership and its
subsidiaries and the combined financial statements of the Predecessor as
at the dates indicated and the results of their operations and cash flow
for the periods specified, except as otherwise stated in the Registration
Statement; the historical financial statements with respect to ▇▇▇▇▇▇▇▇'▇
included in the Registration Statement and the Prospectus, together with
the related schedules and notes, present fairly the financial position of
▇▇▇▇▇▇▇▇'▇ at the dates indicated and the statement of operations,
stockholders' equity and cash flows of ▇▇▇▇▇▇▇▇'▇ for the periods
specified, except as otherwise stated in the Registration Statement; the
historical financial statements with respect to WearGuard included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of WearGuard
at the dates indicated and the statement of operations, stockholders'
equity and cash flows of WearGuard for the periods specified, except as
otherwise stated in the Registration Statement; all said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved in all material respects. The supporting schedules
to the historical financial statements included in the Registration
Statement present fairly in accordance with GAAP the information required
to be stated therein. The selected financial data and the summary
financial information included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the
Registration Statement. The pro forma financial statements and other pro
forma financial information and the related notes thereto included in the
Registration Statement and the Prospectus 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, in the
opinion of each of the Company and the Partnership, 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.
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(iv) No Material Adverse Change in Business. Since the
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respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company, the Partnership and their subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered
into by the Company, the Partnership or any of their subsidiaries, other
than those in the ordinary course of business, which are material with
respect to the Company, the Partnership and their subsidiaries considered
as one enterprise, and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Company or Holding on any class of
its capital stock and except for distributions in respect of accrued tax
liabilities of the partners determined pursuant to the terms of the
Partnership Agreement, there has been no distribution of any kind
declared, paid or made by the Partnership on any of its partnership
interests.
(v) Good Standing of the Company, Holding, the General Partner,
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VLP and the Partnership. (A) Each of the Company, Holding, VGP
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Corporation, a Delaware corporation (the "General Partner") and VLP has
been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has corporate power
and authority to own, lease and operate their respective properties and to
conduct their respective businesses as described in the Prospectus and to
enter into and perform their respective obligations under this Agreement;
and each of the Company, Holding, the General Partner and VLP 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.
(B) The Partnership has been duly organized and is validly
existing as a limited partnership under the laws of the State of Delaware
with the partnership power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and
to enter into and perform its obligations under this Agreement; for
United States Federal income tax purposes, the Partnership has been and
is currently classified as a partnership, and not as an association
taxable as a corporation; and the Partnership is duly qualified as a
foreign partnership to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership of leasing of property or the conduct of such business,
except where the failure to so qualify would not have a Material Adverse
Effect.
(vi) Good Standing of Subsidiaries. Each subsidiary of the
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Partnership has been duly organized and is validly existing as a
corporation or partnership, as the case may be, in good standing under
the laws of the jurisdiction of its organization, has the corporate or
partnership power and authority to own, lease and operate its properties
and
7
to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation or partnership, as the case may be, to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure
so to qualify or to be in good standing would not result in a Material
Adverse Effect. Except as otherwise disclosed in the Registration
Statement, (x) all of the issued and outstanding capital stock of each
subsidiary of Holding and the Partnership that is a corporation
(including without limitation the General Partner and VLP) has been duly
authorized and validly issued, is fully paid and non-assessable and was
not issued in violation of any preemptive rights arising from operation
of law, under the Partnership Agreement, the charter or by-law of each
such subsidiary or under any agreement to which the Company, Holding, the
Partnership or any such subsidiary is a party, (y) all of the issued and
outstanding partnership interests in each such subsidiary of Holding and
the Partnership that is a partnership (including without limitation the
Partnership) have been duly authorized and validly issued and, for United
States Federal income tax purposes, each subsidiary of the Company that
is a partnership has been and is currently classified as a partnership,
and not as an association taxable as a corporation, and (z) other than
such partnership interests owned by the FS Entities, LBDHI, WearGuard,
Leeway & Co. and NYNEX as described in the Prospectus, prior to the
Closing Time all such capital stock (other than the capital stock of
Holding) and partnership interests of such subsidiaries shall be owned by
Holding, and at the Closing Time, other than such capital stock owned by
the FS Entities, LBDHI, WearGuard, Leeway & Co. and NYNEX as described in
the Prospectus, all such capital stock and partnership interests shall be
owned by the Company, in each case directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity, except as described in the Prospectus and except for
restrictions on transfer imposed under federal or state securities law.
The only subsidiaries of the Company are (a) the subsidiaries listed on
Exhibit 21.1 to the Registration Statement and (b) certain other
subsidiaries which, considered in the aggregate as a single subsidiary,
do not constitute a "significant subsidiary" as defined in Rule 1-02 of
Regulation S-X.
(vii) Capitalization of Holding. All of the issued and
-------------------------
outstanding capital stock of Holding has been duly authorized and validly
issued and is fully paid and non-assessable and was not issued in
violation of any preemptive right arising by operation of law, under the
charter or by-laws or any document or under any agreement to which the
Company, Holding or the Partnership is a party; at the Closing Time, all
such capital stock shall be owned by the Company directly, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity, except as described in the Prospectus and except for restrictions
on transfer imposed under federal or state securities law.
(viii)Securities Ownership of Partnership. At the Closing
-----------------------------------
Time, the Partnership will not hold or beneficially own any securities
(stock, debt, general or limited partnership interests, or other forms of
ownership) in any corporation, partnership or
8
other association except for its ownership of all the outstanding capital
stock or partnership interests in its subsidiaries.
(ix) Authorization of Exchange Agreement. The Company and, to
-----------------------------------
the best knowledge of the Company and the Partnership, the other parties
thereto each have the requisite corporate power and authority to execute,
deliver and perform their respective obligations under the Exchange
Agreement; the Exchange Agreement (A) will be substantially in the form
heretofore delivered to the Representatives, (B) has been duly and
validly authorized, executed and delivered by all the parties thereto and
creates valid and binding obligations of the Company and, to the best
knowledge of the Company and the Partnership, the other parties thereto
and (C) is enforceable against the Company and, to the best knowledge of
the Company and the Partnership, the other parties thereto in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency, moratorium, reorganization, or other similar laws affecting
creditors' rights generally or by general principals of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law). The terms of the Exchange Agreement conform in all
material respects to the description thereof contained in the Prospectus.
(x) Authorization of Management Subscription Documents. The
--------------------------------------------------
Company and, to the best knowledge of the Company and the Partnership,
the other parties thereto, have the requisite corporate power and
authority to execute, deliver and perform their respective obligations
under the Management Subscription Documents; the Management Subscription
Documents (A) will be substantially in the form heretofore delivered to
the Representatives, (B) have been duly and validly authorized, and, at
the Closing Time, will be duly and validly executed and delivered by the
Company and will create valid and binding obligations of the Company and,
to the best knowledge of the Company and the Partnership, the other
parties thereto and (C) will be enforceable against the Company and, to
the best knowledge of the Company and the Partnership, the other parties
thereto in accordance with their terms, except as such enforcement may be
limited by bankruptcy, insolvency, moratorium, reorganization, or other
similar laws affecting creditors' rights generally or by general
principals of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law). The terms of the
Management Subscription Documents conform in all material respects to the
descriptions thereof contained in the Prospectus.
(xi) Authorization of the Transaction Agreements. (A)
-------------------------------------------
The Partnership and, to the best knowledge of the Company and the
Partnership, the other parties thereto, each have the requisite corporate
or partnership power and authority to execute, deliver and perform their
respective obligations under the Transaction Agreements; each of the
Transaction Agreements (A) will be substantially in the form heretofore
delivered to the Representatives, (B) has been duly and validly
authorized, executed and delivered by all the parties thereto and creates
valid and binding obligations of the Partnership and, to the best
knowledge of the Company and the Partnership, the other parties thereto,
and (C) is enforceable against the Partnership and, to the best knowledge
of the Company and the
9
Partnership, the other parties thereto, in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
moratorium, reorganization, or other similar laws affecting creditors'
rights generally or by general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity). The
terms of the Transaction Agreements and the ▇▇▇▇▇▇▇▇'▇ Acquisition
conform in all material respects to the description thereof contained in
the Prospectus.
(xii) Authorization of Registration Rights Agreement. The
----------------------------------------------
Company and, to the best knowledge of the Company and the Partnership,
the other parties thereto each have the requisite power and authority to
execute, deliver and perform their respective obligations under the
Registration Rights Agreement; the Registration Rights Agreement (A) will
be substantially in the form heretofore delivered to the Representatives,
(B) has been duly and validly authorized, and, at the Closing Time, will
be duly and validly executed and delivered by all the parties thereto and
will create valid and binding obligations of the Company and, to the best
knowledge of the Company and the Partnership, the other parties thereto
and (C) will be enforceable against the Company and, to the best
knowledge of the Company and the Partnership, the other parties thereto
in accordance with its terms, except as such enforcement may be limited
by bankruptcy, insolvency, moratorium, reorganization, or other similar
laws affecting creditors' rights generally or by general principals of
equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law). The terms of the Registration Rights
Agreement conform in all material respects to the description thereof
contained in the Prospectus.
(xiii)Authorization of Stockholders Agreement. The Company
---------------------------------------
and, to the best knowledge of the Company and the Partnership, the other
parties thereto, each have the requisite corporate power and authority to
execute, deliver and perform their respective obligations under the
Stockholders Agreement; the Stockholders Agreement (A) will be
substantially in the form heretofore delivered to the Representatives,
(B) has been duly and validly authorized, and. at the Closing Time, will
be duly and validly executed and delivered by the Company and will create
valid and binding obligations of the Company and, to the best knowledge
of the Company and the Partnership, the other parties thereto and (C)
will be enforceable against the Company and, to the best knowledge of the
Company and the Partnership, the other parties thereto in accordance with
its terms, except as such enforcement may be limited by bankruptcy,
insolvency, moratorium, reorganization, or other similar laws affecting
creditors' rights generally or by general principals of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law). The terms of the Stockholders Agreement conform in
all material respects to the description thereof contained in the
Prospectus.
(xiv) Restated Partnership Agreement. The Company and, to the
------------------------------
best knowledge of the Company and the Partnership, the other parties
thereto, each have the requisite corporate power and authority to
execute, deliver and perform their respective obligations under the
Restated Partnership Agreement; the Restated Partnership Agreement (A)
will be substantially in the form heretofore delivered to the
Representatives, (B) has been duly
10
and validly authorized and, at the Closing Time will be duly and validly
executed and delivered by the Company and will create valid and binding
obligations of the Company and, to the best knowledge of the Company and
the Partnership, the other parties thereto, and (C) will be enforceable
against the Company and, to the best knowledge of the Company and the
Partnership, the other parties thereto in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
moratorium, reorganization, or other similar laws affecting creditors'
rights generally or by general principals of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at
law). The terms of the Partnership Agreement, as amended, conform in all
material respects to the description thereof contained in the Prospectus.
(xv) Capitalization of the Partnership and the Company. The
-------------------------------------------------
Partnership had, at the date indicated in the Prospectus a duly
authorized and outstanding capitalization as set forth in the Prospectus
in the column entitled "The Partnership Historical" under the caption
"Capitalization;" at the Closing Time, the issued and outstanding capital
stock of the Company (including for this purpose the Initial Securities)
will be as described in the Prospectus under the caption "The
Incorporation Plan;" and at the Closing Time, there will also be
outstanding options to purchase an additional [ ] shares of Common
Stock, which will be held as described in the Prospectus.
(xvi) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by each of the Company and the
Partnership.
(xvii)Authorization and Description of Securities. The
-------------------------------------------
Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered by
the Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued and fully paid and
non-assessable; the other shares of Common Stock that will be issued at
the Closing Time as contemplated in the Exchange Agreement and the
Management Subscription Documents have been duly authorized for issuance
and, when issued and delivered by the Company in the manner contemplated
in the Exchange Agreement or the Management Subscription Documents, as
the case may be, against payment of the consideration therefor, will be
validly issued and fully paid and non-assessable; the Common Stock
conforms to all statements relating thereto contained in the Prospectus
and such description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to
personal liability by reason of being such a holder; and the issuance of
the Securities is not subject to the preemptive or other similar rights
of any securityholder of the Company.
(xviii)Absence of Defaults and Conflicts. None of the Company,
---------------------------------
Holding, the Partnership or any of their subsidiaries is in violation of
its charter or by-laws or other organizational document or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in the Bank Credit Facility or in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or
11
other agreement or instrument to which the Company, Holding, the
Partnership or any of their subsidiaries is a party or by which it or any
of them may be bound, or to which any of the property or assets of the
Company, Holding, the Partnership or any of their subsidiaries is subject
(collectively, "Agreements and Instruments") except for such violations
or defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement, the Exchange
Agreement, the Management Subscription Documents, the Restated
Partnership Agreement, the Registration Rights Agreement, the
Stockholders Agreement and the Transaction Agreements and the
consummation of the transactions contemplated herein and therein and in
the Registration Statement (including, but not limited to, the issuance
and sale of the Securities and the use of the proceeds from the sale of
the Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company, Holding, the Partnership and
their subsidiaries with their respective obligations hereunder have been
duly authorized by all necessary corporate action or partnership action,
as the case may be, 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, except with respect to that portion of the
Bank Credit Facility that is required to be repaid in connection with the
issuance and sale of the Securities, a Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance ("Lien") upon any property or assets of the Company, Holding,
the Partnership or any of their subsidiaries pursuant to the Agreements
and Instruments (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not result in a Material
Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws or other organizational document of
the Company, Holding, the Partnership or any of their subsidiaries or,
except for violations that would not result in a Material Adverse Effect,
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, Holding, the
Partnership or any of their 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, Holding, the Partnership or
any of their subsidiaries.
(xix) Absence of Labor Dispute. No labor dispute with the
------------------------
employees of the Company, Holding, the Partnership or any of their
subsidiaries exists or, to the knowledge of the Company or the
Partnership, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case and in any circumstance contemplated
by this clause (xix), may reasonably be expected to result in a Material
Adverse Effect.
12
(xx) Absence of Proceedings. There is no action, suit,
----------------------
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company or the Partnership, threatened, against or
affecting the Company, Holding, the Partnership or any of their
subsidiaries, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), 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 thereof or the consummation of the transactions contemplated in
this Agreement, the Transaction Agreements, the Exchange Agreement, the
Restated Partnership Agreement, the Registration Rights Agreement, the
Stockholders Agreement or the Management Subscription Documents or the
performance by the Company, the General Partner, VLP or the Partnership,
as the case may be, of their respective obligations hereunder or
thereunder; the aggregate of all pending legal or governmental
proceedings to which the Company, Holding, the Partnership or any of
their subsidiaries is a party or of which any of their respective
property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental
to the business, could not reasonably be expected to result in a Material
Adverse Effect.
(xxi) Accuracy of Exhibits. There are no contracts or
--------------------
documents of the Company, Holding, the Partnership or any of their
subsidiaries which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto which have
not been so described and filed as required.
(xxii)Possession of Intellectual Property. The Company,
-----------------------------------
Holding, the Partnership and their subsidiaries own or possess or have
the right to use, or can acquire or acquire the right to use 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, except where the failure to own,
possess or have the right to use or to have the ability to acquire or to
acquire the right to use any such intellectual property would not have a
Material Adverse Effect and neither the Company, Holding, the Partnership
nor any of their 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, Holding, the
Partnership or any of their 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. The continued use of the trademarks
(the "Trademarks") transferred or licensed to the Partnership pursuant to
the Trademark Agreement, the CDM Agreement, the CDM Trademark Agreement,
the TJX Trademark Agreement, and the License Agreement with Sears Shop at
Home Services, Inc. which enables the
13
Company to market its catalogs under the Sears name to Sears ▇▇▇▇▇▇▇ &
Co. customers (the "Sears Agreement") (as such Trademarks have heretofore
been used by the business and as currently planned by the Company and the
Partnership) will not result in any infringement of the rights of others
in the United States, and the Company and the Partnership have no
knowledge of any such claim as to the Trademarks transferred or licensed
to the Partnership pursuant to the Trademark Agreement, the CDM
Agreement, the CDM Trademark Agreement, the TJX Trademark Agreement, or
the Sears Agreement registered in any foreign countries. As of the date
hereof, to the best of the knowledge of the Company and the Partnership,
(x) affiliates of The Limited are the sole and legal owners of such
Trademarks transferred or licensed to the Partnership pursuant to the
Trademark Agreement in the United States, (y) affiliates of Sears are the
sole and legal owners of such Trademarks licensed to the Partnership
pursuant to the Sears Agreement in the United States, and (z) affiliates
of TJX are the sole and legal owners of such Trademarks transferred or
licensed to the Partnership pursuant to the CDM Agreement, the CDM
Trademark Agreement and the TJX Trademark Agreement, and, as of the date
hereof, the Company and the Partnership have no knowledge of any claim by
any other person that such other person is the legal owner of the
Trademarks and to the best knowledge of the Company and the Partnership,
affiliates of The Limited, TJX or Sears, as the case may be, have not
granted any license or right to any other person to use any Trademarks in
connection with a mail-order catalog business for women's and men's
special size apparel, off-price women's apparel, moderately priced
fashion apparel and related accessories.
(xxiii)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 in connection with the transactions contemplated
by (i) the Exchange Agreement, (ii) the Management Subscription
Documents, (iii) the Transaction Agreements, (iv) the Restated
Partnership Agreement, (v) the Registration Rights Agreement, (vi) the
Stockholders Agreement, (vii) the offering, issuance or sale of the
Securities hereunder or (viii) the consummation of the transactions
contemplated by this Agreement, except (x) such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws, (y) such as have been obtained or
may be required under the laws and regulations of jurisdictions outside
the United States in which the Reserved Securities are offered or (z)
those that if not obtained would not reasonably be expected to result in
a Material Adverse Effect. The applicable waiting period as a result of
any filings made by any of the Company, The Limited, any of the FS
Entities or any of their respective affiliates pursuant to the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 with respect to the
formation of the Company or the transaction contemplated by the Exchange
Agreement has expired or has been the subject of early termination.
(xxiv)Possession of Licenses and Permits. The Company,
----------------------------------
Holding, the Partnership and their subsidiaries possess such permits,
licenses, approvals, consents, certificates and other authorizations
(collectively, "Governmental Licenses") issued by
14
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them, except
where the failure to own or possess such licenses, certificates,
authorities or permits would not have a Material Adverse Effect; the
Company, Holding, the Partnership and their subsidiaries 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 when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and none of the Company, Holding, the
Partnership nor any of their subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(xxv) Title to Property. The Company, Holding, the Partnership
-----------------
and their subsidiaries have good and marketable title to all real
property owned by the Company, Holding, the Partnership and their
subsidiaries, as applicable, and good title to all other properties owned
by them, in each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind,
except such as (a) are described in the Prospectus or (b) do not, singly
or in the aggregate, materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property
by the Company, Holding, the Partnership or any of their subsidiaries;
and all of the leases and subleases material to the business of the
Company, Holding, the Partnership and any of their subsidiaries,
considered as one enterprise, and under which the Company, Holding, the
Partnership or any of their subsidiaries holds properties described in
the Prospectus, are in full force and effect, and, except as would not,
singly or in the aggregate, result in a Material Adverse Effect, neither
the Company, Holding, the Partnership nor any of their subsidiaries has
any notice of any claim of any sort that has been asserted by anyone
adverse to the rights of the Company, Holding, the Partnership or any of
their subsidiaries under any of the leases or subleases mentioned above,
or affecting or questioning the rights of the Company, Holding, the
Partnership or any of their subsidiaries to the continued possession of
the leased or subleased premises under any such lease or sublease.
(xxvi)Investment Company Act. None of the Company, Holding,
----------------------
the General Partner, VLP or the Partnership 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 Prospectus 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").
(xxvii) Environmental Laws. Except as described in the
------------------
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) none of the Company,
Holding, the Partnership and their subsidiaries are in violation
15
of any federal, state, local or foreign statute, law, rule, regulation,
ordinance, code 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, Holding, the Partnership and their subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the best knowledge of the Company and the
Partnership, threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any Environmental
Law against the Company, Holding, the Partnership or any of their
subsidiaries 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, Holding,
the Partnership or any of their subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xxviii)Registration Rights. There are no persons with
-------------------
registration rights or other similar rights, other than disclosed in the
Registration Statement, to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act.
(xxix) Filings of Tax Returns. The Company, Holding, the
----------------------
Partnership and their subsidiaries have duly and properly filed, or will
duly and properly file, on a timely basis, all tax returns (including,
without limitation, Federal, state, local and foreign returns) which were
or will be required to be filed by them for all periods ending on or
before the Closing Time or including the Closing Time. All such tax
returns and amendments thereto filed on or after August 30, 1993 and, to
the knowledge of the Company, Holding, the General partner, VLP and the
Partnership, all such tax returns filed before August 30, 1993 are (or
will be) true, correct and complete in all material respects when filed,
and all taxes (including, without limitation, withholding taxes,
penalties and interest) due and payable by the Company and its
subsidiaries have been (or will be) paid, other than those being
contested in good faith and for which an adequate reserve or accrual has
been established in accordance with generally accepted accounting
principles. Neither the Company nor the Partnership is aware of any
audit by a tax authority that is pending or threatened with respect to
any such tax returns that would, singly or in the aggregate, result in a
Material Adverse Effect. No material deficiency or adjustment for any
taxes has been threatened, proprosed, asserted or assessed against
16
the Company, Holding, the Partnership or their subsidiaries. There are no
tax liens upon any of the properties or assets, real or personal,
tangible or intangible, of the Company, Holding, the Partnership or any
of their subsidiaries, except for statutory liens for taxes not yet due
or delinquent.
(xxx) Maintenance of Internal Controls. The Company and its
--------------------------------
subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific
authorization, (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (C)
access to assets is permitted only in accordance with management's
generally 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.
(xxxi) Maintenance of Insurance. The Company and its
------------------------
subsidiaries maintain insurance of the types of and in the amounts that
are reasonable for the business conducted by them.
(xxxii) No Violations of Regulations G, T, U or X. Neither the
-----------------------------------------
issuance, sale or delivery of the Securities nor the application of the
proceeds thereof by any of the Company, Holding, the General Partner, VLP
or the Partnership as set forth in the Prospectus will violate
Regulations G, T, U, or X of the Boards of Governors of the Federal
Reserve System or any other regulation of such Board of Governors.
(xxxiii)Exchange Agreement. Each of the parties to the
------------------
Exchange Agreement has performed or will perform all of such party's
obligations under the Exchange Agreement required to be performed on or
prior to the date hereof.
(xxxiv)Transaction Agreements. Each of the parties to each of
----------------------
the Transaction Agreements has performed or will perform all of such
party's obligations under each Transaction Agreement required to be
performed on or prior to the date hereof.
(xxxv) Partnership Agreement. The Partnership Agreement is
---------------------
currently in full force and effect, and each of the parties thereto has
performed all of such party's obligations under the Partnership Agreement
required to be performed on or prior to the date hereof.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company, Holding, the General Partner, VLP or the Partnership or any of
their subsidiaries delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the applicable
entity to each Underwriter as to the matters covered thereby.
17
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule B, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an additional
600,000 shares of Common Stock at the price per share set forth in Schedule B,
less an amount per share equal to any dividends or distributions declared by
the Company and payable on the Initial Securities but not payable on the Option
Securities. The option hereby granted will expire 30 days after the date
hereof and may be exercised in whole or in part from time to time only for the
purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Securities upon [written] notice by
the Representatives to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and delivery for such Option Securities. Any
such time and date of delivery (a "Date of Delivery") shall be determined by
the Representatives, but shall not be later than seven full business days after
the exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined, unless otherwise agreed by the Company and the
Representatives. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as the Representatives in
their discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
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 (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the Company (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option
18
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Representatives and the Company, on each Date of
Delivery as specified in the written notice from the Representatives to the
Company.
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 Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations
and registered in such names as the Representatives may request in writing at
least one full business day before the Closing Time or the relevant Date of
Delivery, as the case may be. The certificates for the Initial Securities and
the Option Securities, if any, will be made available for examination and
packaging by the Representatives in The City of New York not later than 10:00
A.M. (Eastern time) on the business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be.
(e) Appointment of Qualified Independent Underwriter. The Company
hereby confirms its engagement of Lazard Freres as, and Lazard Freres hereby
confirms its agreement with the Company to render services as, a "qualified
independent underwriter" within the meaning of Rule 2720 of the Conduct Rules
of the National Association of Securities Dealers, Inc. with respect to the
offering and sale of the Securities. Lazard Freres, solely in its capacity as
qualified independent underwriter and not otherwise, is referred to herein as
the "Independent Underwriter".
SECTION 3. Covenants of the Company. The Company covenants with
------------------------
each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the Representatives
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been filed,
(ii) of the receipt of any comments from the Commission, (iii) of any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
19
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect any filings necessary pursuant to Rule 424(b) and
will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will promptly
file such prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
will furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or counsel
for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies
of the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed by the Company with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the Securities
Exchange Act of 1934 (the "1934 Act"), such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed by the Company with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion
of the distribution of the Securities as contemplated in this Agreement and in
the Prospectus. If at any time when a prospectus is required by the 1933 Act
to be delivered in connection with sales of the Securities,
20
any event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or for the Company,
to amend the Registration Statement or amend or supplement the Prospectus in
order that the Prospectus will not include any untrue statements of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, or if it shall be necessary, in the opinion of
such counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representatives may designate and to
maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall not,
as a consequence thereof, be obligated to file any general consent to service
of process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the Securities have been
so qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) 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 Prospectus
under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Common Stock (including the Securities) on the New York Stock
Exchange.
(j) Restriction on Sale of Securities. During a period of 180 days
from the date of this Agreement, the Company will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, on behalf of the Representatives, directly or
indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of any
share of Common Stock or
21
any securities convertible into or exercisable or exchangeable for Common Stock
or file any registration statement under the 1933 Act with respect to any of
the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder, (B) any
shares of Common Stock issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof and
referred to in the Prospectus, (C) any shares of Common Stock issued or options
to purchase Common Stock granted pursuant to existing employee benefit plans of
the Company referred to in the Prospectus or (D) any shares of Common Stock
issued pursuant to any non-employee director stock plan or dividend
reinvestment plan.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
use its best efforts to 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 rules and regulations of the Commission thereunder.
(l) Compliance with NASD Rules. The Company hereby agrees that it will
use its best efforts to ensure that the Reserved Securities will be restricted
as required by the National Association of Securities Dealers, Inc. (the
"NASD") or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of this
Agreement. The Underwriters will notify the Company as to which persons will
need to be so restricted. At the request of the Underwriters, the Company will
direct the transfer agent to place a stop transfer restriction upon such
securities for such period of time. Should the Company release, or seek to
release, from such restrictions any of such Reserved Securities, the Company
agrees to reimburse the Underwriters for any reasonable expenses (including,
without limitation, legal expenses) they incur in connection with such release.
(m) Compliance with Rule 463. The Company will file with the
Commission such reports on Form SR as may be required pursuant to Rule 463 of
the 1933 Act Regulations.
SECTION 4. Payment of Expenses. (a)Expenses. The Company will pay
-------------------
all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation and
delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to
the Underwriters, including any stock or other transfer taxes and any stamp or
other duties payable upon the sale, issuance or delivery of the Securities to
the Underwriters, (iv) the fees and disbursements of the Company's counsel and
accountants, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Underwriters in
connection
22
therewith and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vi) the printing and delivery to the Underwriters of
copies of each preliminary prospectus, any Term Sheets and of the Prospectus
and any amendments or supplements thereto, (vii) the preparation, printing and
delivery to the Underwriters of copies of the Blue Sky Survey and any
supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities, (ix) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the National Association of Securities Dealers, Inc. (the
"NASD") of the terms of the sale of the Securities, (x) the fees and expenses
incurred in connection with the listing of the Securities on the New York Stock
Exchange and (xi) all costs and expenses of the Underwriters, including the
fees and disbursements of counsel for the Underwriters, in connection with
matters related to the Reserved Securities which are designated by the Company
for sale to employees and others having a business relationship with the
Company.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations
---------------------------------------
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule
434, a Term Sheet shall have been filed with the Commission in accordance with
Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters to the effect set forth
in Exhibit A hereto and to such further effect as counsel to the Underwriters
may reasonably request. In giving such opinion such counsel may rely, as to all
matters governed
23
by the laws of jurisdictions other than the law of the State of California, the
federal law of the United States and the General Corporation Law of the State
of Delaware, upon the opinions of counsel satisfactory to the counsel for the
Underwriters. 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
certificates of public officials.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters with respect to the matters set forth in clauses (i), (ii) (solely
as to the Purchase Agreement), (ix), (x) (solely as to preemptive or other
similar rights arising by operation of law or under the charter or by-laws of
the Company), (xii) (solely as to the Purchase Agreement), (xiii), (xiv), (xvi),
(xviii) (solely as to the information in the Prospectus under "Description of
Capital Stock--Common Stock") and (xxvi) of 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, the federal law of
the United States and the General Corporation Law of the State of Delaware, 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 certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company, the Partnership and their subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the President and the
chief financial officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time,
except to the extent that such representation or warranty is expressly stated
as of an earlier time, (iii) the Company, Holding, and the Partnership have
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or, to the
best of their respective knowledge, are contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Coopers & ▇▇▇▇▇▇▇ 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 Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial
24
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(f) Bring-down Comfort Letter. At the Closing Time, the
Representatives shall have received from Coopers & ▇▇▇▇▇▇▇ a letter,
dated as of the Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (e) of this Section, except
that the specified date referred to shall be a date not more than three
business days prior to Closing Time.
(g) Approval of Listing. At the Closing Time, the Securities shall
have been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(h) No Objection. At the Closing Time, the NASD shall have confirmed
that it has not raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit B hereto signed by each of the persons and entities listed on Schedule
C hereto.
(j) Receipt of Waivers. At the Closing Time the Representatives shall
have received (i) evidence of waiver by the TJX Noteholder of its right to
convert the Partnership Note into partnership units of the Partnership and (ii)
evidence of the waiver by the holders of the Company's Series A Preferred Stock
of their right to convert their shares of Series A Preferred Stock of the
Company into shares of Common Stock of the Company, and (iv) evidence of the
termination of the waiting period under the HSR Act.
(k) Execution of Exchange Agreement. Each of the parties to the
Exchange Agreement has performed all of such party's obligations under the
Exchange Agreement required to be performed on or prior to the Closing Time.
(l) Execution of Management Subscription Documents. Each of the
parties to each of the Management Subscription Documents has performed all of
such party's obligation under each of such Management Subscription Documents
required to be performed on or prior to the Closing Time.
(m) Execution of Transaction Agreements. Each of the parties to each
of the Transaction Agreements has performed all of such party's obligations
under each of such Transaction Agreements required to be performed on or prior
to the Closing Time.
(n) Execution of Restated Partnership Agreement, Registration Rights
Agreement and Stockholders Agreement. The Company and the Partnership, and to
the best knowledge of the Company and the Partnership, each of the other
parties to each of the Restated Partnership Agreement, the Registration Rights
Agreements and the Stockholders Agreement has duly and
25
validly authorized, executed and delivered each of such agreements and has
performed all of such parties obligations under each of the such agreements
required to be performed on or prior to the Closing Time.
(o) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates
furnished by the Company or any subsidiary of the Company hereunder shall be
true and correct as of each Date of Delivery and, at the relevant Date of
Delivery, the Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
---------------------
Delivery, of the President of the Company and of the chief financial
officer of the Company confirming that the certificate delivered at the
Closing Time pursuant to Section 5(d) hereof remains true and correct as
of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such Date
of Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion required
by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable
-----------------------------------
opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from Coopers &
▇▇▇▇▇▇▇, in form and substance satisfactory to the Representatives
and dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Representatives pursuant to
Section 5(f) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than five
days prior to such Date of Delivery.
(p) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may 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 Underwriters.
26
(q) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by written notice to the
Company at any time at or prior to Closing Time or such Date of Delivery, as
the case may be, and such termination shall be without liability of any party
to any other party except as provided in Section 4 and except that Sections 1,
6, 7 and 8 shall survive any such termination and remain in full force and
effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters. (1) Each of the Company and the
Partnership agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided that (subject to
Section 6(d) below) any such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇
▇▇▇▇▇), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission or in connection with any violation
of the nature referred to in Section 6(a)(1)(ii)(A) hereof, to the extent
that any such expense is not paid under (i) or (ii) above;
27
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 Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) and,
provided, further, that the Company will not be liable to an
-------
Underwriter with respect to any Preliminary Prospectus to the extent that such
loss, liability, claim, damage or expense resulted from the fact that such
Underwriter, in contravention of this Agreement or applicable law, sold
Securities to a person to whom such Underwriter failed to send or give, at or
prior to the Closing Date, a copy of the Prospectus as then amended and
supplemented if (i) the Company has previously furnished copies thereof
(sufficiently in advance of the Closing Date to allow distribution by the
Closing Date) to the Underwriters and the loss, liability, claim, damage or
expense of such Underwriter resulted from an untrue statement or omission or
alleged untrue statement or omission of a material fact contained in or omitted
from the Preliminary Prospectus which was corrected in the Prospectus and (ii)
such failure to give or send such Prospectus by the Closing Date to the party
or parties asserting such loss, liability, claim, damage or expense would have
constituted the sole defense to the claim asserted by such person.
(2) In addition to and without limitation of the Company's obligation to
indemnify Lazard Freres as an Underwriter, the Company also agrees to indemnify
and hold harmless the Independent Underwriter and each person, if any, who
controls the Independent Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, from and against any and all loss,
liability, claim, damage, and expense whatsoever, as incurred, incurred as a
result of the Independent Underwriter's participation as a "qualified
independent underwriter" within the meaning of Rule 2720 of the Conduct Rules
of the National Association of Securities Dealers, Inc. in connection with the
offering of the Securities.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a)(1) of this Section, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
28
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to
Section 6(a) (1) above, counsel to the indemnified parties shall be selected by
▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances;
provided, that, if indemnity is sought pursuant to Section 6(a)(2), then, in
addition to the fees and expenses of such counsel for the indemnified parties,
the indemnifying party shall be liable for the reasonable fees and expenses of
not more than one counsel (in addition to any local counsel) separate from its
own counsel and that of the other indemnified parties for the Independent
Underwriter in its capacity as a "qualified independent underwriter" and all
persons, if any, who control the Independent Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of 1934 Act 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 if, in the
reasonable judgment of the Independent Underwriter, there may exist a conflict
of interest between the Independent Underwriter and the other indemnified
parties. Any such separate counsel for the Independent Underwriter and such
control persons of the Independent Underwriter shall be designated in writing
by the Independent Underwriter. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(1)(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
29
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
(e) Indemnification for Reserved Securities. In connection with the
offer and sale of the Reserved Securities, the Company agrees, promptly upon a
request in writing, to indemnify and hold harmless the Underwriters from and
against any and all losses, liabilities, claims, damages and expenses incurred
by them as a result of the failure of eligible employees of the Company to pay
for and accept delivery of Reserved Securities which, by the end of the first
business day following the date of this Agreement, were subject to a properly
confirmed agreement to purchase.
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one hand and
of the Underwriters on the other hand in connection with the statements or
omissions, which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters,
in each case as set forth on the cover of the Prospectus, or, if Rule 434 is
used, the corresponding location on the Term Sheet, bear to the aggregate
initial public offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
the Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that Lazard Freres will not
receive any additional benefits hereunder for serving as the Independent
Underwriter in connection with the offering and sale of the Securities.
30
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
------------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
--------
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
31
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company, the
Partnership or any of their subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States, any outbreak of hostilities or escalation thereof or other calamity or
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 New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New
York Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed,
or 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 or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
SECTION 10. Default by One or More of the Underwriters. If one or
------------------------------------------
more of the Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but
not less than all, of the Defaulted Securities in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the Representatives
shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the
full amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which
32
occurs after the Closing Time, the obligation of the Underwriters to purchase
and of the Company to sell the Option Securities to be purchased and sold on
such Date of Delivery shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option
Securities, as the case may be, either the Representatives or the Company shall
have the right to postpone Closing Time or the relevant Date of Delivery, as
the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives c/o Merrill ▇▇▇▇▇ at
North Tower, World Financial Center, New York, New York 10281-1201, attention
of [ ]; with copies to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.; and notices to the Company shall be directed
to it at Brylane, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
attention: Chief Financial Officer, with copies to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co.,
Incorporated, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
SECTION 12. Parties. This Agreement shall each inure to the benefit
-------
of and be binding upon the Underwriters and the Company, the Partnership, and
their respective successors. Nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any person, firm or corporation,
other than the Underwriters and the Company, Holding, the General Partner, VLP,
the Partnership and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company, Holding, the General
Partner, VLP, the Partnership and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Securities from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
----------------------
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
33
STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings
------------------
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
34
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 between the Underwriters and the Company in accordance with its
terms.
Very truly yours,
BRYLANE INC.
By:
---------------------------------------
Name:
Title:
BRYLANE, L.P.
By: VGP Corporation,
General Partner
By:
-----------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
LAZARD FRERES & CO. LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
-----------------------------------------
Authorized Signatory
For themselves and as Representatives of the
other Underwriters named in Schedule A hereto.
35
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
------------------- ----------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated.....................................
Lazard Freres & Co. LLC................................
▇.▇. ▇▇▇▇▇▇ Securities Inc..............................
------------
Total ..................................................... 4,000,000
Sch A-1
SCHEDULE B
BRYLANE INC.
Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $[ ].
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[ ], being an amount equal to the initial
public offering price set forth above less $[ ] per share; provided, that
the purchase price per share for any Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall be
reduced by an amount per share equal to any dividends or distributions declared
by the Company and payable on the Initial Securities but not payable on the
Option Securities.
Sch B-1
SCHEDULE C
[TO COME]
---------
Sch C-1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) Each of the Company, Holding, the General Partner and VLP has
the been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware.
(ii) Each of the Company, Holding, the General Partner and VLP has
the corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and
to enter into and perform its obligations under the Purchase Agreement,
the Exchange Agreement, the Management Subscription Documents and the
Transaction Agreements.
(iii) The Partnership has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the
State of Delaware.
(iv) The Partnership has the partnership power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under the Purchase Agreement.
(v) The Partnership Agreement constitutes the legal, valid and
binding obligation of the parties thereto enforceable against the parties
thereto in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or a law).
(vi) For United States Federal income tax purposes, the
Partnership has been and is currently classified as a partnership, and
not as an association taxable as a corporation.
(vii) To the best of such counsel's knowledge, each of the Company,
Holding, the General Partner and VLP is duly qualified as a foreign
corporation, and the Partnership is qualified as a foreign partnership,
to transact business and is in good standing in each jurisdiction in
which such qualification is required, except for such jurisdictions in
which the failure to be so duly qualified and in good standing would not
have a Material Adverse Effect.
A-1
(viii)The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption "The
Incorporation Plan" (except for subsequent issuances, if any, pursuant to
the Purchase Agreement or pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus); 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.
(ix) The Securities have been duly authorized for issuance and
sale to the Underwriters pursuant to the Purchase Agreement and, when
issued and delivered by the Company pursuant to the Purchase Agreement
against payment of the consideration set forth in the Purchase Agreement,
will be validly issued and fully paid and non-assessable; no holder of
the Securities is or will be subject to personal liability by reason of
being such a holder.
(x) The issuance of the Securities is not subject to preemptive
or other similar rights of any securityholder of the Company arising by
operation of law, under the charter or by-laws of the Company or, to the
best knowledge of such counsel, otherwise.
(xi) Each of Holding, VLP and VGP 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 their properties and to conduct their business
as described in the Prospectus and, to the best of such counsel's
knowledge, are duly qualified as foreign corporations to transact
business and are in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse
Effect; except as otherwise disclosed in the Registration Statement, all
of the issued and outstanding capital stock of Holding and each such
subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and, to the best of our knowledge, are owned of record by
the Company, directly (in the case of Holding) or through Holding (in the
case of the General Partner and VLP), free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock of Holding and any such
subsidiary was issued in violation of the preemptive or similar rights of
any securityholder of Holding or such subsidiary arising by operation of
law, under the charter or by-laws of Holding or such subsidiary or, to
the best knowledge of such counsel, otherwise.
(xii) The Purchase Agreement has been duly and validly authorized,
executed and delivered by the Company and the Partnership, and each of
the Exchange Agreement, the Registration Rights Agreement, the
Stockholders Agreement, the Restated Partnership Agreement, the
Management Subscription Documents and the Transaction Agreements have
been duly authorized, executed and delivered by the Company or the
A-2
Partnership, as the case may be, and, to such counsel's knowledge, the
other parties thereto, and each of such agreements creates a valid and
binding obligation of the Company or the Partnership, as the case may be,
and to such counsel's knowledge, the other parties thereto, and will be
enforceable against the Company or the Partnership, as the case may be,
in accordance with their terms except as such enforcement may be limited
by bankruptcy, insolvency, moratorium, reorganization, or other similar
laws affecting enforcement of creditors' rights generally or by general
principals of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(xiii)The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act;
any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b);
and, to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or
threatened by the Commission.
(xiv) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectus and each amendment or
supplement to the Registration Statement and Prospectus as of their
respective effective or issue dates (other than the financial statements
and supporting schedules included therein or omitted therefrom, as to
which no opinion is rendered) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(xv) If Rule 434 has been relied upon, the Prospectus was not
"materially different," as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it became
effective.
(xvi) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and by-laws
of the Company and the requirements of the New York Stock Exchange.
(xvii)To the best of such counsel's knowledge, there is not pending
or threatened any action, suit, proceeding, inquiry or investigation, to
which the Company, Holding, the Partnership or any of their subsidiaries
is a party, or to which any of their property is subject, before or
brought by any court or governmental agency or body, domestic or foreign,
which is required to be disclosed in the Registration Statement 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 thereof or the consummation of the transactions
contemplated in the Purchase Agreement, the Exchange Agreement, the
Management Subscription Documents, the Restated
A-3
Partnership Agreement, the Registration Rights Agreement, the
Stockholders Agreement, and the Transaction Agreements or the performance
by the Company, the General Partner, VLP or the Partnership, as the case
may be, of their respective obligations thereunder.
(xviii)The information in the Prospectus under "Description of
Capital Stock--Common Stock," "The Incorporation Plan," "Certain
Relationships and Related Transactions" and "Description of Certain
Financing Arrangements" and in the Registration Statement under Item 14,
to the extent that it constitutes matters of law, summaries of legal
matters, the Company's charter and by-laws or legal proceedings, or legal
conclusions, has been reviewed by us and is correct in all material
respects.
(xix) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that are
not described as required.
(xx) All descriptions in the Registration Statement of contracts
and other documents to which the Company or its subsidiaries 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 required to be described
or referred to in the Registration Statement or to be filed as exhibits
thereto other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct in all material respects.
(xxi) 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 under
the HSR Act, the 1933 Act and the 1933 Act Regulations, which have been
obtained, or as may be required under the securities or blue sky laws of
the various states, as to which we need express no opinion) is necessary
or required in connection with the offering, issuance or sale of the
Securities, and to the best of such counsel's knowledge, in connection
with the due authorization, execution and delivery of the Purchase
Agreement, the Exchange Agreement, the Management Subscription Documents,
the Transaction Agreements, the Amendments to the Partnership Agreement,
the Registration Rights Agreement or the Stockholders Agreement or for
(xxii)The execution, delivery and performance of the Purchase
Agreement, the Exchange Agreement, the Management Subscription Documents,
the Restated Partnership Agreement, the Registration Rights Agreement,
the Stockholders Agreement, and the Transaction Agreements, and the
consummation of the transactions contemplated therein and in the
Registration Statement (including, but not limited to, the issuance and
sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use Of
Proceeds") and compliance by the Company, Holding, the Partnership and
their subsidiaries with their respective obligations under the
A-4
Purchase Agreement 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 (except with respect to that portion of the Bank
Credit Facility that is required to be repaid in connection with the
issuance and sale of the Securities) a Repayment Event (as defined in
Section 1(a)(xviii) 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, Holding, the Partnership or any of
their subsidiaries 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, Holding, the Partnership
or any of their subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company,
Holding, the Partnership or any of their subsidiaries is subject, and
which have been identified to us on the Certificate (except for such
conflicts, breaches or defaults or Liens 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, Holding, the
Partnership or any of their subsidiaries, 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, Holding, the Partnership or any of
their subsidiaries or any of their respective properties, assets or
operations.
(xxiii)To the best of such counsel's knowledge, there are no
persons with registration rights or other similar rights to have any
securities registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.
(xxiv)The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
1940 Act.
(xxv) Each of the Trademark Agreement and Sears Agreement has been
duly and validly authorized, executed and delivered by the Partnership
and, to such counsel's knowledge, the respective licensors and each
creates a valid and binding obligation of the Partnership and, to such
counsel's knowledge, the respective licensors and will be enforceable
against the Partnership and, to their knowledge, the respective licensors
in accordance with their terms, except as such enforcement may be limited
by bankruptcy, insolvency, moratorium, reorganization, or other similar
laws affecting creditors' rights generally or by general principals of
equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(xxvi) Such counsel has participated in conferences with officers
and other representatives of the Company, counsel employed by the
Company, representatives of the independent public accountants for the
Company, representatives of the Underwriters and counsel for the
Underwriters, at which conferences the contents of the Registration
Statement and Prospectus and related matters were discussed and, although
such counsel are not passing upon, and do not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained
in the Registration Statement or the
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Prospectus, and have not made any independent check or verification
thereof, except as specifically provided in such opinions, on the basis
of the foregoing, nothing has come to their attention that would lead
them to believe that the Registration Statement (except for financial
statements and schedules and other financial tables or data included
therein, as to which counsel need make no statement), as of its date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (except for
financial statements and schedules and other financial tables or data
included therein, as to which counsel need make no statement), as of its
date (unless the term "Prospectus" refers to a prospectus which has been
provided to the Underwriters by the Company for use in connection with
the offering of the Securities which differs from the Prospectus on file
at the Commission at the time the Registration Statement becomes
effective, in which case at the time it is first provided to the
Underwriters for such use) or at 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-6
[FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS PURSUANT TO
SECTION 5(I)]
Exhibit B
_________ __, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
LAZARD FRERES & CO. LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
as Representative(s) of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Proposed Public Offering by Brylane Inc.
------------
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director][1] of
Brylane Inc., a Delaware corporation (the "Company"), understands that ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇
▇▇▇▇▇"), Lazard Freres & Co. LLC and ▇.▇. ▇▇▇▇▇▇ Securities Inc. propose to
enter into a Purchase Agreement (the "Purchase Agreement") with the Company
providing for the public offering of shares of the Company's common stock, par
value $.01 per share (the "Common Stock"). In recognition of the benefit
that such an offering will confer upon the undersigned as a stockholder [and an
officer and/or director]2 of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the undersigned agrees with each underwriter to be named in the Purchase
Agreement that, during a period of 180 days from the date of the Purchase
Agreement, the undersigned will not, directly or indirectly, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise dispose of
or transfer any shares of the Company's Common Stock or any securities
convertible into or exchangeable or exercisable for Common Stock, whether now
owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or file any
registration statement under the Securities Act of
--------------------
1. Delete or revise bracketed language as appropriate.
B-1
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap transaction is to be settled by delivery of
Common Stock or other securities, in cash or otherwise; provided, however, that
the undersigned may without such consent (i) exercise any outstanding stock
options granted pursuant to existing employee benefit plans of the Company
referred to in the Prospectus, and (ii) with prior notice to ▇▇▇▇▇▇▇ ▇▇▇▇▇,
make (x) bona fide gifts to persons, or (y) transfers or sales to affiliates of
the undersigned, in each case who agree in writing with ▇▇▇▇▇▇▇ ▇▇▇▇▇ to be
bound by the provisions of this letter.
If for any reason the Purchase Agreement shall be terminated prior
to the Closing Date (as defined in the Purchase Agreement), the agreement set
forth above shall likewise be terminated.
Very truly yours,
Signature:
Print Name:
B-2