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EXHIBIT 1.1
EXECUTION COPY
TROPICAL SPORTSWEAR INT'L CORPORATION
$100,000,000
11% Senior Subordination Notes Due 2008
PURCHASE AGREEMENT
June 18, 1998
PRUDENTIAL SECURITIES INCORPORATED
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
1. Introductory. Tropical Sportswear Int'l Corporation, a Florida
corporation (the "Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell to Prudential Securities Incorporated (the
"Initial Purchaser") $100,000,000 aggregate principal amount of its 11% Senior
Subordinated Notes Due 2008 (the "Notes"). The Notes will be fully and
unconditionally guaranteed on a senior subordinated basis by all existing
domestic subsidiaries of the Company (the "Subsidiary Guarantors"). Each
Subsidiary Guarantor is listed on Schedule I hereto. The Notes are to be issued
under an indenture, to be dated as of June 24, 1998 (the "Indenture"), by and
among the Company, the Subsidiary Guarantors and SunTrust Bank, Atlanta, as
trustee (the "Trustee").
Pursuant to an Agreement and Plan of Merger dated May 1, 1998 (the
"Merger Agreement") by and among the Company, Foxfire Acquisition Corp.
("Foxfire") and Farah Incorporated ("Farah"), Foxfire, a wholly owned
subsidiary of the Company, commenced a tender offer (the "Tender Offer") to
purchase all of the outstanding shares of common stock, no par value per share,
of Farah (the "Shares"). The Tender Offer was consummated on June 10, 1998.
Pursuant to the Merger Agreement, as soon as practicable after the completion
of the Tender Offer, Foxfire will be merged with and into Farah and Farah will
become a wholly owned subsidiary of the Company (the "Merger" and, together
with the Tender Offer, the "Farah Acquisition"). It is acknowledged and agreed
that, unless the context otherwise requires, for purposes of this Agreement,
(i) all references herein to any subsidiary or subsidiaries of the Company
shall include Farah and its subsidiaries and (ii) the term "subsidiary" shall
mean any corporation, partnership, joint venture, unincorporated organization
or other entity a majority of the equity ownership of which is owned or
controlled, directly or indirectly, by the Company and/or one or more
subsidiaries of the Company.
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The Notes will be offered and sold without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance on
exemptions from the registration requirements thereunder. The Company
understands that the Initial Purchaser will resell a portion of the Notes
inside the United States to qualified institutional buyers ("Qualified
Institutional Buyers") in reliance on Rule 144A under the Securities Act ("Rule
144A") and the remaining Notes outside the United States to persons other than
U.S. persons in reliance on Regulation S under the Securities Act ("Regulation
S").
It is understood and acknowledged that the Initial Purchaser and other
holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the Exchange and Registration Rights Agreement
of even date herewith (the "Registration Rights Agreement") between the Company
and the Initial Purchaser. Pursuant to the Registration Rights Agreement, the
Company has agreed to file with the Securities and Exchange Commission (the
"Commission") (i) a registration statement (the "Exchange Offer Registration
Statement") under the Securities Act registering an issue of 11% senior
subordinated notes due 2008 (the "Exchange Securities") identical in all
material respects to the Notes (except that the Exchange Securities will not
contain terms with respect to transfer restrictions) to be offered in exchange
for the Notes (the "Exchange Offer") and (ii) under certain circumstances
specified in the Registration Rights Agreement, a shelf registration statement
pursuant to Rule 415 under the Securities Act (the "Shelf Registration
Statement").
This Agreement, the Indenture and the Registration Rights Agreement are
referred to herein collectively as the "Operative Documents." Capitalized terms
used and not defined herein shall have the meaning given to such terms in the
Offering Memorandum (as defined herein).
The Company hereby agrees with the Initial Purchaser as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, Initial Purchaser that:
(a) A preliminary offering memorandum dated May 29, 1998
and an offering memorandum dated June 18, 1998 have been prepared by the
Company in connection with the offering of the Notes (the preliminary
offering memorandum being hereinafter referred to as the "Preliminary
Offering Memorandum" and the offering memorandum being hereinafter
referred to as the "Offering Memorandum"; any reference to the
Preliminary Offering Memorandum or the Offering Memorandum shall be
deemed to refer to and include the Additional Company Information (as
defined in Section 5(f)), if any). The Preliminary Offering Memorandum
and the Offering Memorandum and any amendments or supplements thereto
did not and will not, as of their respective dates and, with respect to
the Offering Memorandum, as of the Closing Date (as defined herein),
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The foregoing provisions of this paragraph shall not apply to statements
or omissions made in the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendments or supplements thereto, in reliance upon
and in conformity with written information furnished to the Company by
or on behalf of the Initial Purchaser specifically for use therein.
(b) The Company and its affiliates (as defined in Rule
501(b) under the Securities Act) have not, directly or indirectly
through any agent, solicited any offer to buy, sold or offered to sell
(or otherwise negotiate in respect of), any security (as defined in the
Securities Act) which is or would be integrated with the sale of the
Notes in a manner that would require the Notes to be registered under
the Securities Act.
(c) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida and
has all requisite power and authority (corporate and other) to own,
lease and operate its properties and conduct its business as described
in the Offering Memorandum and to enter into and perform its obligations
under the Operative Documents. The Company is duly qualified to transact
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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 to the extent
that the failure to so qualify or be in good standing would not have a
material adverse effect on the business, condition (financial or
otherwise), results of operations, prospects, assets, properties or
management of the Company and it subsidiaries taken as a whole (a
"Material Adverse Effect").
(d) Each of the subsidiaries of the Company is a
corporation or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
formation and has all requisite power and authority (corporate and/or
other) to own, lease and operate its properties and conduct its business
as described in the Offering Memorandum and, to the extent it is a party
thereto, to enter into and perform its obligations under the Operative
Documents. Each of the subsidiaries of the Company is duly qualified 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 to the extent
that the failure to so qualify or be in good standing would not have a
Material Adverse Effect.
(e) The capitalization of the Company, pro forma for the
Transactions, is as set forth in the Offering Memorandum under the
caption "Capitalization" in the "Pro forma" column. All of the issued
and outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable and
were not issued in violation of any preemptive or similar rights. All of
the issued and outstanding shares of capital stock of each subsidiary of
the Company have been duly authorized and validly issued, are fully paid
and non-assessable, were not issued in violation of any preemptive or
similar rights and are owned directly or indirectly by the Company, free
and clear of all liens, mortgages, pledges, encumbrances, equities or
claims ("Encumbrances"), except for Encumbrances under the New Credit
Facility.
(f) Ernst & Young LLP, which is reporting upon certain
audited financial statements and related notes of the Company included
in the Offering Memorandum, are independent accountants with respect to
the Company and its subsidiaries in accordance with the provisions of
the Securities Act and the rules and regulations of the Commission
thereunder. Coopers & Xxxxxxx LLP, which is reporting upon certain
audited financial statements and related notes of Farah included in the
Offering Memorandum, are independent accountants with respect to Farah
and its subsidiaries in accordance with the provisions of the Securities
Act and the rules and regulations of the Commission thereunder. Xxxxxx
Xxxxxxxx, LLP, which is reporting upon certain audited financial
statements and related notes of Farah included in the Offering
Memorandum, are independent accountants with respect to Farah and its
subsidiaries in accordance with the provisions of the Securities Act and
the rules and regulations of the Commission thereunder.
(g) The consolidated financial statements of the Company
and its consolidated subsidiaries, together with the related notes and
schedules thereto, included in the Offering Memorandum present fairly
(i) the financial position of the Company and its consolidated
subsidiaries as of the dates indicated and (ii) the results of
operations and cash flows of the Company and its consolidated
subsidiaries for the periods specified. The consolidated financial
statements of Farah and its consolidated subsidiaries, together with the
related notes and schedules thereto, included in the Offering Memorandum
present fairly (i) the financial position of Farah and its consolidated
subsidiaries as of the dates indicated and (ii) the results of
operations and cash flows for the periods specified. Each of the
foregoing financial statements has been prepared in conformity with
generally accepted accounting principles in the United States applied on
a consistent basis throughout the periods involved. The selected
consolidated financial data set forth under the caption "Selected
Consolidated Financial Data" in the Offering Memorandum present fairly
the information shown therein and have been compiled on a basis
consistent with that of the audited consolidated financial statements
included in the Offering Memorandum. The pro forma combined financial
statements and related notes thereto included in the Offering Memorandum
under the caption "Unaudited Pro Forma Combined Financial Data" present
fairly the information shown therein, have been prepared in accordance
with the
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Commission's rules and guidelines with respect to pro forma financial
statements, and have been properly compiled on the pro forma bases
described therein and (x) the assumptions underlying the pro forma
adjustments are reasonable, (y) such adjustments are appropriate to give
effect to the transactions or circumstances referred to therein and have
been properly applied to the historical amounts in the compilation of
such statements and (z) such statements fairly present, with respect to
the Company and its consolidated subsidiaries, the combined pro forma
financial position and results of operations and other information
purported to be shown therein at the respective dates or for the
respective periods therein specified.
(h) Each of the Company and its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(i) Subsequent to the date as of which information is
given in the Offering Memorandum, (i) the Company and its subsidiaries
have not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the
ordinary course of business, (ii) the Company has not purchased any of
its outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock, and (iii)
there has not been any material change in the capital stock, short-term
debt or long-term debt of the Company and its consolidated subsidiaries,
except in each case as described in or contemplated by the Offering
Memorandum.
(j) Subsequent to the date as of which information is
given in the Offering Memorandum, the Company and its subsidiaries have
not sustained any material loss or interference with their business or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding and there has not been any material
adverse change any development involving a prospective material adverse
change, in the business, condition (financial or otherwise), results of
operations, prospects, assets, properties or management of the Company
and its subsidiaries taken as a whole, except in each case as described
in or contemplated by the Offering Memorandum.
(k) This Agreement has been duly authorized, executed and
delivered by the Company.
(l) The execution and delivery of the Indenture has been
duly authorized by the Company and each of the Subsidiary Guarantors,
and, when executed and delivered by the Company and the Subsidiary
Guarantors in accordance with the terms thereof, will constitute a valid
and binding obligation of the Company and each Subsidiary Guarantor,
enforceable against the Company and each Subsidiary Guarantor in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles (regardless of whether enforcement is sought in a proceeding
in equity or at law).
(m) The execution, issuance and delivery of the Notes have
been duly authorized by the Company and, on the Closing Date, will have
been duly executed by the Company. When executed, authenticated, issued
and delivered in the manner provided for in the Indenture and delivered
against payment of the purchase price therefor as provided in this
Agreement, the Notes (A) will constitute valid and binding obligations
of the Company, enforceable against the Company in accordance with their
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles (regardless
of whether enforcement is sought in a
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proceeding in equity or at law) and (B) will be in the form contemplated
by, and entitled to the benefits of, the Indenture.
(n) The execution, issuance and delivery of the Exchange
Notes have been duly authorized by the Company. When executed,
authenticated, issued and delivered in exchange for the Notes in the
manner provided for in the Indenture, the Exchange Notes (A) will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles (regardless of whether enforcement is sought
in a proceeding in equity or at law) and (B) will be in the form
contemplated by, and entitled to the benefits of, the Indenture.
(o) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles (regardless of whether enforcement is sought in a
proceeding in equity or at law) and except that any rights to indemnity
and contribution may be limited under federal and state securities laws
and public policy considerations.
(p) The Merger and the Merger Agreement have been duly
authorized and approved by all necessary corporate action on the part of
the Company and Farah. The Merger Agreement has been duly authorized,
executed and delivered by the Company and Farah and constitutes a valid
and binding obligation of the Company and Farah, enforceable against the
Company and Farah in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and
general equitable principles (regardless of whether enforcement is
sought in a proceeding in equity or at law). A certificate of merger
relating to the Merger has been filed with the Secretary of State of the
State of Texas and the Merger has become effective under the laws of the
State of Texas. The Tender Offer was conducted in a manner that complied
with the Exchange Act and the rules and regulations of the Commission
thereunder, and the Tender Offer has been consummated.
(q) To the extent the statements set forth in the Offering
Memorandum under the captions "Risk Factors--Import and Import
Restrictions," "Risk Factors--Limitation on Subsidiary Guarantees and
the Parent Guarantee; Fraudulent Conveyance Concerns," "The
Transactions," "Business--Imports and Import Regulations,"
"Business--Legal Proceedings," "Description of the Notes," "Exchange
Offer; Registration Rights Agreement," "Description of Other
Indebtedness" and "United States Federal Income and Estate Taxation"
constitute summaries of any law, statute, legal proceeding or document
(or provisions thereof) referred to therein, such statements are true
and correct in all material respects. The Notes, the Indenture and the
Registration Rights Agreement, conform to the descriptions thereof in
the Offering Memorandum.
(r) None of the Company or any of its subsidiaries is (i)
in violation of its respective organizational documents or (ii) in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement
or instrument to which the Company or any such subsidiary is a party or
by which the Company or any such subsidiary is bound or to which any of
the property or assets of the Company or any such subsidiary is subject
(collectively, "Agreements and Instruments"), except for such violations
or defaults that could not reasonably expected to result in a Material
Adverse Effect. The execution, delivery and performance of the Operative
Documents by the Company and the Subsidiary Guarantors party thereto,
the issuance, sale and delivery of the Notes by the Company and the
consummation of the transactions contemplated by the Operative Documents
do not and will not (with or without the giving of notice or the passage
of time or both) (i) constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of any Encumbrance upon any property or assets of the Company or
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any of its subsidiaries pursuant to, the Agreements and Instruments or
(ii) result in any violation of (A) the provisions of the respective
organizational documents of the Company or any of its subsidiaries or
(B) any law, statute, rule or regulation, or any judgment, order, writ
or decree of any court or governmental authority, applicable to the
Company or any of its subsidiaries or any of their respective assets or
properties. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any of the Subsidiary
Guarantors.
(s) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency or quasi-governmental agency is
necessary or required on behalf of the Company or the Subsidiary
Guarantors for the issuance, sale and delivery of the Notes by the
Company or for the execution, delivery or performance by the Company and
the Subsidiary Guarantors of the Operative Documents except, such as may
be required (A) under the Securities Act, the Exchange Act or the Trust
Indenture Act of 1939, as amended, and the rules and regulations under
such Acts with respect to the Registration Rights Agreement and the
transactions contemplated thereby or (B) by state securities or blue sky
laws.
(t) Except as set forth in the Offering Memorandum, there
are no legal or governmental proceedings or investigations pending or,
to the knowledge of the Company, threatened, to which the Company or any
of its subsidiaries is a party or to which any of their respective
properties is subject that (i) would materially and adversely affect the
subject matter of the Operative Documents or the consummation of the
transactions contemplated thereby or (ii) if determined adversely to the
Company or any such subsidiary, could reasonably be expected to have a
Material Adverse Effect. The aggregate of all pending legal or
governmental proceedings that are not disclosed in the Offering
Memorandum to which the Company or any of its subsidiaries is a party or
which affect any of their respective properties, including ordinary
routine litigation incidental to the business of the Company or any of
its subsidiaries, could not reasonably be expected to have a Material
Adverse Effect.
(u) No labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is
imminent or threatened that could reasonably be expected to result in a
Material Adverse Effect.
(v) Each of the Company and its subsidiaries has good and
valid title in fee simple to all real property, and title to all
personal property, owned by each of them and necessary to conduct the
business now operated by them, in each case free and clear of all
Encumbrances except such as do not materially and adversely affect the
value of such property and do not materially interfere with the use made
or proposed to be made of such property by the Company or such
subsidiary, and any real property and buildings held under lease by the
Company or such subsidiary and necessary to conduct the business now
operated by them, are held under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not materially
interfere with the use made or proposed to be made of such property and
buildings by the Company or such subsidiary, in each case, other than
those arising pursuant to the New Credit Facility.
(w) The Company and its subsidiaries own or possess, or
can acquire on reasonable terms, all 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 carried on by them. Except as disclosed in
the Offering Memorandum, none of the Company or any of its subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of
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the Company or its subsidiaries therein, and which infringement or
conflict or invalidity or inadequacy, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(x) Each of the Company and its subsidiaries owns or
possesses such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") of the
appropriate federal, state, local or foreign regulatory and
quasi-regulatory agencies or bodies necessary to conduct any business
now conducted by them and as contemplated to be conducted by them upon
consummation of the transactions contemplated under this Agreement,
except where the failure to possess such Governmental Licenses could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each of the Company and its subsidiaries is in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure to comply would not, individually or
in the aggregate, have a Material Adverse Effect. All of the
Governmental Licenses are, and upon consummation of the transactions
contemplated under this Agreement will be, valid and in full force and
effect, except where the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect
could not reasonably be expected to have a Material Adverse Effect. None
of the Company or any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
(y) Each of the Company, and its subsidiaries has filed
any federal, state, local and foreign tax returns that are required to
be filed or has duly requested extensions thereof (except where the
failure to so file could not reasonably be expected to have a Material
Adverse Effect) and has paid all taxes required to be paid by any of
them and any related assessments, fines or penalties, except for any
such tax, assessment, fine or penalty that is being contested in good
faith and by appropriate proceedings.
(z) Except as described in the Offering Memorandum or
except as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, (A) none of the Company, or
the Company's subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance or code, or rule of
common law or any judicial or administrative interpretation thereof,
including any applicable judicial or administrative order, consent,
decree or judgment, regulating, or imposing liability concerning,
pollution, the protection of human health or 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) there
is no action, suit, proceeding or investigation (including, without
limitation, a claim for remediation) now pending or, to the knowledge of
the Company, threatened, under any Environmental Laws to which the
Company or any of its subsidiaries is a party, (C) the Company and its
subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are in compliance with such
requirements and (D) there are no administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating in
any way to Environmental Laws pending or to the knowledge of the
Company, threatened against the Company or any of its subsidiaries.
(aa) Except as described in the Offering Memorandum, there
are no persons with registration rights or other similar rights to have
any securities registered by the Company under the Securities Act upon
the filing of the Exchange Offer Registration Statement or the Shelf
Registration Statement.
(bb) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
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repaying to the Company any loans or advances from the Company, or from
transferring any of such subsidiary's property or assets to the Company
or any subsidiary of the Company, other than those arising pursuant to
the New Credit Facility.
(cc) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is
customary for companies engaged in similar businesses in similar
industries. Neither the Company nor any of its subsidiaries has been
refused any insurance coverage sought or applied for by reason of loss
experience. Neither the Company nor any of its subsidiaries has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that could not have a Material Adverse Effect.
(dd) Neither of the Company or any of the Subsidiary
Guarantors is, or upon the issuance and sale of the Notes as herein
contemplated and the application of the net proceeds as described in the
Offering Memorandum will be, an "investment company", as such terms is
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(ee) The Notes are eligible for resale pursuant to Rule
144A and will not be, on the Closing Date, of the same class (within the
meaning of Rule 144A) as securities of the Company that are listed on a
national securities exchange registered under Section 6 of the Exchange
Act or quoted in a U.S. automated interdealer quotation system.
(ff) None of the Company, any of its affiliates (as defined
in Rule 501 under the Securities Act) or any person acting on its behalf
through any agent (other than the Initial Purchaser and its affiliates
as to which no representation is made) has engaged or will engage in any
form of general solicitation or general advertising (within the meaning
of Rule 502(c) under the Securities Act) in connection with the offering
of the Notes in the United States.
(gg) Assuming (i) that the representations and warranties
of the Initial Purchaser set forth in Section 4 hereof are true and (ii)
the compliance by the Initial Purchasers with the covenants and
agreements set forth in Section 4 hereof, it is not necessary in
connection with the offer, sale and delivery of the Notes to the Initial
Purchaser under, or in connection with the initial resale of such Notes
by the Initial Purchaser in accordance with, this Agreement to register
the Notes under the Securities Act or to qualify any indenture in
respect of the Notes under the Trust Indenture Act of 1939, as amended.
(hh) With respect to those Notes sold in reliance on
Regulation S, (i) none of the Company, any of its affiliates (as defined
in Rule 501 under the Securities Act) or any person acting on its or
their behalf (other than the Initial Purchaser and its affiliates as to
which no representation is made) has engaged or will engage in any
directed selling efforts (within the meaning of Regulation S) in the
United States and (ii) each of the Company, its affiliates and any
person acting on its or their behalf (other than the Initial Purchaser
and its affiliates as to which no representation is made) has complied
and will comply with the offering restrictions requirement of Regulation
S.
(ii) The Company has not, directly or indirectly, (i) taken
any action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company, to facilitate
the sale or resale of the Notes or (ii) except pursuant to this
Agreement (A) sold, bid for, purchased, or paid anyone any compensation
for soliciting purchases of, the Notes or (B) paid or agreed to pay to
any person any compensation for soliciting another to purchase any other
Notes of the Company.
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3. Purchase Sale and Delivery of the Securities.
(a) On the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and conditions herein set
forth herein, the Company agrees to issue and sell to the Initial Purchaser,
and the Initial Purchaser agrees to purchase from the Company, the Notes at a
purchase price of 97.25% of the principal amount thereof, plus accrued interest
from June 24, 1998, if any, to the Closing Date.
(b) Notes to be purchased will be represented (i) in the case of
Notes purchased by the Initial Purchaser, by one or more definitive global
Notes in book-entry form which will be deposited by or on behalf of the Company
with The Depository Trust Company ("DTC") or its designated custodian and (ii)
in the case of Notes purchased by an affiliate or agent of the Initial
Purchaser outside the United States (the "International Purchaser"), by one or
more definitive global Notes in book-entry form which will be deposited by or
on behalf of the Company with DTC or its designated custodian for the benefit
of Cedel Bank, Societe Anonyme, as operator of the Euroclear System, for credit
to the account of such International Purchaser unless otherwise directed by
such International Purchaser. The Company will deliver the Notes to Prudential
Securities Incorporated against payment by or on behalf of the Initial
Purchaser of the purchase price therefor by wire transfer to the Company in
Federal (same day) funds, by causing DTC to credit the Notes to the respective
accounts of Prudential Securities Incorporated and the International Purchaser,
as the case may be, at DTC. The Company will cause the certificates
representing the Notes to be made available to Prudential Securities
Incorporated for checking at least twenty-four hours prior to the Closing Date
(as defined below) at the office of DTC or its designated custodian (the
"Designated Office"). The time and date of such delivery and payment shall be,
with respect to the Notes, 9:30 a.m., New York City time, on June 24, 1998 or
such other time and date as Prudential Securities Incorporated and the Company
may agree upon in writing. Such time and date are herein called the "Closing
Date."
(c) The documents to be delivered at the Closing Date by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Notes and any additional documents requested by the Initial Purchaser
pursuant to Section 7(g) hereof, will be delivered at such time and date at the
offices of King & Spalding, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000
(the "Closing Location"), and the Notes will be delivered at the Designated
Office, all at the Closing Date. A meeting will be held at the Closing Location
at 1:00 p.m., New York City time, on the New York Business Day next preceding
the Closing Date, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by
the parties hereto. For the purposes of this Section 3, "New York Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in New York are generally authorized or
obligated by law or executive order to close.
(d) It is understood and acknowledged that upon original issuance
thereof, and until such time as the same is no longer required under the
applicable requirements of the Securities Act, the Notes (and all securities in
exchange therefor or in substitution thereof), shall bear a legend to the
following effect:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY
NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
(A) (1) TO A PERSON WHOM THE TRANSFEROR REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION MEETING
THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (3) TO AN INSTITUTION THAT IS AN ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (4)
PURSUANT TO AN
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EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND
(B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES AND OTHER JURISDICTIONS OF THE UNITED STATES.
Each Note issued in the form of a global certificate shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR THE NAME OF SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE UNDER WHICH THIS GLOBAL SECURITY IS ISSUED.
4. Representations, Warranties and Covenants of the Initial
Purchaser.
(a) The Initial Purchaser represents and warrants that it is an
institutional accredited investor as defined under Regulation D of the
Securities Act.
(b) The Initial Purchaser understands that no action has been taken
in any jurisdiction by the Company that would permit a public offering of the
Notes in any jurisdiction where action would be required for such purpose. The
Initial Purchaser represents and agrees that it has not offered, sold or
delivered and it will not offer, sell or deliver any of the Notes in any
jurisdiction except under circumstances that will result in compliance with the
applicable laws thereof, and that it will take at its own expense whatever
action is required to permit its purchase and resale of the Notes in any such
jurisdiction (other than in the United States). Each such offer or sale shall
only be made (i) to persons whom the Initial Purchaser reasonably believes to
be Qualified Institutional Buyers into or (ii) to non-U.S. persons outside the
United States (which shall include dealers or other professional fiduciaries in
the United States acting on a discretionary basis for beneficial owners (other
than an estate or trust) that are non-U.S. persons) to whom the Initial
Purchaser reasonably believes offers and sales of the Notes may be made in
reliance upon Regulation S) and applicable securities legislation of the
relevant jurisdiction.
(c) Neither it nor any person acting on its behalf has engaged or
will engage in any form of general solicitation or general advertising (within
the meaning of Rule 502(c)) in connection with the sale of the Notes in the
United States.
(d) The Initial Purchaser will take reasonable steps to inform, and
cause each of its affiliates to take reasonable steps to inform, persons
acquiring Notes from the Initial Purchaser or such affiliate, as the case may
be, in the United States (the "Subsequent Purchasers") that the Notes (i) have
not been and will not be registered under
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the Securities Act, (ii) are being sold to them without registration under the
Securities Act in reliance on Rule 144A or in accordance with another exemption
from registration under the Securities Act, as the case may be, and (iii) may
not be offered, sold or otherwise transferred except (A) to the Company, (B)
outside the United States in accordance with Rule 904 of Regulation S or (C)
inside the United States in accordance with (x) Rule 144A to a person whom the
seller reasonably believes is a Qualified Institutional Buyer that is
purchasing such Notes for its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the offer, sale or transfer is
being made in reliance on Rule 144A or (y) pursuant to another available
exemption from registration under the Securities Act or (D) pursuant to an
effective registration statement under the Securities Act.
(e) The transfer restrictions set forth under "Notice to Investors"
in the Offering Memorandum, including the legend required thereby, shall apply
to the Notes except as otherwise agreed by the Company and the Initial
Purchaser.
(f) The Initial Purchaser understands that the Notes have not been
and will not be registered under the Securities Act and may not be offered or
sold within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S under the Securities Act or
pursuant to an exemption from the registration requirements of the Securities
Act. The Initial Purchaser severally represents, warrants and agrees that it
has offered and sold Notes and will offer and sell Notes (i) as part of its
distribution at any time and (ii) otherwise until forty days after the later of
the date upon which the offering of the Notes commences and the Closing Date,
only (x) outside the United States in accordance with Rule 903 of Regulation S
or (y) to a Qualified Institutional Buyer in transactions that meet the
requirements of Rule 144A under the Securities Act. Accordingly, neither the
Initial Purchaser, its affiliates nor any person acting on its behalf has
engaged or will engage in any directed selling efforts with respect to Notes,
and the Initial Purchaser, its affiliates and any person acting on its behalf
has complied and will comply with the offering restriction requirements of
Regulation S. The Initial Purchaser agrees that, at or prior to confirmation of
a sale of Notes (other than a sale of Notes pursuant to Rule 144A), it will
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Notes from it or through it during the
restricted period a confirmation or notice to substantially the following
effect:
"The Notes covered hereby have not been registered
under the United States Securities Act of 1933 (the
"Securities Act") and may not be offered or sold
within the United States or to or for the account or
benefit of U.S. persons (i) as part of their distribution
at any time and (ii) otherwise until forty days after the
later of the date upon which the offering of the Notes
commenced and the date of closing, except in either case
in accordance with Regulation S or another exemption from
the registration requirements of the Securities Act. Terms
used above have the meaning given them by Regulation S."
Terms used in the above paragraph have the meaning given to them by
Regulation S.
(g) The Initial Purchaser severally represents and agrees that it
has not entered and will not enter into any contractual arrangements with
respect to the distribution of the Notes, except with its affiliates or with
the prior written consent of the Company.
(h) The Initial Purchaser represents and agrees that (i) it has not
offered or sold and prior to the date six months after the Closing Date will
not offer or sell any Notes to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995, (b) it has complied, and will
comply, with all applicable provisions of the Financial Services Act of 1986 of
Great Britain with respect to anything done by it in relation to the Notes in,
from or otherwise involving the United Kingdom, and (c) it has only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issuance of the Notes to a person who is
of a kind described in
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Article 11(3) of the Financial Services Xxx 0000 (Investment Advertisements)
(Exemptions) Order 1996 of Great Britain or is a person to whom the document
may otherwise lawfully be issued or passed on.
5. Covenants of the Company. The Company covenants and agrees with
the Initial Purchaser that:
(a) The Company will, without charge, provide to the
Initial Purchaser as many copies of the Preliminary Offering Memorandum
or the Offering Memorandum or any amendment or supplement thereto as the
Initial Purchaser and its counsel may reasonably request, in each case
as soon as available; without limiting the application of this sentence,
the Company, not later than 10:00 a.m., New York City time, on the
business day following the date of determination of the offering price
(or such other time and/or day mutually agreed upon by the Company and
the Initial Purchaser), will deliver to the Initial Purchaser, without
charge, as many copies of the Offering Memorandum and any amendment or
supplement thereto as the Initial Purchaser may reasonably request for
purposes of confirming orders that are expected to settle on the Closing
Date.
(b) If at any time when the Offering Memorandum is
required to be used in connection with the offer and sale in the United
States of the Notes by the Initial Purchaser as contemplated hereunder,
any event occurs as a result of which the Offering Memorandum as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at such time to amend
or supplement the Offering Memorandum to comply with any applicable law,
the Company will promptly prepare an amendment or supplement which will
correct such statement or omission or effect such compliance (except
that in case the Initial Purchaser is required to deliver an offering
memorandum under applicable law in connection with the offer or sale of
Notes at any time more than nine months after the Closing Date, the cost
of such preparation and furnishing of such amended or supplemented
offering memorandum shall be borne by the Initial Purchaser of such
Notes), and the Company will not effect any amendment or supplement to
the Offering Memorandum without the consent of the Initial Purchaser,
which consent will not be unreasonably withheld. Neither the Initial
Purchaser's consent to, nor the delivery by the Initial Purchaser of,
any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 7.
(c) The Company will advise the Initial Purchaser promptly
of any proposal to amend or supplement the Offering Memorandum and will
not effect such amendment or supplement without the consent of the
Initial Purchaser (except to the extent any such amendment or supplement
objected to is necessary, in the judgment of counsel to the Company, to
make the statements in the Offering Memorandum, in the light of the
circumstances under which they were made, not misleading), such consent
not to be reasonably withheld. Neither the consent of the Initial
Purchaser, nor the Initial Purchaser's delivery of any such amendment or
supplement, shall constitute a waiver of any of the conditions set forth
in Section 7 hereof
(d) The Company will arrange for the qualification of the
Notes for offering and sale under the securities or blue sky laws of
such jurisdictions as the Initial Purchaser may designate and will
continue such qualifications in effect for as long as may be necessary
to complete the distribution of the Notes, provided that in connection
therewith the Company shall not be required (i) qualify as a foreign
corporation or as a broker or dealer in securities in any jurisdiction
where it would not otherwise be required to so qualify but for this
Section 5(d), (ii) file any general consent to service of process in any
jurisdiction where it is not at the Closing Date then so subject or
(iii) subject to itself to taxation in any such jurisdiction if it is
not so subject. The Company will promptly advise the Initial Purchaser
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or, to the extent the Company has
knowledge thereof, the threatening of any proceeding for such purpose.
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(e) The Company will furnish to the Initial Purchaser, on
the Closing Date, two copies of each of the independent auditors'
reports included in the Offering Memorandum signed by the respective
auditors rendering such reports.
(f) If at any time the Company is not subject to Section
13 or 15(d) of the Exchange Act, the Company will furnish, upon request,
to any holder of the Notes and prospective purchasers of the Notes,
copies of the information required to be delivered to holders pursuant
to Rule 144A(d)(4) to permit compliance with Rule 144A in connection
with resales of the Notes (the "Additional Company Information").
(g) During the period of two years after the later of the
Closing Date, the Company will, upon request, furnish to the Initial
Purchaser and any holder of Notes a copy of the restrictions on transfer
applicable to such Notes.
(h) During the period of two years after the Closing Date,
the Company will not, and will not permit any of its "affiliates" (as
defined in Rule 144 under the Securities Act) to, resell any Notes which
constitute "restricted securities" under Rule 144 that have been
reacquired by any of them.
(i) The Company will apply the net proceeds from the sale
of the Notes in the manner set forth under "Use of Proceeds" in the
Offering Memorandum.
(j) During a period of 180 days from the date of the
Offering Memorandum, the Company shall not, without the prior written
consent of the Initial Purchaser, offer, sell, contract to sell or
otherwise dispose of (or announce any of the foregoing) any
non-convertible debt securities issued or guaranteed by the Company or
securities of the Company that are convertible into, or exchangeable
for, the Notes or such other non-convertible debt securities.
(k) Neither the Company nor any subsidiary of the Company
shall solicit any offer to buy or offer or sell the Notes by means of
any form of general solicitation or general advertising (within the
meaning of Rule 502(c) under the Securities Act) in a manner which would
result in the proposed sale of the Notes in accordance with this
Agreement and the Offering Memorandum failing to be exempt from the
registration requirements of the Securities Act or take any other action
that would have required the registration of the resale by the Initial
Purchaser of the Notes under the Securities Act.
(l) The Company will not, nor will it permit any of its
affiliates (as defined in Rule 501(b) under the Securities Act) to,
sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the Securities Act) the offering
of which security could be integrated with sale of the Notes in a manner
which would require the registration of the Notes under the Securities
Act.
(m) The Company shall use reasonable best efforts in
cooperation with the Initial Purchaser to permit the Notes to be
eligible for clearance and settlement through the Depository Trust
Company, Cedel and Euroclear.
(n) For three years from the date of the Offering
Memorandum, the Company will furnish to the Initial Purchaser, as soon
as practicable after the end of its fiscal year, a copy of its annual
report to stockholders for such year; and the Company will furnish to
the Initial Purchaser as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission
under the Exchange Act or mailed to stockholders.
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(o) The Company will use its best efforts in cooperation
with the Initial Purchaser to permit the Notes to be designated PORTAL
securities in accordance with the rules and regulations adopted by the
National Association of Securities Dealers, Inc. (the "NASD") relating
to trading in the PORTAL market.
(p) Neither the Company nor any of the Subsidiary
Guarantors will be or become, at any time prior to the expiration of two
years after the Closing Date, an open-end investment company, unit
investment trust, closed-end investment company or face-amount
certificate company that is or is required to be registered under
Section 8 of the Investment Company Act.
(q) Until such time as any Note is exchanged for an
Exchange Note pursuant to the Exchange Offer Registration Statement, to
include a legend on the Notes to the effect set forth under "Notice to
Investors" in the Offering Memorandum.
6. Expenses. The Company will pay all costs and expenses incident to
the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses (i)
incident to the preparation and delivery of the Notes in global and definitive
forms, the preparation and printing of the Preliminary Offering Memorandum and
the Offering Memorandum and all other amendments and supplements thereto and
the mailing and delivering of copies thereof to the Initial Purchaser; (ii) of
the Company's counsel and accountants and listing agents in connection with the
issuing and listing of the Notes, (iii) incurred in connection with the
approval of the Notes for trading in the PORTAL market and the registration or
qualification and determination of eligibility for investment of the Notes
under the laws of such jurisdictions as the Initial Purchaser may designate
(including all counsel fees), (iv) in connection with the preparation, printing
(including word processing and duplication costs) and delivery of this
Agreement, the Operative Documents and any Preliminary and Supplemental Blue
Sky Memoranda, including mailing and shipping, (v) payable to rating agencies
in connection with the rating of the Notes, (vi) the reasonable fees and
expenses of the Trustee, any successor Trustee and any agent of any trustee;
(vii) any "road show" meetings with prospective investors in the Notes (other
than as shall have been specifically approved by the Initial Purchaser to be
paid for by the Initial Purchaser). If the sale of the Notes provided for
herein is not consummated because any condition to the obligations of the
Initial Purchaser set forth in Section 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 10 hereof (other than Sections
10(a)(iii), (iv) or (v)) or because of any failure, refusal or inability on the
part of the Company to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder other than by reason of a
default by the Initial Purchaser, the Company will reimburse the Initial
Purchaser upon demand for all out-of-pocket expenses (including counsel fees
and disbursements) that shall have been incurred by them in connection with the
proposed purchase and sale of the Notes. The Company shall not in any event be
liable to the Initial Purchaser for the loss of anticipated profits from the
transactions covered by this Agreement.
7. Conditions of the Obligations of the Initial Purchaser. The
obligations of the Initial Purchaser to purchase and pay for the Notes shall be
subject, in the sole discretion of the Initial Purchaser, to the accuracy of
the representations and warranties of the Company contained herein as of the
date hereof and as of the Closing Date, as if made on and as of the Closing
Date, to the accuracy of the certifications, representations and warranties of
the Company's officers made pursuant to the provisions hereof, to the
performance by the Company of its covenants and agreements hereunder and to the
following additional conditions:
(a) Subsequent to the execution and delivery of this
Agreement, (i) there shall not have occurred any downgrading in the
rating of the Notes or of any debt securities of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act), or any public
announcement that any such organization has under surveillance or review
its rating of the Notes or of any debt securities of the Company other
than an announcement with positive implications of a possible upgrading,
and no implication of a possible downgrading, of such rating; (ii) no
order or decree preventing the use of the Offering Memorandum or any
amendment or supplement thereto, or any order of
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any court or governmental agency or quasi-governmental agency asserting
that the transactions contemplated by this Agreement are subject to the
registration requirements of the Securities Act, shall have been issued
and no proceedings by any court, governmental agency or quasi-government
agency for that purpose shall have been commenced or shall be pending
or, to the knowledge of the Company, be contemplated and no stop order
suspending the sale of the Notes in any jurisdiction designated by the
Initial Purchaser shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending or, to the
knowledge of the Company, shall be contemplated; (iii) the Initial
Purchaser shall not have discovered or disclosed to the Company that the
Offering Memorandum or any amendment or supplement thereto contains an
untrue statement of fact which, in the Initial Purchaser's opinion, is
material or fails to state a fact which is material or is necessary to
make the statements therein, in light of the circumstances under which
they are made, not misleading; or (iv) there shall not have occurred any
invalidation of Rule 144A or Regulation S under the Securities Act by
any court or any withdrawal or proposed withdrawal of any rule or
regulation under the Securities Act or the Exchange Act by the
Commission or any amendment or proposed amendment thereof by the
Commission which in the judgment of the Initial Purchaser would
materially impair the ability of the Initial Purchaser to purchase, hold
or effect resales of the Notes as contemplated hereby.
(b) The Initial Purchaser shall have received an opinion,
dated the Closing Date, of Xxxxxx & Bird LLP, counsel for the Company,
to the effect that:
(i) Tropical Sportswear Company, Inc. is a
corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation
and has the corporate power and authority to own, lease and
operate its properties and conduct its business as described in
the Offering Memorandum and, to the extent it is a party thereto,
to enter into and perform its obligations under the Operative
Documents. Such counsel shall also confirm that each of the
Company and the Subsidiary Guarantors is qualified to transact
business as a foreign corporation in the states set forth on an
exhibit to such opinion and that such confirmation is based
solely upon certificates provided by agencies of such states,
copies of which the Company shall have delivered to the Initial
Purchaser on the Closing Date, and is limited to the meaning
ascribed to such certificates by each applicable state agency.
(ii) The authorized equity capitalization of the
Company is as set forth in the Offering Memorandum under the
caption "Capitalization."
(iii) This Agreement has been duly authorized,
executed and delivered by the Company.
(iv) The Indenture has been duly authorized,
executed and delivered by the Company and each of the Subsidiary
Guarantors and (assuming due execution and delivery thereof by
the Trustee) constitutes a valid and binding obligation of the
Company and each Subsidiary Guarantor, enforceable against the
Company and each Subsidiary Guarantor in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(v) The execution, issuance and delivery of the
Notes have been duly authorized by the Company and, when
executed, authenticated, issued and delivered in the manner
provided for in the Indenture (assuming due authorization,
execution and delivery of the Indenture by the Trustee) and
delivered against payment of the purchase price therefor as
provided in this Agreement, the Notes (A) will constitute valid
and binding obligations of the Company, enforceable against the
Company in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity
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principles (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (B) are in the form
contemplated by, and entitled to the benefits of, the Indenture.
(vi) The execution, issuance and delivery of the
Exchange Notes have been duly authorized by the Company. When
executed, authenticated, issued and delivered in exchange for the
Notes in the manner provided for in the Indenture, (assuming due
authorization, execution and delivery of the Indenture by the
Trustee), the Exchange Notes (A) will constitute valid and
binding obligations of the Company, enforceable against the
Company in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles (regardless of whether
enforcement is sought in a proceeding in equity or at law) and
(B) will be entitled to the benefits of the Indenture.
(vii) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and constitutes
a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles (regardless of whether
enforcement is sought in a proceeding in equity or at law) and
except that any rights to indemnity and contribution may be
limited under federal and state securities laws and public policy
considerations.
(viii) The Merger Agreement has been duly authorized and
approved by all necessary corporate action on the part of the
Company, Foxfire and Farah. The Merger Agreement has been duly
executed and delivered by the Company, Foxfire and Farah and
constitutes a valid and binding obligation of the Company,
Foxfire and Farah, enforceable against the Company and Farah in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and
general equitable principles (regardless of whether enforcement
is sought in a proceeding in equity or at law). The Merger has
become effective under the laws of the State of Texas. The Tender
Offer was conducted in a manner that complied with the Exchange
Act and the rules and regulations of the Commission thereunder.
(ix) To the extent the statements set forth in the
Offering Memorandum under the captions "Risk Factors--Limitation
on Subsidiary Guarantees and the Parent Guarantee; Fraudulent
Conveyance Concerns," "The Transactions," "Business--Legal
Proceedings," "Description of the Notes," "Exchange Offer;
Registration Rights Agreement," "Description of Other
Indebtedness" and "United States Federal Income and Estate
Taxation" constitute summaries of any law, statute, legal
proceeding or document (or provisions thereof) referred to
therein, such statements fairly summarize in all material
respects such law, statute, legal proceeding or document (or
provisions thereof) referred to therein. The Notes, the Indenture
and the Registration Rights Agreement, conform in all material
respects to the descriptions thereof in the Offering Memorandum.
(x) The execution, delivery and performance of the
Operative Documents by the Company and the Subsidiary Guarantors
parties thereto, the issuance, sale and delivery of the Notes by
the Company and the consummation of the transactions contemplated
by the Operative Documents do not (i) constitute a breach of, or
default or Repayment Event under, or result in the creation or
imposition of any Encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to the Agreements and
Instruments filed as exhibits to the Annual Report on Form 10-K
of the Company or Farah for the fiscal years ended September 27,
1997 and November 2, 1997, respectively, or otherwise set forth
on an exhibit to such opinion or (ii) result in any violation of
(A) the provisions of the respective organizational documents of
the Company or any of its subsidiaries or (B) any law, statute,
rule or regulation, or any judgment, order, writ or decree of any
court or governmental
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authority known to such counsel, applicable to the Company or any
of its subsidiaries or any of their respective assets or
properties.
(xi) No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree
of, any court or governmental authority or agency or
quasi-governmental agency is necessary or required on behalf of
the Company or the Subsidiary Guarantors for the issuance, sale
and delivery of the Notes by the Company or for the execution,
delivery or performance by the Company and the Subsidiary
Guarantors of the Operative Documents except, such as may be
required (A) under the Securities Act, the Exchange Act or the
Trust Indenture Act of 1939, as amended, and the rules and
regulations under such Acts with respect to the Registration
Rights Agreement and the transactions contemplated thereby or (B)
by state securities or blue sky laws.
(xii) To such counsel's knowledge, except as set forth
in the Offering Memorandum, there are no legal or governmental
proceedings or investigations pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of
their respective properties is subject that would be required to
be disclosed in the Offering Memorandum if it was a prospectus
included in a registration statement on Form S-1.
(xiii) Neither the Company or any of the Subsidiary
Guarantors is, or upon the issuance and sale of the Notes as
herein contemplated and the application of the net proceeds as
described in the Offering Memorandum will be, an "investment
company", as such terms is defined in the Investment Company.
(xiv) Assuming (A) that the representations and
warranties of the Initial Purchaser set forth in Section 4 hereof
are true and (B) the compliance by the Initial Purchasers with
the covenants and agreements set forth in Section 4 hereof, it is
not necessary in connection with the offer, sale and delivery of
the Notes to the Initial Purchaser under, or in connection with
the initial resale of such Notes by the Initial Purchaser in
accordance with, this Agreement to register the Notes under the
Securities Act or to qualify any indenture in respect of the
Notes under the Trust Indenture Act of 1939, as amended.
Such counsel shall also state that, although such counsel is not
passing upon and does not assume any responsibility for and has not
verified the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum, and has not made any independent
verification thereof, nothing has come to their attention that causes
them to believe that the Offering Memorandum (other than the financial
statements and notes thereto and other financial and statistical data
included therein, as to which such counsel need express no belief), as
of its date and at the Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and public
officials.
(c) The Initial Purchaser shall have received an opinion,
dated the Closing Date, of Machanik, Nuccio, Xxxxx & Xxxxxxxx, P.A.,
Florida, counsel for the Company, to the effect set forth in clauses
(i), (ii), (iv) and (v) below, and of Xxxxxx and Xxxxx LLP, Texas
counsel to the Company, to the effect set forth in clause (iii) below:
(i) The Company is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Florida and has the corporate power and
authority to own, lease and
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operate its properties and conduct its business as described in
the Offering Memorandum and to enter into and perform its
obligations under the Operative Documents.
(ii) Apparel Network Corporation is a corporation
duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has the
corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Offering
Memorandum and, to the extent it is a party thereto, to enter
into and perform its obligations under the Operative Documents.
(iii) Savane International Corp. (f/k/a Farah
Incorporated) is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation and has the corporate power and authority to
own, lease and operate its properties and conduct its business as
described in the Offering Memorandum and, to the extent it is a
party thereto, to enter into and perform its obligations under
the Operative Documents.
(iv) All of the issued and outstanding shares of
capital stock of each subsidiary of the Company have been duly
authorized and validly issued, are fully paid and non-assessable,
were not issued in violation of any preemptive or similar rights
and are owned directly or indirectly by the Company, free and
clear of all Encumbrances.
(v) To such counsel's knowledge, except as set
forth in the Offering Memorandum, there are no legal or
governmental proceedings or investigations pending or threatened
to which any of the Company or any of its subsidiaries is a party
or to which any of their respective properties is subject that
(i) would materially and adversely affect the subject matter of
the Operative Documents or the consummation of the transactions
contemplated thereby or (ii) would, if determined adversely to
the Company or any of its subsidiaries, have a Material Adverse
Effect.
(d) The Initial Purchaser shall have received an opinion,
dated the Closing Date, of King & Spalding, counsel for the Initial
Purchaser, with respect to the issuance and sale of the Notes, the
Offering Memorandum, and such other related matters as the Initial
Purchaser may reasonably require, and the Company shall have furnished
to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(e) The Initial Purchaser shall have received from Ernst &
Young LLP a letter or letters dated, respectively, the date hereof and
the Closing Date, in form and substance satisfactory to the Initial
Purchaser that:
(i) they are independent accountants with
respect to the Company under Rule 101 of the AICPA's Code of
Professional Conduct and its interpretation and rulings;
(ii) in their opinion, the audited financial
statements and schedules of the Company included in the Offering
Memorandum comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the
related published rules and regulations;
(iii) on the basis of their limited review in
accordance with standards established by the American Institute
of Certified Public Accountants of any interim unaudited
financial statements of the Company included in the Offering
Memorandum, carrying out certain specified procedures (which do
not constitute an examination made in accordance with generally
accepted auditing standards) that would not necessarily reveal
matters of significance with respect to the comments set forth in
this paragraph (iii), a reading of the minute books of the
stockholders, the board of directors and any committees thereof
of the Company, officials of the Company, and inquiries of
certain
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officials of the Company who have responsibility for financial
and accounting matters, nothing came to their attention that
caused them to believe that:
(A) the unaudited financial statements of the
Company included in the Offering Memorandum do not comply
as to form in all material respects with the applicable
accounting requirements of the Securities Act and the
related published rules and regulations thereunder or are
not in conformity with generally accepted accounting
principles applied on a basis substantially consistent
with that of the audited financial statements included in
the Offering Memorandum;
(B) at a specific date not more than five
business days prior to the date of such letter, there was
any change in the capital stock or increase in long-term
debt of the Company or any decreases in net current assets
or stockholders' equity or other items specified by the
Initial Purchaser, in each case compared with amounts
shown on the April 4, 1998 consolidated balance sheet
included in the Offering Memorandum, or for the period
from April 4, 1998 to such specified date there were any
decreases in the net sales or income before income taxes
or net income of the Company, or any increases in any
items specified by the Initial Purchaser, in each case as
compared with the comparable period of the preceding year,
except in all instances for changes, decreases or
increases set forth in such letter;
(iv) they have carried out certain specified
procedures (as requested by the Initial Purchaser), not
constituting an audit, with respect to certain amounts,
percentages and financial information that are derived from the
general accounting records of the Company and are included in the
Offering Memorandum, and have compared such amounts, percentages
and financial information with such records of the Company or
with information derived from such records and have found them to
be in agreement, excluding any questions of legal interpretation;
and
(v) on the basis of a reading of the unaudited pro
forma financial data included in the Offering Memorandum,
carrying out certain specified procedures that would not
necessarily reveal matters of significance with respect to the
comments set forth in this paragraph (v), inquiries of certain
officials of the Company who have responsibility for financial
and accounting matters and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the unaudited pro forma financial data, nothing came
to their attention that caused them to believe that the unaudited
pro forma financial data do not comply in form in all material
respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X or that the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of such date.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to
the obligations of the Initial Purchaser that (i) such letters shall be
accompanied by a written explanation of the Company as to the
significance thereof, unless the Initial Purchaser deems such
explanation unnecessary, and (ii) such changes, decreases or increases
do not, in the sole judgment of the Initial Purchaser, make it
impractical or inadvisable to proceed with the purchase and delivery of
the Notes as contemplated by the Offering Memorandum, as amended as of
the date hereof.
References to the Offering Memorandum in this paragraph (e), with
respect to either letter referred to above shall include any amendment
or supplement thereto at the date of such letter.
(f) The Initial Purchaser shall have received from Coopers
& Xxxxxxx LLP a letter or letters dated, respectively, the date hereof
and the Closing Date, in form and substance satisfactory to the Initial
Purchaser that:
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(i) they are independent accountants with respect to
Farah under Rule 101 of the AICPA's Code of Professional Conduct
and its interpretation and rulings;
(ii) in their opinion, the audited financial
statements and schedules of Farah included in the Offering
Memorandum for the years ended November 3, 1996 and November 2,
1997 comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the
related published rules and regulations;
(iii) on the basis of their limited review in
accordance with standards established by the American Institute
of Certified Public Accountants of any interim unaudited
financial statements of Farah included in the Offering
Memorandum, carrying out certain specified procedures (which do
not constitute an examination made in accordance with generally
accepted auditing standards) that would not necessarily reveal
matters of significance with respect to the comments set forth in
this paragraph (iii), a reading of the minute books of the
stockholders, the board of directors and any committees thereof
of Farah, officials of Farah, and inquiries of certain officials
of Farah who have responsibility for financial and accounting
matters, nothing came to their attention that caused them to
believe that:
(A) the unaudited financial statements of
Farah included in the Offering Memorandum do not comply as
to form in all material respects with the applicable
accounting requirements of the Act and the related
published rules and regulations thereunder or are not in
conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of
the audited financial statements included or incorporated
by reference in the Offering Memorandum;
(B) at a specific date not more than five
business days prior to the date of such letter, there was
any change in the capital stock or increase in long-term
debt of the Company or any decreases in net current assets
or stockholders' equity or other items specified by the
Initial Purchaser, in each case compared with amounts
shown on the February 1, 1998 consolidated balance sheet
included in the Offering Memorandum, or for the period
from February 1, 1998 to such specified date there were
any decreases in the net sales or total or per share
amounts of income before income taxes or net income of the
Company, or any increases in any items specified by the
Initial Purchaser, in each case as compared with the
comparable period of the preceding year, except in all
instances for changes, decreases or increases set forth in
such letter;
(iv) they have carried out certain specified
procedures (as requested by the Initial Purchaser), not
constituting an audit, with respect to certain amounts,
percentages and financial information that are derived from the
general accounting records of Farah and are included in the
Offering Memorandum, and have compared such amounts, percentages
and financial information with such records of Farah or with
information derived from such records and have found them to be
in agreement, excluding any questions of legal interpretation.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to
the obligations of the Initial Purchaser that (i) such letters shall be
accompanied by a written explanation of Farah as to the significance
thereof, unless the Initial Purchaser deems such explanation
unnecessary, and (ii) such changes, decreases or increases do not, in
the sole judgment of the Initial Purchaser, make it impractical or
inadvisable to proceed with the purchase and delivery of the Notes as
contemplated by the Offering Memorandum, as amended as of the date
hereof.
References to the Offering Memorandum in this paragraph (f), with
respect to either letter referred to above shall include any amendment
or supplement thereto at the date of such letter.
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(g) The Initial Purchaser shall have received from Xxxxxx
Xxxxxxxx LLP a letter or letters dated, respectively, the date hereof
and the Closing Date, in form and substance satisfactory to the Initial
Purchaser that:
(i) they are independent accountants with respect
to Farah under Rule 101 of the AICPA's Code of Professional
Conduct and its interpretation and rulings;
(ii) in their opinion, the audited financial
statements and schedules of Farah included in the Offering
Memorandum for the year ended November 3, 1995 comply as to form
in all material respects with the applicable accounting
requirements of the Securities Act and the related published
rules and regulations;
(iii) they have carried out certain specified
procedures (as requested by the Initial Purchaser), not
constituting an audit, with respect to certain amounts,
percentages and financial information that are derived from the
general accounting records of Farah and are included in the
Offering Memorandum, and have compared such amounts, percentages
and financial information with such records of Farah or with
information derived from such records and have found them to be
in agreement, excluding any questions of legal interpretation.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to
the obligations of the Initial Purchaser that (i) such letters shall be
accompanied by a written explanation of Farah as to the significance
thereof, unless the Initial Purchaser deems such explanation
unnecessary, and (ii) such changes, decreases or increases do not, in
the sole judgment of the Initial Purchaser, make it impractical or
inadvisable to proceed with the purchase and delivery of the Notes as
contemplated by the Offering Memorandum, as amended as of the date
hereof.
References to the Offering Memorandum in this paragraph (g), with
respect to either letter referred to above shall include any amendment
or supplement thereto at the date of such letter.
(h) The Initial Purchaser shall have received a certificate
dated the Closing Date, of the Chief Executive Officer and Chief
Financial Officer of the Company, on behalf of the Company, to the
effect that:
(i) the representations and warranties of the
Company in this Agreement are true and correct as if made on and
as of the Closing Date; the Offering Memorandum, as amended as of
the Closing Date, does not include any untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the
Company has performed all covenants and agreements and satisfied
all conditions on their part to be performed or satisfied at or
prior to the Closing Date;
(ii) no order or decree preventing the use of the
Offering Memorandum or any amendment or supplement thereto, or
any order of any court or governmental agency or
quasi-governmental agency asserting that the transactions
contemplated by this Agreement are subject to the registration
requirements of the Securities Act, have been issued and no
proceedings by any court or governmental agency or
quasi-governmental agency for that purpose have been commenced or
are pending or, to the knowledge of the Company, threatened, and
no stop order suspending the sale of the Notes in any
jurisdiction designated by the Initial Purchaser has been issued
and no proceedings by any court or governmental agency or
quasi-governmental agency for that purpose have been commenced or
are pending or, to the knowledge of the Company, threatened ; and
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(iii) subsequent to the respective dates as of which
information is given in the Offering Memorandum, neither the
Company nor any of its subsidiaries has sustained any material
loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, and there has
not been any material adverse change, or any development
involving a prospective material adverse change, in the
business, condition (financial or otherwise), results or
operations, prospects, assets, properties or management of the
Company and its subsidiaries taken as a whole, except in each
case as described in or contemplated by the Offering Memorandum
(exclusive of any amendment or supplement thereto).
(i) On or before the Closing Date, the Initial Purchaser
and counsel for the Initial Purchaser shall have received such further
certificates, documents or other information as they may have reasonably
requested from the Company.
(j) The Notes shall have been approved by the NASD for
trading in the PORTAL market.
(k) The Indenture and the Registration Rights Agreement
shall have been duly executed and delivered and shall be in full force
and effect and the Notes shall have been duly executed and delivered by
the Company and duly authenticated by the Trustee.
(l) The Tender Offer shall have been consummated.
All opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only
if they are reasonably satisfactory in all material respects to the
Initial Purchaser and counsel for the Initial Purchaser. The Company
shall furnish to the Initial Purchaser such conformed copies of such
opinions, certificates, letters and documents in such quantities as the
Initial Purchaser and counsel for the Initial Purchaser shall reasonably
request.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Initial
Purchaser and each person, if any, who controls the Initial Purchaser within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, against any losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act or the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made
by the Company in Section 2 of this Agreement;
(ii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Offering Memorandum or the
Preliminary Offering Memorandum or any amendment or supplement thereto,
(B) any application or other document, or any amendment or supplement
thereto, executed by the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in
order to qualify the Notes under the securities or blue sky laws thereof
or filed with or any securities association or securities exchange (each
an "Application"), or (C) any Additional Company Information provided by
the Company to any holder or prospective purchaser of Notes pursuant to
Section 5(c);
(iii) the omission or alleged omission to state in the
Offering Memorandum or the Preliminary Offering Memorandum or any
amendment or supplement thereto, any Application or any Additional
Company Information provided by the Company to any holder or prospective
purchaser of Notes pursuant to
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Section 5(c), a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading; or
(iv) any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual materials supplied by
the Company in connection with the offering of the Notes, including
without limitation, slides, videos, films and tape recordings;
and will reimburse, as incurred, each indemnified person for any legal or other
expenses reasonably incurred by each indemnified person in connection with
investigating, defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action; provided
that the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
such Offering Memorandum or Preliminary Offering Memorandum or any Application
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Initial Purchaser specifically for use therein;
provided, further, that the Company will not be liable to the Initial Purchaser
or any person controlling the Initial Purchaser with respect to any such untrue
statement or omission made in the Preliminary Offering Memorandum that is
corrected in the Offering Memorandum if (A) the person asserting any such loss,
claim, damage or liability purchased Notes from the Initial Purchaser but was
not sent or given a copy of the Offering Memorandum at or prior to the written
confirmation of the sale of such Notes to such person unless such failure to
deliver the Offering Memorandum was a result of the Company's failure to comply
with Section 5(a) of this Agreement, and (B) a court of competent jurisdiction
determines by final nonappealable judgment that the Initial Purchaser or any
such person controlling the Initial Purchaser is liable with respect to such
untrue statement or omission made in the Preliminary Offering Memorandum
notwithstanding that it was corrected in the Offering Memorandum. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have. The Company will not, without the prior written consent of the
Initial Purchaser, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not the Initial
Purchaser or any person who controls the Initial Purchaser within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act is a
party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of the Initial
Purchaser and such directors, officers, employees, agents or controlling
persons from all liability arising out of such claim, action, suit or
proceeding.
(b) The Initial Purchaser will indemnify and hold harmless the
Company, each of its directors, officers, employees and agents and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any losses, claims,
damages or liabilities, joint or several, to which the Company or any such
director, officer, employee or agent or controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement
by the Initial Purchaser in Section 4 of this Agreement (ii) any untrue
statement or alleged untrue statement of any material fact contained in the
Offering Memorandum or the Preliminary Offering Memorandum or any amendment or
supplement thereto, or any Application or (iii) the omission or the alleged
omission to state therein a material fact required to be stated in the Offering
Memorandum or the Preliminary Offering Memorandum or any amendment or
supplement thereto, or any Application, or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by or on behalf of the Initial Purchaser specifically for use
therein; and, subject to the limitation set forth immediately preceding this
clause, will reimburse, as incurred, any legal or other expenses reasonably
incurred by the Company or any such director, officer, employee or agent or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Initial Purchaser may
otherwise have. The Initial Purchase will not, without the prior written
consent of the Company, settle or
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compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not the Company or any person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of the
Company and such directors, officers, employees, agents or controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section 8. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available
to the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or
parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Initial Purchaser in the case
of paragraph (a) of this Section 8, representing the indemnified parties under
such paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel reasonably satisfactory to
the indemnified party or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 8 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) that by the
terms of the preceding paragraphs of this Section 8 could otherwise be the
subject of an indemnity claim, each indemnifying party, in order to provide for
just and equitable contribution, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from
the offering of the Notes or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, not only such relative benefits
but also the relative fault of the indemnifying party or parties on the one
hand and the indemnified party on the other in connection with the statements
or omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) that by the
terms of the preceding paragraphs of this Section 8 could otherwise be the
subject of an indemnity claim, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Initial Purchaser on the other shall be deemed to be in the same
proportion as the total proceeds from the offering (before deducting expenses)
received by the Company bear to the total discounts
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and commissions received by the Initial Purchaser. The relative fault of the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Initial Purchaser, the parties' relative intents, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Initial Purchaser agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation or by any other method of allocation that does not take into
account the equitable considerations referred to above in this paragraph (d).
Notwithstanding any other provision of this paragraph (d), the Initial
Purchaser shall not be obligated to make contributions hereunder that in the
aggregate exceed the total offering price of the Notes purchased by the Initial
Purchaser under this Agreement, less the aggregate amount of any damages that
the Initial Purchaser has otherwise been required to pay in respect of the same
or any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d), each person,
if any, who controls the Initial Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same rights
to contribution as the Initial Purchaser, and each director, officer, employee
and agent of the Company and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as the Company.
9. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company and the
Initial Purchaser set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Company, any of
its officers or directors, the Initial Purchaser or any controlling person
referred to in Section 8 hereof and (ii) delivery of and payment for the Notes.
The respective agreements, covenants, indemnities and other statements set
forth in Sections 6 and 8 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
10. Termination.
(a) This Agreement may be terminated with respect to the Notes in
the sole discretion of the Initial Purchaser by notice to the Company given
prior to the Closing Date in the event that the Company shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder at or prior thereto or, if at
or prior to the Closing Date,
(i) the Company or any of its subsidiaries shall have, in
the sole judgment of the Initial Purchaser, sustained any material loss
or interference with their respective businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or any legal or
governmental proceeding or there shall have been any material adverse
change, or any development involving a prospective material adverse
change (including without limitation a change in management or control
of the Company), in the business, condition (financial or otherwise),
results of operations, prospects, assets, properties or management of
the Company and its subsidiaries, taken as a whole, except in each case
as described in or contemplated by the Offering Memorandum (exclusive of
any amendment or supplement thereto);
(ii) on or after the date hereof, there shall have occurred
any downgrading in the rating of the Notes or of any debt securities of
the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the
Securities Act), or any public announcement that any such organization
has under surveillance or review its rating of the Notes or of any debt
securities of the Company other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating;
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(iii) trading in securities generally on the New York Stock
Exchange or the Nasdaq National Market shall have been suspended or
minimum or maximum prices shall have been established;
(iv) a banking moratorium shall have been declared by New
York authorities; or
(v) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the United States financial markets that,
in the sole judgment of the Initial Purchaser, makes it impractical or
inadvisable to proceed with the offering or the delivery of the Notes as
contemplated by the Offering Memorandum, as amended as of the date
hereof.
(b) Termination of this Agreement pursuant to this Section 10 shall
be without liability of any party to any other party except as provided in
Section 9 hereof.
11. Information Supplied by Initial Purchaser. The statements set
forth in the last paragraph on the front cover page and in the third and tenth
paragraphs under the heading "Plan of Distribution" in the Preliminary Offering
Memorandum or the Offering Memorandum constitute the only information furnished
by the Initial Purchaser to the Company for the purposes of Sections 2(a) and 8
hereof. The Initial Purchaser confirms that such statements are correct.
12. Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchaser, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx Xxx Xxxx, XX 00000 Attention: High Yield
Finance Group; and if sent to the Company, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to the Company at 0000
Xxxx Xxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000-0000, Attention: Chief Financial
Officer.
13. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the Initial Purchaser, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person
except that (i) the indemnities of the Company contained in Section 8 of this
Agreement shall also be for the benefit of any person or persons who control
the Initial Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act and (ii) the indemnities of the Initial
Purchaser contained in Section 8 of this Agreement shall also be for the
benefit of the directors, officers, employees and agents of the Company and any
person or persons who control the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act. No purchaser of Notes
from the Initial Purchaser shall be deemed a successor because of such
purchase.
14. Applicable Law. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
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15. Consent to Jurisdiction and Service of Process. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, the Company accepts for itself and
in connection with its properties, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts and waives any defense of
forum non convenience and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement. The Company designates and
appoints CT Corporation, and such other persons as may hereafter by selected by
the Company irrevocably agreeing in writing to so serve, as its agent to
receive on its behalf service of all process in any such proceedings in any
such court, such service being hereby acknowledged by the Company to be
effective and binding service in every respect. A copy of any such process so
served shall be mailed by registered mail to the Company at the address
provided in Section 12 hereof; provided, however, that, unless otherwise
provided by applicable law, any failure to mail such copy shall not affect the
validity of service of such process. If any agent appointed by the Company
refuses to accept service, the Company hereby agrees that service of process
sufficient for personal jurisdiction in any action against the Company in the
State of New York may be made by registered or certified mail, return receipt
requested, to the Company at its address provided in Section 12 hereof, and the
Company hereby acknowledges that such service shall be effective and binding in
every respect. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of the Initial Purchaser
to bring proceedings against the Company in the courts of any other
jurisdiction.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. If the foregoing
correctly sets forth our understanding, please indicate your acceptance thereof
in the space provided below for that purpose, whereupon this letter shall
constitute an agreement binding the Company, and the Initial Purchaser.
Very truly yours,
TROPICAL SPORTSWEAR
INT'L CORPORATION
By: /s/ N. Xxxxx XxXxxxxxx
-------------------------------------------
Name: N. Xxxxx XxXxxxxxx
Title: Executive Vice President -- Finance
and Operations and Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Xxxxxxxxxxx Xxxxxx
---------------------------------
Xxxxxxxxxxx Xxxxxx
Managing Director
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SCHEDULE I
SUBSIDIARY GUARANTORS
Name State of Incorporation
---- ----------------------
Savane International Corp. Texas
Apparel Network Corporation Florida
Tropical Sportswear Company, Inc. Delaware
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