Exhibit 4.7
XXXXX XXXXX INTERNATIONAL, INC.
(a Florida corporation)
Senior Secured Notes due 2009
PURCHASE AGREEMENT
Dated: March 15, 2002
Table of Contents
Page
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SECTION 1. Representations and Warranties....................................................................... 2
(a) Representations and Warranties by the Company and the Subsidiary Guarantors.................. 2
(i) Offering Memorandum.......................................................................... 2
(ii) Independent Accountants...................................................................... 3
(iii) Financial Statements......................................................................... 3
(iv) No Material Adverse Change in Business....................................................... 3
(v) Good Standing of the Company................................................................. 3
(vi) Good Standing of Subsidiaries................................................................ 4
(vii) Capitalization............................................................................... 4
(viii) Authorization of Agreement................................................................... 4
(ix) Authorization of the Indenture............................................................... 5
(x) Authorization of the Securities.............................................................. 5
(xi) Authorization of the Security Agreement...................................................... 5
(xii) Authorization of the Registration Rights Agreement........................................... 5
(xiii) Consummation of the Xxxxxxx Acquisition...................................................... 6
(xiv) Description of the Securities, the Indenture, the Security Agreement and the Registration
Rights Agreement............................................................................. 6
(xv) Absence of Defaults and Conflicts............................................................ 6
(xvi) Absence of Default Under Senior Indebtedness................................................. 7
(xvii) Absence of Labor Dispute..................................................................... 7
(xviii) Absence of Proceedings; No Change in Import Regulations...................................... 8
(xix) Possession of Intellectual Property.......................................................... 8
(xx) Absence of Further Requirements.............................................................. 9
(xxi) Possession of Licenses and Permits........................................................... 9
(xxii) Valid and Enforceable Security Interest...................................................... 9
(xxiii) Title to Collateral.......................................................................... 9
(xxiv) Perfection of Security Interest.............................................................. 10
(xxv) Title to Property............................................................................ 10
(xxvi) Tax Returns.................................................................................. 10
(xxvii) Registration Rights.......................................................................... 11
(xxviii) Environmental Laws........................................................................... 11
(xxix) Investment Company Act....................................................................... 11
(xxx) Similar Offerings............................................................................ 11
(xxxi) Rule 144A Eligibility........................................................................ 12
(xxxii) No General Solicitation...................................................................... 12
(xxxiii) No Registration Required..................................................................... 12
(xxxiv) Reporting Company............................................................................ 12
(xxxv) No Directed Selling Efforts.................................................................. 12
(xxxvi) Solvency..................................................................................... 13
(xxxvii) Internal Accounting Controls................................................................. 13
(xxxviii) Insurance.................................................................................... 13
(xxxix) No Stabilization or Manipulation............................................................. 13
(xl) No Undisclosed Relationships................................................................. 13
i
(xli) No Distribution of Unauthorized Materials......................................... 14
(xlii) No Cessation of Supply............................................................ 14
(xliii) No Additional Documents........................................................... 14
(xliv) The Xxxxxxx Acquisition........................................................... 14
(xlv) Representations and Warranties in the Asset Purchase Agreement.................... 14
(b) Officer's Certificates....................................................................... 15
SECTION 2. Sale and Delivery to Initial Purchaser; Closing............................................... 15
(a) Securities................................................................................... 15
(b) Payment...................................................................................... 15
(c) Denominations; Registration.................................................................. 15
SECTION 3. Covenants of the Company and the Subsidiary Guarantors........................................ 16
(a) Offering Memorandum.......................................................................... 16
(b) Notice and Effect of Material Events......................................................... 16
(c) Amendment to Offering Memorandum and Supplements............................................. 16
(d) Qualification of Securities for Offer and Sale............................................... 16
(e) Rating of Securities......................................................................... 17
(f) DTC.......................................................................................... 17
(g) Use of Proceeds.............................................................................. 17
(h) Restriction on Sale of Securities............................................................ 17
(i) PORTAL Designation........................................................................... 17
(j) Reporting Requirements....................................................................... 17
(k) Xxxxxxx Subsidiary Guarantee................................................................. 18
(l) Security Interest in Collateral.............................................................. 18
SECTION 4. Payment of Expenses........................................................................... 18
(a) Expenses..................................................................................... 18
(b) Termination of Agreement..................................................................... 19
SECTION 5. Conditions of Initial Purchaser's Obligations................................................. 19
(a) Opinion of Counsel for the Company and the Subsidiary Guarantors............................. 19
(b) Opinion of Counsel for the Initial Purchaser................................................. 19
(c) Officers' Certificate........................................................................ 19
(d) Accountants' Comfort Letter.................................................................. 20
(e) Bring-down Comfort Letter.................................................................... 20
(f) Maintenance of Rating........................................................................ 20
(g) PORTAL....................................................................................... 20
(h) Registration Rights Agreement................................................................ 20
(i) Security Agreement........................................................................... 21
(j) Additional Documents......................................................................... 21
(k) Consummation of the Xxxxxxx Acquisition...................................................... 21
(l) Intercreditor Agreement...................................................................... 21
(m) Consent under Senior Credit Agreement and Amendment of Lease................................. 21
(n) Undertaking and Release...................................................................... 21
(o) Termination of Agreement..................................................................... 21
SECTION 6. Subsequent Offers and Resales of the Securities............................................... 22
ii
(a) Offer and Sale Procedures.......................................................................... 22
(i) Offers and Sales Only to Qualified Institutional Buyers.................................... 22
(ii) No General Solicitation.................................................................... 22
(iii) Purchaser by Non-Bank Fiduciaries.......................................................... 22
(iv) Subsequent Purchaser Notification.......................................................... 22
(v) Minimum Principal Amount................................................................... 23
(vi) Restrictions on Transfer................................................................... 23
(vii) Delivery of Offering Memorandum............................................................ 23
(b) Covenants of the Company and the Subsidiary Guarantors............................................. 23
(i) Integration................................................................................ 23
(ii) Rule 144A Information...................................................................... 23
(iii) Restriction on Resales..................................................................... 24
(c) Qualified Institutional Buyer...................................................................... 24
(d) Resale Pursuant to Rule 903 of Regulation S or Rule 144A........................................... 24
(e) Additional Representations and Warranties of the Initial Purchaser................................. 25
SECTION 7. Indemnification...................................................................................... 25
(a) Indemnification of the Initial Purchaser........................................................... 25
(b) Indemnification of the Company and the Subsidiary Guarantors....................................... 26
(c) Actions Against Parties; Notification.............................................................. 26
(d) Settlement Without Consent If Failure to Reimburse................................................. 26
SECTION 8. Contribution......................................................................................... 27
SECTION 9. Representations, Warranties, Covenants and Agreements to Survive Delivery............................ 28
SECTION 10. Termination of Agreement............................................................................ 28
(a) Termination; General............................................................................... 28
(b) Liabilities........................................................................................ 29
SECTION 11. Notices............................................................................................. 29
SECTION 12. Parties............................................................................................. 29
SECTION 13. Appointment of Agent For Service.................................................................... 29
SECTION 14. Governing Law And Time.............................................................................. 30
SECTION 15. Effect of Headings.................................................................................. 30
SCHEDULES
Schedule A - Pricing Information.................................................................... Sch. A-1
Schedule B - List of Subsidiaries................................................................... Sch. B-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.................................................... Ex. A-1
iii
XXXXX XXXXX INTERNATIONAL, INC.
(a Florida corporation)
$57,000,000
9 1/2% Senior Secured Notes due 2009
PURCHASE AGREEMENT
March 15, 2002
First Union Securities, Inc.
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Ladies and Gentlemen:
Xxxxx Xxxxx International, Inc., a Florida corporation (the
"Company"), and each of Supreme Munsingwear Canada, Inc., a corporation
organized under the laws of Canada, Supreme International Corporation de Mexico,
S.A. de C.V., a corporation organized under the laws of Mexico, and BBI Retail
LLC, a Florida limited liability company (collectively, the "Subsidiary
Guarantors"), confirm their agreement with First Union Securities, Inc. (the
"Initial Purchaser"), with respect to the issue and sale by the Company and the
purchase by the Initial Purchaser, of $57,000,000 aggregate principal amount of
the Company's [ ]% Senior Secured Notes due 2009 (the "Securities"). The
Securities are to be issued pursuant to an indenture dated as of March 22, 2002
(the "Indenture") among the Company, each Subsidiary Guarantor and State Street
Bank and Trust Company, as trustee (the "Trustee"). The obligations of the
Company under the Indenture and the Securities will be guaranteed (the
"Subsidiary Guarantees") by each of the Subsidiary Guarantors, pursuant to the
Indenture. Pursuant to the security agreement to be dated as of March 22, 2002
(the "Security Agreement"), among the Company, the Subsidiary Guarantors and
State Street Bank and Trust Company, as collateral agent (the "Collateral
Agent"), the Securities are secured by certain trademarks of the Company and
Xxxxxxx Apparel Corp. (the "Xxxxxxx Subsidiary").
Securities issued in book-entry form will be issued to Cede & Co. as
nominee of The Depository Trust Company ("DTC") pursuant to a letter agreement,
to be dated as of the Closing Time (as defined in Section 2(b)) (the "DTC
Agreement"), among the Company, the Trustee and DTC.
The holders of Securities will be entitled to the benefits of a
Registration Rights Agreement, in form and substance reasonably satisfactory to
the Initial Purchaser (the "Registration Rights Agreement"), pursuant to which
the Company and the Subsidiary Guarantors will file a registration statement
with the Securities and Exchange Commission (the "Commission") registering the
Securities and/or Exchange Securities together with the related
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Subsidiary Guarantees referred to in the Registration Rights Agreement under the
Securities Act of 1933, as amended (the "1933 Act").
The Company and each Subsidiary Guarantor understand that the Initial
Purchaser proposes to make an offering of the Securities on the terms and in the
manner set forth herein and agree that the Initial Purchaser may resell, subject
to the conditions set forth herein, all or a portion of the Securities to
purchasers ("Subsequent Purchasers") at any time after this Agreement has been
executed and delivered. The Securities are to be offered and sold through the
Initial Purchaser without being registered under the 1933 Act, in reliance upon
exemptions therefrom. Pursuant to the terms of the Securities and the
Indenture, investors that acquire Securities may only resell or otherwise
transfer such Securities if such Securities are hereafter registered under the
1933 Act or if an exemption from the registration requirements of the 1933 Act
is available (including the exemption afforded by Rule 144A ("Rule 144A") or
Regulation S ("Regulation S") of the rules and regulations promulgated under the
1933 Act by the Commission).
The Company has prepared on behalf of itself and the Subsidiary
Guarantors and will deliver to the Initial Purchaser copies of an offering
memorandum dated March 15, 2002 (such offering memorandum, as most recently
amended or supplemented, including the documents incorporated by reference
therein and any exhibits thereto, is herein referred to as the "Offering
Memorandum") each for use by the Initial Purchaser in connection with its
solicitation of purchases of, or offering of, the Securities.
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company and the Subsidiary
Guarantors.
The Company and each of the Subsidiary Guarantors, jointly and
severally, represent and warrant to the Initial Purchaser as of the date hereof
and as of the Closing Time referred to in Section 2(b) hereof, and agree with
the Initial Purchaser, as follows:
(i) Offering Memorandum.
The Offering Memorandum at the Closing Time will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that
this representation and warranty shall not apply to statements in or
omissions from the Offering Memorandum made in reliance upon and in
conformity with information furnished to the Company in writing by the
Initial Purchaser expressly for use in the Offering Memorandum. The
documents incorporated by reference or deemed to be incorporated by
reference in the Offering Memorandum at the time they were or hereafter are
filed with the Commission complied and will comply in all material respects
with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder and, when read together with the other information in
the Offering Memorandum, at the date of the Offering Memorandum and at the
Closing Time, do not and will not include an untrue statement of a material
fact or omit to state a
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material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(ii) Independent Accountants.
The accountants who certified the financial statements and supporting
schedules included in the Offering Memorandum are independent public
accountants with respect to the Company and its subsidiaries within the
meaning of Regulation S-X under the 1933 Act.
(iii) Financial Statements.
The financial statements, together with the related schedules and notes,
incorporated by reference in the Offering Memorandum present fairly the
financial position of the Company and its consolidated subsidiaries at the
dates indicated and the statement of operations, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved. The supporting schedules, if any,
incorporated by reference in the Offering Memorandum present fairly in
accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included in
the Offering Memorandum present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited financial
statements incorporated by reference in the Offering Memorandum.
(iv) No Material Adverse Change in Business.
Since the respective dates as of which information is given in the
Offering Memorandum, except as otherwise stated therein, (A) there has been
no material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects, whether or not
arising in the ordinary course of business, of the Company and its
subsidiaries considered as one enterprise (a "Material Adverse Effect"),
(B) there have been no transactions entered into by the Company or any of
its subsidiaries other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as
one enterprise and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(v) Good Standing of the Company.
The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Florida and has
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Offering Memorandum and to
enter into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact business and
is in good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or
the conduct of
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business, except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries.
Each of the Company's subsidiaries has been duly organized and is
validly existing as a corporation or limited liability company in good
standing under the laws of the jurisdiction of its incorporation or
formation, has power and authority to own, lease and operate its properties
and to conduct its business as described in the Offering Memorandum and is
duly qualified as a foreign corporation or limited liability company to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect; except as otherwise disclosed in the Offering Memorandum, all of
the issued and outstanding capital stock of each subsidiary of the Company
has been duly authorized and validly issued, is fully paid and non-
assessable and is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares of capital
stock of such subsidiary was issued in violation of any preemptive or
similar rights of any securityholder of such subsidiary. The only
subsidiaries of the Company are the subsidiaries listed on Schedule B
hereto.
(vii) Capitalization.
The authorized, issued and outstanding capital stock of the Company
is:
i. Preferred Stock--$.01 par value; 1,000,000 shares authorized; no
shares issued or outstanding; and
ii. Common Stock--$.01 par value; 30,000,000 shares authorized;
6,337,440 shares issued and 6,286,740 shares outstanding as of
January 31, 2002;
(except for subsequent issuances, if any, pursuant to this Agreement,
pursuant to reservations, agreements, employee benefit plans referred to in
the Offering Memorandum or pursuant to the exercise of convertible
securities or options referred to in the Offering Memorandum). The shares
of issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; none
of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any securityholder
of the Company.
(viii) Authorization of Agreement.
This Agreement has been duly authorized, executed and delivered by
the Company and each of the Subsidiary Guarantors.
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(ix) Authorization of the Indenture.
The Indenture has been duly authorized by the Company and each
Subsidiary Guarantor and, when executed and delivered by the Company, each
Subsidiary Guarantor and the Trustee, will constitute a valid and binding
agreement of the Company and each Subsidiary Guarantor, enforceable against
the Company and each Subsidiary Guarantor in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(x) Authorization of the Securities.
The Securities have been duly authorized and, at the Closing Time, will
have been duly executed by the Company and, when authenticated, issued and
delivered in the manner provided for in the Indenture and delivered against
payment of the purchase price therefor as provided in this Agreement, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the Indenture, the
Security Agreement and the Registration Rights Agreement.
(xi) Authorization of the Security Agreement.
The Security Agreement has been duly authorized by the Company and each
Subsidiary Guarantor and, when executed and delivered by the Company and
each Subsidiary Guarantor will constitute a valid and binding agreement of
the Company and each Subsidiary Guarantor, enforceable against the Company
and each Subsidiary Guarantor in accordance with its terms except as
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws relating to or affecting
enforcement of creditors' rights generally, and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xii) Authorization of the Registration Rights Agreement.
The Registration Rights Agreement has been duly authorized by the
Company and each Subsidiary Guarantor and, when executed and delivered by
the Company, each Subsidiary Guarantor and the Initial Purchaser, will
constitute a valid and binding agreement of the Company and each Subsidiary
Guarantor, enforceable against the
5
Company and each Subsidiary Guarantor in accordance with its terms except
as enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws relating to or affecting
enforcement of creditors' rights generally, and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xiii) Consummation of the Xxxxxxx Acquisition.
On March 15, 2002, the Company entered into an Asset Purchase Agreement
the ("Asset Purchase Agreement") with Xxxxxxx Inc. ("Xxxxxxx" and VF
Canada, Inc. ("VF Canada") in order to acquire certain assets and all of
the capital stock of the Xxxxxxx Subsidiary (the "Xxxxxxx Assets") from
Xxxxxxx and VF Canada (collectively, the "VF Entities") relating to the
manufacture and sale of the Xxxxxxx line of swim wear and apparel (the
"Xxxxxxx Acquisition"). At the Closing Time, there shall not be any pending
or threatened legal or governmental proceedings with respect to the Xxxxxxx
Acquisition or to any of the transactions contemplated in the Offering
Memorandum under the heading "Use of Proceeds." The Company and the
Subsidiary Guarantors will provide the Initial Purchaser and counsel for
the Initial Purchaser the opportunity to review all closing documents to be
delivered by the parties in connection with the Xxxxxxx Acquisition. The
Asset Purchase Agreement has been duly authorized, executed and delivered
by the Company and, to the best of the Company's and each of the Subsidiary
Guarantors' knowledge, by each of the other parties thereto, and
constitutes a valid and binding obligation of the Company and, to the best
of the Company's and each of the Subsidiary Guarantors' knowledge, of each
of the other parties thereto, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law).
The Asset Purchase Agreement is in full force and effect and, as of the
Closing Time, the Company will have performed all of its obligations
thereunder required to be performed in order to consummate the Xxxxxxx
Acquisition at or prior to the Closing Time, except for payment of the
purchase price which shall be paid immediately after the Closing Time with
the proceeds from the sale of the Securities.
(xiv) Description of the Securities, the Indenture, the Security
Agreement and the Registration Rights Agreement.
The Securities, the Indenture, the Security Agreement and the
Registration Rights Agreement will conform in all material respects to the
respective statements relating thereto contained in the Offering Memorandum
and will be in substantially the respective forms last delivered to the
Initial Purchaser prior to the date of this Agreement.
(xv) Absence of Defaults and Conflicts.
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None of the Company or any of its subsidiaries is in violation of its
charter or by-laws, as applicable, or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company or any of
its subsidiaries, as the case may be, is a party or by which any of them
may be bound, or to which any of the property or assets of the Company or
any of its subsidiaries, as the case may be, is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Indenture, the Securities, the Security
Agreement, the Registration Rights Agreement and any other agreement or
instrument entered into or issued or to be entered into or issued by the
Company or the Subsidiary Guarantors in connection with the transactions
contemplated hereby or thereby or in the Offering Memorandum and the
consummation of the transactions contemplated herein and in the Offering
Memorandum (including the issuance and sale of the Securities, the
consummation of the Xxxxxxx Acquisition and the use of the proceeds from
the sale of the Securities as described in the Offering Memorandum under
the caption "Use of Proceeds") and compliance by the Company and the
Subsidiary Guarantors with their obligations hereunder and thereunder have
been duly authorized by all necessary corporate action and do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or a Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to, the Agreements and Instruments
except for such conflicts, breaches or defaults or liens, charges or
encumbrances that, singly or in the aggregate, would not result in a
Material Adverse Effect, nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any of its
subsidiaries or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of
its subsidiaries or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any of its subsidiaries.
(xvi) Absence of Default Under Senior Indebtedness.
No event of default exists under any contract, indenture, mortgage,
loan, agreement, note, lease, or other agreement or instrument constituting
Senior Indebtedness (as defined in the Indenture).
(xvii) Absence of Labor Dispute.
No labor dispute with the employees of the Company or any of its
subsidiaries or of Xxxxxxx exists or, to the knowledge of the Company or
any Subsidiary Guarantor, is imminent, and neither the Company nor any
Subsidiary Guarantor is aware of any existing or imminent labor disturbance
by the employees of any of the Company's or any
7
of its subsidiaries' or of Xxxxxxx'x principal suppliers, manufacturers,
customers or contractors, which, in any case, may reasonably be expected to
result in a Material Adverse Effect.
(xviii) Absence of Proceedings; No Change in Import Regulations.
Except as disclosed in the Offering Memorandum, there is no action,
suit, proceeding, inquiry or investigation before or brought by any court
or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company or any Subsidiary Guarantor, threatened,
against or affecting the Company, any of its subsidiaries or the Xxxxxxx
Assets which would be required to be disclosed in the Offering Memorandum
if it were a prospectus filed as part of a registration statement on
Form S-1 under the 1933 Act or which might reasonably be expected to result
in a Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets of the Company or
any of its subsidiaries or of the Xxxxxxx Assets or the consummation of the
transactions contemplated by this Agreement, or the performance by the
Company or the Subsidiary Guarantors of their respective obligations
hereunder, or under the Xxxxxxx Acquisition. The aggregate of all pending
legal or governmental proceedings to which the Company or any of its
subsidiaries is a party or of which any of their respective property or
assets or the Xxxxxxx Assets is the subject which are not described in the
Offering Memorandum, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Material
Adverse Effect. Since the respective dates as of which information is given
in the Offering Memorandum, there have been no changes in the laws or
regulations governing the import of any products which the Company imports
which would have a Material Adverse Effect.
(xix) Possession of Intellectual Property.
The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect. In addition, upon consummation
of the Xxxxxxx Acquisition, the Company will own all of the Intellectual
Property that are a part of the Xxxxxxx Assets, including the Xxxxxxx
trademark, free and clear of any security, interest, mortgage, pledge,
lien, encumbrance, claim or equity other than any security interest,
mortgage, pledge, lien, encumbrance, claim or equity referred to in the
Intercreditor Agreement to be dated on or prior to the Closing Time (the
"Intercreditor Agreement").
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(xx) Absence of Further Requirements.
No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by the
Company or the Subsidiary Guarantors of their respective obligations
hereunder, in connection with the offering, issuance or sale of the
Securities hereunder or the consummation of the transactions contemplated
by this Agreement or the Asset Purchase Agreement, for the due execution,
delivery or performance of the Indenture, the Security Agreement and the
Registration Rights Agreement by the Company and the Subsidiary Guarantors,
or for the due execution, delivery or performance of the Asset Purchase
Agreement by the parties thereto, except such as have been already
obtained.
(xxi) Possession of Licenses and Permits.
The Company and its subsidiaries possess such permits, licenses,
approvals, consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them, except where the failure so to possess would not, singly
or in the aggregate, have a Material Adverse Effect; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except where
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and none of the Company or any of its subsidiaries
has received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect.
(xxii) Valid and Enforceable Security Interest.
The Security Agreement, upon its execution and delivery by the Company
and the Xxxxxxx Subsidiary, will create a valid and enforceable security
interest in the Collateral (as defined in the Indenture) in favor of the
Trustee, for the benefit of the holders of the Securities.
(xxiii) Title to Collateral.
The Company and the Xxxxxxx Subsidiary collectively own the
Collateral, free and clear of any security, interest, mortgage, pledge,
lien, encumbrance or claim other than the security interest pursuant to the
Senior Credit Agreement, the Letters of Credit and the Lease.
9
(xxiv) Perfection of Security Interest.
Upon the execution and delivery of the Security Agreement by the
Company and the Xxxxxxx Subsidiary and the filing of financing statements
on Form UCC-1 with the Secretary of State of Florida and Delaware,
respectively, and the filing with the United States Patent and Trademark
Office and any other foreign authorities as may be necessary in order to
create or perfect liens in respect of the Collateral, the Trustee for the
benefit of any holders of Securities will have a first priority perfected
security interest in the Collateral, other than the security interest
pursuant to the Senior Credit Agreement, the Letters of Credit and the
Lease.
(xxv) Title to Property.
The Company and its subsidiaries have good and marketable title to
all real property owned by the Company and its subsidiaries and good title
to all other properties owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the Offering
Memorandum or (b) do not, singly or in the aggregate, materially affect the
value of such property and do not interfere with the use made or proposed
to be made of such property by the Company or any of its subsidiaries; and
all of the leases and subleases material to the business of the Company and
its subsidiaries, considered as one enterprise, and under which the Company
or any of its subsidiaries hold properties described in the Offering
Memorandum, are in full force and effect, and neither the Company nor any
of its subsidiaries have any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any of
its subsidiaries under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or any of its
subsidiaries to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xxvi) Tax Returns.
All United States federal income tax returns of the Company and its
subsidiaries required by law to be filed have been filed and all taxes
shown by such returns or otherwise assessed, which are due and payable,
have been paid, except assessments against which appeals have been or will
be promptly taken and as to which adequate reserves have been provided. The
Company and its subsidiaries have filed all other tax returns that are
required to have been filed by them pursuant to applicable foreign, state,
local or other law except insofar as the failure to file such returns would
not result in a Material Adverse Effect, and has paid all taxes due
pursuant to such returns or pursuant to any assessment received by the
Company and its subsidiaries, except for such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been
provided. The charges, accruals and reserves on the books of the Company
in respect of any income and corporation tax liability for any years not
finally determined are adequate to meet any assessments or re-assessments
for additional income tax for any years not finally determined, except to
the extent of any inadequacy that would not result in a Material Adverse
Effect.
10
(xxvii) Registration Rights.
Except as described in the Offering Memorandum, there are no persons
with registration rights or other similar rights to have any debt
securities or securities convertible into, or exchangeable for, debt
securities registered by the Company or any Subsidiary Guarantor under the
1933 Act.
(xxviii) Environmental Laws.
Except as described in the Offering Memorandum and except such
matters as would not, singly or in the aggregate, result in a Material
Adverse Effect, (A) none of the Company or any of its subsidiaries is in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements, (C) there are no
pending or, to the knowledge of the Company or any of the Subsidiary
Guarantors, threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its subsidiaries or with respect to the
Xxxxxxx Assets and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries or with respect to the Xxxxxxx Assets relating to Hazardous
Materials or Environmental Laws.
(xxix) Investment Company Act.
Neither the Company nor any Subsidiary Guarantor is, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Memorandum will be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(xxx) Similar Offerings.
None of the Company, any Subsidiary Guarantor or any of their
affiliates, as such term is defined in Rule 501(b) under the 1933 Act
(each, an "Affiliate"), has, directly or indirectly, solicited any offer to
buy, sold or offered to sell or otherwise
11
negotiated in respect of, or will solicit any offer to buy, sell or offer
to sell or otherwise negotiate in respect of, in the United States or to
any United States citizen or resident, any security which is or would be
integrated with the sale of the Securities in a manner that would require
the Securities to be registered under the 1933 Act.
(xxxi) Rule 144A Eligibility.
The Securities are eligible for resale pursuant to Rule 144A and will
not be, at the Closing Time, of the same class as securities listed on a
national securities exchange registered under Section 6 of the 1934 Act, or
quoted in a U.S. automated interdealer quotation system.
(xxxii) No General Solicitation.
None of the Company, any Subsidiary Guarantor or any of their
Affiliates or any person acting on its or any of their behalf (other than
the Initial Purchaser, as to whom the Company and the Subsidiary Guarantors
make no representation) has engaged or will engage, in connection with the
offering of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the 1933 Act.
(xxxiii) No Registration Required.
Subject to compliance by the Initial Purchaser with the
representations and warranties set forth in Section 2 and the procedures
set forth in Section 6 hereof, it is not necessary in connection with the
offer, sale and delivery of the Securities to the Initial Purchaser and to
each Subsequent Purchaser in the manner contemplated by this Agreement and
the Offering Memorandum to register the Securities under the 1933 Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "1939 Act").
(xxxiv) Reporting Company.
The Company is subject to the reporting requirements of Section 13 or
Section 15(d) of the 1934 Act.
(xxxv) No Directed Selling Efforts.
With respect to those Securities sold in reliance on Regulation S, (A)
none of the Company, any Subsidiary Guarantor or any of their Affiliates or
any person acting on its or their behalf (other than the Initial Purchaser,
as to whom the Company and the Subsidiary Guarantors make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S and (B) each of the Company, the
Subsidiary Guarantors and their Affiliates and any person acting on its or
their behalf (other than the Initial Purchaser, as to whom the Company and
the Subsidiary Guarantors make no representation) has complied and will
comply with the offering restrictions requirement of Regulation S.
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(xxxvi) Solvency.
The Company and each of the Subsidiary Guarantors are, and immediately
after the Closing Time (after giving effect to the Xxxxxxx Acquisition)
will be, Solvent. As used herein, the term "Solvent" means, with respect to
the Company and each Subsidiary Guarantor, on a particular date, that on
such date (A) the fair market value of the assets of the Company or such
Subsidiary Guarantor, as the case may be, is greater than the total amount
of liabilities (including contingent liabilities) of the Company or such
Subsidiary Guarantor, as the case may be, (B) the present fair salable
value of the assets of the Company or such Subsidiary Guarantor, as the
case may be, is greater than the amount that will be required to pay the
probable liabilities of the Company or such Subsidiary Guarantor, as the
case may be, on its debts as they become absolute and matured, (C) the
Company and such Subsidiary Guarantor, as the case may be, is able to
realize upon its assets and pay its debts and other liabilities, including
contingent obligations, as they mature and (D) the Company and such
Subsidiary Guarantor, as the case may be, does not have an unreasonably
small capital.
(xxxvii) Internal Accounting Controls.
Each of the Company and the Subsidiary Guarantors maintains a system
of internal accounting controls sufficient to provide reasonable assurances
that (A) transactions are executed in accordance with management's general
or specific authorization, (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain accountability for assets, (C) access to assets is permitted only
in accordance with management's general or specific authorization and (D)
the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.
(xxxviii) Insurance.
Each of the Company and the Subsidiary Guarantors carry or are
entitled to the benefits of, insurance with financially sound and reputable
insurers, in such amounts and covering such risks as is generally
maintained by companies of established repute engaged in the same or
similar business, and all such insurance is in full force and effect.
(xxxix) No Stabilization or Manipulation.
None of the Company, the Subsidiary Guarantors or any of their
respective officers, directors or controlling persons has taken, directly
or indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(xl) No Undisclosed Relationships.
No relationship, direct or indirect, exists between or among any of
the Company, any Subsidiary Guarantor or any of their Affiliates, on the
one hand, and any director,
13
officer, stockholder, customer or supplier of any of them, on the other
hand, which is required by the 1933 Act or by the 1933 Act Regulations to
be described in a registration statement on Form S-1 which is not so
described, or is not described as required, in the Offering Memorandum.
(xli) No Distribution of Unauthorized Materials.
The Company and the Subsidiary Guarantors have not distributed and,
prior to the later to occur of (i) the Closing Time and (ii) completion of
the distribution of the Securities, will not distribute any offering
material in connection with the offering and sale of the Securities other
than the Offering Memorandum or other materials, if any, permitted by the
1933 Act and approved by the Initial Purchaser.
(xlii) No Cessation of Supply.
No supplier of merchandise to the Company or any of the Subsidiary
Guarantors (or any of their subsidiaries) or to the knowledge of the
Company, with respect to the Xxxxxxx Assets, the supplier of merchandise
necessary for the business operations of the Xxxxxxx Assets, has ceased
shipments of merchandise to the Company or any of the Subsidiary Guarantors
or with respect to the Xxxxxxx Assets, as the case may be, other than in
the normal and ordinary course of business consistent with past practices,
which cessation would result in a Material Adverse Effect.
(xliii) No Additional Documents.
There are no contracts or documents of a character that would be
required to be described in the Offering Memorandum if it were a prospectus
filed as part of a registration statement on Form S-1 under the 1933 Act
that are not described as would be so required. All such contracts to
which the Company or any of its subsidiaries is party have been duly
authorized, executed and delivered by the Company or such subsidiaries, as
the case may be, and constitute valid and binding obligations of the
Company or such subsidiaries, as the case may be, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(xliv) The Xxxxxxx Acquisition.
As of the date hereof, all closing conditions to the Xxxxxxx are
satisfied or can be satisfied other than the receipt by the Company of
sufficient funds to consummate the Xxxxxxx Acquisition.
(xlv) Representations and Warranties in the Asset Purchase
Agreement.
The representations and warranties set forth in the Asset Purchase
Agreement made by the Company, and to the knowledge of the Company, the
representations and
14
warranties in the Asset Purchase Agreement made by Xxxxxxx and VF Canada,
were true and correct in all material respects as of the time such
representations and warranties were made and shall be true and correct in
all material respects as of the Closing Time as if such representations and
warranties were made on and as of such date, unless such representations
and warranties expressly indicate that they are being made as of any other
specific date.
(b) Officer's Certificates.
Any certificate signed by any officer of the Company or any Subsidiary
Guarantor delivered to the Initial Purchaser or to counsel for the Initial
Purchaser shall be deemed a representation and warranty by the Company or such
Subsidiary Guarantor to the Initial Purchaser as to the matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchaser; Closing.
------------------------------------------------------------
(a) Securities.
On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
sell to the Initial Purchaser, and the Initial Purchaser, agrees to purchase
from the Company, at the price set forth in Schedule A, $57,000,000 aggregate
principal amount of Securities.
(b) Payment.
Payment of the purchase price for, and delivery of certificates for,
the Securities shall be made at the office of First Union Securities, Inc. One
First Union Center, 301 South College Street, Charlotte, North Carolina, or at
such other place as shall be agreed upon by the Initial Purchaser and the
Company, at 9:00 A.M. (eastern time) on the third business day after the date
hereof, or such other time not later than ten business days after such date as
shall be agreed upon by the Initial Purchaser and the Company (such time and
date of payment and delivery being herein called the "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Initial Purchaser of certificates for the Securities to be purchased by
them.
(c) Denominations; Registration.
Certificates for the Securities shall be in such denominations
($100,000 or integral multiples of $1,000 in excess thereof) and registered in
such names as the Initial Purchaser may request in writing at least one full
business day before the Closing Time. The certificates representing the
Securities shall be made available for examination and packaging by the Initial
Purchaser in the City of Charlotte, North Carolina not later than 10:00 A.M. on
the last business day prior to the Closing Time.
15
SECTION 3. Covenants of the Company and the Subsidiary Guarantors.
-------------------------------------------------------------------
The Company and each Subsidiary Guarantor, jointly and severally,
covenant with the Initial Purchaser as follows:
(a) Offering Memorandum.
The Company, as promptly as possible, will furnish to the Initial
Purchaser, without charge, such number of copies of the Preliminary Offering
Memorandum, the Final Offering Memorandum and any amendments and supplements
thereto as the Initial Purchaser may reasonably request.
(b) Notice and Effect of Material Events.
The Company will immediately notify the Initial Purchaser, and confirm
such notice in writing, of (x) any filing made by the Company of information
relating to the offering of the Securities with any securities exchange or any
other regulatory body in the United States or any other jurisdiction, and (y)
prior to the completion of the placement of the Securities by the Initial
Purchaser as evidenced by a notice in writing from the Initial Purchaser to the
Company, any material changes in or affecting the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise which (i) make any
statement in the Offering Memorandum false or misleading or (ii) are not
disclosed in the Offering Memorandum. In such event or if during such time any
event shall occur as a result of which it is necessary, in the reasonable
opinion of any of the Company, its counsel, the Initial Purchaser or counsel for
the Initial Purchaser, to amend or supplement the Final Offering Memorandum in
order that the Final Offering Memorandum not include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances then
existing, the Company will forthwith amend or supplement the Final Offering
Memorandum by preparing and furnishing to the Initial Purchaser an amendment or
amendments of, or a supplement or supplements to, the Final Offering Memorandum
(in form and substance satisfactory in the reasonable opinion of counsel for the
Initial Purchaser) so that, as so amended or supplemented, the Final Offering
Memorandum will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is delivered to a Subsequent
Purchaser, not misleading.
(c) Amendment to Offering Memorandum and Supplements.
The Company will advise 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. 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 5 hereof.
(d) Qualification of Securities for Offer and Sale.
The Company will use its best efforts, in cooperation with the Initial
Purchaser, to qualify the Securities for offering and sale under the applicable
securities laws of such states
16
and other jurisdictions as the Initial Purchaser may designate and will maintain
such qualifications in effect as long as required for the sale of the
Securities; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
(e) Rating of Securities.
The Company shall take all reasonable action necessary to enable
Standard & Poor's Ratings Services, a division of McGraw Hill, Inc. ("S&P"), and
Xxxxx'x Investors Service Inc. ("Moody's") to provide their respective credit
ratings of the Securities.
(f) DTC.
The Company will cooperate with the Initial Purchaser and use its best
efforts to permit the Securities to be eligible for clearance and settlement
through the facilities of DTC.
(g) Use of Proceeds.
The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Offering Memorandum under "Use of
Proceeds".
(h) Restriction on Sale of Securities.
During a period of 180 days from the date of the Offering Memorandum,
the Company will not, without the prior written consent of the Initial
Purchaser, directly or indirectly, issue, sell, offer or agree to sell, grant
any option for the sale of, or otherwise dispose of, any other debt securities
of the Company or securities of the Company that are convertible into, or
exchangeable for, the Securities or such other debt securities (other than
registered notes to be exchanged for the Securities).
(i) PORTAL Designation.
The Company will use its best efforts to permit the Securities to be
designated PORTAL securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. ("NASD")
relating to trading in the PORTAL Market.
(j) Reporting Requirements.
The Company, during the period when the Offering Memorandum is
required to be delivered pursuant to Section 6(a)(vii) hereof, will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act Regulations.
17
(k) Xxxxxxx Subsidiary Guarantee.
Immediately following the consummation of the Xxxxxxx Acquisition, the
Company shall cause the Xxxxxxx Subsidiary to execute and deliver to the Trustee
a supplemental indenture in accordance with the terms of the Indenture pursuant
to which the Xxxxxxx Subsidiary shall assume the obligations of a Subsidiary
Guarantor (as defined in the Indenture).
(l) Security Interest in Collateral.
The Company will take, and upon the consummation of the Xxxxxxx
Acquisition, will cause the Xxxxxxx Subsidiary to take, all actions necessary so
that the Trustee holds, for the benefit of the holders of the Securities, a
valid and perfected first priority lien on the Collateral. Such actions shall
include the execution of the Security Agreement and the preparation and delivery
of all instruments required to be delivered pursuant to the Security Agreement,
including the financing statements on Form UCC-1 and the filing of documents
evidencing the grant of a security interest in the Collateral with the United
States Patent and Trademark Office and any other foreign authorities as may be
necessary in order to create or perfect liens in respect of the Collateral.
SECTION 4. Payment of Expenses.
--------------------------------
(a) Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, the Securities, the Registration Rights
Agreement, the Security Agreement and the Indenture including (i) the
preparation, printing, delivery to the Initial Purchaser and any filing of the
Offering Memorandum (including financial statements and any schedules or
exhibits and any document incorporated therein by reference) and of each
amendment or supplement thereto, (ii) the preparation, printing and delivery to
the Initial Purchaser of this Agreement, the Indenture, the Registration Rights
Agreement, the Security Agreement and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Initial Purchaser, including any transfer taxes, any stamp
or other duties payable upon the sale, issuance and delivery of the Securities
to the Initial Purchaser and any charges of DTC in connection therewith, (iv)
the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(d) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Initial Purchaser in
connection therewith and in connection with the preparation of the Blue Sky
Survey, and any supplement thereto, (vi) the fees and expenses of the Trustee,
including the fees and disbursements of counsel for the Trustee in connection
with the Indenture and the Securities, (vii) any fees payable in connection with
the rating of the Securities, (viii) the fees and expenses of the Collateral
Agent, including the fees and disbursements of counsel for the Collateral Agent
in connection with the Security Agreement, and (ix) any fees and expenses
payable in connection with the initial and continued designation of the
Securities as PORTAL securities under the PORTAL Market Rules pursuant to NASD
Rule 5325.
18
(b) Termination of Agreement.
If this Agreement is terminated by the Initial Purchaser in accordance
with the provisions of Section 5 or Section 10(a)(i) hereof, the Company and the
Subsidiary Guarantors, jointly and severally, shall reimburse the Initial
Purchaser for all of its out-of-pocket expenses, including the reasonable fees
and disbursements of counsel for the Initial Purchaser.
SECTION 5. Conditions of Initial Purchaser's Obligations.
---------------------------------------------------------
The obligations of the Initial Purchaser hereunder are subject to the
accuracy of the representations and warranties of the Company and the Subsidiary
Guarantors contained in Section 1 hereof or in certificates of any officer of
the Company or any of its subsidiaries delivered pursuant to the provisions
hereof, to the performance by each of the Company and the Subsidiary Guarantors
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Opinion of Counsel for the Company and the Subsidiary Guarantors.
At the Closing Time, the Initial Purchaser shall have received the
favorable opinion, dated as of the Closing Time, of Broad and Xxxxxx, counsel
for the Company and the Subsidiary Guarantors, in form and substance
satisfactory to counsel for the Initial Purchaser, to the effect set forth in
Exhibit A hereto and to such further effect as counsel for the Initial Purchaser
may reasonably request. Such opinion shall state that counsel for the Initial
Purchaser may rely on such opinion as to matters of Florida Law. Such counsel
may also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.
(b) Opinion of Counsel for the Initial Purchaser.
At the Closing Time, the Initial Purchaser shall have received the
favorable opinion, dated as of the Closing Time, of Shearman & Sterling, counsel
for the Initial Purchaser, with respect to certain matters as may be reasonably
requested. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York and the federal law of the United States, upon the opinions of counsel
satisfactory to the Initial Purchaser. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
(c) Officers' Certificate.
At the Closing Time, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the Offering
Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Initial Purchaser shall have
received certificates of the President or a Vice President of the Company and
each Subsidiary Guarantor and of the chief financial or chief accounting officer
of the Company and each Subsidiary Guarantor, dated as of the Closing Time, to
the effect that (i) there has been no such material
19
adverse change, (ii) the representations and warranties in Section 1 hereof are
true and correct with the same force and effect as though expressly made at and
as of the Closing Time, and (iii) the Company and each Subsidiary Guarantor have
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time.
(d) Accountants' Comfort Letter.
At the time of the execution of this Agreement, the Initial Purchaser
shall have received from Deloitte & Touche LLP a letter dated such date, in form
and substance satisfactory to the Initial Purchaser, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
the Initial Purchaser with respect to the financial statements and certain
financial information contained in the Offering Memorandum.
(e) Bring-down Comfort Letter.
At the Closing Time, the Initial Purchaser shall have received from
Deloitte & Touche LLP a letter, dated as of the Closing Time, to the effect that
they reaffirm the statements made in the letter furnished pursuant to subsection
(d) of this Section, except that the specified date referred to shall be a date
not more than three business days prior to the Closing Time.
(f) Maintenance of Rating.
At the Closing Time, the Securities shall be rated at least B3 by
Moody's and B- by S&P, and the Company shall have delivered to the Initial
Purchaser a letter dated the Closing Time, from each such rating agency, or
other evidence satisfactory to the Initial Purchaser, confirming that the
Securities have such ratings; and since the date of this Agreement, there shall
not have occurred a downgrading in the rating assigned to the Securities or any
of the Company's other debt securities by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the 1933 Act, and no such securities rating agency shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Securities or any of the Company's
other debt securities.
(g) PORTAL.
At the Closing Time, the Securities shall have been designated for
trading on PORTAL.
(h) Registration Rights Agreement.
At the Closing Time, the Registration Rights Agreement, in form and
substance reasonably satisfactory to the Initial Purchaser, shall have been duly
executed and delivered and be in full force and effect.
20
(i) Security Agreement.
At the Closing Time, the Security Agreement (and the instruments
required to be delivered thereunder), in form and substance reasonably
satisfactory to the Initial Purchaser, shall have been duly executed and
delivered and be in full force and effect.
(j) Additional Documents.
At the Closing Time, counsel for the Initial Purchaser shall have been
furnished with such documents and opinions as they may require for the purpose
of enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be satisfactory in form and
substance to the Initial Purchaser and counsel for the Initial Purchaser.
(k) Consummation of the Xxxxxxx Acquisition.
At the Closing Time, the Company shall have consummated the Xxxxxxx
Acquisition in accordance with the terms of the Asset Purchase Agreement.
(l) Intercreditor Agreement.
At the Closing Time, the Intercreditor Agreement, in form and
substance reasonably satisfactory to the Initial Purchaser, shall have been duly
executed and delivered by the agent for the lenders under the Senior Credit
Agreement, the agent for the lenders under the Lease and the lenders under the
Letters of Credit and shall be in full force and effect.
(m) Consent under Senior Credit Agreement and Amendment of Lease.
At or prior to the Closing Time, the Company shall have (i) provided
satisfactory evidence to the Initial Purchaser that the Securities constitute
permitted indebtedness under the Senior Credit Agreement and (ii) presented to
the Initial Purchaser an executed amendment to the Lease satisfactory to the
Initial Purchaser dated the date hereof.
(n) Undertaking and Release.
At or prior to the Closing Time, the Company shall have presented to
the Initial Purchaser executed Undertaking and Release agreements satisfactory
to the Initial Purchaser.
(o) Termination of Agreement.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Initial Purchaser by notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 1, 7, 8
and 9 shall survive any such termination and remain in full force and effect.
21
SECTION 6. Subsequent Offers and Resales of the Securities.
-----------------------------------------------------------
(a) Offer and Sale Procedures.
The Initial Purchaser and the Company hereby establish and agree to
observe the following procedures in connection with the offer and sale of the
Securities:
(i) Offers and Sales Only to Qualified Institutional Buyers.
Offers and sales of the Securities shall only be made (A) to persons
whom the offeror or seller reasonably believes to be qualified
institutional buyers, as defined in Rule 144A under the 1933 Act
("Qualified Institutional Buyers"), (B) to a limited number of persons who
are institutional accredited investors, as such term is defined in Rule
501(a)(1), (2), (3) and (7) under the 1933 Act, that the offeror reasonably
believes to be and, with respect to sales and deliveries, that are such
institutional accredited investors ("Institutional Accredited Investors")
or (C) non-U.S. persons outside the United States, as defined in Regulation
S under the 1933 Act, to whom the offeror or seller reasonably believes
offers and sales of the Securities may be made in reliance upon Regulation
S under the 1933 Act. The Initial Purchaser agrees that it will not offer,
sell or deliver any of the Securities in any jurisdiction outside the
United States except under circumstances that will result in compliance
with the applicable laws thereof, and that it will take at its own expense
whatever action is required to permit its purchase and resale of the
Securities in such jurisdictions.
(ii) No General Solicitation.
No general solicitation or general advertising (within the meaning of
Rule 502(c) under the 0000 Xxx) will be used in the United States in
connection with the offering or sale of the Securities.
(iii) Purchaser by Non-Bank Fiduciaries.
In the case of a non-bank Subsequent Purchaser of a Security acting as
a fiduciary for one or more third parties, each third party shall, in the
judgment of the Initial Purchaser, be an Institutional Accredited Investor
or a Qualified Institutional Buyer or a non-U.S. person outside the United
States.
(iv) Subsequent Purchaser Notification.
The Initial Purchaser will take reasonable steps to inform, and cause
each of its U.S. Affiliates to take reasonable steps to inform, persons
acquiring Securities from the Initial Purchaser or affiliate, as the case
may be, in the United States that the Securities (A) have not been and will
not be registered under the 1933 Act, (B) are being sold to them without
registration under the 1933 Act in reliance on Rule 144A or in accordance
with another exemption from registration under the 1933 Act, as the case
may be, and (C) may not be offered, sold or otherwise transferred except
(1) to the Company, (2) outside the United States in accordance with
Regulation S, or (3) inside the United States in accordance with (x) Rule
144A to a person whom the seller reasonably believes is a
22
Qualified Institutional Buyer that is purchasing such Securities for its
own account or for the account of a Qualified Institutional Buyer to whom
notice is given that the offer, sale or transfer is being made in reliance
on Rule 144A or (y) pursuant to another available exemption from
registration under the 1933 Act.
(v) Minimum Principal Amount.
No sale of the Securities to any one Subsequent Purchaser will be for
less than U.S. $100,000 principal amount and no Security will be issued in
a smaller principal amount. If the Subsequent Purchaser is a non-bank
fiduciary acting on behalf of others, each person for whom it is acting
must purchase at least U.S. $100,000 principal amount of the Securities.
(vi) Restrictions on Transfer.
The transfer restrictions and the other provisions set forth in the
Offering Memorandum under the heading "Notice to Investors", including the
legend required thereby, shall apply to the Securities except as otherwise
agreed by the Company and the Initial Purchaser.
(vii) Delivery of Offering Memorandum.
The Initial Purchaser will deliver to each purchaser of the Securities
from the Initial Purchaser, in connection with its original distribution of
the Securities, a copy of the Offering Memorandum, as amended and
supplemented at the date of such delivery.
(b) Covenants of the Company and the Subsidiary Guarantors.
The Company and each Subsidiary Guarantor, jointly and severally,
covenant with the Initial Purchaser as follows:
(i) Integration.
The Company and each Subsidiary Guarantor agree that they will not and
will cause their Affiliates not to, directly or indirectly, solicit any
offer to buy, sell or make any offer or sale of, or otherwise negotiate in
respect of, securities of the Company or any Subsidiary Guarantor of any
class if, as a result of the doctrine of "integration" referred to in Rule
502 under the 1933 Act, such offer or sale would render invalid (for the
purpose of (i) the sale of the Securities by the Company and the Subsidiary
Guarantors to the Initial Purchaser, (ii) the resale of the Securities by
the Initial Purchaser to Subsequent Purchasers or (iii) the resale of the
Securities by such Subsequent Purchasers to others) the exemption from the
registration requirements of the 1933 Act provided by Section 4(2) thereof
or by Rule 144A or by Regulation S thereunder or otherwise.
(ii) Rule 144A Information.
The Company agrees that, in order to render the Securities eligible
for resale pursuant to Rule 144A under the 1933 Act, while any of the
Securities remain
23
outstanding, it will make available, upon request, to any holder of
Securities or prospective purchasers of Securities the information
specified in Rule 144A(d)(4), unless the Company furnishes information to
the Commission pursuant to Section 13 or 15(d) of the 1934 Act.
(iii) Restriction on Resales.
Until the expiration of two years after the original issuance of the
Securities, the Company and the Subsidiary Guarantors will not, and each
will cause their Affiliates not to, resell any Securities which are
"restricted securities" (as such term is defined under Rule 144(a)(3) under
the 1933 Act), whether as beneficial owner or otherwise (except as agent
acting as a securities broker on behalf of and for the account of customers
in the ordinary course of business in unsolicited broker's transactions).
(c) Qualified Institutional Buyer.
The Initial Purchaser represents and warrants to, and agrees with, the
Company that it is a "qualified institutional buyer" within the meaning of Rule
144A under the 1933 Act (a "Qualified Institutional Buyer") and an "accredited
investor" within the meaning of Rule 501(a) under the 1933 Act (an "Accredited
Investor").
(d) Resale Pursuant to Rule 903 of Regulation S or Rule 144A.
The Initial Purchaser understands that the Securities have not been
and will not be registered under the 1933 Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except in accordance with Regulation S under the 1933 Act or pursuant to an
exemption from the registration requirements of the 1933 Act. The Initial
Purchaser represents and agrees, that, except as permitted by Section 6(a)
above, it has offered and sold Securities and will offer and sell Securities (i)
as part of their distribution at any time and (ii) otherwise until forty days
after the later of the date upon which the offering of the Securities commences
and the Closing Time, only in accordance with Rule 903 of Regulation S, Rule
144A under the 1933 Act or another applicable exemption from the registration
requirements of the 1933 Act. Accordingly, neither the Initial Purchaser, its
affiliates nor any persons acting on their behalf have engaged or will engage in
any directed selling efforts with respect to Securities sold hereunder pursuant
to Regulation S, and the Initial Purchaser, its affiliates and any person acting
on their behalf have 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 Securities pursuant to Regulation S it will have sent
to each distributor, dealer or person receiving a selling concession, fee or
other remuneration that purchases Securities from it or through it during the
restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the
United States Securities Act of 1933 (the "Securities Act") and may not be
offered or sold within the United States or to or for the account or
benefit of U.S. persons (i) as part of their distribution at any time and
(ii) otherwise until forty days after the later of the date upon which the
offering of the Securities commenced and the
24
date of closing, except in either case in accordance with Regulation S or
Rule 144A under the Securities Act. Terms used above have the meaning given
to them by Regulation S."
Terms used in the above paragraph have the meanings given to them by
Regulation S.
(e) Additional Representations and Warranties of the Initial
Purchaser.
The Initial Purchaser represents and agrees that it has not entered
and will not enter into any contractual arrangements with respect to the
distribution of the Securities, except with its affiliates or with the prior
written consent of the Company.
SECTION 7. Indemnification.
---------------------------
(a) Indemnification of the Initial Purchaser.
The Company and each Subsidiary Guarantor, jointly and severally,
agree 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
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Offering
Memorandum or the Final Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
7(d) below) any such settlement is effected with the written consent of the
Company and the Subsidiary Guarantors; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Initial Purchaser),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information
25
furnished to the Company by the Initial Purchaser expressly for use in the
Offering Memorandum (or any amendment thereto).
(b) Indemnification of the Company and the Subsidiary Guarantors.
The Initial Purchaser agrees to indemnify and hold harmless the
Company and the Subsidiary Guarantors and each person, if any, who controls the
Company and the Subsidiary Guarantor within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Offering
Memorandum in reliance upon and in conformity with written information furnished
to the Company by the Initial Purchaser expressly for use in the Offering
Memorandum.
(c) Actions Against Parties; Notification.
Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 7(a) above, counsel to the indemnified parties shall be
selected by the Initial Purchaser, and, in the case of parties indemnified
pursuant to Section 7(b) above, counsel to the indemnified parties shall be
selected by the Company. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section or Section 8 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) Settlement Without Consent If Failure to Reimburse.
If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 7(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
26
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 8. Contribution.
------------------------
If the indemnification provided for in Section 7 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Subsidiary
Guarantors on the one hand and the Initial Purchaser on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Subsidiary
Guarantors on the one hand and of the Initial Purchaser on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Subsidiary
Guarantors on the one hand and the Initial Purchaser on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received
by the Initial Purchaser, bear to the aggregate initial offering price of the
Securities.
The relative fault of the Company and the Subsidiary Guarantors on the
one hand and the Initial Purchaser on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or any Subsidiary Guarantor
or by the Initial Purchaser and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company, the Subsidiary Guarantors and the Initial Purchaser agree
that it would not be just and equitable if contribution pursuant to this Section
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
27
Notwithstanding the provisions of this Section, the Initial Purchaser
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities purchased and sold by it hereunder
exceeds the amount of any damages which the Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls the
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Initial
Purchaser, and each person, if any, who controls the Company or any Subsidiary
Guarantor within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company or the
Subsidiary Guarantors, as the case may be.
SECTION 9. Representations, Warranties, Covenants and Agreements to
--------------------------------------------------------------------
Survive Delivery.
----------------
All representations, warranties, covenants and agreements contained in
this Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of the Initial
Purchaser or controlling person, or by or on behalf of the Company or any
Subsidiary Guarantor, and shall survive delivery of the Securities to the
Initial Purchaser.
SECTION 10. Termination of Agreement.
------------------------------------
(a) Termination; General.
The Initial Purchaser may terminate this Agreement, by notice to the
Company, at any time at or prior to the Closing Time (i) if there has been,
since the time of execution of this Agreement or since the respective dates as
of which information is given in the Offering Memorandum, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial markets
in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Initial Purchaser, impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the
Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the NASDAQ System, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the NASDAQ System has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required,
28
by any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, or (iv) if a
banking moratorium has been declared by either Federal, New York or Florida
authorities.
(b) Liabilities.
If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 1, 7, 8 and 9
shall survive such termination and remain in full force and effect.
SECTION 11. Notices.
-------------------
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Initial Purchaser shall be directed
at One First Union Center, 000 Xxxxx Xxxxxxx Xxxxxx, XX-0, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000-0000 attention of Xxxxxx Xxxxx. Notices to the Company shall be
directed to it at 0000 X.X. 000xx Xxxxxx, Xxxxx, Xxxxxxx 00000, attention of
Xxxxxx Xxxxxxxxxxx, Chairman.
SECTION 12. Parties.
-------------------
This Agreement shall inure to the benefit of and be binding upon the
Initial Purchaser, the Company, the Subsidiary Guarantors and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchaser, the Company, the Subsidiary Guarantors and their respective
successors and the controlling persons and officers and directors referred to in
Sections 7 and 8 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Initial
Purchaser, the Company, the Subsidiary Guarantors and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from the Initial Purchaser shall be
deemed to be a successor by reason merely of such purchase.
SECTION 13. Appointment of Agent For Service.
--------------------------------------------
By the execution of this Agreement, each of BBI Retail LLC., Supreme
Munsingwear Canada, Inc. and Supreme International Corporation de Mexico, S.A.
de C. V. hereby designates the Company as its authorized agent upon which
process may be served in any legal action or proceeding, including with respect
to any state or federal securities laws, that may be instituted in any federal
court of the United States or the court of any state thereof and arising out of
or relating to this Agreement. Service of process upon such agent at 0000 X.X.
000/xx/ Xxxxxx, Xxxxx, Xxxxxxx 00000, attention: Xxxxxx Xxxxxxxxxxx shall be
deemed in every respect effective service of process upon BBI Retail LLC,
Supreme Munsingwear Canada, Inc. or Supreme International Corporation de Mexico,
S.A. de C.V., as applicable, in any such legal
29
action or proceeding and each of BBI Retail LLC, Supreme Munsingwear Canada,
Inc. and Supreme International Corporation de Mexico, S.A. de C.V. hereby
submits to the nonexclusive jurisdiction of any such court in which any such
legal action or proceeding is so instituted and waives, to the extent it may
effectively do so, any objection it may have now or hereafter to the laying of
the venue of any such legal action or proceeding. Such appointment shall be
irrevocable so long as the Initial Purchaser shall have any rights pursuant to
the terms of this Agreement. Each of BBI Retail LLC, Supreme Munsingwear Canada,
Inc. and Supreme International Corporation de Mexico, S.A. de C.V., further
agrees to take any and all action, including the execution and filing of any and
all such documents and instruments, as may be necessary to continue such
designation and appointment of such agent.
SECTION 14. Governing Law And Time.
----------------------------------
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 15. Effect of Headings.
------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
30
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Initial Purchaser, the Company and the Subsidiary Guarantors in
accordance with its terms.
Very truly yours,
XXXXX XXXXX INTERNATIONAL, INC.
By________________________________________________
Name:
Title:
SUPREME MUNSINGWEAR CANADA INC.
By________________________________________________
Name:
Title:
SUPREME INTERNATIONAL CORPORATION DE MEXICO, S.A.
de C.V.
By ____________________________________________
Name:
Title:
BBI RETAIL LLC
By________________________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
FIRST UNION SECURITIES, INC.
By:_______________________________________
Authorized Signatory
SCHEDULE A
XXXXX XXXXX INTERNATIONAL, INC.
$57,000,000 Senior Secured Notes due 2009
1. The initial public offering price of the Securities shall be
97.525% of the principal amount thereof, plus accrued interest, if any, from the
date of issuance.
2. The purchase price to be paid by the Initial Purchaser for the
Securities shall be 95.025% of the principal amount thereof.
3. The interest rate on the Securities shall be 9 1/2% per annum.
Sch. A-1
SCHEDULE B
List of Subsidiaries of Xxxxx Xxxxx International, Inc.
Supreme Munsingwear Canada, Inc.
Supreme International Corporation de Mexico, S.A. de C.V.
BBI Retail LLC
Sch. B-1
Exhibit A
FORM OF OPINION OF COMPANY'S AND
SUBSIDIARY GUARANTORS' COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Florida.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Offering
Memorandum and to enter into and perform its obligations under the Purchase
Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is:
1. Preferred Stock--$.01 par value; 1,000,000 shares authorized; no
shares issued or outstanding; and
2. Common Stock--$.01 par value; 30,000,000 shares authorized;
6,337,440 shares issued and 6,286,740 shares outstanding as of
January 31, 2002;
(except for subsequent issuances, if any, pursuant to the Purchase Agreement or
pursuant to reservations, agreements, employee benefit plans or the exercise of
convertible securities or options referred to in the Offering Memorandum); the
shares of issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was issued in violation
of the preemptive or other similar rights of any securityholder of the Company.
(v) BBI Retail LLC has been duly formed and is validly existing as a
limited liability company in good standing under the laws of the State of
Florida, has power and authority to own, lease and operate its properties and to
conduct its business as described in the Offering Memorandum and is duly
qualified as a foreign limited liability company to transact business and is in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect; all of the issued and outstanding
membership interests of BBI Retail LLC has been duly authorized and validly
issued, is fully paid and non-assessable and, to the best of our knowledge and
information, is owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity, other than the pledge of the membership interests of BBI Retail LLC
under the Senior Credit Agreement.
Ex. A-1
(vi) Xxxxxxx has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Offering Memorandum.
(vii) The Asset Purchase Agreement has been duly authorized, executed
and delivered by the Company and, to the best of our knowledge, each of the
other parties thereto, and constitutes a valid and binding obligation of the
Company and, to the best of our knowledge, of each of the parties thereto,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, or by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
(viii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company and the Subsidiary Guarantors.
(ix) The Indenture has been duly authorized, executed and delivered
by the Company and the Subsidiary Guarantors and (assuming the due
authorization, execution and delivery thereof by the Trustee) constitutes a
valid and binding agreement of the Company and the Subsidiary Guarantors,
enforceable against the Company and the Subsidiary Guarantors in accordance with
its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating to or
affecting enforcement of creditors' rights generally, or by general principles
of equity (regardless of whether enforcement is considered in a proceeding in
equity or at law).
(x) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and the Subsidiary Guarantors and
(assuming the due authorization, execution and delivery thereof by the Initial
Purchaser) constitutes a valid and binding agreement of the Company and the
Subsidiary Guarantors, enforceable against the Company and the Subsidiary
Guarantors in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other similar
laws relating to or affecting enforcement of creditors' rights generally, or by
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
(xi) The Security Agreement has been duly authorized by the Company
and Xxxxxxx and constitutes a valid and binding agreement of the Company and
Xxxxxxx, enforceable against the Company and Xxxxxxx in accordance with its
terms except as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws relating to or affecting enforcement
of creditors' rights generally, and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
Ex. A-2
(xii) The Security Agreement creates a valid security interest in
favor of the Trustee, for the benefit of the holders of the Securities, in the
Collateral described therein in which a security interest may be created under
Article 9 of the Uniform Commercial Code in effect in the States of New York,
Florida and Delaware.
(xiii) We have reviewed copies of the financing statements on Form
UCC-1 to be filed in the offices of the Secretary of State of Florida and of
Delaware (collectively, the "Filing Offices"), listing the Company or the
Xxxxxxx Subsidiary, respectively, as debtor and the Trustee as secured party and
covering the Collateral. The financing statements are in appropriate form and
the Trustee, for the benefit of the holder of the Securities, will have, upon
the filing of the Financing Statements in the Filing Offices and upon the filing
of documents evidencing the grant of a security interest in the Collateral with
the United States Patent and Trademark Office, a perfected security interest in
the Collateral described therein in which a security interest may be perfected
by such filings.
(xiv) The Securities are in the form contemplated by the Indenture,
have been duly authorized by the Company and, when executed by the Company and
authenticated by the Trustee in the manner provided in the Indenture (assuming
the due authorization, execution and delivery of the Indenture by the Trustee)
and issued and delivered against payment of the purchase price therefor; will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium (including,
without limitation, all laws relating to fraudulent transfers), or other similar
laws relating to or affecting enforcement of creditor's rights generally, or by
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law), and will be entitled to the benefits of the
Indenture.
(xv) The Securities, the Indenture, the Security Agreement and the
Registration Rights Agreement conform in all material respects to the
descriptions thereof contained in the Offering Memorandum.
(xvi) Except as disclosed or incorporated by reference in the
Offering Memorandum, to the best of our knowledge, there is no pending
litigation that potentially involves a loss contingency in which the Company or
any of its subsidiaries is a party, which would be required to be disclosed
pursuant to Item 103 of Regulation S-K, and, to our knowledge, none of such
pending litigation disclosed or incorporated by reference in the Offering
Memorandum seeks to enjoin or prevent the Company from the consummation of the
transactions contemplated by the Purchase Agreement or by the Xxxxxxx
Acquisition, or the performance by the Company or the Subsidiary Guarantors of
their obligations thereunder or the transactions contemplated by the Offering
Memorandum;
(xvii) The information in the Offering Memorandum under "Risk
factors--We are subject to risks associated with importing products, "Business
Summary--Overview--The Xxxxxxx Acquisition", "Description of Other
Indebtedness", "Description of the Notes", "Exchange Offer; Registration
Rights", "Certain Federal Tax Considerations" and "Notice to Investors", to
the extent that it constitutes matters of law, summaries of legal matters, the
Ex. A-3
Company's or the Subsidiary Guarantors' charter and bylaws, or legal
conclusions, has been reviewed by us and is correct in all material respects.
(xviii) All descriptions in (as incorporated by reference) the
Offering Memorandum of contracts and other documents to which the Company or any
of its subsidiaries or to which Xxxxxxx are a party are accurate in all material
respects; to the best of our knowledge, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments that
would be required to be described in the Offering Memorandum if the Offering
Memorandum were a prospectus filed as part of a registration statement on Form
S-1 under the 1933 Act that are not described or referred to in the Offering
Memorandum other than those described or referred to therein, and the
descriptions thereof or references thereto are correct in all material respects.
(xix) To the best of our knowledge, none of the Company or any of
its subsidiaries is in violation of its charter or by-laws, as applicable, and
no default by the Company or any of its subsidiaries exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to in the
Offering Memorandum.
(xx) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than such as may be required
under the applicable securities laws of the various jurisdictions in which the
Securities will be offered or sold, as to which we need express no opinion) is
necessary or required in connection with (i) the due authorization, execution
and delivery of the Purchase Agreement and the Security Agreement or the due
execution, delivery or performance of the Indenture by the Company and the
Subsidiary Guarantors or (ii) the due authorization, execution and delivery of
the Asset Purchase Agreement by the parties thereto, or for the offering,
issuance, sale or delivery of the Securities to the Initial Purchaser or the
resale by the Initial Purchaser in accordance with the terms of the Purchase
Agreement.
(xxi) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchaser and to each Subsequent
Purchaser in the manner contemplated by the Purchase Agreement and the Offering
Memorandum to register the Securities under the 1933 Act or to qualify the
Indenture under the Trust Indenture Act.
(xxii) Except as contemplated in the Security Agreement, the
execution, delivery and performance of the Purchase Agreement, the DTC
Agreement, the Indenture, the Security Agreement, the Registration Rights
Agreement, the Securities and the Asset Purchase Agreement and the consummation
of the transactions contemplated in the Purchase Agreement and in the Offering
Memorandum (including the consummation of the Xxxxxxx Acquisition and the use of
the proceeds from the sale of the Securities as described in the Offering
Memorandum under the caption "Use Of Proceeds") and compliance by the Company
and the Subsidiary Guarantors with their obligations under the Purchase
Agreement, the Indenture, the Security Agreement, the Registration Rights
Agreement and, in the case of the Company, the Securities and compliance by the
parties to the Asset Purchase Agreement of their obligations thereunder do not
and will not, whether with or without the giving of notice or lapse of time or
both, conflict
Ex. A-4
with or constitute a breach of, or default or Repayment Event (as defined in
Section 1(a)(xv) of the Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary thereof or of the Xxxxxxx Assets pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument, known to us, to which the Company or
any of its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any subsidiary
thereof is subject (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or by-laws
of the Company or any of its subsidiaries, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its subsidiaries or any of their respective
properties, assets or operations.
(xxiii) Neither the Company nor any of the Subsidiary Guarantors is
an "investment company" or an entity "controlled" by an "investment company," as
such terms are defined in the 1940 Act.
Nothing has come to our attention that would lead us to believe that the
Offering Memorandum or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom as to which we express no opinion), at
the time the Offering Memorandum was issued, at the time any such amended or
supplemented Offering Memorandum was issued or at the Closing Time, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
Ex. A-5
