Execution Copy
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GFSI, INC.
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$125,000,000
9 5/8% SENIOR SUBORDINATED NOTES DUE 2007
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PURCHASE AGREEMENT
DATED AS OF FEBRUARY 20, 1997
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Donaldson, Lufkin & Jenrette Jefferies & Company, Inc.
Securities Corporation
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February 20, 1997
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
JEFFERIES & COMPANY, INC.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
GFSI, Inc., a Delaware corporation (the "COMPANY") and a wholly-owned
subsidiary of GFSI Holdings, Inc., a Delaware corporation ("HOLDINGS"), proposes
to issue and sell an aggregate of $125,000,000 in principal amount of 9 5/8%
Senior Subordinated Notes due 2007 (the "SERIES A NOTES") of the Company to
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and Jefferies &
Company, Inc. ("JEFFERIES" and, together with DLJ, the "INITIAL PURCHASERS").
The payment of principal, premium, interest and liquidated damages on the Notes
will be unconditionally guaranteed (the "NOTES GUARANTEE") on a senior
subordinated basis by all future Restricted Subsidiaries (as defined in the
Offering Memorandum (as defined)) of the Company (the "GUARANTORS"). The Series
A Notes and the Series B Notes (as defined) will be issued pursuant to an
indenture (the "INDENTURE") between the Company and Fleet National Bank, as
trustee (the "TRUSTEE").
Pursuant to an agreement (the "STOCK PURCHASE AGREEMENT") to be dated the
Closing Date (as defined) among the Company, Holdings and the Stockholders (the
"STOCKHOLDERS") of Winning Ways, Inc., a Missouri corporation, the Company and
Holdings have agreed to purchase all of the outstanding shares of common stock
of Winning Ways, Inc. from the Stockholders (the "ACQUISITION"). Upon
consummation of the Acquisition, Winning Ways, Inc. will merge with and into the
Company (the "MERGER") with the Company being the surviving entity. The Stock
Purchase Agreement, the related agreements (including but not limited to the
Subscription and Stockholders Agreement dated as of the Closing Date by and
among the Company and the Stockholders) governing the terms of the Acquisition,
and all closing documents relating to the closing of the Acquisition are herein
referred to as the "ACQUISITION DOCUMENTS."
1. ISSUANCE OF SECURITIES. The Series A Notes will be offered and sold to
the Initial Purchasers pursuant to an exemption from the registration
requirements under the Securities Act of 1933, as amended (the "ACT"). The
Company has prepared a preliminary offering memorandum, dated February 3, 1997
(the "PRELIMINARY OFFERING MEMORANDUM"), and a final offering memorandum, dated
February 20, 1997 (the "OFFERING MEMORANDUM" and, together with the Preliminary
Offering Memorandum, the "OFFERING DOCUMENTS"), relating to the Company and the
Series A Notes.
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Act, the Series A Notes
(and all securities issued in exchange therefor or in substitution thereof)
shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
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ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1) (a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this
Agreement, (i) the Company agrees to issue and sell the Series A Notes to the
Initial Purchasers, and (ii) each Initial Purchaser agrees, severally and not
jointly, to purchase Series A Notes from the Company in the principal amount set
forth opposite the name of such Initial Purchaser in Schedule I at a price of
97% of the principal amount of the Series A Notes (the "PURCHASE PRICE").
3. TERM OF OFFERING. The Initial Purchasers have advised the Company that
the Initial Purchasers will make offers (the "EXEMPT RESALES") of the Series A
Notes purchased by the Initial Purchasers hereunder on the terms set forth in
the Offering Memorandum, as amended or supplemented, solely to (i) persons
(each, a "144A PURCHASER") whom the Initial Purchasers reasonably believe to be
"qualified institutional buyers" as defined in Rule 144A under the Act ("QIBs"),
(ii) a limited number of other institutional "accredited investors," as defined
in Rule 501(a) (1), (2), (3) and (7) under the Act, that make certain
representations and agreements to the Company (each, an "ACCREDITED
INSTITUTION") and (iii) to non-U.S. persons outside the United States in
reliance upon Regulation S ("REGULATION S") under the Act (such persons
specified in clauses (i), (ii) and (iii) being referred to herein as the
"ELIGIBLE PURCHASERS"). The Initial Purchasers will offer the Series A Notes to
Eligible Purchasers initially at a price equal to 100% of the principal amount
thereof. Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will have
the registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in substantially
the form of Exhibit A hereto, for so long as such Series A Notes constitute
"TRANSFER RESTRICTED SECURITIES" (as defined in the Registration Rights
Agreement).
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Pursuant to the Registration Rights Agreement, the Company will agree to file
with the Securities and Exchange Commission (the "COMMISSION"), under the
circumstances set forth therein, (i) a registration statement under the Act (the
"EXCHANGE OFFER REGISTRATION STATEMENT") relating to (A) the Company's 9 5/8%
Series B Senior Subordinated Notes due 2007 (the "SERIES B NOTES" and, together
with the Series A Notes, the "NOTES") to be offered in exchange for the Series A
Notes (such offer to exchange being referred to as the "REGISTERED EXCHANGE
OFFER") and/or (ii) a shelf registration statement pursuant to Rule 415 under
the Act (the "SHELF REGISTRATION STATEMENT" and together with the Exchange Offer
Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by
certain holders of the Series A Notes, and to use their best efforts to cause
such Registration Statements to be declared effective. This Agreement, the
Indenture, the Registration Rights Agreement, the New Credit Agreement (as
defined) and the Acquisition Documents are hereinafter referred to collectively
as the "OPERATIVE DOCUMENTS." The Equity Contribution (as defined in the
Offering Memorandum), the consummation of the offering of the Notes, the
execution of the New Credit Agreement, the consummation of the Acquisition and
the repayment of the Company's Existing Indebtedness (as defined in the Offering
Memorandum) are collectively referred to herein as the "TRANSACTIONS."
4. DELIVERY AND PAYMENT. Delivery to the Initial Purchasers by the Company
of, and payment by the Initial Purchasers for, the Series A Notes shall be made
at 9:00 A.M., New York City time, on February 27, 1997 (or such other date as
the Company and the Initial Purchasers may agree) (the "CLOSING DATE") at the
offices of Mayer, Brown & Platt, 1675 Broadway, New York, New York 10019.
One or more Series A Notes in definitive form (the "GLOBAL NOTE"),
registered in the name of Cede & Co., as nominee of the Depository Trust Company
("DTC"), or such other names as the Initial Purchasers may request upon at least
one business days' notice to the Company, having an aggregate principal amount
corresponding to the aggregate principal amount of Series A Notes sold pursuant
to Exempt Resales, shall be delivered by the Company to the Initial Purchasers,
against payment by the Initial Purchasers of the purchase price thereof by wire
transfer of immediately available funds to an account designated by the Company
at least one business day prior to the Closing Date. The Global Note shall be
made available to the Initial Purchasers for inspection at the offices of DLJ
not later than 9:30 a.m. on the business day immediately preceding the Closing
Date.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the Initial
Purchasers:
(a) To advise the Initial Purchasers promptly and, if requested by the
Initial Purchasers, to confirm such advice in writing, (i) of receipt of
any notification with respect to the issuance by any state securities
commission of any stop order suspending the qualification or exemption from
qualification of any of the Series A Notes for offering or sale in any
jurisdiction designated by the Initial Purchasers pursuant to Section 5(f),
or the initiation of any proceeding for such purpose by any state
securities commission or other regulatory authority, and (ii) of the
happening of any event that makes any statement of a material fact made in
the Offering Documents (or any amendment or supplement thereto) untrue or
that requires the making of any additions to or changes in the Offering
Documents (or any amendment or supplement thereto) in order to make the
statements therein, in the light of the circumstances in which they are
made, not misleading. The Company shall use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or
exemption from qualification of the Series A Notes under any state
securities or Blue Sky laws, and, if at any time any state securities
commission or other regulatory authority shall issue any stop order or
order suspending the qualification or exemption
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from qualification of any of the Series A Notes under any state securities
or Blue Sky laws, the Company shall use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To furnish to the Initial Purchasers, without charge, as many
copies of the Offering Documents, and any amendments or supplements
thereto, as the Initial Purchasers may reasonably request. The Company
consents to the use of the Offering Documents, and any amendments or
supplements thereto, by the Initial Purchasers in connection with Exempt
Resales.
(c) Not to amend or supplement the Offering Memorandum, whether before
or after the Closing Date, unless (i) the Initial Purchasers have been
previously advised thereof, and (ii) the Initial Purchasers have not
reasonably objected thereto (unless in the opinion of counsel to the
Company such amendment or supplement is necessary, in the judgment of
counsel to the Company, to make the statements made in the Offering
Memorandum not misleading); and to prepare, promptly upon the Initial
Purchasers' request, any amendment or supplement to the Offering Memorandum
that the Initial Purchasers deem necessary or advisable in connection with
Exempt Resales (except to the extent any such amendment or supplement
requested would, in the judgment of counsel to the Company, render the
statements made in the Offering Memorandum, as proposed to be amended or
supplemented, misleading).
(d) If, after the date hereof, in the opinion of counsel for the
Initial Purchasers, any event shall occur as a result of which it becomes
necessary to amend or supplement the Offering Memorandum to comply with any
law or to make the statements therein, in the light of the circumstances at
the time that the Offering Memorandum is delivered to an Eligible Purchaser
which is a prospective purchaser, not misleading, to promptly (i) prepare
an appropriate amendment or supplement to the Offering Memorandum so that
the statements in the Offering Memorandum, as so amended or supplemented,
will comply with all applicable laws and will not, in the light of the
circumstances at the time it is so delivered, be misleading, and (ii)
furnish each Initial Purchaser with such number of copies of the Offering
Memorandum, as amended or supplemented, as such Initial Purchaser may
reasonably request.
(e) Prior to the earlier of consummation of the Exchange Offer or the
effectiveness of a Shelf Registration Statement if, in the reasonable
judgment of the Initial Purchasers, the Initial Purchasers or any of their
affiliates (as such term is defined in the rules and regulations under the
Act) are required to deliver an offering memorandum in connection with
sales of, or market-making activities with respect to, the Notes, (A) to
periodically amend or supplement the Offering Memorandum so that the
information contained in the Offering Memorandum complies with the
requirements of Rule 144A of the Act, (B) to amend or supplement the
Offering Memorandum when necessary to reflect any material changes in the
information provided therein so that the Offering Memorandum will not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light
of the circumstances existing as of the date the Offering Memorandum is so
delivered, not misleading and (C) to provide the Initial Purchasers with
copies of each such amended or supplemented Offering Memorandum, as the
Initial Purchasers may reasonably request.
Following the consummation of the Exchange Offer or the effectiveness
of a Shelf Registration Statement and for so long as the Notes are
outstanding if, in the reasonable judgment of the Initial Purchasers, the
Initial Purchasers or any of their affiliates (as such term is defined in
the rules and regulations under the Act) are required to deliver a
prospectus in connection with sales of, or market-making activities with
respect to, the Notes, (A) to periodically amend the
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applicable registration statement so that the information contained therein
complies with the requirements of Section 10(a) of the Act, (B) to amend
the applicable registration statement or supplement the related prospectus
or the documents incorporated therein when necessary to reflect any
material changes in the information provided therein so that the
registration statement and the prospectus will not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
existing as of the date the prospectus is so delivered, not misleading and
(C) to provide the Initial Purchasers with copies of each amendment or
supplement filed and such other documents as the Initial Purchasers may
reasonably request.
The Company hereby expressly acknowledges that the indemnification and
contribution provisions of Section 8 hereof are specifically applicable and
relate to each offering memorandum, registration statement, prospectus,
amendment or supplement referred to in this Section 5(e).
(f) To (i) cooperate with the Initial Purchasers and counsel for the
Initial Purchasers in connection with the qualification of the Series A
Notes for offer and sale by the Initial Purchasers under the state
securities or Blue Sky laws of such jurisdictions as the Initial Purchasers
may request, (ii) continue such qualification in effect so long as required
for Exempt Resales of the Series A Notes and (iii) file such consents to
service of process or other documents as may be necessary in order to
effect such qualification; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now
so qualified, or take any action which would subject it to general service
of process in any jurisdiction where it is not now so subject.
(g) So long as any of the Notes are outstanding, to file reports
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), and, during the period of three years
following the date of this Agreement, to deliver to the Initial Purchasers,
promptly upon their becoming available, (i) copies of all current, regular
and periodic reports filed by the Company with any securities exchange or
with the Commission or any governmental authority succeeding to any of the
Commission's functions, and (ii) copies of each report or other publicly
available information of the Company mailed to the holders of Notes and
such other publicly available information concerning the Company and its
subsidiaries as the Initial Purchasers may request.
(h) To use the proceeds from the sale of the Series A Notes in the
manner specified in the Offering Documents (and any amendments or
supplements thereto) under the captions "Use of Proceeds" and "The
Transactions."
(i) Not to voluntarily claim, and to resist actively any attempts to
claim, the benefit of any usury laws against the holders of the Notes.
(j) Except as otherwise agreed to by the parties hereto, to pay all
costs, expenses, fees and taxes incident to:
(1) the preparation, printing, filing and distribution under the
Act of the Offering Documents (including financial statements and
exhibits) and all amendments and supplements to any of them;
(2) the printing and delivery of the Operative Documents, the
Series A
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Notes, the preliminary and supplemental Blue Sky memoranda and all
other agreements, memoranda, correspondence and other documents
printed and delivered in connection herewith and with the Exempt
Resales (including in each case any disbursements of counsel to the
Initial Purchasers relating to such printing and delivery);
(3) the issuance and delivery by the Company of the Series A
Notes;
(4) the registration or qualification of the Series A Notes for
offer and sale under the securities or Blue Sky laws of the several
states (including in each case the fees and disbursements of counsel
to the Initial Purchasers relating to such registration or
qualification and memoranda relating thereto);
(5) furnishing such copies of the Offering Documents (including
all documents incorporated by reference therein) and all amendments
and supplements thereto as may be requested for use in connection with
the Exempt Resales;
(6) the rating of the Series A Notes by rating agencies, if any;
(7) all expenses and listing fees in connection with the
application for quotation of the Series A Notes in the National
Association of Securities Dealers, Inc. Automated Quotation System -
PORTAL ("PORTAL");
(8) all fees and expenses (including fees and expenses of
counsel) of the Company in connection with approval of the Series A
Notes by DTC for "book-entry" transfer; and
(9) the performance by the Company of its other obligations under
this Agreement.
(k) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than a default by the Initial Purchasers) or
if for any reason the Company shall be unable or unwilling to perform its
obligations hereunder, the Company shall, except as otherwise agreed by the
parties hereto, reimburse the Initial Purchasers for the fees and expenses
to be paid or reimbursed pursuant to Section 5(j) above, and reimburse the
Initial Purchasers for all reasonable out-of-pocket expenses (including the
reasonable fees and expenses of counsel to the Initial Purchasers) incurred
by the Initial Purchasers in connection with the transactions contemplated
by this Agreement.
(l) Prior to the Closing Date, to furnish to the Initial Purchasers,
as soon as they have been prepared by the Company, a copy of any
consolidated financial statements of the Company for any period subsequent
to the period covered by the financial statements appearing in the Offering
Documents.
(m) To cause all future Restricted Subsidiaries of the Company that
become co-obligors with respect to the obligations of the Company under the
credit agreement, dated as of the Closing Date, between the Company and The
First National Bank of Chicago, as contractual representative, and other
lenders thereunder (the "NEW CREDIT AGREEMENT"), to concurrently become
guarantors with respect to the Notes pursuant to the terms of the
Indenture.
(n) Not to distribute prior to the Closing Date any offering material
in connection
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with the offering and sale of the Series A Notes other than the Offering
Documents.
(o) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Series A Notes in a manner that would
require the registration under the Act of the sale to the Initial
Purchasers or the Eligible Purchasers of Series A Notes.
(p) For so long as any of the Notes remain outstanding and during any
period in which the Company is not subject to Section 13 or 15(d) of the
Exchange Act, to make available to any Eligible Purchaser or beneficial
owner of Notes in connection with any sale thereof and any prospective
purchaser of such Notes from such Eligible Purchaser or beneficial owner,
the information required by Rule 144A(d)(4) under the Act.
(q) To comply with their agreements in the Registration Rights
Agreement, and all agreements set forth in the representation letters of
the Company to DTC relating to the approval of the Series A Notes by DTC
for "book-entry" transfer.
(r) To cause the Registered Exchange Offer, if available, to be made
in the appropriate form, as contemplated by the Registration Rights
Agreement, to permit registration of the Series B Notes to be offered in
exchange for the Series A Notes and to comply with all applicable federal
and state securities laws in connection with the Registered Exchange Offer.
(s) To use its best efforts to effect the inclusion of the Series A
Notes in PORTAL.
(t) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company
prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Series A Notes and the issuance of the Guarantees.
(u) During the period beginning from the date hereof and continuing to
and including the date that is 180 days after the Closing Date, not to
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder, any securities of the Company (other than the Series B Notes)
that are substantially similar to the Notes including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive, Notes or any such substantially similar
securities (other than pursuant to employee stock option plans existing on,
or upon the conversion or exchange of convertible or exchangeable
securities outstanding as of, the date of this Agreement), without your
prior written consent.
(v) Not to cause any advertisement of the Notes to be published in any
newspaper or periodical or posted in any public place and not to issue any
circular relating to the Notes, except such advertisements that include the
statements required by Regulation S.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each Initial Purchaser that (for purposes of this Section 6,
references to the "Company" shall be deemed to include the Company after giving
pro forma effect to the Transactions (as defined in the Offering Memorandum):
(a) The Offering Documents have been prepared in connection with the
Exempt Resales. The Preliminary Offering Memorandum as of its date did not,
and the Offering Memorandum as of its date does not and as of the Closing
Date will not, and any amendment or
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supplement thereto will not, contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties
contained in this paragraph (a) shall not apply to statements or omissions
in the Offering Documents (or any amendment or supplement thereto) based
upon information relating to the Initial Purchasers furnished to the
Company in writing by or on behalf of the Initial Purchasers expressly for
use therein. No stop order preventing the use of the any of the Offering
Documents, or any amendment or supplement thereto, or any order asserting
that any of the transactions contemplated by this Agreement are subject to
the registration requirements of the Act, have been issued.
(b) The Company has been, and after giving effect to the Acquisition
pursuant to the terms of the Acquisition Documents, will be, a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has, and after giving effect to the
Acquisition pursuant to the terms of the Acquisition Documents, will have,
full corporate power and authority to carry on its business as it is
currently being and is proposed to be conducted and to own, lease and
operate its properties, and has been, and after giving effect to the
Acquisition pursuant to the terms of the Acquisition Documents, will be,
duly qualified and in good standing as a foreign corporation registered to
do business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires or will require such
qualification, except where the failure to be so qualified would not be
reasonably likely to have a material adverse effect on the condition
(financial or other), business, property, prospects, net worth or results
of operations of the Company (a "MATERIAL ADVERSE EFFECT"). All of the
outstanding capital stock of the Company has been, and after giving effect
to the Acquisition pursuant to the terms of the Acquisition Documents, will
be, duly authorized and validly issued, fully paid and nonassessable and
not subject to preemptive or similar rights other than as set forth in the
Operative Documents. The Company has, and after giving effect to the
Acquisition pursuant to the terms of the Acquisition Documents, will have,
all necessary corporate power and authority to enter into and perform its
obligations under the Operative Documents and to issue, sell and deliver
the Series A Notes to the Initial Purchasers. The Company has, and after
giving effect to the Acquisition pursuant to the terms of the Acquisition
Documents, will have, no subsidiaries.
(c) The Company is not, and after giving effect to the Acquisition,
will not be, in violation of its charter or bylaws or in default in any
material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, indenture or instrument material to
the conduct of the business of the Company to which the Company is a party
or by which the Company or its property is bound.
(d) The execution, delivery and performance of the Operative Documents
by the Company, compliance by the Company with the provisions of the
Operative Documents and the Series A Notes, and the consummation of the
transactions contemplated by the Operative Documents and the Series A Notes
does not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, or result in the imposition of a lien or
encumbrance on any properties of the Company or an acceleration of
indebtedness pursuant to, (i) the charter or bylaws of the Company, (ii)
any bond, debenture, note, indenture, mortgage, deed of trust or other
agreement or instrument to which the Company is a party or by which the
Company or its property is bound, or (iii) any law or administrative
regulation applicable to the Company or any of its assets or properties, or
any judgment, order or decree of any court or governmental agency
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or authority entered in any proceeding to which the Company was or is now a
party or to which the Company or its properties may be subject, except, in
the case of clauses (ii) and (iii), for any such conflict, breach, default
or imposition of a lien that would not be reasonably likely to have a
Material Adverse Effect. No consent, approval, authorization or order of,
or filing or registration with, any regulatory body, administrative agency,
or other governmental agency (except as securities or Blue Sky laws of the
various states may require) that has not been made or obtained is required
for the execution, delivery and performance of the Operative Documents and
the valid issuance and sale of the Series A Notes. No consents or waivers
from any person are required to consummate the transactions contemplated by
the Operative Documents and the Offering Documents other than such consents
and waivers as have been or, prior to the Closing Date, will be obtained,
except where the failure to obtain any such consents or waivers,
individually or in the aggregate, would not be reasonably likely to have a
Material Adverse Effect or adversely effect the ability to consummate the
Transactions.
(e) This Agreement has been duly authorized and validly executed by
each of the Company and (assuming the due execution and delivery thereof by
the Initial Purchasers) is a legally valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as the enforceability thereof may be (i) subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws in
effect which affect the enforcement of creditors rights generally, (ii)
limited by general principles of equity (whether considered in a proceeding
at law or in equity) and (iii) limited by securities laws prohibiting or
limiting the availability of, and public policy against, indemnification or
contribution.
(f) Each of the Company, Holdings and the Stockholders, as applicable,
has duly authorized the Acquisition Documents, and, when the Company,
Holdings and the Stockholders, as applicable, have duly executed and
delivered the Acquisition Documents, the Acquisition Documents will be a
legally valid and binding obligation of each of the Company, Holdings and
the Stockholders, as applicable, enforceable against each of them in
accordance with their terms, except as the enforceability thereof may be
(i) subject to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect which affect the enforcement of
creditors rights generally and (ii) limited by general principles of equity
(whether considered in a proceeding at law or in equity).
(g) The Company has duly authorized the Indenture, and when the
Company has duly executed and delivered it (assuming the due authorization,
execution and delivery thereof by the Trustee), the Indenture will be a
legally valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as the enforceability
thereof may be (i) subject to applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws in effect which affect the
enforcement of creditors rights generally and (ii) limited by general
principles of equity (whether considered in a proceeding at law or in
equity).
(h) The Company has duly authorized the Series A Notes and, when
issued and authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with the
terms hereof, the Series A Notes will conform to the description thereof in
the Offering Memorandum, and will be legally valid and binding obligations
of the Company, enforceable against the Company in accordance with their
terms, except as the enforceability thereof may be (i) subject to
applicable bankruptcy, insolvency, moratorium, reorganization or similar
laws in effect which affect the enforcement of creditors rights generally
and (ii) limited by general principles of equity (whether considered in a
proceeding at law or in equity).
9
(i) The Company has duly authorized the Series B Notes and, when
issued and authenticated in accordance with the terms of the Registration
Rights Agreement and the Indenture, the Series B Notes will conform to the
description thereof in the Offering Memorandum, and will be legally valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforceability thereof may be
(i) subject to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect which affect the enforcement of
creditors rights generally and (ii) limited by general principles of equity
(whether considered in a proceeding at law or in equity).
(j) The Company has duly authorized the Registration Rights Agreement,
and when the Company has executed and delivered it (assuming the due
execution and delivery thereof by the Initial Purchasers), the Registration
Rights Agreement will be a legally valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as the enforceability thereof may be (i) subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws in
effect which affect the enforcement of creditors rights generally, (ii)
limited by general principles of equity (whether considered in a proceeding
at law or in equity) and (iii) limited by securities laws prohibiting or
limiting the availability of, and public policy against, indemnification or
contribution.
(k) There is, and after giving effect to the Acquisition pursuant to
the terms of the Acquisition Documents, will be, (i) no action, suit or
proceeding before or by any court, arbitrator or governmental agency, body
or official, domestic or foreign, now pending or, to the knowledge of the
Company, threatened or contemplated to which the Company is or may be a
party or to which the business or property of the Company is or may be
subject, (ii) no statute, rule, regulation or order that has been enacted,
adopted or issued by any governmental agency or, to the best knowledge of
the Company, proposed by any governmental body and (iii) no injunction,
restraining order or order of any nature issued by a federal or state court
of competent jurisdiction to which the Company is or may be subject that,
in the case of clauses (i), (ii) and (iii) above, (A) is required to be
disclosed in the Offering Memorandum and that is not so disclosed, (B)
would be reasonably likely to have a Material Adverse Effect, (C) would
interfere with or adversely affect the issuance of the Series A Notes or
the consummation of the Acquisition or (D) in any manner draw into question
the validity of the Operative Documents or the Series A Notes.
(l) Following consummation of the Transactions, no holder of any
security of the Company has any right to require registration of any
security of the Company.
(m) The Company is not, and after giving effect to the Acquisition
pursuant to the terms of the Acquisition Documents, will not be, involved
in any material labor dispute nor, to the knowledge of the Company, is any
material dispute threatened which, if such dispute were to occur, would be
reasonably likely to have a Material Adverse Effect.
(n) The Company has not, and after giving effect to the Acquisition,
will not have, violated any safety or similar law applicable to its
business, nor any federal or state law relating to discrimination in the
hiring, promotion or pay of employees nor any applicable federal or state
wages and hours laws, nor any provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or the rules and regulations
promulgated thereunder, except for such instances of noncompliance that,
either singly or in the aggregate, would not be reasonably likely to have a
Material Adverse Effect.
10
(o) Except as set forth in the Offering Memorandum, the Company is,
and after giving effect to the Acquisition, will be, in compliance with all
applicable existing federal, state, local and foreign laws and regulations
(collectively, "ENVIRONMENTAL LAWS") relating to protection of human health
or the environment or imposing liability or standards of conduct concerning
any Hazardous Material (as defined below), except for such instances of
noncompliance that, either singly or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect. The term "HAZARDOUS
MATERIAL" means (i) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, (ii) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (iii) any petroleum or petroleum
product, (iv) any polychlorinated biphenyl and (v) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material, waste or
substance regulated under or within the meaning of any other Environmental
Law. Except as set forth in the Offering Memorandum, there is, and after
giving effect to the Acquisition, there will be, to the best knowledge and
information of the Company, no alleged or potential liability (including,
without limitation, alleged or potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resources damages,
property damages, personal injuries, or penalties) of the Company arising
out of, based on, or resulting from (1) the presence or release into the
environment of any Hazardous Material at any location currently or
previously owned by the Company or at any location currently or previously
used or leased by the Company, or (2) any violation or alleged violation of
any Environmental Law, except in each case with respect to clause (1) and
(2), alleged or potential liabilities that, singly or in the aggregate,
would not be reasonably likely to have a Material Adverse Effect.
(p) The Company owns or possesses, and after giving effect to the
Acquisition pursuant to the terms of the Acquisition Documents, will own
and possess, the patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names (collectively, "INTELLECTUAL
PROPERTY") presently or proposed to be employed by it in connection with
the businesses now or proposed to be operated by it, except where the
failure to own or possess such Intellectual Property would not, either
singly or in the aggregate, be reasonably likely to have a Material Adverse
Effect, and the Company has not received any notice that its use of any
Intellectual Property allegedly infringes upon, or conflicts with, rights
asserted by others, except for such instances that, singly or in the
aggregate, would not be reasonably likely to have a Material Adverse Effect
if an unfavorable decision, judgment, ruling or finding is rendered against
the Company.
(q) All income tax returns required to be filed by the Company in any
jurisdiction have been, and after giving effect to the Acquisition pursuant
to the terms of the Acquisition Documents, will be, filed, and all material
taxes (including, but not limited to, withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be due from
any taxing authority) have been paid other than those (i) being contested
in good faith and for which adequate reserves have been provided, or (ii)
currently payable without penalty or interest.
(r) Except as set forth in the Offering Memorandum or that, singly or
in the aggregate, would not be reasonably likely to have a Material Adverse
Effect, (i) the Company has, and after giving effect to the Acquisition
pursuant to the terms of the Acquisition Documents, will have, (1) such
permits, licenses, franchises and authorizations of governmental or
regulatory authorities ("PERMITS") as are necessary to own, lease and
operate its respective properties and to conduct its business as presently
conducted, and (2) fulfilled and performed all of its material obligations
with respect to the Permits, and (ii) no event has occurred that would
11
allow, or after notice or lapse of time would allow, revocation or
termination of any Permit or that would result in any other material
impairment of the rights granted to the Company under any Permit, and the
Company has no reason to believe that any governmental body or agency is
considering limiting, suspending or revoking any Permit.
(s) Except as set forth in the Offering Memorandum or that, singly or
in the aggregate, would not be reasonably likely to have a Material Adverse
Effect, (i) the Company has, and after giving effect to the Acquisition
pursuant to the terms of the Acquisition Documents, will have, good and
marketable title, free and clear of all liens, claims, encumbrances and
restrictions except liens for taxes not yet due and payable, to all
property and assets described in the Offering Memorandum as being owned by
it, (ii) each lease to which the Company is a party is, and after giving
effect to the Acquisition pursuant to the terms of the Acquisition
Documents, will be, valid and binding and no default has occurred or is
continuing thereunder and (iii) the Company enjoys, and after giving effect
to the Acquisition pursuant to the terms of the Acquisition Documents, will
enjoy, peaceful and undisturbed possession under all such leases to which
it is a party as lessee.
(t) The Company maintains adequate insurance for its businesses and
the value of its properties (including, without limitation, public
liability insurance, third party property damage insurance and replacement
value insurance), and all such insurance is outstanding and in force as of
the date hereof.
(u) The financial statements, together with related schedules and
notes forming part of the Offering Documents (and any amendment or
supplement thereto), present fairly the consolidated financial position,
results of operations and changes in financial position of the Company on
the basis stated in the Offering Documents at the respective dates or for
the respective periods to which they apply, and such financial statements
and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved, except as disclosed in the Offering Documents. The
other financial and statistical information and data set forth in the
Offering Documents (and any amendment or supplement thereto) is, in all
material respects, accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the Company.
(v) The Company maintains a system of internal accounting controls
sufficient to provide assurance that: (1) transactions are executed in
accordance with management's general or specific authorizations; (2)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to maintain accountability for assets; and (3) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(w) Subsequent to the dates for which information is given in the
Offering Documents and up to the Closing Date, unless set forth in the
Offering Memorandum: (1) the Company has not incurred any liabilities or
obligations, direct or contingent, which are material, individually or in
the aggregate, to the Company, nor entered into any material transactions
not in the ordinary course of business; (2) there has not been any decrease
in the Company's capital stock or any increase in long-term indebtedness to
meet working capital requirements or any material increase in short-term
indebtedness of the Company or any payment of or declaration to pay any
dividends or any other distribution with respect to the Company's capital
stock, as the case may be; and (3) there has not been any event or series
of events that would be reasonably likely to have a Material Adverse
Effect.
12
(x) Prior to the issuance of the Series A Notes, (i) the present fair
salable value of the assets of the Company exceeded and will exceed the
amount that will be required to be paid on, or in respect of, the Company's
debts and other liabilities (including contingent liabilities) as they
become absolute and matured, (ii) the assets of the Company do not
constitute and will not constitute unreasonably small capital to carry out
its business as conducted or as proposed to be conducted, and (iii) the
Company does not intend to, or believe that it will, incur debts or other
liabilities beyond its ability to pay such debts and liabilities as they
mature. Upon consummation of the Offering, and after giving effect to the
Acquisition pursuant to the terms of the Acquisition Documents, (x) the
present fair salable value of the assets of the Company will exceed the
amount that will be required to be paid on, or in respect of, the Company's
debts and other liabilities (including contingent liabilities) as they
become absolute and matured, (y) the assets of the Company will not
constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted, and (iii) the Company does not
intend to, or believe that it will, incur debts or other liabilities beyond
its ability to pay such debts and liabilities as they mature.
(y) Neither the Company, nor any agent thereof acting on its behalf,
has taken, and none of them will take any action that might cause this
Agreement or the issuance or sale of the Series A Notes to violate
Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of
the Board of Governors of the Federal Reserve System, in each case as in
effect now or as the same may hereafter be in effect on the Closing Date.
(z) The Company is not, and after giving effect to the Acquisition
pursuant to the terms of the Acquisition Documents, will not be, an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(aa) Each of Deloitte & Touche LLP and Donnelly Meiners Jordan Kline
are independent public accountants with respect to the Company as required
by the Act.
(ab) When the Series A Notes are issued and delivered pursuant to this
Agreement, such Series A Notes will not be of the same class (within the
meaning of Rule 144A under the Act) as securities of the Company that are
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that are quoted in a United States automated inter-dealer
quotation system.
(ac) Assuming (i) that the representations and warranties of the
Initial Purchasers in Section 7 hereof are true, (ii) that the
representations of the Accredited Institutions set forth in the
certificates of such Accredited Institutions in the form set forth in Annex
A to the Offering Memorandum are true, (iii) compliance by the Initial
Purchasers with their covenants set forth in Section 7 hereof and (iv) that
each of the Eligible Purchasers is a QIB or an Accredited Institution, the
purchase and resale of the Series A Notes pursuant hereto (including
pursuant to the Exempt Resales) is exempt from the registration
requirements of the Act. No form of general solicitation or general
advertising was used by the Company or any of its representatives (other
than the Initial Purchasers, as to whom the Company make no representation)
in connection with the offer and sale of the Series A Notes, including, but
not limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising. No securities of the same
class as the Series A Notes have
13
been issued and sold by the Company within the six-month period immediately
prior to the date hereof.
(ad) The execution and delivery of this Agreement and the other
Operative Documents and the sale of the Series A Notes to be purchased by
the Eligible Purchasers will not involve any prohibited transaction within
the meaning of Section 406 of ERISA or Section 4975 of the Code. The
representation made by the Company in the preceding sentence is made in
reliance upon and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by the Eligible
Purchasers as set forth in the Offering Documents under the section
entitled "Notice to Investors."
7. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASERS. Each Initial
Purchaser, severally and not jointly, represents and warrants to the Company as
follows:
(a) Such Initial Purchaser is either a QIB or an Accredited
Institution, in either case with such knowledge and experience in financial
and business matters as are necessary in order to evaluate the merits and
risks of an investment in the Series A Notes.
(b) Such Initial Purchaser (i) is not acquiring the Series A Notes
with a view to any distribution thereof or with any present intention of
offering or selling any of the Series A Notes in a transaction that would
violate the Act or the securities laws of any State of the United States or
any other applicable jurisdiction, (ii) will be reoffering and reselling
the Series A Notes only to QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A and to a limited
number of Accredited Institutions that execute and deliver a letter
containing certain representations and agreements in the form attached as
Annex A to the Offering Documents and (iii) has not solicited and, unless
and until the Series A Notes are registered under the Act, will not solicit
any offer to buy or offer to sell the Series A Notes by means of any form
of general solicitation or general advertising (as such terms are defined
in Regulation D under the Act) or in any manner involving a public offering
within the meaning of the Act.
(c) Such Initial Purchaser also understands that the Company and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant
hereto, counsel to the Company and counsel to the Initial Purchasers will
rely upon the accuracy and truth of the foregoing representations and the
Initial Purchasers hereby consent to such reliance.
(d) Such Initial Purchaser further agrees that, in connection with the
Exempt Resales, it will solicit offers to buy the Series A Notes only from,
and will offer to sell the Series A Notes only to, the Eligible Purchasers.
Such Initial Purchaser further agrees that it will offer to sell the Series
A Notes only to, and will solicit offers to buy the Series A Notes only
from, persons who in purchasing such Series A Notes will be deemed to have
represented and agreed (1) if such Eligible Purchaser is a QIB, that it is
purchasing the Series A Notes for its own account or an account with
respect to which it exercises sole investment discretion and that its or
such accounts are QIBs, (2) that such Series A Notes will not have been
registered under the Act and may be resold, pledged or otherwise
transferred, only (A) (I) inside the United States to a person who the
seller reasonably believes is a "qualified institutional buyer" within the
meaning of Rule 144A under the Act in a transaction meeting the
requirements of Rule 144A, (II) in a transaction meeting the requirements
of Rule 144 under the Act, (III) outside the United States to a foreign
person in a transaction meeting the requirements of Rule 904 under the Act
or (IV) in accordance with another exemption from the registration
requirements of the Act (and based upon an opinion
14
of counsel if the Company so requests), (B) to the Company or (C) pursuant
to an effective registration statement under the Act, in each case, in
accordance with any applicable securities laws of any State of the United
States or any other applicable jurisdiction, and (3) that the holder will,
and each subsequent holder is required to, notify any purchaser from it of
the security evidenced thereby of the resale restrictions set forth in (2)
above. Accordingly, each Initial Purchaser represents and agrees that
neither it, its affiliates nor any persons acting on its or their behalf
has engaged or will engage in any directed selling efforts within the
meaning of Rule 901(b) of Regulation S with respect to the Notes, and it,
its affiliates and all persons acting on its or their behalf have complied
and will comply with the offering restrictions requirements of Regulation
S.
(e) Such Initial Purchaser represents and agrees that the Notes
offered and sold in reliance on Regulation S have been and will be offered
and sold only in offshore transactions and that such securities have been
and will be represented upon issuance by a global security that may not be
exchanged for definitive securities until the expiration of the restricted
period (as defined in Regulation S) (except to the extent of any beneficial
owners thereof who acquired an interest therein pursuant to another
exemption from registration under the Act and who will take delivery of a
beneficial ownership interest in a Rule 144A Global Note (as defined in the
Indenture), as contemplated by the Indenture) and only upon certification
of beneficial ownership of the securities by a non-U.S. person or a U.S.
person who purchased such securities in a transaction that was exempt from
the registration requirements of the Act.
(f) Such Initial Purchaser agrees that, at or prior to confirmation of
a sale of Notes (other than a sale pursuant to Rule 144A, to Accredited
Institutions in accordance with Section 3(a)(ii) of this Agreement or
pursuant to Paragraph (i) of this Section 7), it will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Notes from it during the Restricted Period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the Act
and may not be offered and 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 or (ii) otherwise until 40 days after the
later of the commencement of the offering and the closing date, except
in either case in accordance with Regulation S (or Rule 144A if
available) under the Act. Terms used above have the meaning given to
them by Regulation S."
(g) Such Initial Purchaser further agrees that it has not entered and
will not enter into any contractual arrangement with respect to the
distribution or delivery of the Notes, except with its affiliates or with
the prior written consent of the Company.
(h) Notwithstanding the foregoing, Notes in registered form may be
offered, sold and delivered by such Initial Purchaser in the United States
and to U.S. persons pursuant to Section 3 of this Agreement without
delivery of the written statement required by paragraph (f) of this Section
7.
(i) Such Initial Purchaser further represents and agrees that (i) it
has not offered or sold and will not offer or sell any Notes to persons in
the United Kingdom prior to the expiry of the period of six months from the
issue date of the Notes, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments
(as principal
15
or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to
the public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995, (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Notes in, from or otherwise
involving the United Kingdom, and (iii) it has only issued or passed on and
will only issue or pass on in the United Kingdom any document received by
it in connection with the issuance of the Notes to a person who is of a
kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 or is a person to whom
the document may otherwise lawfully be issued or passed on.
(j) Such Initial Purchaser agrees that it will not offer, sell or
deliver any of the Notes 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 Notes in such
jurisdictions. Such Initial Purchaser understands that no action has been
taken to permit a public offering in any jurisdiction outside the United
States where action would be required for such purpose.
(k) Such Initial Purchaser agrees not to cause any advertisement of
the Notes to be published in any newspaper or periodical or posted in any
public place and not to issue any circular relating to the Notes, except
such advertisements that include the statements required by Regulation S.
(l) The sale of the Series A Notes in offshore transactions pursuant
to Regulation S is not part of a plan or scheme to evade the registration
provisions of the Act.
Terms used in this Section 7 that have meanings assigned to them in
Regulation S are used herein as so defined.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Initial
Purchaser and each person, if any, who controls either Initial Purchaser
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages, liabilities and
judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Documents (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to
state therein a 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, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to such Initial Purchaser furnished in writing to the Company by
such Initial Purchaser expressly for use therein; provided, however, that
the indemnification contained in this paragraph (a) with respect to the
Preliminary Offering Memorandum shall not inure to the benefit of either
Initial Purchaser (or to the benefit of any person controlling such Initial
Purchaser) on account of any such loss, claim, damage, liability or
judgment (i) arising from the sale of the Series A Notes by such Initial
Purchaser to any person if a copy of the Offering Memorandum shall not have
been delivered or sent to such person, at or prior to the written
confirmation of such sale, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in
the Preliminary Offering Memorandum was corrected in the Offering
Memorandum, provided that the Company has delivered the Offering Memorandum
to the Initial
16
Purchasers in requisite quantity on a timely basis to permit such delivery
or sending or (ii) resulting from the use by such Initial Purchaser of any
offering memorandum, registration statement or prospectus, or any amendment
or supplement thereto, referred to in Section 5(e) hereof when, under
Section 11 hereof, such Initial Purchaser was not permitted to do so;
provided further, however, that the foregoing exceptions in clauses (i) and
(ii) shall not affect the indemnity with respect to any other Initial
Purchaser not otherwise subject to such exceptions.
(b) In case any action shall be brought against either Initial
Purchaser or any person controlling such Initial Purchaser, based upon any
Offering Document or any amendment or supplement thereto and with respect
to which indemnity may be sought against the Company, such Initial
Purchaser shall promptly notify the Company in writing, and the Company
shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees
and expenses. Either Initial Purchaser or any such controlling person shall
have the right to employ separate counsel in any such action and
participate in the defense thereof, but the reasonable fees and expenses of
such counsel shall be at the expense of such Initial Purchaser or such
controlling person unless (i) the employment of such counsel has been
specifically authorized in writing by the Company, (ii) the Company has
failed to assume the defense and employ counsel or (iii) the named parties
to any such action (including any impleaded parties) include both such
Initial Purchaser or such controlling person and the Company, and such
Initial Purchaser or such controlling person shall have been advised by
such counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to the Company
(in which case the Company shall not have the right to assume the defense
of such action on behalf of such Initial Purchaser or such controlling
person, it being understood, however, that the Company shall not, in
connection with any one such action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel) for
all such Initial Purchasers and controlling persons, which firm shall be
designated in writing by DLJ, and that all such fees and expenses shall be
reimbursed as they are incurred). The Company shall not be liable for any
settlement of any such action effected without the written consent of the
Company, but if settled with the Company's written consent, the Company
agrees to indemnify and hold harmless the Initial Purchasers and any such
controlling person from and against any loss or liability by reason of such
settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding.
(c) Each Initial Purchaser agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors and officers, and
any person controlling them within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act (collectively the "ISSUER INDEMNIFIED
PARTIES"), to the same extent as the foregoing indemnity from the Company
to each Initial Purchaser but only with reference to information relating
to such Initial Purchaser furnished in writing by such Initial Purchaser
expressly for use in the Offering Documents. In case any action shall be
brought against any Issuer Indemnified Party in respect of which indemnity
may be sought against an Initial Purchaser, such Initial Purchaser shall
have the rights and duties given to the Company (except that if the Company
shall have assumed the defense thereof, such Initial Purchaser shall not be
required to do so, but may employ separate counsel therein and participate
in the defense thereof but the fees and expenses of such counsel shall be
17
at the expense of such Initial Purchaser), and the Issuer Indemnified
Parties shall have the rights and duties given to such Initial Purchaser by
Section 8(b) hereof.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities and judgments (i) in
such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Initial Purchasers on the other hand
from the offering of the Series A Notes or (ii) if the allocation provided
by clause (i) above 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 Initial
Purchasers in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well as any
other relevant equitable considerations. The relative benefits received by
the Company and the Initial Purchasers shall be deemed to be in the same
proportion as the total proceeds from the offering of the Series A Notes
(before deducting expenses) received by the Company, and the total
discounts and commissions received by the Initial Purchasers, bear to the
total price to investors of the Series A Notes, in each case as set forth
in the table on the cover page of the Offering Memorandum. The relative
fault of the Company and the Initial Purchasers shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the Company or the Initial Purchasers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this paragraph were determined by
pro rata allocation (even if the Initial Purchasers were treated as one
entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the
immediately preceding paragraph. The losses, claims, damages, liabilities
or judgments of an indemnified party referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, no
Initial Purchaser shall be required to contribute any amount in excess of
the amount by which the discounts and commissions received by it exceeds
the amount of any damages which such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to
contribute pursuant to this Section 8(d) are several in proportion to the
respective principal amount of Series A Notes purchased by each of the
Initial Purchasers hereunder and not joint.
(e) The Company hereby designates The Jordan Company, 9 West 57th
Street, New York, New York 10019, as its authorized agent, upon which
process may be served in any action, suit or proceeding which may be
instituted in any state or federal court in the State of New York by any
Initial Purchaser or person controlling such Initial Purchaser asserting a
claim for indemnification or contribution under or pursuant to this Section
8, and the Company will accept the jurisdiction of such court in such
action, and waive, to the fullest extent permitted by applicable law, any
defense based upon lack of personal jurisdiction or venue. A copy of any
18
such process shall be sent or given to the Company, at the address for
notices specified in Section 11(a) hereof.
(f) The indemnity and contribution agreements contained in this
Section 8 are in addition to any liability which the indemnifying persons
may otherwise have to the indemnified persons referred to above.
9. CONDITIONS OF THE INITIAL PURCHASERS' OBLIGATIONS. The several
obligations of the Initial Purchasers to purchase the Series A Notes under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date. The Company
shall have performed or complied with all of the agreements and satisfied
all conditions to be performed, complied with or satisfied by it under this
Agreement on or prior to the Closing Date.
(b) (1) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 9:00 a.m., New York
City time, on the second business day following the date of this Agreement,
or at such later date and time as the Initial Purchasers may approve in
writing;
(2) no injunction, restraining order or order of any nature by a
federal or state court of competent jurisdiction shall have been
issued as of the Closing Date which would prevent the issuance of the
Series A Notes; and
(3) at the Closing Date, (i) no stop order preventing the use of
the Offering Documents, or any amendment or supplement thereto, or
suspending the qualification or exemption from qualification of the
Series A Notes for sale in any jurisdiction designated by the Initial
Purchasers pursuant to Section 5(f) hereof shall have been issued and
no proceedings for that purpose shall have been commenced or shall be
pending before or, to the knowledge of the Company, be contemplated.
(c) (1) Since the date of the latest balance sheet included in the
Offering Documents, there shall not have been any event that had a Material
Adverse Effect, or any development involving a prospective change that
would be reasonably likely to have a Material Adverse Effect, whether or
not arising in the ordinary course of business;
(2) since the date of the latest balance sheet included in the
Offering Documents, there has not been any change, or any development
involving a prospective change, in the capital stock or in the
long-term debt of the Company from that set forth in the Offering
Documents;
(3) the Company shall have no material liability or obligation,
direct or contingent, other than those reflected in the Offering
Memorandum; and
(4) on the Closing Date, the Initial Purchasers shall have
received a certificate dated the Closing Date, signed on behalf of the
Company by John Menghini and Robert Shaw, in their capacities as
President and Senior Vice President, Finance and Human Resources,
respectively, of the Company, confirming all matters set forth in
19
Sections 9(a), (b), and (c) hereof.
(d) The Initial Purchasers shall have received on the Closing Date an
opinion (satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers) dated the Closing Date, of Mayer, Brown & Platt, counsel for
the Company, to the effect that:
(1) The Company has all necessary corporate power and authority
to enter into and perform its obligations under the Operative
Documents (other than the Acquisition Documents) and to issue, sell
and deliver the Series A Notes to the Initial Purchasers to be sold by
the Initial Purchasers pursuant hereto;
(2) No consent, approval, authorization or order of, or filing or
registration with, any regulatory body, administrative agency, or
other governmental agency (except as securities or Blue Sky laws of
the various states may require) which has not been made or obtained is
required for the execution, delivery and performance of the Operative
Documents (other than the Acquisition Documents) and the valid
issuance and sale of the Series A Notes to the Initial Purchasers as
contemplated by this Agreement or the offering of the Series A Notes
as contemplated by the Offering Memorandum, except where the failure
to obtain any such consents or waivers, individually or in the
aggregate, would not be reasonably likely to have a Material Adverse
Effect or adversely effect the ability to consummate the Transactions;
(3) To the best of such counsel's knowledge, no consents or
waivers from any person are required to consummate the transactions
contemplated by the Operative Documents (other than the Acquisition
Documents) or the Offering Documents other than such consents and
waivers as have been or will be obtained;
(4) This Agreement has been duly authorized and validly executed
by the Company and (assuming the due execution and delivery thereof by
the Initial Purchasers) is a legally valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms, except as the enforceability thereof may be (i) subject to
applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect which affect the enforcement of creditors
rights generally, (ii) limited by general principles of equity
(whether considered in a proceeding at law or in equity) and (iii)
limited by securities laws prohibiting or limiting the availability
of, and public policy against, indemnification or contribution;
(5) The Company has duly authorized, executed and delivered the
Indenture, and (assuming due authorization, execution and delivery
thereof by the Trustee) the Indenture is a legally valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability thereof may be
(i) subject to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect which affect the enforcement
of creditors rights generally and (ii) limited by general principles
of equity (whether considered in a proceeding at law or in equity);
(6) The Company has duly authorized the Series A Notes and, when
issued and authenticated in accordance with the terms of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance
with the terms hereof, the Series A Notes will conform to the
description thereof in the Offering Memorandum, and will be the
legally valid and binding obligations of the Company, enforceable
against the Company in
20
accordance with their terms, except as the enforceability thereof may
be (i) subject to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect which affect the enforcement
of creditors rights generally and (ii) limited by general principles
of equity (whether considered in a proceeding at law or in equity);
(7) The Company has duly authorized the Series B Notes and, when
issued and authenticated in accordance with the terms of the
Registration Rights Agreement and the Indenture, the Series B Notes
will conform to the description thereof in the Offering Memorandum,
and will be the legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
as the enforceability thereof may be (i) subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws in
effect which affect the enforcement of creditors rights generally and
(ii) limited by general principles of equity (whether considered in a
proceeding at law or in equity);
(8) The Company has duly authorized, executed and delivered the
Registration Rights Agreement, and (assuming the due execution and
delivery thereof by the Initial Purchasers) the Registration Rights
Agreement is a legally valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except
as the enforceability thereof may be (i) subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws in
effect which affect the enforcement of creditors rights generally,
(ii) limited by general principles of equity (whether considered in a
proceeding at law or in equity) and (iii) limited by securities laws
prohibiting or limiting the availability of, and public policy
against, indemnification or contribution;
(9) The statements under the captions "Certain Transactions,"
"Description of Notes," "Description of Certain Indebtedness," and
"Certain U.S. Federal Income Tax Considerations" in the Offering
Memorandum, insofar as such statements constitute a summary of legal
matters, documents or proceedings referred to therein, are correct in
all material respects;
(10) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(11) When the Series A Notes are issued and delivered pursuant to
this Agreement, such Series A Notes will not be of the same class
(within the meaning of Rule 144A under the Act) as securities of the
Company that are listed on a national securities exchange registered
under Section 6 of the Exchange Act or that are quoted in a United
States automated inter-dealer quotation system;
(12) The Indenture is not required to be qualified under the
Trust Indenture Act prior to the first to occur of (i) the Registered
Exchange Offer and (ii) the effectiveness of the Shelf Registration
Statement;
(13) No registration under the Act of the Series A Notes is
required for the sale of the Series A Notes to the Initial Purchasers
as contemplated hereby or for the Exempt Resales (assuming (i) that
the Eligible Purchasers who buy the Series A Notes in the Exempt
Resales are QIBs or Accredited Institutions, (ii) the accuracy of, and
21
compliance with, the representations of the Initial Purchasers and
those of the Company contained in Sections 6 and 7 hereof and (iii)
the accuracy of the representations made by each Accredited
Institution who purchases Series A Notes pursuant to an Exempt Resale
as set forth in the letters of representation executed by such
Accredited Institutions in the form of Annex A to the Offering
Memorandum).
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, the
Initial Purchasers' representatives and counsel for the Initial Purchasers,
at which conferences the contents of the Offering Memorandum and related
matters were discussed, and, although such counsel is not passing upon and
assumes no responsibility for the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum, and have not made any
independent check or verification thereof, during the course of such
participation (relying as to materiality to the extent such counsel deemed
appropriate upon the statements of officers and other representatives of
the Company), no facts came to such counsel's attention that caused such
counsel to believe that the Offering Memorandum, as of its date, contained
an untrue statement of material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; it being understood that such counsel expresses no belief
with respect to the financial statements, schedules and other financial and
statistical data included in the Offering Memorandum or incorporated
therein.
(e) The Initial Purchasers shall have received on the Closing Date an
opinion (satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers) dated the Closing Date of Bryan Cave LLP, counsel for the
Company, to the effect that:
(1) The Company is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation, has full corporate power and authority to carry on its
respective business as it is currently being conducted and to own,
lease and operate its respective properties, and, to the best of such
counsel's knowledge, is duly qualified and is in good standing as a
foreign corporation registered to do business in each jurisdiction in
which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be
so qualified would not be reasonably likely to have a Material Adverse
Effect;
(2) All of the outstanding capital stock of the Company has been
duly authorized and validly issued and is fully paid and nonassessable
and is not subject to preemptive or similar rights;
(3) The Company has all necessary corporate power and authority
to enter into and perform its obligations under the Acquisition
Documents;
(4) The Company is not in violation of its charter or bylaws,
and, to the best knowledge of such counsel after due inquiry, the
Company is not in default in the performance of any obligation,
agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any other agreement, indenture or
instrument material to the conduct of the business of the Company, to
which the Company is a party or by which the Company or its property
is bound;
(5) The execution, delivery and performance of the Operative
Documents by the Company, compliance by the Company with the
provisions thereof and the Series A
22
Notes, and the consummation of the transactions contemplated hereby
and thereby does not conflict with or constitute a breach of any of
the terms or provisions of, or a default under, or result in the
imposition of a lien or encumbrance on any properties of the Company,
or an acceleration of indebtedness pursuant to, (1) the charter or
bylaws of the Company, (2) any bond, debenture, note, indenture,
mortgage, deed of trust or other agreement or instrument known to such
counsel after due inquiry to which the Company is a party or by which
the Company or any of its property is bound, or (3) to the best of
such counsel's knowledge, any law or administrative regulation
applicable to the Company or any of its assets or properties, or any
judgment, order or decree of any court or governmental agency or
authority entered in any proceeding to which the Company was or is now
a party or to which the Company or any of its property may be subject;
(6) No consent, approval, authorization or order of, or filing or
registration with, any regulatory body, administrative agency, or
other governmental agency (except as securities or Blue Sky laws of
the various states may require) which has not been made or obtained is
required for the execution, delivery and performance of the
Acquisition Documents, except where the failure to obtain any such
consents or waivers, individually or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect or adversely
effect the ability to consummate the Transactions;
(7) To the best of such counsel's knowledge, no consents or
waivers from any person are required to consummate the transactions
contemplated by the Acquisition Documents other than such consents and
waivers as have been or will be obtained;
(8) To the best knowledge of such counsel, after due inquiry,
there is (i) no action, suit or proceeding before or by any court,
arbitrator or governmental agency, body or official, domestic or
foreign, now pending, threatened or contemplated to which the Company
is or may be a party or to which the business or property of the
Company is or may be subject, (ii) no statute, rule, regulation or
order that has been enacted, adopted or issued by any governmental
agency or proposed by any governmental body, or (iii) no injunction,
restraining order or order of any nature by a federal or state court
of competent jurisdiction applicable to the Company has been issued
that, in the case of clauses (i), (ii) and (iii) above, (a) is
required to be disclosed in the Offering Memorandum and that is not so
disclosed, (b) would interfere with or adversely affect the issuance
of the Series A Notes or the consummation of the Acquisition, or (c)
might invalidate any provision or the validity of the Operative
Documents or the Series A Notes;
(9) To the best knowledge of such counsel, there is no contract
or document concerning the Company of a character required to be
described in the Offering Memorandum that is not so described or filed
in a registration statement on Form S-4 if the Senior Notes were
registered pursuant to the Act;
(10) To the best knowledge of such counsel, after due inquiry,
following consummation of the Transactions, no holder of any security
of the Company has any right to require registration of any of the
Company's securities;
(f) The Initial Purchasers shall have received copies, addressed to
the Initial
23
Purchasers, of each opinion of counsel to the Company or Holdings delivered
in connection with the Transactions, including, without limitation, in
connection with the Acquisition and the New Credit Agreement.
(g) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, of Latham & Watkins, in form and substance
satisfactory to the Initial Purchasers, and the Company shall have provided
Latham & Watkins such papers and information as it requests to enable it to
pass upon the matters contained in such opinion.
(h) The Initial Purchasers shall have received letters from each of
Deloitte & Touche LLP and Donnelly Meiners Jordan Kline, independent public
accountants, on the date hereof and, in the case of Deloitte & Touche LLP,
on the Closing Date, in form and substance satisfactory to the Initial
Purchasers, with respect to the financial statements and certain financial
information contained in the Offering Memorandum.
(i) All Acquisition Documents shall have been entered into by the
parties thereto, and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof and of all other documents and
agreements entered into in connection therewith. Each condition to the
closing contemplated by the Acquisition Documents shall have been satisfied
or, with the Initial Purchasers' specific approval, waived. There shall
exist at and as of the Closing Date (after giving effect to the
transactions contemplated by this Agreement) no condition that would
constitute a default (or an event that with notice or the lapse of time, or
both, would constitute a default) under the Acquisition Documents. Prior
to, or simultaneously with, the closing of the Offering, the Acquisition
pursuant to the terms of the Acquisition Documents shall have been
consummated on terms that conform in all material respects to the
description thereof in the Offering Documents, and the Initial Purchasers
shall have received true and correct copies of all documents pertaining
thereto and evidence satisfactory to the Initial Purchasers of the
consummation thereof.
(j) The Acquisition shall have been consummated, and the Company shall
have delivered to you evidence satisfactory to you that the Acquisition has
been consummated.
(k) The Company shall have entered into the New Credit Agreement on or
prior to the Closing Date.
(l) The Company shall have entered into the Registration Rights
Agreement on or prior to the Closing Date.
(m) The Company shall have obtained all necessary consents to the
Acquisition from its licensors in connection with its licensing agreements
described in the Offering Memorandum, except to the extent that failure to
obtain such consents, singly or in the aggregate, would not be reasonably
likely to have a Material Adverse Effect, and the Company shall have
delivered to you evidence satisfactory to you that all such consents have
been obtained.
(n) The Company shall have performed or complied in all material
respects with any of the agreements herein contained and required to be
performed or complied with by the Company on or prior to the Closing Date.
10. EFFECTIVE DATE OF AGREEMENT AND TERMINATION. This Agreement shall
become effective at the time that the Company and the Initial Purchasers execute
this Agreement.
24
The Initial Purchasers may terminate this Agreement at any time prior to
the Closing Date by written notice to the Company if any of the following has
occurred:
(a) since the respective dates as of which information is given in the
Offering Documents, any adverse change or development involving a
prospective adverse change, whether or not arising in the ordinary course
of business, which would, in the Initial Purchasers' judgment, make it
impracticable to market the Series A Notes on the terms and in the manner
contemplated in the Offering Documents;
(b) any outbreak or escalation of hostilities or other national or
international calamity or crisis or material change in economic conditions,
if the effect of such outbreak, escalation, calamity, crisis or change on
the financial markets of the United States or elsewhere would, in the
Initial Purchasers' judgment, make it impracticable to market the Series A
Notes on the terms and in the manner contemplated in the Offering
Documents;
(c) the suspension or material limitation of trading in securities on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market or limitation on prices for securities on any such
exchange;
(d) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in the Initial Purchasers' opinion causes or
could cause a Material Adverse Effect;
(e) the declaration of a banking moratorium by either federal or New
York State authorities;
(f) the taking of any action by any federal, state or local government
or agency in respect of its monetary or fiscal affairs which in the Initial
Purchasers' opinion has a material adverse effect on the financial markets
in the United States; or
(g) any of the Company's securities shall have been downgraded or
placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization, provided that in the case of
such "watch list" placement, termination shall be permitted only if such
placement would, in the judgment of the Initial Purchasers, make it
impracticable or inadvisable to market the Series A Notes or to enforce
contracts for the sale of the Series A Notes or materially impair the
investment quality of the Series A Notes.
If on the Closing Date, either of the Initial Purchasers shall fail or
refuse to purchase the Series A Notes which it has agreed to purchase hereunder
on such date and arrangements satisfactory to the Company for purchase of such
Series A Notes are not made within 48 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Initial
Purchaser. In any such case that does not result in termination of this
Agreement, the Company shall have the right to postpone the Closing Date, but in
no event for longer than seven days, in order that the required changes, if any,
in the Offering Memorandum or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Initial Purchaser from liability in respect of any default by it under this
Agreement.
11. MISCELLANEOUS.
(a) Notices given pursuant to any provision of this Agreement shall be
addressed as
25
follows: (i) if to the Company, The Jordan Company, 9 West 57th Street,
40th Floor, New York, New York 10019, Attention: A. Richard Caputo, Jr. and
(ii) if to the Initial Purchasers, c/o Donaldson, Lufkin & Jenrette
Securities Corporation, 277 Park Avenue, New York, New York 10172,
Attention: Syndicate Department, or in any case to such other address as
the person to be notified may have requested in writing.
(b) The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company and the
Initial Purchasers set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of
and payment for the Series A Notes, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of any such
person, (ii) acceptance of the Series A Notes and payment for them
hereunder and (iii) termination of this Agreement.
(c) Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Initial Purchasers, any controlling persons referred to herein and their
respective successors and assigns, all as and to the extent provided in
this Agreement, and no other person shall acquire or have any right under
or by virtue of this Agreement. The term "successors and assigns" shall not
include a purchaser of any of the Series A Notes from any of the several
Initial Purchasers merely because of such purchase.
(d) This Agreement shall be construed, interpreted and the rights of
the parties determined in accordance with the laws of the State of New York
without reference to its choice of law provisions.
(e) This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
[SIGNATURE PAGE IS THE NEXT PAGE]
SCHEDULE I
----------
PRINCIPAL AMOUNT
OF SERIES A SENIOR
INITIAL PURCHASER NOTES TO BE PURCHASED
- ----------------- ---------------------
Donaldson, Lufkin & Jenrette
Securities Corporation................................. $75,000,000
Jefferies & Company, Inc.................................. 50,000,000
------------
$125,000,000
============
28
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Initial Purchasers.
Very truly yours,
GFSI, INC.
By: /s/ Illegible
-------------------------------
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: ___________________________________
Name:
Title:
JEFFERIES & COMPANY, INC.
By: ___________________________________
Name:
Title: