Exhibit 10.1
EXECUTION COPY
SPECIALTY RETAILERS, INC.
$18,353,000 11% Series C Senior Subordinated Notes due 2003
PURCHASE AGREEMENT
July 20, 1995
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
Specialty Retailers, Inc., a Delaware corporation (the "COMPANY"), and
its subsidiary, Palais Royal, Inc., a Texas corporation (the "GUARANTOR"), agree
with you as follows:
1. ISSUANCE OF SERIES C SENIOR SUBORDINATED NOTES. The Company proposes
to issue and sell to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation ("DLJ")
an aggregate of $18,353,000 principal amount of the Company's 11% Series C
Senior Subordinated Notes due 2003 (the "SERIES C SENIOR SUBORDINATED NOTES").
The Series C Senior Subordinated Notes and the 11% Series D Senior Subordinated
Notes due 2003 (the "SERIES D SENIOR SUBORDINATED NOTES" and, together with the
Series C Senior Subordinated Notes, the "SECURITIES") are to be issued pursuant
to an indenture (the "INDENTURE") by the Company and The First National Bank of
Boston, a national banking association, as trustee. On the Closing Date (as
defined below), the Company shall issue the Master Senior Subordinated Note (as
defined below) and the Individual Senior Subordinated Notes (as defined below)
representing the Series C Senior Subordinated Notes to be purchased hereunder,
which will be dated as of the Closing Date, will bear interest from the Closing
Date and will otherwise be in the form of Exhibit A to the Indenture.
The Series C Senior Subordinated Notes will be offered and sold to you
pursuant to an exemption from the registration requirements under the Securities
Act of 1933, as amended (the "ACT"). The Company has prepared an offering
circular, dated July 19, 1995 and a final offering circular dated July 20, 1995
(collectively, the "OFFERING CIRCULAR"), relating to the Company and the Series
C Senior Subordinated 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 C
Senior Subordinated Notes shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX
XXXXXX XXXXXX 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 FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
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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, IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144, OR 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), (b) TO THE
COMPANY, (c) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR (d)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, AND (2) 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."
You have advised the Company that you will make offers (the "EXEMPT
RESALES") of the Series C Senior Subordinated Notes purchased by you hereunder
on the terms set forth in the Offering Circular, as amended or supplemented,
solely to (i) persons whom you reasonably believe to be "qualified institutional
buyers" as defined in Rule 144A under the Act ("QIBS") and (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 to and
agreements with the Company (each, an "ACCREDITED INSTITUTION") (such persons
specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE
PURCHASERS"). You will offer the Series C Senior Subordinated Notes to Eligible
Purchasers initially at a price equal to 90.180% of the principal amount
thereof. Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Series C Senior
Subordinated Notes will have the registration rights set forth in the
registration rights agreement relating thereto (the "REGISTRATION RIGHTS
AGREEMENT"), to be dated the Closing Date, in substantially the form of Exhibit
B hereto, for so long as such Series C Senior Subordinated Notes constitute
"Transfer Restricted Securities" (as defined in the Senior Subordinated Note
Registration Rights Agreement). 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 the Company's 11% Series D Senior Subordinated Notes due 2003 (the "SERIES D
SECURITIES") to be offered in exchange for the Series C Senior Subordinated
Notes (the "EXCHANGE OFFER"), and (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Act (the "SHELF
REGISTRATION STATEMENT") relating to the resale by certain holders of the Series
C Senior Subordinated Notes, and to use its best efforts to cause such
Registration Statement to be declared effective. This Agreement, the Securities,
the Indenture and the Registration Rights Agreement are hereinafter referred to
collectively as the "OPERATIVE DOCUMENTS."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms and
conditions, the Company agrees to issue and sell to you, and you agree to
purchase from the Company, all of Series C Senior Subordinated Notes. The
purchase price for the Series C Senior Subordinated Notes shall be equal to
87.475% of their principal amount.
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3. DELIVERY AND PAYMENT. Delivery to you of and payment for the Series C
Senior Subordinated Notes shall be made at 9:00 a.m., New York City time, on
July 27, 1995 (the "CLOSING DATE") at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other time or place as you and the
Company shall designate.
One or more of the Series C Senior Subordinated Notes each in definitive
form, registered in the name of Cede & Co., as nominee of The Depository Trust
Company ("DTC"), or such other names as you may request upon at least two
business day's notice to the Company, having an aggregate principal amount
corresponding to the aggregate principal amount of the Series C Senior
Subordinated Notes sold pursuant to Exempt Resales to QIBs (the "MASTER NOTES"),
and one or more of the Series C Senior Subordinated Notes in definitive form,
registered in such names and denominations as you may so request, having an
aggregate principal amount corresponding to the aggregate principal amount of
the Series C Senior Subordinated Notes sold pursuant to Exempt Resales to
Accredited Institutions (the "INDIVIDUAL NOTES") shall be delivered by the
Company to you, against payment by you of the purchase price thereof by
certified or official bank check or checks payable in next day funds (prior
payment or deposit of which you shall bear no responsibility for) to the order
of the Company or as the Company may direct. The Master Notes and the Individual
Notes in definitive form shall be made available to you for inspection not later
than 9:30 a.m. on the business day immediately preceding the Closing Date.
4. AGREEMENTS OF THE COMPANY AND THE GUARANTOR. The Company and the
Guarantor, jointly and severally, agree with you as follows:
(a) To advise you promptly and, if requested by any of you,
confirm such advice in writing, (i) of the issuance by any state
securities commission of any stop order suspending the qualification or
exemption from qualification of any of the Series C Senior Subordinated
Notes for offering or sale in any jurisdiction, 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 Circular untrue or
that requires the making of any additions to or changes in the Offering
Circular in order to make the statements therein, in the light of the
circumstances under 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 of any of the Series C
Senior Subordinated Notes under any state securities or Blue Sky laws,
and if at any time any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption
of any of the Series C Senior Subordinated Notes under any state
securities or Blue Sky laws, the Company shall use every reasonable
effort to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) To furnish you, without charge, as many copies of the
Offering Circular, and any amendments or supplements thereto, as you may
reasonably request. The Company and the Guarantor consent to the use of
the Offering Circular, and any amendments and supplements thereto, by
you in connection with Exempt Resales until the earlier of (i) the time
at which the Exchange Offer Registration Statement is declared effective
and (ii) the time at which the Shelf Registration Statement is declared
effective.
(c) Not to amend or supplement the Offering Circular prior to the
Closing Date unless you shall previously have been advised thereof and
shall not have reasonably objected thereto after being furnished a copy
thereof. The Company and the Guarantor shall promptly
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prepare, upon your request, any amendment or supplement to the Offering
Circular that may be reasonably necessary or advisable in connection
with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any
Exempt Resales, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of your counsel, it
becomes necessary to amend or supplement the Offering Circular in order
to make the statements therein, in the light of the circumstances when
the Offering Circular is delivered to a prospective Eligible Purchaser,
not misleading, or if it is necessary to amend or supplement the
Offering Circular to comply with applicable law, forthwith to prepare an
appropriate amendment or supplement to the Offering Circular so that the
statements therein as so amended or supplemented will not, in the light
of the circumstances when it is so delivered, be misleading, or so that
the Offering Circular will comply with applicable law.
(e) To cooperate with you and your counsel in connection with the
qualification of the Series C Senior Subordinated Notes under the
securities or Blue Sky laws of such jurisdictions as you may reasonably
request and to continue such qualification in effect so long as
reasonably required for the Exempt Resales; PROVIDED, HOWEVER that the
Company shall not be required in connection therewith to qualify as a
foreign corporation or execute a general consent to service of process
in any jurisdiction.
(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is
terminated, to pay all costs, expenses, fees and taxes incident to and
in connection with: (i) the preparation, printing, filing and
distribution of the Offering Circular (including, without limitation,
financial statements and exhibits) and all amendments and supplements
thereto, (ii) the preparation (including, without limitation, word
processing and duplication costs) and delivery of this Agreement, the
Indenture, the Registration Rights Agreement, all preliminary and final
Blue Sky memoranda and all other agreements, memoranda, correspondence
and other documents prepared and delivered in connection herewith and
with the Exempt Resales, (iii) the issuance and delivery by the Company
of the Securities, (iv) the qualification of the Securities for offer
and sale under the securities or Blue Sky laws of the several states
(including, without limitation, the reasonable fees and disbursements of
your counsel relating to such registration or qualification), (v)
furnishing such copies of the Offering Circular, and all amendments and
supplements thereto, as may be reasonably requested for use in
connection with Exempt Resales, (vi) the preparation of certificates for
the Securities (including, without limitation, printing and engraving
thereof), (vii) the fees, disbursements and expenses of the Company's
counsel and accountants, (viii) all expenses and listing fees in
connection with the application for quotation of the Series C Senior
Subordinated Notes in the National Association of Securities Dealers,
Inc. ("NASD") Automated Quotation System PORTAL ("PORTAL"), (ix) all
fees and expenses (including fees and expenses of counsel) of the
Company in connection with approval of the Securities by DTC for
"book-entry" transfer and (x) the performance by the Company and the
Guarantor of their other obligations under this Agreement.
(g) To use the proceeds from the sale of the Series C Senior
Subordinated Notes in the manner described in the Offering Circular
under the caption "Use of Proceeds."
(h) Not to voluntarily claim, and to resist actively any attempts
to claim, the benefit of any usury laws against the holders of any
Series C Senior Subordinated Notes.
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(i) To use their best efforts to do and perform all things
required to be done and performed under this Agreement by them prior to
or after the Closing Date and to satisfy all conditions precedent on
their part to the delivery of the Series C Senior Subordinated Notes.
(j) 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 C Senior
Subordinated Notes in a manner that would require the registration under
the Act of the sale to you or Eligible Purchasers of the Series C Senior
Subordinated Notes.
(k) For so long as any Series C Senior Subordinated Notes remain
outstanding and during any period in which the Company is not subject to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), to make available to any Eligible Purchaser or
beneficial owner of Series C Senior Subordinated Notes in connection
with any sale thereof and any prospective purchaser of such Series C
Senior Subordinated Notes from such Eligible Purchaser or beneficial
owner, the information required by Rule 144A(d)(4) under the Act.
(l) To comply with all of its agreements set forth in the
representation letters of the Company to DTC relating to the approval of
the Securities by DTC for "book-entry" transfer.
(m) To use their best efforts to effect the inclusion of the
Series C Senior Subordinated Notes in PORTAL.
(n) During a period of five years following the date of this
Agreement, to deliver to you promptly upon their becoming available,
copies of all current, regular and periodic reports filed by the Company
with the Commission or any securities exchange.
5. REPRESENTATIONS AND WARRANTIES. (a) The Company and the Guarantor,
jointly and severally, represent and warrant to you that:
(i) The Offering Circular as of its date does not and as of the
Closing Date will not, and any supplement or amendment 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 (i) shall not apply to statements in or omissions from the
Offering Circular (or any supplement or amendment thereto) made in
reliance upon and in conformity with information relating to you (as set
forth in Section 11 hereof) furnished to the Company in writing by you
expressly for use therein.
(ii) When the Series C Senior Subordinated Notes are issued and
delivered pursuant to this Agreement, none of the Series C Senior
Subordinated Notes will be of the same class (within the meaning of Rule
144A under the Act) as securities of the Company or the Guarantor 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.
(iii) The Company and each of its subsidiaries (each, a
"SUBSIDIARY" and, collectively, the "SUBSIDIARIES") has been duly
organized, is validly existing as a corporation in good standing under
the laws of its jurisdiction of organization and has the requisite
corporate power and authority to carry on its business as it is
currently being conducted and to own, lease and operate
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its properties, and each is duly qualified and is in good standing as a
foreign corporation authorized to do business in each jurisdiction where
the operation, ownership or leasing of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the properties,
business, results of operations, condition (financial or other), affairs
or prospects of the Company and the Subsidiaries, taken as a whole (a
"MATERIAL ADVERSE EFFECT").
(iv) All of the issued and outstanding shares of capital stock
of, or other ownership interests in, each Subsidiary have been duly and
validly authorized and issued and are owned, directly or through other
Subsidiaries, by the Company. All such shares of capital stock are fully
paid and nonassessable, and are owned free and clear of any security
interest, mortgage, pledge, claim, lien or encumbrance (each, a "LIEN"),
except for Permitted Liens (as defined in the Indenture). There are no
outstanding subscriptions, rights, warrants, options, calls, convertible
securities or commitments of sale related to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of, or
other ownership interest in, any Subsidiary.
(v) The Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement,
the Indenture and the Registration Rights Agreement and to consummate
the transactions contemplated hereby and thereby, including, without
limitation, the authorization, issuance and sale of the Securities as
provided herein and therein. The Guarantor has all requisite corporate
power and authority to execute, deliver and perform its obligation under
this Agreement.
(vi) This Agreement has been duly authorized, executed and
delivered by each of the Company and the Guarantor and constitutes a
valid and legally binding agreement of each of the Company and the
Guarantor, enforceable against each of them in accordance with its
terms.
(vii) The Indenture has been duly authorized by the Company and,
when duly executed and delivered in accordance with its terms, will be a
legally valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms.
(viii) The Registration Rights Agreement has been duly authorized
by the Company, and when duly executed and delivered in accordance with
its terms, will be a legally valid and binding obligation of the
Company, enforceable against it in accordance with its terms.
(ix) The Series C Senior Subordinated Notes have been duly
authorized by the Company and, when issued, authenticated and delivered
in accordance with the Indenture and paid for in accordance with the
terms of this Agreement, will constitute legally valid and binding
obligations of the Company, enforceable against it in accordance with
their terms and entitled to the benefits of the Indenture.
(x) The Series D Senior Subordinated Notes have been duly
authorized by the Company and, when issued, authenticated and delivered
in accordance with the Indenture and the Registration Rights Agreement,
will constitute legally valid and binding obligations of the Company,
enforceable against it in accordance with their terms and entitled to
the benefits of the Indenture.
(xi) Neither the Company nor any of the Subsidiaries is (A) in
violation of its respective charter or bylaws or (B) in default in the
performance of any bond, debenture, note
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or any other evidence of indebtedness or any indenture, mortgage, deed
of trust or other contract, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them is
bound, or to which any of the property or assets of the Company or any
of the Subsidiaries is subject, in each case set forth in this clause
(B), which would, singly or in the aggregate, have a Material Adverse
Effect.
(xii) The execution, delivery and performance of this Agreement
and the other Operative Documents, compliance by the Company and the
Guarantor, as applicable, with all of the provisions hereof and thereof,
and the consummation of the transactions contemplated hereby and thereby
will not (A) conflict with or result in a breach or violation of the
charter or bylaws of the Company or any of the Subsidiaries, (B)
conflict with or result in a breach or violation of the terms or
provisions of, or constitute a default or cause an acceleration of any
obligation under or result in the imposition or creation of (or the
obligation to create or impose) a Lien with respect to, any bond, note,
debenture or other evidence of indebtedness or any indenture, mortgage,
deed of trust or other agreement or instrument to which the Company or
any of the Subsidiaries is a party or by which it or any of them is
bound, or to which any properties of the Company or any of the
Subsidiaries is or may be subject, (C) contravene any order of any court
or governmental agency or body having jurisdiction over the Company or
any of the Subsidiaries or any of their properties, or (D) violate or
conflict with any statute, rule or regulation or administrative or court
decree applicable to the Company or any of the Subsidiaries, or any of
their respective properties, in the case of clauses (B), (C) and (D),
which conflict, breach, violation, default or contravention, singly or
in the aggregate with each other such conflict, breach, violation,
default or contravention, would have a Material Adverse Effect or would
materially and adversely affect the consummation of this Agreement, the
Indenture or the Registration Rights Agreement or the transactions
contemplated hereby or thereby; except that the Company and Guarantor
are required to obtain an amendment and waiver under their $25 million
working capital facility and related $10 million loan with The First
National Bank of Boston (the "BANK WAIVER"), which amendment and waiver
the Company expects to receive prior to the Closing Date. The execution,
delivery and performance of this Agreement and the other Operative
Documents by the Company and the Guarantor, as applicable, and
consummation of the transactions contemplated thereby will not violate
the Indenture of Apparel Retailers, Inc. relating to its 12 3/4% Series
A and Series B Senior Discount Debentures (the "Apparel Retailers
Indenture").
(xiii) There is no action, suit, proceeding or investigation
before or by any court or governmental agency or body, domestic or
foreign, pending against or affecting the Company or any of the
Subsidiaries, or any of their respective properties, which would, singly
or in the aggregate, have a Material Adverse Effect or materially and
adversely affect the consummation of this Agreement, the Indenture or
the Registration Rights Agreement or the transactions contemplated
hereby or thereby, and to the best of the Company's knowledge, no such
proceedings are contemplated or threatened.
(xiv) No action has been taken and no statute, rule or regulation
or order has been enacted, adopted or issued by any governmental agency
or body which prevents the issuance of any of the Securities, or
suspends the sale of any of the Securities in any jurisdiction referred
to in Section 4(e) hereof; no injunction, restraining order or order of
any nature by a federal or state court of competent jurisdiction has
been issued with respect to the Company or any of the Subsidiaries which
would prevent or suspend the issuance or sale of any of the Securities
in any jurisdiction referred to in Section 4(e) hereof; no action, suit
or proceeding is pending against or,
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to the best of the Company's knowledge, threatened against or affecting
the Company or any of the Subsidiaries before any court or arbitrator or
any governmental body, agency or official, domestic or foreign, which,
if adversely determined, would materially interfere with or adversely
affect the issuance of any of the Securities or in any manner draw into
question the validity of any of the Operative Documents; and every
request of any securities authority or agency of any jurisdiction for
additional information has been complied with in all material respects.
(xv) Neither the Company nor any of the Subsidiaries has violated
any environmental, safety or similar law or regulation applicable to its
business relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), lacks any permits, licenses or
other approvals required of them under applicable Environmental Laws or
is violating any terms and conditions of any such permit, license or
approval, nor has the Company or any of the Subsidiaries violated any
federal, state or local law relating to discrimination in the hiring,
promotion or pay of employees nor any applicable wage or hour laws, nor
any provisions of the Employee Retirement Income Security Act of 1974
("ERISA") or the rules and regulations promulgated thereunder, nor has
the Company or any of the Subsidiaries engaged in any unfair labor
practice, which in each case would result, singly or in the aggregate,
in a Material Adverse Effect. There is (A) no significant unfair labor
practice complaint pending against the Company or any of the
Subsidiaries or, to the best knowledge of the Company, threatened
against any of them, before the National Labor Relations Board or any
state or local labor relations board, and no significant grievance or
significant arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Company or any
of the Subsidiaries or, to the best knowledge of the Company, threatened
against any of them, (B) no significant strike, labor dispute, slowdown
or stoppage pending against the Company or any of the Subsidiaries or,
to the best knowledge of the Company, threatened against the Company or
any of the Subsidiaries and (C) to the best knowledge of the Company, no
union representation question existing with respect to the employees of
the Company or any of the Subsidiaries and no union organizing
activities are taking place, except, with respect to any matter
specified in clause (A), (B) or (C) above, singly or in the aggregate,
such as could not have a Material Adverse Effect.
(xvi) Except as would not result, singly or in the aggregate, in
a Material Adverse Effect, the Company and the Subsidiaries have good
and marketable title, free and clear of all Liens (except (A) Liens for
taxes not yet due and payable, (B) Permitted Liens and (C) Liens in
connection with the Accounts Receivable Program), to all property and
assets reflected in the Company's audited consolidated financial
statements for the fiscal year ended January 30, 1995.
(xvii) All tax returns required to be filed by the Company or any
of the Subsidiaries in any jurisdiction have been filed, other than
those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees
and other charges due or claimed to be due from such entities have been
paid, other than those being contested in good faith and for which
adequate reserves have been provided or those currently payable without
penalty or interest.
(xviii)No authorization, approval, consent or order of, or filing
with, any court or governmental body or agency is required for the
consummation by the Company and the Guarantor, as applicable, of the
transactions contemplated by this Agreement and the other Operative
Documents, except such as have been obtained or made (or, in the case of
the Registration Rights Agreement, will be obtained or made) under the
Act, the Trust Indenture Act
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of 1939, as amended (the "TIA"), state securities or Blue Sky laws or
regulations or such as may be required by the NASD. Neither the Company,
the Subsidiaries nor any of their affiliates is presently doing business
with the government of Cuba or with any person located in Cuba.
(xix) (A) Each of the Company and the Subsidiaries has all
material certificates, consents, exemptions, orders, permits, licenses,
authorizations, or other approvals (each, an "AUTHORIZATION") of and
from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, necessary or required
to own, lease, license and use its properties and assets and to conduct
its business in the manner described in the Offering Circular, (B) all
such Authorizations are valid and in full force and effect and (C) each
of the Company and the Subsidiaries is in compliance in all material
respects with the terms and conditions of all such Authorizations and
with the rules and regulations of the regulatory authorities and
governing bodies having jurisdiction with respect thereto.
(xx) Neither the Company nor any of the Subsidiaries is (A) an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, or (B) a "holding company" or a "subsidiary company"
of a holding company, or an "affiliate" thereof within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
(xxi) No holder of any security of the Company has or will have
any right to require the registration of such security by virtue of any
transaction contemplated by this Agreement or the other Operative
Documents, which right will not have been waived prior to the Closing
Date.
(xxii) The Company and the Subsidiaries own, possess or currently
have the right to use 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 employed by them in connection with
the businesses now operated by them, and neither the Company nor any of
the Subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to the foregoing. The use of
such Intellectual Property in connection with the business and
operations of the Company and the Subsidiaries does not, to the
Company's knowledge, infringe on the rights of any person.
(xxiii) Each certificate signed by any officer of the Company or
the Guarantor and delivered to you or your counsel shall be deemed to be
a representation and warranty by the Company and the Guarantor to you as
to the matters covered thereby.
(xxiv) The Company and each of the Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance with
management's general or specific authorizations, (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability, (C) access to assets is permitted only in
accordance with management's general or specific authorization and (D)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxv) The Company has not (A) taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute,
9
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any of the Securities or (B)
since the date of the Offering Circular, except as disclosed therein,
(1) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, any of the Securities or (2) paid or agreed to
pay to any person any compensation for soliciting another to purchase
any other securities of the Company or any of the Subsidiaries.
(xxvi) The Company and each Subsidiary maintains insurance
covering their properties, operations, personnel and businesses. Such
insurance insures against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company and
the Subsidiaries and their businesses. Neither the Company nor any
Subsidiary has received notice from any insurer or agent of such insurer
that substantial capital improvements or other expenditures will have to
be made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof and will be outstanding
and duly in force on the Closing Date.
(xxvii) No registration under the Act of any of the Series C
Senior Subordinated Notes is required for the sale of the Series C
Senior Subordinated Notes to you as contemplated hereby or for the
Exempt Resales assuming (i) that the Eligible Purchasers who buy the
Series C Senior Subordinated Notes in the Exempt Resales are QIBs or
Accredited Institutions, (ii) the accuracy of your representations and
those of the Company and the Guarantor regarding the absence of general
solicitation in connection with the sale of Series C Senior Subordinated
Notes to you and the Exempt Resales contained herein and (iii) the
accuracy of the representations made by each Accredited Institution who
purchases Series C Senior Subordinated Notes pursuant to an Exempt
Resale as set forth in the letters of representation executed by such
Accredited Institutions in the form included in the Offering Circular.
No form of general solicitation or general advertising was used by the
Company or any of its representatives in connection with the offer and
sale of any of the Series C Senior Subordinated Notes or in connection
with Exempt Resales, 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 any of the Series C
Senior Subordinated Notes have been issued and sold by the Company
within the six-month period immediately prior to the date hereof.
(xxviii) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Series C Senior Subordinated
Notes to be purchased by the Eligible Purchasers will not involve any
non-exempt prohibited transaction within the meaning of Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1986. 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 Circular under the Section
entitled "Notice to Investors."
(xxix) The Offering Circular, as of its date, and each amendment
or supplement thereto, as of its date, contains all the information
specified in, and meets the requirements of, Rule 144A(d)(4) under the
Act.
(xxx) Since the date of the Offering Circular, except as
disclosed therein, (A) neither the Company nor any of the Subsidiaries
has incurred any liabilities or obligations outside the ordinary course
of business, direct or contingent, that are material to the Company and
the
10
Subsidiaries, taken as a whole, (B) neither the Company nor any of the
Subsidiaries has entered into any material transactions outside of the
ordinary course of business and (C) there has not been any material
adverse change in the business, condition (financial or other), results
of operations, properties or prospects of the Company and the
Subsidiaries, taken as a whole (a "MATERIAL ADVERSE CHANGE").
(xxxi) Neither the Company, the Guarantor nor any agent thereof
acting on behalf of either of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale
of the Securities 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.
The Company and the Guarantor acknowledge that, for purposes of
the opinions to be delivered to you pursuant to Section 7 hereof,
counsel to the Company and your counsel will rely upon the accuracy and
truth of the foregoing representations and you hereby consent to such
reliance.
(b) You represent and warrant to the Company and the Guarantor and agree
that:
(i) You are 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 C Senior Subordinated Notes.
(ii) You (A) are not acquiring the Series C Senior Subordinated
Notes with a view to any distribution thereof that would violate the Act
or the securities laws of any state of the United States or any other
applicable jurisdiction and (B) will be reoffering and reselling the
Series C Senior Subordinated 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 to the Offering Circular.
(iii) No form of general solicitation or general advertising has
been or will be used by you or any of your representatives in connection
with the offer and sale of any of the Series C Senior Subordinated
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.
(iv) You agree that, in connection with the Exempt Resales, you
will solicit offers to buy the Series C Senior Subordinated Notes only
from, and will offer to sell the Series C Senior Subordinated Notes only
to, Eligible Purchasers. You further agree that you will offer to sell
the Series C Senior Subordinated Notes only to, and will solicit offers
to buy the Series C Senior Subordinated Notes only from, persons who in
purchasing such Series C Senior Subordinated Notes will be deemed to
have represented and agreed (A) if such Eligible Purchasers are QIBs,
that they are purchasing the Series C Senior Subordinated Notes for
their own accounts or accounts with respect to which they exercise sole
investment discretion and that they or such accounts are QIBs, (B) that
such Series C Senior Subordinated Notes will not have been registered
under the Act and may be resold, pledged or otherwise transferred only
(1) inside the
00
Xxxxxx Xxxxxx to a person who the seller reasonably believes is a QIB in
a transaction meeting the requirements of Rule 144A, in a transaction
meeting the requirements of Rule 144, or in accordance with another
exemption from the registration requirements of the Act, (2) to the
Company, (3) pursuant to an effective registration statement, (4)
outside the United States to a foreign person in a transaction meeting
the requirements of Rule 904 under the Act and, in each case, in
accordance with any applicable securities laws of any state of the
United States or any other applicable jurisdiction and (C) 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 (B) above.
(v) You are not a pension or welfare plan (as defined in Section
3 of ERISA) and you are not acquiring the Series C Senior Subordinated
Notes on behalf of a pension or welfare plan.
(vi) You also understand that, for purposes of the opinions to be
delivered to you pursuant to Section 7 hereof, counsel to the Company
and your counsel will rely upon the accuracy and truth of the foregoing
representations and you hereby consent to such reliance.
6. INDEMNIFICATION.
(a) The Company and the Guarantor, jointly and severally, agree
to indemnify and hold harmless (i) you and (ii) each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act) you (any of the persons referred to in this clause
(ii) being hereinafter referred to as a "controlling person"), and (iii)
your respective officers, directors, partners, employees,
representatives and agents or any controlling person (any person
referred to in clause (i), (ii) or (iii) may hereinafter be referred to
as an "INDEMNIFIED PERSON") to the fullest extent lawful, from and
against any and all losses, claims, damages, liabilities, judgments,
actions and expenses (including without limitation and as incurred,
reimbursement of all reasonable costs of investigating, preparing,
pursuing or defending any claim or action, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
including the reasonable fees and expenses of counsel to any Indemnified
Person) directly or indirectly caused by, related to, based upon,
arising out of or in connection with any untrue statement or alleged
untrue statement of a material fact contained in the Offering Circular
(or any amendment or supplement thereto), or 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 expenses are caused by
an untrue statement or omission or alleged untrue statement or omission
that is made in reliance upon and in conformity with information
relating to you (as set forth in Section 11 hereof) furnished in writing
to the Company by you expressly for use therein. The Company shall
notify you promptly of the institution, threat or assertion of any
claim, proceeding (including any governmental investigation) or
litigation of which the Company is aware in connection with the matters
addressed by this Agreement which involves the Company or an Indemnified
Person.
(b) In case any action or proceeding (including any governmental
or regulatory investigation or proceeding) shall be brought or asserted
against any of the Indemnified Persons with respect to which indemnity
may be sought against the Company or the Guarantor, you (or any person
controlling you) shall promptly notify the Company and the Guarantor in
writing (PROVIDED, that the failure to give such notice shall not
relieve the Company or the Guarantor of its obligations pursuant to this
Agreement, except to the extent that the Company or the
12
Guarantor, as the case may be, is prejudiced thereby). Such Indemnified
Person shall have the right to employ its own counsel in any such action
and the fees and expenses of such counsel shall be paid, as incurred, by
the Company and the Guarantor (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder). The Company and the Guarantor shall not, in connection with
any one such action or proceeding or separate but substantially similar
or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) at any time for such Indemnified
Persons, which firm shall be designated by you. The Company and the
Guarantor shall be liable for any settlement of any such action or
proceeding effected with the Company's prior written consent, which
consent will not be unreasonably withheld, and the Company and the
Guarantor agree to indemnify and hold harmless any Indemnified Person
from and against any loss, claim, damage, liability or expense by reason
of any settlement of any action effected with the written consent of the
Company. Neither the Company nor the Guarantor shall, without your prior
written consent, settle or compromise or consent to the entry of
judgment in or otherwise seek to terminate any pending or threatened
action, claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not
any Indemnified Person is a party thereto), unless such settlement,
compromise, consent or termination includes an unconditional release of
each Indemnified Person from all liability arising out of such action,
claim, litigation or proceeding.
(c) You agree to indemnify and hold harmless the Company and the
Guarantor, and their respective directors, officers and any person
controlling (within the meaning of Section 15 of the Act or Section 20
of the Exchange Act) the Company or the Guarantor, and the respective
officers, directors, partners, employees, representatives and agents of
each such person, to the same extent as the foregoing indemnity from the
Company and the Guarantor to each of the Indemnified Persons, but only
with respect to claims and actions based on information relating to you
(as set forth in Section 11 hereof) furnished in writing by you
expressly for use in the Offering Circular.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party (other than by reason of the
exceptions provided in this Section 6) in respect of any losses, claims,
damages, liabilities or expenses referred to herein, 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 expenses
(i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and the
indemnified party on the other hand from the offering of the Series C
Senior Subordinated 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 indemnifying parties
and the indemnified party, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Guarantor, on the one hand, and you, on the other hand, shall be deemed
to be in the same proportion as the total proceeds from the sale of the
Series C Senior Subordinated Notes (net of discounts and commissions but
before deducting expenses) received by the Company and the total
discounts and commissions received by you, bear to the total price of
the Series C Senior Subordinated Notes paid in the Exempt Resales, in
each case as set forth in the table on the cover page of the Offering
Circular. The relative fault of the Company and the Guarantor on the one
hand and you on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission or
13
alleged omission to state a material fact related to information
supplied by the Company or the Guarantor on the one hand or you on the
other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The indemnity and contribution obligations of the Company and
the Guarantor set forth herein shall be in addition to any liability or
obligation the Company or the Guarantor may otherwise have to any
Indemnified Person.
The Company, the Guarantor and you agree that it would not be
just and equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages,
liabilities or expenses 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 6, you
(and your related Indemnified Persons) shall be required to contribute,
in the aggregate, any amount in excess of the amount by which the total
discounts and commissions received by you with respect to the Series C
Senior Subordinated Notes exceeds the amount of any damages which you
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.
7. CONDITIONS OF YOUR OBLIGATIONS. The several of your obligations under
this Agreement are subject to the satisfaction of each of the following
conditions:
(a) All of the representations and warranties of the Company and
the Guarantor 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 (except for those representations and warranties made
as of a specified date). The Company and the Guarantor shall have
performed or complied with all of their obligations and agreements
herein contained and required to be performed or complied with by them
at or prior to the Closing Date.
(b) The Offering Circular shall have been distributed to you not
later than 10:00 a.m., New York City time, on the date that is two days
after the date of this Agreement or at such later date and time as to
which you may agree, and no stop order suspending the qualification or
exemption from qualification of any of the Series C Senior Subordinated
Notes in any jurisdiction referred to in Section 4(e) shall have been
issued and no proceeding for that purpose shall have been commenced or
shall be pending or threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the
issuance of any of the Series C Senior Subordinated Notes; and 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 that would prevent the issuance of any of the Series C
Senior Subordinated Notes.
(d) Since the date as of which information is given in the
Offering Circular, (i) there shall not have been any Material Adverse
Change and (ii) except as contemplated by the Offering
14
Circular, (A) there shall not have been any material change in the
capital stock or long-term debt, or material increase in short-term
debt, of the Company or any of the Subsidiaries and (B) neither the
Company nor any Subsidiary shall have incurred any liability or
obligation, direct or contingent, that, singly or in the aggregate, is
material to the Company and the Subsidiaries, taken as a whole, and is
required to be disclosed on a balance sheet in accordance with generally
accepted accounting principals and is not disclosed on the latest
balance sheet included in the Offering Circular.
(e) You shall have received certificates, dated the Closing Date,
signed by (i) the President or any Vice President and (ii) a principal
financial or accounting officer of each of the Company and the Guarantor
confirming, as of the Closing Date, the matters set forth in paragraphs
(a), (b), (c) and (d) of this Section 7 and certifying as to the
solvency of the Company and the Guarantor and as to the attached
charter, bylaws and board resolutions and the incumbency of the relevant
officers.
(f) On the Closing Date, you shall have received opinions
(satisfactory to you and your counsel), dated the Closing Date, of
Xxxxxxxx & Xxxxx, counsel for the Company, to the effect that:
(i) the Company and each of the Subsidiaries has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of organization and
has the requisite corporate power and authority to carry on its
business as it is currently being conducted and to own, lease and
operate its properties;
(ii) when the Series C Senior Subordinated Notes are
issued and delivered pursuant to this Agreement, none of the
Series C Senior Subordinated Notes will 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;
(iii) no registration under the Act of any of the Series C
Senior Subordinated Notes is required for the sale of the Series
C Senior Subordinated Notes to you as contemplated hereby or for
the Exempt Resales assuming (i) that the Eligible Purchasers who
buy the Series C Senior Subordinated Notes in the Exempt Resales
are QIBs or Accredited Institutions, (ii) the accuracy of your
representations and those of the Company regarding the absence of
general solicitation in connection with the sale of the Series C
Senior Subordinated Notes to you and the Exempt Resales contained
herein and (iii) the accuracy of the representations made by each
Accredited Institution who purchases Series C Senior Subordinated
Notes pursuant to an Exempt Resale as set forth in the letters of
representation executed by such Accredited Institutions in the
form included in the Offering Circular;
(iv) the Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under
this Agreement; this Agreement has been duly authorized, executed
and delivered by each of the Company and the Guarantor;
(v) the Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under
the Indenture; the Indenture has been duly
15
authorized, executed and delivered by the Company and is a
legally valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such
enforceability may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights and remedies generally and
(B) general equitable principles, whether asserted in an action
at law or in equity, and that such enforceability may be subject
to the discretion of the court before which any proceedings
therefor may be brought;
(vi) the Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under
the Registration Rights Agreement; the Registration Rights
Agreement has been duly authorized, executed and delivered by the
Company and is a legally valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by (A)
bankruptcy, insolvency, reorganization, moratorium or similar
laws now or hereafter in effect relating to creditors' rights and
remedies generally and (B) general equitable principles, whether
asserted in an action at law or in equity, and that such
enforceability may be subject to the discretion of the court
before which any proceedings therefor may be brought;
(vii) the Company has all requisite corporate power and
authority to authorize, issue and sell the Series C Senior
Subordinated Notes to be sold by it hereunder; each of the Series
C Senior Subordinated Notes have been duly authorized, executed
and delivered by the Company and (assuming the due authentication
thereof by the Trustee and payment therefor in accordance with
the terms of this Agreement) are the legally valid and binding
obligations of the Company, enforceable against it in accordance
with their terms and entitled to the benefits of the Indenture,
except as such enforceability may be limited by (A) bankruptcy,
insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights and remedies
generally and (B) general equitable principles, whether asserted
in an action at law or in equity, and that such enforceability
may be subject to the discretion of the court before which any
proceedings therefor may be brought;
(viii) the Company has all requisite corporate power and
authority to authorize and issue the Series D Securities; the
Series D Senior Subordinated Notes have been duly authorized by
the Company and, when issued, authenticated and delivered in
accordance with the Indenture and the Registration Rights
Agreement, will constitute legally valid and binding obligations
of the Company, enforceable against it in accordance with their
terms and entitled to the benefits of the applicable Indenture,
except as such enforceability may be limited by (A) bankruptcy,
insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights and remedies
generally and (B) general equitable principles, whether asserted
in an action at law or in equity, and that such enforceability
may be subject to the discretion of the court before which any
proceedings therefor may be brought;
(ix) each of the Series C Senior Subordinated Notes, the
Registration Rights Agreement, the Indenture and this Agreement
are contained in the Offering Circular;
(x) all of the issued and outstanding shares of capital
stock of, or other ownership interests in, each Subsidiary have
been duly and validly authorized and issued
16
and are owned, directly or through other Subsidiaries, by the
Company free and clear of any Lien, except for such Liens as will
be released on or about the Closing Date in connection with the
Refinancing and Permitted Liens, and are fully paid and
nonassessable;
(xi) there are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities or commitments
of sale related to or entitling any person to purchase or
otherwise to acquire any shares of the capital stock of, or other
ownership interest in, any Subsidiary, other than in connection
with the Accounts Receivable Program;
(xii) neither the Company nor any of the Subsidiaries is
(A) an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or (B) a "holding company" or a
"subsidiary company" of a holding company, or an "affiliate"
thereof within the meaning of the Public Utility Holding Company
Act of 1935, as amended;
(xiii) prior to the consummation of the Exchange Offer or
the effectiveness of the Shelf Registration Statement, the
Indenture is not required to be qualified under the TIA;
(xiv) neither the Company nor any of the Subsidiaries is
(A) in violation of its respective charter or bylaws or (B) in
default in the performance of any bond, debenture, note or any
other evidence of indebtedness or any indenture, mortgage, deed
of trust or other contract, lease or other instrument to which
the Company or any of the Subsidiaries is a party or by which any
of them is bound, or to which any of the property or assets of
the Company or any of the Subsidiaries is subject, which default
would have a Material Adverse Effect;
(xv) to the knowledge of such counsel, no authorization,
approval, consent or order of, or filing with, any court or
governmental body or agency is required for the consummation by
the Company of the transactions contemplated by this Agreement
and the other Operative Documents, except such as have been
obtained or made (or, in the case of the Registration Rights
Agreement, will be obtained or made) under the Act, the TIA,
state securities or Blue Sky laws or regulations or such as may
be required by the NASD; the execution, delivery and performance
of this Agreement and the other Operative Documents, compliance
by the Company with all of the provisions hereof and thereof, and
the consummation of the transactions contemplated hereby and
thereby will not (A) conflict with or result in a breach or
violation of the charter or bylaws of the Company or any of the
Subsidiaries, (B) to the knowledge of such counsel, conflict with
or result in a breach or violation of the terms or provisions of,
or constitute a default or cause an acceleration of any
obligation under or result in the imposition or creation of (or
the obligation to create or impose) a Lien with respect to, any
material bond, note, debenture or other evidence of indebtedness
or any material indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which it or any of them is bound,
or to which any properties of the Company or any of the
Subsidiaries is or may be subject, (C) to the knowledge of such
counsel, contravene any order of any court or governmental agency
or body having jurisdiction over the Company or any of the
Subsidiaries or any of their
17
properties, or (D) violate or conflict with any statute, rule or
regulation or administrative or court decree applicable to the
Company or any of the Subsidiaries, or any of their respective
properties, in the case of clauses (B), (C) and (D), which
conflict, breach, violation, default or contravention, singly or
in the aggregate with each other such conflict, breach,
violation, default or contravention, would have a Material
Adverse Effect or would materially and adversely affect the
consummation of this Agreement, the Indenture or the Registration
Rights Agreement or the transactions contemplated hereby or
thereby;
(xvi) to the knowledge of such counsel, neither the
Company nor any of the Subsidiaries has violated any
Environmental Laws, lacks any permits, licenses or other
approvals required of them under applicable Environmental Laws or
is violating any terms and conditions of any such permit, license
or approval, nor has the Company or any of the Subsidiaries
violated any federal, state or local law relating to
discrimination in the hiring, promotion or pay of employees nor
any applicable wage or hour laws, nor any provisions of ERISA or
the rules and regulations promulgated thereunder, nor has the
Company or any of the Subsidiaries engaged in any unfair labor
practice, which in each case would result, singly or in the
aggregate, in a Material Adverse Effect;
(xvii) to the knowledge of such counsel, there is no
action, suit, proceeding or investigation before or by any court
or governmental agency or body, domestic or foreign, pending
against or affecting the Company or any of the Subsidiaries,
which would, singly or in the aggregate, have a Material Adverse
Effect or materially and adversely affect the consummation of
this Agreement, the Indenture or the Registration Rights
Agreement or the transactions contemplated hereby or thereby;
(xviii) to the knowledge of such counsel, (A) no action has
been taken and no statute, rule or regulation or order has been
enacted, adopted or issued by any governmental agency or body
which prevents the issuance of any of the Securities, or suspends
the sale of any of the Securities in any jurisdiction referred to
in Section 4(e) hereof, (B) no injunction, restraining order or
order of any nature by a federal or state court of competent
jurisdiction has been issued with respect to the Company or any
of the Subsidiaries which would prevent or suspend the issuance
or sale of any of the Securities in any jurisdiction referred to
in Section 4(e) hereof, (C) no action, suit or proceeding is
pending or threatened against or affecting the Company or any of
the Subsidiaries before any court or arbitrator or any
governmental body, agency or official, domestic or foreign,
which, if adversely determined, would materially interfere with
or adversely affect the issuance of any of the Securities or in
any manner draw into question the validity of any of the
Operative Documents and (D) every request of any securities
authority or agency of any jurisdiction for additional
information has been complied with in all material respects;
(xix) the Offering Circular, as of its date, and each
amendment of supplement thereto, as of its date (except for the
financial statements, including the notes thereto, and supporting
schedules and other financial, statistical and accounting data
included therein or omitted therefrom, as to which no opinion
need be expressed), contains all the information specified in,
and meeting the requirements of, Rule 144A(d)(4) under the Act;
18
(xx) to the knowledge of such counsel, other than the
holders of the Securities, no holder of any security of the
Company has or will have any right to require the registration of
such security by virtue of any transaction contemplated by this
Agreement or the other Operative Documents, which right has not
been waived; and
(xxi) the execution, delivery and performance of this
Agreement and the other Operative Documents and the consummation
of the transactions contemplated thereby by the Company does not
violate the Apparel Retailers Indenture.
In giving their opinion required by this Section 7(f), Xxxxxxxx & Xxxxx shall
additionally state that such counsel has participated in conferences with
officers and other representatives of the Company, representatives of the
independent public accountants for the Company, your representatives and your
counsel in connection with the preparation of and the Offering Circular and has
considered the matters required to be stated therein and the statements
contained therein, although such counsel has not independently verified the
accuracy, completeness or fairness of such statements (except as indicated
above), such counsel advises you that, on the basis of the foregoing (relying as
to materiality to a large extent upon facts provided to such counsel by officers
and other representatives of the Company and, to the extent indicated above,
without independent check or verification), no facts came to such counsel's
attention that caused such counsel to believe that the Offering Circular (as
amended or supplemented, if applicable), as of its date or at the Closing Date,
contained or contains an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Without limiting the foregoing, such counsel may further
state that they assume no responsibility for, and have not independently
verified, the accuracy, completeness or fairness of the financial statements,
notes and schedules and other financial, statistical and accounting data
included in the Offering Circular.
The opinions described in this paragraph (f) shall be rendered to
you at the request of the Company and shall so state therein.
(g) You shall have received an opinion, dated the Closing Date,
of Xxxxxx & Xxxxxxx, your counsel, in form and substance reasonably
satisfactory to you, covering such matters as are customarily covered in
such opinions.
(h) You shall have received customary comfort letters on and as
of the date hereof as well as on and as of the Closing Date (in the
latter case constituting an affirmation of the statements set forth in
the former), in form and substance satisfactory to you, from Price
Waterhouse, independent accountants, with respect to the financial
statements and certain financial information contained in the Offering
Circular.
(i) Xxxxxx & Xxxxxxx shall have been furnished with such
documents and opinions, in addition to those set forth above, as they
may reasonably require for the purpose of enabling them to review or
pass upon the matters referred to in this Section 7 and in order to
evidence the accuracy, completeness or satisfaction in all material
respects of any of the representations, warranties or conditions herein
contained.
(j) Prior to the Closing Date, the Company and the Guarantor
shall have furnished to you such further information, certificates and
documents as you may reasonably request.
19
(k) The Company and the Trustees shall have entered into the
Indenture and you shall have received counterparts, conformed as
executed, thereof.
(l) The Company shall have entered into the Registration Rights
Agreement and you shall have received counterparts, conformed as
executed, thereof.
(m) Each holder of a security of the Company who has or will have
any right to require the registration of such security by virtue of any
transaction contemplated by this Agreement or the other Operative
Documents shall have waived all such rights.
(n) The Company shall have obtained any required written consents
under existing agreements in order to effect the transactions
contemplated hereby including, without limitation, the Bank Waiver,
copies of such consents shall have been sent to you and shall be
satisfactory in form and substance to you and your counsel.
8. EFFECTIVE DATE OF AGREEMENT AND TERMINATION. This Agreement shall
become effective upon the execution hereof.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by notice to the Company if any of the following has occurred: (i)
subsequent to the date information is provided in the Offering Circular, any
Material Adverse Change which, in your judgment, materially impairs the
investment quality of any of the Series C Senior Subordinated Notes, (ii) any
outbreak or escalation of hostilities or, other national or international
calamity or crisis or material adverse change in the financial markets of the
United States or elsewhere, or any other substantial national or international
calamity or emergency if the effect of such outbreak, escalation, calamity,
crisis or emergency would, in your judgment, make it impracticable or
inadvisable to market any of the Series C Senior Subordinated Notes or to
enforce contracts for the sale of any of the Series C Senior Subordinated Notes,
(iii) any suspension or limitation of trading generally in securities on the New
York Stock Exchange or in the over-the-counter markets or any setting of minimum
prices for trading on such exchange or markets, (iv) any declaration of a
general banking moratorium by either federal or New York authorities, (v) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs that in your judgment has a material
adverse effect on the financial markets in the United States, and would, in your
judgment, make it impracticable or inadvisable to market any of the Series C
Senior Subordinated Notes or to enforce contracts for the sale of any of the
Series C Senior Subordinated Notes, (vi) 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 your judgment, materially
and adversely affects or will materially and adversely affect the business or
operations of the Company and the Subsidiaries, taken as a whole, or (vii) any
securities of the Company or any of the Subsidiaries shall have been downgraded
or placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
The indemnities and contribution provisions and the other agreements,
representations and warranties of the Company and the Guarantor, their officers
and directors and of you 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 C Senior Subordinated Notes, regardless of (i) any
investigation, or statement as to the results thereof, made by or on your behalf
or by or on behalf of the Company, the officers or directors of the Company or
any controlling person of the Company, (ii) acceptance of the Series C Senior
Subordinated Notes and payment for them hereunder and (iii) termination of this
Agreement.
20
If this Agreement shall be terminated by you pursuant to clauses (i) or
(vii) of the second paragraph of this Section 8 or because of the failure or
refusal on the part of the Company or the Guarantor to comply with the terms or
to fulfill any of the conditions of this Agreement, the Company agrees to
reimburse you for all out-of-pocket expenses (including the reasonable fees and
disbursements of counsel) incurred by you. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 4(f) hereof.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Guarantor, you,
any Indemnified Person 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
terms "successors and assigns" shall not include a purchaser of any of the
Series C Senior Subordinated Notes from any of you merely because of such
purchase.
9. NOTICES. Notices given pursuant to any provision of this Agreement
shall be addressed as follows:
If to the Company:
Specialty Retailers, Inc.
00000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxxxx
With a copy to:
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxx
If to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation:
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
With a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx
21
10. INFORMATION RELATING TO YOU. The statements set forth in the last
paragraph on the cover page of, and in the second paragraph, the second sentence
of the third paragraph and the first sentence of the fifth paragraph under the
caption "Plan of Distribution" in, the Offering Circular constitute the only
information furnished to the Company in writing by you expressly for use
therein.
11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK.
22
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument. Please confirm that the foregoing
correctly sets forth the agreement among the Company, the Guarantor and you.
Very truly yours,
SPECIALTY RETAILERS, INC.
XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: EVP/CFO
PALAIS ROYAL, INC.
XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: EVP/CFO
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By: XXXX XXXXXXX
Name: Xxxx Xxxxxxx
Title: Vice President
EXECUTIION COPY
FIRST AMENDMENT TO PURCHASE AGREEMENT
The undersigned hereby amend that certain Purchase Agreement, dated July
20, 1995 (the "Agreement"), by and among the undersigned, with respect to the
aggregate principal amount of Series C Senior Subordinated Notes ("Notes") to be
issued thereunder, such that the aggregate principal amount of Notes being
purchased and sold thereunder is $18,250,000. In all other respects, the
undersigned parties hereby reaffirm their respective obligations thereunder.
Except as amended by this letter, the Agreement remains in full force and
effect.
This amendment is hereby entered into as of this 25th day of July, 1995,
and shall be effective immediately upon execution. This amendment may be
executed in counterparts.
Very truly yours,
SPECIALTY RETAILERS, INC.
By: XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: EVP/CFO
PALAIS ROYAL, INC.
By: XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: EVP/CFO
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By: XXXX XXXXXXX
Name: Xxxx Xxxxxxx
Title: Vice President
