EXECUTION COPY
$85,000,000
12.25% Series A Senior Notes
due December 15, 2003
PURCHASE AGREEMENT
December 20, 1996
PURCHASE AGREEMENT
December 20, 1996
XXXXXX, READ & CO. INC.
as Initial Purchaser
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
Xxxxxxx & Xxxxx, Inc. (the "Company") proposes to issue and sell to you
(also referred to herein as the "Initial Purchaser") $85,000,000 aggregate
principal amount of its 12.25% Series A Senior Notes due December 15, 2003 (the
"Notes"). The Notes are described in the Offering Memorandum which is referred
to below.
The Notes are to be issued pursuant to an indenture (the "Indenture") to
be dated as of the Closing Date (as defined herein), among the Company, WG
Apparel, Inc. ("Apparel"), Clinton Machinery Corporation and Clinton Management
Corp. (together, "Clinton"), Leadtec Systems, Inc. ("Leadtec"), W&G Daon, Inc.
("W&G Daon"), J&E Sewing Supplies, Inc. ("J&E"), W&G Tennessee Imports, Inc.
("W&G Tennessee"), Clinton Leasing Corp. ("Clinton Leasing"), Clinton Equipment
Corp. ("Clinton Equipment Corp.) and Paradise Color Corp. ("Paradise Color")
(Apparel, Clinton, Leadtec, W&G Daon, J&E, W&G Tennessee, Clinton Leasing,
Clinton Equipment and Paradise Color are referred to herein collectively as the
"Subsidiary Guarantors") and IBJ Xxxxxxxx Bank & Trust Company, as trustee (the
"Trustee"). Pursuant to the Indenture, the Notes will be unconditionally
guaranteed on a senior unsecured basis (the "Subsidiary Guarantees") by the
Subsidiary Guarantors. Pursuant to a Pledge and Security Agreement, dated the
Closing Date (the "Stock Pledge Agreement"), between the Company and the
Trustee, the Notes will be secured by a pledge of 65% of the capital stock of
Xxxxxxx & Xxxxx, Ltd. Copies of the Indenture and the Stock Pledge Agreement, in
substantially final form, have been delivered to the Initial Purchaser.
A portion of the proceeds from the sale of the Notes will be used to
finance the acquisition by WG Apparel, Inc. ("Apparel"), a Delaware corporation
and a wholly owned subsidiary of the Company, of all the outstanding capital
stock of Macpherson Meistergram, Inc. ("Macpherson"), a North Carolina
corporation, and Xxxxxxxx X. Xxxxxxxxxx Canada, Inc. ("GEMC"), an Ontario
corporation, pursuant to that certain Stock Purchase Agreement, dated as of
November 27, 1996 (the "Stock Purchase Agreement"), by and among the Company,
Apparel, Macpherson, GEMC, Xxxx X. Xxxxxxxxxx and the other stockholders of
Macpherson.
In connection with the issuance of the Notes, (i) the Company, Apparel,
Leadtec and Clinton (collectively, the "Borrowers"), have entered into a
Financing and Security Agreement, dated December 17, 1996, with NationsBank,
N.A. (the "Lender"), to be joined by Macpherson, as Borrower as of the time of
purchase, and (ii) the Company has entered into an amendment (the "Clinton
Amendment") to the Agreement and Plan of Merger, dated December 17, 1995, among
the Company, Clinton Machinery Corporation, Apparel, Xxxxx Xxxxxxxxxx, Xxxxxxx
Xxxx and Xxxx Xxxxxx.
Holders of the Notes (including subsequent transferees) of the Notes will
have the registration rights set forth in the Registration Rights Agreement of
even date herewith (the "Registration Rights Agreement") among the Company, the
Subsidiary Guarantors and the Initial Purchaser. Pursuant to the Registration
Rights Agreement, the Company has agreed to file with the Securities and
Exchange Commission (the "Commission") (i) a registration statement (the
"Exchange Offer Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act") with respect to an offer to exchange the Notes
for a new issue of debt securities of the Company (the "Exchange Notes") with
terms substantially identical to those of the Notes (the "Exchange Offer") and
(ii) under certain circumstances specified in the Registration Rights Agreement,
a shelf registration statement pursuant to Rule 415 under the Securities Act
(the "Shelf Registration Statement").
The Company has furnished to you for your use copies of a preliminary
offering memorandum, dated November 29, 1996 (the "Preliminary Offering
Memorandum"), and will promptly prepare and furnish to you for your use copies
of an offering memorandum, dated December 19, 1996 (the "Offering Memorandum"),
relating to the Notes. The Preliminary Offering Memorandum and the Offering
Memorandum, as amended and supplemented, are hereinafter referred to as the
"Offering Documents."
This Agreement, the Indenture, the Registration Rights Agreement and the
Stock Pledge Agreement are hereinafter sometimes referred to collectively as the
"Operative Documents."
The Company and the Subsidiary Guarantors jointly and severally agree with
the Initial Purchaser as follows:
1. Sale and Purchase. Upon the basis of the warranties and representations
and the other terms and conditions herein set forth, the Company agrees to sell
to the Initial Purchaser and the Initial Purchaser agrees to purchase from the
Company, $85,000,000 aggregate principal amount of Notes at a purchase price of
94.75% of the principal amount thereof, plus accrued interest, if any, from the
Closing Date (as hereinafter defined). You shall release the Notes for sale as
described in the next succeeding paragraph promptly after this Agreement becomes
effective. You may from time to time increase or decrease the offering price
after your purchase to such extent as you may determine.
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2. Payment and Delivery. The Company will deliver against payment of the
purchase price the Notes in the form of one or more permanent global securities
in definitive form (the "Global Securities") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent Global Securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Offering Documents. Payment for the Notes shall
be made by the Initial Purchaser in Federal (same-day) funds by wire transfer to
an account in New York previously designated to the Initial Purchaser by the
Company at a bank acceptable to the Initial Purchaser at 10:00 a.m. (New York
time), January 3, 1997, or at such other time not later than seven full business
days thereafter as the Initial Purchaser and the Company determine, such time
being herein referred to as the "time of purchase" or the "Closing Date,"
against delivery to the Trustee as custodian for DTC of the Global Securities
representing all of the Notes. The Global Securities will be made available for
checking at the office of the Trustee at least 24 hours prior to the Closing
Date.
Notwithstanding the foregoing, any Notes sold to Institutional Accredited
Investors (as hereinafter defined) pursuant to Section 4(c) hereof shall be
issued in definitive, fully registered form (the "Definitive Certificates") and
shall bear the legend relating thereto set forth under "Transfer Restrictions"
in the Offering Documents, but shall be paid for in the same manner as any Notes
to be purchased by the Initial Purchaser hereunder and to be offered and sold by
them in reliance on Rule 144A under the Securities Act ("Rule 144A"). Definitive
Certificates shall be registered in such names and in such denominations as the
Initial Purchaser may request not less than two business days in advance of the
Closing Date.
3. Representations and Warranties of the Company. The Company represents
and warrants to the Initial Purchaser that:
(a) as of their respective dates and in the case of the Offering
Memorandum, as of the date of this Agreement, no Offering Document
contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no warranty or representation with respect
to any statement contained in the Offering Documents in reliance upon and
in conformity with information concerning the Initial Purchaser and
furnished in writing by or on behalf of the Initial Purchaser to the
Company expressly for use in the Offering Documents;
(b) as of September 30, 1996, the Company had an authorized
capitalization as set forth under the heading entitled "Actual" in the
section of the Offering Documents entitled "Capitalization" and, assuming
the time of purchase had occurred as of September 30, 1996, the Company
would have had an authorized capitalization as set forth under the heading
entitled "Pro Forma" in the section of the Offering Documents entitled
"Capitalization"; all of the issued and outstanding shares of capital
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stock of the Company have been duly authorized and validly issued and are
fully paid and non-assessable; the Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
the State of Delaware, with full power and authority to own its properties
(including, upon the closing of the transactions contemplated by the Stock
Purchase Agreement, the power and authority to own, directly or indirectly
through one or more Subsidiaries (as defined herein), the properties owned
by Macpherson and GEMC) and conduct its business (including, upon the
closing of the transactions contemplated by the Stock Purchase Agreement,
the power and authority to conduct, directly or indirectly through one or
more Subsidiaries, the business conducted by Macpherson and GEMC) as
described in the Offering Documents, to execute and deliver the Operative
Documents, the New Credit Agreement, the Clinton Amendment, the Barudan
Amendment (as such term is defined in the Stock Purchase Agreement) and
the ELC Acquisition Agreement (as such term is defined in the Stock
Purchase Agreement) and to issue and sell the Notes as herein
contemplated;
(c) each of the Company's direct and indirect subsidiaries (the
"Subsidiaries") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with full power and authority to own its properties and
conduct its respective business as described in the Offering Documents,
and in the case of each Subsidiary Guarantor, to execute and deliver this
Agreement, the Subsidiary Guarantees, the Registration Rights Agreement
and the Indenture and to the extent a party thereto, the New Credit
Agreement, the Clinton Amendment, the Barudan Amendment and the ELC
Acquisition Agreement; all of the issued and outstanding shares of capital
stock of each of the Company's Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable and are owned
beneficially by the Company free and clear of all liens, security
interests, pledges, charges, encumbrances, defects, shareholders'
agreements, voting trusts, equities or claims of any nature whatsoever,
except for the liens listed on Schedule I to this Agreement; other than as
listed on Schedule I to this Agreement, the Company does not own, directly
or indirectly, any capital stock or other equity securities of any other
corporation or any ownership interest in any partnership, joint venture or
other association;
(d) each of Macpherson and GEMC has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full power and authority to own
its properties and conduct its respective business, as described in the
Offering Documents, and to execute and deliver the Stock Purchase
Agreement; all of the issued and outstanding shares of capital stock of
each of Macpherson and GEMC have been duly authorized and validly issued,
are fully paid and non-assessable, and upon consummation of the
transactions contemplated by the Stock Purchase Agreement, will be owned
beneficially by the Company free and clear of all liens, security
interests, pledges, charges, encumbrances, defects,
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shareholders' agreements, voting trusts, equities or claims of any nature
whatsoever; Macpherson and GEMC do not have any other subsidiaries and do
not own, directly or indirectly, any capital stock or other equity
securities of any other corporation or any ownership interest in any
partnership, joint venture or other association;
(e) the Company, each of the Subsidiaries, Macpherson and GEMC are
duly qualified or licensed by and are in good standing in each
jurisdiction in which they conduct their respective businesses and in
which the failure, individually or in the aggregate, to be so licensed or
qualified could reasonably be expected to have a material adverse effect
on the results of operations, business or condition (financial or
otherwise) of the Company and the Subsidiaries taken as a whole (a
"Company Material Adverse Effect") or Macpherson and GEMC taken as a whole
(a "Macpherson Material Adverse Effect"), and the Company, each of the
Subsidiaries, Macpherson and GEMC are in compliance in all material
respects with the laws, orders, rules, regulations and directives issued
or administered by such jurisdictions;
(f) none of the Company, the Subsidiaries, Macpherson or GEMC is in
breach of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would constitute a breach of, or default
under) (i) its respective charter or by-laws or (ii) in the performance or
observance of any obligation, agreement, covenant or condition contained
in any indenture, mortgage, deed of trust, bank loan or credit agreement
or other agreement or instrument to which the Company, any of the
Subsidiaries, Macpherson or GEMC is a party or by which any of them is
bound that has had or could reasonably be expected to have a Company
Material Adverse Effect or a Macpherson Material Adverse Effect; and the
execution, delivery and performance of the Operative Documents, the New
Credit Agreement, the Clinton Amendment, the Barudan Amendment and the ELC
Acquisition Agreement, the issuance of the Notes by the Company and
consummation of the transactions contemplated hereby and thereby by the
Company, the Subsidiaries, Macpherson and GEMC (to the extent a party
thereto) will not conflict with, or result in any breach of or constitute
a default under (nor constitute any event which with notice, lapse of
time, or both would constitute a breach of, or default under), any
provisions of the charter or by-laws of the Company, any of the
Subsidiaries, Macpherson or GEMC or under any provision of any license,
indenture, mortgage, deed of trust, bank loan or credit agreement or other
agreement or instrument to which the Company, any of the Subsidiaries,
Macpherson or GEMC is a party or by which any of them or their respective
properties may be bound, or under any Federal, state, local or foreign
law, regulation or rule or any decree, judgment or order applicable to the
Company, any of the Subsidiaries, Macpherson or GEMC;
(g) the Indenture has been duly authorized by each of the Company
and the Subsidiary Guarantors and when executed and delivered by the
Company, the Subsidiary Guarantors and the Trustee will constitute the
legal, valid and binding agreement of the Company and the Subsidiary
Guarantors, enforceable in accordance
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with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization,
moratorium or similar laws affecting creditors' rights generally and
general principles of equity;
(h) the Notes have been duly authorized by the Company and when
executed and authenticated in accordance with the terms of the Indenture
and delivered by the Company against payment therefor in accordance with
this Agreement, will constitute legal, valid and binding obligations of
the Company, enforceable in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance or transfer, reorganization, moratorium or similar
laws affecting creditors' rights generally and general principles of
equity;
(i) the Exchange Notes have been duly authorized by the Company and
when executed and authenticated in accordance with the terms of the
Indenture and delivered by the Company against exchange of the Notes in
accordance with the Indenture and the Registration Rights Agreement, will
constitute legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance or
transfer, reorganization, moratorium or similar laws affecting creditors'
rights generally and general principles of equity;
(j) the Operative Documents and the Stock Purchase Agreement have
been duly authorized, executed and delivered by the Company, and the Stock
Purchase Agreement has been duly authorized, executed and delivered by
each of the other parties thereto, and constitute legal, valid and binding
agreements of the Company and, with respect to the Stock Purchase
Agreement, such other parties thereto, enforceable in accordance with
their respective terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium or similar laws affecting creditors' rights
generally and general principles of equity and, in the case of this
Agreement and the Registration Rights Agreement, except for limitations on
the indemnification of, or contribution to amounts paid by, any person in
respect of liabilities under the Federal securities laws;
(k) the New Credit Agreement, the Clinton Amendment, the Barudan
Amendment and the ELC Acquisition Agreement have been duly authorized,
executed and delivered by the Company and the Subsidiaries of the Company
party thereto and constitute legal, valid and binding agreements of the
Company and such Subsidiaries, enforceable in accordance with their
respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization,
moratorium or similar laws affecting creditors' rights generally and
general principles of equity;
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(l) the Operative Documents, the Notes, the New Credit Agreement,
the Clinton Amendment, the Barudan Amendment and the ELC Acquisition
Agreement conform in all material respects to the respective descriptions
thereof contained in the Offering Documents;
(m) no approval, authorization, consent or order of or filing with
any Federal, state or local governmental or regulatory commission, board,
body, authority or agency is required by the Company or any of the
Subsidiary Guarantors in connection with the performance by the Company
and the Subsidiary Guarantors of their respective obligations (to the
extent a party thereto) under the Indenture, the Registration Rights
Agreement, the Barudan Amendment and the ELC Acquisition Agreement, the
issuance or sale of the Notes by the Company, the issuance of the
Subsidiary Guarantees by the Subsidiary Guarantors or the consummation of
the transactions contemplated by the Stock Purchase Agreement, other than
actions required to comply with securities laws in the performance of the
Registration Rights Agreement;
(n) no approval, authorization, consent or order of or filing with
any Federal, state or local governmental or regulatory commission, board,
body, authority or agency, except for those of which have been or will be
obtained prior to the Closing Date, is required by the Company or any of
the Subsidiary Guarantors in connection with the performance by the
Company and the Subsidiary Guarantors of their respective obligations (to
the extent a party thereto) under the Stock Pledge Agreement, the New
Credit Agreement and the Clinton Amendment;
(o) KPMG Peat Marwick LLP, whose reports on the (i) consolidated
financial statements of the Company and its Subsidiaries and (ii) combined
financial statements of Clinton are included in the Offering Documents,
and Xxxxxx Xxxxxxxx LLP, whose reports on the consolidated financial
statements of Macpherson and GEMC are included in the Offering Documents,
are each independent public accountants as required by the Act and the
applicable published rules and regulations thereunder;
(p) each of the Company, the Subsidiaries, Macpherson and GEMC has
all necessary licenses, authorizations, consents and approvals and has
made all necessary filings required under any Federal, state, local or
foreign law, regulation or rule, and has obtained all necessary
authorizations, consents and approvals from any governmental entity, in
order to conduct its respective business, except for any failure to do so
that would have a Company Material Adverse Effect or a Macpherson Material
Adverse Effect; none of the Company, any of the Subsidiaries, Macpherson
or GEMC, is in violation of, or in default under, any such license,
authorization, consent or approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment applicable to the
Company, any of the Subsidiaries, Macpherson or
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GEMC the effect of which could reasonably be expected to have a Company
Material Adverse Effect or a Macpherson Material Adverse Effect;
(q) there are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against the Company, any of the
Subsidiaries, Macpherson or GEMC or any of their respective properties, at
law or in equity, or before or by any Federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency
which could reasonably be expected to result in a judgment, decree or
order having a Company Material Adverse Effect or a Macpherson Material
Adverse Effect;
(r) the audited consolidated financial statements included in the
Offering Documents present fairly in all material respects (i) the
consolidated financial position of the Company and the Subsidiaries as of
the dates indicated and the consolidated results of operations and changes
in cash flows of the Company and the Subsidiaries for the periods
specified, (ii) the combined financial position of Clinton as of the dates
indicated and the combined results of operations and changes in cash flows
of Clinton for the periods specified and (iii) the consolidated financial
position of Macpherson and GEMC as of the dates indicated and the
consolidated results of operations and changes in cash flows of Macpherson
and GEMC for the periods specified; such consolidated financial statements
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis during the periods involved
except as indicated in the respective notes thereto;
(s) the unaudited interim consolidated financial statements of the
Company included in the Offering Memorandum present fairly in all material
respects the consolidated financial position of the Company and the
Subsidiaries as of the dates indicated and the consolidated results of
operations and changes in cash flows of the Company and the Subsidiaries
for the periods specified, subject to normal year-end adjustments; such
unaudited interim consolidated financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved, except for the absence of
footnotes required by such principles;
(t) the unaudited pro forma combined financial statements included
in the Offering Documents comply as to form in all material respects with
the applicable accounting requirements of the rules and regulations under
the Securities Act and (A) management of the Company believes the
assumptions underlying the pro forma adjustments are reasonable, (B) such
adjustments have been properly applied to the historical amounts in the
compilation of such statements and (C) such statements fairly present in
all material respects, with respect to the Company, the Subsidiaries,
Macpherson and GEMC, the combined pro forma financial position and results
of operations at the respective dates and for the respective periods
therein specified;
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(u) subsequent to the respective dates as of which information is
given in the Offering Documents, and except as may be otherwise stated in
the Offering Documents, there has not been (i) any material and
unfavorable change, financial or otherwise, in the results of operations,
business, condition (financial or otherwise) or prospects, present or
prospective, of the Company and the Subsidiaries taken as a whole, or
Macpherson and GEMC taken as a whole, (ii) any transaction, which is
material to the Company and the Subsidiaries taken as a whole, or
Macpherson and GEMC taken as a whole, contemplated or entered into by the
Company, any of the Subsidiaries, Macpherson or GEMC or (iii) any
obligation, contingent or otherwise, directly or indirectly, incurred by
the Company, any of the Subsidiaries, Macpherson or GEMC which is material
to the Company and the Subsidiaries taken as a whole, or Macpherson or
GEMC taken as a whole;
(v) except as contemplated by this Agreement or disclosed in the
Offering Documents, there is no broker, finder or other party engaged by
the Company or any affiliate of the Company that is entitled to receive
from the Company, any of the Subsidiaries or the Initial Purchaser any
brokerage or finder's fee or other fee or commission as a result of the
transactions contemplated by this Agreement;
(w) except as disclosed in the Offering Documents, none of the
Company, the Subsidiaries, Macpherson, or GEMC is (i) in violation of any
statute, any rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "environmental laws"), (ii)
owns or operates any real property contaminated with any substance that is
subject to any environmental laws, (iii) is liable for any off-site
disposal or contamination pursuant to any environmental laws, or (iv) is
subject to any claim relating to any environmental laws, which violation,
contamination, liability or claim referred to in clause (i), (ii), (iii)
or (iv) individually or in the aggregate could reasonably be expected to
have a Company Material Adverse Effect or a Macpherson Material Adverse
Effect and the Company is not aware of any pending investigation which
might lead to such a claim except for any such claim that would not have
such a Company Material Adverse Effect or a Macpherson Material Adverse
Effect;
(x) except as disclosed in the Offering Documents, the Company and
each of the Subsidiary Guarantors maintains insurance covering the
operation of its business and such insurance insures against such losses
and risks in accordance with customary industry practice to protect the
Company and each of the Subsidiary Guarantors and its respective business;
neither the Company nor any of the Subsidiary Guarantors has received
notice from any insurer or agent of such insurer that any material capital
improvements or other material expenditures will have to be made in order
to continue any insurance maintained by any of them other than capital
improvements and other
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expenditures in the ordinary course of the Company's or such Subsidiary
Guarantor's business;
(y) the Company has delivered to the Initial Purchaser true and
correct copies of the Stock Purchase Agreement, the Clinton Amendment, the
Barudan Amendment and the ELC Acquisition Agreement in the forms
originally executed, and there have been no amendments or waivers thereto
or in the exhibits or schedules thereto;
(z) the Company has delivered to the Initial Purchaser a true and
correct executed copy of the New Credit Agreement and there have been no
amendments, alterations or modifications to the New Credit Agreement or
waivers of any of the provisions thereof;
(aa) the Company is not an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), nor is it a closed-end investment
company required to be registered, but not registered, thereunder; and the
Company is not and, after giving effect to the offering and sale of the
Notes and the application of the proceeds thereof as described in the
Offering Documents, will not be an "investment company" as defined in the
Investment Company Act;
(bb) no securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Notes are listed on any
national securities exchange registered under Section 6 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or quoted in the
U.S. automated inter-dealer quotation system;
(cc) assuming the accuracy of the representations and warranties of
the Initial Purchaser in Section 4 hereof, the offer and sale of the Notes
in the manner contemplated by this Agreement will be exempt from the
registration requirements of the Securities Act; and it is not necessary
to qualify an indenture in respect of the Notes under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act") in connection with
such offer and sale of the Notes;
(dd) neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf (other than the Initial Purchaser), (i) has
(except as contemplated by the Offering Documents), within the six-month
period prior to the date hereof, offered or sold in the United States or
to any U.S. person (as such terms are defined in Regulation S under the
Securities Act) the Notes, or any security of the same class or series as
the Notes or (ii) has offered or will offer or sell the Notes (A) in the
United States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act or
(B) with respect to any such
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securities sold in reliance on Rule 904 of Regulation S under the
Securities Act, by means of any directed selling efforts within the
meaning of Rule 902(b) of Regulation S; the Company, its affiliates and
any person acting on its or their behalf (other than the Initial
Purchaser) have complied and will comply with the offering restrictions
requirement of Regulation S; the Company has not entered and will not
enter into any contractual arrangement with respect to the distribution of
the Notes except for this Agreement; and
(ee) there is no "substantial U.S. market interest" as defined in
Rule 902(n) of Regulation S in the Company's debt securities.
4. Representations by the Initial Purchaser; Resale by the Initial
Purchaser.
(a) The Initial Purchaser represents and warrants to the Company
that it is an "accredited investor" within the meaning of Regulation D
under the Securities Act.
(b) The Initial Purchaser acknowledges that the Notes have not been
registered under the Securities Act and, unless so registered, may not be
offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except in accordance with Regulation S or
pursuant to an exemption from the registration requirements of the
Securities Act. The Initial Purchaser represents and agrees that it has
offered and sold the Notes and will offer and sell the Notes only in
accordance with Rule 144A, to a limited number of Institutional Accredited
Investors (as hereinafter defined) in accordance with subsection (c) of
this Section 4 or outside the United States to foreign persons in
transactions meeting the requirements of Rule 904 of Regulation S under
the Securities Act. Accordingly, neither the Initial Purchaser nor its
affiliates, nor any persons acting on its or their behalf, have engaged or
will engage in any directed selling efforts with respect to the Notes, and
the Initial Purchaser, its affiliates and all persons acting on its or
their behalf have complied and will comply with the offering restrictions
requirement of Regulation S. Unless otherwise defined herein, terms used
in this subsection (b) have the meanings given to them by Regulation S.
(c) The Initial Purchaser may offer and sell Notes in definitive,
fully registered form to a limited number of institutions, each of which
is reasonably believed by the Initial Purchaser to be an "accredited
investor" within the meaning of Rule 501(a) (1), (2), (3) or (7) under the
Securities Act or an entity in which all of the equity owners are
accredited investors within the meaning of Rule 501(a) (1), (2), (3) or
(7) under the Securities Act (each, an "Institutional Accredited
Investor"); provided, however, that each such Institutional Accredited
Investor executes and delivers to the Initial Purchaser and the Company,
prior to the consummation of any sale of Notes to such Institutional
Accredited Investor, an Initial Purchaser's Letter in substantially the
form attached as Annex A to the Offering Documents (an "Initial
Purchaser's Letter").
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(d) The Initial Purchaser represents, warrants and agrees that it
and each of its affiliates has not entered and will not enter into any
contractual arrangement with respect to the distribution of the Notes
except with the prior written consent of the Company.
(e) The Initial Purchaser agrees that it and each of its affiliates
or anyone acting on its behalf will not offer or sell the Notes purchased
hereby in the United States by means of any form of general solicitation
or general advertising within the meaning of Rule 502(c) under the
Securities Act, including, but not limited to (i) any advertisement,
article, notice or other communication published in any newspaper,
magazine or similar media or broadcast over television or radio or (ii)
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. The Initial Purchaser agrees, with
respect to resales of any of the Notes made in reliance on Rule 144A, to
deliver either with the confirmation of such resale or otherwise prior to
settlement of such resale a notice to the effect that such resale has been
made in reliance upon the exemption from the registration requirements of
the Securities Act provided by Rule 144A.
(f) The Initial Purchaser represents, warrants and agrees that (i)
it has not offered or sold, and prior to the date six months after the
date of issue of the Notes will not offer or sell, any Notes to persons in
the United Kingdom except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to
the public in the United Kingdom within the meaning of the Public Offers
of Securities Regulations 1995, (ii) it has complied and will comply with
all applicable provisions of the Public Offers of Securities Regulations
1995 and the Financial Services Xxx 0000 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 to any person, in the United Kingdom, any document received by it
in connection with the issue of the Notes to a person who is of a kind
described in Article 11(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1995 or is a person to whom such
document may otherwise lawfully be issued or passed on.
(g) The Initial Purchaser represents, warrants and agrees that (i)
it has not solicited, and will not solicit, offers to purchase any of the
Notes from, (ii) it has not sold, and will not sell, any of the Offering
Documents to, and (iii) it has not distributed, and will not distribute,
the Notes to, any person or entity in any jurisdiction outside of the
Untied States except, in each case, in compliance in all material respects
with all applicable laws. For the purpose of this Agreement, "United
States" means the United States of America, its territories, its
possessions and other areas subject to its jurisdiction.
-12-
5. Certain Covenants of the Company.
(a) The Company will advise the Initial Purchaser promptly of any
proposal to amend or supplement the Offering Documents and will not effect
such amendment or supplementation without the Initial Purchaser's consent,
which consent shall not be unreasonably withheld. If, at any time prior to
the completion of the initial resale of the Notes by the Initial
Purchaser, any event occurs as a result of which the Offering Documents as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, the Company promptly will notify the
Initial Purchaser of such event and promptly will prepare at its own
expense, an amendment or supplement which will correct such statement or
omission. Neither the Initial Purchaser's consent to, nor the Initial
Purchaser's delivery to offerees or investors of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in
Section 7.
(b) The Company will furnish to the Initial Purchaser copies of the
Offering Documents and all amendments and supplements to such documents,
in each case as soon as available and in such quantities as the Initial
Purchaser reasonably requests, and the Company will furnish to the Initial
Purchaser on the date thereof three copies of the independent accountants'
reports included in the Offering Memorandum manually signed by such
independent accountants. At any time when the Company is not subject to
Section 13 or 15(d) of the Exchange Act, for so long as any Notes are
outstanding, the Company will promptly furnish or cause to be furnished to
the Initial Purchaser and, upon request of holders and prospective
purchasers of the Notes, to such holders and purchasers, a reasonable
number of copies of the information required to be delivered to holders
and prospective purchasers of the Notes pursuant to Rule 144(d)(4) under
the Securities Act (or any successor provision thereto) in order to permit
compliance with Rule 144A in connection with resales by such holders of
the Notes. The Company will pay the expenses of printing and distributing
to the Initial Purchaser all such documents.
(c) The Company will arrange, in cooperation with the Initial
Purchaser and its counsel, for the qualification of the Notes for sale and
the determination of their eligibility for investment under the laws of
such jurisdictions in the United States and Canada as the Initial
Purchaser designates and will continue such qualifications in effect so
long as required to complete the resale of the Notes by the Initial
Purchaser; provided, however, that the Company will not be required to
qualify as a foreign corporation or to file a general consent to service
of process in any such jurisdiction.
(d) During the period of three years after the Closing Date or, if
earlier, until such time as the Notes are no longer restricted securities
(as defined in Rule 144 under the Securities Act), the Company will not,
and will not permit any of its affiliates
-13-
(as defined in Rule 144 under the Securities Act) to, resell any of the
Notes that have been reacquired by any of them.
(e) During the period of three years after the Closing Date or, if
earlier, until such time as the Notes are no longer restricted securities
(as defined in Rule 144 under the Securities Act), the Company will not be
or become an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered
under Section 8 of the Investment Company Act and will not be or become a
closed-end investment company required to be registered, but not
registered, under the Investment Company Act.
(f) The Company will furnish to you as early as practicable prior to
the time of purchase, but no later than two business days prior thereto, a
copy of the latest available unaudited interim consolidated financial
statements, if any, of (i) the Company and its Subsidiaries and (ii)
Macpherson and GEMC, which have been read by the Company's independent
certified public accountants and Macpherson's independent certified public
accountants, respectively, as stated in their letters to be furnished
pursuant to Section 6(c) of this Agreement.
(g) In connection with the offering, until the Initial Purchaser
shall have notified the Company of the completion of the resale of the
Notes, neither the Company nor any of its affiliates has or will, either
alone or with one or more other persons, bid for or purchase for any
account in which it or any of its affiliates has a beneficial interest any
Notes; and neither it nor any of its affiliates will make bids or
purchases for the purpose of creating actual, or apparent, active trading
in, or of raising the price of, the Notes.
(h) For a period of 90 days after the date of the Offering
Memorandum, neither the Company nor any of its Subsidiaries will offer,
sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, any United States dollar-denominated debt securities issued by
the Company or any of its Subsidiaries (other than the Exchange Notes as
contemplated by the Registration Rights Agreement) in any transaction
involving a public offering or a private placement in connection with
intended resale under Rule 144A and having a maturity of more than three
years from the date of issue or publicly disclose the intention to make
any such offer, sale, pledge or disposal, without the prior written
consent of the Initial Purchaser. Neither the Company nor any of its
Subsidiaries will at any time offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any securities under
circumstances where such offer, sale, pledge, contract or disposition
would cause the exemption afforded by Section 4(2) of the Securities Act
or the safe harbor of Regulation S thereunder to cease to be applicable to
the offer and sale of the Notes.
-14-
(i) The Company will apply the net proceeds from the sale of the
Notes in the manner set forth under the caption "Use of Proceeds" in the
Offering Memorandum.
(j) The Company will pay all expenses, fees and taxes (other than
any transfer taxes and fees and disbursements of counsel for the Initial
Purchaser except as set forth under Section 6 hereof and subclause (iv)
below) in connection with (i) the preparation of the Offering Documents,
and any amendments or supplements thereto, and the printing and furnishing
of copies of each thereof to the Initial Purchaser (including costs of
mailing and shipment), (ii) the preparation, issuance, execution,
authentication and delivery of the Notes, (iii) the word processing and/or
printing of this Agreement, the Indenture, and the reproduction and/or
printing and furnishing of copies of each thereof to the Initial Purchaser
(including costs of mailing and shipment), (iv) the determination of the
eligibility of the Notes for investment under state securities or Blue Sky
laws (including the legal fees and filing fees and other disbursements of
counsel for the Initial Purchaser) and the printing and furnishing of
copies of any Blue Sky surveys or legal investment surveys to the Initial
Purchaser, (v) any fees payable to investment rating agencies with respect
to the Notes (vi) the cost of qualifying the Notes for trading in the
Private Offerings, Resale and Trading through Automated Linkages
("PORTAL") Market and any expenses incidental thereto and (vii) the
performance of the Company's other obligations hereunder.
(k) The Company will use its best efforts to cause the Notes to be
eligible for trading in the PORTAL Market upon issuance.
(l) The Company will comply with all of its agreements set forth 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 Notes by DTC for "book-entry" transfer.
(m) The Company will cause each Note to bear the legend set forth in
the form of Note attached as Exhibit 1 to Appendix A to the Indenture
until such legend shall no longer be necessary or advisable because the
Notes are no longer subject to the restrictions on transfer described
therein.
6. Reimbursement of Initial Purchaser Expenses. If the Notes are not
delivered for any reason other than the termination of this Agreement pursuant
to the first two paragraphs of Section 8 hereof or the default by the Initial
Purchaser in its obligations hereunder, the Company shall reimburse the Initial
Purchaser for all of its reasonable out-of-pocket expenses, including the fees
and disbursements of its counsel.
-15-
7. Conditions of Initial Purchaser's Obligations. The Initial Purchaser's
obligations hereunder are subject to the accuracy of the representations and
warranties on the part of the Company on the date hereof and at the time of
purchase, the performance by the Company of its obligations hereunder and to the
following conditions:
(a) The Company shall furnish to you at the time of purchase an
opinion of Xxxxxx Xxxxxxx & Xxxx LLP, special counsel for the Company,
addressed to the Initial Purchaser and dated the time of purchase and in
form satisfactory to King & Spalding, counsel for the Initial Purchaser,
stating that:
(i) the Company is a corporation validly existing and in good
standing under the laws of the State of Delaware, with the corporate
power and authority to execute and deliver this Agreement, the
Indenture and the Registration Rights Agreement (collectively, the
"Transaction Documents") and to issue, sell and deliver the Notes;
(ii) each of the Subsidiary Guarantors is a corporation
validly existing in good standing under the laws of the jurisdiction
of its incorporation, with the corporate power and authority to
execute and deliver the Transaction Documents to which it is a
party;
(iii) this Agreement has been duly authorized by all necessary
corporate action on the part of the Company and each of the
Subsidiary Guarantors and has been executed and delivered by the
Company and each of the Subsidiary Guarantors;
(iv) the Indenture has been duly authorized by all necessary
corporate action on the part of the Company and the Subsidiary
Guarantors, has been executed and delivered by the Company and each
of the Subsidiary Guarantors and constitutes the legal, valid and
binding obligation of the Company and the Subsidiary Guarantors,
enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance or transfer, reorganization, moratorium or
similar laws affecting creditors' rights generally and general
principles of equity;
(v) the Notes have been duly authorized by all necessary
corporate action on the part of the Company and, when executed and
authenticated in accordance with the terms of the Indenture and
delivered by the Company against payment therefor in accordance with
this Agreement, will constitute legal, valid and binding obligations
of the Company, enforceable in accordance with their terms, except
as the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization or
-16-
similar laws affecting creditors' rights generally and general
principles of equity;
(vi) the Exchange Notes have been duly authorized by all
necessary corporate action on the part of the Company and, when
executed and authenticated in accordance with the terms of the
Indenture and delivered by the Company in exchange for the Notes in
accordance with the Indenture, will constitute legal, valid and
binding obligations of the Company, enforceable in accordance with
their terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium or similar laws affecting creditors'
rights generally and general principles of equity;
(vii) the Registration Rights Agreement has been duly
authorized by all necessary corporate action on the part of the
Company and the Subsidiary Guarantors, has been executed and
delivered by the Company and the Subsidiary Guarantors and
constitutes legal, valid and binding agreements of the Company and
the Subsidiary Guarantors enforceable in accordance with their
respective terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance or
transfer, reorganization, moratorium or similar laws affecting
creditors' rights generally and general principles of equity;
(viii) the Indenture, the Notes and the Registration Rights
Agreement conform in all material respects to the descriptions
thereof contained in the Offering Memorandum;
(ix) no approval, authorization, consent or order of or filing
with any Federal or New York state governmental or regulatory
commission, board, body, authority or agency is required to be
obtained by the Company or any of the Subsidiary Guarantors in
connection with the performance by the Company and the Subsidiary
Guarantors of their respective obligations under the Transaction
Documents (to the extent a party thereto), the issuance or sale of
the Notes by the Company or the issuance of the Subsidiary
Guarantees by the Subsidiary Guarantors, other than actions required
to comply with securities laws in the performance of the
Registration Rights Agreement;
(x) the execution, delivery and performance of the Transaction
Documents, the issuance of the Notes by the Company and consummation
of the transactions contemplated by the Transaction Documents by the
Company and the Subsidiary Guarantors party thereto will not
conflict with, or result in any breach of or constitute a default
under (nor constitute any event which with notice, lapse of time, or
both would constitute a breach of, or default under),
-17-
any provisions of the charter or by-laws of the Company or any of
the Subsidiary Guarantors or under any provision of the distribution
agreements of the Company and the Subsidiary Guarantors with Xxxxx
XX, Pegasus Sewing Machine Mfg. Co., Ltd., M&R Printing Equipment,
Inc., and Barudan America, Inc. and Barudan Company, Ltd., or under
any Federal or New York state law, regulation or rule or any decree,
judgment or order known to such counsel to be applicable to the
Company or any of the Subsidiary Guarantors;
(xi) to such counsel's knowledge, there are no actions, suits
or proceedings pending or threatened in writing against the Company,
any of the Subsidiary Guarantors, Macpherson or GEMC or any of their
respective properties, at law or in equity, or before or by any
Federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency which could reasonably
be expected to result in a judgment, decree or order having a
Company Material Adverse Effect;
(xii) the Company is not and, after giving effect to the
offering and sale of the Notes and the application of the proceeds
thereof as described in the Offering Memorandum, will not be an
"investment company" as defined in the Investment Company Act; and
(xiii) assuming the accuracy of the representations and
warranties of the Initial Purchaser in Section 4 hereof, the offer
and sale of the Notes in the manner contemplated by this Agreement
will be exempt from the registration requirements of the Securities
Act; and it is not necessary to qualify an indenture in respect of
the Notes under the Trust Indenture Act in connection with such
offer and sale of the Notes.
In addition, such opinion shall include a statement that such
counsel has participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants of the Company and representatives of the Initial Purchaser at
which the contents of the Offering Memorandum were discussed, and although
such counsel has not independently verified and does not assume
responsibility for the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum (except as and to the
extent stated in subparagraph (viii) above), on the basis of the foregoing
such counsel does not believe that the Offering Memorandum, after giving
effect to any amendment or supplement thereto made prior to the time of
purchase, as of its date or at the time of purchase contained an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need express no opinion with respect to the financial statements
and schedules and other financial and statistical data included in the
Offering Memorandum).
-18-
(b) The Company shall furnish to you at the time of purchase an
opinion of Waters, McPherson, McNeill, counsel for the Company, addressed
to the Initial Purchaser and dated the time of purchase and in form
satisfactory to King & Spalding, counsel for the Initial Purchaser,
stating that:
(i) the Company has the corporate power and authority to own
its properties (including, upon the closing of the transactions
contemplated by the Stock Purchase Agreement, the properties owned
by Macpherson and GEMC) and conduct its business (including, upon
the closing of the transactions contemplated by the Stock Purchase
Agreement, the business conducted by Macpherson and GEMC) as
described in the Offering Documents and to execute and deliver the
Stock Pledge Agreement, the New Credit Agreement, the Clinton
Amendment, the Barudan Amendment and the ELC Acquisition Agreement;
(ii) each of the Company's direct and indirect Subsidiaries
has the corporate power and authority to own its properties and
conduct its respective business as described in the Offering
Documents; all of the issued and outstanding shares of capital stock
of each of the Company's Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable and are owned of
record directly or indirectly by the Company free and clear of all
liens, security interests, pledges, charges, encumbrances, defects,
shareholders' agreements, voting trusts, equities or claims of any
nature whatsoever, except for the liens listed on Schedule I to this
Agreement; other than the Subsidiaries listed on Schedule I to this
Agreement, to the best of such counsel's knowledge, the Company does
not own, directly or indirectly, any capital stock or other equity
securities of any other corporation or any ownership interest in any
partnership, joint venture or other association;
(iii) the Company and each of the Subsidiaries are duly
qualified or licensed by and are in good standing in each
jurisdiction in which they conduct their respective businesses and
in which the failure, individually or in the aggregate, to be so
licensed or qualified could reasonably be expected to have a Company
Material Adverse Effect, and the Company and each of the
Subsidiaries are in compliance in all material respects with the
laws, orders, rules, regulations and directives issued or
administered by such jurisdictions;
(iv) the Stock Pledge Agreement, the New Credit Agreement, the
Clinton Amendment, the Barudan Amendment and the ELC Acquisition
Agreement have been duly authorized by all necessary corporate
action on the part of the Company and the Subsidiaries party
thereto, have been executed and delivered by the Company and the
Subsidiaries party thereto and constitute legal, valid and binding
agreements of the Company and the Subsidiaries party
-19-
thereto, enforceable in accordance with their respective terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance or transfer, preferential
transfers, reorganization, moratorium or similar laws affecting
creditors' rights generally and general principles of equity;
(v) the Stock Pledge Agreement, the New Credit Agreement, the
Stock Purchase Agreement, the Clinton Amendment, the Barudan
Amendment and the ELC Acquisition Agreement conform in all material
respects to the descriptions thereof contained in the Offering
Memorandum;
(vi) no approval, authorization, consent or order of or filing
with any Federal, state or local governmental or regulatory
commission, board, body, authority or agency is required to be
obtained by the Company or any of the Subsidiary Guarantors in
connection with the performance by the Company and the Subsidiary
Guarantors of their respective obligations under the Stock Pledge
Agreement, the New Credit Agreement, the Clinton Amendment, the
Barudan Amendment and the ELC Acquisition Agreement or the
consummation of the transactions contemplated by the Stock Purchase
Agreement;
(vii) neither of the Company nor any of the Subsidiaries is in
breach of, or in default under (nor has any event occurred which
with notice, lapse of time, or both would constitute a breach of, or
default under), (viii) its respective charter or by-laws or (ix) in
the performance or observance of any obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of trust,
bank loan or credit agreement or other agreement or instrument to
which the Company or any such Subsidiary is a party or by which any
of them is bound that had or reasonably could be expected to have a
Company Material Adverse Effect; and the execution, delivery and
performance of the Stock Pledge Agreement, the New Credit Agreement,
the Clinton Amendment, the Barudan Amendment and the ELC Acquisition
Agreement and consummation of the transactions contemplated thereby
by the Company and the Subsidiaries party thereto will not conflict
with, or result in any breach of or constitute a default under (nor
constitute any event which with notice, lapse of time, or both would
constitute a breach of, or default under), any provisions of the
charter or by-laws of the Company or any of the Subsidiaries or
under any provision of any license, indenture, mortgage, deed of
trust, bank loan or credit agreement or other agreement or
instrument to which the Company or any of the Subsidiaries is a
party or by which any of them or their respective properties may be
bound, or under any Federal, state, local or foreign law, regulation
or rule or any decree, judgment or order known to such counsel
applicable to the Company or any of its Subsidiaries, other than
those which would not have a Company Material Adverse Effect;
-20-
(viii) to the best of such counsel's knowledge each of the
Company and the Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary
filings required under any Federal, state, local or foreign law,
regulation or rule, and has obtained all necessary authorizations,
consents and approvals from any governmental entity, in order to
conduct its respective business, other than those which the failure
to obtain would not have a Company Material Adverse Effect; to the
best of such counsel's knowledge, neither the Company nor any of the
Subsidiaries is in violation of, or in default under, any such
license, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company or any of the Subsidiaries the
effect of which could reasonably be expected to have a Company
Material Adverse Effect;
(ix) to the best of such counsel's knowledge, there are no
actions, suits or proceedings pending or threatened against the
Company or any of the Subsidiaries or any of their respective
properties, at law or in equity, or before or by any Federal, state,
local or foreign governmental or regulatory commission, board, body,
authority or agency which could reasonably be expected to result in
a judgment, decree or order having a Company Material Adverse
Effect;
(c) The Company shall furnish to you at the time of purchase an
opinion of Xxxxx Xxxxx Mulliss & Xxxxx LLP, counsel for Macpherson and
GEMC, addressed to the Initial Purchaser and dated the time of purchase
and in form satisfactory to King & Spalding, counsel for the Initial
Purchaser, stating that:
(i) Macpherson has been duly incorporated and is validly
existing as a corporation, authorized to transact business under the
laws of the jurisdiction of its incorporation with full corporate
power and authority to own its properties and to conduct its
business, and to execute and deliver the Stock Purchase Agreement;
(ii) GEMC has been duly incorporated and is validly existing
as a corporation, in good standing under the laws of the
jurisdiction of its incorporation with full corporate power and
authority to own its properties and to conduct its business, and to
execute and deliver the Stock Purchase Agreement;
(iii) all of the issued shares of capital stock of Macpherson
have been duly authorized and validly issued, are fully paid and
non-assessable, and, to the best knowledge of such counsel, based
upon a review of the corporate books and records, upon consummation
of the transactions contemplated by the Stock
-21-
Purchase Agreement, will be owned of record by the Company free and
clear of all liens, security interests, pledges, charges,
encumbrances, defects, shareholders' agreements, voting trusts,
equities or claims of any nature whatsoever other than those liens,
security interests, pledges, charges, encumbrances, defects,
shareholders' agreements, voting trusts, equities or claims created
by the Company or as the result of actions of the Company;
(iv) all of the issued shares of capital stock of GEMC have
been duly authorized and validly issued, are fully paid and
nonassessable, and, to the best knowledge of such counsel, based
upon a review of the corporate books and records, upon consummation
of the transactions contemplated by the Stock Purchase Agreement,
will be owned of record by the Company and Macpherson free and clear
of all liens, security interests, pledges, charges, encumbrances,
defects, shareholders' agreements, voting trusts, equities or claims
of any nature whatsoever other than those liens, security interests,
pledges, charges, encumbrances, defects, shareholders' agreements,
voting trusts, equities or claims created by the Company or
Macpherson or as the result of actions of the Company or Macpherson
after the consummation of the transactions contemplated by the Stock
Purchase Agreement;
(v) to the best knowledge of such counsel, Macpherson and GEMC
do not own, directly or indirectly, any capital stock or other
equity securities of any other corporation or any ownership interest
in any partnership, joint venture or other association;
(vi) the Stock Purchase Agreement has been duly authorized,
executed and delivered by Macpherson and GEMC and is a legal, valid
and binding agreement of Macpherson and GEMC, enforceable in
accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, fraudulent conveyance or
transfer, reorganization, moratorium or similar laws affecting
creditors' rights generally and general principles of equity;
(vii) no approval, authorization, consent or order of or
filing with any national, state or local governmental or regulatory
commission, board, body, authority or agency is required in
connection with the performance by Macpherson and GEMC of its
obligations under the Stock Purchase Agreement or consummation of
the transactions contemplated thereby or, if required, has been
obtained in connection with the execution, delivery or performance
by the Macpherson or GEMC of the Stock Purchase Agreement or any of
the instruments or agreements referenced therein or the taking of
any action therein contemplated;
-22-
(viii) the execution, delivery and performance of the Stock
Purchase Agreement by Macpherson and GEMC and the consummation by
Macpherson and GEMC of the transactions contemplated thereby do not
and will not conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which with
notice, lapse of time, or both would constitute a breach of or
default under), any provisions of the charter or by-laws of
Macpherson or GEMC or under any provision of any license, indenture,
mortgage, deed of trust, bank loan, credit agreement or other
agreement or instrument, of which such counsel is aware, to which
Macpherson or GEMC is a party or by which any of them or their
respective properties may be bound or affected, or, to such
counsel's best knowledge, under any law, regulation or rule or any
decree, judgment or order applicable to Macpherson or GEMC;
(ix) to the best of such counsel's knowledge, neither
Macpherson or GEMC is in breach of, or in default under (nor has any
event occurred which with notice, lapse of time, or both would
constitute a breach of, or default under), any license, indenture,
mortgage, deed of trust, bank loan or credit agreement or any other
agreement or instrument to which Macpherson or GEMC is a party or by
which any of them or their respective properties may be bound or
affected or under any law, regulation or rule or any decree,
judgment or order applicable to Macpherson or GEMC which could
reasonably be expected to have Macpherson Material Adverse Effect;
and
(x) to the best of such counsel's knowledge, there are no
actions, suits or proceedings pending or threatened against
Macpherson or GEMC or any of their respective properties, at law or
in equity or before or by any commission, board, body, authority or
agency which could reasonably be expected to have a Macpherson
Material Adverse Effect.
(d) You shall have received from each of KPMG Peat Marwick LLP and
Xxxxxx Xxxxxxxx LLP letters dated as of the date of this Agreement and the
time of purchase and addressed to the Initial Purchaser in the forms
heretofore approved by you.
(e) You shall have received at the time of purchase, the favorable
opinion of King & Spalding, counsel for the Initial Purchaser, dated the
time of purchase, as to the matters referred to in subparagraphs (v),
(vii), (x) and (xii) of paragraph (a) of this Section 7.
In addition, such counsel shall state that they have advised you as
to the requirements of the Securities Act and the applicable rules and
regulations thereunder and rendered legal advice and assistance to you in
the course of your investigation pertaining to, and your participation in
the preparation of, the Offering Memorandum.
-23-
Such counsel shall state that rendering such assistance involved, among
other things, discussions and inquiries concerning various legal matters
and the review of the documents referred to above. Such counsel shall
state that they have also participated in conferences with your
representatives, representatives of the Company and its counsel and
independent public accountants during which the contents of the Offering
Memorandum and related matters were discussed and reviewed. Such counsel
shall state that, nothing has come to their attention that causes such
counsel to believe that the Offering Memorandum (other than the financial
statements and schedules and other financial and statistical data included
therein as to which such counsel need express no belief), on the date of
such Offering Memorandum and as of the date of the time of purchase,
contained or contains any untrue statement of a material fact or omitted
or omits to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(f) No amendment or supplement to the Offering Documents shall have
been made to which you reasonably object in writing.
(g) At the time of purchase, the Offering Memorandum and all
amendments or supplements thereto, or modifications thereof, if any, taken
together, shall not contain an untrue statement of material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.
(h) Between the time of execution of this Agreement and the time of
purchase, there has not been (i) any material adverse change, present or
prospective, in the business, properties, results of operations, condition
(financial or otherwise), assets or prospects of the Company, the
Subsidiaries, and Macpherson and GEMC taken as a whole, other than as
described in the Offering Memorandum, (ii) any transaction that is
material to the Company, the Subsidiaries, and Macpherson and GEMC taken
as a whole, entered into by such persons, other than as described in the
Offering Memorandum, or (iii) any obligation, contingent or otherwise,
directly or indirectly, incurred by the Company, the Subsidiaries, and
Macpherson and GEMC taken as a whole, that is material to such persons
other than as described in the Offering Memorandum.
(i) The Company will, at the time of purchase, deliver to you a
certificate of two of its executive officers to the effect that the
representations and warranties of the Company set forth in this Agreement
and the conditions set forth in paragraph (f) and paragraph (g) have been
met and are true and correct as of such date.
(j) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Offering Documents as of the time of purchase as you may reasonably
request.
-24-
(k) The Company shall perform such of its obligations under this
Agreement as are to be performed by the terms hereof at or before the time
of purchase.
(l) The Company, each of the Subsidiary Guarantors and the Trustee
shall have entered into the Indenture and the Initial Purchaser shall have
received executed counterparts thereof.
(m) The Notes shall be eligible for trading in the PORTAL Market
upon issuance.
(n) The closing of the transactions contemplated by the Stock
Purchase Agreement shall occur simultaneously with the closing of the
transactions contemplated by this Agreement. The Company shall have
provided to the Initial Purchaser and its counsel copies of all material
documents required to be delivered by parties pursuant to the Stock
Purchase Agreement in connection with the closing of the transactions
thereunder. All consents, approvals, authorizations, orders or
declarations of or from, or registrations, qualifications or filings with,
any court or governmental agency or body required in connection with the
transactions contemplated by the Stock Purchase Agreement shall have been
obtained and shall be in full force and effect.
(o) The Clinton Amendment, the Barudan Amendment and the ELC
Acquisition Agreement shall be in full force and effect.
(p) Prior to or simultaneously with the closing of the transactions
contemplated by this Agreement, the Company shall have entered into the
New Credit Agreement and the Initial Purchaser shall have received
executed counterparts thereof and all other documents and agreements
entered into in connection therewith, including but not limited to, such
documents and agreements evidencing the release of liens on certain of the
Company's assets under the Existing Credit Facility (as defined in the
Offering Documents).
(q) Prior to or simultaneously with the closing of the transactions
contemplated by this Agreement, the Company shall have entered into the
Clinton Amendment and the Initial Purchaser shall have received executed
counterparts of the Clinton Amendment and all other documents and
agreements entered into in connection therewith.
8. Effective Date of Agreement; Termination. This Agreement shall become
effective when the parties hereto have executed and delivered this Agreement.
The obligations of the Initial Purchaser hereunder shall be subject to
termination in its absolute discretion if, at any time prior to the time of
purchase, trading in securities on the New York Stock Exchange shall have been
suspended or minimum prices shall have been
-25-
established on the New York Stock Exchange, or if a general banking moratorium
shall have been declared either by the United States or New York State
authorities, or if the United States shall have declared war in accordance with
its constitutional processes or there shall have occurred any material outbreak
or escalation of hostilities or other national or international calamity or
crisis of such magnitude in its effect on, or any material adverse change in any
financial market which, in your judgment makes it impracticable to market the
Notes.
If the Initial Purchaser elects to terminate this Agreement as provided in
this Section 8, the Company shall be notified promptly by letter or telegram.
If the sale to the Initial Purchaser of the Notes, as contemplated by this
Agreement, is not carried out by the Initial Purchaser for any reason permitted
under this Agreement or if such sale is not carried out because the Company
shall be unable to comply with any of the terms of this Agreement, the Company
shall not be under any obligation or liability under this Agreement (except to
the extent provided in Sections 5(j), 6 and 9 hereof), and the Initial Purchaser
shall be under no obligation or liability to the Company under this Agreement
(except to the extent provided in Section 9 hereof) or to one another hereunder.
9. Indemnity by the Company, the Subsidiary Guarantors and the Initial
Purchaser.
(a) The Company and each of the Subsidiary Guarantors, jointly and
severally, agree to indemnify, defend and hold harmless the Initial Purchaser
and any person who controls the Initial Purchaser within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, from and against any
loss, expense, liability or claim (including but not limited to reasonable
attorneys' fees and any and all reasonable expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), which, jointly or severally, the Initial Purchaser
or controlling person may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, expense, liability or claim (or actions in
respect thereof) arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in any Offering Document or any
amendment or supplement thereto or arises out of or is based upon any omission
or alleged omission to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, except insofar as any such loss, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact made in reliance upon and in conformity with
information furnished in writing by the Initial Purchaser to the Company
expressly for use in such Offering Document or arises out of or is based upon
any omission or alleged omission to state a material fact in connection with
such information necessary in order to make the statements regarding such
information, in light of the circumstances under which they were made, not
misleading; provided, however, that neither the Company nor any Subsidiary
Guarantor shall be liable pursuant to this subsection (a) with respect to the
Preliminary Offering Memorandum to the extent that any such loss, expense,
liability or claim
-26-
arises solely from the fact that the Initial Purchaser sold Notes to a person to
whom there was not sent or given, on or prior to the written confirmation of
such sale, a copy of the Offering Memorandum, as amended and supplemented,
provided that the Company shall have previously furnished copies thereof to the
Initial Purchaser in accordance with this Agreement and the Offering Memorandum,
as amended and supplemented, would have corrected any such untrue statement or
omission.
If any action is brought against the Initial Purchaser or such other
indemnified party in respect of which indemnity may be sought against the
Company pursuant to the foregoing paragraph, the Initial Purchaser shall
promptly notify the Company in writing of the institution of such action and the
Company shall assume the defense of such action, including the employment of
counsel and payment of expenses (but the failure so to notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have under this Section 9 except to the extent that it has been prejudiced in
any material respect by such failure or from any liability which it may
otherwise have). The Initial Purchaser or such other indemnified party shall
have the right to employ its own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of the Initial Purchaser or
such controlling person unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of such
action or the Company shall not have employed counsel to have charge of the
defense of such action or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to the Company (in which
case the Company shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the Company and paid as incurred (it being
understood, however, that the Company shall not be liable for the fees and
expenses of more than one separate law firm (in addition to any local counsel)
in any one action or series of related actions in the same jurisdiction
representing the indemnified parties who are parties to such action). Anything
in this paragraph to the contrary notwithstanding, the Company shall not be
liable for any settlement of any such claim or action effected without its
written consent (which consent shall not be unreasonably withheld or delayed),
but if settled with the written consent of the Company, or if there is a final
judgment with respect thereto, the Company agrees to indemnify and hold harmless
the Initial Purchaser and each controlling person from and against any loss or
liability by reason of such settlement or judgment.
(b) The Initial Purchaser agrees to indemnify, defend and hold harmless
the Company and the Subsidiary Guarantors, their respective directors and
officers and any person who controls the Company and the Subsidiary Guarantors
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any loss, expense, liability or claim (including
but not limited to reasonable attorneys' fees and any and all reasonable
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), which, jointly or
severally, the Company and the
-27-
Subsidiary Guarantors or any such person may incur under the Securities Act, the
Exchange Act or otherwise, insofar as such loss, expense, liability or claim (or
actions in respect thereof) arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in any Offering
Document or any amendment or supplement thereto that is made in reliance upon
and in conformity with information furnished in writing by or on behalf of the
Initial Purchaser to the Company expressly for use in such Offering Document, or
arises out of or is based upon any omission or alleged omission to state a
material fact in connection with such information necessary in order to make the
statements regarding such information, in light of the circumstances under which
they were made, not misleading.
If any action is brought against the Company, the Subsidiary Guarantors or
any such person in respect of which indemnity may be sought against the Initial
Purchaser pursuant to the foregoing paragraph, the Company, the Subsidiary
Guarantors or such person shall promptly notify the Initial Purchaser in writing
of the institution of such action and the Initial Purchaser shall assume the
defense of such action, including the employment of counsel and payment of
expenses. The Company, the Subsidiary Guarantors or such person shall have the
right to employ its own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the Company, the Subsidiary Guarantors
or such person unless the employment of such counsel shall have been authorized
in writing by the Initial Purchaser in connection with the defense of such
action or the Initial Purchaser shall not have employed counsel to have charge
of the defense of such action or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to the Initial Purchaser (in
which case the Initial Purchaser shall not have the right to direct the defense
of such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the Initial Purchaser and paid
as incurred (it being understood, however, that the Initial Purchaser shall not
be liable for the expenses of more than one separate law firm (in addition to
any local counsel) in any one action or series of related actions in the same
jurisdiction representing the indemnified parties who are parties to such
action). Anything in this paragraph to the contrary notwithstanding, the Initial
Purchaser shall not be liable for any settlement of any such claim or action
effected without the written consent of the Initial Purchaser (which consent
shall not be unreasonably withheld or delayed), but if settled with the written
consent of the Initial Purchaser, or if there is a final judgment with respect
thereto, the Initial Purchaser agrees to indemnify and hold harmless the
Company, the Subsidiary Guarantors and each controlling person from and against
any loss or liability by reason of such settlement or judgment.
(c) If the indemnification provided for in this Section 9 is unavailable
to an indemnified party under subsections (a) and (b) of this Section 9 or is
insufficient to hold harmless an indemnified party under this Section 9, in each
case in respect of any losses, expenses, liabilities or claims required to be
indemnified, then each applicable 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, expenses, liabilities or claims
-28-
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Subsidiary Guarantors on the one hand and the
Initial Purchaser on the other hand from the offering of the 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 Subsidiary Guarantors on the one hand and of the Initial Purchaser on the
other in connection with the statements or omissions which resulted in such
losses, expenses, liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Subsidiary
Guarantors on the one hand and the Initial Purchaser on the other shall be
deemed to be in the same proportion as the total proceeds from the offering of
the Notes (net of discounts to the Initial Purchaser but before deducting
expenses) received by the Company bear to the discounts received by the Initial
Purchaser, in each cases as set forth in the table on the cover page of the
Offering Memorandum. The relative fault of the Company and the Subsidiary
Guarantors on the one hand and of the Initial Purchaser on the other shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Company and the Subsidiary Guarantors or
by the Initial Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, expenses,
liabilities and claims referred to above shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any claim or action.
(d) The Company, the Subsidiary Guarantors and the Initial Purchaser agree
that it would not be just and equitable if contribution pursuant to this Section
9 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
subsection (c) above. Notwithstanding the provisions of this Section 9, the
Initial Purchaser shall not be required to contribute any amount in excess of
the amount by which the total discount applicable to the Notes pursuant to this
Agreement exceeds the amount of any damages which the Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action against such party in
respect of which a claim for contribution may be made against another party or
parties under this Section 9, notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 9 or otherwise. Anything
in this paragraph to the contrary notwithstanding, no party or parties from whom
contribution may be sought shall be liable for contribution with respect to any
claim or action settled without its written consent (which consent shall not be
unreasonably withheld), but if settled with the written consent of such party,
or if there is a final judgment with respect thereto, such party or
-29-
parties from whom contribution may be sought agree to indemnify and hold
harmless such other party or parties seeking contribution and each controlling
person in respect thereof from and against any loss or liability by reason of
such settlement or judgment.
The Company and the Subsidiary Guarantors hereby acknowledge and agree
with the Initial Purchaser that the statements set forth in (i) the last
paragraph on the cover page of the Offering Documents and (ii) the last
paragraph in boldface type on page five of the Offering Documents relating to
stabilization constitute the only information furnished to the Company in
writing by the Initial Purchaser expressly for use in the Offering Documents.
(e) The indemnity and contribution agreements contained in this Section 9
and the covenants, warranties and representations of the Company contained in
this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of the Initial Purchaser, or any person who
controls the Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or by or on behalf of the
Company, the Subsidiary Guarantors, their respective directors and officers or
any person who controls the Company and the Subsidiary Guarantors within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and shall survive any termination of this Agreement or the issuance and delivery
of the Notes. The Company, the Subsidiary Guarantors and the Initial Purchaser
agree promptly to notify the other of the commencement of any litigation or
proceeding against it and, in the case of the Company and the Subsidiary
Guarantors, against any of their respective officers and directors, in
connection with the issuance and sale of the Notes, or in connection with the
Offering Memorandum.
10. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Initial Purchaser, shall be sufficient in all respects if delivered or sent
to Xxxxxx, Read & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, X.X. 00000, Attention:
Syndicate Department and, if to the Company and the Subsidiary Guarantors, shall
be sufficient in all respects if delivered to the Company at the offices of the
Company at 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, Attention: Chief
Executive Officer.
11. Construction. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of law. The section headings in this Agreement have been inserted
as a matter of convenience of reference and are not a part of this Agreement.
12. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Initial Purchaser and the Company, the
Subsidiary Guarantors and the controlling persons, directors and officers
referred to in Section 9 hereof, and their respective successors, assigns,
executors and administrators. No other person, partnership, association or
corporation (including a purchaser, as such purchaser, from the Initial
Purchaser) shall acquire or have any right under or by virtue of this Agreement.
-30-
13. Counterparts. This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
-31-
If the foregoing Purchase Agreement correctly sets forth the understanding
among the Company, the Subsidiary Guarantors and the Initial Purchaser, please
so indicate in the space provided below for the purpose, whereupon this letter
and your acceptance shall constitute a binding agreement among the Company, the
Subsidiary Guarantors and the Initial Purchaser.
Very truly yours,
XXXXXXX & XXXXX, INC.
By /s/ [Illegible]
---------------------------------
Title: CEO
WG APPAREL, INC.
By /s/ [Illegible]
---------------------------------
Title: CEO
CLINTON MANAGEMENT CORP.
By /s/ [Illegible]
---------------------------------
Title: X.X.
XXXXXXX MACHINERY
CORPORATION
By /s/ [Illegible]
---------------------------------
Title: V.P.
LEADTEC SYSTEMS, INC.
By /s/ [Illegible]
---------------------------------
Title: V.P.
[Signature page continued on next page]
W&G DAON, INC.
By /s/ [Illegible]
---------------------------------
Title: President
J&E SEWING SUPPLIES, INC.
By /s/ [Illegible]
---------------------------------
Title: President
W&G TENNESSEE IMPORTS, INC.
By /s/ [Illegible]
---------------------------------
Title: President
CLINTON LEASING CORP.
By /s/ [Illegible]
---------------------------------
Title: X.X.
XXXXXXX EQUIPMENT CORP.
By /s/ [Illegible]
---------------------------------
Title: V.P.
PARADISE COLOR CORP.
By /s/ [Illegible]
---------------------------------
Title: V.P.
[Signature page continued on next page]
The foregoing Purchase Agreement is
accepted and agreed to as of
the date first above written:
XXXXXX, READ & CO. INC.,
as Initial Purchaser
By /s/ [Illegible]
---------------------------------
Title: Vice President
SCHEDULE I
List of Subsidiaries and Liens
Subsidiaries
1. WG Apparel, Inc.
2. Clinton Machinery Corporation
3. Clinton Management Corp.
4. Leadtec Systems, Inc.
5. W&G Daon, Inc.
6. J&E Sewing Supplies, Inc.
7. W&G Tennessee Imports, Inc.
8. Clinton Leasing Corp.
9. Clinton Equipment Corp.
10. Paradise Color Corp.
11. Xxxxxxx & Xxxxx, Ltd.
12. Sunbrand S.A. de C.V.
13. Sunbrand Caribe S.A.
14. Allied Machine Parts Ltd.
15. M.E.C. (Sewing Machines) Ltd.
16. Unity Sewing Supply Company (UK) Limited
17. Allide Machine Parts Limited
18. Matyork Limited
19. Forest Needle Company Limited
20. Xxxxxx & Xxxxxx (Textiles) Limited
21. Eildon Electronics Limited
Other Equity Investments
Pegasus Sewing Machine Mfg. Co., Ltd.
Liens
The Company's indebtedness under the Financing and Security Agreement,
dated as of February 1, 1996, between the Company and NationsBank, N.A. is
secured by pledges of the capital stock of certain direct and indirect
Subsidiaries of the Company as follows: 100% of the capital stock of WG Apparel,
Inc., Leadtec Systems, Inc., Clinton Management Corp. and Clinton Machinery
Corporation, and 66% of the capital stock of Xxxxxxx & Xxxxx, Ltd. Such
indebtedness will be repaid as of the time of purchase with a portion of the net
proceeds of the offering of the Notes.
