EXHIBIT 10.13
PURCHASE AGREEMENT
French Fragrances, Inc.
10-3/8% Senior Notes due 2007, Series C
PURCHASE AGREEMENT
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April 20, 1998
XXXXXXXXX, XXXXXX & XXXXXXXX
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
French Fragrances, Inc., a Florida corporation
("Company"), agrees with you as follows:
1. Issuance of Securities. The Company proposes to
issue and sell to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation (the "Purchaser"), an aggregate of $40 million
principal amount of 10-3/8% Senior Notes due 2007, Series C (the
"Series C Notes"). The Series C Notes are to be issued pursuant
to an indenture (the "Note Indenture") to be dated as of April
27, 1998 between the Company and Marine Midland Bank, as trustee
(the "Trustee").
Capitalized terms used but not defined herein shall
have the meanings given to such terms in the Note Indenture or
the Offering Memorandum, as the case may be.
The Series C Notes will be offered and sold to the
Purchaser pursuant to an exemption from the registration
requirements under the Securities Act of 1933, as amended (the
"Act"). The Company has prepared a final offering memorandum,
dated April 20, 1998 including the Company's Annual Report for
the year ended January 31, 1998 on Form 10-K as Appendix A
thereto and the Company's Current Report on Form 8-K dated March
31, 1998 as Appendix B thereto (collectively, the "Offering
Memorandum"), relating to the Company and the Series C Notes
for the Purchaser's use.
Upon original issuance thereof, and until such time as
the same is no longer required under the applicable requirements
of the Act, the Series C Notes (and all securities issued in
exchange therefor or in substitution thereof) shall bear the
following legend:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE.
BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER:
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (As defined in Rule 144A under the Securities
Act) (A "QIB") OR (B) IT HAS ACQUIRED THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT,
(1) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE COMPANY, (B) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
IN THE CASE OF CLAUSE (D) OR (E) BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY SO
REQUESTS) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION,
(2) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND, AND
(3) ACKNOWLEDGES THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE
902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION
OF THE FOREGOING."
The Purchaser has advised the Company that it will make
offers (the "Exempt Resales") of the Series C Notes purchased
hereunder on the terms set forth in the Offering Memorandum, as
amended or supplemented, solely (i) to persons whom the Purchaser
reasonably believes to be "qualified institutional buyers," as
defined in Rule 144A under the Act ("QIBs") and, (ii) to non-U.S.
persons whom the Purchaser reasonably believes are outside the
United States and to whom offers and sales of the Series C Notes
may be made in reliance upon Regulation S under the Act
("Regulation S"), in transactions meeting the requirements of
Regulation S. The QIBs and the non-U.S. persons outside the
United States are referred to herein as the "Eligible
Purchasers." The Purchaser will offer the Series C Notes to such
Eligible Purchasers initially at a price equal to 106.50% of the
principal amount thereof. Such price may be changed at any time
without notice.
Holders (including subsequent transferees) of the
Series C Notes will have the registration rights set forth in the
registration rights agreement relating thereto (the "Registration
Rights Agreement"), to be dated the Closing Date, in
substantially the form of Exhibit A hereto, for so long as such
Series C Notes constitute "Transfer Restricted Securities" (as
defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company will agree to file
with the Securities and Exchange Commission (the "Commission"),
under the circumstances set forth therein, (i) a registration
statement under the Act (the "Exchange Offer Registration
Statement") relating to the 10-3/8% Series D Senior Notes due
2007 (the "Series D Notes", and together with the Series C Notes,
the "Notes") to be offered in exchange for the Series C Notes
(the "Exchange Offer"), and (ii) a shelf registration statement
pursuant to Rule 415 under the Act (the "Shelf Registration
Statement") relating to the resale by certain holders of the
Series C Notes, and to use its reasonable best efforts to cause
such Registration Statements to be declared effective. This
Purchase Agreement (this "Agreement"), the Notes, the Note
Indenture and the Registration Rights Agreement are hereinafter
sometimes referred to collectively as the "Operative
Documents."
2. Agreements to Sell and Purchase. On the basis of
the representations and warranties contained in this Agreement,
and subject to its terms and conditions, the Company agrees
to issue and sell to the Purchaser, and the Purchaser agrees to
purchase from the Company $40 million in principal amount of
Series C Notes. The purchase price for the Series C Notes shall
be 103.75% of their principal amount.
3. Delivery and Payment. Delivery to the Purchaser
of and payment for the Series C Notes shall be made at 9:00 a.m.,
New York City time, on April 27, 1998 (the "Closing Date") at the
offices of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other time or place as
the Purchaser and the Company shall designate.
One or more of the Series C Notes in definitive form,
registered in the name of Cede & Company., as nominee of The
Depository Trust Company ("DTC"), having an aggregate principal
amount corresponding to the aggregate principal amount of the
Series C Notes sold pursuant to Exempt Resales to QIBs
(collectively, the "Master Note") and one or more of the Series C
Notes in definitive form, registered in the name of Cede &
Company., as nominee of DTC, having an aggregate principal amount
corresponding to the aggregate principal amount of the Series C
Notes sold pursuant to Exempt Resales to non-U.S. persons in
reliance upon Regulation S (collectively, the "Regulation S
Note"), shall be delivered by the Company to the Purchaser (or as
the Purchaser directs), against payment by the Purchaser of the
purchase price therefor by certified or official bank check or
checks payable in federal (same day) funds to the order of the
Company or as the Company may direct. The Master Note and the
Regulation S Note shall be made available to the Purchaser for
inspection not later than 9:30 a.m. on the business day
immediately preceding the Closing Date.
4. Agreements of the Company. The Company agrees
with the Purchaser as follows:
(a) To advise the Purchaser promptly and, if
requested by the Purchaser, to confirm such advice in
writing, (i) of the issuance by any state securities
commission of any stop order suspending the qualification or
exemption from qualification of any of the Series C Notes
for offering or sale in any jurisdiction, or the initiation
of any proceeding for such purpose by any state securities
commission or other regulatory authority, and (ii) of the
happening of any event that makes any statement of a
material fact made in the Offering Memorandum untrue or that
requires the making of any additions to or changes in the
Offering Memorandum in order to make the statements therein,
in the light of the circumstances under which they are made,
not misleading. The Company shall use its reasonable best
efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption of any of the
Series C Notes under any state securities or Blue Sky laws,
and if at any time any state securities commission or other
regulatory authority shall issue an order suspending the
qualification or exemption of any of the Series C Notes
under any state securities or Blue Sky laws, the Company
shall use its reasonable best efforts to obtain the
withdrawal or lifting of such order at the earliest possible
time.
(b) To furnish the Purchaser, without charge, as
many copies of the Offering Memorandum, and any amendments
or supplements thereto, as the Purchaser may reasonably
request. The Company consents to the use of the Offering
Memorandum, and any amendments and supplements thereto, by
the Purchaser in connection with Exempt Resales.
(c) Not to amend or supplement the Offering
Memorandum prior to the Closing Date unless the Purchaser
shall previously have been advised thereof and shall have
no reasonable objection thereto after being furnished a copy
thereof. The Company shall promptly prepare, upon the
Purchaser's request, any amendment or supplement to the
Offering Memorandum that may be reasonably necessary or
advisable in connection with Exempt Resales.
(d) If, after the date hereof and prior to
consummation of any Exempt Resales, any event shall occur as
a result of which, in the judgment of the Company or in the
reasonable opinion of Purchaser's counsel, it becomes
necessary to amend or supplement the Offering Memorandum in
order to make the statements therein, in the light of the
circumstances when the Offering Memorandum is delivered to
an Eligible Purchaser which is a prospective purchaser, not
misleading, or if it is necessary to amend or supplement the
Offering Memorandum to comply with applicable law, forthwith
to prepare an appropriate amendment or supplement to the
Offering Memorandum so that statements therein as so amended
or supplemented will not, in the light of the circumstances
when it is so delivered, be misleading, or so that the
Offering Memorandum will comply with applicable law.
(e) To cooperate with the Purchaser and its
counsel in connection with the qualification of the Series C
Notes under the securities or Blue Sky laws of such
jurisdictions as the Purchaser may request and to continue
such qualification in effect so long as required for the
Exempt Resales; provided, however, that the Company shall
not be required in connection therewith to register or
qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject it to
service of process in suits or taxation, other than as to
matters and transactions relating to the Exempt Resales, in
any jurisdiction where it is not now so subject.
(f) Whether or not the transactions contemplated
by this Agreement are consummated or this Agreement becomes
effective or is terminated, to pay all costs, expenses, fees
and taxes incident to and in connection with: (i) the
preparation, printing, filing and distribution of the
Offering Memorandum (including, without limitation,
financial statements and exhibits) and all amendments and
supplements thereto (but not, however, legal fees and
expenses of Purchaser's counsel incurred in connection with
any of the foregoing), (ii) the preparation (including,
without limitation, word processing and duplication costs)
and delivery of this Agreement and the other Operative
Documents and all other agreements, memoranda,
correspondence and other documents (but not, however,
legal fees and expenses of Purchaser's counsel incurred in
connection with any of the foregoing) and all preliminary
and final Blue Sky memoranda prepared and delivered in
connection herewith and with the Exempt Resales, (iii) the
issuance and delivery by the Company of the Notes, (iv) the
qualification of the Notes for offer and sale under the
securities or Blue Sky laws of the several states
(including, without limitation, the reasonable fees and
disbursements of Purchaser's counsel relating to such
registration or qualification), (v) furnishing such copies
of the Offering Memorandum, and all amendments and
supplements thereto, as may be reasonably requested for use
in connection with Exempt Resales, (vi) the preparation of
certificates for the Notes (including, without limitation,
printing and engraving thereof), (vii) the fees,
disbursements and expenses of the Company's counsel and
accountants, (viii) all expenses and listing fees in
connection with the application for quotation of the Series
C Notes in the National Association of Securities
Dealers, Inc. ("NASD") Automated Quotation System - PORTAL
("PORTAL"), (ix) all fees and expenses (including fees and
expenses of counsel) of the Company in connection with
approval of the Notes by DTC for "book-entry" transfer and
(x) the performance by the Company of its other obligations
under this Agreement and the other Operative Documents.
(g) To use the proceeds from the sale of the
Series C Notes in the manner described or reflected in the
Offering Memorandum under the caption "Use of Proceeds."
(h) To the extent it may be lawful, not to
voluntarily claim, and to resist actively any attempts to
claim, the benefit of any usury laws against the holders of
any Notes.
(i) To do and perform all things required to be
done and performed under this Agreement by the Purchaser
prior to or after the Closing Date and to satisfy all
conditions precedent on its part to the delivery of the
Series C Notes.
(j) Not to sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as
defined in the Act) that would be integrated with the sale
of the Series C Notes in a manner that would require the
registration under the Act of the sale to the Purchaser or
Eligible Purchasers of the Series C Notes.
(k) For so long as any of the Notes remain
outstanding and during any period in which the Company is
not subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to
make available, upon request, to any QIB holding Series C
Notes or any beneficial owner of Series C Notes in
connection with any sale thereof and any prospective
purchaser of such Series C Notes from such QIB or beneficial
owner, the information required by Rule 144A(d)(4) under the
Act.
(l) To cause the Exchange Offer to be made in the
appropriate form to permit registration of the Series D
Notes to be offered in exchange for the Series C Notes and
to comply with all applicable federal and state securities
laws in connection with the Exchange Offer.
(m) To comply with all of its agreements set
forth in the Registration Rights Agreement, and all
agreements set forth in the representation letter of the
Company to DTC relating to the approval of the Notes by DTC
for "book-entry" transfer.
(n) To use its reasonable best efforts to effect
the inclusion of the Series C Notes in PORTAL.
(o) During a period of five years following the
date of this Agreement, to deliver to the Purchaser promptly
upon their becoming available, copies of all current,
regular and periodic reports filed by the Company with the
Commission or any securities exchange or with any
governmental authority succeeding to any of the Commission's
functions.
5. Representations and Warranties.
(a) The Company represents and warrants to the
Purchaser that, as of the date hereof:
(i) The Offering Memorandum has been prepared in
connection with the Exempt Resales. The Offering
Memorandum, as of the date thereof, does not, and will not
as of the Closing Date, and any supplement or amendment to
the Offering Memorandum will not, as of the date thereof,
contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading, except that the
representations and warranties contained in this paragraph
(i) shall not apply to statements in or omissions from the
Offering Memorandum (or any supplement or amendment thereto)
made in reliance upon and in conformity with information
relating to the Purchaser furnished to the Company in
writing by it expressly for use therein. No stop order
preventing the use of the Offering Memorandum, or any
amendment or supplement thereto, or order asserting that any
of the transactions contemplated by this Agreement is
subject to the registration requirements of the Act, has
been issued.
(ii) When the Series C Notes are issued and
delivered pursuant to this Agreement, none of the Series C
Notes will be of the same class (within the meaning of Rule
144A under the Act) as securities of the Company that are
listed on a national securities exchange registered under
Section 6 of the Exchange Act or that are quoted in a
United States automated inter-dealer quotation system.
(iii) Each of the Company and the Subsidiaries has
been duly organized, is validly existing as a corporation in
good standing under the laws of its respective jurisdiction
of incorporation, has all requisite corporate power and
authority to carry on its business as it is currently being
conducted and as described or reflected in the Offering
Memorandum and to own, lease and operate its properties, and
is duly qualified and in good standing as a foreign
corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or
leasing of property requires such qualification, except
where the failure to be so qualified would not have a
material adverse effect on the financial condition, results
of operations, business or prospects of the Company and the
Subsidiaries (as defined below), taken as a whole (a
"Material Adverse Effect").
(iv) The entities listed on Schedule I hereto are
the only subsidiaries, direct or indirect, of the Company
(the "Subsidiaries"). All of the outstanding shares of
capital stock or other securities evidencing equity
ownership of such Subsidiaries of the Company are owned,
directly or indirectly, by the Company or through one or
more subsidiaries, and such shares of capital stock or
securities have been duly authorized and validly issued and
are fully paid and non-assessable, were not issued in
violation of any preemptive or similar rights and are free
and clear of any security interest, claim, lien or
encumbrance (each, a "Lien"). There are no outstanding
subscriptions, rights, warrants, calls, commitments of sale
or options to acquire, or instruments convertible into or
exchangeable for, any such shares of capital stock or other
equity interest of such Subsidiaries.
(v) The Company has all requisite corporate power
and authority to execute, deliver and perform its
obligations under this Agreement, the Notes, the Note
Indenture and the Registration Rights Agreement and to
consummate the transactions contemplated hereby and thereby,
including, without limitation, the corporate power and
authority to issue, sell and deliver the Notes as provided
herein and therein.
(vi) This Agreement has been duly and validly
authorized, executed and delivered by the Company and is the
legally valid and binding agreement of the Company,
enforceable against the Company in accordance with its
terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance (including the Uniform Fraudulent
Transfers Act as adopted in Florida) or other laws affecting
creditors' rights and remedies generally and except as such
enforcement is subject to general principles of equity
(including, without limitation, standards of materiality,
good faith, fair dealing and reasonableness), regardless of
whether enforcement is considered in a proceeding in equity
or at law, except as any rights to indemnity and
contribution under this Agreement may be limited by federal
and state securities laws and except to the extent that a
waiver of rights under any usury laws may be unenforceable.
(vii) The Note Indenture has been duly and validly
authorized by the Company and on the Closing Date, will be
validly executed and delivered by the Company. When the
Note Indenture has been duly executed and delivered by the
Company, the Note Indenture will be the legally valid and
binding agreement and obligation of the Company, enforceable
against the Company in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance (including
the Uniform Fraudulent Transfers Act as adopted in
Florida) or other laws affecting enforcement of creditors'
rights and remedies generally and except as such enforcement
is subject to general principles of equity (including,
without limitation, standards of materiality, good faith,
fair dealing and reasonableness), regardless of whether
enforcement is considered in a proceeding in equity or at
law, and except to the extent that a waiver of rights under
any usury laws may be unenforceable. The Note Indenture,
when executed and delivered, will conform in all material
respects to the description thereof in the Offering
Memorandum.
(viii) The Series C Notes have been duly and
validly authorized for issuance and sale to the Purchaser by
the Company pursuant to this Agreement and, when executed,
issued and authenticated in accordance with the terms of the
Note Indenture and delivered against payment therefor in
accordance with the terms hereof, will be the legally
valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and
entitled to the benefits of the Note Indenture, except as
such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance (including
the Uniform Fraudulent Transfers Act as adopted in
Florida) or other laws affecting enforcement of creditors'
rights and remedies generally and except as such enforcement
is subject to general principles of equity (including,
without limitation, standards of materiality, good faith,
fair dealing and reasonableness), regardless of whether
enforcement is considered in a proceeding in equity or at
law, and except to the extent that a waiver of rights under
any usury laws may be unenforceable. The Series C Notes,
when executed, issued, authenticated and delivered, will
conform in all material respects to the description thereof
in the Offering Memorandum.
(ix) The Series D Notes have been duly and
validly authorized for issuance by the Company, and when
executed, issued and authenticated in accordance with the
terms of the Note Indenture, the Registration Rights
Agreement and the Exchange Offer, will be the legally valid
and binding obligations of the Company, enforceable against
the Company in accordance with their terms and entitled to
the benefits of the Note Indenture, except as such
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance (including
the Uniform Fraudulent Transfers Act as adopted in Florida)
or other laws affecting enforcement of creditors' rights and
remedies generally and except as such enforcement is subject
to general principles of equity (including, without
limitation, standards of materiality, good faith, fair
dealing and reasonableness), regardless of whether
enforcement is considered in a proceeding in equity or at
law, and except to the extent that a waiver of rights under
any usury laws may be unenforceable.
(x) The Registration Rights Agreement has been
duly and validly authorized by the Company and on the
Closing Date will be duly executed and delivered by the
Company. When the Registration Rights Agreement has been
duly executed and delivered by the Company, the Registration
Rights Agreement will be the legally valid and binding
agreement and obligation of the Company, enforceable against
the Company in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance (including
the Uniform Fraudulent Transfers Act as adopted in Florida)
or other laws affecting enforcement of creditors' rights and
remedies generally and except as such enforcement is subject
to general principles of equity (including, without
limitation, standards of materiality, good faith, fair
dealing and reasonableness), regardless of whether
enforcement is considered in a proceeding in equity or at
law, except as any rights to indemnity and contribution
under the Registration Rights Agreement may be limited by
federal and state securities laws and public policy
considerations, and except as enforcement of any provisions
requiring the payment of liquidated damages may be limited
by applicable law or public policy. The Registration
Rights Agreement, when executed and delivered, will conform
in all material respects to the description thereof in the
Offering Memorandum.
(xi) Neither the Company nor any of the
Subsidiaries is in violation of its respective charter or
bylaws or is in default in the performance of any bond,
debenture, note, indenture, mortgage, deed of trust or other
agreement or instrument to which it is a party or by which
it is bound or to which any of its properties is subject, or
is in violation of any law, statute, rule, regulation,
judgment or court decree applicable to the Company, any of
the Subsidiaries or their assets or properties, except for
any such violations or defaults as would not have a Material
Adverse Effect. There exists no condition that, with
notice, the passage of time or otherwise, would constitute a
default under any such document or instrument, except for
any such default as would not have a Material Adverse
Effect.
(xii) The execution, delivery and performance by
the Company of this Agreement and the other Operative
Documents, the issuance and sale of the Notes, and the
consummation of the transactions contemplated hereby and
thereby will not violate, conflict with or constitute a
breach of any of the terms or provisions of, or a default
under (or an event that with notice or the lapse of time, or
both, would constitute a default), or require consent under,
or result in the imposition of a lien or encumbrance on any
properties of the Company or any of the Subsidiaries, or an
acceleration of indebtedness pursuant to, (i) the charter or
bylaws of the Company or any of the Subsidiaries, (ii) any
bond, debenture, note, indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or their
property is or may be bound, except for any such violation,
conflict, breach or default as would not have a Material
Adverse Effect, (iii) any statute, rule or regulation
applicable to the Company, any of the Subsidiaries or any of
their assets or properties, or (iv) any judgment, order or
decree of any court or governmental agency or authority
having jurisdiction over the Company, any of the
Subsidiaries or their assets or properties. Subject to the
assumptions set forth in clauses (i) and (ii) of Section
5(xxvii), no consent, approval, authorization or order of,
or filing, registration, qualification, license or permit of
or with, any court or governmental agency, body or
administrative agency is required for the execution,
delivery and performance of this Agreement and the other
Operative Documents and the consummation of the transactions
contemplated hereby and thereby, except such as have been
obtained and made (or, in the case of the Registration
Rights Agreement and the transactions contemplated thereby
and by the Note Indenture, will be obtained and made under
the Act and the Trust Indenture Act, or such as may be
required by the NASD, or such as may be required under
state securities or Blue Sky laws or regulations or the
securities laws of non-U.S. jurisdictions. No consents or
waivers from any other person are required for the
execution, delivery and performance of this Agreement and
the other Operative Documents and the consummation of the
transactions contemplated hereby and thereby, other than
such consents and waivers as have been obtained (or, in the
case of the Registration Rights Agreement and the
transactions contemplated thereby and by the Note Indenture,
will be obtained).
(xiii) There is (i) no action, suit or
proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign,
now pending or, to the knowledge of the Company, threatened
or contemplated to which the Company or any of the
Subsidiaries is or may be a party or to which the business
or property of the Company or any of the Subsidiaries is or
may be subject, (ii) no statute, rule, regulation, or
order that has been enacted, adopted or issued by any
governmental agency or, to the knowledge of the Company,
that has been proposed by any governmental body, (iii) no
injunction, restraining order or order of any nature by a
federal or state court or foreign court of competent
jurisdiction to which the Company or any of the Subsidiaries
is subject that has been issued that, in the case of clauses
(i), (ii) and (iii) above, if adversely determined,
(x) might reasonably be expected to, singly or in the
aggregate, result in a Material Adverse Effect, or (y) would
interfere with or adversely affect the issuance of the Notes
or (z) in any manner draw into question the validity of this
Agreement or any other Operative Document.
(xiv) No action, to the Company's knowledge, has
been taken and no statute, rule or regulation or order has
been enacted, adopted or issued by any governmental agency
that prevents the issuance of the Notes; no injunction,
restraining order or order of any nature by a federal or
state court of competent jurisdiction has been issued that
prevents the issuance of the Notes or suspends the sale of
the Notes in any jurisdiction referred to in Section 4(e)
hereof; and no action, suit or proceeding is pending against
or affecting or, to the knowledge of the Company, threatened
against, the Company or any of the Subsidiaries before any
court or arbitrator or any governmental body, agency or
official which, if adversely determined, would prohibit,
interfere with or adversely affect the issuance or
marketability of the Notes or in any manner draw into
question the validity of any Operative Document; and, to the
Company's knowledge, every request of any securities
authority or agency of any jurisdiction for additional
information has been complied with in all material respects.
(xv) There is (i) no significant unfair labor
practice complaint pending against the Company or any of the
Subsidiaries nor, to the knowledge of the Company,
threatened against any of them, before the National Labor
Relations Board, any state or local labor relations board or
any foreign labor relations board, and no significant
grievance or significant arbitration proceeding arising out
of or under any collective bargaining agreement is so
pending against the Company or any or the Subsidiaries or,
to the knowledge of the Company, threatened against any of
them, (ii) no significant strike, labor dispute slowdown or
stoppage pending against the Company or any of the
Subsidiaries nor, to the knowledge of the Company,
threatened against the Company or any of the Subsidiaries
and (iii) to the knowledge of the Company, no union
representation question existing with respect to the
employees of the Company and, to the knowledge of the
Company, no union organizing activities are taking place.
Neither the Company nor any of the Subsidiaries has
violated any federal, state or local law or foreign law
relating to discrimination in hiring, promotion or pay of
employees, nor any applicable wage or hour laws, nor any
provision of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or the rules and regulations
thereunder, or analogous foreign laws and regulations, other
than any such violation as would not result in a Material
Adverse Effect.
(xvi) Neither the Company nor any of the
Subsidiaries has violated any environmental, safety or
similar law or regulation applicable to it or its business
or property relating to the protection of human health and
safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"),
lacks any permit, license or other approval required of them
under applicable Environmental Laws or is violating any term
or condition of such permit, license or approval, other than
any such violation or failure to obtain a permit, license or
approval as would not have a Material Adverse Effect.
(xvii) Each of the Company and the Subsidiaries
has (i) good and marketable title to all of the properties
and assets described or reflected in the Offering Memorandum
as owned by it, free and clear of all Liens, except such as
exist on the date hereof and are described or reflected in
the Offering Memorandum or as would not have a Material
Adverse Effect, (ii) peaceful and undisturbed possession
under all leases to which it is party as lessee, (iii) all
licenses, certificates, permits, authorizations, approvals,
franchises and other rights from, and has made all
declarations and filings with, all federal, state and local
authorities, all self-regulatory authorities and all courts
and other tribunals (each an "Authorization") necessary to
engage in the business currently conducted by it in
the manner described or reflected in the Offering
Memorandum, except where failure to hold such Authorizations
or to make any such declaration or filing would not have a
Material Adverse Effect and (iv) no reason to believe that
any governmental body or agency is considering limiting
suspending or revoking any such Authorization. All such
Authorizations (as qualified in clause (iii) above) are
valid and in full force and effect and the Company and the
Subsidiaries are in compliance in all material respects with
the terms and conditions of all such Authorizations (as
qualified in clause (iii) above) and with the rules and
regulations of the regulatory authorities having
jurisdiction with respect thereto, except where the failure
to comply would not have a Material Adverse Effect. All
leases to which the Company or any of the Subsidiaries is a
party are valid and binding in all material respects upon
the Company or such Subsidiary, as the case may be, and, to
the Company's knowledge, upon the other parties thereto, no
material default by the Company or any of the Subsidiaries
has occurred and is continuing thereunder, and, to the
knowledge of the Company, no material defaults by the
landlord are existing under any such lease.
(xviii) Each of the Company and the Subsidiaries
owns or possesses or otherwise has the right to use all
patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade
names (collectively, the "Intellectual Property") presently
employed by it in connection with the businesses now
operated by them, and neither the Company nor any of the
Subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect
to any of the foregoing. To the knowledge of the Company,
the use of the Intellectual Property in connection with the
business and operations of the Company and the Subsidiaries
does not infringe on the right of any person, which, if
determined adversely to the Company or the Subsidiaries,
would have a Material Adverse Effect.
(xix) All tax returns required to be filed by the
Company or any of the Subsidiaries, in all jurisdictions,
have been so filed, except where the failure to so file
would not have a Material Adverse Effect. All taxes,
including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due
from such entities or that are due and payable have been
paid, other than those being contested in good faith
and for which adequate reserves have been provided or those
currently payable without penalty or interest, except where
the failure to so pay would not have a Material Adverse
Effect. Neither the Company nor any of the Subsidiaries
knows of any material proposed additional tax assessments
against it or any of the Subsidiaries.
(xx) Neither the Company nor any of the
Subsidiaries is, and after giving effect to the offering and
sale of the Notes and the application of the net proceeds
therefrom in accordance with the Offering Memorandum, none
of them will be, (i) an "investment company" or a company
"controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended
(the "Investment Company Act"), or analogous foreign laws
and regulations, or (ii) a "holding company" or a
"subsidiary company" or an "affiliate" of a holding company
within the meaning of the Public Utility Holding Company Act
of 1935, as amended, or analogous foreign laws and
regulations.
(xxi) There are no holders of securities of the
Company who, by reason of the execution by the Company of
this Agreement or any other Operative Document to which it
is a party or the consummation of the transactions
contemplated hereby and thereby, have the right to request
or demand that the Company register under the Act or
analogous foreign laws and regulations securities held by
them.
(xxii) The authorized, issued and outstanding
capital stock of each of the Company and each of the
Subsidiaries has been duly and validly authorized and
issued, is fully paid and nonassessable and was not issued
in violation of or subject to any preemptive or similar
rights. The Company had at January 31, 1998, an authorized
and outstanding capitalization as set forth in the Company's
annual report on Form 10-K for the year ended January 31,
1998 (the "Form 10-K").
(xxiii) Each certificate signed by any officer of
the Company and delivered to the Purchaser or counsel for
the Purchaser shall be deemed to be a representation and
warranty by the Company to the Purchaser as to the matters
covered thereby.
(xxiv) The Company maintains a system of
internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in
accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity
with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets
is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability
for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with
respect to any differences.
(xxv) The Company and each of the Subsidiaries
maintain insurance covering their properties, operations,
personnel and businesses. Such insurance insures against
such losses and risks as are adequate in accordance with
customary industry practice to protect the Company and the
Subsidiaries and their businesses. Neither the Company nor
any of the Subsidiaries has received notice from any insurer
or agent of such insurer that substantial capital
improvements or other expenditures will have to be made
(that have not been undertaken) in order to continue such
insurance. All such insurance is outstanding and duly in
force on the date hereof and will be outstanding and duly in
force on the Closing Date.
(xxvi) Neither the Company nor any of the
Subsidiaries has (i) taken, directly or indirectly, any
action designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale
or resale of the Notes or (ii) since the fifth business day
prior to the date of this Agreement (A) sold, bid for,
purchased or paid any person any compensation for soliciting
purchases of, the Notes or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase
any other securities of the Company.
(xxvii) No registration under the Act of the
Series C Notes is required for the sale of the Series C
Notes to the Purchaser as contemplated hereby or for the
Exempt Resales assuming (i) that the purchasers who buy the
Series C Senior Notes in the Exempt Resales are either QIBs
or non-U.S. persons the Purchaser reasonably believes are
outside the United States to whom offers and sales of the
Series C Notes may be made in reliance upon Regulation S and
(ii) the accuracy of the Purchaser's representations
contained herein. No form of general solicitation and
directed selling efforts or general advertising was used by
the Company, the Subsidiaries or any of its representatives
in connection with the offer and sale of any of the Series C
Notes or in connection with Exempt Resales, including,
but not limited to, articles, notices or other
communications published in any newspaper, magazine, or
similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any
general solicitation or general advertising. The Company
has not (and none of its representatives has) engaged in any
directed selling efforts within the meaning of Rule 902
under the Act in the United States in connection with the
Series C Notes being offered and sold pursuant to Regulation
S. No securities of the same class as the Series C Notes
have been issued and sold by the Company within the
six-month period immediately prior to the date hereof.
(xxviii) Set forth on Exhibit B hereto is a list
of each employee pension or welfare benefit plan with
respect to which the Company or any corporation considered
an affiliate of the Company within the meaning of Section
407(d)(7) of ERISA (an "Affiliate") is a party in interest
or disqualified person. The execution and delivery of
this Agreement, the other Operative Documents and the sale
of the Series C Notes to be purchased by the Eligible
Purchasers will not involve any prohibited transaction
within the meaning of Section 406 of ERISA or Section 4975
of the Internal Revenue Code of 1986. The representation
made by the Company in the preceding sentence is made in
reliance upon and subject to the accuracy of, and compliance
with, the representations and covenants made or deemed made
by the Eligible Purchasers as set forth in the Offering
Memorandum under the Section entitled "Notices to
Investors."
(xxix) Subsequent to the respective dates as of
which information is given in the Offering Memorandum and up
to the Closing Date, except as set forth in the Offering
Memorandum: neither the Company nor any of the Subsidiaries
has incurred or will incur any liabilities or obligations,
direct or contingent, which are material to the Company
and the Subsidiaries taken as a whole (other than accounts
payable in the ordinary course of business), nor entered
into any transaction not in the ordinary course of business;
there has not been, singly or in the aggregate, any material
adverse change, or any development which may reasonably be
expected to involve a material adverse change, in the
properties, business, results of operations, condition
(financial or otherwise), affairs or prospects of the
Company and the Subsidiaries, taken as a whole (a "Material
Adverse Change"); there have not been dividends or
distributions of any kind declared, paid or made by the
Company or any of the Subsidiaries on any class of its
capital stock other than the Company's repurchase for an
aggregate purchase price of approximately $169,000 of 32,202
shares of the Company's Series C Convertible Preferred
Stock, par value $.01 for award pursuant to the Company's
6% Bonus Pool (as defined in the Offering Memorandum) (the
"Series C Preferred Purchase"); there has not been any
material change, or any development that is reasonably
likely to result in a material change, in the capital stock
or the long-term debt, or material increase in the
short-term debt (other than accounts payable incurred in the
ordinary course of business), of the Company or any of the
Subsidiaries from that set forth in the Offering Memorandum.
(xxx) Neither the Company, the Subsidiaries nor
any agent thereof acting on the behalf of any of them has
taken, and none of them will take, any action that might
cause this Agreement or the issuance or sale of the Notes to
violate Regulation G (12 C.F.R. Part 207), Regulation T (12
C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
Regulation X (12 C.F.R. Part 224) of the Board of Governors
of the Federal Reserve System or analogous foreign laws and
regulations.
(xxxi) The accountants who have certified or
shall certify the financial statements and supporting
schedules included or to be included as part of the Offering
Memorandum are independent accountants. The consolidated
historical financial statements of the Company and the
Subsidiaries together with the related notes included in
the Offering Memorandum (and any amendment or supplement
thereto) present fairly the consolidated financial
condition, results of operations and statements of cash flow
of the Company and the Subsidiaries, on the basis stated in
the Offering Memorandum, at the respective dates and for the
respective periods indicated; such statements and related
notes have been prepared in accordance with generally
accepted accounting principles consistently applied
throughout the periods involved, except as disclosed
therein; and the other financial and statistical information
and data relating to the Company set forth in the Offering
Memorandum (and any amendment or supplement thereto) are, in
all material respects, accurately presented and prepared on
a basis consistent with such financial statements and
the books and records of the Company. Based solely on the
audit opinion of Xxxxxxx X. Xxxxxx LLP, independent public
accountants, the historical financial statements of J.P.
Fragrances, Inc. ("JPF") together with related notes
included in the Offering Memorandum (and any amendment or
supplement thereto) present fairly in all material respects
the financial position and results of operations of JPF, on
the basis stated in the Offering Memorandum, at the
respective dates and for the respective periods indicated in
conformity with generally accepted accounting principles
consistently applied throughout the periods involved. The
pro forma financial statements included in the Offering
Memorandum or forming a part thereof, have been prepared on
a basis consistent with such historical statements, except
for the pro forma adjustments specified therein, and give
effect to assumptions made on a reasonable basis and present
fairly on that basis, the acquisition of JPF, provided,
however, that to the extent that the foregoing
representation relates to the historical financial
statements of JPF, it is based solely on the audit opinion
of Xxxxxxx X. Xxxxxx LLP, independent public accountants.
The other pro forma financial and statistical information
and data included in the Offering Memorandum are, in all
material respects, accurately presented and prepared on a
basis consistent with the pro forma financial statements and
the books and records of the Company and the Subsidiaries,
provided, however, that to the extent that the foregoing
representation relates to the historical financial
statements of JPF, it is based solely on the audit opinion
of Xxxxxxx X. Xxxxxx LLP, independent public accountants.
(xxxii) The present fair saleable value of the
assets of the Company, on a consolidated basis, exceeds the
amount that will be required to be paid on or in respect
of the existing debts and other liabilities (including
contingent liabilities) of the Company as they become
absolute and matured. The assets of the Company, on a
consolidated basis, do not constitute unreasonably small
capital to carry out its business as conducted or as
proposed to be conducted. The Company does not intend to,
nor does it believe that it will, incur debts beyond its
ability to pay such debts as they mature. Upon the issuance
of the Series C Notes, the present fair saleable value of
the assets of the Company, on a consolidated basis, will
exceed the amount that will be required to be paid on or in
respect of the existing debts and other liabilities
(including contingent liabilities) of the Company as they
become absolute and matured. The assets of the Company, on
a consolidated basis, upon the issuance of the Series C
Notes, will not constitute unreasonably small capital to
carry out its business as now conducted, including the
capital needs of the Company, on a consolidated basis,
taking into account the projected capital requirements and
capital availability of the Company.
(xxxiii) There are no contracts, agreements or
understandings between the Company or any of the
Subsidiaries and any person (other than the Purchaser)
that would give rise to a valid claim against the Company,
the Subsidiaries or the Purchaser for a brokerage
commission, finder's fee or like payment in connection with
the issuance, purchase and sale of the Notes.
(xxxiv) Neither the Company nor any of its
affiliates does business with the government of Cuba or with
any person or affiliate located in Cuba within the meaning
of Section 517.075, Florida Statutes.
(xxxv) No "nationally recognized statistical
rating organization" as such term is defined for purposes of
Rule 436(g)(2) under the Act (i) has, to the Company's
knowledge, imposed (or has informed the Company that it is
considering imposing) any condition (financial or otherwise)
on the Company's retaining any rating assigned to the
Company or any securities of the Company or (ii) has
indicated to the Company that it is considering (a) the
downgrading, suspension, or withdrawal of, or any review for
a possible change that does not indicate the direction of
the possible change in, any rating so assigned or (b) any
change in the outlook for any rating of the Company or any
securities of the Company.
The Company acknowledges that the Purchaser and, for
purposes of the opinions to be delivered to the Purchaser
pursuant to Section 7 hereof, counsel to the Company and counsel
to the Purchaser will rely upon the accuracy and truth of the
foregoing representations and hereby consents to such reliance.
(b) The Purchaser represents and warrants to the
Company and agrees that:
(i) The Purchaser is a QIB, with such
knowledge and experience in financial and business matters
as are necessary in order to evaluate the merits and risks
of an investment in the Series C Notes.
(ii) The Purchaser (A) is not acquiring the
Series C Notes with a view to any distribution thereof that
would violate the Act or the securities laws of any state of
the United States or any other applicable jurisdiction and
(B) will be reoffering and reselling the Series C Notes only
to QIBs in reliance on the exemption from the registration
requirements of the Act provided by Rule 144A and to
non-U.S. persons it reasonably believes are outside the
United States to whom offers and sales of the Series C Notes
may be made in reliance on Regulation S.
(iii) No form of general solicitation or general
advertising has been or will be used by the Purchaser or any
of its representatives in connection with the offer and sale
of any of the Series C Notes, including, but not limited to,
articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or
general advertising.
(iv) No form of directed selling efforts within
the meaning of Rule 902 under the Act in the United States
has been or will be used by the Purchaser or any of its
representatives in connection with the offer and sale of any
of the Series C Notes being sold pursuant to Regulation S.
(v) In connection with sales outside the United
States, the Purchaser represents and warrants to and agrees
with the Company that it will not offer, sell or deliver the
Series C Notes to, or for the account or benefit of, U.S.
persons (i) as part of the Purchaser's distribution at any
time except pursuant to Rule 144A or another exemption
from the registration requirements under the Securities Act,
or (ii) otherwise until forty (40) days after the later of
the commencement of the sale of the Series C Notes and the
Closing Date and it will send to each dealer or person
receiving a selling concession, fee or other remuneration to
whom it sells such Series C Notes (whether or not such
dealer or person participated in the offering) during such
period, a confirmation or other notice stating that such
dealer or person receiving a selling concession, fee or
other remuneration is subject to the restrictions on offers
and sales of the Series C Notes within the United States or
to, or for the account or benefit of, U.S. persons
applicable to the Initial Purchaser.
(vi) The Purchaser agrees that, in connection
with the Exempt Resales, it will solicit offers to buy the
Series C Notes only from, and will offer to sell the
Series C Notes only to, QIBs and non-U.S. persons it
reasonably believes are outside the United States to whom
offers and sales of the Series C Notes may be made in
reliance on Regulation S. The Purchaser further agrees (A)
that it will offer to sell the Series C Notes only to, and
will solicit offers to buy the Series C Notes only from (1)
QIBs who in purchasing such Series C Notes will be deemed to
have represented and agreed that they are purchasing the
Series C Notes for their own account or accounts with
respect to which they exercise sole investment discretion
and that they or such accounts are QIBs and (2) non-U.S.
persons who in purchasing such Series C Notes will be deemed
to have represented and agreed that they are outside the
United States, (B) that, in the case of such QIBs, such QIBs
acknowledge and agree that such Series C Notes will not have
been registered under the Act and may be resold, pledged or
otherwise transferred only (x)(I) to a person who the seller
reasonably believes is a QIB in a transaction meeting the
requirements of Rule 144A, (II) in a transaction meeting the
requirements of Rule 144, (III) to a non-U.S. person in a
transaction meeting the requirements of Rule 904 under the
Act or (IV) in accordance with another exemption from the
registration requirements of the Act (and, in the case of
clauses (II) or (IV), based upon an opinion of counsel if
the Company so requests), (y) to the Company, (z) pursuant
to an effective registration statement under the Act and, in
each case, in accordance with any applicable securities laws
of any state of the United States or any other applicable
jurisdiction and (C) that the holder will, and each
subsequent holder is required to, notify any purchaser from
it of the note evidenced thereby of the resale restrictions
set forth in (B) above.
(vii) The Purchaser also understands that the
Company and, for purposes of the opinions to be delivered to
the Purchaser pursuant to Section 7 hereof, counsel to the
Company and counsel to the Purchaser will rely upon the
accuracy and truth of the foregoing representations and
hereby consents to such reliance.
6. Indemnification.
(a) The Company agrees to indemnify and hold
harmless (i) the Purchaser and (ii) each person, if any, who
controls (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) the Purchaser (any of the
persons referred to in this clause (ii) being hereinafter
referred to as a "controlling person"), and (iii) the
respective officers, directors, partners, employees,
representatives and agents of the Purchaser or any
controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an
"Indemnified Person") to the fullest extent lawful, from and
against any and all losses, claims, damages, liabilities,
judgments, actions and expenses (including without
limitation and as incurred, reimbursement of all reasonable
costs of investigating, preparing, pursuing or defending any
claim or action, or any investigation or proceeding by any
governmental agency or body, commenced or threatened,
including the reasonable fees and expenses of counsel to any
Indemnified Person) directly or indirectly caused by,
related to, based upon, arising out of or in connection with
any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), or any omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims,
damages, liabilities or expenses are caused by an untrue
statement or omission or alleged untrue statement or
omission that is made in reliance upon and in conformity
with information relating to the Purchaser furnished in
writing to the Company by the Purchaser expressly for use
therein. The Company shall notify the Purchaser promptly of
the institution, threat or assertion of any claim,
proceeding (including any governmental investigation) or
litigation in connection with the matters addressed by this
Agreement which involves the Company or an Indemnified
Person.
(b) In case any action or proceeding (including
any governmental investigation) shall be brought or asserted
against any of the Indemnified Persons with respect to which
indemnity may be sought against the Company, such
Indemnified Person shall promptly notify the Company in
writing (provided, that the failure to give such notice
shall not relieve the Company of its obligations pursuant to
this Agreement, except to the extent the Company or any
Subsidiary is materially prejudiced by such failure). Such
Indemnified Person shall have the right to employ its own
counsel in any such action and the fees and expenses of such
counsel shall be paid, as incurred, by the Indemnified
Person, unless (i) the Company has failed promptly to assume
the defense and employ counsel reasonably satisfactory to
such Indemnified Person, (ii) the Company has authorized the
employment of counsel for the Indemnified Person at the
expense of the Company, or (iii) the named parties to any
such action or proceeding (including any impleaded parties)
include such Indemnified Person and the Company and such
Indemnified Person shall have been advised by counsel that
it has reasonably concluded that a conflict of interest may
exist between the Company and such Indemnified Person in the
conduct of the defense of such action or proceeding. In the
case of each of clause (i), (ii) or (iii) above, the Company
shall pay, as incurred, the fees and expenses of such
counsel, regardless of whether it is ultimately determined
that an Indemnified Person is not entitled to
indemnification hereunder. The Company shall not, in
connection with any one such action or proceeding or
separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm
of attorneys (in addition to any local counsel) at any time
for the Indemnified Persons, which firm shall be designated
by the Purchaser. The Company shall be liable for any
settlement of any such action or proceeding effected with
the Company's prior written consent, which consent will not
be unreasonably withheld, and the Company agrees to
indemnify and hold harmless any Indemnified Person from and
against any loss, claim, damage, liability or expense by
reason of any settlement of any action effected with the
written consent of the Company. Notwithstanding the
immediately preceding sentence, if at any time an
Indemnified Person shall have requested an indemnifying
party to reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by the second sentence
of this paragraph, the indemnifying party agrees that
it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement
is entered into more than sixty business days after receipt
by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the
Indemnified Person in accordance with such request prior to
the date of such settlement. The Company shall not, without
the prior written consent of an Indemnified Person, settle
or compromise or consent to the entry of judgment in or
otherwise seek to terminate any pending or threatened
action, claim, litigation or proceeding in respect of
which indemnification or contribution may be sought
hereunder (whether or not any Indemnified Person is a party
thereto), unless such settlement, compromise, consent or
termination includes an unconditional release of such
Indemnified Person from all liability arising out of such
action, claim, litigation or proceeding.
(c) The Purchaser agrees to indemnify and hold
harmless the Company, and its directors, officers and any
person controlling (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act) the Company, and
the respective officers, directors, partners, employees,
representatives and agents of each such person, to the same
extent as the foregoing indemnity from the Company to each
of the Indemnified Persons, but only with respect to claims
and actions based on information relating to the Purchaser
furnished in writing by the Purchaser to the Company
expressly for use in the Offering Memorandum.
The statements in the Offering Memorandum in the
third paragraph, the fourth sentence in the seventh
paragraph and the last paragraph in Plan of Distribution
constitute the only information heretofore furnished to the
Company in writing by the Purchaser expressly for use in the
Offering Memorandum, or any amendment or supplement thereto.
(d) If the indemnification provided for in this
Section 6 is unavailable to an indemnified party in respect
of any losses, claims, damages, liabilities or expenses
referred to herein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and expenses
(i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party, on the
one hand, and the indemnified party, on the other hand, from
the offering of the Series C Notes or (ii) if the allocation
provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above
but also the relative fault of the indemnifying party and
the indemnified party, as well as any other relevant
equitable considerations. The relative benefits received by
the Company, on the one hand, and the Purchaser, on the
other hand, shall be deemed to be in the same proportion as
the total proceeds from the offering of the Series C Notes
(net of discounts and commissions but before deducting
expenses) received by the Company and the total discounts
and commissions received by the Purchaser bear to the total
price of the Series C Notes paid in the Exempt Resales, in
each case as set forth in the table on the cover page of the
Offering Memorandum. The relative fault of the Company, on
the one hand, and the Purchaser, on the other hand, shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact
related to information supplied by the Company, on the one
hand, and the Purchaser, on the other hand, and the parties'
relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or
omission.
The Company and the Purchaser agree that it would
not be just and equitable if contribution to this Section
6(d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the
equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims,
damages, liabilities or expenses referred to in the
immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this
Section 6, neither the Purchaser (nor any of the related
Indemnified Persons) shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the
total discounts and commissions received by the Purchaser
with respect to the Series C Notes, exceeds the amount of
any damages which the Purchaser has otherwise been required
to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
(e) The indemnity set forth herein shall be in
addition to any liability or obligation the Company may
otherwise have to any Indemnified Person.
(f) The Company hereby designates Xxxxxxx, Xxxxxx
& Xxxxxx, 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000-0000 (Attention: Xxxxx Xxxxxxxx) as its authorized
agent upon whom process may be served in any action, suit or
proceeding that may be instituted in any state or federal
court in the State of New York by the Purchaser or any
person controlling the Purchaser asserting a claim for
indemnification or contribution under or pursuant to this
Section 6, and the Company will accept the jurisdiction of
such court in such action, and waive, to the fullest extent
permitted by applicable law, any defense based upon lack of
personal jurisdiction or venue. A copy of any such process
shall be sent or given to the Company at the address for
notices specified in Section 9 hereof.
7. Conditions of Purchaser's Obligations. The
obligations of the Purchaser under this Agreement are subject to
the satisfaction of each of the following conditions:
(a) All of the representations and warranties of
the Company contained in this Agreement shall be true and
correct in all material respects on the date hereof and on
the Closing Date with the same force and effect as if,
assuming, in the case of the Closing Date, that this
Agreement had been executed on the Closing Date, made on and
as of the date hereof and the Closing Date, respectively.
The Company shall have performed or complied with all of the
agreements herein contained and required to be performed or
complied with in all material respects by it at or prior to
the Closing Date.
(b) The Offering Memorandum shall have been
printed and copies distributed to the Purchaser not later
than 10:00 a.m., New York City time, on the date of this
Agreement or at such later date and time as to which the
Purchaser may agree, and no stop order suspending the
qualification or exemption from qualification of any of the
Series C Notes in any jurisdiction referred to in Section
4(e) shall have been issued and no proceeding for that
purpose shall have been commenced or shall be pending or
threatened.
(c) No action shall have been taken and no
statute, rule, regulation or order shall have been enacted,
adopted or issued by any governmental agency which would,
as of the Closing Date, prevent the issuance of any of the
Series C Notes; no action, suit or proceeding shall be
pending against or affecting or, to the knowledge of the
Company, threatened against the Company or any Subsidiary
before any court or arbitrator or any governmental body,
agency or official that, if adversely determined, (i) would
prohibit, interfere with or adversely affect the issuance of
the Series C Notes, (ii) would reasonably be expected to
have a Material Adverse Effect or (iii) would in any manner
draw into question the validity of this Agreement, the Note
Indenture, the Series C Notes or the Registration Rights
Agreement; and no stop order preventing the use of the
Offering Memorandum, or any amendment or supplement thereto,
or any order asserting that any of the transactions
contemplated by this Agreement is subject to the
registration requirements of the Act shall have been issued.
(d) Since the dates as of which information is
given in the Offering Memorandum and other than as described
or reflected therein, (i) there shall not have been
any material change, or any development that is reasonably
likely to result in a material change, in the capital stock
or the long-term debt, or material increase in the
short-term debt (other than accounts payable incurred in the
ordinary course of business), of the Company or any of the
Subsidiaries from that set forth in, or contemplated by, the
Offering Memorandum, (ii) no dividend or distribution of any
kind shall have been declared, paid or made by the Company
or any of the Subsidiaries on any class of its capital stock
other than the Series C Preferred Purchase, and (iii)
neither the Company nor any of the Subsidiaries shall have
incurred any liabilities or obligations, direct or
contingent, that are material, individually or in the
aggregate, to the Company and the Subsidiaries, taken as a
whole, and that are required to be disclosed on a balance
sheet in accordance with generally accepted accounting
principles and are not disclosed on the latest balance sheet
included in the Offering Memorandum (other than accounts
payable incurred in the ordinary course of business) or
elsewhere in the Offering Memorandum. Since the date hereof
and since the dates as of which information is given in the
Offering Memorandum, there shall not have been any Material
Adverse Change.
(e) The Purchaser shall have received
certificates, dated the Closing Date, signed by (i) the
President or any Vice President and (ii) a principal
financial or accounting officer of the Company confirming,
as of the Closing Date, the matters set forth in paragraphs
(a), (b), (c) and (d) of this Section 7.
(f) The Purchaser shall have received on the
Closing Date an opinion (satisfactory to Purchaser and its
counsel), dated the Closing Date, of Steel Xxxxxx & Xxxxx
LLP, counsel for the Company and the Subsidiaries, to the
effect that:
(i) The Company and each of the
Subsidiaries has been duly organized and is validly existing
as a corporation in good standing under the laws of its
respective jurisdiction of incorporation, has all requisite
corporate power and authority to own, lease and operate its
properties and to conduct its business as it is currently
being conducted and as described or reflected in the
Offering Memorandum, and is duly qualified and in good
standing as a foreign corporation authorized to do business
in each jurisdiction in which, to such counsel's knowledge,
the ownership, leasing and operating of its property and the
conduct of its business requires such qualification, except
where the failure to be so qualified would not have a
Material Adverse Effect.
(ii) To such counsel's knowledge, the
entities listed on Schedule I hereto are the only
Subsidiaries, direct or indirect, of the Company. All of
the outstanding shares of capital stock or other securities
evidencing equity ownership of such Subsidiaries of the
Company are owned, directly or indirectly, by the Company or
through one or more subsidiaries, and such shares of capital
stock or securities have been duly authorized and validly
issued and are fully paid and non-assessable, and to such
counsel's knowledge, were not issued in violation of any
preemptive or similar rights, free and clear of any security
interest, claim, lien or encumbrance. To such counsel's
knowledge, there are no outstanding subscriptions, rights,
warrants, calls, commitments of sale or options to acquire,
or instruments convertible into or exchangeable for, any
such shares of capital stock or other equity interest of
such Subsidiaries.
(iii) The Company has all requisite corporate
power and authority to execute, deliver and perform its
obligations under this Agreement, the Notes, the Note
Indenture and the Registration Rights Agreement and to
consummate the transactions contemplated hereby or thereby,
including, without limitation, the corporate power and
authority to issue, sell and deliver the Notes as provided
herein.
(iv) The Company has duly and validly authorized,
executed and delivered this Agreement.
(v) The Company has duly and validly authorized,
executed and delivered the Note Indenture and (assuming the
due authorization, execution and delivery thereof by the
Trustee) the Note Indenture is the legally valid agreement
and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except (i) as such
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance (including
the Uniform Fraudulent Transfers Act as adopted in Florida)
or other laws affecting creditors' rights and remedies
generally, (ii) as to general principles of equity
(including, without limitation, standards of materiality,
good faith, fair dealing and reasonableness), regardless of
whether enforcement is sought in a proceeding at law or in
equity, and (iii) to the extent that a waiver of rights
under any usury laws may be unenforceable. The Note
Indenture conforms in all material respects to the
description thereof in the Offering Memorandum.
(vi) The Series C Notes have been duly and
validly authorized for issuance and sale to the Purchaser by
the Company pursuant to this Agreement and, when
executed, issued and authenticated in accordance with the
terms of the Note Indenture and delivered against payment
therefor in accordance with the terms hereof, will be the
legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their
terms and entitled to the benefits of the Note Indenture,
except (i) as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent
conveyance (including the Uniform Fraudulent Transfers Act
as adopted in Florida) or other laws affecting creditors'
rights and remedies generally, (ii) as to general
principles of equity (including, without limitation,
standards of materiality, good faith, fair dealing and
reasonableness), regardless of whether enforcement is sought
in a proceeding at law or in equity, and (iii) to the extent
that a waiver of rights under any usury laws may be
unenforceable. The Series C Notes, when executed, issued,
authenticated and delivered in accordance with the terms of
the Note Indenture, will conform in all material respects to
the description thereof in the Offering Memorandum.
(vii) The Series D Notes have been duly and
validly authorized for issuance by the Company and, when
executed, issued, authenticated and delivered in accordance
with the terms of the Note Indenture, the Registration
Rights Agreement and the Exchange Offer, will be the legally
valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and
entitled to the benefits of the Note Indenture, except (i)
as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent
conveyance (including the Uniform Fraudulent Transfers Act
as adopted in Florida) or other laws affecting creditors'
rights and remedies generally, (ii) as to general principles
of equity (including, without limitation, standards of
materiality, good faith, fair dealing and reasonableness),
regardless of whether enforcement is sought in a proceeding
at law or in equity, and (iii) to the extent that a waiver
of rights under any usury laws may be unenforceable.
(viii) The Registration Rights Agreement has been
duly and validly authorized by the Company and, when duly
executed and delivered by the Company, will be the legally
valid and binding agreement and obligation of the Company,
enforceable against the Company in accordance with its
terms, except (i) as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance (including the Uniform Fraudulent
Transfers Act as adopted in Florida) or other laws
affecting creditors' rights and remedies generally, (ii) as
to general principles of equity (including, without
limitation, standards of materiality, good faith, fair
dealing and reasonableness), regardless of whether
enforcement is sought in a proceeding at law or in
equity, (iii) except as any rights to indemnity and
contribution thereunder may be limited by federal and state
securities laws and public policy considerations, and (iv)
except as enforcement of any provisions requiring the
payment of liquidated damages may be limited by applicable
law or public policy. The Registration Rights Agreement,
when executed and delivered, will conform in all material
respects to the description thereof in the Offering
Memorandum.
(ix) When the Series C Notes are issued and
delivered pursuant to this Agreement, none of the Series C
Notes will be of the same class (within the meaning of Rule
144A under the Act) as securities of the Company or any
Subsidiary that are listed on a national securities exchange
registered under Section 6 of the Exchange Act or that are
quoted in a United States automated inter-dealer quotation
system.
(x) No registration under the Act of any of the
Series C Notes is required for the sale of the Series C
Notes to the Purchaser as contemplated hereby or for the
Exempt Resales assuming (i) that each of the Eligible
Purchasers is a QIB or a non-U.S. person the Purchaser
reasonably believes is outside the United States and to whom
offers and sales of the Series C Notes may be made in
reliance upon Regulation S and (ii) the accuracy of the
Purchaser's representations contained herein.
(xi) To such counsel's knowledge, neither the
Company nor any of the Subsidiaries (a) is in violation of
its respective charter or bylaws, (b) is in default in
the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence
of indebtedness or in any other loan agreement, indenture,
mortgage or deed of trust or any other agreement that is
material to the Company and known to such counsel to which
it is a party or by which it is bound or to which any of its
properties is subject or (c) is in violation of any law,
statute, rule, regulation, judgment or court decree, known
to such counsel, applicable to the Company or the
subsidiaries, in the case of clause (b) or (c), other than
such violation or default that has not had and will not have
a Material Adverse Effect; provided however that no opinion
need be expressed with respect to the Company's purchase of
fragrance products from Diverted Sources. To such counsel's
knowledge, there exists no condition that, with notice, the
passage of time or otherwise, would constitute such default
under any such document or instrument; provided however that
no opinion need be expressed with respect to the Company's
purchase of fragrance products from Diverted Sources.
(xii) The execution, delivery and performance by
the Company of this Agreement and the other Operative
Documents, the issuance and sale of the Notes, and the
consummation of the transactions contemplated hereby and
thereby will not violate, conflict with or constitute a
breach of any of the terms or provisions of, or a default
under (or an event that with notice or the lapse of time, or
both, would constitute a default), or require consent under,
or result in the imposition of a lien or encumbrance on any
properties of the Company or any of the Subsidiaries, or an
acceleration of indebtedness pursuant to, (i) the charter or
bylaws of the Company or any of the Subsidiaries, (ii) any
bond, debenture, note or any other evidence of indebtedness
or any other loan agreement, indenture, mortgage or deed of
trust or any other agreement that is material to the Company
and known to such counsel to which the Company or any of the
Subsidiaries is a party or by which any of them or their
property is or may be bound, (iii) any statute, rule or
regulation applicable to the Company, any of the
Subsidiaries or their assets or properties; provided however
that no opinion need be expressed with respect to applicable
state or foreign securities or Blue Sky laws, or (iv) any
judgment, order or decree known to such counsel of any court
or governmental agency or authority having jurisdiction over
the Company, any of the Subsidiaries or their assets or
properties. Subject to the assumptions set forth in clauses
(i) and (ii) of Section 7(f)(x), no consent, approval,
authorization or order of, or filing, registration,
qualification, license or permit of or with, any court or
governmental agency, body or administrative agency is
required for the execution, delivery and performance of this
Agreement and the other Operative Documents and the
consummation of the transactions contemplated hereby and
thereby, except such as have been obtained and made (or, in
the case of the Registration Rights Agreement and the
transactions contemplated thereby and by the Note Indenture,
will be obtained and made under the Act and the Trust
Indenture Act) or such as may be required by NASD or under
state securities or Blue Sky laws and regulations or under
the securities laws of non-U.S. jurisdictions. No consents
or waivers from any other person are required under any
bond, debenture, note or any other evidence of indebtedness
or any other loan agreement, indenture, mortgage or deed of
trust or any other agreement that is material to the Company
and known to such counsel for the execution, delivery and
performance of this Agreement and the other Operative
Documents and the consummation of the transactions
contemplated hereby and thereby, other than such consents
and waivers as have been obtained (or, in the case of the
Registration Rights Agreement and the transactions
contemplated thereby and by the Note Indenture, are
required to be obtained).
(xiii) To the knowledge of such counsel, no
action has been taken and no statute, rule or regulation or
order has been enacted, adopted or issued by any
governmental agency that prevents the issuance of the Notes;
to the knowledge of such counsel, no injunction, restraining
order or order of any nature by a federal or state court of
competent jurisdiction has been issued that prevents the
issuance of the Notes or suspends the sale of the Notes in
any jurisdiction referred to in Section 4(e) hereof; and, to
the knowledge of such counsel, no action, suit or proceeding
is pending or threatened against or affecting, the Company
or any of the Subsidiaries before any court or arbitrator or
any governmental body, agency or official which, if
adversely determined, would prohibit, interfere with or
adversely affect the issuance or marketability of the Notes
or in any manner draw into question the validity of any
Operative Document; and to the knowledge of such counsel
every request of any securities authority or agency of any
jurisdiction for additional information has been complied
with in all material respects (provided however that no
opinion need be expressed as to requests from state or
foreign securities authorities or agencies).
(xiv) To the knowledge of such counsel, the
Company and each of the Subsidiaries has (i) all
Authorizations necessary to engage in the business currently
conducted by it in the manner described or reflected in the
Offering Memorandum, except where failure to hold such
Authorizations would not have a Material Adverse Effect and
(ii) no reason to believe that any governmental body or
agency is considering limiting, suspending or revoking any
such Authorization. To such counsel's knowledge, all such
Authorizations (as qualified in clause (i) above) are valid
and in full force and effect and the Company and the
Subsidiaries are in compliance in all material respects with
the terms and conditions of all such Authorizations (as
qualified in clause (i) above) and with the rules and
regulations of the regulatory authorities having
jurisdiction with respect thereto. To the knowledge of such
counsel, the lease of the National Trading Facility is valid
and binding and no material default by the Company has
occurred and is continuing thereunder, and no material
defaults by the landlord are existing under such lease.
(xv) To the knowledge of such counsel, neither
the Company nor any of the Subsidiaries has violated any
Environmental Laws, lacks any permits, licenses or
other approvals required of them under applicable
Environmental Laws or is violating any terms and conditions
of any such permit, license or approval, nor, to the
knowledge of such counsel, has the Company or any of the
Subsidiaries violated any federal, state, local or
foreign law relating to discrimination in the hiring,
promotion or pay of employees nor, to the knowledge of such
counsel, any applicable wage or hourly laws, nor any
provisions of ERISA or the rules and regulations promulgated
thereunder or analogous foreign laws and regulations, nor,
to the knowledge of such counsel, has the Company or any of
the Subsidiaries engaged in any unfair labor practice, which
in each case would result in a Material Adverse Effect.
(xvi) Neither the Company nor any of the
Subsidiaries is, and after giving effect to the offering and
sale of the Notes and the application of the net proceeds
therefrom in accordance with the Offering Memorandum, none
of them will be, (i) an "investment company" or a company
"controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940 or analogous
foreign laws and regulations, or (ii) a "holding company" or
a "subsidiary company" or an "affiliate" of a holding
company within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or analogous foreign laws
and regulations.
(xvii) To the knowledge of such counsel, there
are no holders of securities of the Company or any of the
Subsidiaries who, by reason of the execution by the
Company of this Agreement or any other Operative Document,
or the consummation of the transactions contemplated hereby
and thereby, have the right to request or demand that the
Company or any Subsidiary register under the Act or
analogous foreign laws and regulations securities held by
them.
(xviii) Prior to the effectiveness of the
Exchange Offer Registration Statement or the effectiveness
of the Shelf Registration Statement, the Note Indenture is
not required to be qualified under the Trust Indenture Act.
(xix) The authorized capital stock of the Company
and each of the Subsidiaries as of the date hereof has been
duly and validly authorized and the issued and outstanding
capital stock of the Company and each of the Subsidiaries at
January 31, 1998, has been duly and validly authorized and
issued, is fully paid and nonassessable and was not issued
in violation of or subject to statutory preemptive rights.
The Company had at January 31, 1998, an authorized and, to
the knowledge of such counsel, outstanding capitalization
as set forth in the Company's Form 10-K.
In addition, such counsel shall state that it has
participated in conferences with officers and other
representatives of the Company, representatives of the
independent public accountants for the Company, the Purchaser's
representatives and its counsel in connection with the
preparation of the Offering Memorandum and has considered the
matters required to be stated therein and the statements
contained therein and, although such counsel has not
independently verified the accuracy, completeness or fairness of
such statements (except as indicated above), such counsel advises
the Purchaser that, on the basis of the foregoing, no facts came
to its attention that caused it to believe that the Offering
Memorandum (as amended or supplemented, if applicable), at
the time such Offering Memorandum was circulated or that the
Offering Memorandum, at the Closing Date, contained or contains
an untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Without limiting the
foregoing, such counsel may further state that they assume no
responsibility for, and have not independently verified, the
accuracy, completeness or fairness of the financial statements,
notes and schedules and other financial data included in the
Offering Memorandum.
The opinions of such counsel described in this
paragraph shall be rendered to the Purchaser at the request of
the Company and shall so state therein.
(g) The Purchaser shall have received on the
Closing Date an opinion (satisfactory to Purchaser and its
counsel) dated the Closing Date, of Xxxxx X. Xxxxxx, Esq.,
general counsel of the Company and the Subsidiaries, to the
effect that, to the knowledge of such counsel, the Company
and each of the Subsidiaries has (i) good and marketable
title to all of the properties and assets described or
reflected in the Offering Memorandum as owned by it, free
and clear of all liens, charges, encumbrances and
restrictions, except such as exist on the date hereof and
are described or reflected in the Offering Memorandum or as
would not have a Material Adverse Effect and (ii) peaceful
and undisturbed possession under all leases to which it is
party as lessee.
(h) The Purchaser shall have received an opinion,
dated the Closing Date, of Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx, the Purchaser's counsel, in form and substance
reasonably satisfactory to the Purchaser, covering such
matters as are customarily covered in such opinions.
(i) At the time this Agreement is executed and
delivered by the Company and on the Closing Date, the
Purchaser shall have received letters, substantially in the
form previously approved by the Purchaser, from Deloitte &
Touche LLP, independent public accountants, with respect to
the financial statements and certain financial information
contained in Offering Memorandum.
(j) At the time this Agreement is executed and
delivered by the Company and on the Closing Date, the
Purchaser shall have received a letter, substantially in the
form previously approved by the Purchaser, from Xxxxxxx X.
Xxxxxx LLP, independent public accountants, certifying that
they are "independent accountants" with the meaning of the
Act.
(k) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
shall have been furnished with such documents, in addition
to those set forth above, as they may reasonably require for
the purpose of enabling them to review or pass upon the
matters referred to in this Section 7 and in order to
evidence the accuracy, completeness or satisfaction in all
material respects of any of the representations, warranties
or conditions herein contained.
(l) Prior to the Closing Date, the Company shall
have furnished to the Purchaser such further information,
certificates and documents as it may reasonably request.
(m) The Company and the Trustee shall have
entered into the Note Indenture and the Purchaser shall have
received counterparts, conformed as executed, thereof.
(n) The Company shall have entered into the
Registration Rights Agreement and the Purchaser shall have
received counterparts, conformed as executed, thereof.
All opinions, certificates, letters and other documents
required by this Section 7 to be delivered by the Company will be
in compliance with the provisions hereof only if they are
reasonably satisfactory in form and substance to the Purchaser.
The Company will furnish the Purchaser with such conformed copies
of such opinions, certificates, letters and other documents as
it may reasonably request.
8. Effectiveness of Agreement and Termination. This
Agreement shall become effective upon the execution and delivery
of this Agreement by the parties hereto.
This Agreement may be terminated at any time on or
prior to the Closing Date by the Purchaser by written notice to
the Company if any of the following has occurred: (i) any
outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions
or in the financial markets of the United States or elsewhere
that, in the Purchaser's judgment, is material and adverse and,
in the Purchaser's judgment, makes it impracticable to market the
Series C Notes on the terms and in the manner contemplated in the
Offering Memorandum, (ii) the suspension or material limitation
of trading in securities or other instruments on the New York
Stock Exchange, the American Stock Exchange, the Chicago Board of
Options Exchange, the Chicago Mercantile Exchange, the Chicago
Board of Trade or the Nasdaq National Market or limitation on
prices for securities or other instruments on any such exchange
or the Nasdaq National Market, (iii) the suspension of trading of
any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree
or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental
authority which in the Purchaser's opinion materially and
adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole, (v) the
declaration of a banking moratorium by either federal or New York
State authorities or (vi) the taking of any action by any
federal, state or local government or agency in respect of its
monetary or fiscal affairs which in the Purchaser's opinion has a
material adverse effect on the financial markets in the United
States or (vii) any securities of the Company shall have been
downgraded or placed on any "watch list" for possible downgrading
by any nationally recognized statistical rating organization.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company
and the Purchaser set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will
survive delivery of and payment for the Series C Notes,
regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of the Purchaser, the
officers or directors of the Purchaser, any person controlling
the Purchaser, the Company, the officers or directors of the
Company or any person controlling the Company, (ii) acceptance of
the Series C Notes and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Series C Notes are not delivered
by or on behalf of the Company as provided herein (other than as
a result of any termination of this Agreement pursuant to Section
8), the Company agrees to reimburse the Purchaser for all
out-of-pocket expenses (including the fees and disbursements of
counsel) incurred by the Purchaser. Notwithstanding any
termination of this Agreement, the Company shall be liable for
all expenses which it has agreed to pay pursuant to Section 4(f)
hereof. The Company agrees to reimburse the Purchaser and its
officers, directors and each person, if any, who controls the
Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act for any and all fees and expenses
(including without limitation the fees and expenses of counsel)
incurred by the Purchaser in connection with enforcing its rights
under this Agreement (including without limitation its rights
under Section 6).
Except as otherwise provided, this Agreement has been
and is made solely for the benefit of and shall be binding upon
the Company and the Purchaser, its directors and officers, any
controlling persons referred to herein, the directors and
officers of the Company and their respective successors and
assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns"
shall not include a purchaser of any of the Series C Notes from
the Purchaser merely because of such purchase.
9. Miscellaneous. Notices given pursuant to any provision
of this Agreement shall be made in writing by hand-delivery,
first-class mail (registered or certified, return receipt
requested), telecopier or air courier guaranteeing overnight
delivery and shall be addressed as follows: (a) if to
the Company, French Fragrances, Inc., 00000 X.X. 00xx Xxxxxx,
Xxxxx Xxxxx, Xxxxxxx 00000, Attention: Xxxxx X. Marina, Esq.,
with a copy to Steel Xxxxxx & Xxxxx LLP, 000 Xxxxx Xxxxxxxx
Xxxxxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxx
Xxxxxxx Xxxxxx, Esq., and (b) if to the Purchaser, c/x Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Block, with a copy to
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx,
Esq., or in any case to such other address as the person to be
notified may have requested in writing.
All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in
the mail, postage prepaid, if mailed; when receipt is
acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight
delivery.
This Agreement shall be governed and construed in
accordance with the laws of the State of New York.
This Agreement may be signed in various counterparts
which together shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth
the agreement among the Company and the Purchaser.
Please confirm that the foregoing correctly sets forth
the Agreement among the Company and the Purchaser.
Very truly yours,
FRENCH FRAGRANCES, INC.
By:/s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Accepted and agreed to as of
the date first above written:
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:______________________________
Name:
Title:
SCHEDULE I
List of Subsidiaries of the Company
G.B. Parfums, Inc.
Halston Parfums, Inc.
FRM Services, Inc.
Fine Fragrances, Inc.
EXHIBIT A
Registration Rights Agreement
REGISTRATION RIGHTS AGREEMENT
DATED AS OF APRIL 27, 1998
BETWEEN
FRENCH FRAGRANCES, INC.
AND
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
THIS REGISTRATION RIGHTS AGREEMENT (THIS "AGREEMENT")
IS MADE AND ENTERED INTO AS OF APRIL 27, 1998 BETWEEN FRENCH
FRAGRANCES, INC., A FLORIDA CORPORATION (THE "COMPANY") AND
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION (THE "INITIAL
PURCHASER"), WHO HAS AGREED TO PURCHASE THE COMPANY'S 10-3/8%
SERIES C SENIOR NOTES DUE 2007, SERIES C (THE "SERIES C NOTES")
PURSUANT TO THE PURCHASE AGREEMENT (AS DEFINED BELOW).
THIS AGREEMENT IS MADE PURSUANT TO THE PURCHASE
AGREEMENT, DATED APRIL 20, 1998 (THE "PURCHASE AGREEMENT"),
BETWEEN THE COMPANY AND THE INITIAL PURCHASER. IN ORDER
TO INDUCE THE INITIAL PURCHASER TO PURCHASE THE SERIES C NOTES,
THE COMPANY HAS AGREED TO PROVIDE THE REGISTRATION RIGHTS SET
FORTH IN THIS AGREEMENT. THE EXECUTION AND DELIVERY OF THIS
AGREEMENT IS A CONDITION TO THE OBLIGATIONS OF THE INITIAL
PURCHASER SET FORTH IN SECTION 7 OF THE PURCHASE AGREEMENT.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized
terms shall have the following meanings:
Act: The Securities Act of 1933, as amended.
Business Day: Any day except a Saturday, Sunday or
other day in the City of New York, or in the city of the
corporate trust office of the Trustee, on which banks are
authorized to close.
Broker-Dealer: Any broker or dealer registered under
the Exchange Act.
Broker-Dealer Transfer Restricted Securities: Series D
Notes that are acquired by a Broker Dealer in the Exchange Offer
in exchange for Series C Notes that such Broker-Dealer acquired
for its own account as a result of market making activities or
other trading activities (other than Series C Notes acquired
directly from the Company or any of its affiliates).
Certificated Securities: As defined in the Indenture.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence
of (a) the filing and effectiveness under the Act of the Exchange
Offer Registration Statement relating to the Series D Notes to be
issued in the Exchange Offer, (b) the maintenance of such
Registration Statement continuously effective and the keeping of
the Exchange Offer open for a period not less than the minimum
period required pursuant to Section 3(b) hereof and (c) the
delivery by the Company to the Registrar under the Indenture of
Series D Notes in the same aggregate principal amount as the
aggregate principal amount of Transfer Restricted Securities
tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Series C
Notes, each Interest Payment Date.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
Exchange Offer: The registration by the Company under
the Act of the Series D Notes pursuant to the Exchange Offer
Registration Statement pursuant to which the Company shall
offer the Holders of all outstanding Transfer Restricted
Securities the opportunity to exchange all such outstanding
Transfer Restricted Securities for Series D Notes in an aggregate
principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by
such Holders.
Exchange Offer Registration Statement: The
Registration Statement relating to the Exchange Offer, including
the related Prospectus.
Exempt Resales: The transactions in which the Initial
Purchaser proposes to sell the Series C Notes to certain
"qualified institutional buyers," as such term is defined in Rule
144A under the Act, and to non-U.S. persons whom the Initial
Purchaser reasonably believes are outside the United States and
to whom offers and sales of the Series C Notes may be made in
reliance upon Regulation S under the Act, in transactions meeting
the requirements of Regulation S under the Act.
Global Notes: As defined in the Indenture.
Holders: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated the Closing Date,
between the Company and Marine Midland Bank, as trustee (the
"Trustee"), pursuant to which the Notes are to be issued, as such
Indenture is amended or supplemented from time to time in
accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and
the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Series C Notes and the Series D Notes.
Person: An individual, partnership, corporation,
trust, unincorporated organization, or a government or agency or
political subdivision thereof.
Prospectus: The prospectus included in a Registration
Statement at the time such Registration Statement is declared
effective, as amended or supplemented by any prospectus
supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by
reference into such Prospectus.
Record Holder: With respect to any Damages Payment
Date, each Person who is a Holder of Notes on the record date
with respect to the Interest Payment Date on which such Damages
Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of
the Company relating to (a) an offering of Series D Notes
pursuant to an Exchange Offer or (b) the registration for resale
of Transfer Restricted Securities pursuant to the Shelf
Registration Statement, in each case, (i) which is filed pursuant
to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits
and material incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer which
holds Broker-Dealer Transfer Restricted Securities.
Series D Notes: The Company's 10-3/8% Series D Senior
Notes due 2007 to be issued pursuant to the Indenture (i) in the
Exchange Offer or (ii) upon the request of any Holder of Series C
Notes covered by a Shelf Registration Statement, in exchange for
such Series C Notes.
Shelf Registration Statement: As defined in Section 4
hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C.
Section 77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the
earliest to occur of (a) the date on which such Note is exchanged
in the Exchange Offer and entitled to be resold to the public by
the Holder thereof without complying with the prospectus delivery
requirements of the Act, (b) the date on which such Note has been
disposed of in accordance with a Shelf Registration Statement,
(c) the date on which such Note is disposed of by a Broker-Dealer
pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the
Prospectus contained therein) and (d) the date on which such Note
is distributed to the public pursuant to Rule 144 under the Act.
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an
underwriter for reoffering to the public.
SECTION 2. HOLDERS
A Person is deemed to be a Holder of Transfer
Restricted Securities (each, a "Holder") whenever such Person
owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted
by applicable law or Commission policy (after the procedures set
forth in Section 6(a)(i) below have been complied with), the
Company shall (i) cause to be filed with the Commission as soon
as practicable after the Closing Date, but in no event later than
60 days after the Closing Date, the Exchange Offer Registration
Statement, (ii) use its reasonable best efforts to cause such
Exchange Offer Registration Statement to become effective at the
earliest possible time, but in no event later than 150 days after
the Closing Date, (iii) in connection with the foregoing, (A)
file all pre-effective amendments to such Exchange Offer
Registration Statement as may be necessary in order to cause such
Exchange Offer Registration Statement to become effective, (B)
file, if applicable, a post-effective amendment to such Exchange
Offer Registration Statement pursuant to Rule 430A under the Act
and (C) cause all necessary filings, if any, in connection with
the registration and qualification of the Series D Notes to be
made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer, and (iv)
upon the effectiveness of such Exchange Offer Registration
Statement, commence and Consummate the Exchange Offer. The
Exchange Offer shall be on the appropriate form permitting
registration of the Series D Notes to be offered in exchange for
the Series C Notes that are Transfer Restricted Securities and to
permit sales of Broker-Dealer Transfer Restricted Securities by
Restricted Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company shall use its reasonable best efforts
to cause the Exchange Offer Registration Statement to be
effective continuously, and shall keep the Exchange Offer open
for a period of not less than the minimum period required under
applicable federal and state securities laws to Consummate the
Exchange Offer; provided, however, that in no event shall such
period be less than 20 Business Days. The Company shall cause
the Exchange Offer to comply with all applicable federal and
state securities laws. No securities other than the Notes shall
be included in the Exchange Offer Registration Statement. The
Company shall use its reasonable best efforts to commence the
Exchange Offer on or prior to 30 Business Days after the Exchange
Offer Registration Statement has become effective.
(c) The Company shall include a "Plan of Distribution"
section in the Prospectus contained in the Exchange Offer
Registration Statement and indicate therein that any Restricted
Broker-Dealer who holds Series C Notes that are Transfer
Restricted Securities and that were acquired for the account of
such Broker-Dealer as a result of market-making activities or
other trading activities, may exchange such Series C Notes (other
than Transfer Restricted Securities acquired directly from the
Company or any Affiliate of the Company) pursuant to the Exchange
Offer; however, such Broker-Dealer may be deemed to be an
"underwriter" within the meaning of the Act and must, therefore,
deliver a prospectus meeting the requirements of the Act in
connection with its initial sale of each Series D Note received
by such Broker-Dealer in the Exchange Offer, which prospectus
delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer
Registration Statement. Such "Plan of Distribution" section
shall also contain all other information with respect to such
sales of Broker-Dealer Transfer Restricted Securities by
Restricted Broker-Dealers that the Commission may require in
order to permit such sales pursuant thereto, but such "Plan of
Distribution" shall not be required to name any such
Broker-Dealer or disclose the amount of Notes held by any such
Broker-Dealer, except to the extent required by the Commission as
a result of a change in policy after the date of this Agreement.
The Company shall use its reasonable best efforts to
keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required by the
provisions of Section 6(c) below to the extent necessary to
ensure that it is available for sales of Broker-Dealer Transfer
Restricted Securities by Restricted Broker-Dealers, and to ensure
that such Registration Statement conforms with the requirements
of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for
a period equal to the shorter of (A) one year from the date on
which the Exchange Offer is Consummated and (B) the date on which
all Transfer Restricted Securities acquired in the Exchange Offer
by Restricted Broker-Dealers have been sold to the public by such
Restricted Broker-Dealers.
The Company shall provide sufficient copies of the
latest version of such Prospectus to such Restricted
Broker-Dealers promptly upon request, and in no event later than
one day after such request, at any time during such one-year
period in order to facilitate such sales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not
required to file an Exchange Offer Registration Statement with
respect to the Series D Notes because the Exchange Offer is not
permitted by applicable law or Commission policy (after the
procedures set forth in Section 6(a)(i) below have been complied
with) or if (ii) any Holder of Transfer Restricted Securities
shall notify the Company within 20 Business Days following the
Consummation of the Exchange Offer that (A) such Holder was
prohibited by law or Commission policy from participating in the
Exchange Offer or (B) such Holder may not resell the Series D
Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder or (C) such Holder is a
Broker-Dealer and holds Series C Notes acquired directly from the
Company or one of its affiliates, then the Company shall (x)
cause to be filed, on or prior to 30 days after the date on
which the Company determines that it is not required to file the
Exchange Offer Registration Statement pursuant to clause (i)
above or 30 days after the date on which the Company receives the
notice specified in clause (ii) above, a shelf registration
statement pursuant to Rule 415 under the Act (which may be an
amendment to the Exchange Offer Registration Statement (in either
event, the "Shelf Registration Statement")), relating to all
Transfer Restricted Securities the Holders of which shall have
provided the information required pursuant to Section 4(b)
hereof, and shall (y) use its reasonable best efforts to cause
such Shelf Registration Statement to become effective on or prior
to 150 days after the date on which the Company becomes obligated
to file such Shelf Registration Statement; provided that if the
Company has not consummated the Exchange Offer within 180 days
of the Closing Date, then the Company will file the Shelf
Registration Statement with the Commission on or prior to the
181st date after the Closing Date. If, after the Company has
filed an Exchange Offer Registration Statement which satisfies
the requirements of Section 3(a) above, the Company is required
to file and make effective a Shelf Registration Statement solely
because the Exchange Offer shall not be permitted under
applicable law or Commission policy, then the filing of the
Exchange Offer Registration Statement shall be deemed to satisfy
the requirements of clause (x) above. Such an event shall have
no effect on the requirements of clause (y) above. The Company
shall use its reasonable best efforts to keep the Shelf
Registration Statement discussed in this Section 4(a)
continuously effective, supplemented and amended as required by
and subject to the provisions of Sections 6(b) and (c) hereof to
the extent necessary to ensure that it is available for
sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a), and to ensure that
it conforms with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years
(as extended pursuant to Section 6(d)) following the Closing Date
or such shorter period that will terminate when all the Transfer
Restricted Securities covered by the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement or
are eligible for sale under Rule 144(k) under the Act.
(b) Provision by Holders of Certain Information in
Connection with the Shelf Registration Statement. No Holder of
Transfer Restricted Securities may include any of its Transfer
Restricted Securities in any Shelf Registration Statement
pursuant to this Agreement unless and until such Holder furnishes
to the Company in writing, within 20 days after receipt of a
request therefor, such information specified in Item 507 of
Regulation S-K under the Act for use in connection with
any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted
Securities shall be entitled to Liquidated Damages pursuant to
Section 5 hereof unless and until such Holder shall have used its
reasonable best efforts to provide all such information. Each
Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Company all
information required to be disclosed in order to make the
information previously furnished to the Company by such Holder
not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) the Company fails to file any Registration
Statement required by this Agreement with the Commission on or
prior to the date specified for such filing in this Agreement,
(ii) any such Registration Statement has not been declared
effective by the Commission on or prior to the date specified for
such effectiveness in this Agreement, (iii) the Company fails to
Consummate the Exchange Offer within 30 Business Days after the
Exchange Offer Registration Statement is first declared effective
by the Commission, (iv) subject to the provisions of Section
6(c)(i) below, any Registration Statement required by this
Agreement is filed and declared effective but shall thereafter
cease to be effective for a period of one business day without
being succeeded immediately by a post-effective amendment to such
Registration Statement that cures such failure and that is itself
declared effective immediately or (v) subject to the provisions
of Section 6(c)(i) below, at any time when a prospectus is
required by the Act to be delivered in connection with sales of
the Transfer Restricted Securities, the Company shall conclude,
or the Holders of a majority in principal amount of the affected
Transfer Restricted Securities shall reasonably conclude, based
on the advice of their counsel, and shall give notice to the
Company, that either (A) any event shall have occurred or fact
exist as a result of which it is necessary to amend or
supplement the prospectus in order that it will not include an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made, in light of
the circumstances under which they were made, not misleading, or
(B) it shall be necessary to amend or supplement such
Registration Statement or a Prospectus in order to comply with
the requirements of the Act or the rules of the Commission
thereunder, and in the case of clause (A) or (B), such
Registration Statement is not appropriately amended by an
effective post-effective amendment, or the Prospectus is not
amended or supplemented, in a manner reasonably satisfactory to
the Holders of Transfer Restricted Securities so as to be
declared effective or made usable within one business day after
the Company shall so conclude or shall receive the
above-mentioned notice from Holders of Transfer Restricted
Securities (each such event referred to in clauses (i) through
(v), a "Registration Default"), then the Company agrees to pay
liquidated damages to each Holder of Transfer Restricted
Securities with respect to the first 90-day period immediately
following the occurrence of such Registration Default in an
amount equal to $.05 per week per $1,000 principal amount of
Transfer Restricted Securities held by such Holder for each week
or portion thereof that the Registration Default continues. The
amount of the liquidated damages shall increase by an additional
$.05 per week per $1,000 in principal amount of Transfer
Restricted Securities with respect to each subsequent 90-day
period until all Registration Defaults have been cured, up to a
maximum amount of liquidated damages of $.50 per week per
$1,000 principal amount of Transfer Restricted Securities.
Notwithstanding anything to the contrary set forth herein, (1)
upon filing of the Exchange Offer Registration Statement (and/or,
if applicable, the Shelf Registration Statement), in the case of
(i) above, (2) upon the effectiveness of the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (ii) above, (3) upon
Consummation of the Exchange Offer, in the case of (iii) above,
(4) upon the filing of a post-effective amendment to the
Registration Statement, or an amendment or supplement to the
Prospectus, or an additional Registration Statement, in each case
that causes the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement) to again be
declared effective or made usable in the case of (iv) and (v)
above, or (5) once the Transfer Restricted Securities are
eligible for resale under Rule 144(k) under the Act, the
liquidated damages payable with respect to the Transfer
Restricted Securities as a result of such clause (i), (ii),
(iii), (iv) or (v), as applicable, shall cease.
All accrued liquidated damages shall be paid to the
Holder of the Global Note by wire transfer of immediately
available funds or by federal funds check and to Holders of
Certificated Securities by mailing checks to their registered
addresses on each Damages Payment Date. All obligations of the
Company set forth in the preceding paragraph that are outstanding
with respect to any Transfer Restricted Security at the time such
security ceases to be a Transfer Restricted Security shall
survive until such time as all such obligations with respect to
such security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In
connection with the Exchange Offer, the Company shall comply with
all applicable provisions of Section 6(c) below, shall use its
reasonable best efforts to effect such exchange and to permit the
sale of Broker-Dealer Transfer Restricted Securities being sold
in accordance with the intended method or methods of distribution
thereof, and shall comply with all of the following provisions:
(i) If, following the date hereof there has been
published a change in Commission policy with respect to
exchange offers such as the Exchange Offer, such that
in the reasonable opinion of counsel to the Company there is
a substantial question as to whether the Exchange Offer is
permitted by applicable federal law, the Company hereby
agrees to seek a no-action letter or other favorable
decision from the Commission allowing the Company to
Consummate an Exchange Offer for such Series C Notes. The
Company hereby agrees to pursue the issuance of such a
decision to the Commission staff level, but shall not be
required to take commercially unreasonable action to effect
a change of Commission policy. In connection with the
foregoing, the Company hereby agrees to take all such other
actions as are requested by the Commission or otherwise
required in connection with the issuance of such decision,
including without limitation (A) participating in telephonic
conferences with the Commission, (B) delivering to the
Commission staff an analysis prepared by counsel to the
Company setting forth the legal bases, if any, upon which
such counsel has concluded that such an Exchange Offer
should be permitted and (C) diligently pursuing a resolution
(which need not be favorable) by the Commission staff of
such submission.
(ii) As a condition to its participation in the
Exchange Offer pursuant to the terms of this Agreement, each
Holder of Transfer Restricted Securities shall furnish, upon
the request of the Company, prior to the Consummation of the
Exchange Offer, a written representation to the Company
(which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement)
to the effect that (A) it is not an affiliate of the
Company, (B) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any
person to participate in, a distribution of the
Series D Notes to be issued in the Exchange Offer and (C) it
is acquiring the Series D Notes in its ordinary course of
business. The Exchange Offer Registration Statement shall
disclose that any Broker-Dealer and any such Holder using
the Exchange Offer to participate in a distribution of the
securities to be acquired in the Exchange Offer (1) may not
under Commission policy as in effect on the date of this
Agreement rely on the position of the Commission enunciated
in Xxxxxx Xxxxxxx and Co., Inc. (available June 5, 1991) and
Exxon Capital Holdings Corporation (available May 13, 1988),
as interpreted in the Commission's letter to Shearman &
Sterling dated July 2, 1993, and similar no-action letters
(including, if applicable, any no-action letter obtained
pursuant to clause (i) above), and (2) must comply with the
registration and prospectus delivery requirements of the Act
in connection with a secondary resale transaction and that
such a secondary resale transaction must be covered by an
effective registration statement containing the selling
security Holder information required by Item 507 or 508, as
applicable, of Regulation S-K if the resales are of Series D
Notes obtained by such Holder in exchange for Series C Notes
acquired by such Holder directly from the Company or an
affiliate thereof.
(iii) If the Commission requests, prior to
effectiveness of the Exchange Offer Registration Statement,
the Company shall provide a supplemental letter to the
Commission (A) stating that the Company is registering the
Exchange Offer in reliance on the position of the Commission
enunciated in Exxon Capital Holdings Corporation (available
May 13, 1988), Xxxxxx Xxxxxxx and Company., Inc. (available
June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) above, (B) including a
representation that the Company has not entered into any
arrangement or understanding with any Person to distribute
the Series D Notes to be received in the Exchange Offer and
that, to the best of the Company's information and belief,
each Holder participating in the Exchange Offer is
acquiring the Series D Notes in its ordinary course of
business and has no arrangement or understanding with any
Person to participate in the distribution of the Series D
Notes received in the Exchange Offer and (C) any other
undertaking or representation required by the Commission as
set forth in any no-action letter obtained pursuant to
clause (i) above.
(b) Shelf Registration Statement. In connection with
the Shelf Registration Statement, the Company shall comply with
all the provisions of Section 6(c) below and shall use its
reasonable best efforts to effect such registration to permit the
sale of the Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution
thereof (as indicated in the information furnished to the Company
pursuant to Section 4(b) hereof), and pursuant thereto the
Company will prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the sale
of the Transfer Restricted Securities in accordance with the
intended method or methods of distribution thereof within the
time periods and otherwise in accordance with the provisions
hereof.
(c) General Provisions. In connection with any
Registration Statement and any related Prospectus required by
this Agreement to permit the sale or resale of Transfer
Restricted Securities (including, without limitation, any
Exchange Offer Registration Statement and the related Prospectus,
to the extent that the same are required to be available to
permit sales of Broker-Dealer Transfer Restricted Securities by
Restricted Broker-Dealers), the Company shall:
(i) use its reasonable best efforts to keep such
Registration Statement continuously effective and provide
all requisite financial statements for the period specified
in Section 3 or 4 of this Agreement, as applicable. Upon
the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein
(A) to contain a material misstatement or omission or (B)
not to be effective and usable for resale of Transfer
Restricted Securities during the period required by this
Agreement, the Company shall give notice promptly to the
underwriter(s), if any, and selling Holders of the
occurrence of such event and file promptly an appropriate
amendment to such Registration Statement, (1) in the case of
clause (A), correcting any such misstatement or omission,
and (2) in the case of clauses (A) and (B), use its
reasonable best efforts to cause such amendment to be
declared effective and such Registration Statement and the
related Prospectus to become usable for their intended
purpose(s) as soon as practicable thereafter.
Notwithstanding the foregoing, the Company may suspend the
offering and sales under the Exchange Offer Registration
Statement subsequent to the Consummation of the Exchange
Offer or the Shelf Registration Statement for up to 30 days
in each year during which such Exchange Offer Registration
Statement is required to be effective and usable hereunder
subsequent to the Consummation of the Exchange Offer or such
Shelf Registration Statement is required to be effective and
usable hereunder (measured from the date of effectiveness of
such Shelf Registration Statement to successive
anniversaries thereof) if (A) either (y)(I) the Company
shall be engaged in a material acquisition or disposition
and (II)(aa) such acquisition or disposition is required to
be disclosed in the Exchange Offer Registration Statement or
the Shelf Registration Statement, the related Prospectus or
any amendment or supplement thereto, or the failure by the
Company to disclose such transaction in the Exchange Offer
Registration Statement or the Shelf Registration Statement
or related Prospectus, or any amendment or supplement
thereto, as then amended or supplemented, would cause such
Exchange Offer Registration Statement or Shelf Registration
Statement, Prospectus or amendment or supplement thereto, to
contain an untrue statement of material fact or omit to
state a material fact necessary in order to make the
statement therein not misleading, in light of the
circumstances under which they were made, (bb) information
regarding the existence of such acquisition or disposition
has not then been publicly disclosed by or on behalf of the
Company and (cc) a majority of the Board of Directors of the
Company determines in the exercise of its good faith
judgment that disclosure of such acquisition or disposition
would not be in the best interest of the Company or would
have a material adverse effect on the consummation of such
acquisition or disposition or (z) a majority of the Board of
Directors of the Company determines in the exercise of its
good faith judgment that compliance with the disclosure
obligations set forth in this Section 6(c)(i) would
otherwise have a material adverse effect on the Company and
its subsidiaries, taken as a whole, and (B) the Company
notifies the Holders within two business days after such
Board of Directors makes the relevant determination set
forth in clause (A); provided, however, that in each such
case the applicable period specified in Section 3
(subsequent to the Consummation of the Exchange Offer) and
Section 4 hereof during which the applicable Exchange Offer
Registration Statement or Shelf Registration Statement is
required to be kept effective and usable shall be extended
by the number of days during which such effectiveness was
suspended pursuant to the foregoing and Liquidated Damages
shall not apply during any period the Company is
permitted to suspend offerings and sales under this
sentence;
(ii) prepare and file with the Commission such
amendments and post-effective amendments to the Registration
Statement as may be necessary to keep the Registration
Statement effective for the applicable period set forth in
Section 3 or 4 hereof, or such shorter period as will
terminate when all Transfer Restricted Securities covered by
such Registration Statement have been sold; cause the
Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Act, and to comply fully with Rules 424,
430A and 462, as applicable, under the Act in a timely
manner; and comply with the provisions of the Act with
respect to the disposition of all securities covered by such
Registration Statement during the applicable period in
accordance with the intended method or methods of
distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and
selling Holders promptly and, if requested by such Persons,
confirm such advice in writing, (A) when the Prospectus or
any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any Registration Statement
or any post-effective amendment thereto, when the same has
become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information
relating thereto, (C) of the issuance by the Commission of
any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by
any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of
the preceding purposes, and (D) of the existence of any fact
or the happening of any event that makes any statement of a
material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any
document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the
Registration Statement in order to make the statements
therein not misleading, or that requires the making of any
additions to or changes in the Prospectus in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading. If at any time
the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall
issue an order suspending the qualification or exemption
from qualification of the Transfer Restricted
Securities under state securities or Blue Sky laws, the
Company shall use its reasonable best efforts to obtain the
withdrawal or lifting of such order at the earliest possible
time;
(iv) furnish to the Initial Purchaser, each
selling Holder named in any Registration Statement or
Prospectus and each of the underwriter(s) in connection with
such sale, if any, before filing with the Commission, copies
of any Registration Statement or any Prospectus included
therein or any amendments or supplements to any such
Registration Statement or Prospectus (including all
documents incorporated by reference after the initial
filing of such Registration Statement), which documents will
be subject to the review and comment of such Holders and
underwriter(s) in connection with such sale, if any, for a
period of at least five Business Days, and the Company will
not file any such Registration Statement or Prospectus or
any amendment or supplement to any such Registration
Statement or Prospectus (including all such documents
incorporated by reference) to which the selling Holders of
the Transfer Restricted Securities covered by such
Registration Statement or the underwriter(s) in connection
with such sale, if any, shall reasonably object within five
Business Days after the receipt thereof;
(v) promptly prior to the filing of any document
that is to be incorporated by reference into a Registration
Statement or Prospectus, provide copies of such document
to the selling Holders and to the underwriter(s) in
connection with such sale, if any, make the
Company's representatives available for discussion of such
document and other customary due diligence matters, and
include such information in such document prior to the
filing thereof as such selling Holders or underwriter(s), if
any, reasonably may request;
(vi) make available at reasonable times for
inspection by the selling Holders, any managing underwriter
participating in any disposition pursuant to such
Registration Statement and any attorney or accountant
retained by such selling Holders or any of such
underwriter(s), all financial and other records, pertinent
corporate documents and properties of the Company and its
subsidiaries cause the Company's and its subsidiaries'
officers, directors and employees to supply all information
reasonably requested by any such Holder, underwriter,
attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent
to the filing thereof and prior to its effectiveness;
(vii) if requested by any selling Holders or the
underwriter(s) in connection with such sale, if any,
promptly include in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling
Holders and underwriter(s), if any, may reasonably request
to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, information with respect to
the principal amount of Transfer Restricted Securities being
sold to such underwriter(s), the purchase price being paid
therefor and any other terms of the offering of the Transfer
Restricted Securities to be sold in such offering; and make
all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the
Company is notified of the matters to be included in such
Prospectus supplement or post-effective amendment;
(viii) furnish to each selling Holder and each of
the underwriter(s) in connection with such sale, if any,
without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by
reference therein and all exhibits (including, at the
request of such selling Holder and such underwriter(s),
exhibits incorporated therein by reference);
(ix) deliver to each selling Holder and each of
the underwriter(s), if any, without charge, as many copies
of the Prospectus (including each preliminary prospectus)
and any amendment or supplement thereto as such Persons
reasonably may request; the Company hereby consents to the
use (in accordance with law) of the Prospectus and any
amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer
Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;
(x) enter into such agreements (including an
underwriting agreement) and make such representations and
warranties and take all such other actions in connection
therewith in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any
Registration Statement contemplated by this Agreement as may
be reasonably requested by any Holder of Transfer Restricted
Securities or underwriter in connection with any sale or
resale pursuant to any Registration Statement contemplated
by this Agreement, and in such connection, whether or not an
underwriting agreement is entered into and whether or not
the registration is an Underwritten Registration, the
Company shall:
(A) furnish (or in the case of paragraphs (2) and (3),
use its reasonable best efforts to furnish) to each
selling Holder, the Trustee under the Indenture and each
underwriter, if any, upon the effectiveness of the Shelf
Registration Statement and to each Restricted
Broker-Dealer upon Consummation of the Exchange Offer:
(1) a certificate, dated the date of Consummation
of the Exchange Offer or the date of effectiveness
of the Shelf Registration Statement, as the case may
be, signed on behalf of the Company by (x) the
President or any Vice President and (y) a principal
financial or accounting officer of the Company,
confirming, as of the date thereof, the matters set
forth in paragraphs (a) through (d) of Section 7 of
the Purchase Agreement and such other similar
matters as the Holders, underwriter(s) and/or
Restricted Broker Dealers may reasonably request;
(2) an opinion, dated the date of Consummation of
the Exchange Offer or the date of effectiveness of
the Shelf Registration Statement, as the case may
be, of counsel for the Company covering matters
similar to those set forth in paragraph (f) of
Section 7 of the Purchase Agreement and such other
matter as the Holders, underwriters and/or
Restricted Broker Dealers may reasonably request,
and in any event including a statement to the effect
that such counsel has participated in conferences
with officers and other representatives of the
Company, representatives of the independent public
accountants for the Company and has considered the
matters required to be stated therein and the
statements contained therein, although such counsel
has not independently verified the accuracy,
completeness or fairness of such statements; and
that such counsel advises that, on the basis of the
foregoing (relying as to materiality to a large
extent upon facts provided to such counsel by
officers and other representatives of the Company
and without independent check or verification), no
facts came to such counsel's attention that caused
such counsel to believe that the applicable
Registration Statement, at the time such
Registration Statement or any post-effective
amendment thereto became effective and, in the case
of the Exchange Offer Registration Statement, as of
the date of Consummation of the Exchange Offer,
contained an untrue statement of a material fact
or omitted to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading, or that the Prospectus
contained in such Registration Statement as of its
date and, in the case of the opinion dated the date
of Consummation of the Exchange Offer, as of the
date of Consummation, contained an untrue statement
of a material fact or omitted to state a material
fact necessary in order to make the statements
therein, in the light of the circumstances under
which they were made, not misleading. Without
limiting the foregoing, such counsel may state
further that such counsel assumes no responsibility
for, and expresses no opinion as to, the accuracy,
completeness or fairness of the financial
statements, notes and schedules and other financial
data included in any Registration Statement
contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated as of the
date of effectiveness of the Shelf Registration
Statement or the date of Consummation of the
Exchange Offer, as the case may be, from the
Company's independent accountants, in the customary
form and covering matters of the type customarily
covered in comfort letters to underwriters in
connection with primary underwritten offerings, and
affirming the matters set forth in the comfort
letters delivered pursuant to Section 7 of the
Purchase Agreement, without exception;
(B) set forth in full or incorporate by reference in
the underwriting agreement, if any, in connection with
any sale or resale pursuant to any Shelf Registration
Statement the indemnification provisions and procedures
of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as
may be reasonably requested by the selling Holders, the
underwriter(s), if any, and Restricted Broker Dealers, if
any, to evidence compliance with clause (A) above and
with any customary conditions contained in the
underwriting agreement or other agreement entered into by
the Company pursuant to this clause (x).
The above shall be done at each closing under such
underwriting or similar agreement, as and to the extent
required thereunder, and if at any time the representations and
warranties of the Company contemplated in (A)(1) above cease to
be true and correct, the Company shall so advise the
underwriter(s), if any, the selling Holders and each Restricted
Broker-Dealer promptly and if requested by such Persons, shall
confirm such advice in writing;
(xi) prior to any public offering of Transfer
Restricted Securities, cooperate with the selling Holders,
the underwriter(s), if any, and their respective counsel in
connection with the registration and qualification of the
Transfer Restricted Securities under the securities or Blue
Sky laws of such jurisdictions as the selling Holders or
underwriter(s), if any, may request and do any and all other
acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted
Securities covered by the applicable Registration Statement;
provided, however, that the Company shall not be required to
register or qualify as a foreign corporation where it is not
now so qualified or to take any action that would subject it
to the service of process in suits or to taxation, other
than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not
now so subject;
(xii) issue, upon the request of any Holder of
Series C Notes covered by any Shelf Registration Statement
contemplated by this Agreement, Series D Notes having an
aggregate principal amount equal to the aggregate principal
amount of Series C Notes surrendered to the Company by such
Holder in exchange therefor or being sold by such Holder;
such Series D Notes to be registered in the name of such
Holder or in the name of the purchaser(s) of such Notes, as
the case may be; in return, the Series C Notes held by such
Holder shall be surrendered to the Company for cancellation;
(xiii) in connection with any sale of Transfer
Restricted Securities that will result in such securities no
longer being Transfer Restricted Securities, cooperate with
the selling Holders and the underwriter(s), if any, to
facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and to
register such Transfer Restricted Securities in such
denominations and such names as the Holders or the
underwriter(s), if any, may request at least two Business
Days prior to such sale of Transfer Restricted Securities;
(xiv) use its reasonable best efforts to cause
the disposition of the Transfer Restricted Securities
covered by the Registration Statement to be registered with
or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or
sellers thereof or the underwriter(s), if any, to consummate
the disposition of such Transfer Restricted Securities,
subject to the proviso contained in clause (xi) above;
(xv) subject to Section 6(c)(i), if any fact or
event contemplated by Section 6(c)(iii)(D) above shall exist
or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related
Prospectus or any document incorporated therein by reference
or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted
Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading;
(xvi) provide a CUSIP number for all Transfer
Restricted Securities not later than the effective date of a
Registration Statement covering such Transfer Restricted
Securities and provide the Trustee under the Indenture with
printed certificates for the Transfer Restricted Securities
which are in a form eligible for deposit with The Depository
Trust Company;
(xvii) cooperate and assist in any filings
required to be made with the NASD and in the performance of
any due diligence investigation by any underwriter
(including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and
regulations of the NASD, and use its reasonable best efforts
to cause such Registration Statement to become effective and
approved by such governmental agencies or authorities as may
be necessary to enable the Holders selling Transfer
Restricted Securities to consummate the disposition of such
Transfer Restricted Securities;
(xviii) otherwise use its reasonable best efforts
to comply with all applicable rules and regulations of the
Commission, and make generally available to its security
Holders with regard to any applicable Registration
Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need
not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as
such term is defined in paragraph (c) of Rule 158 under the
Act);
(xix) use its reasonable best efforts to cause
the Indenture to be qualified under the TIA not later than
the effective date of the first Registration Statement
required by this Agreement and, in connection therewith,
cooperate with the Trustee and the Holders of Notes to
effect such changes to the Indenture as may be required for
such Indenture to be so qualified in accordance with the
terms of the TIA; and execute, and use its reasonable best
efforts to cause the Trustee to execute, all documents that
may be required to effect such changes and all other forms
and documents required to be filed with the Commission to
enable such Indenture to be so qualified in a timely manner;
and
(xx) provide promptly to each Holder upon request
each document filed with the Commission pursuant to the
requirements of Section 13 or Section 15(d) of the Exchange
Act.
(d) Restrictions on Holders. Each Holder agrees by
acquisition of a Transfer Restricted Security that, upon receipt
of the notice referred to in Section 6(c)(i) or any notice from
the Company of the existence of any fact of the kind described in
Sections 6(c)(iii)(B),(C)or (D) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted
Securities pursuant to the applicable Registration Statement
until such Holder's receipt of the copies of the supplemented
or amended Prospectus contemplated by Section 6(c)(xv) hereof, or
until it is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by
reference in the Prospectus (the "Advice"). If so directed by
the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such
Transfer Restricted Securities that was current at the time of
receipt of either such notice. In the event the Company shall
give any such notice, the time period regarding the effectiveness
of such Registration Statement set forth in Section 3 or 4
hereof, as applicable, shall be extended by the number of days
during the period from and including the date of the giving of
such notice pursuant to Section 6(c)(i) or Sections
6(c)(iii)(B),(C) or (D) hereof to and including the date when
each selling Holder covered by such Registration Statement shall
have received the copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(xv) hereof or shall have
received the Advice.
SECTION 7. REGISTRATION EXPENSES
All expenses incident to the Company's performance of
or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing
fees and expenses (including filings made by the Initial
Purchaser or any Holder with the NASD (and, if applicable, the
reasonable fees and expenses of any "qualified independent
underwriter" and its counsel that may be required by the rules
and regulations of the NASD)); (ii) all fees and expenses of
compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including
printing certificates for the Series D Notes to be issued in the
Exchange Offer and printing of Prospectuses), messenger and
delivery services and telephone; (iv) all fees and disbursements
of counsel for the Company; (v) all application and filing fees
in connection with listing the Notes on a national securities
exchange or automated quotation system pursuant to the
requirements hereof; (vi) all fees and disbursements of
independent certified public accountants of the Company
(including the expenses of any special audit and comfort letters
required by or incident to such performance); and (vii) all fees
and reasonable out-of-pocket disbursements of the Trustee and the
Exchange Agent, including all fees and disbursements of counsel
for the Trustee and the Exchange Agent.
The Company will, in any event, bear its internal
expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees
and expenses of any Person, including special experts, retained
by the Company. The Company shall not be responsible for fees
and disbursements of counsel, accountants or any other advisors
to the Initial Purchaser or Holder, underwriting commissions and
discounts, brokerage commissions, agent fees (other than fees of
the Exchange Agent as specified above) and transfer taxes
relating to any Registration Statement filed pursuant to this
Agreement.
SECTION 8. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless
(i) each Holder and (ii) each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) any Holder (any of the persons referred to in this
clause (ii) being hereinafter referred to as a "controlling
person") and (iii) the respective officers, directors, partners,
employees, representatives and agents of any Holder or any
controlling person (any person referred to in clause (i), (ii) or
(iii) may hereinafter be referred to as an "Indemnified Holder"),
to the fullest extent lawful, from and against any and all
losses, claims, damages, liabilities, judgments, actions and
expenses (including without limitation and as incurred,
reimbursement of all reasonable costs of investigating,
preparing, pursuing or defending any claim or action, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, including the reasonable fees and
expenses of counsel to any Indemnified Holder) directly or
indirectly caused by, related to, based upon, arising out of or
in connection with any untrue statement or alleged untrue
statement of a material fact contained in any Registration
Statement, preliminary prospectus or Prospectus (or any amendment
or supplement thereto), or any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or expenses
are caused by an untrue statement or omission or alleged untrue
statement or omission that is made in reliance upon and in
conformity with information relating to any of the Holders
furnished in writing to the Company by any of the Holders
expressly for use therein.
In case any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be
brought or asserted against any of the Indemnified Holders with
respect to which indemnity may be sought against the Company,
such Indemnified Holder (or the Indemnified Holder controlled by
such controlling person) shall promptly notify the Company in
writing (provided that the failure to give such notice shall not
relieve the Company of its obligations pursuant to this
Agreement, except to the extent the Company or any Subsidiary is
materially prejudiced by such failure). In case any such action
or proceeding shall be brought or asserted against any of the
Indemnified Holders and such Indemnified Holder shall notify the
Company of the commencement thereof, the Company shall be
entitled to participate therein and, to the extent it shall wish,
to assume the defense thereof, with counsel reasonably
satisfactory to such Indemnified Holder. Such Indemnified Holder
shall have the right to employ its own counsel in any such action
and the fees and expenses of such counsel shall be paid, as
incurred, by such Indemnified Holder, unless (i) the Company has
failed promptly to assume the defense and employ counsel
reasonably satisfactory to such Indemnified Holder, (ii) the
Company has authorized the employment of counsel for the
Indemnified Holder at the expense of the Company, or (iii) the
named parties to any such action or proceeding (including any
impleaded parties) include such Indemnified Holder and the
Company and such Indemnified Holder shall have been advised by
counsel that it has reasonably concluded that a conflict of
interest may exist between the Company and such Indemnified
Holder in the conduct of the defense of such action or
proceeding. In the case of each of clause (i), (ii), or
(iii) above, the Company shall pay, as incurred, the fees and
expenses of such counsel, regardless of whether it is ultimately
determined that an Indemnified Holder is not entitled to
indemnification hereunder. The Company shall not, in connection
with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses
of more than one separate firm of attorneys (in addition to any
local counsel) at any time for such Indemnified Holders, which
firm shall be designated by the Holders of a majority in
principal amount of Transfer Restricted Securities involved in
such action or proceeding. The Company shall be liable for any
settlement of any such action or proceeding effected with the
Company's prior written consent, which consent shall not be
withheld unreasonably, and the Company agrees to indemnify and
hold harmless each Indemnified Holder from and against any loss,
claim, damage, liability or expense by reason of any settlement
of any action effected with the written consent of the Company.
The Company shall not, without the prior written consent of each
Indemnified Holder, settle or compromise or consent to the entry
of judgment in or otherwise seek to terminate any pending or
threatened action, claim, litigation or proceeding in respect of
which indemnification or contribution may be sought hereunder
(whether or not any Indemnified Holder is a party thereto),
unless such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Holder from
all liability arising out of such action, claim, litigation or
proceeding.
(b) Each Holder of Transfer Restricted Securities
agrees, severally and not jointly, to indemnify and hold harmless
the Company, and its respective directors, officers, and any
person controlling (within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act) the Company, and the
respective officers, directors, partners, employees,
representatives and agents of each such person, to the same
extent as the foregoing indemnity from the Company to each of the
Indemnified Holders, but only with respect to claims and actions
based on information relating to such Holder furnished in writing
by such Holder expressly for use in any Registration Statement.
In case any action or proceeding shall be brought against the
Company or its directors or officers or any such controlling
person in respect of which indemnity may be sought against a
Holder of Transfer Restricted Securities, such Holder shall have
the rights and duties given the Company, and the Company, such
directors or officers or such controlling person shall have the
rights and duties given to each Holder by the preceding
paragraph. In no event shall any Holder be liable or responsible
for any amount in excess of the amount by which the total amount
received by such Holder with respect to its sale of Transfer
Restricted Securities pursuant to a Registration Statement
exceeds the sum of (i) the amount paid by such Holder for such
Transfer Restricted Securities and (ii) the amount of any damages
which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission.
(c) If the indemnification provided for in this
Section 8 is unavailable to an indemnified party under Section
8(a) or Section 8(b) hereof (other than by reason of exceptions
provided in those Sections) in respect of any losses, claims,
damages, liabilities or expenses referred to therein, 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, claims,
damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Holders, on the other hand,
from their sale of Transfer Restricted Securities or if such
allocation is not permitted by applicable law, the relative fault
of the Company, on the one hand, and of the Indemnified Holder,
on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations.
The relative fault of the Company, on the one hand, and of the
Indemnified Holder, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information
supplied by the Company or by the Indemnified Holder and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and each Holder of Transfer Restricted
Securities agree that it would not be just and equitable if
contribution pursuant to this Section 8(c) were determined by pro
rata allocation (even if the Holders were treated as one entity
for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in
the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims,
damages, liabilities or expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Holder or
its related Indemnified Holders shall be required to contribute,
in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of its
Transfer Restricted Securities pursuant to a Registration
Statement exceeds the sum of (A) the amount paid by such Holder
for such Transfer Restricted Securities and (B) the amount of any
damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 8(c) are
several in proportion to the respective principal amount of
Series C Notes held by each of the Holders hereunder and not
joint.
SECTION 9. RULE 144A
The Company hereby agrees with each Holder, for so long
as any Transfer Restricted Securities remain outstanding and
during any period in which the Company is not subject to Section
13 or 15(d) of the Securities Exchange Act, to make available,
upon request of any Holder of Transfer Restricted Securities, to
any Holder or beneficial owner of Transfer Restricted Securities
in connection with any sale thereof and any prospective purchaser
of such Transfer Restricted Securities designated by such Holder
or beneficial owner, the information required by Rule 144A(d)(4)
under the Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A.
SECTION 10. UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten
Registration hereunder unless such Holder (a) agrees to sell such
Holder's Transfer Restricted Securities on the basis provided in
customary underwriting arrangements entered into in connection
therewith and (b) completes and executes all reasonable
questionnaires, powers of attorney, and other documents required
under the terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
For any Underwritten Offering, the investment banker or
investment bankers and manager or managers for any Underwritten
Offering that will administer such offering will be selected by
the Holders of a majority in aggregate principal amount of the
Transfer Restricted Securities included in such offering. Such
investment bankers and managers are referred to herein as the
"underwriters."
SECTION 12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being
entitled to exercise all rights provided herein, in the
Indenture, the Purchase Agreement or granted by law, including
recovery of liquidated or other damages, will be entitled to
specific performance of its rights under this Agreement. The
Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by them
of the provisions of this Agreement and hereby agrees to waive
the defense in any action for specific performance that a remedy
at law would be adequate.
(b) No Inconsistent Agreements. The Company will not,
on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise
conflicts with the provisions hereof. The Company has not
previously entered into any agreement granting any registration
rights pursuant to which the holders of such rights have the
right to demand or request that the Company register the
securities held by them as a result of the filing of any
Registration Statement required to be filed hereunder. The
rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to
the holders of the Company's securities under any agreement in
effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company will
not take any action, or voluntarily permit any change to occur,
with respect to the Notes that would materially and adversely
affect the ability of the Holders to Consummate any Exchange
Offer.
(d) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and
waivers or consents to or departures from the provisions
hereof may not be given unless (i) in the case of Section 5
hereof and this Section 12(d)(i), the Company has obtained the
written consent of Holders of all outstanding Transfer Restricted
Securities and (ii) in the case of all other provisions hereof,
the Company has obtained the written consent of Holders of a
majority of the outstanding principal amount of Transfer
Restricted Securities. Notwithstanding the foregoing, a waiver
or consent to departure from the provisions hereof that relates
exclusively to the rights of Holders whose securities are being
tendered pursuant to the Exchange Offer and that does not affect
directly or indirectly the rights of other Holders whose
securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities subject to
such Exchange Offer. The Company will promptly furnish to the
Trustee under the Indenture a copy of any amendment, modification
or supplement to this Agreement.
(e) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by
hand-delivery, first-class mail (registered or certified, return
receipt requested), telex, telecopier, or air courier
guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on
the records of the Registrar under the Indenture, with a
copy to the Registrar under the Indenture; and
(ii) if to the Company:
French Fragrances, Inc.
00000 X.X. 00xx Xxxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
With a copy to:
Steel Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx Xxxxxx, Esq.
All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in
the mail, postage prepaid, if mailed; when receipt is
acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other
communications shall be concurrently delivered by the Person
giving the same to the Trustee at the address specified in the
Indenture.
(f) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and
assigns of each of the parties, including without limitation and
without the need for an express assignment, subsequent Holders of
Transfer Restricted Securities; provided, however, that this
Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent
such successor or assign acquired Transfer Restricted Securities
directly from such Holder.
(g) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS RULES THEREOF.
(j) Severability. In the event that any one or more
of the provisions contained herein, or the application thereof in
any circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by
the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or
referred to herein with respect to the registration rights
granted with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
FRENCH FRAGRANCES, INC.
By: /s/ XXXXXXX X. XXXXXXX
------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President - Operations,
Chief Financial Officer
and Treasurer
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By: /s/ Xxxxxxx X.X. Xxxxxx
--------------------------
Name: Xxxxxxx X.X. Xxxxxx
Title: Vice President
EXHIBIT B
EMPLOYEE PENSION AND WELFARE BENEFIT PLANS
------------------------------------------
Employee Pension Plans: None
Welfare Benefit Plans: The Company's employees are leased
from The Vincam Group, Inc. which
provides the Company's employees
with a health and dental insurance
plan and a life insurance plan
through Prudential, and the Company
maintains a separate disability
plan through UNUM. The Company
also maintains two stock option
plans (the 1995 Stock Option Plan
and the Non-employee Directors
Stock Plan).
