EXHIBIT 1.2
WF&G DRAFT
9/30/97
900,000 Shares
▇▇▇▇▇ APPAREL GROUP, INC.,
(a Pennsylvania corporation)
Common Stock
(Par Value $.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
[October __, 1997]
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
Bear, ▇▇▇▇▇▇▇ International Limited
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
as Lead Managers of the several International Managers
c/o Merrill ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇ Apparel Group, Inc., a Pennsylvania corporation (the "Company"),
Bristol Rittanhouse Investments, L.P., a Delaware limited partnership, (the
"Selling Shareholder") and ▇▇▇▇▇▇ ▇▇▇▇▇▇, the sole general partner of the
Selling Shareholder (the "General Partner"), confirm their respective
agreements with ▇▇▇▇▇▇▇ ▇▇▇▇▇ International ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), and each of
the other international underwriters named in Schedule A hereto
(collectively, the "International Managers," which term shall also include
any underwriter substituted as hereinafter provided in Section 10 hereof),
for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, Bear, ▇▇▇▇▇▇▇ International Limited and ▇▇▇▇▇▇▇ ▇▇▇▇▇
International are acting as representatives (in such capacity, the "Lead
Managers"), with respect to (i) the sale by the Selling Shareholder of
900,000 shares of Common Stock, par value $.01 per share, of the Company
("Common Stock") and the purchase by the International Managers, acting
severally and not jointly, of the respective number of shares of Common Stock
set forth in said Schedule A; and (ii) the grant by the Selling Shareholder
to the International Managers, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of
135,000 additional shares of Common Stock solely to cover over-allotments, if
any. The 900,000 shares of Common Stock (the "Initial International
Securities") and all or any part of the 135,000 shares of Common Stock
subject to the option described in Section 2(b) hereof (the "International
Option Securities") to be purchased by the International Managers are
collectively hereinafter called the "International Securities."
It is understood that the Company, the Selling Shareholder and the
General Partner are concurrently entering into an agreement dated the date
hereof (the "U.S. Purchase Agreement") providing for the offering by the
Selling Shareholder of 3,600,000 shares of Common Stock (the "Initial U.S.
Securities") through arrangements with certain managers in the United States
and Canada (the "U.S. Underwriters") for which ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated, Bear, ▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. are
acting as representatives (the "U.S. Representatives") and the grant by the
Selling Shareholder to the U.S. Underwriters, acting severally and not
jointly, of an option to purchase all or any part of the U.S. Underwriters'
pro rata portion of the 540,000 additional shares of Common Stock solely to
cover over-allotments, if any (the "U.S. Option Securities" and, together
with the International Option Securities, the "Option Securities"). The
Initial U.S. Securities and the U.S. Option Securities are hereinafter called
the "U.S. Securities." It is understood that the Selling Shareholder is not
obligated to sell, and the International Managers are not obligated to
purchase, any Initial International Securities unless all of the Initial U.S.
Securities are contemporaneously purchased by the U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters," the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities," and the International Securities and U.S. Securities are
hereinafter collectively called the "Securities."
The Company, the Selling Shareholder and the General Partner understand
that the Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing
for the coordination of certain transactions among the Underwriters under the
direction of ▇▇▇▇▇▇▇ ▇▇▇▇▇ (in such capacity, the "Global Coordinator").
The Company, the Selling Shareholder and the General Partner understand
that the International Managers propose to make a public offering of the
International Securities as soon as the Lead Managers deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-36213) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a
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term sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and
Rule 424(b). Two forms of prospectus are to be used in connection with the
offering and sale of the Securities: one relating to the International
Securities (the "Form of International Prospectus") and one relating to the U.S.
Securities (the "Form of U.S. Prospectus"). The Form of International Prospectus
is identical to the Form of U.S. Prospectus, except for the front cover and back
cover pages and the information under the caption "Underwriting." The
information included in any such prospectus or in any such Term Sheet, as the
case may be, that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective (a) pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule
434 is referred to as "Rule 434 Information." Each Form of International
Prospectus and Form of U.S. Prospectus used before such registration statement
became effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto, schedules thereto, if any, and the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final Form of International Prospectus and the final
Form of U.S. Prospectus, including the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the forms first
furnished to the Underwriters for use in connection with the offering of the
Securities are herein called the "International Prospectus" and the "U.S.
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "International Prospectus" and "U.S. Prospectus" shall
refer to the preliminary International Prospectus dated [_____, 1997] and
preliminary U.S. Prospectus dated [____, 1997,] respectively, each together with
the applicable Term Sheet and all references in this Agreement to the date of
such Prospectuses shall mean the date of the applicable Term Sheet. For purposes
of this Agreement, all references to the Registration Statement, any preliminary
prospectus, the International Prospectus, the U.S. Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus
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(including the Form of U.S. Prospectus and Form of International Prospectus) or
the Prospectuses (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other information
which is incorporated by reference in the Registration Statement, any
preliminary prospectus (including the Form of U.S. Prospectus and Form of
International Prospectus) or the Prospectuses, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration
Statement, any preliminary prospectus or the Prospectuses shall be deemed to
mean and include the filing of any document under the Securities Exchange Act of
1934 (the "1934 Act") which is incorporated by reference in the Registration
Statement, such preliminary prospectus or the Prospectuses, as the case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES. (a) The Company represents and
warrants to each International Manager as of the date hereof, as of the Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b) hereof, and agrees with each International
Manager, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. Neither of the Prospectuses nor any
amendments or supplements thereto, at the time the Prospectuses or any
amendments or supplements thereto were issued and at the Closing Time
(and, if any International Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact
or omitted or will omit to state a material fact necessary in order to
make the statements therein, in the
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light of the circumstances under which they were made, not misleading. If
Rule 434 is used, the Company will comply with the requirements of Rule
434. The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or the
International Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any International
Manager through the Lead Managers expressly for use in the Registration
Statement or the International Prospectus.
Each preliminary prospectus and the prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectuses, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectuses, at the time the
Registration Statement became effective, at the time the Prospectuses were
issued and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), did not and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements included in the
Registration Statement and the Prospectuses, together with the related
schedules and notes, present fairly the financial position of the Company
and its subsidiaries as of the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
subsidiaries for the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity
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with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present fairly
in accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included in
the Prospectuses present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein; (A) there has been
no material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business (a "Material Adverse Effect"); (B) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered
as one enterprise; and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the Commonwealth of Pennsylvania with corporate power
and authority to own, lease and operate its properties and to conduct its
business as now being conducted and as described in the Prospectuses and
to enter into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or be in
good standing would not have a Material Adverse Effect.
(vii) GOOD STANDING OF SUBSIDIARIES. Each of the operating
subsidiaries of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the
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failure to so qualify or be in good standing would not have a Material
Adverse Effect; all of the issued and outstanding capital stock of each
such operating subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable; the capital stock of each of the operating
subsidiaries owned by the Company, directly or through subsidiaries, is
owned free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; and none of the outstanding securities of
any subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such subsidiary. The only subsidiaries of the
Company are (a) the subsidiaries (the "Operating Subsidiaries") listed on
Schedule B hereto and (b) certain other subsidiaries which, considered in
the aggregate as a single Subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectuses under
"Capitalization" (except for subsequent issuances, if any, pursuant to
reservations, agreements or employee benefit plans); the shares of issued
and outstanding capital stock of the Company including the Securities to
be purchased by the International Managers and the U.S. Underwriters from
the Selling Shareholder, have been duly authorized and validly issued and
are fully paid and non-assessable; none of the outstanding shares of
capital stock, including the Securities to be purchased by the
International Managers, of the Company was issued in violation of the
preemptive or other similar rights of any security holder of the Company;
the Common Stock conforms to all statements relating thereto contained in
the Prospectuses and such description conforms to the rights set forth in
the instruments defining the same; the outstanding stock options relating
to the Company's Common Stock have been duly authorized and validly issued
and the description thereof contained in the Registration Statement and
the Prospectuses is true and accurate; no holder of the Securities will be
subject to personal liability by reason of being such a holder.
(ix) AUTHORIZATION OF AGREEMENT. This Agreement and the U.S.
Purchase Agreement have been duly authorized, executed and delivered by
the Company.
(x) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any of
its subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other instrument or agreement to
which the Company or any of its subsidiaries is a party or by which it or
any of them
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may be bound, or to which any of the property or assets of the Company or
any of its subsidiaries is subject (collectively, "Agreements and
Instruments"), except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of
this Agreement and the U.S. Purchase Agreement and the consummation of the
transactions contemplated in this Agreement and the U.S. Purchase
Agreement and in the Registration Statement have been duly authorized by
all necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws of the
Company or any of its subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any of its subsidiaries or any of their assets, properties
or operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any of its subsidiaries.
(xi) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees of
the Company or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent; and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any of its
subsidiaries' principal suppliers, manufacturers, customers or contractors
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xii) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any of its
subsidiaries, that is required to be disclosed in the Registration
Statement, or that might result in a Material Adverse Effect, or that
might materially and adversely affect the properties or assets thereof or
that might materially and adversely affect the consummation of the
transactions contemplated by this Agreement and the U.S. Purchase
Agreement or the performance by the Company of its obligations hereunder
or thereunder; the aggregate of all
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pending legal or governmental proceedings to which the Company or any of
its subsidiaries is a party or of which any of their respective properties
or assets is the subject that are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(xiii) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xiv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names and other intellectual property
presently employed by them in connection with the business now operated by
them or necessary in order to conduct such business, and neither the
Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to
any of the foregoing which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(xv) ABSENCE OF FURTHER REQUIREMENTS. No filing with, authorization,
approval, consent, license, order, registration, qualification or decree
of any court or governmental authority or agency is necessary or required
for the performance by the Company or any of its subsidiaries in
connection with the offering or sale of the Securities under this
Agreement and the U.S. Purchase Agreement or the transactions contemplated
by this Agreement and the U.S. Purchase Agreement, except such as may be
required under the 1933 Act or the 1933 Act Regulations and foreign or
state securities or blue sky laws.
(xvi) POSSESSION OF LICENSES AND PERMITS. The Company and its
subsidiaries possess such authorizations, approvals, consents, licenses,
orders, registrations, qualifications, decrees or permits (collectively,
"Governmental Licenses") issued by the appropriate state, federal or
foreign regulatory agencies or bodies, necessary to conduct the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly
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or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xvii) NO REGISTRATION RIGHTS. No holder of securities of the
Company has rights to the registration of securities of the Company
because of the filing of the Registration Statement.
(xviii)ACCOUNTING CONTROLS. The Company and its subsidiaries maintain
a system of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xix) COMPLIANCE WITH CUBA ACT. The Company has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xx) INVESTMENT COMPANY ACT. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(b) The Selling Shareholder and the General Partner, jointly and
severally, represent and warrant to, and agree with, each International
Manager as of the date hereof, as of the Closing Time and as of each Date of
Delivery, each of subparagraphs (i) through (xx), inclusive, of subsection
(a) of this Section 1 and each of subparagraphs (i) through (vii), inclusive,
of this subsection (b) as follows:
(i) For a period 90 days from the date of the Prospectuses, such
Selling Shareholder or General Partner, as the case may be, will not,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer
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or dispose of, directly or indirectly, any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock or file any registration statement under the 1933 Act with respect
to any of the foregoing or (ii) enter into any swap or any other agreement
or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to the
Securities to be sold hereunder or under the U.S. Purchase Agreement.
(ii) The execution and delivery of this Agreement and the U.S.
Purchase Agreement and the consummation of the transactions contemplated
hereby and thereby will not result in a breach by such Selling Shareholder
or General Partner, as the case may be, of, or constitute a default by
such Selling Shareholder or General Partner, as the case may be, under,
any material indenture, deed or trust, contract or other agreement or
instrument or any decree, judgment or order to which such Selling
Shareholder or General Partner, as the case may be, is a party or by
which such Selling Shareholder or General Partner, as the case may be,
may be bound.
(iii) Such Selling Shareholder has and will have, at the Closing Time
and on each Date of Delivery, good and marketable title to the
International Securities to be sold by such Selling Shareholder hereunder,
free and clear of any pledge, lien, security interest, encumbrance, claim
or equity, created by or arising through the Selling Shareholder other
than pursuant to this Agreement; such Selling Shareholder has full right,
power and authority to sell, transfer and deliver the International
Securities to be sold by such Selling Shareholder hereunder; and upon
delivery of the International Securities to be sold by such Selling
Shareholder hereunder and payment of the purchase price therefor as herein
contemplated, each of the International Managers will receive good and
marketable title to its ratable share of the International Securities
purchased by it from such Selling Shareholder, free and clear of any
pledge, lien, security interest, encumbrance, claim or equity.
(iv) Such Selling Shareholder has duly executed and delivered in the
form heretofore furnished to the International Managers, a power of
attorney and custody agreement (the "International Power of Attorney and
Custody Agreement") with ▇▇▇ ▇▇▇▇▇▇, as the attorney-in-fact and the
custodian (the "Attorney-in-Fact" and the "Custodian," respectively); the
Attorney-in-Fact is authorized to execute and deliver this Agreement, and
the certificates referred to in Section 5(d) or that may be required
pursuant to Section 5(j) on behalf of such Selling Shareholder, to
determine the purchase price to be
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paid by the International Managers to such Selling Shareholder as provided
in Section 2(a) hereof, to authorize the delivery of the International
Securities to be sold by such Selling Shareholder hereunder, to duly
endorse (in blank or otherwise) the certificate or certificates
representing such International Securities, to accept payment therefor,
and otherwise to act on behalf of such Selling Shareholder in connection
with this Agreement.
(v) All authorizations, approvals, consents, licenses, orders,
registrations, qualifications, decrees or permits necessary for the
execution and delivery by such Selling Shareholder of the International
Power of Attorney and Custody Agreement and the U.S. Power of Attorney and
Custody Agreement, the execution and delivery by or on behalf of such
Selling Shareholder or General Partner, as the case may be, of this
Agreement and the U.S. Purchase Agreement, and the sale and delivery of
the Securities to be sold by such Selling Shareholder hereunder and
thereunder (other than, at the time of the execution hereof, the issuance
of the order of the Commission declaring the Registration Statement
effective and such authorizations, approvals, consents, licenses, orders,
registrations, qualifications, decrees or permits as may be necessary
under state securities laws), have been obtained and are in full force
and effect; and such Selling Shareholder or General Partner, as the case
may be, has the full right, power and authority to enter into this
Agreement and the U.S. Purchase Agreement and such International Power
of Attorney and Custody Agreement and U.S. Power of Attorney and Custody
Agreement to sell, transfer and deliver the Securities to be sold by such
Selling Shareholder hereunder.
(vi) Such Selling Shareholder or General Partner, as the case may
be, has not taken, and will not take, directly or indirectly, any action
which is designed to or which has constituted or which might reasonably
be expected to cause or result in stabilization or manipulation of the
price of any security or the Company to facilitate the sale or resale of
the Securities.
(vii) Certificates in negotiable form for all Securities to be sold
by such Selling Shareholder hereunder and under the U.S. Purchase
Agreement have been placed in custody with the Custodian by or for the
benefit of such Selling Shareholder with irrevocable conditional
instructions for the purposes of effecting delivery by such Selling
Shareholder hereunder and under the U.S. Purchase Agreement.
(c) Any certificate signed by any officer of the Company or any of its
subsidiaries and delivered to the Global Coordinator, Lead Managers or to
counsel for the International Managers shall be deemed a representation and
warranty by the Company to each International Manager as to the matters covered
thereby; and any certificate signed by or on behalf of the Selling Shareholder
or the General Partner, as the case may be, and
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delivered to the Global Coordinator, Lead Managers or to counsel for the
International Managers shall be deemed a representation and warranty by such
Selling Shareholder or General Partner, as the case may be, to each
International Manager as to matters covered thereby.
SECTION 2. SALE AND DELIVERY TO U.S. UNDERWRITERS; CLOSING.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Selling Shareholder agrees to sell to each International Manager,
severally and not jointly, and each International Manager, severally and not
jointly, agrees to purchase from the Selling Shareholder, at the price per share
set forth in Schedule C, the number of Initial International Securities set
forth in Schedule A opposite the name of such International Manager, plus any
additional number of Initial International Securities which such International
Manager may become obligated to purchase pursuant to the provisions of Section
10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Selling Shareholder hereby grants an option to the International
Managers, severally and not jointly, to purchase up to an additional 135,000
shares of Common Stock at the price per share set forth in Schedule C, less an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial International Securities but not payable on the
International Option Securities. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial International Securities upon
notice by the Global Coordinator to the Company and the Selling Shareholder
setting forth the number of International Option Securities as to which the
several International Managers are then exercising the option and the time and
date of payment and delivery for such International Option Securities. Any such
time and date of delivery for the International Option Securities (a "Date of
Delivery") shall be determined by the Global Coordinator, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the International Option Securities, each
of the International Managers, acting severally and not jointly, will purchase
that proportion of the total number of International Option Securities then
being purchased which the number of Initial International Securities set forth
in Schedule A opposite the name of such International Manager bears to the total
number of Initial International Securities, subject in each case to such
adjustments as the Global Coordinator in its discretion shall make to eliminate
any sales or purchases of fractional shares.
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(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, 153 East 53rd Street, New York, New York, or at such other
place as shall be agreed upon by the Global Coordinator and the Company and the
Selling Shareholder, at 9:00 A.M. (Eastern time) on the third (fourth, if the
pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day
after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Global Coordinator, the Company and the Selling
Shareholder (such time and date of payment and delivery being herein called
"Closing Time").
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator, the Company and the Selling
Shareholder, on each Date of Delivery as specified in the notice from the Global
Coordinator to the Company and the Selling Shareholder.
Payment shall be made to the Selling Shareholder by wire transfer of
immediately available funds to a bank account designated by the Selling
Shareholder or the Custodian pursuant to the Selling Shareholder's International
Power of Attorney and Custody Agreement, as the case may be, against delivery to
the Lead Managers for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the Lead Managers, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Securities and the International
Option Securities, if any, which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any International Manager whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such International Manager from its obligations
hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not
-14-
later than 10:00 A.M. (Eastern time) on the business day prior to the Closing
Time or the relevant Date of Delivery, as the case may be.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
International Manager as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable and will notify the Global
Coordinator immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)), any
Term Sheet or any amendment, supplement or revision to either the
Prospectus included in the Registration Statement at the time it became
effective or the Prospectuses, whether pursuant to the 1933 Act, the 1934
Act or otherwise, will furnish the Global Coordinator with copies of any
such documents a reasonable amount of time prior to such proposed filing
or use, as the case may be, and will not file or use any such document to
which the Global Coordinator or counsel for the International Managers
shall reasonably object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company will deliver to
the Lead Managers and counsel for the International Managers, without
charge, signed copies of the Registration Statement as originally filed
and of each
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amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated
by reference therein) and signed copies of all consents and certificates
of experts; and will also deliver to the Lead Managers, without charge, a
conformed copy of the Registration Statement as originally filed and of
each amendment thereto (without exhibits) for each of the International
Managers. The copies of the Registration Statement and each amendment
thereto furnished to the Lead Managers or counsel for the International
Managers will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted
by the 1933 Act. The Company will furnish to each International Manager,
without charge, during the period when the International Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number
of copies of the International Prospectus (as amended or supplemented) as
such International Manager may reasonably request. The International
Prospectus and any amendments or supplements thereto furnished to the
International Managers will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement, the U.S.
Purchase Agreement and in the Prospectuses. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with
sales of the Securities, any event shall occur or condition shall exist as
a result of which it is necessary, in the opinion of counsel for the
International Managers or for the Company, to amend the Registration
Statement or amend or supplement any Prospectus in order that the
Prospectuses will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement any Prospectus in order to comply with
the requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be
-16-
necessary to correct such statement or omission or to make the
Registration Statement or the Prospectuses comply with such requirements,
and the Company will furnish to the International Managers such number of
copies of such amendment or supplement as the International Managers may
reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best
efforts, in cooperation with the International Managers, to qualify the
Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions (domestic or foreign) as the Global
Coordinator may designate and to maintain such qualifications in effect
for a period of not less than one year from the later of the effective
date of the Registration Statement and any Rule 462(b) Registration
Statement; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) RULE 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of the Global Coordinator, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of any share of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise.
-17-
The foregoing sentence shall not apply to (A) the Securities to be sold
hereunder or under the U.S. Purchase Agreement, (B) any shares of Common
Stock issued by the Company upon the exercise of an option or warrant or
the conversion of a security outstanding on the date hereof and referred
to in the Prospectuses, (C) any shares of Common Stock issued or options
to purchase Common Stock granted pursuant to existing employee benefit
plans of the Company referred to in the Prospectuses or (D) any shares of
Common Stock issued pursuant to any non-employee director stock plan or
dividend reinvestment plan.
(i) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
(j) LISTING. The Company will file with the New York Stock Exchange
all documents and notices required by the New York Stock Exchange of
companies that have securities listed on such exchange and will use every
reasonable effort to maintain the listing of the Securities on the New
York Stock Exchange.
SECTION 4. PAYMENT OF EXPENSES. (a) The Company, the Selling Shareholder
and the General Partner will pay all expenses incident to the performance of
the obligations of the Company and the Selling Shareholder under this
Agreement, including (i) the printing and filing of the Registration
Statement (including financial statements and exhibits) as originally filed
and of each amendment thereto, (ii) the preparation, printing and delivery to
the Underwriters of this Agreement, any Agreement among Underwriters and such
other documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the Securities, (iii) the preparation and
delivery of the certificates for the International Securities to the
International Managers, including any stock or other transfer taxes and any
stamp or other duties payable upon the sale or delivery of the Securities to
the Underwriters and the transfer of the Securities between the U.S.
Underwriters and the International Managers, (iv) the fees and disbursements
of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f), including filing fees and the fees and
disbursements of counsel for the International Managers (which shall not
exceed $10,000) in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) the
printing and delivery to the Underwriters of copies of each preliminary
prospectus, any Term Sheets and of the Prospectuses and any amendments or
supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue
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Sky Survey and any supplement thereto, (viii) the fees and expenses of
any transfer agent or registrar for the Securities and the Custodians, (ix) the
filing fees incident to, and the reasonable fees and disbursements of counsel to
the International Managers in connection with, the review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the Securities and (x) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock Exchange.
(b) EXPENSES OF THE SELLING SHAREHOLDER AND THE GENERAL PARTNER. The
Selling Shareholder and the General Partner will pay all expenses incident to
the performance of his obligations under, and the consummation of the
transactions contemplated by this Agreement, including (i) any stamp duties,
capital duties and stock transfer taxes, if any, payable upon the sale of the
Securities to the Underwriters, and their transfer between the Underwriters
pursuant to an agreement between such Underwriters or between the
International Managers and the U.S. Underwriters, and (ii) the fees and
disbursements of his counsel and accountants, if any.
(c) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Lead Managers in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11, the Company, the Selling Shareholder and the General Partner
shall reimburse the International Managers for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
International Managers.
(d) ALLOCATION OF EXPENSES. The provisions of this Section shall not
affect any agreement that the Company, the Selling Shareholder and the
General Partner may make for the sharing of such costs and expenses.
SECTION 5. CONDITIONS OF THE INTERNATIONAL MANAGERS' OBLIGATIONS. The
obligations of the several International Managers hereunder are subject to
the accuracy of the representations and warranties of the Company, the
Selling Shareholder and the General Partner herein contained or in
certificates of any officer of the Company or any of its subsidiaries or on
behalf of the Selling Shareholder or General Partner delivered pursuant to
the provisions hereof, to the performance by the Company, the Selling
Shareholder and the General Partner of their respective covenants and
obligations hereunder, and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the International Managers. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in
-19-
accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) At Closing Time, the Lead Managers shall have received:
(1) The favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & Ballon LLP, counsel for the Company, in form and
substance satisfactory to counsel for the International Managers, together
with signed or reproduced copies of such letter for each of the other
International Managers to the effect that:
(i) The Company is validly existing as a corporation
in good standing under the laws of the Commonwealth of
Pennsylvania.
(ii) The Company has the corporate power and authority to own,
lease and operate its properties and to conduct its business as now
being conducted and as described in the Registration Statement and
to enter into and perform its obligations under this Agreement and
the U.S. Purchase Agreement.
(iii) To the best of their knowledge and information, the Company
is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such
qualification is required, except where the failure to so qualify
or be in good standing would not result in a Material Adverse
Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses under "Capitalization"
(except for subsequent issuances, if any, pursuant to reservations,
agreements, employee benefit plans referred to in the
Prospectuses), and the shares of issued and outstanding Common
Stock, including the Securities to be purchased by the
International Managers and the U.S. Underwriters from the Selling
Shareholder have been duly authorized and validly issued and are
fully paid and nonassessable and no holder of the Securities is or
will be subject to personal liability by reason of being such a
holder.
(v) The outstanding stock options relating to the Company's
Common Stock have been duly authorized and validly issued and the
description thereof contained in the Registration Statement and the
Prospectuses is true and accurate.
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(vi) This Agreement and the U.S. Purchase Agreement have each
been duly authorized, executed and delivered by the Company.
(vii) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933
Act; any required filing of the Prospectuses pursuant to Rule
424(b) has been made in the manner and within the time period
required by Rule 424(b); and, to the best of their knowledge, no
stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or threatened by the Commission.
(viii) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectuses, excluding the
documents incorporated by reference therein, and each amendment or
supplement to the Registration Statement and the Prospectuses,
excluding the documents incorporated by reference therein, as of
their respective effective or issue dates (other than the financial
statements and supporting schedules included therein or omitted
therefrom, as to which we need express no opinion) complied as to
form in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations.
(ix) The documents incorporated by reference in the
Prospectuses (other than the financial statements and supporting
schedules included therein or omitted therefrom, as to which we
need express no opinion), when they were filed with the Commission
complied as to form in all material respects with the requirements
of the 1934 Act and the rules and regulations of the Commission
thereunder.
(x) To the best of their knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation,
to which the Company or any subsidiary is a party, or to which the
property of the Company or any subsidiary is subject, before or
brought by any court or governmental agency or body, domestic or
foreign, which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially
and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the International
Purchase Agreement and the U.S.
-21-
Purchase Agreement or the performance by the Company of its
obligations thereunder.
(xi) The Common Stock conforms to the description thereof
contained in the Prospectuses, and the form of certificate used to
evidence the Common Stock is in due and proper form and complies
with all applicable statutory requirements and the requirements of
the New York Stock Exchange.
(xii) Each of the Company's operating subsidiaries is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its organization, has corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Registration Statement, and is duly
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which it owns or leases real
property except where the failure to so qualify would not have a
Material Adverse Effect; all of the issued and outstanding capital
stock of each such corporate subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned
by the Company, directly or through subsidiaries, free and clear of
any mortgage, pledge, lien, encumbrance, claim or equity.
(xiii) The information in the Prospectuses under the heading
"Certain United States Federal Tax Consequences to Non-U.S. Holders
of Common Stock" and the description of the Company's capital stock
incorporated by reference in the Registration Statement and in the
Registration Statement under Item 15 to the extent that it
constitutes summaries of legal matters, documents or proceedings,
or legal conclusions, has been reviewed by them and is correct in
all material respects.
(xiv) To the best of their knowledge after due inquiry, there
are no contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments or agreements required to be described
or referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to therein
or filed as exhibits thereto; the descriptions thereof or
references thereto are correct; and no default exists in the due
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument or agreement so
described, referred to or filed, which
-22-
default or defaults, singly or in the aggregate, are material to
the condition, financial or otherwise, or earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(xv) No authorization, approval, consent or order of any court
or governmental authority or agency is required in connection with
the sale of the International Securities to the International
Managers hereunder or the U.S. Securities to the U.S. Underwriters
under the U.S. Purchase Agreement, except such as may be required
under the 1933 Act or the 1933 Act Regulations or state securities
law; and, to the best of their knowledge and information, the
execution and delivery of this Agreement and the U.S. Purchase
Agreement and the consummation of the transactions contemplated
herein and therein will not conflict with or constitute a breach
of, or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument or agreement to which the Company or any of its
subsidiaries is a party or by which any of them may be bound, or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any
violation of the provisions of the charter or by-laws of the
Company, or any applicable law, rule, regulation, order or
administrative or court decree.
In rendering the foregoing opinion, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
& Ballon LLP may rely as to matters of law of the Commonwealth of
Pennsylvania upon the opinion of Mesirov, Gelman, Jaffe, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, which opinion shall state that ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
may rely on such opinion. ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall render an opinion
relating to Camisas de ▇▇▇▇▇▇ ▇.▇. de C.V. as to matters of the
laws of Mexico. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ shall render an opinion
relating to ▇▇▇▇▇ Apparel Group Canada, Inc. as to matters of law
of the Canadian province of Ontario. All such opinions shall be
satisfactory in form and in substance to counsel for the
International Managers.
(2) The favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & Ballon LLP, counsel for the Selling Shareholder
and the General Partner, in form and substance satisfactory to counsel
for the International Managers, to the effect that:
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(i) This Agreement and the U.S. Purchase Agreement
have been duly authorized, executed and delivered by or an behalf
of the Selling Shareholder and the General Partner.
(ii) The International Power of Attorney and Custody Agreement
has been duly authorized, executed and delivered by the Selling
Shareholder and constitutes the valid and binding obligation of the
Selling Shareholder in accordance with its terms.
(iii) The International Securities to be purchased by the
International Managers from the Selling Shareholder have been
validly issued and are fully paid and non-assessable.
(iv) To the best of their knowledge after due inquiry, the
Selling Shareholder has good and marketable title to the
International Securities to be sold by such Selling Shareholder
hereunder and full power, right and authority to sell such
International Securities as herein contemplated, each of the
International Managers will receive good and marketable title to
the International Securities purchased by it from the Selling
Shareholder, free and clear of any mortgage, pledge, lien, security
interest, encumbrance, claim or equity created by or arising
through the Selling Shareholder. In rendering such opinion, counsel
may assume that the International Managers are without notice of
any defect in the title of the Selling Shareholder to the
Securities being purchased from such Selling Shareholder.
(v) No authorization, approval, consent, or order of any court
or governmental authority or agency is required in connection with
the sale of the International Securities from the Selling
Shareholder to the International Managers, except such as may be
required under the 1933 Act of the 1933 Act Regulations or state
securities law.
(3) The favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇ ▇▇▇▇
& ▇▇▇▇▇▇▇▇▇, counsel for the International Managers, with respect to the
matters set forth in (i), (vi) to (ix), inclusive, and (xi) of subsection
(b)(1) of this Section and (i) and (iii) of subsection (b)(2) of this
Section. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem
proper, upon certificates of the Company and its subsidiaries and
certificates of public officials. In addition, in rendering the foregoing
opinion, ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ may rely as to matters of law of the
-24-
Commonwealth of Pennsylvania upon the opinion of Mesirov, Gelman, Jaffe,
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇.
(4) In giving their opinions required by subsections (b) (1), (b) (2)
and (b) (3) of this Section, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & Ballon LLP and
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ shall each additionally state that nothing has
come to their attention that would lead them to believe that the
Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for
financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to they need
make no statement), at the time such Registration Statement or any such
amendment became effective, 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
Prospectuses or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included or incorporated
by reference therein or omitted therefrom, as to which they need make no
statement), at the time the Prospectuses were issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time,
included or includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(c) At Closing Time, there shall not have been, since the date hereof or
since the respective dates as of which information is given in the Registration
Statement and the Prospectuses, any Material Adverse Effect, and the Lead
Managers shall have received a certificate of the Chairman or President of the
Company and of the chief financial or chief accounting officer of the Company,
dated as of Closing Time, to the effect that (i) there has been no such Material
Adverse Effect, (ii) the representations and warranties in Section 1(a) hereof
are true and correct with the same force and effect as though expressly made at
and as of Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been initiated or threatened by the Commission.
(d) At Closing Time, the Lead Managers shall have received a
certificate of (x) the Attorney in Fact for the Selling Shareholder, dated as
of Closing Time, to the effect that (i) the representations and warranties of
the Selling Shareholder contained in Section 1(b) hereof are true and correct
with the same force and effect as though expressly made at and as of
-25-
Closing Time and (ii) the Selling Shareholder has complied with all
agreements and satisfied all conditions on his part to be performed or
satisfied hereunder at or prior to Closing Time and (y) of the General
Partner to the same effect, but with respect to the General Partner. The
Attorney in Fact shall be entitled to rely upon a certificate of the Selling
Shareholder in giving its certificate.
(e) At the time of the execution of this Agreement, the Lead Managers
shall have received from BDO ▇▇▇▇▇▇▇, LLP a letter dated such date, in form and
substance satisfactory to the Lead Managers, together with signed or reproduced
copies of such letter for each of the other International Managers containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectuses.
(f) At Closing Time, the Lead Managers shall have received from BDO
▇▇▇▇▇▇▇, LLP a letter, dated as of the Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection (e)
of this Section, except that the specified date referred to shall be a date not
more than three business days prior to Closing Time.
(g) At Closing Time, the Securities shall have been approved for listing
on the New York Stock Exchange, subject only to official notice of issuance.
(h) At the date of this Agreement, the Lead Managers shall have received
an agreement substantially in the form of Exhibit A hereto signed by the persons
listed on Schedule D hereto.
(i) In the event the International Managers exercise the option granted
in Section 2(b) hereof to purchase all or any portion of the International
Option Securities, the representations and warranties of the Company, the
Selling Shareholder and the General Partner contained herein and the
statements in any certificates furnished by the Company, the Selling
Shareholder or the General Partner hereunder shall be true and correct as of
the relevant Date of Delivery, and the Lead Managers shall have received:
(1) A certificate, dated such Date of Delivery, of the Chairman or
President of the Company and of the chief financial or chief accounting
officer of the Company confirming that the certificate delivered at
Closing Time pursuant to Section 5(c) remains true as of the Date of
Delivery.
(2) A certificate, dated such Date of Delivery, of an Attorney in
Fact on behalf of the Selling Shareholder confirming that the certificate
delivered at Closing Time pursuant to Section 5(d) remains true and
correct as of such Date of Delivery.
-26-
(3) The favorable opinions of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & Ballon
LLP, counsel for the Company, for the Selling Shareholder and the General
Partner, in the form and substance reasonably satisfactory to counsel for
the International Managers, dated such Date of Delivery, relating to the
International Option Securities and otherwise to the same effect as the
opinions required by Section 5(b)(1) and 5(b)(2).
(4) The favorable opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for
the International Managers, dated such Date of Delivery, relating to the
International Option Securities and otherwise to the same effect as the
opinion required by Section 5(b)(3).
(5) A letter from BDO ▇▇▇▇▇▇▇, LLP, in form and substance
satisfactory to the International Managers and dated such Date of
Delivery, substantially the same in scope and substance as the letter
furnished to the International Managers pursuant to Section 5(f) except
that any "specified date" in the letter furnished pursuant to this Section
(5)(i)(5) shall be a date not more than three days prior to the Date of
Delivery.
(j) At Closing Time and at each Date of Delivery, if any, counsel for
the International Managers shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as contemplated herein, in the U.S.
Purchase Agreement and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of
any of the agreements or conditions, herein contained; and all proceedings
taken by the Company, the Selling Shareholder and the General Partner in
connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the Lead Managers
and counsel for the International Managers.
(k) Contemporaneously with the purchase by the International Managers of
the Initial International Securities under this Agreement, the U.S. Underwriters
shall have purchased the Initial U.S. Securities under the U.S. Purchase
Agreement.
(l) If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or in the case
of any condition to the purchase of International Option Securities on a Date of
Delivery which is after the Closing Time, the obligations of the several
International Managers to purchase the relevant International Option Securities,
may be terminated by the Lead Managers by notice to the Company at any time at
or prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8
-27-
hereof shall survive any such termination and remain in full force and effect.
SECTION 6. INDEMNIFICATION. (a) The Company, the Selling Shareholder
and the General Partner agree to indemnify and hold harmless each
International Manager, its directors, officers and employees, and each
person, if any who controls any International Manager within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act to the extent and in
the manner set forth in clauses (i), (ii) and (iii) below.
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use
-28-
in the Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto).
(b) Each International Manager agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, each of its officers
who signed the Registration Statement, the Selling Shareholder, the General
Partner and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary international prospectus or the International
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the indemnifying party
shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7
-29-
hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) In the event of a claim for indemnity pursuant to the provisions of
this Section 6, each indemnified party severally agrees to seek such
indemnity in full from the Company. If, after seeking such indemnity, any
indemnified party is unable, for any reason, to obtain such indemnity from
the Company, such indemnified party may seek indemnity from the Selling
Shareholder and the General Partner, whose obligations hereunder shall be
joint and several, in accordance with the provisions of subsection (a) of
this Section.
(e) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(f) The provisions of this Section shall not affect any agreement
between the Company, the Selling Shareholder and the General Partner with
respect to indemnification.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, Selling Shareholder and the General Partner on the one hand and the
International Managers on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i)
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, the Selling Shareholder and the
General Partner on the one hand and of the International Managers on the
other hand in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
-30-
The relative benefits received by the Company, the Selling Shareholder
and the General Partner on the one hand and the International Managers on the
other hand in connection with the offering of the International Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the International
Securities pursuant to this Agreement (before deducting expenses) received by
the Company, the Selling Shareholder and the General Partner and the total
underwriting discount received by the International Managers, in each case as
set forth on the cover of the International Prospectus, or, if Rule 434 is
used, the corresponding location on the Term Sheet bear to the aggregate
initial public offering price of the International Securities as set forth on
such cover. In addition, for purposes of this section, the General Partner
shall be deemed to have received any net proceeds received by the Selling
Shareholder.
The relative fault of the Company, the Selling Shareholder and the
General Partner on the one hand and the International Managers on the other
hand shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
the Company, the Selling Shareholder or the General Partner or by the
International Managers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholder, the General Partner and the
International Managers agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the International Managers 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 above in this Section 7.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no International Manager
shall be required to contribute any amount in excess of the amount by which the
total price at which the International Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which International Manager has otherwise been required to pay by reason
of any 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
-31-
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
The International Managers' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial International
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
The provisions of this Section shall not affect any agreement between
the Company, the Selling Shareholder and the General Partner with respect to
contribution.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries or the Selling Shareholder submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any International Manager or
controlling person, or by or on behalf of the Company, the Selling
Shareholder or the General Partner and shall survive delivery of the
Securities to the International Managers.
SECTION 9. TERMINATION OF AGREEMENT. (a) The Lead Managers may terminate
this agreement, by notice to the Company and the Selling Shareholder, at any
time at or prior to Closing Time (i) if there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the International Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial markets
in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Lead Managers, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any of the securities of the Company has been suspended or
materially limited by the Commission or the New York Stock Exchange, or if
trading generally on either the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said Exchanges or by order of
the Commission,
-32-
the NASD or any governmental authority, or if a banking moratorium has been
declared by either Federal, New York or Pennsylvania authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 1, 6, 7 and 8
hereof shall survive such termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE INTERNATIONAL MANAGERS. If one
or more of the International Managers shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Lead Managers shall have
the right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting International Managers, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth. If, however, the Lead
Managers shall not have completed such arrangements within such 24-hour period,
then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of International Securities to be purchased on such date, each of
the non-defaulting International Managers shall be obligated, severally
and not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of International Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the International Managers to purchase and of the
Selling Shareholder to sell the International Option Securities to be
purchased and sold on such Date of Delivery, shall terminate without
liability on the part of any non-defaulting International Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
International Managers to purchase and the Selling Shareholder to sell the
relevant International Option Securities, as the case may be, either the Lead
Managers or the Company shall have the right to postpone Closing Time or the
relevant Date of Delivery for a period not
-33-
exceeding seven days in order to effect any required changes in the Registration
Statement or the Prospectuses or in any other documents or arrangements. As used
herein, the term "International Manager" includes any person substituted for an
International Manager under this Section 10.
SECTION 11. DEFAULT BY THE SELLING SHAREHOLDER. If the Selling Shareholder
shall fail at Closing Time or a Date of Delivery to sell and deliver the number
of International Securities which such Selling Shareholder is obligated to sell
hereunder, then the Lead Managers may, at their option, by notice to the Company
and the Selling Shareholder, terminate this Agreement without liability on the
part of any non-defaulting party except that the provisions of Section 1, 4, 6,
7 and 8 shall remain in full force and effect.
In the event of a default by the Selling Shareholder as referred to in
this Section 11, the International Managers shall have the right to postpone
Closing Time or a Date of Delivery for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectuses or in any other documents or arrangements.
No action taken pursuant to this Section 11 shall relieve the Company or
the Selling Shareholder from liability, if any, in respect of such default.
SECTION 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers c/o Merrill
▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, North Tower, World Financial
Center, New York, N.Y. 10281-1201, attention of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Managing
Director; and notices to the Company, the Selling Shareholder and the General
Partner shall be directed to ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇.
SECTION 13. PARTIES. This Agreement shall each inure to the benefit of
and be binding upon the International Managers, the Company, the Selling
Shareholder and the General Partner and their respective successors, heirs
and legal representatives. Nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any person, firm or corporation,
other than the International Managers, the Company, the Selling Shareholder
and the General Partner and their respective successors, heirs and legal
representatives and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their respective successors, heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein or therein contained.
This Agreement and all conditions and provisions hereof are intended to be
for the sole and exclusive benefit of the International Managers, the
Company, the Selling Shareholder and the General Partner and their respective
successors, heirs
-34-
and legal representatives, and said controlling persons and officers and
directors and their respective successors, heirs and legal representatives, and
for the benefit of no other person, firm or corporation. No purchaser of
International Securities from any International Manager shall be deemed to be a
successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Specified times of day refer
to New York City time.
SECTION 15. EFFECT OF HEADINGS. The section headings herein contained are
for convenience only and shall not affect the construction hereof.
-35-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to each of the Company, the Selling
Shareholder and the General Partner a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement
between the International Managers, the Company, the Selling Shareholder and
the General Partner in accordance with its terms.
Very truly yours,
▇▇▇▇▇ APPAREL GROUP, INC.
By: ______________________
Name:
Title:
SELLING SHAREHOLDER
By:_______________________
Attorney in Fact, acting
on behalf of Bristol ▇▇▇▇▇▇▇▇▇▇▇
Investments, L.P.
GENERAL PARTNER
___________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
BEAR, ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By: _________________________________
Authorized Signatory
For themselves and as Lead Managers of the other International Managers named in
Schedule A hereto.
-36-
SCHEDULE A
NUMBER OF INITIAL INTERNATIONAL
NAME OF THE INTERNATIONAL MANAGER SECURITIES TO BE PURCHASED
▇▇▇▇▇▇▇ ▇▇▇▇▇ International......
Bear, ▇▇▇▇▇▇▇ International
Limited .........................
▇▇▇▇▇▇▇ ▇▇▇▇▇ International......
Total............................ 900,000
=======
SCHEDULE B
List of subsidiaries
Melru Corporation
▇▇▇▇▇ Apparel Group Canada Inc.
▇▇▇▇▇ Investment Co., Inc.
▇▇▇▇▇ Holding Corporation
Camisas de ▇▇▇▇▇▇ ▇.▇. De C.V.
SCHEDULE C
▇▇▇▇▇ Apparel Group, Inc.
900,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the International
Securities, determined as provided in said Section 2, shall be $[___].
2. The purchase price per share for the International Securities to be
paid by the several International Managers shall be $__, being an amount
equal to the initial public offering price set forth above less $__ per
share; provided that the purchase price per share for any International
Option Securities purchased upon the exercise of the over-allotment option
described in Section 2(b) shall be reduced by an amount per share equal to
any dividends or distributions declared by the Company and payable on the
Initial International Securities but not payable on the International Option
Securities.
SCHEDULE D
NAME LOCK-UP PERIOD
---- --------------
▇▇▇▇▇ Apparel Group, Inc. 90 days
▇▇▇▇▇▇ ▇▇▇▇▇▇ 90 days
The ▇▇▇▇▇▇ ▇▇▇▇▇▇ Foundation 90 days
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 30 days
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 30 days
▇▇▇▇▇▇ ▇. Card 30 days
▇▇▇▇ ▇. ▇▇▇▇▇▇ 30 days
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 30 days
▇▇▇▇▇▇ ▇▇▇▇▇▇ 30 days
▇▇▇▇ ▇▇▇▇▇ 30 days
[Form of lock-up from directors, officers or other stockholders]
Exhibit A
[October __, 1997]
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
Bear, ▇▇▇▇▇▇▇ International Limited
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
as Lead Managers of the several
International Managers to be named in the
within-mentioned International Purchase Agreement
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: PROPOSED PUBLIC OFFERING BY ▇▇▇▇▇ APPAREL GROUP, INC.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of
▇▇▇▇▇ Apparel Group, Inc., Pennsylvania corporation (the "Company"),
understands (i) that ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), Bear, ▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co., as U.S. Representatives of the several U.S. Underwriters to be
named in Schedule A to the U.S. Purchase Agreement (as defined herein),
propose to enter into a U.S. Purchase Agreement (the "U.S. Purchase
Agreement") with the Company, Bristol ▇▇▇▇▇▇▇▇▇▇▇ Investments, L.P., a
Delaware limited partnership (the "Selling Shareholder") and ▇▇▇▇▇▇ ▇▇▇▇▇▇,
the sole general partner of the Selling Shareholder (the "General Partner"),
and (ii) that ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, Bear, ▇▇▇▇▇▇▇ International
Limited and ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, as Lead Managers of the several
International Managers to be named in Schedule A to the International
Purchase Agreement (as defined herein), propose to enter into an
International Purchase Agreement (the "International Purchase Agreement" and
collectively with the U.S. Purchase Agreement, the "Purchase Agreements")
with the Company the Selling Shareholder and the General Partner, in each
case providing for the public offering of shares (the "Securities") of the
Company's common stock, par value $.01 per share (the "Common Stock"). The
U.S. Underwriters and the International Managers to be named in Schedule A to
each of the U.S. Purchase Agreement and the International Purchase Agreement,
respectively, are collectively referred to herein as the "Underwriters."
In recognition of the benefit that such an offering will confer upon
the undersigned as a stockholder [and an officer and/or director] of the
Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with
each of the Underwriters that, during a period of [___________ days]
[SEE SCHEDULE D TO INTERNATIONAL PURCHASE AGREEMENT FOR NUMBER OF DAYS] from
the date of the Purchase Agreements, the undersigned will not, without the
prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of, directly or indirectly, any
share of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter
acquires the power of disposition, or file any registration statement under
the 1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement
or any transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of the Common Stock, whether any such swap
or transaction described in clause is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise.
Very truly yours,
Signature:
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Print Name:
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