EXHIBIT 10.15
PURCHASE AGREEMENT
French Fragrances, Inc.
Senior Notes due 2007
PURCHASE AGREEMENT
May 6, 1997
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
TD SECURITIES (USA) INC.
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
French Fragrances, Inc., a Florida corporation ("COMPANY"), agrees with
you as follows:
1. Issuance of Securities. The Company proposes to issue and sell to
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and TD Securities (USA) Inc.
(each, a "Purchaser"), an aggregate of $115 million principal amount of 10 3/8%
Senior Notes due 2007 (the "Series A NoteS"). The Series A Notes are to be
issued pursuant to an indenture (the "Note Indenture") to be dated as of May 13,
1997 between the Company and Marine Midland Bank, as trustee (the "Trustee").
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Note Indenture or the Offering Memorandum, as the
case may be.
The Series A Notes will be offered and sold to you pursuant to an
exemption from the registration requirements under the Securities Act of 1933,
as amended (the "Act"). The Company has prepared a preliminary offering
memorandum, dated April 21, 1997 (the "Preliminary Offering Memorandum"), and a
final offering memorandum, dated May 6, 1997 (the "Offering Memorandum"),
relating to the Company and the Series A Notes for your use.
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Act, the Series A Notes
(and all securities issued in exchange therefor or in substitution thereof)
shall bear the following legend:
"THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE NOTE EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE
SECURITIES ACT, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A
FOREIGN PURCHASER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND, IN THE
CASE OF CLAUSE (b), (c) OR (d), BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE NOTE EVIDENCED HEREBY OR ANY NOTE ISSUED IN
EXCHANGE FOR OR IN SUBSTITUTION HEREOF OF THE RESALE RESTRICTIONS SET
FORTH IN (A) ABOVE."
You have advised the Company that you will make offers (the "Exempt
Resales") of the Series A Notes purchased hereunder on the terms set forth in
the Offering Memorandum, as amended or supplemented, solely (i) to persons whom
you reasonably believe to be "qualified institutional buyers," as defined in
Rule 144A under the Act ("QIBs"), (ii) to non-U.S. persons whom you reasonably
believe are outside the United States and to whom offers and sales of the Series
A Notes may be made in reliance upon Regulation S under the Act ("Regulation
S"), in transactions meeting the requirements of regulation s, and (iii) to a
limited number of institutional "Accredited Investors" referred to in Rule
501(a)(1), (2), (3) or (7) under the Act (each, an "Accredited Investor"). The
QIBs, the non-U.S. persons outside the United States and the Accredited
Investors are referred to herein as the "Eligible Purchasers." You will offer
the Series A Notes to such Eligible Purchasers initially at a price equal to
100% of the principal amount thereof. Such price may be changed at any time
without notice.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement
relating thereto (the "Registration
2
Rights Agreement"), to be dated the Closing Date, in substantially the form of
Exhibit A hereto, for so long as such Series A Notes constitute "Transfer
Restricted Securities" (as defined in the Registration Rights Agreement).
Pursuant to the Registration Rights Agreement, the Company will agree to file
with the Securities and Exchange Commission (the "Commission"), under the
circumstances set forth therein, (i) a registration statement under the Act (the
"Exchange Offer Registration Statement") relating to the 10 3/8% Series B Senior
Notes due 2007 (the "Series B Notes", and together with the Series A Notes, the
"Notes") to be offered in exchange for the Series A Notes (the "Exchange
Offer"), and (ii) a shelf registration statement pursuant to Rule 415 under the
Act (the "Shelf Registration Statement") relating to the resale by certain
holders of the Series A Notes, and to use its reasonable best efforts to cause
such Registration Statements to be declared effective. This Purchase Agreement
(this "Agreement"), the Notes, the Note Indenture and the Registration Rights
Agreement are hereinafter sometimes referred to collectively as the "Operative
Documents".
2. Agreements To Sell And Purchase. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms and
conditions, the Company agrees to issue and sell to you, and each of the
Purchasers, severally but not jointly, agrees to purchase from the Company,
Series A Notes in the respective principal amount set forth opposite its name on
Schedule I hereto. The purchase price for the Series A Notes shall be 97% of
their principal amount.
3. Delivery And Payment. Delivery to the Purchasers of and payment for
the Series A Notes shall be made at 9:00 a.m., New York City time, on May 13,
1997 (the "Closing Date") at the offices of Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other time or
place as you and the Company shall designate.
One or more of the Series A Notes in definitive form, registered in the
name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), having
an aggregate principal amount corresponding to the aggregate principal amount of
the Series A Notes sold pursuant to Exempt Resales to QIBs (collectively, the
"Master Note"), one or more of the Series A Notes in definitive form, registered
in the name of Cede & Co., as nominee of DTC, having an aggregate principal
amount corresponding to the aggregate principal amount of the Series A Notes
sold pursuant to Exempt Resales to non-U.S. persons in reliance upon Regulation
S (collectively, the "Regulation S Note") and one or more Series A Notes in
definitive form registered in the name of Cede & Co., as nominee of DTC, having
an aggregate principal amount corresponding to the aggregate principal amount of
the Series A Notes sold pursuant to Exempt Resales to Accredited Investors
(collectively, the "Other Note"), shall be delivered by the Company to you (or
as you direct), against payment by you of the purchase price therefor by
certified or official bank check or checks payable in federal (same day) funds
to the order of the Company or as the Company may direct. The Master Note, the
Regulation S Note and the Other Note shall be made available to you for
inspection not later than 9:30 a.m. on the business day immediately preceding
the Closing Date.
3
4. Agreements Of The Company. The Company agrees with each of you as
follows:
(a) To advise you promptly and, if requested by the
Purchasers, to confirm such advice in writing, (i) of the issuance by
any state securities commission of any stop order suspending the
qualification or exemption from qualification of any of the Series A
Notes for offering or sale in any jurisdiction, or the initiation of
any proceeding for such purpose by any state securities commission or
other regulatory authority, and (ii) of the happening of any event that
makes any statement of a material fact made in the Offering Memorandum
untrue or that requires the making of any additions to or changes in
the Offering Memorandum in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading.
The Company shall use its reasonable best efforts to prevent the
issuance of any stop order or order suspending the qualification or
exemption of any of the Series A Notes under any state securities or
Blue Sky laws, and if at any time any state securities commission or
other regulatory authority shall issue an order suspending the
qualification or exemption of any of the Series A Notes under any state
securities or Blue Sky laws, the Company shall use its reasonable best
efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish you, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments or supplements thereto, as you may reasonably request. The
Company consents to the use of the Preliminary Offering Memorandum and
the Offering Memorandum, and any amendments and supplements thereto, by
you in connection with Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum prior to the Closing Date unless
you shall previously have been advised thereof and shall have no
reasonable objection thereto after being furnished a copy thereof. The
Company shall promptly prepare, upon your request, any amendment or
supplement to the Preliminary Offering Memorandum or the Offering
Memorandum that may be reasonably necessary or advisable in connection
with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any
Exempt Resales, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of your counsel,
it becomes necessary to amend or supplement the Offering Memorandum in
order to made the statements therein, in the light of the circumstances
when the Offering Memorandum is delivered to an Eligible Purchaser
which is a prospective purchaser, not misleading, or if it is necessary
to amend or supplement the Offering Memorandum to comply with
applicable law, forthwith to prepare an appropriate amendment or
supplement to the Offering Memorandum so that statements therein as so
amended or supplemented will not, in the light of the circumstances
when it is so delivered, be misleading, or so that the Offering
Memorandum will comply with applicable law.
4
(e) To cooperate with you and your counsel in connection with
the qualification of the Series A Notes under the securities or Blue
Sky laws of such jurisdictions as you may request and to continue such
qualification in effect so long as required for the Exempt Resales;
provided, however, that the Company shall not be required in connection
therewith to register or qualify as a foreign corporation where it is
not now so qualified or to take any action that would subject it to
service of process in suits or taxation, other than as to matters and
transactions relating to the Exempt Resales, in any jurisdiction where
it is not now so subject.
(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is
terminated, to pay all costs, expenses, fees and taxes incident to and
in connection with: (i) the preparation, printing, filing and
distribution of the Preliminary Offering Memorandum and the Offering
Memorandum (including, without limitation, financial statements and
exhibits) and all amendments and supplements thereto (but not, however,
legal fees and expenses of your counsel incurred in connection with any
of the foregoing), (ii) the preparation (including, without limitation,
word processing and duplication costs) and delivery of this Agreement
and the other Operative Documents and all other agreements, memoranda,
correspondence and other documents (but not, however, legal fees and
expenses of your counsel incurred in connection with any of the
foregoing) and all preliminary and final Blue Sky memoranda prepared
and delivered in connection herewith and with the Exempt Resales, (iii)
the issuance and delivery by the Company of the Notes, (iv) the
qualification of the Notes for offer and sale under the securities or
Blue Sky laws of the several states (including, without limitation, the
reasonable fees and disbursements of your counsel relating to such
registration or qualification), (v) furnishing such copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and all
amendments and supplements thereto, as may be reasonably requested for
use in connection with Exempt Resales, (vi) the preparation of
certificates for the Notes (including, without limitation, printing and
engraving thereof), (vii) the fees, disbursements and expenses of the
Company's counsel and accountants, (viii) all expenses and listing fees
in connection with the application for quotation of the Series A Notes
in the National Association of Securities Dealers, Inc. ("NASD")
Automated Quotation System - PORTAL ("PORTAL"), (ix) all fees and
expenses (including fees and expenses of counsel) of the Company in
connection with approval of the Notes by DTC for "book-entry" transfer
and (x) the performance by the Company of its other obligations under
this Agreement and the other Operative Documents.
(g) To use the proceeds from the sale of the Series A Notes in
the manner described in the Offering Memorandum under the caption "Use
of Proceeds".
(h) To the extent it may be lawful, not to voluntarily claim,
and to resist actively any attempts to claim, the benefit of any usury
laws against the holders of any Notes.
5
(i) To do and perform all things required to be done and
performed under this Agreement by them prior to or after the Closing
Date and to satisfy all conditions precedent on their part to the
delivery of the Series A Notes.
(j) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Series A Notes in a
manner that would require the registration under the Act of the sale to
you or Eligible Purchasers of the Series A Notes.
(k) For so long as any of the Notes remain outstanding and
during any period in which the Company is not subject to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to make available, upon request, to any QIB holding Series A
Notes or any beneficial owner of Series A Notes in connection with any
sale thereof and any prospective purchaser of such Series A Notes from
such QIB or beneficial owner, the information required by Rule
144A(d)(4) under the Act.
(l) To cause the Exchange Offer to be made in the appropriate
form to permit registration of the Series B Notes to be offered in
exchange for the Series A Notes and to comply with all applicable
federal and state securities laws in connection with the Exchange
Offer.
(m) To comply with all of its agreements set forth in the
Registration Rights Agreement, and all agreements set forth in the
representation letter of the Company to DTC relating to the approval of
the Notes by DTC for "book-entry" transfer.
(n) To use its reasonable best efforts to effect the inclusion
of the Series A Notes in PORTAL.
(o) During a period of five years following the date of this
Agreement, to deliver to each of you promptly upon their becoming
available, copies of all current, regular and periodic reports filed by
the Company with the Commission or any securities exchange or with any
governmental authority succeeding to any of the Commission's functions.
5. Representations And Warranties. (a) The Company represents and
warrants to each of you that, as of the date hereof:
(i) The Preliminary Offering Memorandum and the Offering
Memorandum have been prepared in connection with the Exempt Resales.
The Preliminary Offering Memorandum and the Offering Memorandum, as of
the respective dates thereof, do not, and the Offering Memorandum will
not as of the Closing Date, and any supplement or amendment to them
will not, contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except that the representations and warranties
contained in this paragraph (i) shall not
6
apply to statements in or omissions from the Preliminary
Offering Memorandum and the Offering Memorandum (or any supplement or
amendment thereto) made in reliance upon and in conformity with
information relating to you furnished to the Company in writing by you
expressly for use therein. No stop order preventing the use of the
Preliminary Offering Memorandum or the Offering Memorandum, or any
amendment or supplement thereto, or order asserting that any of the
transactions contemplated by this Agreement is subject to the
registration requirements of the Act, has been issued.
(ii) When the Series A Notes are issued and delivered
pursuant to this Agreement, none of the Series A Notes will be of the
same class (within the meaning of Rule 144A under the Act) as
securities of the Company that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are
quoted in a United States automated inter-dealer quotation system.
(iii) Each of the Company and the Subsidiaries has been
duly organized, is validly existing as a corporation in good standing
under the laws of its respective jurisdiction of incorporation, has all
requisite corporate power and authority to carry on its business as it
is currently being conducted and as described in the Offering
Memorandum and to own, lease and operate its properties, and is duly
qualified and in good standing as a foreign corporation authorized to
do business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on the financial condition, results of operations,
business or prospects of the Company and the Subsidiaries (as defined
below), taken as a whole (a "Material Adverse Effect").
(iv) Each of the entities listed on Schedule II hereto
is, and upon consummation of the Fine Fragrances Acquisition on the
Closing Date, Fine Fragrances, Inc. will become, a subsidiary of the
Company. The entities listed on Schedule II are, together with Fine
Fragrances, Inc. when so acquired on the Closing Date, the only
subsidiaries, direct or indirect, of the Company. The Company owns, or
in the case of Fine Fragrances, Inc. will own on the Closing Date upon
consummation of the Fine Fragrances Acquisition, directly or indirectly
through other subsidiaries, 100% of the outstanding capital stock or
other securities evidencing equity ownership of such subsidiaries, free
and clear of any security interest, claim, lien, limitation on voting
rights or encumbrance, subject only to security interests in favor of
the Existing Credit Facility and the 8.0% Secured Subordinated
Debentures which will be released on the Closing Date; and all of such
securities have been duly authorized, validly issued, are fully paid
and nonassessable and were not issued in violation of any preemptive or
similar rights. As used herein, "Subsidiaries" means the entities
listed on Schedule II, together with Fine Fragrances, Inc. upon
consummation of the Fine Fragrances Acquisition. Other than in
connection with the Fine Fragrances Acquisition, there are no
outstanding subscriptions, rights, warrants, calls, commitments of sale
or options to acquire, or instruments convertible into or exchangeable
for, any such shares of capital stock or other equity interest of such
Subsidiaries.
7
(v) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement, the Notes, the Note Indenture and the Registration Rights
Agreement and to consummate the transactions contemplated hereby and
thereby, including, without limitation, the corporate power and
authority to issue, sell and deliver the Notes as provided herein and
therein.
(vi) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is the legally valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance (including the Uniform Fraudulent Transfers Act as adopted
in Florida) or other laws affecting creditors' rights and remedies
generally and except as such enforcement is subject to general
principles of equity (including, without limitation, standards of
materiality, good faith, fair dealing and reasonableness), regardless
of whether enforcement is considered in a proceeding in equity or at
law, except as any rights to indemnity and contribution under this
Agreement may be limited by federal and state securities laws and
except to the extent that a waiver of rights under any usury laws may
be unenforceable.
(vii) The Note Indenture has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be the legally valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance (including the
Uniform Fraudulent Transfers Act as adopted in Florida) or other laws
affecting enforcement of creditors' rights and remedies generally and
except as such enforcement is subject to general principles of equity
(including, without limitation, standards of materiality, good faith,
fair dealing and reasonableness), regardless of whether enforcement is
considered in a proceeding in equity or at law, and except to the
extent that a waiver of rights under any usury laws may be
unenforceable. The Note Indenture, when executed and delivered, will
conform in all material respects to the description thereof in the
Offering Memorandum.
(viii) The Series A Notes have been duly and validly
authorized for issuance and sale to you by the Company pursuant to this
Agreement and, when issued and authenticated in accordance with the
terms of the Note Indenture and delivered against payment therefor in
accordance with the terms hereof, will be the legally valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the Note
Indenture, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance
(including the Uniform Fraudulent Transfers Act as adopted in Florida)
or other laws affecting enforcement of creditors' rights and remedies
generally and except as such enforcement is subject to general
principles of equity (including, without limitation, standards of
materiality, good faith, fair dealing and reasonableness),
8
regardless of whether enforcement is considered in a
proceeding in equity or at law, and except to the extent that a waiver
of rights under any usury laws may be unenforceable. The Series A
Notes, when issued, authenticated and delivered, will conform in all
material respects to the description thereof in the Offering
Memorandum.
(ix) The Series B Notes have been duly and validly
authorized for issuance by the Company, and when issued and
authenticated in accordance with the terms of the Note Indenture, the
Registration Rights Agreement and the Exchange Offer, will be the
legally valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Note Indenture, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance (including the Uniform Fraudulent Transfers Act
as adopted in Florida) or other laws affecting enforcement of
creditors' rights and remedies generally and except as such enforcement
is subject to general principles of equity (including, without
limitation, standards of materiality, good faith, fair dealing and
reasonableness), regardless of whether enforcement is considered in a
proceeding in equity or at law, and except to the extent that a waiver
of rights under any usury laws may be unenforceable.
(x) The Registration Rights Agreement has been duly and
validly authorized by the Company and, when duly executed and delivered
by the Company, will be the legally valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance (including the
Uniform Fraudulent Transfers Act as adopted in Florida) or other laws
affecting enforcement of creditors' rights and remedies generally and
except as such enforcement is subject to general principles of equity
(including, without limitation, standards of materiality, good faith,
fair dealing and reasonableness), regardless of whether enforcement is
considered in a proceeding in equity or at law, except as any rights to
indemnity and contribution under the Registration Rights Agreement may
be limited by federal and state securities laws and public policy
considerations, and except as enforcement of any provisions requiring
the payment of liquidated damages may be limited by applicable law or
public policy. The Registration Rights Agreement, when executed and
delivered, will conform in all material respects to the description
thereof in the Offering Memorandum.
(xi) Neither the Company nor any of the Subsidiaries is
in violation of its respective charter or bylaws or is in default in
the performance of any bond, debenture, note, indenture, mortgage, deed
of trust or other agreement or instrument to which it is a party or by
which it is bound or to which any of its properties is subject, or is
in violation of any law, statute, rule, regulation, judgment or court
decree applicable to the Company, any of the Subsidiaries or their
assets or properties, except for any such violations or defaults as
would not have a Material Adverse Effect. There exists no condition
that, with notice, the passage of time or otherwise, would constitute a
default
9
under any such document or instrument, except for any such default as
would not have a Material Adverse Effect.
(xii) The execution, delivery and performance by the
Company of this Agreement and the other Operative Documents, the
issuance and sale of the Notes, and the consummation of the
transactions contemplated hereby and thereby will not violate, conflict
with or constitute a breach of any of the terms or provisions of, or a
default under (or an event that with notice or the lapse of time, or
both, would constitute a default), or require consent under, or result
in the imposition of a lien or encumbrance on any properties of the
Company or any of the Subsidiaries, or an acceleration of indebtedness
pursuant to, (i) the charter or bylaws of the Company or any of the
Subsidiaries, (ii) any bond, debenture, note, indenture, mortgage, deed
of trust or other agreement or instrument to which the Company or any
of the Subsidiaries is a party or by which any of them or their
property is or may be bound, except for any such violation, conflict,
breach or default as would not have a Material Adverse Effect, (iii)
any statute, rule or regulation applicable to the Company, any of the
Subsidiaries or any of their assets or properties, or (iv) any
judgment, order or decree of any court or governmental agency or
authority having jurisdiction over the Company, any of the Subsidiaries
or their assets or properties. Subject to the assumptions set forth in
clauses (i) through (iii) of Section 5(xxvii), no consent, approval,
authorization or order of, or filing, registration, qualification,
license or permit of or with, any court or governmental agency, body or
administrative agency is required for the execution, delivery and
performance of this Agreement and the other Operative Documents and the
consummation of the transactions contemplated hereby and thereby,
except such as have been obtained and made (or, in the case of the
Registration Rights Agreement and the transactions contemplated thereby
and by the Note Indenture, will be obtained and made under the Act and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act")), or such as may be required by the NASD, or such as may be
required under state securities or Blue Sky laws or regulations or the
securities laws of non-U.S. jurisdictions. No consents or waivers from
any other person are required for the execution, delivery and
performance of this Agreement and the other Operative Documents and the
consummation of the transactions contemplated hereby and thereby, other
than such consents and waivers as have been obtained (or, in the case
of the Registration Rights Agreement and the transactions contemplated
thereby and by the Note Indenture, will be obtained).
(xiii) There is (i) no action, suit or proceeding before
or by any court, arbitrator or governmental agency, body or official,
domestic or foreign, now pending or, to the knowledge of the Company,
threatened or contemplated to which the Company or any of the
Subsidiaries is or may be a party or to which the business or property
of the Company or any of the Subsidiaries is or may be subject, (ii) no
statute, rule, regulation, or order that has been enacted, adopted or
issued by any governmental agency or, to the knowledge of the Company,
that has been proposed by any governmental body, (iii) no injunction,
restraining order or order of any nature by a federal or state court or
foreign court of competent jurisdiction to which the Company or
10
any of the Subsidiaries is subject that has been issued that,
in the case of clauses (i), (ii) and (iii) above, if adversely
determined, (x) might reasonably be expected to, singly or in the
aggregate, result in a Material Adverse Effect, or (y) would interfere
with or adversely affect the issuance of the Notes or (z) in any manner
draw into question the validity of this Agreement or any other
Operative Document.
(xiv) No action, to the Company's knowledge, has been
taken and no statute, rule or regulation or order has been enacted,
adopted or issued by any governmental agency that prevents the issuance
of the Notes; no injunction, restraining order or order of any nature
by a federal or state court of competent jurisdiction has been issued
that prevents the issuance of the Notes or suspends the sale of the
Notes in any jurisdiction referred to in Section 4(e) hereof; and no
action, suit or proceeding is pending against or affecting or, to the
knowledge of the Company, threatened against, the Company or any of the
Subsidiaries before any court or arbitrator or any governmental body,
agency or official which, if adversely determined, would prohibit,
interfere with or adversely affect the issuance or marketability of the
Notes or in any manner draw into question the validity of any Operative
Document; and, to the Company's knowledge, every request of any
securities authority or agency of any jurisdiction for additional
information has been complied with in all material respects.
(xv) There is (i) no significant unfair labor practice
complaint pending against the Company or any of the Subsidiaries nor,
to the knowledge of the Company, threatened against any of them, before
the National Labor Relations Board, any state or local labor relations
board or any foreign labor relations board, and no significant
grievance or significant arbitration proceeding arising out of or under
any collective bargaining agreement is so pending against the Company
or any or the Subsidiaries or, to the knowledge of the Company,
threatened against any of them, (ii) no significant strike, labor
dispute slowdown or stoppage pending against the Company or any of the
Subsidiaries nor, to the knowledge of the Company, threatened against
the Company or any of the Subsidiaries and (iii) to the knowledge of
the Company, no union representation question existing with respect to
the employees of the Company and, to the knowledge of the Company, no
union organizing activities are taking place. Neither the Company nor
any of the Subsidiaries has violated any federal, state or local law or
foreign law relating to discrimination in hiring, promotion or pay of
employees, nor any applicable wage or hour laws, nor any provision of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the rules and regulations thereunder, or analogous
foreign laws and regulations, other than any such violation as would
not result in a Material Adverse Effect.
(xvi) Neither the Company nor any of the Subsidiaries has
violated any environmental, safety or similar law or regulation
applicable to it or its business or property relating to the protection
of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental
Laws"), lacks any permit, license or other approval required of them
under applicable Environmental Laws or is violating any term or
condition of such
11
permit, license or approval, other than any such violation or
failure to obtain a permit, license or approval as would not have a
Material Adverse Effect.
(xvii) Each of the Company and the Subsidiaries has (i)
good and marketable title to all of the properties and assets described
in the Offering Memorandum as owned by it, free and clear of all liens,
charges, encumbrances and restrictions, except such as exist on the
date hereof and are described in the Offering Memorandum or will arise
upon consummation of the transactions described therein or as would not
have a Material Adverse Effect, (ii) peaceful and undisturbed
possession under all leases to which it is party as lessee, (iii) all
licenses, certificates, permits, authorizations, approvals, franchises
and other rights from, and has made all declarations and filings with,
all federal, state and local authorities, all self-regulatory
authorities and all courts and other tribunals (each an
"Authorization") necessary to engage in the business currently
conducted by it in the manner described in the Offering Memorandum,
except where failure to hold such Authorizations would not have a
Material Adverse Effect and (iv) no reason to believe that any
governmental body or agency is considering limiting suspending or
revoking any such Authorization. All such Authorizations (as qualified
in clause (iii) above) are valid and in full force and effect and the
Company and the Subsidiaries are in compliance in all material respects
with the terms and conditions of all such Authorizations (as qualified
in clause (iii) above) and with the rules and regulations of the
regulatory authorities having jurisdiction with respect thereto, except
where the failure to comply would not have a Material Adverse Effect.
All leases to which the Company or any of the Subsidiaries is a party
are valid and binding upon the Company or such Subsidiary, as the case
may be, and, to the Company's knowledge, upon the other parties
thereto, no material default by the Company or any of the Subsidiaries
has occurred and is continuing thereunder, and, to the knowledge of the
Company, no material defaults by the landlord are existing under any
such lease.
(xviii) Each of the Company and the Subsidiaries owns or
possesses or otherwise has the right to use all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names (collectively, the "Intellectual Property") presently
employed by it in connection with the businesses now operated by them,
and neither the Company nor any of the Subsidiaries has received any
notice of infringement of or conflict with asserted rights of others
with respect to any of the foregoing. To the knowledge of the Company,
the use of the Intellectual Property in connection with the business
and operations of the Company and the Subsidiaries does not infringe on
the right of any person, which, if determined adversely to the Company
or the Subsidiaries, would have a Material Adverse Effect.
(xix) All tax returns required to be filed by the Company
or any of the Subsidiaries, in all jurisdictions, have been so filed,
except where the failure to so file would not have a Material Adverse
Effect. All taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from
12
such entities or that are due and payable have been paid,
other than those being contested in good faith and for which adequate
reserves have been provided or those currently payable without penalty
or interest, except where the failure to so pay would not have a
Material Adverse Effect. Neither the Company nor any of the
Subsidiaries knows of any material proposed additional tax assessments
against it or any of the Subsidiaries.
(xx) Neither the Company nor any of the Subsidiaries is
(i) an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), or analogous foreign laws and
regulations, or (ii) a "holding company" or a "subsidiary company" or
an "affiliate" of a holding company within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or analogous foreign
laws and regulations.
(xxi) There are no holders of securities of the Company
who, by reason of the execution by the Company of this Agreement or any
other Operative Document to which it is a party or the consummation of
the transactions contemplated hereby and thereby, have the right to
request or demand that the Company register under the Act or analogous
foreign laws and regulations securities held by them.
(xxii) The authorized, issued and outstanding capital
stock of each of the Company and each of the Subsidiaries has been duly
and validly authorized and issued, is fully paid and nonassessable and
was not issued in violation of or subject to any preemptive or similar
rights. The Company had at January 31, 1997, an authorized and
outstanding capitalization as set forth in the Offering Memorandum.
(xxiii) Each certificate signed by any officer of the
Company and delivered to the Purchasers or counsel for the Purchasers
shall be deemed to be a representation and warranty by the Company to
each Purchaser as to the matters covered thereby.
(xxiv) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that:
(i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(xxv) The Company and each of the Subsidiaries maintain
insurance covering their properties, operations, personnel and
businesses. Such insurance insures against such losses and risks as are
adequate in accordance with customary industry practice to protect the
Company and the Subsidiaries and their businesses. Neither the Company
nor any of the Subsidiaries has received notice from any insurer or
13
agent of such insurer that substantial capital improvements or other
expenditures will have to be made (that have not been undertaken) in
order to continue such insurance. All such insurance is outstanding and
duly in force on the date hereof and will be outstanding and duly in
force on the Closing Date.
(xxvi) Neither the Company nor any of the Subsidiaries
has (i) taken, directly or indirectly, any action designed to, or that
might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Notes or (ii) since the date of the
Preliminary Offering Memorandum (A) sold, bid for, purchased or paid
any person any compensation for soliciting purchases of, the Notes or
(B) paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.
(xxvii) No registration under the Act of the Series A
Notes is required for the sale of the Series A Notes to the Purchasers
as contemplated hereby or for the Exempt Resales assuming (i) that the
purchasers who buy the Series A Senior Notes in the Exempt Resales are
either QIBs, non-U.S. persons you reasonably believe are outside the
United States to whom offers and sales of the Series A Notes may be
made in reliance upon Regulation S or Accredited Investors (up to a
maximum of 35 such Accredited Investors), (ii) the accuracy of the
Purchasers' representations contained herein and (iii) the accuracy of
the representations made by such Accredited Investors as set forth in
the letter of representation executed by each Accredited Investor in
the form of Annex A to the Offering Memorandum. No form of general
solicitation and directed selling efforts or general advertising was
used by the Company, the Subsidiaries or any of its representatives in
connection with the offer and sale of any of the Series A Notes or in
connection with Exempt Resales, including, but not limited to,
articles, notices or other communications published in any newspaper,
magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. The Company has not (and none of
its representatives has) engaged in any directed selling efforts within
the meaning of Rule 902 under the Act in the United States in
connection with the Series A Notes being offered and sold pursuant to
Regulation S. No securities of the same class as the Series A Notes
have been issued and sold by the Company within the six-month period
immediately prior to the date hereof.
(xxviii) Set forth on Exhibit B hereto is a list of each
employee pension or welfare benefit plan with respect to which the
Company or any corporation considered an affiliate of the Company
within the meaning of Section 407(d)(7) of ERISA (an "Affiliate") is a
party in interest or disqualified person. The execution and delivery of
this Agreement, the other Operative Documents and the sale of the
Series A Notes to be purchased by the Eligible Purchasers will not
involve any prohibited transaction within the meaning of Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1986. The
representation made by the Company in the preceding sentence is made in
reliance upon and subject to the accuracy of, and compliance with,
14
the representations and covenants made or deemed made by the
Eligible Purchasers as set forth in the Offering Memorandum under the
Section entitled "Notices to Investors."
(xxix) Subsequent to the respective dates as of which
information is given in the Offering Memorandum and up to the Closing
Date, except as set forth in the Offering Memorandum, neither the
Company nor any of the Subsidiaries has incurred or will incur any
liabilities or obligations, direct or contingent, which are material to
the Company and the Subsidiaries taken as a whole (other than accounts
payable in the ordinary course of business), nor entered into any
transaction not in the ordinary course of business, and there has not
been, singly or in the aggregate, any material adverse change, or any
development which may reasonably be expected to involve a material
adverse change, in the properties, business, results of operations,
condition (financial or otherwise), affairs or prospects of the Company
and the Subsidiaries, taken as a whole (a "Material Adverse Change")
and there have not been dividends or distributions of any kind
declared, paid or made by the Company or any of the Subsidiaries on any
class of its capital stock.
(xxx) Neither the Company, the Subsidiaries nor any agent
thereof acting on the behalf of any of them has taken, and none of them
will take, any action that might cause this Agreement or the issuance
or sale of the Notes to violate Regulation G (12 C.F.R. Part 207),
Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
Regulation X (12 C.F.R. Part 224) of the Board of Governors of the
Federal Reserve System or analogous foreign laws and regulations.
(xxxi) The accountants who have certified or shall
certify the financial statements and supporting schedules included or
to be included as part of the Offering Memorandum are independent
accountants. The consolidated historical statements fairly present the
consolidated financial condition and results of operations of the
Company and the Subsidiaries at the respective dates and for the
respective periods indicated, in accordance with generally accepted
accounting principles consistently applied throughout such periods,
except as stated therein. The pro forma financial statements have been
prepared on a basis consistent with such historical statements, except
for the pro forma adjustments specified therein, and give effect to
assumptions made on a reasonable basis and present fairly the
historical and proposed transactions contemplated by this Agreement and
the other Operative Documents. Other financial information and data
included in the Offering Memorandum, historical and pro forma, are
accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company and the
Subsidiaries.
(xxxii) The present fair saleable value of the assets of
the Company, on a consolidated basis, exceeds the amount that will be
required to be paid on or in respect of the existing debts and other
liabilities (including contingent liabilities) of the Company as they
become absolute and matured. The assets of the Company, on a
consolidated basis, do not constitute unreasonably small capital to
carry out its business as conducted or as proposed to be conducted. The
Company does not intend to, nor does
15
it believe that it will, incur debts beyond its ability to pay
such debts as they mature. Upon the issuance of the Series A Notes, the
present fair saleable value of the assets of the Company, on a
consolidated basis, will exceed the amount that will be required to be
paid on or in respect of the existing debts and other liabilities
(including contingent liabilities) of the Company as they become
absolute and matured. The assets of the Company, on a consolidated
basis, upon the issuance of the Series A Notes, will not constitute
unreasonably small capital to carry out its business as now conducted,
including the capital needs of the Company, on a consolidated basis,
taking into account the projected capital requirements and capital
availability of the Company.
(xxxiii) There are no contracts, agreements or
understandings between the Company or any of the Subsidiaries and any
person (other than the Purchasers) that would give rise to a valid
claim against the Company, the Subsidiaries or any Purchaser for a
brokerage commission, finder's fee or like payment in connection with
the issuance, purchase and sale of the Notes.
(xxxiv) Neither the Company nor any of its affiliates
does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes.
The Company acknowledges that the Purchasers and, for purposes
of the opinions to be delivered to the Purchasers pursuant to Section 7 hereof,
counsel to the Company and counsel to the Purchasers will rely upon the accuracy
and truth of the foregoing representations and hereby consents to such reliance.
(b) Each Purchaser represents and warrants to the Company
and the other Purchaser and agrees that:
(i) Such Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order
to evaluate the merits and risks of an investment in the Series A
Notes.
(ii) Such Purchaser (A) is not acquiring the Series A
Notes with a view to any distribution thereof that would violate the
Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling
the Series A Notes only to QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A, to non-U.S.
persons it reasonably believes are outside the United States to whom
offers and sales of the Series A Notes may be made in reliance on
Regulation S and to Accredited Investors in a private placement exempt
from the registration requirements of the Act.
(iii) No form of general solicitation or general
advertising has been or will be used by such Purchaser or any of its
representatives in connection with the offer and sale of any of the
Series A Notes, including, but not limited to, articles, notices or
other communications published in any newspaper, magazine, or similar
medium or
16
broadcast over television or radio, or any seminar or meeting
whose attendees have been invited by any general solicitation or
general advertising.
(iv) No form of directed selling efforts within the
meaning of Rule 902 under the Act in the United States has been or will
be used by such Purchaser or any of its representatives in connection
with the offer and sale of any of the Series A Notes being sold
pursuant to Regulation S.
(v) In connection with sales outside the United States,
such Purchaser represents and warrants to and agrees with the Company
that it will not offer, sell or deliver the Series A Notes to, or for
the account or benefit of, U.S. persons (i) as part of such Purchaser's
distribution at any time or (ii) otherwise until forty (40) days after
the later of the commencement of the sale of the Series A Notes and the
Closing Date and it will send to each dealer to whom it sells such
Series A Notes during such period, a confirmation or other notice
setting forth the restrictions on offers and sales of the Series A
Notes within the United States or to, or for the account or benefit of,
U.S. persons.
(vi) Such Purchaser agrees that, in connection with the
Exempt Resales, it will solicit offers to buy the Series A Notes only
from, and will offer to sell the Series A Notes only to, QIBs, non-U.S.
persons it reasonably believes are outside the United States to whom
offers and sales of the Series A Notes may be made in reliance on
Regulation S and a total of no more than 35 Accredited Investors. Such
Purchaser further agrees (A) that it will offer to sell the Series A
Notes only to, and will solicit offers to buy the Series A Notes only
from (1) QIBs who in purchasing such Series A Notes will be deemed to
have represented and agreed that they are purchasing the Series A Notes
for their own account or accounts with respect to which they exercise
sole investment discretion and that they or such accounts are QIBs, (2)
non-U.S. persons who in purchasing such Series A Notes will be deemed
to have represented and agreed that they are outside the United States
and (3) Accredited Investors who make the representations contained in,
and execute and return to the Purchaser, a certificate in the form of
Annex A attached to the Offering Memorandum and (B) that, in the case
of such QIBs and Accredited Investors, such QIBs and Accredited
Investors acknowledge and agree that such Series A Notes will not have
been registered under the Act and may be resold, pledged or otherwise
transferred only (x)(I) to a person who the seller reasonably believes
is a QIB in a transaction meeting the requirements of Rule 144A, (II)
in a transaction meeting the requirements of Rule 144, (III) to a
non-U.S. person in a transaction meeting the requirements of Rule 904
under the Act or (IV) in accordance with another exemption from the
registration requirements of the Act (and based upon an opinion of
counsel if the Company so requests), (y) to the Company, (z) pursuant
to an effective registration statement under the Act and, in each case,
in accordance with any applicable securities laws of any state of the
United States or any other applicable jurisdiction and (C) that the
holder will, and each subsequent holder is required to, notify any
purchaser from it of the note evidenced thereby of the resale
restrictions set forth in (B) above.
17
(vii) Such Purchaser also understands that the Company
and, for purposes of the opinions to be delivered to you pursuant to
Section 7 hereof, counsel to the Company and counsel to the Purchasers
will rely upon the accuracy and truth of the foregoing representations
and hereby consents to such reliance.
6. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless (i) each
of the Purchasers and (ii) each person, if any, who controls (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
each of the Purchasers (any of the persons referred to in this clause
(ii) being hereinafter referred to as a "controlling person"), and
(iii) the respective officers, directors, partners, employees,
representatives and agents of each of the Purchasers or any controlling
person (any person referred to in clause (i), (ii) or (iii) may
hereinafter be referred to as an "Indemnified Person") to the fullest
extent lawful, from and against any and all losses, claims, damages,
liabilities, judgments, actions and expenses (including without
limitation and as incurred, reimbursement of all reasonable costs of
investigating, preparing, pursuing or defending any claim or action, or
any investigation or proceeding by any governmental agency or body,
commenced or threatened, including the reasonable fees and expenses of
counsel to any Indemnified Person) directly or indirectly caused by,
related to, based upon, arising out of or in connection with any untrue
statement or alleged untrue statement of a material fact contained in
the Preliminary Offering Memorandum or the Offering Memorandum (or any
amendment or supplement thereto), or any omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar
as such losses, claims, damages, liabilities or expenses are caused by
an untrue statement or omission or alleged untrue statement or omission
that is made in reliance upon and in conformity with information
relating to such Purchaser furnished in writing to the Company by such
Purchaser expressly for use therein. The Company shall notify you
promptly of the institution, threat or assertion of any claim,
proceeding (including any governmental investigation) or litigation in
connection with the matters addressed by this Agreement which involves
the Company or an Indemnified Person.
(b) In case any action or proceeding (including any
governmental investigation) shall be brought or asserted against any of
the Indemnified Persons with respect to which indemnity may be sought
against the Company, such Indemnified Person shall promptly notify the
Company in writing (provided, that the failure to give such notice
shall not relieve the Company of its obligations pursuant to this
Agreement, except to the extent the Company or any Subsidiary is
materially prejudiced by such failure). Such Indemnified Person shall
have the right to employ its own counsel in any such action and the
fees and expenses of such counsel shall be paid, as incurred, by the
Indemnified Person, unless (i) the Company has failed promptly to
assume the defense and employ counsel reasonably satisfactory to such
Indemnified Person, (ii) the Company has authorized the employment of
counsel for the Indemnified Person at the expense of the Company, or
(iii) the named parties to any such action or proceeding (including any
18
impleaded parties) include such Indemnified Person and the Company and
such Indemnified Person shall have been advised by counsel that it has
reasonably concluded that a conflict of interest may exist between the
Company and such Indemnified Person in the conduct of the defense of
such action or proceeding. In the case of each of clause (i), (ii) or
(iii) above, the Company shall pay, as incurred, the fees and expenses
of such counsel, regardless of whether it is ultimately determined that
an Indemnified Person is not entitled to indemnification hereunder. The
Company shall not, in connection with any one such action or proceeding
or separate but substantially similar or related actions or proceedings
in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel)
at any time for the Indemnified Persons, which firm shall be designated
by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. The Company
shall be liable for any settlement of any such action or proceeding
effected with the Company's prior written consent, which consent will
not be unreasonably withheld, and the Company agrees to indemnify and
hold harmless any Indemnified Person from and against any loss, claim,
damage, liability or expense by reason of any settlement of any action
effected with the written consent of the Company. Notwithstanding the
immediately preceding sentence, if at any time an Indemnified Person
shall have requested an indemnifying party to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than sixty
business days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
Indemnified Person in accordance with such request prior to the date of
such settlement. The Company shall not, without the prior written
consent of an Indemnified Person, settle or compromise or consent to
the entry of judgment in or otherwise seek to terminate any pending or
threatened action, claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not
any Indemnified Person is a party thereto), unless such settlement,
compromise, consent or termination includes an unconditional release of
such Indemnified Person from all liability arising out of such action,
claim, litigation or proceeding.
(c) Each of the Purchasers agrees, severally and not jointly,
to indemnify and hold harmless the Company, and its directors, officers
and any person controlling (within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act) the Company, and the respective
officers, directors, partners, employees, representatives and agents of
each such person, to the same extent as the foregoing indemnity from
the Company to each of the Indemnified Persons, but only with respect
to claims and actions based on information relating to such Purchaser
furnished in writing by such Purchaser to the Company expressly for use
in the Offering Memorandum.
The statements in the Offering Memorandum in the third and
fourth paragraphs and in the third sentence in the fifth paragraph in
Plan of Distribution constitute the only information heretofore
furnished to the Company in writing by any
19
Purchaser expressly for use in the Preliminary Offering
Memorandum or the Offering Memorandum, or any amendment or supplement
thereto.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to herein, then each
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities and
expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party, on the one hand,
and the indemnified party, on the other hand, from the offering of the
Series A Notes or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the indemnifying party
and the indemnified party, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the
one hand, and either of the Purchasers, on the other hand, shall be
deemed to be in the same proportion as the total proceeds from the
offering of the Series A Notes (net of discounts and commissions but
before deducting expenses) received by the Company and the total
discounts and commissions received by such Purchaser bear to the total
price of the Series A Notes paid in the Exempt Resales, in each case as
set forth in the table on the cover page of the Offering Memorandum.
The relative fault of the Company, on the one hand, and the Purchasers,
on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
related to information supplied by the Company, on the one hand, and
the Purchasers, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The indemnity set forth herein shall be in
addition to any liability or obligation the Company may otherwise have
to any Indemnified Person.
The Company and the Purchasers agree that it would not be just
and equitable if contribution to this Section 6(d) were determined by
pro rata allocation (even if the Purchasers were treated as one entity
for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages,
liabilities or expenses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 6,
neither of the Purchasers (and none of the related Indemnified Persons)
shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the total discounts and commissions received by
such Purchaser with respect to the Series A Notes, exceeds the amount
of any damages which such Purchaser has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
20
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Purchasers' obligations to contribute pursuant
to this Section 6(d) are several in proportion to the respective
principal amount of Series A Notes purchased by each of the Purchasers
hereunder and not joint.
(e) The Company hereby designates Xxxxxxx, Xxxxxx & Xxxxxx,
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000-0000 (Attn: Xxxxx
Xxxxxxxx) as its authorized agent upon whom process may be served in
any action, suit or proceeding that may be instituted in any state or
federal court in the State of New York by either Purchaser or any
person controlling either Purchaser asserting a claim for
indemnification or contribution under or pursuant to this Section 6,
and the Company will accept the jurisdiction of such court in such
action, and waive, to the fullest extent permitted by applicable law,
any defense based upon lack of personal jurisdiction or venue. A copy
of any such process shall be sent or given to the Company at the
address for notices specified in Section 10 hereof.
7. Conditions Of Purchasers' Obligations. The several obligations
of the Purchasers under this Agreement are subject to the satisfaction of each
of the following conditions:
(a) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material
respects on the date hereof and on the Closing Date with the same force
and effect as if, assuming, in the case of the Closing Date, that this
Agreement had been executed on the Closing Date, made on and as of the
date hereof and the Closing Date, respectively. The Company shall have
performed or complied with all of the agreements herein contained and
required to be performed or complied with in all material respects by
it at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Purchasers not later than 10:00 a.m., New York City
time, on the date of this Agreement or at such later date and time as
to which you may agree, and no stop order suspending the qualification
or exemption from qualification of any of the Series A Notes in any
jurisdiction referred to in Section 4(e) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be
pending or threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the
issuance of any of the Series A Notes; no action, suit or proceeding
shall be pending against or affecting or, to the knowledge of the
Company, threatened against the Company or any Subsidiary before any
court or arbitrator or any governmental body, agency or official that,
if adversely determined, (i) would prohibit, interfere with or
adversely affect the issuance of the Series A Notes, (ii) would
reasonably be expected to have a Material Adverse Effect or (iii) would
in any manner draw into question the validity of this Agreement, the
Note Indenture, the Series
21
A Notes or the Registration Rights Agreement; and no stop
order preventing the use of the Offering Memorandum, or any amendment
or supplement thereto, or any order asserting that any of the
transactions contemplated by this Agreement is subject to the
registration requirements of the Act shall have been issued.
(d) Since the dates as of which information is given in the
Offering Memorandum and other than as described therein, (i) there
shall not have been any material change, or any development that is
reasonably likely to result in a material change, in the capital stock
or the long-term debt, or material increase in the short-term debt
(other than accounts payable incurred in the ordinary course of
business), of the Company or any of the Subsidiaries from that set
forth in the Offering Memorandum, (ii) no dividend or distribution of
any kind shall have been declared, paid or made by the Company or any
of the Subsidiaries on any class of its capital stock, and (iii)
neither the Company nor any of the Subsidiaries shall have incurred any
liabilities or obligations, direct or contingent, that are material,
individually or in the aggregate, to the Company and the Subsidiaries,
taken as a whole, and that are required to be disclosed on a balance
sheet in accordance with generally accepted accounting principles and
are not disclosed on the latest balance sheet included in the Offering
Memorandum (other than accounts payable incurred in the ordinary course
of business). Since the date hereof and since the dates as of which
information is given in the Offering Memorandum, there shall not have
been any Material Adverse Change.
(e) You shall have received certificates, dated the Closing
Date, signed by (i) the President or any Vice President and (ii) a
principal financial or accounting officer of the Company confirming, as
of the Closing Date, the matters set forth in paragraphs (a), (b), (c)
and (d) of this Section 7.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and your counsel), dated the Closing Date, of
Steel Xxxxxx & Xxxxx LLP, counsel for the Company and the Subsidiaries,
to the effect that:
(i) The Company and each of the Subsidiaries has been
duly organized and is validly existing as a corporation in good
standing under the laws of its respective jurisdiction of
incorporation, has all requisite corporate power and authority to own,
lease and operate its properties and to conduct its business as it is
currently being conducted and as described in the Offering Memorandum,
and is duly qualified and in good standing as a foreign corporation
authorized to do business in each jurisdiction in which, to such
counsel's knowledge, the ownership, leasing and operating of its
property and the conduct of its business requires such qualification,
except where the failure to be so qualified would not have a Material
Adverse Effect.
(ii) To such counsel's knowledge, each of the entities
listed on Schedule II hereto is, and upon consummation of the Fine
Fragrances Acquisition on the Closing Date, Fine Fragrances, Inc. will
become, a subsidiary of the Company. To such counsel's knowledge, the
entities listed on Schedule II are, together with Fine
22
Fragrances, Inc. when so acquired on the Closing Date, the only
subsidiaries, direct or indirect, of the Company. The Company owns or
in the case of Fine Fragrances, Inc. will own on the Closing Date upon
consummation of the Fine Fragrances Acquisition, directly or indirectly
through other subsidiaries, 100% of the outstanding capital stock or
other securities evidencing equity ownership of such subsidiaries, to
such counsel's knowledge, and upon the release of the collateral
securing the Existing Credit Facility and the 8.0% Secured Subordinated
Debentures, free and clear of any security interest, claim, lien,
limitation on voting rights or encumbrance; and all of such securities
have been duly authorized, validly issued, are fully paid and
nonassessable and, to such counsel's knowledge, were not issued in
violation of any preemptive or similar rights. To such counsel's
knowledge, other than in connection with the Fine Fragrances
Acquisition, there are no outstanding subscriptions, rights, warrants,
calls, commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, any such shares of capital stock
or other equity interest of such subsidiaries.
(iii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement, the Notes, the Note Indenture and the Registration Rights
Agreement and to consummate the transactions contemplated hereby or
thereby, including, without limitation, the corporate power and
authority to issue, sell and deliver the Notes as provided herein.
(iv) The Company has duly and validly authorized,
executed and delivered this Agreement.
(v) The Company has duly and validly authorized, executed
and delivered the Note Indenture and (assuming the due authorization,
execution and delivery thereof by the Trustee) the Note Indenture is
the legally valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except (i) as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance (including the Uniform Fraudulent
Transfers Act as adopted in Florida) or other laws affecting creditors'
rights and remedies generally, (ii) as to general principles of equity
(including, without limitation, standards of materiality, good faith,
fair dealing and reasonableness), regardless of whether enforcement is
sought in a proceeding at law or in equity, and (iii) to the extent
that a waiver of rights under any usury laws may be unenforceable. The
Note Indenture conforms in all material respects to the description
thereof in the Offering Memorandum.
(vi) The Series A Notes have been duly and validly
authorized for issuance and sale to you by the Company pursuant to this
Agreement and, when issued and authenticated in accordance with the
terms of the Note Indenture and delivered against payment therefor in
accordance with the terms hereof, will be the legally valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the Note
Indenture, except (i) as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance
(including the Uniform Fraudulent Transfers Act as
23
adopted in Florida) or other laws affecting creditors' rights and
remedies generally, (ii) as to general principles of equity (including,
without limitation, standards of materiality, good faith, fair dealing
and reasonableness), regardless of whether enforcement is sought in a
proceeding at law or in equity, and (iii) to the extent that a waiver
of rights under any usury laws may be unenforceable. The Series A
Notes, when issued, authenticated and delivered in accordance with the
terms of the Note Indenture, will conform in all material respects to
the description thereof in the Offering Memorandum.
(vii) The Series B Notes have been duly and validly
authorized for issuance by the Company and, when issued, authenticated
and delivered in accordance with the terms of the Note Indenture, the
Registration Rights Agreement and the Exchange Offer, will be the
legally valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Note Indenture, except (i) as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance (including the Uniform Fraudulent Transfers Act
as adopted in Florida) or other laws affecting creditors' rights and
remedies generally, (ii) as to general principles of equity (including,
without limitation, standards of materiality, good faith, fair dealing
and reasonableness), regardless of whether enforcement is sought in a
proceeding at law or in equity, and (iii) to the extent that a waiver
of rights under any usury laws may be unenforceable.
(viii) The Registration Rights Agreement has been duly
and validly authorized by the Company and, when duly executed and
delivered by the Company, will be the legally valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except (i) as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance (including the Uniform Fraudulent Transfers Act
as adopted in Florida) or other laws affecting creditors' rights and
remedies generally, (ii) as to general principles of equity (including,
without limitation, standards of materiality, good faith, fair dealing
and reasonableness), regardless of whether enforcement is sought in a
proceeding at law or in equity, (iii) except as any rights to indemnity
and contribution thereunder may be limited by federal and state
securities laws and public policy considerations, and (iv) except as
enforcement of any provisions requiring the payment of liquidated
damages may be limited by applicable law or public policy. The
Registration Rights Agreement, when executed and delivered, will
conform in all material respects to the description thereof in the
Offering Memorandum.
(ix) When the Series A Notes are issued and delivered
pursuant to this Agreement, none of the Series A Notes will be of the
same class (within the meaning of Rule 144A under the Act) as
securities of the Company or any Subsidiary that are listed on a
national securities exchange registered under Section 6 of the Exchange
Act or that are quoted in a United States automated inter-dealer
quotation system.
24
(x) No registration under the Act of any of the Series A
Notes is required for the sale of the Series A Notes to you as
contemplated hereby or for the Exempt Resales assuming (i) that each of
the Eligible Purchasers is a QIB or an Accredited Investor or a
non-U.S. person you reasonably believe is outside the United States and
to whom offers and sales of the Series A Notes may be made in reliance
upon Regulation S, (ii) the accuracy of the Purchasers' representations
contained herein and (iii) the accuracy of the representations made by
each Accredited Investor as set forth in the letter of representation
executed by such Accredited Investor in the form of Annex A to the
Offering Memorandum.
(xi) To such counsel's knowledge, neither the Company nor
any of the Subsidiaries (a) is in violation of its respective charter
or bylaws, (b) is in default in the performance of any obligation,
agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any other loan agreement,
indenture, mortgage or deed of trust or any other agreement that is
material to the Company and known to such counsel to which it is a
party or by which it is bound or to which any of its properties is
subject or (c) is in violation of any law, statute, rule, regulation,
judgment or court decree applicable to the Company or the Subsidiaries,
in the case of clause (b) or (c), other than such violation or default
that has not had and will not have a Material Adverse Effect; provided
however that no opinion need be expressed with respect to the Company's
purchase of fragrance products from Diverted Sources. To such counsel's
knowledge, there exists no condition that, with notice, the passage of
time or otherwise, would constitute such default under any such
document or instrument; provided however that no opinion need be
expressed with respect to the Company's purchase of fragrance products
from Diverted Sources.
(xii) The execution, delivery and performance by the
Company of this Agreement and the other Operative Documents, the
issuance and sale of the Notes, and the consummation of the
transactions contemplated hereby and thereby will not violate, conflict
with or constitute a breach of any of the terms or provisions of, or a
default under (or an event that with notice or the lapse of time, or
both, would constitute a default), or require consent under, or result
in the imposition of a lien or encumbrance on any properties of the
Company or any of the Subsidiaries, or an acceleration of indebtedness
pursuant to, (i) the charter or bylaws of the Company or any of the
Subsidiaries, (ii) any bond, debenture, note or any other evidence of
indebtedness or any other loan agreement, indenture, mortgage or deed
of trust or any other agreement that is material to the Company and
known to such counsel to which the Company or any of the Subsidiaries
is a party or by which any of them or their property is or may be
bound, (iii) any statute, rule or regulation applicable to the Company,
any of the Subsidiaries or their assets or properties; provided however
that no opinion need be expressed with respect to applicable state or
foreign securities or Blue Sky laws, or (iv) any judgment, order or
decree known to such counsel of any court or governmental agency or
authority having jurisdiction over the Company, any of the Subsidiaries
or their assets or properties. Subject to the assumptions set forth in
clauses (i) through (iii) of Section 7(f)(x), no consent, approval,
authorization or order of, or filing, registration,
25
qualification, license or permit of or with, any court or governmental
agency, body or administrative agency is required for the execution,
delivery and performance of this Agreement and the other Operative
Documents and the consummation of the transactions contemplated hereby
and thereby, except such as have been obtained and made (or, in the
case of the Registration Rights Agreement and the transactions
contemplated thereby and by the Note Indenture, will be obtained and
made under the Act the Trust Indenture Act) or such as may be required
by NASD or under state securities or Blue Sky laws and regulations or
under the securities laws of non-U.S. jurisdictions. No consents or
waivers from any other person are required under any bond, debenture,
note or any other evidence of indebtedness or any other loan agreement,
indenture, mortgage or deed of trust or any other agreement that is
material to the Company and known to such counsel for the execution,
delivery and performance of this Agreement and the other Operative
Documents and the consummation of the transactions contemplated hereby
and thereby, other than such consents and waivers as have been obtained
(or, in the case of the Registration Rights Agreement and the
transactions contemplated thereby and by the Note Indenture, are
required to be obtained).
(xiii) To the knowledge of such counsel, no action has
been taken and no statute, rule or regulation or order has been
enacted, adopted or issued by any governmental agency that prevents the
issuance of the Notes; to the knowledge of such counsel, no injunction,
restraining order or order of any nature by a federal or state court of
competent jurisdiction has been issued that prevents the issuance of
the Notes or suspends the sale of the Notes in any jurisdiction
referred to in Section 4(e) hereof; and, to the knowledge of such
counsel, no action, suit or proceeding is pending or threatened against
or affecting, the Company or any of the Subsidiaries before any court
or arbitrator or any governmental body, agency or official which, if
adversely determined, would prohibit, interfere with or adversely
affect the issuance or marketability of the Notes or in any manner draw
into question the validity of any Operative Document; and every request
of any securities authority or agency of any jurisdiction for
additional information has been complied with in all material respects
(provided however that no opinion need be expressed as to requests from
state or foreign securities authorities or agencies).
(xiv) To the knowledge of such counsel, the Company and
each of the Subsidiaries has (i) good and marketable title to all of
the properties and assets described in the Offering Memorandum as owned
by it, free and clear of all liens, charges, encumbrances and
restrictions, except such as exist on the date hereof and are described
in the Offering Memorandum or will arise upon consummation of the
transactions described therein or as would not have a Material Adverse
Effect, (ii) peaceful and undistributed possession under all leases to
which it is party as lessee, (iii) all Authorizations necessary to
engage in the business currently conducted by it in the manner
described in the Offering Memorandum, except where failure to hold such
Authorizations would not have a Material Adverse Effect and (iv) no
reason to believe that any governmental body or agency is considering
limiting, suspending or revoking any such Authorization. To such
counsel's knowledge, all such Authorizations (as qualified in clause
(iii) above) are valid and in full force and effect and the Company and
26
the Subsidiaries are in compliance in all material respects with the
terms and conditions of all such Authorizations (as qualified in clause
(iii) above) and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto. To the knowledge
of such counsel, the lease of the National Trading Facility is valid
and binding and no material default by the Company has occurred and is
continuing thereunder, and no material defaults by the landlord are
existing under such lease.
(xv) To the knowledge of such counsel, neither the
Company nor any of the Subsidiaries has violated any Environmental
Laws, lacks any permits, licenses or other approvals required of them
under applicable Environmental Laws or is violating any terms and
conditions of any such permit, license or approval, nor, to the
knowledge of such counsel, has the Company or any of the Subsidiaries
violated any federal, state, local or foreign law relating to
discrimination in the hiring, promotion or pay of employees nor, to the
knowledge of such counsel, any applicable wage or hourly laws, nor any
provisions of ERISA or the rules and regulations promulgated thereunder
or analogous foreign laws and regulations, nor, to the knowledge of
such counsel, has the Company or any of the Subsidiaries engaged in any
unfair labor practice, which in each case would result in a Material
Adverse Effect.
(xvi) Neither the Company nor any of the Subsidiaries is
(i) an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940 or
analogous foreign laws and regulations, or (ii) a "holding company" or
a "subsidiary company" or an "affiliate" of a holding company within
the meaning of the Public Utility Holding Company Act of 1935, as
amended, or analogous foreign laws and regulations.
(xvii) To the knowledge of such counsel, there are no
holders of securities of the Company or any of the Subsidiaries who, by
reason of the execution by the Company of this Agreement or any other
Operative Document, or the consummation of the transactions
contemplated hereby and thereby, have the right to request or demand
that the Company or any Subsidiary register under the Act or analogous
foreign laws and regulations securities held by them.
(xviii) Prior to the effectiveness of the Exchange Offer
Registration Statement or the effectiveness of the Shelf Registration
Statement, the Note Indenture is not required to be qualified under the
Trust Indenture Act of 1939.
(xix) The authorized and, at January 31, 1997, issued and
outstanding capital stock of the Company and each of the Subsidiaries
has been duly and validly authorized and issued, is fully paid and
nonassessable and was not issued in violation of or subject to
statutory preemptive rights. The Company had at January 31, 1997, an
authorized and, to the knowledge of such counsel, outstanding
capitalization as set forth in the Offering Memorandum.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public
27
accountants for the Company, your representatives and your counsel in connection
with the preparation of the Preliminary Offering Memorandum and the Offering
Memorandum and has considered the matters required to be stated therein and the
statements contained therein and, although such counsel has not independently
verified the accuracy, completeness or fairness of such statements (except as
indicated above), such counsel advises you that, on the basis of the foregoing,
no facts came to its attention that caused it to believe that the Preliminary
Offering Memorandum or the Offering Memorandum (as amended or supplemented, if
applicable), at the time such Preliminary Offering Memorandum or Offering
Memorandum was circulated or that the Offering Memorandum, at the Closing Date,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Without limiting the foregoing, such counsel may further
state that they assume no responsibility for, and have not independently
verified, the accuracy, completeness or fairness of the financial statements,
notes and schedules and other financial data included in the Preliminary
Offering Memorandum or the Offering Memorandum.
The opinions of such counsel described in this paragraph shall be
rendered to you at the request of the Company and shall so state therein.
(g) You shall have received an opinion, dated the Closing
Date, of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, your counsel, in
form and substance reasonably satisfactory to you, covering such
matters as are customarily covered in such opinions.
(h) At the time this Agreement is executed and delivered by
the Company and on the Closing Date, you shall have received letters,
substantially in the form previously approved by you, from Deloitte &
Touche LLP, independent public accountants, with respect to the
financial statements and certain financial information contained in
Offering Memorandum.
(i) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx shall have been
furnished with such documents, in addition to those set forth above, as
they may reasonably require for the purpose of enabling them to review
or pass upon the matters referred to in this Section 7 and in order to
evidence the accuracy, completeness or satisfaction in all material
respects of any of the representations, warranties or conditions herein
contained.
(j) Prior to the Closing Date, the Company shall have
furnished to you such further information, certificates and documents
as you may reasonably request.
(k) The Company and the Trustee shall have entered into the
Note Indenture and you shall have received counterparts, conformed as
executed, thereof.
(l) The Company shall have entered into the Registration
Rights Agreement and you shall have received counterparts, conformed as
executed, thereof.
(m) Prior to, or simultaneously with, the sale to you of the
Series A Notes, the Company shall have (i) terminated the Existing
Credit Facility and (ii) entered
28
into a new credit facility with Fleet National Bank providing for
revolving loans up to $40.0 million and you shall have received
counterparts, conformed as executed, thereof, which shall conform in
all material respects to the description thereof in the Offering
Memorandum.
(n) Prior to, or simultaneously with, the sale to you of the
Series A Notes, the Company shall have acquired the remaining 50.01% of
the common stock of Fine Fragrances, Inc. that the Company did not
already own.
(o) Prior to, or simultaneously with, the sale to you of the
Series A Notes, all security interests in the capital stock of the
Subsidiaries shall have been released.
All opinions, certificates, letters and other documents
required by this Section 7 to be delivered by the Company will be in compliance
with the provisions hereof only if they are reasonably satisfactory in form and
substance to you. The Company will furnish the Purchasers with such conformed
copies of such opinions, certificates, letters and other documents as they shall
reasonably request.
8. Defaults. If, on the Closing Date, either of the Purchasers shall
fail or refuse to purchase Series A Notes that it has agreed to purchase
hereunder on such date, and the aggregate principal amount of such Series A
Notes that such defaulting Purchaser agreed but failed or refused to purchase
does not exceed 10% of the total principal amount of such Series A Notes that
both of the Purchasers are obligated to purchase on such Closing Date, the
non-defaulting Purchaser shall be obligated to purchase the amount of such
Series A Notes that such defaulting Purchaser agreed but failed or refused to
purchase. If, on the Closing Date, either of the Purchasers shall fail or refuse
to purchase Series A Notes in an aggregate principal amount that exceeds 10% of
such total principal amount and arrangements satisfactory to the other Purchaser
and the Company for the purchase of such Series A Notes are not made within 48
hours after such default, this Agreement shall terminate without liability on
the part of the non-defaulting Purchaser or the Company, except as otherwise
provided in Section 9. In any such case that does not result in termination of
this Agreement, the Purchasers or the Company may postpone the Closing Date for
not longer than seven (7) days, in order that the required changes, if any, in
the Offering Memorandum or any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve a defaulting Purchaser
from liability in respect of any default by any such Purchaser under this
Agreement.
9. Effective Date Of Agreement And Termination. This Agreement shall
become effective upon the execution hereof.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by notice to the Company if any of the following has occurred: (i)
subsequent to the date information is provided in the Offering Memorandum, any
Material Adverse Change which, in your judgment, materially impairs the
investment quality of any of the Series A Notes, (ii) any outbreak or escalation
of hostilities or other national or international calamity or crisis or material
adverse change in the financial markets of the United States or elsewhere, or
any other
29
substantial national or international calamity or emergency if the effect of
such outbreak, escalation, calamity, crisis, material adverse change or
emergency would, in your judgment, make it impracticable or inadvisable to
market any of the Series A Notes or to enforce contracts for the sale of any of
the Series A Notes, (iii) any suspension or limitation of trading generally in
securities on the New York Stock Exchange or in the over-the-counter markets or
any setting of minimum prices for trading on such exchange or markets, (iv) any
declaration of a general banking moratorium by either federal or New York
authorities, (v) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs that in your
judgment has a material adverse effect on the financial markets in the United
States, and would, in your judgment, make it impracticable or inadvisable to
market any of the Series A Notes or to enforce contracts for the sale of any of
the Series A Notes, (vi) the enactment, publication, decree, or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which, in your judgment, would have a
Material Adverse Effect, or (vii) any securities of the Company shall have been
downgraded or placed on any "watch list" for possible downgrading by any
nationally recognized statistical rating organization.
The indemnities and contribution provisions and the other agreements,
representations and warranties of the Company and of the Purchasers set forth in
or made pursuant to this Agreement shall remain operative and in full force and
effect, and will survive delivery of and payment for the Series A Notes,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of either of the Purchasers or by or on behalf of the
Company, the officers or directors of the Company or any controlling person of
the Company, (ii) acceptance of the Series A Notes and payment for them
hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Purchasers pursuant to
clauses (i) or (vii) of the second paragraph of this Section 9 or because of the
failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company agrees to reimburse
you for all out-of-pocket expenses (including the fees and disbursements of
counsel) incurred by you. Notwithstanding any termination of this Agreement, the
Company shall be liable for all expenses which it has agreed to pay pursuant to
Section 4(f) hereof.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Purchasers,
any Indemnified Person referred to herein and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
terms "successors and assigns" shall not include a purchaser of any of the
Series A Notes from any of the Purchasers merely because of such purchase.
10. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telecopier or air courier
guaranteeing overnight delivery and shall be addressed as follows: (a) if to the
Company, French Fragrances, Inc., 00000 X.X. 00xx Xxxxxx, Xxxxx
00
Xxxxx, Xxxxxxx 00000, Attention: Xxxxx X. Marina, Esq., with a copy to Steel
Xxxxxx & Xxxxx LLP, 000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx
00000, Attention: Xxxxxxx Xxxxxxx Xxxxxx, Esq., and (b) if to the Purchasers,
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Block, with a copy to Fried, Frank,
Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx X. Xxxxxxxx, Esq., or in any case to such other address as
the person to be notified may have requested in writing.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged, if telecopied; and on the next business day, if timely
delivered to an air courier guaranteeing overnight delivery.
This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York. This Agreement may be signed in various
counterparts which together shall constitute one and the same instrument.
31
Please confirm that the foregoing correctly sets forth the Agreement
among the Company and the Purchasers.
Very truly yours,
FRENCH FRAGRANCES, INC.
By: /s/ E. XXXXX XXXXXXX
-----------------------------
Name: E. Xxxxx Xxxxxxx
Title: President & COO
Accepted and agreed to as of
the date first above written:
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By: /s/ XXXXXXX X.X. XXXXXX
---------------------------------
Name: Xxxxxxx X.X. Xxxxxx
Title: Vice President
TD SECURITIES (USA) INC.
By: /s/ XXXXXX X. XXXXX XX.
---------------------------------
Name: Xxxxxx X. Xxxxx Xx.
Title: Managing Director
32
SCHEDULE I
Principal Amount
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation .................................. $ 97,750,000
TD Securities (USA) Inc. .................................. 17,250,000
Total .................................. $115,000,000
============
33
SCHEDULE II
List Subsidiaries of Company
G.B. Parfums, Inc.
Halston Parfums, Inc.
FRM Services, Inc.
34
