GLENOIT CORPORATION
11% Senior Subordinated Notes Due 2007
PURCHASE AGREEMENT
New York, New York
March 26, 1997
To: SALOMON BROTHERS INC
CIBC WOOD GUNDY SECURITIES CORP.
In care of:
Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Glenoit Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell to you (the "Purchasers") $100,000,000 principal amount of its
11% Senior Subordinated Notes Due 2007 (the "Notes") to be unconditionally
guaranteed on a senior subordinated basis (the "Guarantees" and, together with
the Notes, the "Securities") by certain of the Company's subsidiaries
signatories hereto (collectively, the "Guarantors"). The Securities are to be
issued under an indenture (the "Indenture") to be dated as of April 1, 1997,
among the Company, the Guarantors and United States Trust Company of New York,
as trustee (the "Trustee").
The sale of the Securities to you will be made without registration of
the Securities under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon exemptions from the registration requirements of the
Securities Act. You have advised the Company that you will make an offering of
the Securities purchased by you hereunder in accordance with Section 4 hereof as
soon as you deem advisable after the execution and delivery of this Agreement.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated March 13, 1997 (the
"Preliminary Memorandum"), and a final offering memorandum, dated March 26, 1997
(the "Final Memorandum"). Each of the Preliminary Memorandum and the
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Final Memorandum sets forth certain information concerning the Company, the
Guarantors and the Securities. The Company and the Guarantors, jointly and
severally, hereby confirm that they have authorized the use of the Preliminary
Memorandum and the Final Memorandum, and any amendment or supplement thereto, in
connection with the offer and sale of the Securities by the Purchasers. Unless
stated to the contrary, all references herein to the Final Memorandum are to the
Final Memorandum at the Execution Time (as defined below) and are not meant to
include any amendment or supplement thereto subsequent to the Execution Time.
The holders of the Securities will be entitled to the benefits of the
Registration Agreement dated the date hereof, among the Company, the Guarantors
and the Purchasers (the "Registration Agreement").
Capitalized terms used herein without definition have the respective
meanings assigned to them in the Final Memorandum.
1. Representations and Warranties. The Company and the Guarantors
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jointly and severally represent and warrant to, and agree with, the Purchasers
as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not contain any untrue
statement of a material fact or omit to state any material fact (other than
pricing terms and other financial terms intentionally left blank) necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. The Final Memorandum, at the date hereof, does not,
and at the Closing Date will not (and any amendment or supplement thereto, at
the date thereof and at the Closing Date, will not), contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that no representation or warranty
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is made as to the information contained in or omitted from the Preliminary
Memorandum or the Final Memorandum, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of the Purchasers specifically for inclusion therein,
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it being understood that the only such information is that described in Section
8(b) hereof.
(b) Each of the Company and the Guarantors has been duly incorporated
and is an existing corporation in good standing under the laws of the State
of Delaware, with the power and authority to own its properties and conduct
its business as described in the Final Memorandum; and each of the Company
and the Guarantors is duly qualified to do business as a foreign
corporation and is in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
qualification, except to the extent that the failure to so qualify or be in
good standing would not have a material adverse effect on the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole.
(c) None of the Company, the Guarantors, any of their respective
Affiliates (as defined in Rule 501(b) of Regulation D under the Securities
Act ("Regulation D")), nor any person acting on its or their behalf has
directly, or indirectly, (i) made offers or sales of any security, or
solicited offers to buy any security, under circumstances that would
require the registration of the Securities under the Securities Act or (ii)
engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with the offering of the
Securities.
(d) None of the Company, the Guarantors, any of their respective
Affiliates, nor any person acting on its or their behalf has engaged in any
directed selling efforts (as that term is defined in Regulation S under the
Securities Act ("Regulation S")) with respect to the Securities, and each
of them has complied with the offering restrictions requirement of
Regulation S.
(e) Neither the Company nor any Guarantor has taken, directly or
indirectly, any action prohibited by Regulation M under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), in connection with
any offering of the Securities.
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(f) The Securities satisfy the eligibility requirements set forth in
Rule 144A(d)(3) under the Securities Act.
(g) Each of the Company and the Guarantors has full corporate power
and authority to enter into this Agreement, the Registration Agreement, the
Indenture, the Securities and the New Credit Facility (as defined in
Section 6(i) hereof) and to perform the transactions contemplated hereby
and thereby (the "Transactions"). This Agreement has been duly authorized,
executed and delivered by the Company and each Guarantor and constitutes a
valid and binding obligation of the Company and each Guarantor, and the
execution and delivery of the Registration Agreement, the Indenture, the
Securities and the New Credit Facility have been duly authorized by the
Company and each Guarantor party thereto and, when duly executed and
delivered by the parties thereto, will constitute valid and binding
obligations of the Company and each such Guarantor, enforceable against the
Company and each such Guarantor in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity).
(h) Upon execution and delivery of the Indenture, and when the Notes
are issued, authenticated and delivered in accordance with the Indenture
and paid for in accordance with the terms of this Agreement, (i) the Notes
will constitute valid and binding obligations of the Company enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture and (ii) the Guarantees will constitute valid and
binding obligations of the Guarantors enforceable against the Guarantors in
accordance with their terms, in each case subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law
or in equity).
(i) The execution, delivery and performance of this Agreement, the
Registration Agreement, the
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Indenture, the Securities and the New Credit Facility by the Company and
each Guarantor party thereto and the consummation of the Transactions will
not result in a breach or violation of any of the terms and provisions of,
or constitute a default under (i) the articles of incorporation, by-laws or
other organizational documents of the Company or any of the Subsidiaries,
(ii) any statute, rule or regulation applicable to the Company or any
Subsidiary or any order of any governmental agency or body or any court
having jurisdiction over the Company or any Subsidiary or any of their
respective properties, (iii) any agreement or instrument relating to
borrowed money to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary is bound or to which any of their
respective properties is subject, or (iv) any other material agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which the Company or any of the Subsidiaries is bound or to which any of
their respective properties is subject. No consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body which has not already been obtained is
required for the execution and delivery of this Agreement, the Registration
Agreement, the Indenture, the Securities, the New Credit Facility or the
consummation of the Transactions, except such as may be required under the
Securities Act with respect to the Registration Agreement, and such as may
be required by state securities or blue sky laws in connection with the
offering and sale of the Securities. The term "Subsidiary" means each
person of which a majority of the voting equity securities of other
interests is owned, directly or indirectly, by the Company.
(j) The consolidated financial statements with respect to the Company
included in the Final Memorandum present fairly the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
shown and their results of operations and cash flows for the periods shown,
and such consolidated financial statements have been prepared in conformity
with the generally accepted accounting principles in the United States
applied on a consistent basis.
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(k) Since the date of the latest audited consolidated financial
statements of the Company included in the Final Memorandum, there has been
no material adverse change, nor to the Company's and the Guarantors'
knowledge, after due inquiry, any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole, and since the date of the latest audited
consolidated financial statements of the Company included in the Final
Memorandum, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(l) Except as disclosed in the Final Memorandum, (i) there are no
legal or governmental actions, suits or proceedings pending or, to the best
of the Company's and the Guarantors' knowledge, threatened against or
affecting Holdings, the Company, any of the Subsidiaries or any of their
respective properties that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to have a material adverse
effect on the condition (financial or otherwise), properties, business,
results of operations or prospects of the Company and its Subsidiaries,
taken as a whole, or materially and adversely affect the ability of the
Company or any Guarantor to perform its obligations under this Agreement,
the Indenture, the Registration Agreement, the Securities or the New Credit
Facility (a "Material Adverse Effect"), and (ii) no labor disturbance by
the employees of the Company or any of its Subsidiaries exists or, to the
best of the Company's and the Guarantors' knowledge, is imminent, in either
case which could reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body.
(m) Except as disclosed in the Final Memorandum, the Company and its
Subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them and necessary to conduct the
business now operated by them, in each case
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free from liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be made
thereof by them or that could reasonably be expected to have a Material
Adverse Effect; and except as disclosed in the Final Memorandum, the
Company and its Subsidiaries hold any leased real or personal property
necessary to the conduct of the business now operated by them under valid
and enforceable leases with no exceptions that would materially interfere
with the use made or to be made thereof by them or that could reasonably be
expected to have a Material Adverse Effect.
(n) Except as disclosed in the Final Memorandum, the Company and its
Subsidiaries have sufficient trademarks, trade names, patent rights,
copyrights, licenses, approvals and governmental authorizations to conduct
their businesses as now conducted; the expiration of any trademarks, trade
names, patent rights, copyrights, licenses, approvals or governmental
authorizations would not have a Material Adverse Effect; the Company's and
its Subsidiaries' controlling persons, key employees and stockholders have
all necessary material permits, licenses and other authorizations required
by applicable law for the Company and its Subsidiaries to conduct their
businesses as now conducted.
(o) Except as disclosed in the Final Memorandum, neither the Company
nor any of its Subsidiaries is (i) in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration
of the environment or human exposure to hazardous or toxic substances
(collectively, "Environmental Laws"), (ii) owns or operates any real
property contaminated with any substance that is subject to any
Environmental Laws, (iii) is liable for any off-site disposal or
contamination pursuant to any Environmental Laws, or (iv) is subject to any
claim relating to any Environmental Laws, which violation, contamination,
liability or claim referred to in clauses (i), (ii), (iii) or (iv) could
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; and the Company is not aware of any
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pending investigation which might lead to such a claim except for any such
claim that could not reasonably be expected to have a Material Adverse
Effect.
(p) The information provided by the Company pursuant to Section 5(g)
hereof will not, at the date thereof, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(q) It is not necessary in connection with the offer, sale and
delivery of the Securities in the manner contemplated by this Agreement and
the Final Memorandum to register the Securities under the Securities Act or
to qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
(r) Neither the Company nor any Guarantor is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), without taking account of any exemption arising
out of the number of holders of the Company's or such Guarantor's
securities.
(s) Except as contemplated by this Agreement, neither the Company nor
any Guarantor has paid or agreed to pay to any person any compensation for
soliciting another to purchase any securities of the Company or such
Guarantor.
2. Purchase and Sale. Subject to the terms and conditions and in
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reliance upon the representations and warranties herein set forth, the Company
agrees to sell to the Purchasers, and the Purchasers agree to purchase from the
Company severally and not jointly, at a purchase price of 96.809% of the
principal amount thereof, plus accrued interest, if any, from April 1, 1997, to
the Closing Date, the principal amount of the Securities set forth opposite each
Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
---------------------
shall be made at 10:00 AM, New York City time, on April 1, 1997, or such later
date as the Purchasers may agree or as provided in Section 9 hereof (such date
and
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time of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to the Purchasers against
payment by the Purchasers of the purchase price thereof to or upon the order of
the Company by wire transfer in Federal (same day) funds to a U.S. dollar
account in New York previously designated by the Company or such other manner of
payment as may be designated by the Company and agreed to by the Purchasers not
less than two business days prior to the Closing Date. Delivery of the
Securities shall be made at the offices of Cravath, Swaine & Xxxxx ("Counsel for
the Purchasers"), Xxxxxxxxx Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
Certificates for the Securities shall be registered in such names and in such
denominations as the Purchasers may request not less than three full business
days in advance of the Closing Date.
The Company agrees to have the certificates for the Securities
available for inspection, checking and packaging by the Purchasers in New York,
New York, not later than 1:00 PM on the business day prior to the Closing Date.
4. Offering of Securities. Each Purchaser (i) acknowledges that the
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Securities have not been registered under the Securities Act and may not be
offered or sold except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act or pursuant to
an effective registration statement under the Securities Act and (ii) severally
and not jointly, represents and warrants to and agrees, with the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act) and
that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is aware
that such sale is being made in reliance on Rule 144A or (ii) to other
institutional "accredited investors" (as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D) who provide to it and to the Company a letter
in the form of Exhibit A hereto or (iii) in accordance with the
restrictions set forth in Exhibit B hereto.
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(b) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities in the United States by means of any
form of general solicitation or general advertising (within the meaning of
Regulation D) in the United States, except pursuant to a registered public
offering as provided in the Registration Agreement.
5. Agreements. The Company and the Guarantors jointly and severally
-----------
agree with the Purchasers that:
(a) The Company and the Guarantors will furnish to the Purchasers,
without charge, as many copies of the Final Memorandum and any supplements
and amendments thereof or thereto as the Purchasers may reasonably request.
The Company and the Guarantors will pay the expenses of printing or other
production of all documents relating to the offering.
(b) The Company will not amend or supplement the Final Memorandum
without the prior consent of the Purchasers. If at any time prior to the
completion of the sale of the Securities by the Purchasers, any event
occurs as a result of which the Final Memorandum as then amended or
supplemented would include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein in the
light of the circumstances under which they were made not misleading, or if
it shall be necessary to amend or supplement the Final Memorandum to comply
with applicable law, the Company and the Guarantors will promptly notify
the Purchasers of the same and will prepare and provide to the Purchasers
pursuant to Section 5(a) an amendment or supplement which will correct such
statement or omission or effect such compliance. Neither the Purchasers'
consent to, nor the Purchasers' delivery to offerees or investors of, any
such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6 of this Agreement.
(c) The Company will arrange for the qualification of the
Securities for sale by the Purchasers under the laws of such jurisdictions
as the Purchasers may designate and will maintain such qualifications in
effect so long as required for the sale of the Securities; provided,
--------
however, neither the Company nor
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any Guarantor shall be required to do business in any jurisdiction where it
is not now so qualified or to take any action which would subject it to
general or unlimited service of process in any jurisdiction where it is not
now so subject. Each of the Company and the Guarantors will promptly
advise the Purchasers of the receipt by it of any notification with respect
to the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(d) During the period from the Closing Date until two years after the
Closing Date, none of the Company, the Guarantors, any of their respective
Affiliates, nor any person acting on its or their behalf, will resell any
Securities that have been acquired by any of them, except for any such
Securities resold in a transaction registered under the Securities Act.
(e) None of the Company, the Guarantors nor any of their Affiliates,
nor any person acting on its or their behalf, will, directly or indirectly,
make offers or sales of any security, or solicit offers to buy any
security, under circumstances that would require the registration of the
Securities under the Securities Act.
(f) None of the Company, the Guarantors nor any of their Affiliates,
nor any person acting on its or their behalf, will engage in any form of
general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities in the
United States, except pursuant to a registered public offering as provided
in the Registration Agreement.
(g) The Company shall, during any period in the two years after the
Closing Date in which the Company is not subject to Section 13 or 15(d) of
the Exchange Act, provide to each holder of such restricted securities and
to each prospective purchaser (as designated by such holder) of such
restricted securities, upon the request of such holder or prospective
purchaser, any information required to be provided by Rule 144A(d)(4) under
the Securities Act. This covenant is intended to be for the benefit of the
holders, and the prospective purchasers designated by
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such holders, from time to time of such restricted securities.
(h) None of the Company, the Guarantors nor any of their Affiliates,
nor any person acting on its or their behalf will engage in any directed
selling efforts with respect to the Securities except pursuant to a
registered public offering as provided in the Registration Agreement, and
each of them will comply with the offering restrictions requirement of
Regulation S. Terms used in this paragraph have the meanings given to
them by Regulation S.
(i) None of the Company, the Guarantors, any of their respective
Affiliates, nor any person acting on its or their behalf, will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) the offering of which security
will be integrated with the sale of the Securities in a manner which would
require the registration of the Securities under the Securities Act (except
as provided in the Registration Agreement).
(j) The Company shall include information substantially in the form
set forth in Exhibit C in each Final Memorandum.
(k) The Company and the Guarantors shall use their best efforts in
cooperation with the Purchasers to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(l) The Company will not, until 180 days following the Closing Date,
without the prior written consent of Salomon Brothers Inc, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, or file a registration statement for, any debt
securities issued or guaranteed by the Company or any Guarantor (other than
(i) the Securities, (ii) pursuant to a registered public offering as
provided in the Registration Agreement or (iii) the negotiation,
syndication or arrangement of the New Credit Facility (as defined in the
Final Memorandum). Neither the Company nor any Guarantor will at any time
offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer,
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sale, contract or disposition would cause the exemption afforded by Section
4(2) of the Securities Act or the safe harbor of Regulation S thereunder to
cease to be applicable to the offer and sale of the Securities as
contemplated by this Agreement and the Final Memorandum.
(m) The Company will apply the net proceeds of the Offering and the
sale of the Securities in the manner set forth in the Final Memorandum
under the caption "Use of Proceeds."
(n) Neither the Company nor any Guarantor will take, directly or
indirectly, any action prohibited by Regulation M under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), in connection with
any offering of the Securities.
(o) The Company and the Guarantors hereby agree to permit the
Securities to be designated PORTAL eligible securities, will pay the
requisite fees related thereto and have been advised by the National
Association of Securities Dealers, Inc. PORTAL Market that the Securities
have or will be designated PORTAL eligible securities in accordance with
the rules and regulations of the National Association of Securities
Dealers, Inc.
6. Conditions to the Obligations of the Purchasers. The obligations
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of the Purchasers to purchase the Securities shall be subject to the accuracy of
the representations and warranties on the part of the Company contained herein
at the date and time that this Agreement is executed and delivered by the
parties hereto (the "Execution Time") and the Closing Date, to the accuracy of
the statements of the Company and the Guarantors made in any
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certificates pursuant to the provisions hereof, to the performance by the
Company and the Guarantors of their respective obligations hereunder and to the
following additional conditions:
(a) The Company shall have furnished to the Purchasers the opinion of
Xxxxxxxx & Xxxxx, counsel for the Company, dated the Closing Date, to the
effect that:
(i) each of the Company and the Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with full corporate power and
authority to own its properties and conduct its business as described
in the Final Memorandum, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction listed in a schedule to such counsel's opinion (which
schedule shall list all jurisdictions in which the Company has
represented to such counsel that the Company or its Subsidiaries
conduct material business or lease material property);
(ii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and all outstanding shares of capital
stock of the Subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any perfected
security interest and, to the knowledge of such counsel, any other
security interests, claims, liens or encumbrances (other than the
pledges of capital stock of the Subsidiaries pursuant to the New
Credit Facility);
(iii) the Company's authorized equity capitalization is as set
forth in the Final Memorandum; and the Securities conform to the
description thereof contained in the Final Memorandum;
(iv) the summaries in the Final Memorandum of statutes, legal and
governmental proceedings and contracts and other documents under the
headings
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"Certain Relationships and Related Transactions", "Description of
Capital Stock and Indebtedness of Holdings", "Description of New
Credit Facility", "Legal Proceedings" (excluding the first paragraph
under such heading) and "Certain Federal Income Tax Considerations"
accurately describe in all material respects the provisions purported
to be so summarized;
(v) the Indenture conforms as to form in all material respects
with the requirements of the Trust Indenture Act and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder;
(vi) no authorization, approval, consent or order of, or filing
or registration with, any court or governmental body or agency is
required for the execution, delivery and performance of this
Agreement, the Indenture, the Registration Agreement, the Securities
and the New Credit Facility or for the consummation of the Transac
tions, except such as may be required under the Securities Act with
respect to the Registration Agreement and the transactions
contemplated thereunder and such as may be required under state
securities or blue sky laws (as to which such counsel need not express
any opinion) in connection with the offer and sale of the Securities;
(vii) neither the Company nor any Subsidiary nor CVC is, or after
giving effect to the offering and sale of the Securities and the
application of the net proceeds therefrom will be, an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder;
(viii) the Company and each of the Guarantors which is a party
thereto has full corporate right, power and authority to execute and
deliver the Indenture, the Securities, the Registration Agreement, the
New Credit Facility and this Agreement and to perform its respective
obligations hereunder and thereunder; and all corporate action
required to be taken for the due
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and proper authorization, execution and delivery of the Indenture, the
Securities, the Registration Agreement, the New Credit Facility and
this Agreement and the consummation of the Transactions have been duly
and validly taken;
(ix) each of this Agreement, the Indenture, the Registration
Agreement and the New Credit Facility has been duly authorized,
executed and delivered by the Company and each of the Guarantors which
is a party thereto, and each constitutes (with respect to the
Indenture, assuming due authorization, execution and delivery by the
Trustee and with respect to this Agreement and the Registration
Agreement, assuming due authorization, execution and delivery by the
Initial Purchasers) a valid and legally binding agreement, enforceable
in accordance with its terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and
similar laws affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity);
(x) the Securities are in the form contemplated by the Indenture
and have been duly authorized and executed by the Company and each
Guarantor and, upon the due authentication and delivery thereof by the
Trustee pursuant to the Indenture and payment therefor by the Initial
Purchasers in accordance with the terms of this Agreement, will be
duly and validly issued and outstanding and will constitute valid and
legally binding obligations of the Company and the Guarantors entitled
to the benefits of the Indenture and enforceable in accordance with
their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws
affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity);
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(xi) the execution, delivery and performance of this Agreement,
the Registration Agreement, the Indenture, the Securities and the New
Credit Facility by the Company and each Guarantor party thereto and
the consummation of the Transactions will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under (i) the articles of incorporation or by-laws of the
Company or any Guarantor, (ii) any statute, rule or regulation under
Federal law, New York State law or the Delaware General Corporation
Law applicable to the Company or any Guarantor or any judgment, order
or decree known to such counsel of any governmental agency or body or
any court having jurisdiction over the Company or any Subsidiary or
any of their respective properties to which the Company or any
Guarantor is a named party or (iii) any agreement or instrument listed
on a schedule to such counsel's opinion by which the Company or any of
the Subsidiaries is bound or to which any of their respective
properties is subject;
(xii) except as disclosed in the Final Memorandum under the
heading "Legal Proceedings" (other than the first paragraph thereof),
to the best knowledge of such counsel, there is no pending or
threatened legal action or suit or judicial, arbitral or other
administrative proceeding to which the Company or any of the
Subsidiaries is a named party or of which any property or assets of
the Company or any of the Subsidiaries is the subject that,
individually or in the aggregate, (A) questions the validity of this
Agreement, the Registration Agreement, the Indenture, the Securities
or the New Credit Facility or any action taken or to be taken pursuant
hereto or thereto, or (B) if determined adversely to the Company or
any of the Subsidiaries, could reasonably be expected to have a
Material Adverse Effect;
(xiii) it is not necessary in connection with the offer, sale
and delivery of the Securities in the manner contemplated by this
Agreement to register the Securities under the
18
Securities Act or to qualify the Indenture under the Trust Indenture
Act; and
(xiv) in addition, such counsel shall state that such counsel
has participated in conferences with directors, officers and other
representatives of the Company and the Guarantors, representatives of
the independent public accountants for the Company and the Guarantors,
representatives of the Purchasers and Counsel for the Purchasers, at
which conferences the contents of the Final Memorandum and related
matters were discussed and, although such counsel has not undertaken,
except as otherwise indicated in its opinion, to determine
independently, and is not passing upon and assumes no responsibility
for the accuracy, completeness or fairness of the statements contained
in the Final Memorandum (except as expressly provided above), nothing
has come to such counsel's attention which has caused such counsel to
believe that the Final Memorandum (or any supplement thereto) as of
the date of the Final Memorandum (or any such supplement) and as of
the Closing Date, contained or contains an untrue statement of a
material fact or omitted or omits 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 (it being
understood that such counsel need express no view with respect to the
financial statements and notes thereto and financial statement
schedules and other financial, statistical and accounting data
included in the Final Memorandum).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than
the State of New York, the State of Delaware or the United States, to the
extent they deem proper and specified in such opinion, upon the opinion of
other counsel who are satisfactory to Counsel for the Purchasers, copies of
which shall be provided to the Purchasers and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials, copies of which shall be provided to the
Purchasers. Such opinion may be limited to the
19
General Corporation Law of the State of Delaware and the laws of the State
of New York, and the federal laws of the United States.
All references in this Section 6(a) to the Final Memorandum shall
be deemed to include any amendment or supplement thereto at the Closing
Date.
(b) The Purchasers shall have received from Cravath, Swaine & Xxxxx,
Counsel for the Purchasers, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Securities, the Final
Memorandum (as amended or supplemented at the Closing Date) and other
related matters as the Purchasers may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(c) The Company shall have furnished to the Purchasers a certificate
of the Company, signed by the Chairman of the Board or the President and
the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have
carefully examined the Final Memorandum, any amendment or supplement to the
Final Memorandum and this Agreement and that:
(i) the representations and warranties of the Company and the
Guarantors in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as if made
on the Closing Date and the Company and the Guarantors have complied
with all the agreements and satisfied all the conditions on its part
to be performed or satisfied at or prior to the Closing Date; and
(ii) since the date of the most recent xxxxx cial statements
included in the Final Memorandum there has been no adverse change in
the condition (financial or other), earnings, business or properties
of the Company and its Subsidiaries, which is material to the Company
and its Subsidiaries taken as a whole whether or not arising from
transactions in the ordinary course of business, except as set forth
in or
20
contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereof or thereto).
(d) At the Execution Time and at the Closing Date, Coopers & Xxxxxxx
LLP shall have furnished to the Purchasers a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance satisfactory to the Purchasers, stating in effect that:
(i) they are independent certified public accountants with
respect to the Company within the meaning of Rule 101 of the American
Institute of Certified Public Accountants' Code of Professional
Conduct and its interpretations and rulings;
(ii) in their opinion the audited consolidated financial
statements included in the Final Memorandum and reported on by them
comply in form in all material respects with the accounting
requirements of the Exchange Act and the related published rules and
regulations thereunder that would apply to the Final Memorandum if the
Final Memorandum were a prospectus included in a registration
statement on Form S-1 under the Securities Act;
(iii) based upon the procedures detailed in such letter with
respect to the period subsequent to the date of the latest audited
financial statements included in the Final Memorandum, including the
reading of minutes and inquiries of certain officials of the Company
who have responsibility for financial and accounting matters and
certain other limited procedures requested by the Purchasers and
described in detail in such letter, nothing has come to their
attention that causes them to believe that:
(1) the consolidated financial information included under
the headings "Selected Historical Consolidated Financial Data",
"Summary--Summary Consolidated Historical Financial Data" and
"Compensation of Executive Officers" is not in conformity with
the disclosure requirements of Regulation S-K that would apply to
the Final
21
Memorandum if the Final Memorandum were a prospectus included in
a registration statement on Form S-1 under the Securities Act;
(2) at a specified date not more than five days prior to
the date of the letter, there were any changes in the capital
stock of the Company, increases in the long-term debt of the
Company or decreases in the stockholders' equity or net current
assets of the Company as compared with the amounts shown in the
December 31, 1996, audited consolidated balance sheet included in
the Final Memorandum; or
(3) for the period from January 1, 1997, to a date not more
than five days prior to the date of the letter, there were any
decreases, as compared with the corresponding period in the
preceding year, in net sales, income from continuing operations
or net income of the Company and its subsidiaries, except in all
instances for increases or decreases which are set forth in such
letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof unless
said explanation is not deemed necessary by the Purchasers;
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Final Memorandum (in each case to the extent that
such dollar amounts, percentages and other information are derived
from the general accounting records of the Company and its
subsidiaries or are derived from such records by analysis or
computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
information to be in agreement with such results, except as otherwise
specifically set forth in such letter.
22
References to the Final Memorandum in this para graph (d) include any
amendment or supplement thereof or thereto at the date of the letter.
(e) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum, there shall not have
been (i) any change or decrease specified in the letter referred to in
paragraph (d) of this Section 6 or (ii) any change, or any development
involving a prospective change, in or affecting the business or properties
of the Company and its Subsidiaries the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of the
Purchasers, so material and adverse as to make it impractical or
inadvisable to market the Securities as contemplated by the Final
Memorandum.
(f) At the Execution Time, BDO Xxxxxxx shall have furnished to the
Purchasers a letter, dated as of the Execution Time, in form and substance
satisfactory to the Purchasers, stating in effect that:
(i) they were independent certified public accountants with
respect to the Company within the meaning of Rule 101 of the American
Institute of Certified Public Accountants' Code of Professional
Conduct and its interpretations and rulings during the time they
served as the Company's auditors;
(ii) in their opinion the audited consolidated financial
statements included in the Final Memorandum and reported on by them
comply in form in all material respects with the accounting
requirements of the Exchange Act and the related published rules and
regulations thereunder that would apply to the Final Memorandum if the
Final Memorandum were a prospectus included in a registration
statement on Form S-1 under the Securities Act; and
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Final Memorandum (in each case to the
extent that such dollar amounts, percentages and other information are
derived from the general accounting records of the Company and its
23
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specifically set forth in such
letter.
References to the Final Memorandum in this para graph (f) include any
amendment or supplement thereof or thereto at the date of the letter.
(g) Subsequent to the Execution Time, there shall not have been (i)
any decrease in the rating of the Securities or any of the Company's or any
Guarantor's other debt securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Securities Act) or (ii) any notice given of any intended or potential
decrease in any such rating or that such organization has under
surveillance or review (other than any such notice with positive
implications of a possible upgrading) its rating of the Securities or any
of the Company's or any Guarantor's other debt securities.
(h) On or prior to the Closing Date, the Registration Agreement shall
have been executed substantially in the form hereto delivered to you and
shall have been delivered to you and the Trustee.
(i) The credit agreement relating to the New Credit Facility (the
"New Credit Facility") shall have been executed and delivered by the
parties thereto. The terms of the New Credit Facility shall be reasonably
satisfactory to the Purchasers, and the Purchasers shall have received
conformed counterparts of the New Credit Facility and all other documents
and agreements entered into and received in connection with therewith.
There shall exist at and as of the Closing Date (after giving effect to the
Transactions) no condition that would constitute a default (or an event
that with notice or lapse of time, or both, would constitute a default)
under the New Credit Facility.
24
(j) On or prior to the Closing Date, the Company and the Guarantors
shall have furnished to the Purchasers such further information,
certificates and documents as the Purchasers may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Purchasers and Counsel for
the Purchasers, this Agreement and all obligations of the Purchasers hereunder
may be canceled at, or at any time prior to, the Closing Date by the Purchasers.
Notice of such cancellation shall be given to the Company in writing or
telegraph confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cravath, Swaine & Xxxxx, Counsel for the Purchasers,
at Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided
--------------------------
for herein is not consummated because of any termination pursuant to Section 6
or Section 10 hereof or because of any refusal, inability or failure on the part
of the Company or any Guarantor to perform any agreement herein or comply with
any provision hereof, in each case other than by reason of a default by the
Purchasers, the Company and the Guarantors jointly and severally will reimburse
the Purchasers upon demand for all reasonable out-of-pocket expenses (including
reasonable fees and reasonable disbursements of counsel) that shall have been
incurred by it in connection with the proposed purchase and sale of the
Securities.
8. Indemnification and Contribution. (a) The Company and the
---------------------------------
Guarantors jointly and severally agree to indemnify and hold harmless each
Purchaser, each director, officer, employee and agent of any Purchaser and each
other person, if any, who controls any Purchaser within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Securities Act, the Exchange Act or other
Federal or state statutory law or
25
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Memorandum, the Final Memorandum or any information provided by
the Company to any holder or prospective purchaser of Securities pursuant to
Section 5(g) hereof, or in any amendments thereof or supplements thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that neither the Company nor any
-------- -------
Guarantor will be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Memorandum or the Final Memorandum, or in any amendment thereof
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Purchasers
specifically for inclusion therein, it being understood that the only such
information is that described in Section 8(b); and provided further, however,
---------------- -------
that with respect to any untrue statement or omission or alleged untrue
statement or omission made in the Preliminary Memorandum, the indemnity
agreement contained in this Section 8(a) shall not inure to the benefit of any
indemnified party to the extent that the sale to the person asserting any such
losses, claims, damages or liabilities was an initial resale of Securities by
any Purchaser and any such loss, claim, damage or liability of such indemnified
party results from the fact that there was not sent or given to such person, at
or prior to the written confirmation of the sale of such Securities to such
person, a copy of any revised Preliminary Memorandum, the Final Memorandum or
the Final Memorandum as amended or supplemented, if the Company had previously
furnished copies thereof to such Purchaser and the revised Preliminary
Memorandum, the Final Memorandum or the Final Memorandum as amended or
supplemented corrected such untrue statement or omission or alleged untrue
statement or omission. This indemnity agreement will be in
26
addition to any liability which the Company and the Guarantors may otherwise
have.
(b) The Purchasers, severally and not jointly, agree to indemnify and
hold harmless each of the Company and the Guarantors, their respective directors
and officers, and each other person, if any, who controls the Company or any
Guarantor within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, to the same extent as the foregoing indemnity from the
Company and the Guarantors to the Purchasers, but only with reference to written
information relating to the Purchasers furnished to the Company by or on behalf
of the Purchasers specifically for inclusion in the Preliminary Memorandum or
the Final Memorandum, or in any amendment thereof or supplement thereto. This
indemnity agreement will be in addition to any liability which the Purchasers
may otherwise have. The Company and the Guarantors acknowledge that the
statements set forth in the last paragraph of the cover page and under the
heading "Plan of Distribution" in the Preliminary Memorandum and the Final
Memorandum constitute the only information furnished in writing by or on behalf
of the Purchasers for inclusion in the Preliminary Memorandum or the Final
Memorandum, or in any amendment or supplement thereto.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writ ing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses and (ii)
will not, in any event, relieve the indemnifying party from any obligations to
any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint
as counsel one firm of attorneys of the indemnifying party's choice at the
indemnifying party's expense, which counsel, together with one local counsel in
each jurisdiction, shall act on behalf of all the indemnified parties in any
action for which indemnification is sought (in which case the indemnifying
party shall not thereafter be responsible for the fees
27
and expenses of any separate counsel retained by the indemnified party or
parties except as set forth below); provided, however, that such counsel shall
-------- -------
be reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnified party shall bear
the fees, costs and expenses of such separate counsel unless (i) the use of
counsel chosen by the indemnifying party to represent the indemnified party
would, in the reasonable judgment of the indemnified party, present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. No indemnifying party shall be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled with
its written consent or if there be a final judgment for the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment. An indemnifying party will not, without the prior
written consent of the indemnified par ties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any
28
reason, the Company and the Guarantors on the one hand and the Purchasers on the
other hand agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the
Company and the Guarantors or the Purchasers, as applicable, may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Guarantors or the Purchasers, as applicable, from the
offering of the Securities; provided, however, that in no case shall the
-------- -------
Purchasers be responsible for any amount in excess of the purchase discount or
commis sion applicable to the Securities purchased by the Purchas ers
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Guarantors on the one hand and
the Purchasers on the other hand shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Guarantors or the Purchasers, as applicable, in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Company and the Guarantors shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses), and benefits received by the
Purchasers shall be deemed to be equal to the total purchase discounts and
commissions, in each case as set forth on the cover page of the Final
Memorandum. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company, the Guarantors or the Purchasers. The Company, the Guarantors and the
Purchasers agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls the Purchasers within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and each director, officer,
employee and agent of a Purchaser shall have the same rights to contribution as
such Purchaser, and each person who controls the Company or any Guarantor within
the meaning of
29
either the Securities Act or the Exchange Act and each officer and director of
the Company or any Guarantor shall have the same rights to contribution as the
Company and the Guarantors, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. Default by a Purchaser. If any one or more Purchasers shall fail
-----------------------
to purchase and pay for any of the Securities agreed to be purchased by such
Purchaser hereunder and such failure to purchase shall constitute a default in
the performance of its or their obligations under this Agreement, the remaining
Purchasers shall be obligated severally to take up and pay for (in the
respective proportions which the principal amount of Securities set forth
opposite their names in Schedule I hereto bears to the aggregate principal
amount of Securities set forth opposite the names of all the remaining
Purchaser(s)) the Securities which the defaulting Purchaser or Purchasers agreed
but failed to purchase; provided, however, that in the event that the aggregate
-------- -------
principal amount of Securities which the defaulting Purchaser or Purchasers
agreed but failed to purchase shall exceed 10% of the aggregate principal amount
of Securities set forth in Schedule I hereto, the remaining Purchasers shall
have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such non-defaulting Purchasers do not
purchase all the Securities, this Agreement will terminate without liability to
any non-defaulting Purchaser, the Company or any Guarantor. In the event of a
default by any Purchaser as set forth in this Section 9, the Closing Date shall
be postponed for such period, not exceeding seven days, as the Purchasers shall
determine in order that the required changes in the Final Memorandum or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Purchaser of its liability, if any, to
the Company, any Guarantor or any non-defaulting Purchaser for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
------------
the absolute discretion of the Purchasers, by notice given to the Company prior
to delivery of and payment for the Securities, if prior to such time (i) trading
in securities generally on the New York Stock Exchange or the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") shall
have been suspended or limited or minimum prices shall have been
30
established on either of such Exchange or NASDAQ, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the Purchasers, impracticable or inadvisable to proceed
with the offering or delivery of the Securities as contemplated by the Final
Memorandum.
11. Representations and Indemnities to Survive. The respective
-------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Purchaser set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Purchasers or the Company or any of
the officers, directors or controlling persons referred to in Section 8 hereof,
and will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing and
--------
effective only on receipt, and, if sent to the Purchasers, will be mailed,
delivered or sent by fax (000-000-0000) and confirmed to them, in care of
Salomon Brothers Inc, Xxxxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000; or,
if sent to the Company, will be mailed, delivered or sent by fax (000-000-0000)
and confirmed to it at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, attention:
Chief Executive Officer, with a copy mailed, delivered or sent by fax (212-446-
4900) to Xxxx X. Xxxxx, Esq., Xxxxxxxx & Xxxxx, 000 Xxxx 00xx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000.
13. Successors. This Agreement will inure to the benefit of and be
-----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and,
except as expressly set forth in Section 5(g), no other person will have any
right or obligation hereunder.
14. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND
---------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO THE CONFLICT OF LAW PROVISIONS THEREOF).
31
15. Business Day. For purposes of this Agreement, "business day"
-------------
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which banking institutions in The City of New York, New York are authorized or
obligated by law, executive order or regulation to close.
16. Counterparts. This Agreement may be executed in one or more
-------------
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
32
If the foregoing is in accordance with your under standing of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company and the Purchasers.
Very truly yours,
GLENOIT CORPORATION,
by
--------------------------------
Name:
Title:
SUBSIDIARY GUARANTORS:
GLENOIT XXXXX, INC.,
by
--------------------------------
Name:
Title:
GLENOIT ASSETS CORP.,
by
--------------------------------
Name:
Title:
TARBORO PROPERTIES, LTD.,
by
--------------------------------
Name:
Title:
33
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
CIBC WOOD GUNDY SECURITIES CORP.
by SALOMON BROTHERS INC
by
--------------------------------
Name:
Title: Vice President
SCHEDULE I
Principal Amount
of Securities
Purchasers to be Purchased
---------- ----------------
Salomon Brothers Inc . . . . $ 60,000,000
CIBC Wood Gundy Securities
Corp. . . . . . . . . . . . 40,000,000
------------
Total . . . . . . . . $100,000,000
============
EXHIBIT A
Form of Investment Letter
-------------------------
for Institutional Accredited Investors
--------------------------------------
Glenoit Corporation
c/o United States Trust Company of New York, as Trustee
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed purchase of $_____ aggregate
principal amount of 11% Senior Subordinated Notes Due 2007 (the "Notes") of
Glenoit Corporation, a Delaware corporation (the "Company"), we confirm that:
1. We understand that the Notes have not been registered under the
Securities Act of 1933 (the "Securities Act"), and may not be sold except
as permitted in the following sentence. We understand and agree, on our
own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, (x) that such Notes are being offered only in a
transaction not involving any public offering within the meaning of the
Securities Act, (y) that if we decide to resell, pledge or otherwise
transfer such Notes within two years after the later of the date of the
original issuance of the Notes and the last date on which the Company or
any affiliate of the Company was the owner of such Notes (or any
predecessor of such Notes), or if within three months after we cease to be
an affiliate (within the meaning of Rule 144 under the Securities Act) of
the Company, such Notes may be resold, pledged or transferred only (i) to
the Company, (ii) so long as the Notes are eligible for resale pursuant to
Rule 144A under the Securities Act ("Rule 144A"), to a person whom we
reasonably believe is a "qualified institutional buyer" (as defined in Rule
144A) ("QIB") that purchases for its own account or for the account of QIB
to whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A (as indicated by the box checked by the transferor
on the Certificate of Transfer on the reverse of the certificate for the
Notes), (iii) in an offshore transaction in accordance with Regulation S
under the Securities Act (as indicated by the box checked by the transferor
on the Certificate of Transfer on the reverse of the certificate for the
ii
Notes), (iv) to an institution that is an "accredited investor" as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act (as indicated
by the box checked by the transferor on the Certificate of Transfer on the
reverse of the certificate for the Notes) which has certified to the
Company and the Trustee that it is such an accredited investor and is
acquiring the Notes for investment purposes and not for distribution, (v)
pursuant to an exemption from registration under the Securities Act
provided by Rule 144 (if applicable) under the Securities Act, or (vi)
pursuant to an effective registration statement under the Securities Act,
in each case in accordance with any applicable securities laws of any state
of the United States, and we will notify any purchaser of the Notes from us
of the above resale restriction, if then applicable. We further understand
that in connection with any transfer of the Notes by us that the Company
and the Trustee may request, and if so requested we will furnish, such
certificates, legal opinions and other information as they may reasonably
require to confirm that any such transfer complies with the foregoing
restrictions.
2. We are able to fend for ourselves in the transactions contemplated
by this Offering Memorandum, we have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits
and risks of our investment in the Notes, and we and any accounts for which
we are acting are each able to bear the economic risk of our or its
investment and can afford the complete loss of such investment.
3. We understand that the minimum principal amount of Notes that may
be purchased by an institutional accredited investor is $100,000.
4. We understand that the Company, Salomon Brothers Inc and CIBC Wood
Gundy Securities Corp. as the initial purchasers of the Notes ("Initial
Purchasers"), and others will rely upon the truth and accuracy of the
foregoing acknowledgements, representations and agreements, and we agree
that if any of the acknowledgements, representations and warranties deemed
to have been made by us by our purchase of Notes, for our own account or of
one or more accounts as to each of which we exercise sole investment
discretion, are no
iii
longer accurate, we shall promptly notify the Company and the Initial
Purchasers.
5. We are acquiring the Notes purchased by us for investment purposes
and not for distribution, for our own account or for one or more accounts
as to each of which we exercise sole investment discretion and we are or
such account is an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act).
6. We have received a copy of the Offering Memorandum relating to the
offering of the Notes and acknowledge that we have had access to such
financial and other information, and have been afforded the opportunity to
ask questions of the Company and receive answers thereto, as we deem
necessary in connection with our decision to purchase Notes.
7. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party
in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
-------------------------------
(Name of Purchaser)
By:
----------------------------
Date:
--------------------------
EXHIBIT B
Selling Restrictions for Offers and
-----------------------------------
Sales outside the United States
-------------------------------
(a) The Securities have not been and will not be registered under the
Securities Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Securities Act or pursuant to an exemption from the registration
requirements of the Securities Act. Each Purchaser represents and agrees that,
except as otherwise permitted by Section 4(a)(i) or (ii) of the Agreement to
which this is an exhibit, it has offered and sold the Securities, and will offer
and sell the Securities, (i) as part of their distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the offering and
the Closing Date, only in accordance with Rule 903 of Regulation S under the
Securities Act. Accordingly, each Purchaser represents and agrees that neither
it, nor any of its affiliates nor any person acting on its or their behalf has
engaged or will engage in any directed selling efforts with respect to the
Securities, and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Purchaser agrees that, at or
prior to the confirmation of sale of Securities (other than a sale of Securities
pursuant to Section 4(a)(i) or (ii) of the Agreement to which this is an
exhibit), it shall have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered or sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and April 1, 1997, except in either case in accordance
with Regulation S, Rule 144A or other exemption from registration
under the Securities Act. Terms used above have the meanings given to
them by Regulation S."
(b) Each Purchaser also represents and agrees that it has not entered
and will not enter into any contractual arrangement with any distributor with
respect to the distribution of the Securities, except with its affiliates or
with the prior written consent of the Company.
ii
(c) Terms used in this Section have the meanings given to them by
Regulation S.
EXHIBIT C
NOTICE TO INVESTORS
Offers and Sales by the Initial Purchasers
------------------------------------------
The Notes have not been registered under the Securities Act and may
not be offered or sold in the United States or to, or for the account or benefit
of, U.S. persons except in accordance with an applicable exemption from the
registration requirements thereof. Accordingly, the Notes are being offered and
sold only (1) in the United States to qualified institutional buyers ("Qualified
Institutional Buyers") under Rule 144A under the Securities Act and other
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) ("Institutional Accredited Investors") in a
private sale exempt from the registration requirements of the Securities Act,
and (2) outside the United States to non-U.S. persons ("foreign purchasers") in
reliance upon Regulation S under the Securities Act. Each Institutional
Accredited Investor that is a purchaser of Notes from an Initial Purchaser will
be required to sign a certificate in the form provided by an Initial Purchaser.
Each foreign purchaser that is a purchaser of Notes from the Initial Purchasers
(an "Initial Foreign Purchaser") will be required to sign a certificate in the
form provided by the Initial Purchasers. The only Notes that will be eligible
to be deposited with The Depository Trust Company are Notes held by Qualified
Institutional Buyers and Institutional Accredited Investors.
Investor Representations and Restrictions on Resale
---------------------------------------------------
Each purchaser of the Notes will be deemed to have represented and
agreed as follows:
(1) it is acquiring the Notes for its own account or for an account
with respect to which it exercises sole investment discretion, and that it
or such account is a Qualified Institutional Buyer, an Institutional
Accredited Investor acquiring the Notes for investment purposes and not for
distribution or a foreign purchaser outside the United States;
(2) it acknowledges that the Notes have not been registered under the
Securities Act and may not be sold except as permitted below;
(3) it understands and agrees (x) that such Notes are being offered
only in a transaction not involving
ii
any public offering within the meaning of the Securities Act, and (y) that
(A) if within two years after the later of the date of original issuance of
the Notes and the last date on which the Company or any affiliate of the
Company was the owner of such Notes (or any predecessor of such Notes) or
if it was during the three months preceding such date of transfer an
affiliate of the Company, it decides to resell, pledge or otherwise
transfer such Notes on which the legend set forth below appears, such Notes
may be resold, pledged or transferred only (i) to the Company, (ii) so
long as such Security is eligible for resale pursuant to Rule 144A, to a
person whom the seller reasonably believes is a Qualified Institutional
Buyer that purchases for its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A (as indicated by the box
checked by the transferor on the Certificate of Transfer on the reverse of
the Note), (iii) in an offshore transaction in accordance with Regulation S
(as indicated by the box checked by the transferor on the Certificate of
Transfer on the reverse of the Note) but, if such transfer is being
effected by an Initial Foreign Purchaser or any foreign purchaser who has
purchased Notes from an Initial Foreign Purchaser or from any person other
than a QIB or an Institutional Accredited Investor pursuant to this clause
(iii) prior to the expiration of the 40 day restricted period (within the
meaning of Rule 903(c)(3) of Regulation S under the Securities Act), the
transferee shall have certified to the Company and the Trustee for the
Notes that such transferee is a non-U.S. Person (within the meaning of
Regulation S) and that such transferee is acquiring the Notes in an
offshore transaction, (iv) to an Institutional Accredited Investor (as
indicated by the box checked by the transferor on the Certificate of
Transfer on the reverse of the Note if such Note is not in book-entry form)
who has certified to the Company and the Trustee for the Notes that such
transferee is an Institutional Accredited Investor and is acquiring the
Notes for investment purposes and not for distribution, (provided that no
Initial Foreign Purchaser or any foreign purchaser who has purchased Notes
from an Initial Foreign Purchaser or from any person other than a QIB or an
Institutional Accredited Investor pursuant to clause (iii) shall be
permitted to transfer any Notes purchased by it to an
iii
Institutional Accredited Investor pursuant to this clause (iv) prior to the
expiration of the "40 day restricted period" (within the meaning of Rule
903(c)(3) of Regulation S under the Securities Act)), (v) pursuant to an
exemption from registration under the Securities Act provided by Rule 144
(if applicable under, the Securities Act, or (vi) pursuant to an effective
registration statement under the Securities Act, in each case in accordance
with any applicable securities laws of any state of the United States, (B)
the purchaser will, and each subsequent holder is required to, notify any
purchaser of Notes from it of the resale restrictions referred to in (A)
above, if then applicable, and (C) with respect to any transfer of Notes by
an Institu tional Accredited Investor, such holder will deliver to the
Company and the Trustee such certificates and other information as they may
reasonably require to confirm that the transfer by it complies with the
foregoing restrictions;
(4) it understands that the notification require ment referred to in
(3) above will be satisfied in the case only of transfer by physical
delivery of certificated Notes other than a global certificate by virtue of
the fact that the following legend will be placed on the Notes unless
otherwise agreed by the Company:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT
THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X)
PRIOR TO THE SECOND ANNIVERSARY OF THE LATER OF THE DATE OF THE
ISSUANCE HEREOF OR THE LAST DATE ON WHICH THE COMPANY OR AN AFFILIATE
OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE
COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE COMPANY, (2) SO LONG
AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR
iv
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON
THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) TO
AN INSTITU TION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE IN THE
FORM ATTACHED TO THIS SECURITY IS DELIVERED BY THE TRANSFEREE TO THE
COMPANY AND THE TRUSTEE, (5) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT OR (6) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS
SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE
SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE
TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT
IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT
IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH
(0)(2) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.";
(5) it (i) is able to fend for itself in the transactions contemplated
by this Offering Memorandum;
v
(ii) has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of its prospective
investment in the Notes; and (iii) has the ability to bear the economic
risks of its prospective investment and can afford the complete loss of
such investment; and
(6) it understands that the Company, the Initial Purchasers and others
will rely upon the truth and accuracy of the foregoing acknowledgements,
representations and agreements and agrees that if any of the
acknowledgements, representations and warranties deemed to have been made
by it by its purchase of Notes are no longer accurate, it shall promptly
notify the Company and the Initial Purchasers. If it is acquiring the
Notes as a fiduciary or agent for one or more investor accounts, it
represents that it has sole investment discretion with respect to each such
account and it has full power to make the foregoing acknowledgements,
representations and agreements on behalf of such account.
