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SECURITIES PURCHASE AGREEMENT
AMONG
XXXXXXXX-VAN HEUSEN CORPORATION,
XXXXXX BROTHERS INC.
AND
THE INVESTORS
DATED AS OF DECEMBER 16, 2002
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS..................................................... 1
SECTION 1.01. DEFINITIONS.............................................. 1
SECTION 1.02. RULES OF CONSTRUCTION.................................... 10
ARTICLE II ISSUANCE, SALE AND PURCHASE OF THE SERIES B STOCK.............. 11
SECTION 2.01. SALE AND PURCHASE OF THE SERIES B STOCK.................. 11
SECTION 2.02. CLOSING.................................................. 11
SECTION 2.03. USE OF PROCEEDS.......................................... 12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY................. 12
SECTION 3.01. ORGANIZATION AND GOOD STANDING........................... 12
SECTION 3.02. AUTHORITY; BINDING EFFECT................................ 12
SECTION 3.03. ORGANIZATION AND GOOD STANDING OF COMPANY
SUBSIDIARIES........................................ 12
SECTION 3.04. CAPITALIZATION........................................... 13
SECTION 3.05. NO VIOLATIONS; CONSENTS.................................. 14
SECTION 3.06. LISTING.................................................. 15
SECTION 3.07. FINANCIAL STATEMENTS..................................... 15
SECTION 3.08. COMMISSION FILINGS....................................... 16
SECTION 3.09. ABSENCE OF CERTAIN DEVELOPMENTS.......................... 16
SECTION 3.10. LITIGATION............................................... 18
SECTION 3.11. TAX MATTERS.............................................. 18
SECTION 3.12. REAL PROPERTY............................................ 19
SECTION 3.13. INVENTORY................................................ 19
SECTION 3.14. INTELLECTUAL PROPERTY.................................... 19
SECTION 3.15. MATERIAL CONTRACTS....................................... 20
SECTION 3.16. COMPANY EMPLOYEE PLANS................................... 21
SECTION 3.17. LABOR RELATIONS.......................................... 23
SECTION 3.18. COMPLIANCE WITH LAWS; PERMITS............................ 24
SECTION 3.19. PREFERRED STOCK EXEMPTION................................ 25
SECTION 3.20. ENVIRONMENTAL PROTECTION................................. 25
SECTION 3.21. INVESTMENT COMPANY ACT................................... 26
SECTION 3.22. TRANSACTIONS WITH AFFILIATES............................. 26
SECTION 3.23. INSURANCE................................................ 26
SECTION 3.24. CUSTOMERS................................................ 26
SECTION 3.25. FINANCIAL ADVISORS....................................... 26
SECTION 3.26. DGCL SECTION 203 AND RIGHTS AGREEMENT.................... 26
SECTION 3.27. D&O INSURANCE............................................ 27
SECTION 3.28. SOLVENCY................................................. 27
SECTION 3.29. FULL DISCLOSURE.......................................... 27
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SECTION 3.30. NO GENERAL SOLICITATION.................................. 27
SECTION 3.31. NO INTEGRATION........................................... 27
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE
INITIAL PURCHASER AND THE INVESTORS............................ 27
SECTION 4.01. INITIAL PURCHASER REPRESENTATIONS........................ 27
SECTION 4.02. INVESTORS REPRESENTATIONS................................ 28
ARTICLE V COVENANTS OF THE COMPANY........................................ 30
SECTION 5.01. ACCOUNTING SYSTEM........................................ 30
SECTION 5.02. TAXES30
SECTION 5.03. CORPORATE EXISTENCE...................................... 30
SECTION 5.04. MAINTENANCE OF PROPERTIES................................ 30
SECTION 5.05. INSURANCE................................................ 30
SECTION 5.06. COMPLIANCE WITH LAW...................................... 30
SECTION 5.07. MAINTAIN LISTING......................................... 31
SECTION 5.08. SECURE LISTING........................................... 31
SECTION 5.09. TRANSFER TAXES........................................... 31
ARTICLE VI ACTIONS PRIOR TO CLOSING....................................... 31
SECTION 6.01. ACCESS TO INFORMATION.................................... 31
SECTION 6.02. CONDUCT OF BUSINESS...................................... 32
SECTION 6.03. NO SOLICITATION.......................................... 33
SECTION 6.04. CONSENT.................................................. 33
SECTION 6.05. HSR 34
SECTION 6.06. NOTICE OF BREACH......................................... 34
SECTION 6.07. OTHER TRANSACTION DOCUMENTS.............................. 34
SECTION 6.08. PUBLICITY................................................ 35
ARTICLE VII CONDITIONS TO CLOSING......................................... 35
SECTION 7.01. CONDITIONS TO OBLIGATIONS OF THE INITIAL
PURCHASER AND THE INVESTORS.............................. 35
SECTION 7.02. CONDITIONS TO OBLIGATIONS OF THE COMPANY................. 38
ARTICLE VIII SURVIVAL..................................................... 38
SECTION 8.01. SURVIVAL................................................. 38
ARTICLE IX INDEMNIFICATION................................................ 39
SECTION 9.01. GENERALLY................................................ 39
SECTION 9.02. INDEMNIFICATION PROCEDURE................................ 40
SECTION 9.03. CERTAIN QUALIFICATIONS................................... 41
SECTION 9.04. LIMITATIONS ON INDEMNIFICATION........................... 41
ARTICLE X FEES, EXPENSES AND COSTS........................................ 42
SECTION 10.01. REIMBURSEMENT........................................... 42
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ARTICLE XI TERMINATION.................................................... 43
SECTION 11.01. TERMINATION............................................. 43
SECTION 11.02. EFFECT OF TERMINATION................................... 43
SECTION 11.03. TERMINATION FEE......................................... 43
SECTION 11.04. BREAK-UP FEE............................................ 44
SECTION 11.05. CK RECOVERY............................................. 44
ARTICLE XII MISCELLANEOUS................................................. 44
SECTION 12.01. NOTICES AND ADDRESSES................................... 44
SECTION 12.02. CAPTIONS................................................ 46
SECTION 12.03. NO WAIVER............................................... 46
SECTION 12.04. SEVERABILITY............................................ 46
SECTION 12.05. EXCLUSIVE AGREEMENT; AMENDMENT.......................... 46
SECTION 12.06. LIMITATION ON ASSIGNMENT; PARTIES IN INTEREST........... 46
SECTION 12.07. OBLIGATIONS OF INVESTORS SEVERAL........................ 47
SECTION 12.08. GOVERNING LAW........................................... 47
SECTION 12.09. JURISDICTION............................................ 47
SECTION 12.10. NO THIRD PARTY BENEFICIARY.............................. 47
SECTION 12.11. INJUNCTIVE RELIEF....................................... 47
SECTION 12.12. COUNTERPARTS............................................ 47
SECTION 12.13. ACTIONS SIMULTANEOUS.................................... 48
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT, dated as of December 16, 2002 (this
"Agreement"), is by and among Xxxxxxxx-Van Heusen Corporation, a Delaware
corporation (the "Company"), Xxxxxx Brothers Inc., as initial purchaser (the
"Initial Purchaser") and each investor executing a signature page hereto (each
an "Investor" and collectively, the "Investors").
RECITALS:
A. The Company, on or prior to closing will, authorize a new series of
Preferred Stock designated the "Series B Convertible Preferred Stock" (the
"Series B Stock"), which will be convertible into shares of Common Stock in
accordance with the terms of the Certificate of Designations governing the
Series B Stock, in the form attached hereto as Exhibit A (the "Certificate of
Designations").
B. The Initial Purchaser desires to purchase from the Company, and the
Company desires to sell to the Investors, upon the terms and subject to the
conditions of this Agreement, the Series B Shares.
C. The Investors have agreed to purchase from the Initial Purchaser,
and the Initial Purchaser has agreed to sell to the Investors, subject to the
terms and conditions of this Agreement, the Series B Shares.
D. The Company, the Initial Purchaser and the Investors desire to set
forth certain agreements herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and undertakings hereunder and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
intending to be legally bound, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. As used in this Agreement, the following
terms have the meanings set forth below.
"AAA" shall have the meaning set forth in Section 9.02(b).
"Accredited Investor" shall mean any Person that is an "accredited
investor" within the definition contained in Rule 501(a) under the Securities
Act.
"Affiliate" shall mean (a) with respect to an individual, any member of
such individual's family residing in the same household; (b) with respect to an
entity: (i) any executive officer, director, partner or Person that owns ten
percent (10%) or more of the outstanding beneficial interest of or in such
entity, or (ii) any brother, sister, brother-in-law, sister-in-law, lineal
descendant or ancestor of any executive officer, director, partner or Person
that owns ten percent (10%) or more of the outstanding beneficial interest of or
in such entity; and (c) with respect to a Person, any Person which directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with such Person or entity; provided, however, that for
purposes of the definition of "Affiliate," no Investor shall be deemed an
"Affiliate" of the Company.
"Agreement" shall have the meaning set forth in the preamble.
"Audited Financial Statements" shall have the meaning set forth in
Section 3.07.
"Balance Sheet" shall have the meaning set forth in Section 3.07.
"Basket" shall have the meaning set forth in Section 9.04(a).
"Break-up Fee" shall mean any "break-up fee," "termination fee," or
similar fee that the Company will receive pursuant to the CK Purchase Agreement
or that certain letter agreement, dated September 26, 2002, between the Company
and CKI reduced by the amount that the Company's Expenses exceed the amount by
which the Company has been, or will be, reimbursed by CKI or any of its
Affiliates for such expenses.
"Board of Directors" shall mean the Board of Directors of the Company.
"Business Day" shall mean any day other than (i) a Saturday, (ii) a
Sunday or (iii) any other day on which banks in the City of New York are
authorized or required to close.
"By-Laws" shall mean, when used with respect to a specified Person, the
by-laws of a Person, as the same may be amended from time to time.
"Capital Stock" shall mean, with respect to any Person, any and all
shares, interests, participations, rights in or other equivalents (however
designated and whether voting or non-voting) of such Person's capital stock or
any form of membership, ownership or participation interests, as applicable,
including partnership interests, whether now outstanding or hereafter issued and
any and all securities, debt instruments, rights, warrants or options
exercisable or exchangeable for or convertible into such capital stock.
"Certificate of Designations" shall have the meaning set forth in the
recitals.
"Certificate of Incorporation" shall mean, when used with respect to a
specified Person, the Articles or Certificate of Incorporation or other
applicable organizational document of such Person, as currently in effect.
"CK Acquisition" shall mean the acquisition by the Company of all of
the Capital Stock of the CK Companies pursuant to the CK Purchase Agreement.
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"CK Recovery" shall mean any amounts received by the Company or any
Company Subsidiary paid by the CK Companies or Sellers (or any insurer thereof)
by reason of the failure of the closing pursuant to the CK Purchase Agreement in
excess of (i) the Company Expenses, (ii) Fees and Expenses of the Investors paid
by the Company, and (iii) any out-of-pocket third party expense incurred by the
Company in obtaining the CK Recovery (i.e., legal fees in any action by the
Company against Sellers).
"CK Companies" shall have the meaning set forth in the CK Purchase
Agreement.
"CK Companies Material Adverse Effect" shall mean any event, condition
or contingency that has had, or is reasonably likely to have, a material adverse
effect on the business, assets, liabilities, results of operations or financial
condition of the CK Companies, taken as a whole. For the purposes of this
Agreement, a CK Companies Material Adverse Effect shall not include any event,
condition or contingency, or the effect thereof, resulting from (i) the entering
into of any transaction consented to by PVH pursuant to Section 5.1(b) of the CK
Purchase Agreement, (ii) the announcement, negotiation, or contemplation of the
closing of the transactions contemplated by the CK Purchase Agreement or any
actions taken in furtherance of the transactions contemplated by the CK Purchase
Agreement, (iii) events of war impacting the economy in general, and (iv)
changes in general economic conditions or in the fashion, apparel, accessories,
home furnishings or fragrance industries, in general.
"CK Purchase Agreement" shall mean that certain Stock Purchase
Agreement, by the Company, each CK Company, Xx. Xxxxxx Xxxxx, Mr. Xxxxx
Xxxxxxxx, Trust for the Benefit of the Issue of Xxxxxx Xxxxx, Trust for the
Benefit of the Issue of Xxxxx Xxxxxxxx, Xxxxxxxxx Xxxxxxxx-Xxxxxxx and Xxxxxxxx
Xxxxxxxx.
"CK Transaction Documents" shall mean the CK Purchase Agreement and the
Related Agreements (as such term is defined in the CK Purchase Agreement).
"CKI" shall mean Xxxxxx Xxxxx, Inc., a New York corporation.
"Closing" shall have the meaning set forth in Section 2.02(a).
"Closing Date" shall have the meaning set forth in Section 2.02(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"Commission Filings" shall have the meaning set forth in Section 3.08.
"Common Stock" shall mean the common stock, $1 par value per share, of
the Company, including any associated Right.
"Company" shall have the meaning set forth in the preamble.
"Company Employee Plan" shall have the meaning set forth in Section
3.16(a).
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"Company's Expenses" shall mean all of the fees and out-of-pocket
expenses incurred by the Company in connection with the Contemplated
Transactions.
"Company Group Member" shall mean each of the Company and its
Affiliates and their respective directors, officers, employees, agents and
attorneys and their respective successors and assigns.
"Company Subsidiaries" and "Company Subsidiary" shall have the meaning
set forth in Section 3.03.
"Competing Offer" shall mean any offer or proposal for, or indication
of interest in, acquiring more than 10% of the Capital Stock or other equity
securities or securities convertible into or exchangeable for equity securities
of the Company or any of the Company Subsidiaries or any debt financing (other
than as contemplated by the CK Transaction Documents) intended to replace the
amounts committed pursuant to this Agreement.
"Consents" shall mean all governmental and third party consents,
approvals, authorizations, qualifications and waivers necessary to be received
by a Person for the consummation of the Contemplated Transactions.
"Contemplated Transactions" shall mean the transactions contemplated by
each of this Agreement, the other Transaction Documents, the CK Purchase
Agreement and the other CK Transactions Documents.
"Contract" shall mean any legally binding contract, agreement,
mortgage, deed of trust, bond, loan, indenture, lease, license, note, option,
warrant, right, instrument, commitment or other similar document, arrangement or
agreement, whether written or oral.
"Credit Facility" shall mean the Revolving Credit Agreement dated as of
October 17, 2002 among the Company, certain of the Company Subsidiaries, as
co-borrowers, the lenders identified therein (or that may thereafter become
party thereto), and JPMorgan Chase Bank, as agent for such lenders.
"DGCL Section 203" shall have the meaning set forth in Section 3.26.
"Employee" shall mean any current, former or retired officers,
directors, consultants, employees, independent contractors, agents and other
Persons who render services to the Company or any Company Subsidiary.
"Employee Program" shall mean any "employee benefit plan", within the
meaning of Section 3(3) of ERISA, whether or not it is subject to ERISA.
"Environment" shall mean soil, surface waters, ground waters, land,
stream, sediments, surface or subsurface strata and ambient air.
4
"Environmental Laws" shall mean all Laws relating to the pollution of
or protection of the Environment, from contamination by, or relating to injury
to, or the protection of, real or personal property or human health or the
Environment, including, without limitation, all valid and lawful requirements of
courts and other Governmental Bodies pertaining to reporting, licensing,
permitting, investigation, remediation and removal of, emissions, discharges,
releases or threatened releases of Hazardous Materials, chemical substances,
pesticides, petroleum or petroleum products, pollutants, contaminants or
hazardous or toxic substances, materials or wastes, into the Environment, or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, pollutants, contaminants
or hazardous or toxic substances, materials or wastes.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" shall mean any entity which at any time during the
six-year period ending on the date of this Agreement has been considered a
single employer with the Company or any Company Subsidiary under Section 4001(b)
of ERISA or Section 414(b), (c), (m) or (o) of the Code.
"Excess Amount" shall have the meaning set forth in Section 10.01(d).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Fees and Expenses" shall have the meaning set forth in Section
10.01(a).
"Fifth Amendment" shall have the meaning set forth in Section 7.01(m).
"Foreign Plan" shall mean any plan which is described in Section
4(b)(4) of ERISA, and which is maintained, sponsored or contributed to by, or
covers any employee of, the Company or any Company Subsidiary.
"GAAP" shall mean generally accepted accounting principles applied on a
consistent basis as used in the United States of America.
"Governmental Body" shall mean any government or governmental or
quasi-governmental authority including, without limitation, any federal, state,
territorial, county, municipal or other governmental or quasi-governmental
agency, board, branch, bureau, commission, court, arbitral body (public or
private), department or other instrumentality or political unit or subdivision,
whether located in the United States or abroad, the National Association of
Securities Dealers, Inc., the New York Stock Exchange, the Nasdaq National
Market, the Nasdaq SmallCap Market or the American Stock Exchange.
"Hazardous Materials" shall mean any substance whether solid, liquid or
gaseous in nature: (i) the presence of which requires or may hereafter require
notification, investigation, or remediation under any Environmental Law; (ii)
which is or becomes defined as "toxic", a
5
"hazardous waste", "hazardous material" or "hazardous substance" or "pollutant"
or "contaminant" under any present or future Environmental Laws; (ii) the
presence of which adversely affects or is injurious to human health or the
Environment; (iv) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes
regulated by any Governmental Body; (v) which contains gasoline, diesel fuel or
other petroleum hydrocarbons or volatile organic compounds; (vi) which contains
polychlorinated byphenyls (PCBs) or asbestos or urea formaldehyde foam
insulation; or (vii) which contains or emits radioactive particles, waves or
materials, including radon gas.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnitee" shall have the meaning set forth in Section 9.01.
"Indemnitor" shall have the meaning set forth in Section 9.01.
"Initial Purchase Price" shall have the meaning set forth in Section
2.01.
"Initial Purchaser" shall have the meaning set forth in the preamble.
"Initial Purchaser Group Members" shall mean the Initial Purchaser and
its Affiliates and their respective directors, officers, employees, agents and
attorneys and their respective successors and assigns.
"Intellectual Property" shall have the meaning set forth in Section
3.14(a).
"Investors" shall have the meaning set forth in the preamble.
"Investor Group Member" shall mean the Investors and each of their
respective partners, officers, employees, agents and attorneys and their
respective successors and permitted assigns.
"Investor Representatives" shall mean each of Apax Managers, Inc. and
Apax Partners Europe Managers Ltd.
"Investors' Rights Agreement" shall have the meaning set forth in
Section 7.01(l).
"IRS" shall mean the Internal Revenue Service.
"Law" shall mean any treaty, statute, ordinance, code, rule,
regulation, Order or other legal requirement enacted, adopted, promulgated,
applied or followed by any Governmental Body.
"Leased Real Property" shall have the meaning set forth in Section
3.12(b).
"Legal Proceeding" shall mean any judicial, administrative or arbitral
actions, suits, proceedings (public or private) or governmental proceedings.
6
"Legend" shall mean the Legend set forth in Section 4.02(e).
"Liability" shall mean any debt, liability or obligation, whether known
or unknown, asserted or unasserted, accrued, absolute, contingent or otherwise,
whether due or to become due.
"Lien" shall mean any mortgage, pledge, lien (statutory or otherwise),
security interest, hypothecation, conditional sale agreement, encumbrance or
similar restriction or agreement.
"Loan Documents" shall mean the Term Loan Agreement between the
Company, as borrower, and the Investors, as lenders, of even date herewith and
the various instruments and agreements described therein.
"Loss" shall have the meaning set forth in Section 9.01.
"Marks" shall mean all of the trademarks, service marks and trade names
throughout the entire world licensed to or used by the Company or any Company
Subsidiary and/or owned by the Company or any Company Subsidiary including, but
not limited to, Van Heusen, Bass,X.X. Xxxx & Co., Izod, cKCalvin Xxxxx, Xxxxxxxx
Xxxxx, Arrow, DKNY, Xxxxxxx Xxxx New York and Reaction by Xxxxxxx Xxxx.
"Material Adverse Effect" shall mean any event, condition or
contingency that has had, or is reasonably likely to have, a material adverse
effect on the business, assets, liabilities (including contingent liabilities),
results of operations, financial condition or, to the knowledge of the Company,
prospects of the Company and the Company Subsidiaries, taken as a whole. For the
purposes of this Agreement, a Material Adverse Effect shall not be deemed to
arise by reason of (i) the entering into of any transaction consented to by the
Investor Representatives pursuant to Section 6.02, (ii) the Contemplated
Transactions, (iii) events of war impacting the economy in general, and (iv)
changes in general economic conditions or in the fashion, apparel, accessories,
home furnishings or fragrance industries, in general.
"Material Employee" shall mean any Person, including any employee,
officer or director of the Company or any Company Subsidiary, that earned or was
paid in any twelve (12) month period two hundred and fifty thousand dollars
($250,000) or more, for services rendered in any capacity to the Company or any
Company Subsidiary during the past two (2) years.
"Maximum Amount" shall mean an amount equal to all of the Fees and
Expenses plus all of the Monitor Expenses.
"Minimum Amount" shall mean an amount equal to 50% of the Fees and
Expenses plus all of the Monitor Expenses.
"Monitor Expenses" shall have the meaning set forth in Section
10.01(a).
"Multiemployer Plan" shall have the meaning set forth in Section
3.16(a).
"Notice" shall have the meaning set forth in Section 9.02(a).
7
"NYSE" shall mean the New York Stock Exchange.
"Off-Balance Sheet Arrangement" shall mean any transaction, agreement
or other contractual arrangement to which an entity that is not consolidated
with the Company is a party, under which the Company, whether or not a party to
the arrangement, has, or in the future may have: (i) any obligation under a
direct or indirect guarantee or similar arrangement; (ii) a retained or
contingent interest in assets transferred to an unconsolidated entity or similar
arrangement; (iii) derivatives, to the extent that the fair value thereof is not
fully reflected as a liability or asset in the financial statements of the
Company; or (iv) any obligation or liability in excess of $5,000,000, including
a contingent obligation or liability, not incurred in the ordinary course of
business to the extent that such obligation or liability is not fully reflected
in the financial statements of the Company (excluding the footnotes thereto).
"Order" shall mean any order, injunction, judgment, decree, ruling,
writ, assessment or arbitration award.
"Owned Real Property" shall have the meaning set forth in Section
3.12(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Partial Reimbursement" shall have the meaning set forth in Section
10.01(d).
"Percentage" shall mean that percentage of the Company's Expenses paid
by CKI or any of its Affiliates.
"Permits" shall mean any approvals, authorizations, licenses, permits
or certificates by or of any Governmental Body.
"Permitted Liens" shall mean (a) easements, restrictions, covenants,
rights of way or minor irregularities of title currently of record against any
of the Real Property, (b) real and personal property leases, (c) Liens for Taxes
not yet due and payable, or for Taxes being contested in good faith, provided
that in each such case, adequate reserves are maintained in accordance with GAAP
on the Balance Sheet, and (d) any Lien created by statute of carriers,
warehousemen, vendors, mechanics, laborers or materialmen incurred in the
ordinary course of business for sums not yet due and payable.
"Person" shall mean any individual, corporation, partnership, firm,
limited liability company, joint venture, trust, association, unincorporated
organization, group, joint-stock company, Governmental Body or other entity.
"Preferred Stock" shall mean the preferred stock, $100 par value per
share, of the Company.
"Purchase Price" shall mean $250,000,000 in the aggregate, payable as
set forth in Section 2.02.
8
"Real Property" shall have the meaning set forth in Section 3.12(b).
"Registration Rights Agreement" shall have the meaning set forth in
Section 7.01(k).
"Reportable Event" shall mean a reportable event as defined in Section
4043 of ERISA and the regulations issued under such section, excluding, however,
such events as to which the PBGC has by regulation waived the requirement of
Section 4043 of ERISA that it be notified within 30 days of the occurrence of
such event.
"Retiree" shall mean any Employee who has retired or terminated
employment from the Company or any Company Subsidiary.
"Right" shall have the meaning set forth in the Rights Agreement.
"Rights Agreement" shall mean the Rights Agreement, dated as of June
10, 1986, as amended, by and between the Company and The Bank of New York
(successor to The Chase Manhattan Bank, N.A.), as Rights Agent, and each
amendment and extension thereof (including, without limitation, the Fifth
Amendment).
"SEC" shall mean the U.S. Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Sellers" shall have the meaning set forth in the CK Purchase
Agreement.
"Series A Stock" shall mean the Series A Cumulative Participating
Preferred Stock, $100 par value per share, of the Company.
"Series B Designees" shall mean the directors elected by the Investors
to the Board of Directors pursuant to the Certificate of Designations.
"Series B Shares" shall have the meaning set forth in Section 2.01.
"Series B Stock" shall have the meaning set forth in the recitals.
"Specified Purchase Price" shall have the meaning set forth in Section
2.01.
"Subsidiary" shall mean, as to any Person, any other Person more than
50% of the shares of the voting stock or other voting interests of which are
owned or controlled, or the ability to select or elect more than 50% of the
directors or similar managers is held, directly or indirectly, by such first
Person or one or more of its Subsidiaries or by such first Person and one or
more of its Subsidiaries.
"Tax Return" shall have the meaning set forth in Section 3.11(a).
9
"Taxes" shall mean all U.S. federal, state, local and foreign income,
gross income, corporation, advance corporation, gross receipts, estimated,
import, customs, duties, transfer, excise, property, sales, use, value-added,
license, payroll, pay as you earn, withholding, social security and franchise or
other governmental taxes, imposed by any Governmental Body and any interest,
penalties or additions to tax with respect thereto.
"Termination Fee" shall have the meaning set forth in Section 11.03.
"Termination Warrants" shall mean ten-year warrants to purchase an
aggregate amount of shares of Common Stock equal to ten percent (10%) of the
Common Stock of the Company determined on a fully-diluted basis at an exercise
price per share equal to the volume weighted average price of the shares Common
Stock as reported by Bloomberg (or if such information is not available from
Bloomberg, from another nationally recognized independent pricing source) on the
date of execution of this Agreement, in the form annexed hereto as Exhibit B.
"Transaction Documents" shall mean this Agreement, the schedules and
exhibits hereto, the Certificate of Designations, the Registrations Rights
Agreement, the Investors' Rights Agreement, the Fifth Amendment and the Loan
Documents and any certificate or other document delivered by or on behalf of the
Company or the Investors pursuant to this Agreement or in connection with the
transactions contemplated by this Agreement, but does not include the CK
Transaction Documents.
"Unaudited Financial Statements" shall have the meaning specified in
Section 3.07.
"Warrants" shall have the meaning set forth in the CK Purchase
Agreement.
"2002 Budget" shall mean the annual operating budget for the Company,
for the fiscal year commencing on February 4, 2002 and ending on February 2,
2003, previously delivered to each of the Investor Representatives.
Section 1.02. Rules of Construction. Unless the context otherwise
requires:
(a) an accounting term defined by GAAP that is not otherwise
defined herein has the meaning assigned to it in accordance with GAAP;
(b) "or" is not exclusive;
(c) words in the singular include the plural, and words in the
plural include the singular;
(d) the words "include" and "including" shall be deemed to mean
"include, without limitation," and "including, without limitation";
(e) "herein," "hereof," "hereto," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
article, section, paragraph or clause where such terms may appear;
10
(f) references to sections mean references to such section in this
Agreement, unless stated otherwise; and
(g) the use of any gender shall be applicable to all genders.
ARTICLE II
ISSUANCE, SALE AND PURCHASE OF THE SERIES B STOCK
Section 2.01. Sale and Purchase of the Series B Stock. Upon the terms
and subject to the conditions of this Agreement, the Company will sell to the
Initial Purchaser, and the Initial Purchaser will purchase from the Company, an
aggregate of 10,000 shares of the Series B Stock (the "Series B Shares") for an
aggregate purchase price of $249,250,000 (the "Initial Purchase Price"). The
Initial Purchaser will then immediately sell the Shares to the Investors, and
the Investors will purchase from the Initial Purchaser, an aggregate of 10,000
shares of the Series B Shares for an aggregate purchase price of $250,000,000
(the "Purchase Price"). The number of Series B Shares to be purchased by each
Investor at the Closing and the portion of the aggregate purchase price to be
paid by each Investor at the Closing in the exchange therefor, shall be as
specified in Schedule 2.01 (with respect to each such Investor, such Investor's
"Specified Purchase Price").
Section 2.02. Closing.
(a) Subject to the satisfaction or waiver of the conditions set
forth in this Agreement, the closing of the transactions contemplated by Section
2.01 (the "Closing") shall take place immediately prior to or concurrently with
the closing of the CK Acquisition, or at such other time as may be mutually
agreed upon by the Investor Representatives and the Company (the "Closing
Date"). The Closing shall occur on the Closing Date at the offices of Xxxxxx
Xxxxxx Xxxxx Xxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
(b) At the Closing: (i) the Company will deliver to the Initial
Purchaser certificates for the Series B Shares to be sold in accordance with the
provisions of Section 2.01 registered in the name of the Initial Purchaser; (ii)
the Initial Purchaser, in full payment for the Series B Shares, will deliver to
the Company immediately available funds, by wire transfer to such account as the
Company shall specify, the Initial Purchase Price; and (iii) each party shall
take or cause to happen such other actions, and shall execute and deliver such
other instruments or documents, as shall be required under Article VII.
(c) At the Closing: (i) the Initial Purchaser will deliver to the
Investor Representatives certificates for the Series B Shares to be sold in
accordance with the provisions of Section 2.01 registered in the respective
names of the Investors and proportions set forth in Schedule 2.01; (ii) each
Investor, in full payment for the Series B Shares, will deliver to the Initial
Purchaser immediately available funds, by wire transfer to such account as the
Initial Purchaser shall specify, such Investor's Specified Purchase Price; and
(iii) each party shall take or cause to happen such other actions, and shall
execute and deliver such other instruments or documents, as shall be required
under Article VII.
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Section 2.03. Use of Proceeds. The Company shall use the proceeds from
the sale of the Series B Stock solely to (i) pay a portion of the purchase price
for the Capital Stock of the CK Companies and (ii) pay the fees and
out-of-pocket expenses relating to the Contemplated Transactions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Initial Purchaser and to
each of the Investors as follows:
Section 3.01. Organization and Good Standing. The Company is a
corporation duly incorporated, validly existing and in good standing under the
Laws of the jurisdiction of its incorporation, has full corporate power and
authority to own, lease and operate its properties, and carry on its business as
presently conducted. The Company is duly qualified, registered or licensed as a
foreign corporation to do business and is in good standing in each jurisdiction
in which the ownership or leasing of its properties or the character of its
present operations makes such qualification, registration or licensing
necessary, except where the failure to so qualify or be in good standing could
not reasonably have a Material Adverse Effect. The Company has heretofore
delivered or made available to the Initial Purchaser and to the Investors
complete and correct copies of the Certificate of Incorporation and By-Laws of
the Company, as in effect as of the date of this Agreement.
Section 3.02. Authority; Binding Effect. The Company has full corporate
power and authority to execute and deliver this Agreement, the other Transaction
Documents and the CK Transaction Documents and to consummate the Contemplated
Transactions. The execution and delivery of this Agreement and the other
Transaction Documents and the consummation by the Company of the transactions
contemplated hereby and by the other Transaction Documents have been duly and
validly approved by all necessary corporate action on the part of the Company.
This Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company, enforceable
in accordance with its terms, except as such enforceability may be subject to
the effects of any applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar Laws affecting creditors' rights generally
and subject to the effects of general equitable principles. The other
Transaction Documents and the CK Transaction Documents, when executed and
delivered by the Company, will be duly executed and delivered by the Company and
constitute legal, valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except as such enforceability may be
subject to the effects of any applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar Laws affecting creditors'
rights generally and subject to the effects of general equitable principles.
Section 3.03. Organization and Good Standing of Company Subsidiaries.
Schedule 3.03 lists all Subsidiaries of the Company and their respective
jurisdictions of incorporation (collectively, the "Company Subsidiaries" and
each, a "Company Subsidiary"). Except as set forth in Schedule 3.03, the Company
owns, directly or indirectly, all the shares of outstanding
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Capital Stock of each Company Subsidiary. There are no outstanding securities or
rights convertible into or exchangeable for shares of any Capital Stock of any
Company Subsidiary and there are no Contracts by which any Company Subsidiary is
bound to issue additional shares of Capital Stock. All of the shares of Capital
Stock of each of the Company Subsidiaries are duly and validly authorized, fully
paid and non-assessable and, except for the Liens created by the security
agreement entered into in connection with the Credit Facility, are owned by the
Company free and clear of any Lien with respect thereto. Each Company Subsidiary
is a corporation duly organized, validly existing and, where recognized, in good
standing under the Laws of its jurisdiction of organization, and has all
requisite corporate power and authority to own, operate and lease its properties
and to carry on its business as it is now being conducted, and is duly licensed
or qualified to do business in each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, except where the failure to be so licensed or qualified in any
such jurisdiction could not reasonably have a Material Adverse Effect.
Section 3.04. Capitalization.
(a) Schedule 3.04(a) sets forth, in each case as of the date
hereof, (i) the authorized Capital Stock of the Company, the number of shares of
each class of Capital Stock issued and outstanding and the number of shares of
Common Stock reserved for issuance in connection with the Company's stock option
plans, and (ii) all options, warrants, rights to subscribe to, calls, contracts,
undertakings, arrangements and commitments to issue which may result in the
issuance of Capital Stock of the Company, other than (x) options to purchase
615,887, 1,886,878 and 2,387,564 shares of Common Stock issued and outstanding
under the Company's 1987, 1997 and 2000 stock option plans, respectively and (y)
the Rights. All of the issued and outstanding shares of the Company's Capital
Stock have been duly and validly authorized and issued and are fully paid and
non-assessable and are not subject to any preemptive rights. Except pursuant to
this Agreement, the Company's stock option plans, the Rights Agreement and the
Certificate of Designations, (i) no equity securities of the Company are or may
be required to be issued by reason of any options, warrants, rights to subscribe
to, calls or commitments of any character whatsoever, (ii) there are outstanding
no securities or rights convertible into or exchangeable for shares of any
Capital Stock of the Company, and (iii) there are no contracts, commitments,
understandings or arrangements by which the Company is bound to issue additional
shares of its Capital Stock or securities or rights convertible into or
exchangeable for shares of any Capital Stock of the Company, or options,
warrants or rights to purchase or acquire any additional shares of its Capital
Stock. Neither the Company nor any Company Subsidiary is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any of its Capital Stock. Except as contemplated by the Registration
Rights Agreement, there are no Contracts between the Company and any Person
granting such Person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the Company
owned or to be owned by such Person or to require the Company to include such
securities in any other registration statement filed by the Company under the
Securities Act.
13
(b) The Series B Shares will have the voting powers, designations,
preferences and rights, and the qualifications, limitations and restrictions
thereof, set forth in the Certificate of Designations which will be filed with
the Secretary of State of the State of Delaware on or prior to the Closing. The
Company has reserved, or will on or before Closing reserve, for issuance the
shares of Common Stock issuable upon conversion of the Series B Shares. When
paid for by, and issued to, the Initial Purchaser, the Series B Shares will be
duly authorized, validly issued, fully paid and non-assessable and will be free
and clear of any Liens. When paid for by, and sold to, each of the Investors the
Series B Shares will be duly authorized, validly issued, fully paid and
non-assessable and will be free and clear of any Liens. The issuance and sale of
the Series B Shares is not subject to any preemptive rights. Except for the
restrictions set forth, or referred to, in the Legend, the Series B Shares when
issued and sold will not be subject to any restriction on use, voting or
transfer; and the shares of Common Stock issuable to each such Investor upon
conversion of the Series B Shares, when issued in accordance with the Company's
Certificate of Incorporation, will be duly authorized, validly issued, fully
paid and non-assessable, and will be free and clear of any Liens and except for
the restrictions set forth, or referred to, in the Legend, will not be subject
to any restriction on use, voting or transfer or to any preemptive rights.
(c) Without limiting the generality of subsection (b) above, the
terms and conditions of the Rights to be associated with the Series B Shares
will be set forth in the Rights Agreement, substantially in the form provided to
the Initial Purchaser and to each of the Investors. The Company has reserved, or
will on or before Closing reserve, for issuance the shares of Series A Stock
issuable upon exercise of the Rights. The shares of Series A Stock issuable to
each such Investor upon exercise of the Rights, when issued in accordance with
the Rights Agreement, will be duly authorized, validly issued, fully paid,
non-assessable, and free of preemptive rights and will be free and clear of any
Liens and except for the restrictions set forth, or referred to, in the Legend,
will not be subject to any restriction on use, voting or transfer or to any
preemptive rights.
Section 3.05. No Violations; Consents. Except as set forth on Schedule
3.05, neither the execution, delivery or performance by the Company of this
Agreement, the other Transaction Documents or the CK Transaction Documents nor
the consummation of the Contemplated Transactions, will (a) conflict with, or
result in the breach of, any provision of the Certificate of Incorporation or
By-Laws of the Company or any Company Subsidiary, (b) conflict with, violate,
result in the breach or termination of, or constitute a default or give rise to
any right of termination or acceleration or right to increase the obligations or
otherwise modify the terms thereof under any Contract, Permit or Order to which
the Company or any Company Subsidiary is a party or by which the Company or any
Company Subsidiary or any of the properties or assets of the Company or any
Company Subsidiary is bound, (c) constitute a violation of any Law applicable to
the Company or any Company Subsidiary; or (d) result in the creation of any Lien
upon the properties or assets of the Company or any Company Subsidiary, other
than with respect to the foregoing clauses (b), (c) and (d), such requirements,
conflicts, violations, breaches or rights which could not reasonably have a
Material Adverse Effect. Except as set forth on Schedule 3.05, other than those
which have been obtained or made or which could not reasonably have a Material
Adverse Effect, no Consent is required on the part of the Company or
14
the Company Subsidiaries in connection with the execution and delivery of this
Agreement or the Transaction Documents, or the compliance by the Company with
any of the provisions hereof or thereof.
Section 3.06. Listing. The Company is not in violation of the listing
requirements of the NYSE in any material respect. The Company has not received
any written notice from the NYSE that the Common Stock is to be delisted by the
NYSE. The transactions contemplated under this Agreement constitute a bona fide
private financing under paragraph 312.03 of the NYSE Listed Company Manual and
stockholder approval is not required under the rules and regulations of the NYSE
in order to authorize the issuance of the Series B Shares pursuant to this
Agreement or the listing of the Common Stock into which the Series B Stock is
convertible.
Section 3.07. Financial Statements. The Company has previously
delivered to the Initial Purchaser and to the Investors copies of (i) the
consolidated balance sheet of the Company and the Company Subsidiaries as of
February 3, 2002 and February 4, 2001 and the related consolidated income
statements, changes in stockholders' equity and cash flows for the fiscal years
ended February 3, 2002, February 4, 2001 and January 30, 2000, as reported in
the Company's Annual Report on Form 10-K for the fiscal year ended February 3,
2002, filed by the Company with the SEC under the Exchange Act, and accompanied
by the audit report of Ernst & Young LLP, independent public accountants,
(collectively, the "Audited Financial Statements"), and (ii) the unaudited
consolidated balance sheet of the Company and the Company Subsidiaries as of
August 4, 2002 (the "Balance Sheet") and the related unaudited consolidated
income statements and cash flows for the thirteen weeks and twenty-six weeks
ended August 4, 2002, as reported in the Company's Quarterly Report on Form 10-Q
for the quarterly period ended August 4, 2002, filed with the SEC under the
Exchange Act (the "Unaudited Financial Statements"). The Audited Financial
Statements accurately reflect the books and records of the Company and present
fairly, in all material respects, the consolidated financial position of the
Company and the Company Subsidiaries and the consolidated results of their
operations and their cash flows for the periods and dates covered thereby, in
conformity with GAAP. The Unaudited Financial Statements accurately reflect the
books and records of the Company and present fairly, in all material respects,
the consolidated financial position of the Company and the Company Subsidiaries
and the consolidated results of their operations and their cash flows for the
period and date covered thereby, in conformity with GAAP, except for changes
resulting from year-end adjustments (none of which will be material in amount)
and the absence of footnote disclosures thereto. The Company and the Company
Subsidiaries have no liabilities or obligations of a type that GAAP would
require to be on the Balance Sheet (absolute, accrued, contingent or otherwise)
which are not fully reflected or reserved against in the Balance Sheet, except
for liabilities and obligations that may have arisen in the ordinary and usual
course of business and consistent with past practice since August 4, 2002 and
that, individually or in the aggregate, could not reasonably have a Material
Adverse Effect. Neither the Company nor any Company Subsidiary is currently a
party to any Off-Balance Sheet Arrangement, which is not reflected in the
financial statements (or the footnotes thereto) referred to in this Section
3.07. During the past three years, the Company has not restated any of its
published financial results and the Company is not aware of any facts which may
require such restatement.
15
Section 3.08. Commission Filings. The Company has filed all reports,
registration statements, proxy statements and other materials, together with any
amendments required to be made with respect thereto, that were required to be
filed with the SEC under the Securities Act or the Exchange Act from and after
January 30, 2000 (all such reports and statements are collectively referred to
herein as the "Commission Filings"). As of their respective dates, the
Commission Filings, including the financial statements contained therein,
complied in all material respects with all of the statutes and published rules
and regulations enforced or promulgated by the regulatory authority with which
the Commission Filings were filed, and, except to the extent the information in
any Commission Filing has been revised or superseded by a later filed Commission
Filing, did not and do not as of the date hereof contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Section 3.09. Absence of Certain Developments.
(a) Except as set forth on Schedule 3.09(a), since August 4, 2002
and through the date hereof:
(i) no event occurred which could reasonably have a Material
Adverse Effect;
(ii) there has not been any declaration, setting a record
date, setting aside or authorizing the payment of, any dividend or other
distribution in respect of any shares of Capital Stock of the Company or any
repurchase, redemption or other acquisition by the Company, of any of the
outstanding shares of Capital Stock of the Company other than the Company's
regular quarterly dividends to its stockholders paid on September 13, 2002 and
December 16, 2002;
(iii) neither the Company nor any Company Subsidiary has
transferred, issued, sold or disposed of any shares of their Capital Stock or
granted any options, warrants, calls or other rights to purchase or otherwise
acquire shares of their Capital Stock other than under the Company's employee
stock option plans and the dissolution of former Company Subsidiaries;
(iv) neither the Company nor any Company Subsidiary, except
in the ordinary course of business and consistent with past practice, has (x)
awarded or paid any material bonuses to any senior executive, or (y) entered
into any Plan, material employment, deferred compensation, severance or similar
agreement (nor amended or terminated any such agreement) or agreed to increase
materially the compensation payable or to become payable to any senior executive
or agreed to increase materially the coverage or benefits available under any
material severance pay, deferred compensation, bonus or other incentive
compensation, pension or other employee benefit plan, payment or arrangement
made to, for or with such senior executive;
16
(v) except in connection with the CK Acquisition, neither the
Company nor any Company Subsidiary has made, or agreed to, make any material
acquisition of any business or assets other than in the ordinary course of
business;
(vi) neither the Company nor any Company Subsidiary has made,
or agreed to make, any loans or investments in any business of any Affiliate of
the Company other than a Company Subsidiary;
(vii) there has not been any damage, destruction or loss,
whether or not covered by insurance, with respect to the property of the Company
or any Company Subsidiary having a material adverse impact on the business of
the Company or the Company Subsidiaries, taken as a whole;
(viii) except as granted under the Credit Facility or the
Transaction Documents, neither the Company nor any Company Subsidiary has
mortgaged, pledged or subjected to any Lien (other than Permitted Liens) any of
its assets, or sold, assigned, transferred, conveyed or otherwise disposed of
any material assets of the Company or any Company Subsidiary, except for assets
sold, assigned, transferred, conveyed or otherwise disposed of in the ordinary
course of business;
(ix) except for the CK Purchase Agreement, neither the
Company nor any Company Subsidiary has entered into any Contract to make any
capital expenditures obligating the Company or any Company Subsidiary to pay an
amount which together with amounts already expended or committed during its 2002
fiscal year would exceed the amount budgeted for capital expenditures in the
2002 Budget;
(x) except in connection with the Credit Facility and the CK
Acquisition, neither the Company nor any Company Subsidiary has created,
incurred, assumed or guaranteed any debt for borrowed money, whether due or to
become due, other than in the ordinary course of business and consistent with
past practice;
(xi) except in connection with the Contemplated Transactions,
neither the Company nor any Company Subsidiary has entered into any material
transaction other than in the ordinary course of business consistent with past
practice;
(xii) neither the Company nor any Company Subsidiary has made
any change in the accounting principles, methods or practices followed by it
(including, without limitation, its method of accounting for stock options)
other than a change which was required by reason of a concurrent change in Law
or GAAP;
(xiii) neither the Company nor any Company Subsidiary has
amended its Certificate of Incorporation or By-Laws except as contemplated by
this Agreement;
(xiv) neither the Company nor any Company Subsidiary has had
any material disagreements with its independent public accountants regarding any
matter of
17
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure which has not been resolved;
(xv) neither the Company nor any Company Subsidiary has sold,
assigned or transferred, or allowed any rights to lapse with respect to,
Intellectual Property, other than in the ordinary course of business and
consistent with past practice and which could reasonably have a Material Adverse
Effect;
(xvi) neither the Company nor any Company Subsidiary has
entered into, modified, amended or terminated any material Contract, other than
in the ordinary course of business and consistent with past practice and which
could reasonably have a Material Adverse Effect; and
(xvii) neither the Company nor any Company Subsidiary has
agreed, whether in writing or otherwise, to do any of the foregoing.
Section 3.10. Litigation. There are no Legal Proceedings pending or, to
the knowledge of the Company, threatened, that question the validity of this
Agreement or the Transaction Documents or any action taken or to be taken by the
Company or any Company Subsidiary in connection with the consummation of the
Contemplated Transactions. Except as otherwise disclosed herein or on Schedule
3.10, there are no Legal Proceedings pending or, to the knowledge of the
Company, threatened, against or involving the Company or any Company Subsidiary
or any of their respective properties or assets, at Law or in equity, involving
claims of more than $1,000,000 by stockholders of the Company, or claims
involving more than $1,000,000 for product liability, infringement of trademark,
patent or intellectual property, violations of health and safety laws covering
Employees, violations of Environmental Laws, violations of customs laws, sexual
harassment or discrimination, or racial discrimination. There is no outstanding
or, to the knowledge of the Company, threatened, Order of any Governmental Body
against the Company or any Company Subsidiary or any of their respective
properties or assets, which Order could reasonably have a Material Adverse
Effect.
Section 3.11. Tax Matters.
(a) For the periods since January 1, 1999, the Company and each
Company Subsidiary has timely filed or caused to be timely filed any and all
returns, declarations, reports (including any consolidated, combined or unitary
returns), claims for refund, information returns, or other documents or
statements relating to Taxes, including any schedule or attachment thereto and
any amendment or supplement thereof (each, a "Tax Return") required to be filed
by it under applicable federal, state, local or foreign Law, except to the
extent that any failure to do so could not reasonably have a Material Adverse
Effect. The reserves for Taxes contained in the financial statements of the
Company or carried on the books and records of the Company and the Company
Subsidiaries, as applicable, are in the aggregate adequate to cover all Tax
liabilities and deferred Taxes of the Company and the Company Subsidiaries as of
the date of this Agreement, except to the extent that any inadequacy could not
reasonably have a Material Adverse Effect.
18
(b) For the periods since January 1, 1999, all Taxes shown as
being due and owing by the Company or any Company Subsidiary on any Tax Return
have been paid.
(c) The Company and each Company Subsidiary has timely withheld
and paid all Taxes required to have been withheld and paid in connection with
any amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or third party, except to the extent that any failure to do so
could not reasonably have a Material Adverse Effect.
(d) None of the Company nor any Company Subsidiary has waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency, in each case except as to Taxes
that are disclosed on Schedule 3.11(d) or in the financial statements of the
Company and the Company Subsidiaries, as applicable, or that, if assessed could
not reasonably have a Material Adverse Effect.
(e) The Company has not been a "United States real property
holding corporation" within the meaning of Section 897 of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
Section 3.12. Real Property.
(a) Except as disclosed in Schedule 3.12(a), each of the Company
and the Company Subsidiaries has fee simple title to the material real property
that it owns (the "Owned Real Property"), free and clear of all Liens (other
than Permitted Liens).
(b) Schedule 3.12(b) contains a description of all real property
leased by the Company and the Company Subsidiaries as lessee (the "Leased Real
Property;" the Leased Real Property and the Owned Real Property are collectively
referred to as the "Real Property"), other than properties leased for retail
store operations. Except as disclosed in Schedule 3.12(b), each of the Company
and the Company Subsidiaries has a subsisting leasehold estate in the Leased
Real Property identified on Schedule 3.12(b), free and clear of all Liens (other
than Permitted Liens), and is in sole possession of each parcel of Leased Real
Property that it leases.
(c) There are no condemnation or appropriation proceedings pending
or, to the knowledge of the Company, threatened, against the Real Property.
(d) The buildings, structures, facilities, fixtures and other
improvements constituting a portion of the Owned Real Property are in good
operating condition and in a state of good maintenance and repair, ordinary wear
and tear excepted, and are adequate and suitable for the purposes for which they
are presently being used.
Section 3.13. Inventory. The Company does not now intend to write-down
more than $5,000,000 in inventory.
Section 3.14. Intellectual Property.
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(a) For the purposes of this Agreement, "Intellectual Property"
shall mean (i) all Marks, trade dress, logos, trade names, domain names,
web-sites, brand names and corporate names (and all licenses or other rights
relating to any of the foregoing), together with all goodwill associated
therewith, and all applications, registrations and renewals in connection
therewith, (ii) all inventions and designs (whether patentable or unpatentable
and whether or not reduced to practice), all improvements thereto, and all
patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions and
reexaminations thereof, and (iii) all copyrightable works, all copyrights and
all applications, registrations and renewals in connection therewith, in each
case which is owned by or licensed to the Company and the Company Subsidiaries.
(b) Each of the Company and the Company Subsidiaries owns, or is
licensed to use, all Intellectual Property material to its business, and to the
knowledge of the Company, the use thereof by the Company and the Company
Subsidiaries does not infringe upon the trademark, copyright or proprietary
rights of any other Person, except for any such infringements that, individually
or in the aggregate, could not reasonably have a Material Adverse Effect.
(c) Except as set forth on Schedule 3.14(c), no Xxxx licensed to
or used by the Company or any Company Subsidiary is scheduled to expire (without
the right of extension on the part of the Company) within 12 months from the
date hereof, which such expiration could reasonably have a Material Adverse
Effect.
Section 3.15. Material Contracts.
(a) Except as set forth on Schedule 3.15(a) or in the Commission
Filings or for the CK Transaction Documents, neither the Company, the Company
Subsidiaries nor any of their properties or assets is a party to or bound by any
(i) Contract involving a commitment or payment by the Company or the Company
Subsidiaries in excess of $5,000,000 in any twelve-month period (whether or not
in the ordinary course of business); (ii) Contract among stockholders that
beneficially own five percent (5%) or more of the Common Stock; (iii) Contract
(other than a contract for any Leased Real Property) which contains any
provision that may require payments to be made by the Company or any Company
Subsidiary upon or following a "change of control" (as such term is defined by
such Contract) or similar event. The Company has delivered or otherwise made
available to the Initial Purchaser and the Investors complete and correct copies
of the Contracts listed on Schedule 3.15(a), together with all amendments,
modifications, supplements or side letters to such Contracts.
(b) There is no default and the Company has received no written
notice of default under any Contract listed on Schedule 3.15(a) or a Contract
listed in the Commission Filings by the Company, the Company Subsidiaries or, to
the knowledge of the Company, by any other party thereto, in each case which
could reasonably have a Material Adverse Effect, and no event has occurred that
with the lapse of time or the giving of notice or both would constitute a
default thereunder by the Company, the Company Subsidiaries or, to the knowledge
of the Company, by any other party thereto, that could reasonably have a
Material Adverse Effect.
20
Section 3.16. Company Employee Plans.
(a) Schedule 3.16(a) sets forth a complete and correct list of
every Employee Program which is maintained, administered, sponsored or
contributed to by the Company or any Company Subsidiary, which covers any
Employee of the Company or any Company Subsidiary or with respect to which an
obligation of the Company or any Company Subsidiary to make any contribution
exists, other than a Foreign Plan. Any Employee Program listed in such schedule
(other than any employee Program that is a multiemployer plan, as defined in
Section 3(37) of ERISA (a "Multiemployer Plan") is referred to below as a
"Company Employee Plan."
(b) The Company has made available to the Initial Purchaser and
the Investors with respect to each Company Employee Plan complete and correct
copies of (i) all written documents comprising such Company Employee Plan
(including amendments, individual agreements, service agreements, trusts and
other funding agreements), (ii) the three most recent annual returns in the
Federal Form 5500 series (including all schedules thereto) filed with respect to
such Company Employee Plan, (iii) the three most recent audited financial
statements and actuarial reports, if any, pertaining to such Company Employee
Plan, (iv) the summary plan description currently in effect and all material
modifications thereto, if any, for such Company Employee Plan, (v) any employee
handbook which includes a description of such Company Employee Plan, (vi) the
most recent IRS determination letter, if any, for such Company Employee Plan,
and (vii) any other written communications to any Employee, to the extent that
the provisions of such Company Employee Plan described therein differ materially
from such provisions as set forth or described in the other information or
materials furnished under this subsection (b).
(c) Each Company Employee Plan which is intended to qualify under
Section 401(a) of the Code has received a determination letter from the IRS
which states that such plan is so qualified, and on which any employer which has
adopted such plan may currently rely.
(d) Each Company Employee Plan and Foreign Plan has been
maintained in accordance with its terms and with all applicable Laws, except to
such extent as could not reasonably have a Material Adverse Effect. Neither the
Company nor any Company Subsidiary has any unsatisfied liability, or any unpaid
fine, penalty or tax, with respect to any Company Employee Plan, any Foreign
Plan or any other Employee Program, which could reasonably have a Material
Adverse Effect. To the knowledge of the Company, there has been no "prohibited
transaction" (within the meaning of Section 406 of ERISA or Section 4975 of the
Code), or any breach of any duty under ERISA, any other applicable Law or any
agreement, with respect to any Company Employee Plan or Foreign Plan which could
subject the Company or any Company Subsidiary to material liability either
directly or indirectly (including, without limitation, through any obligation of
indemnification or contribution) for any damages, penalties, taxes or any other
loss or expense which could reasonably have a Material Adverse Effect. The
Company and each Company Subsidiary has made full and timely payment of all
contributions required to be made by it to each Company Employee Plan and
21
Foreign Plan by the terms of any such plan or under the applicable Law, except
that all contributions which are so required to be made by the Company or any
Company Subsidiary to each Company Employee Plan and Foreign Plan for any period
ending prior to the Closing, but which are not due by the date of the Closing,
shall be properly reserved or accrued in the appropriate financial statements.
There have been no material violations of any reporting or disclosure
requirements under ERISA or the Code with respect to any Company Employee Plan,
including any requirement to file an annual return.
(e) No litigation or claim (other than routine claims for
benefits), and no governmental administrative proceeding, audit or
investigation, is pending or, to the knowledge of the Company or any of the
Company Subsidiaries, threatened with respect to any Company Employee Plan or
Foreign Plan which could reasonably have a Material Adverse Effect.
(f) With respect to each Company Employee Plan which is a defined
benefit pension plan, (i) such Company Employee Plan has not incurred an
"accumulated funding deficiency", within the meaning of Section 412 of the Code
or Section 302 of ERISA, whether or not waived, (ii) such Company Employee Plan
has not been terminated, (iii) no notice of intent to terminate such Company
Employee Plan has been issued to participants or filed with the PBGC, (iv) the
PBGC has not instituted any proceeding to terminate, or to appoint a trustee or
administrator of, such Company Employee Plan, and no circumstances exist that
are reasonably likely to constitute grounds under Section 4042 of ERISA which
may allow the PBGC to institute any such proceeding, (v) except as set forth on
Schedule 3.16(f), if such Company Employee Plan is intended to be a "qualified
plan" within the meaning of Section 401(a) of the Code, as of the most recent
valuation date for such Company Employee Plan, the present value of benefit
liabilities, when computed on a termination basis using actuarial assumptions
which are reasonable under the circumstances, does not exceed the value of
assets, (vi) neither the Company nor any Company Subsidiary (x) has incurred any
liability to the PBGC or any other Person, or has become subject to any lien,
under Title IV of ERISA in connection with such Company Employee Plan (other
than PBGC premiums), or (y) has knowledge of any facts or transactions that
might reasonably be anticipated to result in the imposition of any liability on,
or the imposition of any lien on the assets of, the Company or any of the
Company Subsidiaries to, or in favor of, the PBGC or any other Person under
Title IV of ERISA in connection with such Company Employee Plan (other than PBGC
premiums), and (vii) no Reportable Event has occurred with respect to such
Company Employee Plan.
(g) Except as set forth on Schedule 3.16(g), no Employee Program
which has been maintained, administered or contributed to by the Company or any
Company Subsidiary, which has covered any Employee of the Company or any Company
Subsidiary, or to which the Company or any Company Subsidiary has had any
obligation to make a contribution, during the six-year period ending on the date
of this Agreement, is (i) a "multiemployer plan", as defined in Section 3(37) of
ERISA, (ii) a "multiple employer plan", as described in Section 413(c) of the
Code, (iii) a "multiple employer welfare arrangement", as defined in Section
3(40) of ERISA, (iv) a "voluntary employees' beneficiary association" within the
meaning of Section 501(c)(9) of the Code, or (v) a Foreign Plan other than a
plan which does not provide benefits materially greater than any benefits which
may be required by applicable law. Neither the Company nor any Company
Subsidiary has, within the past six years, incurred any withdrawal liability to
a Multiemployer Plan.
22
(h) Except as set forth on Schedule 3.16(h), all health and
medical benefit coverage, and all death benefit coverage, under each Company
Employee Plan is provided solely through insurance, and no Company Employee Plan
provides health or medical coverage, life insurance coverage, or coverage for
any other welfare benefit to any Retiree, except for continuation coverage
required by Section 4980B of the Code, Sections 601 to 608 of ERISA or any
applicable State Law.
(i) No Employee of the Company or any Company Subsidiary shall
accrue or receive additional benefits, additional credit for service,
accelerated vesting or accelerated rights to payment of any benefit under any
Company Employee Plan, or become entitled to any severance, termination
allowance or similar payments or to the forgiveness of any indebtedness, solely
as a result of the execution and delivery of, or the transactions contemplated
by this Agreement. Such execution and delivery, or the occurrence of such
transactions, shall not result in any increase in the contributions required to
be made to any Company Employee Plan. Except as set forth on Schedule 3.16(i),
no payment made or contemplated under any Company Employee Plan, or by the
Company or any Company Subsidiary, in connection with the Contemplated
Transactions, constituted, or would constitute, either (i) an "excess parachute
payment" within the meaning of Section 280G of the Code or (ii) a payment which
is not deductible by reason of Section 404 of the Code.
(j) Except as set forth on Schedule 3.16(j), (i) except for the
adoption of a plan amendment which is needed to bring the plan documents into
conformity with statutory changes enacted in recent years, neither the Company
nor any Company Subsidiary is under any obligation (express or implied) to
modify any Company Employee Plan, or to establish any new Employee Program which
will cover any Employee of the Company or any Company Subsidiary, (ii) the
Company or a Company Subsidiary has expressly reserved to itself the right to
amend, modify or terminate each Company Employee Plan (and any service or
funding agreement or arrangement for each Company Employee Plan), at any time
without material liability or penalty to itself (other than routine expenses),
and (iii) no Company Employee Plan requires the Company or any of the Company
Subsidiaries to continue to employ or use the services of any Employee.
(k) Except as set forth on Schedule 3.16(k), there has been no
amendment, interpretation or announcement by the Company or any of the Company
Subsidiaries relating to any Company Employee Plan which would materially
increase the expense of maintaining such plan above the level of expense
incurred with respect to that plan, as indicated in the applicable financial
statements, for its most recent fiscal year.
(l) No ERISA Affiliate has any unpaid liability, fine, penalty or
tax with respect to any Employee Program for which the Company or any of the
Company Subsidiaries could be liable, and which could reasonably have a Material
Adverse Effect.
Section 3.17. Labor Relations. Except as set forth on Schedule 3.17(a):
23
(a) the Company and the Company Subsidiaries are in compliance in
all material respects with all applicable Laws respecting employment and
employment practices, terms and conditions of employment, wages, hours,
collective bargaining, safety and health, work authorization, equal employment
opportunity, immigration, withholding, unemployment compensation, worker's
compensation and employee privacy and right to know, other than any such failure
to comply that could not reasonably have a Material Adverse Effect;
(b) there is no pending, or to the knowledge of the Company, any
threatened, charge or complaint, against the Company or any of the Company
Subsidiaries before the National Labor Relations Board or any other comparable
Governmental Body, which could reasonably have a Material Adverse Effect;
(c) there is, and for the past three years have been, (i) no labor
strike, union-related slowdown, work stoppage or other union-related labor
controversy pending, or to the knowledge of the Company, threatened in writing,
against or otherwise affecting or involving the Company or the Company
Subsidiaries or (ii) no lawsuits (other than grievance proceedings) pending, or
to the knowledge of the Company, threatened, between any of the Company or the
Company Subsidiaries and any employee of the Company or the Company Subsidiaries
or any union or other collective bargaining unit representing any employees of
the Company or the Company Subsidiaries, which could reasonably have a Material
Adverse Effect;
(d) none of the employees of the Company or the Company
Subsidiaries are covered by any collective bargaining agreements (other than as
disclosed in the Commission Filings) and, to the knowledge of the Company, no
solicitation of the employees of the Company or any of the Company Subsidiaries
is currently being made by any union to organize any of such employees; and
(e) no Material Employee has given notice to the Company or any
Company Subsidiary of his intent to terminate his employment with the Company or
any Company Subsidiary.
Section 3.18. Compliance with Laws; Permits.
(a) The Company and the Company Subsidiaries are in compliance in
all material respects with all material Laws (including, without limitation, the
Xxxxxxxx-Xxxxx Act of 2002) and material Orders promulgated by any Governmental
Body applicable to the Company and the Company Subsidiaries or to the conduct of
the business or operations of the Company and the Company Subsidiaries or the
use of their properties (including any leased properties) and assets. Since
January 1, 1999, neither the Company nor any Company Subsidiary has received any
written notice of violation or alleged material violation of any such Law or
Order by any Governmental Body in any material respect that has not been
resolved. Since January 1, 1999, neither the Company nor any Company Subsidiary
has received written notice that it is the subject of an investigation by any
Governmental Body which could reasonably have a Material Adverse Effect.
24
(b) To the knowledge of the Company, except as set forth on
Schedule 3.18(b), the Company and the Company Subsidiaries have all Permits
necessary for the conduct of their business, except where the failure to have
such Permits could not reasonably have a Material Adverse Effect. The Company
and the Company Subsidiaries have complied in all material respects with all
conditions of such Permits applicable to it.
Section 3.19. Preferred Stock Exemption.
(a) Assuming the representations and warranties of the Initial
Purchaser and of the Investors contained in Article IV are true, the offer and
sale of the Series B Shares (and the issuance of the Common Stock to such
Investors upon the conversion of such Series B Shares) are exempt from the
registration requirements of the Securities Act. The Company has not taken and
will not take any actions which would cause the offers and sales contemplated
hereunder to become ineligible for exemption under the Securities Act.
(b) Neither the Company nor any Person acting on its behalf has
offered the Series B Stock to any Person by means of general or public
solicitation or general or public advertising, such as by newspaper or magazine
advertisements, by broadcast media, or at any seminar or meeting whose attendees
were solicited by such means.
Section 3.20. Environmental Protection.
(a) Each of the Company and the Company Subsidiaries is in
compliance in all material respects with all limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in any applicable Environmental Laws, or in any plan,
Order, notice or demand letter issued, entered, promulgated or approved
thereunder.
(b) Except as set forth on Schedule 3.20(b), to the knowledge of
the Company, as a result of activities of the Company or the Company
Subsidiaries or any of their employees, no Hazardous Material has been
incorporated in, used on, stored on or under, released from, treated on,
transported to or from, or disposed of on or from, any property owned or during
the period of the Company's or any of the Company Subsidiaries' lease(s), or to
the knowledge of the Company without any investigation, any prior period, leased
by the Company or any Company Subsidiary such that, under applicable
Environmental Laws (i) any such Hazardous Material would be required to be
removed, cleaned-up or remediated before the property could be altered,
renovated, demolished or transferred, or (ii) the owner or lessee of the
property could be subjected to liability for the removal, clean-up or
remediation of such Hazardous Material, except, under circumstances that could
not reasonably have a Material Adverse Effect; and, except as set forth on
Schedule 3.20(b), the Company has not received any written notification from any
Governmental Body or other third parties relating to Hazardous Material on or
affecting any property owned or leased by the Company or the Company
Subsidiaries or relating to any potential or known liability under applicable
Environmental Laws arising from the ownership or leasing of any property, which
could reasonably have a Material Adverse Effect
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Section 3.21. Investment Company Act. The Company and the Company
Subsidiaries are not, nor are they directly or indirectly controlled by or
acting on behalf of any Person that is, an investment company within the meaning
of the Investment Company Act of 1940, as amended.
Section 3.22. Transactions with Affiliates. Except: (i) for
transactions between the Company and any wholly-owned Company Subsidiary, (ii)
for expenses in the ordinary course of business, and (iii) as disclosed in the
Company's reports filed with the SEC pursuant to the Exchange Act (including
transactions related to the Xxxx Company), neither the Company nor any Company
Subsidiary has made any payment to, or received any payment from, or made or
received any investment in, or entered into any transaction with, any Affiliate,
including without limitation, the purchase, sale or exchange of property or the
rendering of any service, where the amount involved is material to the business
of the Company.
Section 3.23. Insurance. There is in full force and effect certain
policies of insurance issued by insurers of recognized responsibility,
including, without limitation, fire and casualty insurance, insuring the Company
and each Company Subsidiary and their properties against such losses and risks,
and in such amounts, as are usual and customary in the case of companies engaged
in the same or similar business and similarly situated.
Section 3.24. Customers. Except as set forth in Schedule 3.24, neither
the Company nor any Company Subsidiary has received any written notice that any
customer has ceased, or will cease, or has substantially reduced, or will
substantially reduce, their overall purchases of the products or goods of the
Company or Company Subsidiary, in each case which could reasonably have a
Material Adverse Effect.
Section 3.25. Financial Advisors. Except as set forth on Schedule 3.25,
no agent, broker, investment banker, finder, financial advisor or other Person
is or will be entitled to any broker's or finder's fee or any other commission
or similar fee from the Company, directly or indirectly, in connection with the
Contemplated Transactions.
Section 3.26. DGCL Section 203 and Rights Agreement. The Board of
Directors has taken all action necessary to exempt from the provisions of
Section 203 of the Delaware General Corporation Law ("DGCL Section 203") and
from being deemed an "Acquiring Person" under the Rights Agreement, to the
extent applicable, this Agreement, any acquisition by the Investors or their
Affiliates of the Series B Stock pursuant to this Agreement, and the Certificate
of Designations and any conversion or exercise by the Investors or their
Affiliates of the Series B Stock into Common Stock. No agreement or instrument
to which the Company or any of the Company Subsidiaries is a party or by which
any of them is bound, and no state statute similar to DGCL Section 203 that is
applicable to the Company or any of the Company Subsidiaries imposes any
restrictions on business combinations or similar transactions with interested
stockholders of a nature similar to those set forth in DGCL Section 203.
26
Section 3.27. D&O Insurance. The Company maintains director and officer
liability insurance coverage in the aggregate amount of $20 million, which
policy has a $5,000 per individual deductible up to $50,000 in the aggregate.
Section 3.28. Solvency. The Company is not, and after giving effect to
the Contemplated Transactions, will not be, insolvent within the meaning of
Title 11 of the United States Code, the General Corporation Law of the State of
Delaware, or the General Laws of the State of New York.
Section 3.29. Full Disclosure. No representation or warranty made by
the Company in this Agreement or any other Transaction Document contains or will
contain any untrue statement of a material fact, or omits to state a material
fact necessary to make the statements contained herein or therein not
misleading.
Section 3.30. No General Solicitation. None of the Company or any of
its "affiliates" (as defined in Rule 501(b) of Regulation D under the Securities
Act ("Regulation D")), has, directly or through an agent, engaged in any form of
general solicitation or general advertising in connection with the offering of
the Series B Shares (as those terms are used in Regulation D) under the
Securities Act or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act; and the Company has not entered into any
contractual arrangement with respect to the distribution of the Series B Shares
except for this Agreement and the Registration Rights Agreement, and the Company
will not enter into any such arrangement.
Section 3.31. No Integration. None of the Company or any of its
Affiliates (other than the Initial Purchaser in connection with the transactions
contemplated by this Agreement about which no representation is made by the
Company) has, directly or through any agent, sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any "security" (as defined
in the Securities Act) which is or will be integrated with the sale of the
Series B Shares or the Common Stock in a manner that would require the
registration under the Securities Act of the Series B Shares or the Common
Stock. The Company has not sold or issued any Series B Shares, shares of Common
Stock, any security convertible into Series B Shares or shares of Common Stock,
or any security of the same class as the Series B Shares or Common Stock during
the six-month period prior to the Closing Date, including any sales pursuant to
Rule 144A, Regulation D or Regulation S under the Securities Act, other than
shares issued pursuant to employee benefit plans, qualified stock options plans
or other employee compensation plans or pursuant to outstanding options, rights
or warrants.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE
INITIAL PURCHASER AND THE INVESTORS
Section 4.01. Initial Purchaser Representations.
(a) The Initial Purchaser represents and warrants to and agrees
with the Company that it is an institutional accredited investor, as defined in
Rule 501(a)(1), (2), (3) or
27
(7) under the Securities Act, as the case may be, with such knowledge and
experience in financial and business matters as is necessary in order to
evaluate the merits and risks of an investment in the Series B Shares, and (ii)
it is not acquiring the Series B Shares with any present intention of offering
or selling any of the Series B Shares in a transaction that would violate the
Securities Act or the securities laws of any state of the United States or any
other applicable jurisdiction
(b) The Initial Purchaser hereby represents and warrants to the
Company that it (i) has not solicited offers for, or offered or sold, the Series
B Shares by means of any form of general solicitation or general advertising or
in any manner involving a public offering within the meaning of Section 4(2) of
the Securities Act and (ii) has only solicited offers for the Series B Shares
from persons whom the Initial Purchaser reasonably believed to be accredited
investors.
Section 4.02. Investors Representations. Each of the Investors
represents and warrants, severally and not jointly, to the Company as follows:
(a) Authorization. Such Investor is a limited partnership duly
organized and validly existing under the Laws of the state or country of its
jurisdiction of formation. Such Investor has the full power and authority to
enter into this Agreement and the other Transaction Documents and to consummate
the transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the other Transaction Documents and the consummation by the
Investors of the transactions contemplated hereby and thereby have been duly and
authorized by all necessary action on the part of the Investors. This Agreement
and the other Transaction Documents have been and will be, as the case may be,
duly executed and delivered by the Investors and constitute legal, valid and
binding obligations of the Investors, enforceable in accordance with their
respective terms, except as such enforceability may be subject to the effects of
any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar Laws affecting creditors' rights generally and subject to
the effects of general equitable principles.
(b) Investment Representations. Such Investor is an Accredited
Investor and is acquiring the Series B Shares allocated to such Investor for
such Investor's own account, for investment, and not with a view to, or for sale
in connection with, the distribution thereof or of any interest therein. Such
Investor has adequate net worth and means of providing for its current needs and
contingencies and is able to sustain a complete loss of the investment in such
Series B Shares, and has no need for liquidity in such investment. Such
Investor, itself or through its officers, employees or agents, has sufficient
knowledge and experience in financial and business matters to be capable of
evaluating the merits and risks of an investment such as an investment in the
Series B Shares, and such Investor, either alone or through its officers,
employees or agents, has evaluated the merits and risks of the investment in
such Series B Shares. Such Investor understands that the Series B Stock has not
been registered under the Securities Act by reason of its issuance in a
transaction exempt from the registration requirements of the Securities Act
pursuant to the exemption provided in Section 4(2), and that the Series B Stock
may not be sold or otherwise disposed of unless registered under the Securities
Act or exempted from such registration.
28
(c) Investors' Acknowledgment. Each Investor has had the
opportunity, directly or through its representatives, to ask questions of and
receive answers from Persons acting on behalf of the Company concerning the
transactions contemplated by this Agreement.
(d) Financial Advisors. No agent, broker, investment banker,
finder, financial advisor or other Person is or will be entitled to any broker's
or finder's fee or any other commission or similar fee from any of the
Investors, directly or indirectly, in connection with any of the transactions
contemplated by this Agreement or any of the Transaction Documents.
(e) Legend.
(i) The certificates evidencing the Series B Stock and the
Common Stock issuable upon conversion of the Series B Stock will bear a legend
(the "Legend") substantially similar to the following:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. NO INTEREST IN THESE SECURITIES MAY BE
PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION STATEMENT IS IN EFFECT UNDER SAID ACT
OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT. THIS
CERTIFICATE IS ISSUED PURSUANT TO AND SUBJECT TO THE RESTRICTIONS
ON TRANSFER AND OTHER PROVISIONS OF THE INVESTORS' RIGHTS
AGREEMENT BETWEEN THE COMPANY, AND THE INVESTORS REFERRED TO
THEREIN, A COPY OF WHICH IS ON FILE WITH THE COMPANY. EXCEPT AS
PROVIDED IN SUCH AGREEMENT, THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE NOT TRANSFERABLE AND ANY PURPORTED TRANSFER IN
VIOLATION OF THE PROVISIONS OF SUCH AGREEMENT SHALL BE VOID AND OF
NO FORCE AND EFFECT.
(ii) The legend endorsed on the certificates pursuant to
Section 4.02(e) hereof shall be removed and the Company shall issue a
certificate without such legend to the holder thereof at such time as the
securities evidenced thereby cease to be restricted securities upon the earliest
to occur of (i) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (ii) the securities shall have been sold to the public pursuant to
Rule 144 (or any successor provision) under the Securities Act, and (iii) such
securities may be sold by the holder without restriction or registration under
Rule 144(k) under the Securities Act (or any successor provision).
29
(f) No Reliance. Each Investor acknowledges that the Company is
not making any representation, warranty, covenant or agreement, other than as
set forth in this Agreement and the other Transaction Documents.
ARTICLE V
COVENANTS OF THE COMPANY
The Company covenants and agrees that for so long as the Series B
Shares are outstanding:
Section 5.01. Accounting System. The Company will maintain a system of
accounting and proper books of record and account, in accordance with GAAP.
Section 5.02. Taxes. The Company will, and will cause each Company
Subsidiary to, pay when due (a) all Taxes imposed upon it or any of its
properties or income, other than Taxes which could not reasonably have a
Material Adverse Effect, Taxes which are being contested in good faith by
appropriate proceedings and Taxes which are subject to filings that are on valid
extensions, and (b) all claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons which, if unpaid, might result in
the creation of a Lien upon any of its properties other than claims or demands
which are being contested in good faith or could not reasonably have a Material
Adverse Effect.
Section 5.03. Corporate Existence. The Company will preserve and keep
in full force and effect its corporate existence and the corporate existence of
each Company Subsidiary (unless merged into the Company) and all rights and
franchises of the Company and the Company Subsidiaries unless, in the good faith
judgment of the Company, the termination of or failure to preserve or keep in
full force and effect such corporate existence, right or franchise could not
reasonably have a Material Adverse Effect.
Section 5.04. Maintenance of Properties. The Company will, and will
cause each Company Subsidiary to, maintain all of its properties necessary for
the conduct of its business in good condition, repair and working order (normal
wear and tear excepted) and cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be conducted at all times.
Section 5.05. Insurance. Each of the Company and the Company
Subsidiaries will maintain insurance with insurers of recognized responsibility,
insuring the Company, the Company Subsidiaries and their respective properties,
assets, business and projects against such losses and risks, and in such
amounts, as the Company reasonably determines.
Section 5.06. Compliance with Law. The Company will, and will cause
each Company Subsidiary to, comply, in all material respects, with all material
Laws which it reasonably believes are applicable with respect to the conduct of
their respective businesses and the ownership of their respective properties,
provided that the Company shall not be deemed to be in
30
violation of this Section 5.06 as a result of any failure to comply with any
provisions of such Laws, the noncompliance with which would not result in
enforceable fines, penalties, injunctive relief or other civil or criminal
liabilities which, in the aggregate, could reasonably have a Material Adverse
Effect.
Section 5.07. Maintain Listing. The Company will use commercially
reasonable efforts to (x) maintain the listing and trading of its Common Stock
on the NYSE, for so long as the Company qualifies for such listing under the
rules and regulations of the NYSE and (y) comply in all material respects with
the Company's reporting, filing, and other obligations, under the rules and
regulations of the NYSE. In the event that the Common Stock is no longer
eligible for listing and trading on the NYSE, the Company will use commercially
reasonable efforts to secure the listing or quotation of the Common Stock on the
Nasdaq National Market, the Nasdaq SmallCap Market or the American Stock
Exchange (if such listing is permitted by the bylaws, rules or regulations of
any of the foregoing) and to comply in all material respects with the Company's
reporting, filing and other obligations under the bylaws or rules of such
exchanges or the National Association of Securities Dealers, Inc., as
applicable. The Company will promptly provide to the Initial Purchaser and each
of the Investor Representatives copies of any notices it receives from the NYSE
and any other exchange or quotation system on which the Common Stock is then
listed regarding the continued eligibility of the Common Stock for listing on
such exchanges or quotation systems.
Section 5.08. Secure Listing. The shares of Common Stock issuable upon
conversion of the Series B Stock shall have been duly listed, pending notice of
issuance, on the NYSE and the Company shall maintain such listing in accordance
with Section 5.07.
Section 5.09. Transfer Taxes. The Company shall be responsible for any
Liability with respect to any transfer, stamp or similar non-income Taxes that
may be payable in connection with the execution, delivery and performance of
this Agreement including, without limitation, any such Taxes with respect to the
issuance of the Series B Shares or shares of Common Stock issuable upon
conversion thereof.
ARTICLE VI
ACTIONS PRIOR TO CLOSING
Section 6.01. Access to Information. Until the Closing Date or the
earlier termination of this Agreement:
(a) The Company shall provide the Initial Purchaser and each of
the Investor Representatives with (i) monthly reports, as soon as practicable
and in any event within 20 calendar days after the close of each such month,
(ii) copies of: (A) the unaudited balance sheet of the Company as of the end of
such month, (B) the unaudited statements of operations of the Company for such
month, and (C) the unaudited statements of changes in cash flows of the Company
for such month setting forth in each case in comparative form the corresponding
figures for the preceding month and, with respect to statements relating to the
Company's 2002 fiscal year, for the 2002 Budget, for the year to date and for
the comparable periods in the
31
preceding year; and (iii) such other financial and operating data as the Initial
Purchaser and any Investor Representative may reasonably request.
(b) The Company will permit the Initial Purchaser and
representatives of the Investors to visit and inspect any of the properties of
the Company or any of the Company Subsidiaries, to examine the corporate books,
records, agreements and files of the Company and make copies or extracts
therefrom and to request information at reasonable times and intervals
concerning the general status of the Company's financial condition and
operations, all upon reasonable notice and at such reasonable times and as often
as the Initial Purchaser and such Investor may reasonably request. The Investors
will, and will instruct each of their respective Affiliates and advisors to,
hold in confidence all "Information" as provided in the letter agreement between
Apax Partners, Inc., an Affiliate of the Investors, and the Company, dated
January 17, 2002.
Section 6.02. Conduct of Business.
(a) Except as set forth in Schedule 6.02(a), or as otherwise
agreed to in writing by the Initial Purchaser and the Investors, from the date
hereof to the Closing Date, the Company shall, and shall cause each Company
Subsidiary to (i) use its commercially reasonable efforts to maintain all of the
material assets it owns or uses in the ordinary course of business consistent
with past practice (subject to the good faith judgement of management of the
Company); (ii) use its commercially reasonable efforts to preserve the goodwill
and ongoing operations of its business; (iii) maintain its books and records in
the usual, regular and ordinary manner, on a basis consistent with past
practice; (iv) use its commercially reasonable efforts to maintain insurance in
full force and effect with respect to its business with responsible companies,
comparable in amount, scope and coverage to that in effect on the date of this
Agreement; and (v) comply in all material respects with applicable material
Laws.
(b) Without limiting the generality of the foregoing, except as
expressly contemplated by this Agreement or as set forth on Schedule 6.02(b),
between the date hereof and the Closing Date, the Company shall not, and shall
cause each Company Subsidiary not to, do any of the following without the prior
written consent of the Investors:
(i) engage in any act, other than in the ordinary course of
business and consistent with past practice, which could reasonably have a
Material Adverse Effect or in any way prevent the consummation of the
Contemplated Transactions;
(ii) declare, set a record date, set aside or authorize the
payment of, any dividend or other distribution in respect of any shares of
Capital Stock of the Company or repurchase, redeem or acquire any of the
outstanding shares of Capital Stock of the Company, except for the Company's
regular dividends;
(iii) transfer, issue, sell or dispose of any shares of its
Capital Stock or grant any option, warrant, call or other right to purchase or
otherwise acquire shares of its Capital Stock, except for (x) grants of options
(and the issuance of any shares of its Capital Stock upon
32
exercise of such options) under the Company's employee option plans, and (y) the
issuance of the Warrants;
(iv) except with respect to the CK Acquisition, mortgage or
pledge (other than pursuant to the Credit Agreement or with respect to Permitted
Liens) any of its assets, or acquire any material assets or sell, assign,
transfer, convey or otherwise dispose of any material assets of the Company or
the Company Subsidiaries, except in the ordinary course of business;
(v) except for the CK Purchase Agreement, enter into any
Contract to make any capital expenditures for the Company's fiscal year ending
February 2, 2003 obligating the Company or any Company Subsidiary to pay an
amount in excess of $1,000,000 or an amount which together with amounts already
expended or committed during its 2002 fiscal year would exceed the amount
budgeted for capital expenditures in the 2002 Budget;
(vi) except with respect to the CK Acquisition or under the
Credit Facility, create, incur, assume or guarantee any debt for borrowed money
in excess of $5,000,000, whether due or to become due, except debt incurred in
the ordinary course of business;
(vii) change its accounting principles, methods or practices
(including, without limitation, its method of accounting for stock options)
other than a change which is required by reason of a concurrent change in Law or
GAAP;
(viii) cancel or terminate any material insurance policy
naming it as a beneficiary or a loss payee without obtaining substitute
insurance coverage except where such cancellation or termination could not
reasonably have a Material Adverse Effect;
(ix) amend its Certificate of Incorporation or By-Laws; or
(x) agree, whether in writing or otherwise, to do any of the
foregoing.
Section 6.03. No Solicitation. From the date hereof to the Closing
Date, the Company agrees that neither it nor the Company Subsidiaries shall, and
shall not permit any of their respective directors, officers, Employees,
representatives or agents to, directly or indirectly, solicit or initiate any
discussions or negotiations with, participate in any negotiations with, provide
any information to or otherwise cooperate in any other way with, or facilitate
or encourage any effort or attempt by, any Person, other than the Initial
Purchaser, the Investors and their respective, partners, directors, officers,
employees, representatives and agents, respecting any Competing Offer. The
Company will promptly advise the Initial Purchaser and each Investor
Representative of any proposal or inquiry made to it, the Company Subsidiaries
or any of their respective directors, officers, Employees, representatives, or
agents with respect to any of the foregoing transactions.
Section 6.04. Consent. Each of the parties hereto will use its
reasonable best efforts and shall fully cooperate with each other party to make
promptly all registrations, filings and
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applications, give all notices and obtain all Consents in connection with the
transactions contemplated hereby.
Section 6.05. HSR. The Company and the Investors shall, as promptly as
practicable following the execution and delivery of this Agreement, submit all
filings required by the HSR Act to the Federal Trade Commission and the
Department of Justice and thereafter provide any supplemental information
requested in connection therewith pursuant to the HSR Act and make any similar
filing within, to the extent reasonably practicable, a similar time frame with
any other Governmental Body for which such filing is required. Any such
notification and report form and supplemental information will be in substantial
compliance with the requirements of the HSR Act or other applicable antitrust
regulation. The Company and the Investors shall furnish to each other such
necessary information and reasonable assistance as the other may request in
connection with its preparation of any filing or submission which is necessary
under the HSR Act or other applicable antitrust regulation. The Company and the
Investors shall request early termination of the applicable waiting period under
the HSR Act and any other applicable antitrust regulation; shall respond with
reasonable diligence and dispatch to any request for additional information made
in response to such filings or information requests made by any other
Governmental Body and shall keep each other apprised of any communications with,
and inquiries or requests for additional information from the Federal Trade
Commission, Department of Justice or any other Governmental Body and shall
comply with any inquiry or request made thereby. Notwithstanding anything to the
contrary contained herein, the Company will pay the filing fees of the Investors
with respect to the notification and report forms required by the HSR Act.
Section 6.06. Notice of Breach. From the date hereof through the
Closing Date, as promptly as practicable, and in any event not later than five
Business Days after the Company becomes aware thereof, the Company shall provide
the Initial Purchaser and each Investor Representative with written notice of
(a) any representation or warranty of the CK Companies or the Sellers contained
in the CK Purchase Agreement being untrue or inaccurate in any material respect,
or (b) any failure of the CK Companies or the Sellers to comply with or satisfy
in any material respect any covenant, condition or agreement to be complied with
or satisfied by such Person under any of the CK Transaction Documents.
Section 6.07. Other Transaction Documents. The Company shall keep the
Initial Purchaser, each Investor Representative and their respective counsel
fully informed of, provide the Initial Purchaser, each Investor Representative
and their respective counsel with copies of all drafts of, and, at the request
of the Initial Purchaser or any Investor Representative, discuss with the
Initial Purchaser, each Investor Representative and their respective counsel on
a timely basis, each of the CK Transaction Documents and shall not, without the
prior consent of the Initial Purchaser and each Investor Representative (which
consent shall not be unreasonably withheld or delayed), (i) execute any of the
CK Transaction Documents to be executed after the date hereof or (ii) amend,
waive, supplement or modify any material provisions of any of the CK Transaction
Documents executed on or prior to the date hereof.
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Section 6.08. Publicity. The parties agree not to issue any
announcement, press release, public statement or other information to the press
or any third party with respect to this Agreement or the Contemplated
Transactions without obtaining the prior written approval of the other parties
hereto (which approval shall not be unreasonably withheld); provided, however,
that nothing contained herein shall prevent any party hereto, at any time, from
furnishing any required information to any Governmental Body or from issuing any
announcement, press release, public statement or other information to the press
or any third party with respect to this Agreement or the Contemplated
Transactions if required by Law, although, the parties agree to consult with
each other as to the content of any release so required and consider in good
faith the comments of the other thereon.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.01. Conditions to Obligations of the Initial Purchaser and
the Investors. The obligation of the Initial Purchaser and the Investors to
consummate the transactions contemplated hereby shall be subject to the
fulfillment on or prior to the Closing Date of the following conditions, any or
all of which may be waived by the Initial Purchaser and the Investors, in whole
or in part (except with respect to conditions 7.01 (n)(i) and (r) which may be
waived only by the Initial Purchaser and except with respect to condition 7.01
(n)(ii) which may be waived only by the Investors) to the extent permitted by
applicable Law:
(a) Consents. The Company shall have obtained the consents set
forth in Schedule 3.05, in form and substance reasonably satisfactory to the
Initial Purchaser and the Investors.
(b) Material Adverse Effect. Between the date hereof and the
Closing Date, none of the CK Companies shall have suffered or experienced a CK
Companies Material Adverse Effect.
(c) No Governmental Order or Other Proceeding or Litigation. No
Order of any Governmental Body shall be in effect that restrains or prohibits
the Contemplated Transactions.
(d) CK Transaction Documents. (i) The CK Transaction Documents
executed prior to or simultaneously with this Agreement shall not have been
amended, modified, supplemented, or provisions thereof waived, in violation of
Section 6.07, and (ii) the CK Transaction Documents executed subsequent to this
Agreement shall have been entered into in accordance with Section 6.07.
(e) CK Acquisition. The transactions contemplated by the CK
Transaction Documents that by their terms are to be completed concurrently with,
or immediately after, the Closing shall be capable of being completed at the
Closing and the closing of the
35
CK Acquisition in accordance with the terms and provisions of the applicable CK
Transaction Document and all conditions required in the CK Transaction Documents
to be satisfied on or prior to closing of the CK Acquisition shall have been
satisfied or capable of being satisfied without waiver, amendment or
modification unless otherwise approved in writing by the Initial Purchaser and
each of the Investor Representatives. The closing of the CK Acquisition shall
occur substantially simultaneous with the Closing hereunder.
(f) HSR Act. All filing and other requirements under the HSR Act
shall have been satisfied, and the applicable waiting period with respect to the
Contemplated Transactions under the HSR Act shall have expired or been
terminated.
(g) Closing Fees. The Company shall have paid or reimbursed the
Investors for all of the expenses specified in Section 10.01(a).
(h) Legal Opinion. The Initial Purchaser and the Investors shall
have received, dated the Closing Date and addressed to each of the Initial
Purchaser and the Investors, an opinion of Xxxxxx Xxxxxx Xxxxx Xxxxxxxx, counsel
to the Company, substantially in the form attached hereto as Exhibit C.
(i) Certificate of Designations. The Certificate of Designations
shall have been duly filed with the Secretary of State of Delaware and shall be
in full force and effect.
(j) Directors. The Series B Designees shall have been appointed to
the Board of Directors, effective as of the Closing and the Board of Directors
shall consist of no more than 14 directors.
(k) Registration Rights Agreement. The Registration Rights
Agreement shall have been executed and delivered by the parties thereto and
shall be in full force and effect, in substantially the form attached hereto as
Exhibit D (the "Registration Rights Agreement").
(l) Investors' Rights Agreement. The Investors Rights Agreement
shall have been executed and delivered by the parties thereto and shall be in
full force and effect, in substantially the form attached hereto as Exhibit E
(the "Investors' Rights Agreement").
(m) Amendment to the Rights Agreement. The Fifth Amendment to the
Rights Agreement shall have been executed and delivered by the parties thereto
and shall be in full force and effect, in substantially the form attached hereto
as Exhibit F (the "Fifth Amendment").
(n) Stock Certificates.
(i) The Company shall have delivered to the Initial Purchaser
a certificate or certificates representing the Series B Shares, duly registered
in the name of the Initial Purchaser.
(ii) The Initial Purchaser shall have delivered to the
Investor Representatives certificates representing the Series B Shares in the
amounts specified on Schedule 2.01, duly registered by the Company in the
respective names of the Investors as set forth in Schedule 2.01.
36
(o) NYSE Listing. The shares of Common Stock issuable upon
conversion of the Series B Stock shall have been listed, pending notice of
issuance, on the NYSE and the NYSE shall not have withdrawn its advice that the
transactions contemplated under this Agreement constitute a bona fide private
financing under paragraph 312.03 of the NYSE Listed Company Manual.
(p) Loan Documents. Each of the Loan Documents shall have been
executed and delivered by the parties thereto and shall be in full force and
effect and the closing of the loan transaction contemplated therein shall occur
substantially simultaneously with the Closing hereunder.
(q) Good Standing; Company Certificates. The Company shall have
delivered to the Initial Purchaser and the Investor Representatives:
(i) a certificate issued by the appropriate Governmental Body
evidencing, as of a recent date, the good standing of the Company in its
jurisdiction of incorporation;
(ii) a certificate, dated the Closing Date, executed by the
Secretary of the Company which certifies that (A) attached to such certificate
is a complete and correct copy of the Certificate of Incorporation of the
Company certified by the Secretary of State of the State of Delaware, and that
there has been no amendment to the Certificate of Incorporation of the Company
since that the date of such certification, and (B) attached to such certificate
is a complete and correct copy of the By-Laws of the Company, as in full force
and effect at the Closing Date; and
(iii) a certificate, dated the Closing Date, executed by the
Secretary of the Company, which certifies as complete and correct resolutions of
the Board of Directors: (A) authorizing the execution, delivery and performance
of this Agreement and each of the other Transaction Documents, the issuance and
sale of the Series B Stock and the issuance of the shares of Common Stock
issuable upon conversion of the Series B Stock, the reservation of such shares
of Common Stock and the performance of the transactions contemplated by this
Agreement and the other Transaction Documents, (B) electing the Series B
Designees, (C) implementing the actions with respect to DGCL Section 203 and the
Rights Agreement set forth in Section 3.26, and (D) authorizing the issuance of
the Rights and the issuance of the shares of Series A Stock issuable upon
exercise of the Rights.
(r) Comfort Letter. The Initial Purchaser shall have received from
Ernst & Young LLP a letter addressed to it, in form and substance reasonably
satisfactory to the Initial Purchaser, and dated as of the date hereof, (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
and (ii) stating, as of the date hereof (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Commission Filings filed in 2002, as of a
date not more than five days prior to the date hereof), the
37
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "comfort letters" to
underwriters.
Section 7.02. Conditions to Obligations of the Company. The obligation
of the Company to consummate the transactions contemplated hereby shall be
subject to the fulfillment on or prior to the Closing Date of the following
conditions, any or all of which may be waived by the Company:
(a) No Governmental Order or Other Proceeding or Litigation. No
Order of any Governmental Body shall be in effect that restrains or prohibits
the Contemplated Transactions.
(b) CK Acquisition. The transactions contemplated by the CK
Transaction Documents that by their terms are to be completed concurrently with,
or immediately after, the Closing shall be capable of being completed at the
Closing and the closing of the CK Acquisition in accordance with the terms and
provisions of the applicable CK Transaction Document.
(c) HSR Act. All filing and other requirements under the HSR Act
shall have been satisfied, and the applicable waiting period with respect to the
transactions described herein together with any extensions thereof, under the
HSR Act, shall have expired or been terminated.
(d) NYSE Listing. The shares of Common Stock issuable upon
conversion of the Series B Stock shall have been listed, pending notice of
issuance on the NYSE and the NYSE shall not have withdrawn its advice that the
transactions contemplated under this Agreement constitute a bona fide private
financing under paragraph 312.03 of the NYSE Listed Company Manual.
(e) Registration Rights Agreement. The Registration Rights
Agreement shall have been executed and delivered by the parties thereto and
shall be in full force and effect.
(f) Investors' Rights Agreement. The Investors Rights Agreement
shall have been executed and delivered by the parties thereto and shall be in
full force and effect.
(g) Purchase Price. The Initial Purchaser shall have delivered to
the Company the Initial Purchase Price.
ARTICLE VIII
SURVIVAL
Section 8.01. Survival. The representations, warranties and covenants
to be performed at or prior to Closing of the parties set forth in this
Agreement shall survive for a period of 24 months following the execution and
delivery of this Agreement and thereafter shall be of no further force or
effect, provided that the representations and warranties set forth in Sections
3.11 (Taxes), 3.16 (ERISA) and 3.20 (Environmental Protection) shall survive for
the applicable period of the statute of limitations and the representations and
warranties set forth in Sections 3.01 (Organization), 3.02 (Authorization) and
3.04 (Capitalization) shall survive indefinitely (or
38
if indefinite survival is not permitted by Law, then for the maximum period
permitted by applicable Law). No representations, warranties or covenants of the
Company in this Agreement shall be affected by any examination made for or on
behalf of the Initial Purchaser or the Investors, the knowledge of the Initial
Purchaser or the Investors, or the acceptance by the Initial Purchaser or the
Investors of any certificate or opinion. Following the expiration of the periods
set forth above with respect to any particular representation or warranty, no
party hereto shall have any further liability with respect to such
representation or warranty. Except as set forth herein, all of the covenants,
agreements and obligations of the parties hereto shall survive the Closing
indefinitely (or if indefinite survival is not permitted by Law, then for the
maximum period permitted by applicable Law). Anything herein to the contrary
notwithstanding, any claim for indemnification that is asserted by written
notice which notice specifies in reasonable detail the facts upon which such
claim is made as provided in this Section 8.01 within the survival period shall
survive until resolved pursuant to a final non-appealable judicial determination
or otherwise.
ARTICLE IX
INDEMNIFICATION
Section 9.01. Generally. Subject to the limitations and other
provisions of this Article IX, the Company covenants and agrees to indemnify,
defend and hold harmless the Investor Group Members and the Initial Purchaser
Group Members from and against (but only to the extent of) any and all Losses
resulting from, incurred in connection with or arising out of (but only to the
extent of) (a) any breach of any representation, warranty, covenant or agreement
of the Company contained herein or in any other Transaction Document, (b) the
failure of the Company to perform any of the agreements, covenants or
obligations contained herein or in any other Transaction Documents, or (c) any
claims by the Sellers relating to the CK Acquisition (other than if any such
claim was a result of a breach by the Investors under this Agreement). Subject
to the limitations and other provisions of this Article IX, each Investor,
severally and not jointly, covenants and agrees to indemnify, defend and hold
harmless the Company Group Members from and against (but only to the extent of)
any and all Losses resulting from, incurred in connection with or arising out of
(but only to the extent of) (a) any breach of any representation, warranty,
covenant or agreement of such Investor contained herein or in any other
Transaction Document, or (b) the failure of such Investor to perform any of the
agreements, covenants or obligations of such Investor contained herein or in any
other Transaction Document. The term "Loss" or any similar term shall mean any
and all damages, reduction in value of the original investment in the Series B
Shares, deficiencies, costs, claims, fines, judgments, amounts paid in
settlement, expenses of investigation, interest, penalties, assessments,
out-of-pocket expenses (including reasonable attorneys' and auditors' fees and
disbursements, witness fees and court costs). The party or parties being
indemnified are referred to herein as the "Indemnitee" and the indemnifying
party is referred to herein as the "Indemnitor."
39
Section 9.02. Indemnification Procedure.
(a) Any party who receives notice of a potential claim that may,
in the judgment of such party, result in a Loss shall use all reasonable efforts
to provide the parties hereto notice thereof, provided that failure or delay or
alleged delay in providing such notice shall not adversely affect such party's
right to indemnification hereunder, unless and then only to the extent that such
failure or delay or alleged delay has resulted in actual prejudice to the
Indemnitor, including, without limitation, by the expiration of a statute of
limitations. In the event that any party shall incur or suffer any Losses in
respect of which indemnification may be sought by such party hereunder, the
Indemnitee shall assert a claim for indemnification by written notice (a
"Notice") to the Indemnitor stating the nature and basis of such claim. In the
case of Losses arising by reason of any third party claim, the Notice shall be
given within thirty (30) days of the filing or other written assertion of any
such claim against the Indemnitee, but the failure of the Indemnitee to give the
Notice within such time period shall not relieve the Indemnitor of any liability
that the Indemnitor may have to the Indemnitee, except to the extent that the
Indemnitor demonstrates that the defense of such action has been materially
prejudiced by the Indemnitee's failure to timely give such Notice.
(b) In the case of third party claims for which indemnification is
sought, the Indemnitor shall, if necessary, retain counsel reasonably
satisfactory to the Indemnitee, and have the option (i) to conduct any
proceedings or negotiations in connection therewith, (ii) to take all other
steps to settle or defend any such claim (provided that the Indemnitor shall not
settle any such claim without the consent of the Indemnitee which consent shall
not be unreasonably withheld) and (iii) to employ counsel to contest any such
claim or liability in the name of the Indemnitee or otherwise. In any event, the
Indemnitee shall be entitled to participate at its own expense and by its own
counsel in any proceedings relating to any third party claim. The Indemnitor
shall, within 15 Business Days of receipt of the Notice, notify the Indemnitee
of its intention to assume the defense of such claim. If (i) the Indemnitor
shall decline to assume the defense of any such claim, (ii) the Indemnitor shall
fail to notify the Indemnitee within 15 Business Days after receipt of the
Notice of the Indemnitor's election to defend such claim, (iii) the Indemnitee
shall have reasonably concluded that there may be defenses available to it which
are different from or in addition to those available to the Indemnitor (in which
case the Indemnitor shall not have the right to direct the defense of such
action on behalf of the Indemnitee), or (iv) a conflict exists between the
Indemnitor and the Indemnitee which the Indemnitee has reasonably concluded
would prejudice the Indemnitor's defense of such action, then in each such case
the Indemnitor shall not have the right to direct the defense of such action on
behalf of the Indemnitee and the Indemnitee shall, at the sole expense of the
Indemnitor, defend against such claim and (x) in the event of a circumstance
described in clause (i) and (ii), the Indemnitee may settle such claim without
the consent of the Indemnitor (and the Indemnitor may not challenge the
reasonableness of any such settlement) and (y) in the event of a circumstance
described in clause (iii) and (iv), the Indemnitee may not settle such claim
without the consent of the Indemnitor (which consent will not be unreasonably
withheld or delayed). The reasonable expenses of all proceedings, contests or
lawsuits in respect of such claims shall be borne and paid by the Indemnitor if
the Indemnitee is entitled to indemnification hereunder and the Indemnitor shall
pay the Indemnitee, in immediately available funds, the amount of any
40
Losses, within a reasonable time of the incurrence of such Losses. Regardless of
which party shall assume the defense or negotiation of the settlement of the
claim, the parties agree to cooperate fully with one another in connection
therewith. In the event that any Losses incurred by the Indemnitee do not
involve payment by the Indemnitee of a third party claim, then, the Indemnitor
shall, within 20 days after written notice from the Indemnitee specifying the
amount of Losses, pay to the Indemnitee, in immediately available funds, the
amount of such Losses. Any disagreement between the Indemnitor and Indemnitee
relating to the amount of the Losses shall be resolved by arbitration in
accordance with the rules of the American Arbitration Association (the "AAA")
then pertaining in the City of New York, New York, by a single arbitrator to be
mutually agreed upon by the parties or, if they are unable to so agree, by an
arbitrator selected by the AAA. Anything in this Article X to the contrary
notwithstanding, the Indemnitor shall not, without the Indemnitee's prior
written consent, settle or compromise any claim or consent to entry of any
judgment in respect thereof which imposes any future obligation on the
Indemnitee or which does not include, as an unconditional term thereof, the
giving by the claimant or plaintiff to the Indemnitee, a release from all
liability in respect of such claim.
Section 9.03. Certain Qualifications. The Material Adverse Effect
and other materiality (or correlative meaning) qualifications included in the
representations, warranties, covenants and agreements contained herein shall
have no effect on any provisions in this Article IX concerning the indemnities
of the Company with respect to such representations, warranties, covenants and
agreements, each of which shall be read as though there were no Material Adverse
Effect or other materiality qualification for purposes of such indemnities. All
knowledge qualifications included in the representations, warranties, covenants
and agreements contained herein shall have no effect on any provisions of this
Article IX concerning the indemnities of the Company with respect to such
representations, warranties, covenants and agreements, each of which shall be
read as though there were no such knowledge qualifications for purposes of such
indemnities.
Section 9.04. Limitations on Indemnification.
(a) No Investor Group Member shall be entitled to be indemnified
hereunder unless and until the aggregate of all Losses incurred by Investor
Group Members shall exceed $7,000,000 (the "Basket"); provided, however, that
the Basket shall not apply to any Losses incurred by the Investor Group Members
with respect to any third party claim against any Investor Group Member for
which the Investor Group Members are entitled to indemnity pursuant to Section
9.01. Notwithstanding anything to the contrary contained herein, the liability
of (i) the Company under this Article IX shall be limited to an amount equal to
the Purchase Price; and (ii) the Investors in the aggregate under this Article
IX and under the Loan Documents shall be limited to an amount equal to
$100,000,000.
(b) The parties acknowledge and agree that the indemnification
provisions contained herein shall be the sole and exclusive remedy for Losses
arising out of or caused by the breach of any of the representations,
warranties, covenants or agreements of the parties contained in this Agreement,
except (i) with respect to claims arising out of fraud, or (ii) for the amounts
payable pursuant to Articles X and XI hereof.
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ARTICLE X
FEES, EXPENSES AND COSTS
Section 10.01. Reimbursement.
(a) In the event that the transactions contemplated by this
Agreement are consummated, the Company agrees to pay at the Closing and hold the
Investors harmless against liability for the payment of (i) all reasonable legal
fees and expenses owed by the Investors to their counsel, incurred in connection
with this Agreement, (ii) stamp and other transfer Taxes which may be payable in
respect of (A) the execution and delivery of this Agreement or (B) the issuance
of the Series B Stock and the Common Stock issuable upon the conversion of the
Series B Stock, (iii) all other reasonable costs and expenses (including,
without limitation, accounting expenses and consultants' fees) incurred by the
Investors in connection with this Agreement (clauses (i), (ii) and (iii) of this
subsection (a) are referred to collectively as, the "Fees and Expenses"), and
(iv) all reasonable fees and expenses owed by the Investors to Monitor Company
incurred in connection with this Agreement (the "Monitor Expenses").
(b) In the event that the transactions contemplated by the CK
Purchase Agreement or a similar transaction in which the Company acquires voting
control of the CK Companies or substantially all of their assets are consummated
within one year from the date of termination of this Agreement and the
transactions contemplated by this Agreement are not consummated (other than by
reason of a material breach hereunder by the Investors), the Company agrees to
pay on demand the Maximum Amount.
(c) In the event that none of the Contemplated Transactions are
consummated and the Company has been, or will be, reimbursed by CKI or any of
its Affiliates for all of the Company's Expenses relating to the CK Acquisition,
the Company agrees to pay on demand the Maximum Amount.
(d) In the event that none of the Contemplated Transactions are
consummated and the Company has been, and will only be, partially reimbursed by
CKI or any of its Affiliates for the Company's Expenses relating to the CK
Acquisition (the "Partial Reimbursement"), the Company agrees to pay on demand
the Minimum Amount. In addition to the foregoing, if the aggregate amount of the
Partial Reimbursement exceeds the Minimum Amount (the "Excess Amount"), the
Company shall pay to the Investors an amount equal to the Percentage of the
Excess Amount; provided, however, that in no event shall the Company pay to the
Investors an amount in excess of the Maximum Amount or less than the Minimum
Amount.
(e) In the event that none of the Contemplated Transactions are
consummated and Company has not been, and will not be, reimbursed by CKI or any
of its Affiliates for any of the Company's Expenses, the Company agrees to pay
on demand the Minimum Amount.
(f) Notwithstanding anything to the contrary contained herein, the
Company agrees to reimburse the Initial Purchaser and Investors on demand for
the Initial Purchaser's and
42
the Investors' reasonable out-of-pocket fees and expenses incurred in connection
with any amendment to, or waiver of, this Agreement and the other Transaction
Documents.
(g) The Company shall pay and hold the Initial Purchaser harmless
against liability for the payment of (i) all reasonable legal fees and expenses
owed by the Initial Purchaser to its counsel, incurred in connection with this
Agreement, (ii) stamp and other transfer Taxes which may be payable in respect
of (A) the execution and delivery of this Agreement, (B) the issuance of the
Series B Stock and the Common Stock issuable upon the conversion of the Series B
Stock, or (C) the transfer of the Series B Stock to the Investors, and (iii) all
other reasonable costs and expenses (including, without limitation, accounting
expenses and consultants' fees) incurred by the Initial Purchaser in connection
with this Agreement.
ARTICLE XI
TERMINATION
Section 11.01. Termination. This Agreement may be terminated on or any
time prior to the Closing:
(a) by the mutual written consent of each of the Investors and the
Company; or
(b) by either the Company or the Investors if the CK Purchase
Agreement shall have been terminated pursuant to its terms; or
(c) by the Investors if the Closing shall not have occurred
(unless the failure of such occurrence shall be due to the failure of the
Investors to perform or observe any material agreement set forth herein required
to be performed or observed by the Investors on or before the Closing) on or
before March 31, 2003; provided that if the Company and the Investors agree to
extend the period within which the Closing must occur beyond March 31, 2003, the
Initial Purchaser shall also agree to extend beyond March 31, 2003 (but in any
event not beyond June 30, 2003).
Section 11.02. Effect Of Termination. In the event of the termination
of this Agreement as provided in Section 11.01, all obligations and agreements
of the parties set forth in this Agreement shall forthwith become void except
for the obligations set forth in: (i) the last sentence of Section 6.05 (HSR)
(which shall remain in full force and effect) (ii) Section 6.08 (Publicity),
(iii) Article IX (Indemnification), (iv) Section 10.01(b), (c), (d), (e) and (g)
(Fees and Expenses) (as applicable), (v) Section 11.03 (Termination Fee) and
(vi) Section 11.04 (Break-up Fee), and there shall be no liability or obligation
on the part of the parties hereto except as otherwise provided in this
Agreement. Notwithstanding the foregoing, the termination of this Agreement
under Section 11.01 shall not relieve either party of any liability for breach
of this Agreement prior to the date of termination.
Section 11.03. Termination Fee. The Company shall pay to the Investors
(pro rata at their respective commitments) a termination fee of (a) cash in the
amount of $22,500,000, and
43
(b) the Termination Warrants (referred to collectively as the "Termination
Fee"), in the event that:
(i) the transactions contemplated by the CK Purchase
Agreement are consummated and the transactions contemplated by this Agreement
are not consummated; or
(ii) the Company consummates a similar transaction, within
one year of the termination of this Agreement, in which the Company acquires
voting control of CKI or substantially all of its assets and the Investors do
not participate in the financing of such similar transaction.
Notwithstanding the foregoing, the Investors shall not be entitled
to a Termination Fee in the event that the transactions contemplated by this
Agreement are not consummated (x) by reason of a default hereunder by the
Investors or (y) due to the waiting period with respect to Investors' filing not
having expired by the Termination Date by reason of competitive issues raised by
the Federal Trade Commission or the Department of Justice regarding the
Investors investment in the Company.
Section 11.04. Break-up Fee. In the event that the Contemplated
Transactions are not consummated and the Break-up Fee is paid, the Company
agrees to pay to the Investors an amount equal to 33% of the Break-up Fee.
Section 11.05. CK Recovery. The Company shall pay to the Investors 33%
of any CK Recovery.
ARTICLE XII
MISCELLANEOUS
Section 12.01. Notices and Addresses. Any notice, demand, request,
waiver, or other communication under this Agreement shall be in writing and
shall be deemed to have been duly given on the date of service, if personally
served or sent by facsimile; on the Business Day after notice is delivered to a
courier or mailed by express mail, if sent by courier delivery service or
express mail for next day delivery; and on the third day after mailing, if
mailed to the party to whom notice is to be given, by first class mail,
registered, return receipt requested, postage prepaid and addressed as follows:
If to the Company:
Xxxxxxxx-Van Heusen Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Vice President, General Counsel and Secretary
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
44
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
If to the Initial Purchaser:
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Global Retailing/Consumer Group
Facsimile: (000) 000-0000
with a copy to Office of the General Counsel
Xxxxxx Brothers Inc.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Director of Litigation
Facsimile: (000) 000-0000; and
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to any Investor, to the Investor Representatives:
Apax Managers, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Apax Partners Europe Managers Ltd.
00 Xxxxxxxx Xxxxx
Xxxxxx X0X 0XX
45
United Kingdom
Attention: Xxxxxx Xxxxxxxx and Xxxxx Xxxxxxxx
Facsimile: 00-00-0000-0000
Telephone: 00-00-0000-0000
With a copy to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
Section 12.02. Captions. The captions in this Agreement are for
convenience of reference only and shall not be given any effect in the
interpretation of this Agreement.
Section 12.03. No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must be
in writing. Any of the covenants or agreements contained in this Agreement may
be waived only by the written consent of the Initial Purchaser and the Investor
Representative.
Section 12.04. Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable Law, such provision(s)
shall be excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms so long as the economic or legal substance of the
transactions contemplated by this Agreement are not affected in any manner
materially adverse to any party.
Section 12.05. Exclusive Agreement; Amendment. This Agreement
supersedes all prior agreements among the parties with respect to its subject
matter, other than the letter agreement dated January 17, 2002 with respect to
the non-disclosure of confidential information, is intended (with the documents
referred to herein) as a complete and exclusive statement of the terms of the
agreement among the parties with respect thereto and cannot be changed or
terminated except by a written instrument executed by the party or parties
against whom enforcement thereof is sought, except that, with respect to the
Investors, this Agreement may be amended by a written instrument executed by the
Investor Representative.
Section 12.06. Limitation on Assignment; Parties in Interest.
(a) No assignment of this Agreement or of any rights or
obligations hereunder may be made by the Company or the Investors (by operation
of Law or otherwise) without the prior written consent of the other parties
hereto and any attempted assignment without the
46
required consents shall be void; provided, however, that each Investor may
validly assign any of its rights and obligations hereunder to an Affiliate of
such Investor without the prior written consent of the other parties hereto;
provided, that such Investor shall remain liable for any and all obligations
assigned to such Affiliate.
(b) This Agreement shall be binding upon, and shall inure to the
benefit of, and be enforceable by, the parties and their respective successors,
transferees and assigns.
Section 12.07. Obligations of Investors Several. The obligations of the
Investors hereunder shall be several and not joint. No Investor shall be
responsible for the breach of any provision of this Agreement by any other
Investor.
Section 12.08. Governing Law. This Agreement and (unless otherwise
provided) all amendments hereof and waivers and consents hereunder shall be
governed by the internal Laws of the State of New York, without regard to the
conflicts of Law principles thereof which would specify the application of the
Law of another jurisdiction.
Section 12.09. Jurisdiction. Each of the Investors and the Company (a)
hereby irrevocably and unconditionally submits to the exclusive jurisdiction of
any state or federal court sitting in New York County, New York for the purposes
of any suit, action or other proceeding arising out of this Agreement or the
subject matter hereof brought by the Company, or any Investor and (b) hereby
waives and agrees not to assert, by way of motion, as a defense, or otherwise,
in any such suit, action or proceeding, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is
exempt or immune from attachment or execution, that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement or the subject matter
hereof may not be enforced in or by such court.
Section 12.10. No Third Party Beneficiary. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors or permitted assigns, and it is not the intention of
the parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article IX.
Section 12.11. Injunctive Relief. In the event that any party threatens
to take any action prohibited by this Agreement, the parties agree that there
may not be an adequate remedy at law. Accordingly, in such an event, a party may
seek and obtain preliminary and permanent injunctive relief (without the
necessity of posting any bond or undertaking). Such remedies shall, however, be
cumulative and not exclusive and shall be in addition to any other remedies
which any party may have under this Agreement or otherwise.
Section 12.12. Counterparts. This Agreement may be executed via
facsimile and in any number of counterparts, each of which shall be deemed to be
an original instrument and all of which together shall constitute one and the
same instrument.
47
Section 12.13. Actions Simultaneous. All actions to be taken and all
documents to be executed and delivered by all parties at the Closing shall be
deemed to have been taken and executed and delivered simultaneously and no
actions shall be deemed to have been taken nor shall any documents be deemed to
have been executed and delivered until all actions have been taken and all
documents have been executed and delivered.
[Signature Pages Follow]
48
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
XXXXXXXX-VAN HEUSEN CORPORATION
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
APAX EXCELSIOR VI, L.P.
By: Apax Excelsior VI Partners, L.P.,
Its General Partner
By: Apax Managers, Inc.
Its General Partner
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
APAX EXCELSIOR VI-A C.V.
By: Apax Excelsior VI Partners, L.P.,
Its General Partner
By: Apax Managers, Inc.
Its General Partner
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
APAX EXCELSIOR VI-B C.V.
By: Apax Excelsior VI Partners, L.P.,
Its General Partner
By: Apax Managers, Inc.
Its General Partner
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
PATRICOF PRIVATE INVESTMENT CLUB III, L.P.
By: Apax Excelsior VI Partners, L.P.,
Its General Partner
By: Apax Managers, Inc.
Its General Partner
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
APAX EUROPE V - A, L.P.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Managing Director
APAX EUROPE V - B, L.P.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Director
APAX EUROPE V - C GMBH & CO. KG
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Director
APAX EUROPE V - D, L.P.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Director
APAX EUROPE V - E, L.P.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Director
APAX EUROPE V - F, C.V.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Director
APAX EUROPE V - G, C.V.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Director
APAX EUROPE V - 1, L.P.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Director
APAX EUROPE V - 2, L.P.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Director
XXXXXX BROTHERS INC.
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Authorized Representative
