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1
CONFIRMING ELECTRONIC COPY
This is a confirming electronic copy
of Schedule 13D which was filed in
paper on May 4, 1995.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.______)*
NCC INDUSTRIES, INC.
(Name of Issuer)
Common Stock, par value $1.00 per share
(Title of Class of Securities)
628834 10 3
(CUSIP Number)
Steven N. Masket Danal F. Abrams, Esq.
Executive Vice President Baer Marks & Upham
Maidenform Worldwide, Inc. 805 Third Avenue
90 Park Avenue New York, New York
10022
New York, New York 10016 (212) 702-5966
(212) 856-8913
(Name, Address and Telephone Number of Person Authorized to
Rece
ive Notices and Communications)
April 26, 1995
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a
statement on
Schedule 13G to report the acquisition which is the
subject of
this Schedule 13D, and is filing this schedule
because of
Rule 13d-1(b)(3) or (4), check the following box ".
Check the following box if a fee is being paid with the
statement
x. (A fee is not required only if the reporting person:
(1) has
a previous statement on file reporting beneficial
ownership of
more than five percent of the class of securities
described in
Item 1; and (2) has filed no amendment subsequent
thereto
reporting beneficial ownership of less than five percent of
such
class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all
exhibits,
should be filed with the Commission. See Rule 13d-1(a) for
other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out
for a
reporting person's initial filing on this form with
respect to
the subject class of securities, and for any subsequent
amendment
containing information which would alter disclosures
provided in
a prior cover page.
The information required on the remainder of this cover
page
shall not be deemed to be "filed" for the purpose of
Section 18
of the Securities Exchange Act of 1934 ("Act") or
otherwise
subject to the liabilities of that section of the Act but
shall
be subject to all other provisions of the Act (however, see
the
Notes).
SCHEDULE 13D
CUSIP No. 628834 10 3 Page 2 of
234 Pages
1. NAM
E
OF
REP
ORT
ING
PER
SON
S
S.S
.
OR
I.R
.S.
IDE
NTI
FIC
ATI
ON
NOS
.
OF
ABO
VE
PER
SON
S
M
a
i
d
e
n
f
o
r
m
W
o
r
l
d
w
i
d
e
,
I
n
c
.
T
a
x
I
D
N
o
.
:
1
3-
2
8
4
9
6
3
7
2. CHE
CK
THE
APP
ROP
RIA
TE
BOX
IF
A
MEM
BER
OF
A
GRO
UP
(a) "
(b)
x
SEC
3. USE
ONL
Y
SOU
4. RCE
OF
FUN
DS
Ban
k
Loa
n
(Se
e
Ite
m 3
bel
ow.
)
5. CHE
CK
BOX
IF
DIS
CLO
SUR
E
OF
LEG
AL
PRO
CEE
DIN
GS
IS
REQ
UIR
ED
PUR
SUA
NT
TO
ITE
MS
2(d
)
OR
2(e
)
"
CIT
6. IZE
NSH
IP
OR
PLA
CE
OF
ORG
ANI
ZAT
ION
Del
awa
re
NUM
BER 7. SOLE VOTING POWER None
OF
SHA
RES
BEN
EFI
CIA
LLY
OWN
ED
BY
EAC
H
REP
ORT
ING
PER
SON
WIT
H
8. SHARED VOTING POWER 4,042,479
9. SOLE DISPOSITIVE POWER None
10. SHARED DISPOSITIVE POWER 4,042,479
AGG
11. REG
ATE
AMO
UNT
BEN
EFI
CIA
LLY
OWN
ED
BY
EAC
H
REP
ORT
ING
PER
SON
4,0
42,
479
CHE
12. CK
BOX
IF
THE
AGG
REG
ATE
AMO
UNT
IN
ROW
(11
)
EXC
LUD
ES
CER
TAI
N
SHA
RES
"
PER
13. CEN
T
OF
CLA
SS
REP
RES
ENT
ED
BY
AMO
UNT
IN
ROW
(11
)
92.
4%
TYP
14. E
OF
REP
ORT
ING
PER
SON
HC
SCHEDULE 13D
CUSIP No. 628834 10 3 Page 3 of
234 Pages
1. NAM
E
OF
REP
ORT
ING
PER
SON
S,
S.S
.
OR
I.R
.S.
IDE
NTI
FIC
ATI
ON
NOS
.
OF
ABO
VE
PER
SON
S
Mai
den
for
m,
Inc
.
Tax
ID
No.
:
66-
020
188
2
2. CHE
CK
THE
APP
ROP
RIA
TE
BOX
IF
A
MEM
BER
OF
A
GRO
UP
(a) "
(b) x
SEC
3. USE
ONL
Y
SOU
4. RCE
OF
FUN
DS
Ban
k
Loa
n
(Se
e
Ite
m 3
bel
ow.
)
5. CHE
CK
BOX
IF
DIS
CLO
SUR
E
OF
LEG
AL
PRO
CEE
DIN
GS
IS
REQ
UIR
ED
PUR
SUA
NT
TO
ITE
MS
2(d
)
OR
2(e
)
"
CIT
6. IZE
NSH
IP
OR
PLA
CE
OF
ORG
ANI
ZAT
ION
New
Yor
k
NUM
BER 7. SOLE VOTING POWER None
OF
SHA
RES
BEN
EFI
CIA
LLY
OWN
ED
BY
EAC
H
REP
ORT
ING
PER
SON
WIT
H
8. SHARED VOTING POWER 4,042,479
9. SOLE DISPOSITIVE POWER None
10. SHARED DISPOSITIVE POWER 4,042,479
AGG
11. REG
ATE
AMO
UNT
BEN
EFI
CIA
LLY
OWN
ED
BY
EAC
H
REP
ORT
ING
PER
SON
4,0
42,
479
12. CHE
CK
BOX
IF
THE
AGG
REG
ATE
AMO
UNT
IN
ROW
(11
)
EXC
LUD
ES
CER
TAI
N
SHA
RES
o
PER
13. CEN
T
OF
CLA
SS
REP
RES
ENT
ED
BY
AMO
UNT
IN
ROW
(11
)
92.
4%
TYP
14. E
OF
REP
ORT
ING
PER
SON
CO
SCHEDULE 13D
CUSIP No. 628834 10 3 Page 4 of
234 Pages
1. NAM
E
OF
REP
ORT
ING
PER
SON
S
S.S
.
OR
I.R
.S.
IDE
NTI
FIC
ATI
ON
NOS
.
OF
ABO
VE
PER
SON
S
E
l
i
z
a
b
e
t
h
J
.
C
o
l
e
m
a
n
2. CHE
CK
THE
APP
ROP
RIA
TE
BOX
IF
A
MEM
BER
OF
A
GRO
UP
(a) "
(b)
x
SEC
3. USE
ONL
Y
SOU
4. RCE
OF
FUN
DS
Ban
k
Loa
n
(Se
e
Ite
m 3
bel
ow.
)
5. CHE
CK
BOX
IF
DIS
CLO
SUR
E
OF
LEG
AL
PRO
CEE
DIN
GS
IS
REQ
UIR
ED
PUR
SUA
NT
TO
ITE
MS
2(d
)
OR
2(e
)
"
CIT
6. IZE
NSH
IP
OR
PLA
CE
OF
ORG
ANI
ZAT
ION
Uni
ted
Sta
tes
NUM
BER 7. SOLE VOTING POWER None
OF
SHA
RES
BEN
EFI
CIA
LLY
OWN
ED
BY
EAC
H
REP
ORT
ING
PER
SON
WIT
H
8. SHARED VOTING POWER 4,042,479*
9. SOLE DISPOSITIVE POWER None
10. SHARED DISPOSITIVE POWER 4,042,479*
AGG
11. REG
ATE
AMO
UNT
BEN
EFI
CIA
LLY
OWN
ED
BY
EAC
H
REP
ORT
ING
PER
SON
4,0
42,
479
CHE
12. CK
BOX
IF
THE
AGG
REG
ATE
AMO
UNT
IN
ROW
(11
)
EXC
LUD
ES
CER
TAI
N
SHA
RES
"
PER
13. CEN
T
OF
CLA
SS
REP
RES
ENT
ED
BY
AMO
UNT
IN
ROW
(11
)
92.
4%
TYP
14. E
OF
REP
ORT
ING
PER
SON
IN
* Elizabeth J. Coleman disclaims beneficial ownerhip of
such shares.
CUSIP No. 628834 10 3 Page 5 of
234 Pages
1. Security and Issuer
This Statement on Schedule 13D (the "Statement")
relates to the
acquisition of shares of common stock, $1.00 par value
(the "Common
Stock"), of NCC Industries, Inc., a Delaware corporation
(the "Company").
The address of the principal executive offices of the
Company is located at
163 Main Street, Cortland, New York 13045.
The information set forth in the Exhibits is
hereby expressly
incorporated herein by reference and the responses to each
item of this
Statement are qualified in their entirety by the
provisions of such
exhibits.
2. Identity and Background
A. This Statement is filed by Maidenform
Worldwide, Inc.
("Worldwide"), Maidenform, Inc. ("Maidenform"), a wholly-
owned subsidiary
of Worldwide, and Elizabeth J. Coleman, an officer,
director and principal
stockholder of Worldwide. Each of Worldwide, Maidenform
and Ms. Coleman
are sometimes individually referred to herein as a
"Reporting Person" and
collectively referred to herein as the "Reporting Persons."
The Reporting
Persons are making this joint filing because they are
affiliated and
therefore may be deemed to constitute a "group" within
the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the
"Exchange Act"), although neither the fact of this filing
nor anything
contained herein shall be deemed to be an admission by
the Reporting
Persons that a group exists.
Worldwide, a Delaware corporation, is a privately held
company which
manufactures women's intimate apparel.
Maidenform, a New York corporation, is the wholly-
owned subsidiary of
Worldwide.
B. The principal business address of each of the
Reporting Persons
is 90 Park Avenue, New York, New York 10016.
C. See (a) above.
D. During the last five years, neither the
Reporting Persons, nor
any executive officer, director or controlling person of
Worldwide or
Maidenform, has been convicted in a criminal proceeding
(excluding traffic
violations or similar misdemeanors).
E. During the last five years, neither the
Reporting Persons, nor
any executive officer, director or controlling person of
Worldwide or
Maidenform, was a party to a civil proceeding of a
judicial or
administrative body of competent jurisdiction as a
result of which
proceeding it or he was or is subject to a judgment, decree
or final order
enjoining future violations of, or prohibiting or
mandating activities
subject to, federal or state securities laws or finding any
violation with
respect to such laws.
F. Worldwide is a Delaware corporation;
Maidenform is a New York
corporation. Ms. Coleman is a citizen of the United States.
3. Source and Amount of Funds or Other Consideration
As of the date of this filing, the Reporting Persons
beneficially own
an aggregate of 4,042,479 shares of Common Stock to which
this Statement
relates. Beneficial ownership of the Common Stock was
acquired in a
private transaction for an aggregate purchase price
consisting of
approximately $29,800,000 in cash and shares of Class A
Common Stock of
Worldwide valued at approximately $40,555,000. See Item 4.
Worldwide obtained the cash funds for the transaction
from financing
received by Worldwide from a group of banks, on whose
behalf CoreStores,
N.A. acted as agent, pursuant to a loan made in the
ordinary course of
business (the "Financing Loan"). See Item 5(d).
CUSIP No. 628834 10 3 Page 6 of
234 Pages
4. Purpose of Transaction
Pursuant to a Stock Purchase Agreement (the
"Purchase Agreement"),
dated as of April 26, 1995, among Worldwide, Triumph
International
Overseas, Limited, a Liechtenstein corporation
("Triumph"), Gunther
Spiesshoffer ("Spiesshoffer") and Frank Magrone ("Magrone";
together with
Triumph and Spiesshoffer, the "Sellers"), Sellers sold to
Worldwide all the
shares of the Common Stock owned by Sellers (the "Purchased
Shares"). The
Purchased Shares constitute approximately 92.4% of
the issued and
outstanding Common Stock. Following the closing of
this acquisition,
Worldwide contributed all of the Purchased Shares to
Maidenform.
Pursuant to the Purchase Agreement, Worldwide, in the
aggregate: (i)
acquired from Triumph and Spiesshoffer approximately 84%
of the Common
Stock for a purchase price consisting of (x) approximately
$26,900,000 cash
and (y) shares of Class A Common Stock of Worldwide valued
at approximately
$37,300,000, and (ii) acquired from Magrone approximately 8%
of the Common
Stock for a purchase price consisting of (z) approximately
$2,900,000 cash
and (a) shares of Class A Common Stock of Worldwide valued
at approximately
$3,255,000.
The consideration paid by Worldwide for the Purchased
Shares equaled
approximately $17.55 per Purchased Share before giving
effect to combining
the businesses of Worldwide and the Company.
Concurrently with the consummation of the transactions
provided for in
the Purchase Agreement, Triumph, pursuant to a
related Stock Sale
Agreement, utilized approximately $20,000,000 of the
$26,900,000 cash paid
to it and Spiesshoffer for their shares of the Company (as
described above)
to purchase from certain shareholders of Worldwide
additional shares of the
Class A Common Stock of Worldwide valued at $20,000,000. In
the aggregate,
Triumph and Spiesshoffer acquired approximately 28% of
the outstanding
shares of Class A Common Stock of Worldwide with an
aggregate value of
approximately $57,300,000.
In accordance with the terms of the Purchase
Agreement, concurrent
with the consummation of the acquisitions contemplated
thereby, all members
of the Company's Board of Directors (with the
exception of Magrone)
resigned effective as of the date of the closing, and four
designees of
Worldwide were selected to replace the resigning Directors.
As a result,
the closing of the transactions contemplated by the
Purchase Agreement had
the effect of changing the control of the Company's Board of
Directors.
The purpose of the Reporting Persons' acquisition of
the Common Stock
was to gain a controlling equity interest in the
Company and to
concurrently gain control of the Company's Board of
Directors. As of the
date of filing of this Statement, the Reporting Persons have
not determined
whether they will effect a transaction to acquire any
or all of the
remaining outstanding Common Stock or what form of
transaction any such
further acquisition would take. The Reporting Persons
intend to promptly
file an Amendment to this Statement if and when they
make any such
determination.
(a) Except as described above, the Reporting
Persons currently have
no plans or proposals to acquire or dispose of any
additional securities of
the Company.
(b) Except as described above, the Reporting
Persons currently have
no plans or proposals to cause the Company to enter into
an extraordinary
corporate transaction such as a merger, reorganization or
liquidation of
the Company or any of its subsidiaries.
(c) Except as described above, the Reporting
Persons currently have
no plans or proposals to cause the Company or any of its
subsidiaries to
sell or transfer a material amount of assets.
(d) Except as a result of the transaction
described above, the
Reporting Persons currently have no plans or proposals
which would result
in any change in the present board of directors or
management of the
Company, whether through a change in the number or term of
directors, the
filling of any existing vacancies or otherwise.
(e) Except as described above, the Reporting
Persons currently have
no plans to make any material change in the present
capitalization or
dividend policy of the Company.
(f) Except as described above, the Reporting
Persons currently have
no plans or proposals to cause the Company to make any
other material
change in its business or corporate structure.
(g)
CUSIP No. 628834 10 3
(g) Except as described above, the Reporting
Persons currently have
no plans or proposals to cause the Company to change
its articles of
incorporation or by-laws or to take other actions which
may impede the
acquisition of control of the Company by any other person.
(h) Except as described above, the Reporting
Persons currently have
no plans or proposals which would cause a class of
securities of the
Company to be delisted from a national securities exchange
or cease to be
authorized to be quoted in an inter-dealer quotation system
of a registered
national securities association.
(i) Except as described above, the Reporting
Persons currently have
no plans or proposals which would cause a class of equity
securities of the
Company to become eligible for termination of
registration pursuant to
Section 12(g)(4) of the Exchange Act.
(j) Except as described above, the Reporting
Persons currently have
no plans or proposals to take any actions similar to
those enumerated
above.
5. Interest in Securities of the Issuer
A. Maidenform is the record owner of 4,042,479 shares
of Common Stock.
As the sole shareholder of Maidenform, Worldwide
beneficially owns,
indirectly through Maidenform, such 4,042,479
shares of Common Stock.
These shares represent 92.4% of the total number
of shares of Common Stock
outstanding. Elizabeth J. Coleman, as a result of
her direct and indirect
ownership of the capital stock of Worldwide and
certain voting rights and
powers with respect to the selection of and
decision-making by the Board of
Directors of Worldwide, may be deemed to
beneficially own the 4,042,479
shares of Common Stock indirectly beneficially
owned by Worldwide. Ms.
Coleman disclaims the beneficial ownership of all
of such shares.
B. Maidenform and Worldwide share voting and
dispositive power over the
4,042,479 shares of Common Stock. All of the
shares of Common Stock that
may be deemed to be beneficially owned by Ms.
Coleman are held with shared
voting and dispositive power with Maidenform and
Worldwide.
C. None.
D. Other than the beneficial owners of the Common
Stock referred to above
and as explained in the next succeeding sentences,
no person has the right
to receive or the power to direct the receipt of
dividends from, or the
proceeds from the sale of, any of the Common Stock
referred to in Item 5(a)
above. Pursuant to the Financing Loan, Worldwide
and Maidenform have
pledged all of the Purchased Shares as security
for the borrowers'
obligations thereunder, and as a result the
lenders have certain rights
with respect to dividends paid on the Purchased
Shares and proceeds from
the sale thereof, in each case upon a default
under the Financing Loan in
accordance with the terms thereof.
E. Not Applicable.
6. Contracts, Arrangements, Understandings or
Relationships with Respect
to Securities of the Issuer
Other than as described above, there are no
contracts, arrangements,
understandings or relationships (legal or otherwise)
among the persons
named in Item 2 or between such persons and any other
person with respect
to any securities of the Company, including but not limited
to transfer or
voting of any such securities, finder's fees, joint
ventures, loan or
option arrangements, puts or calls, guarantees of
profits, division of
profits or loss or the giving or withholding of proxies.
CUSIP No. 628834 10 3 Page 8 of
234 Pages
7. Material to Be Filed as Exhibits
Exhibit No. 1 - Stock Purchase Agreement dated April
26, 1995 between
Maidenform Worldwide, Inc. and Certain Stockholders of
NCC Industries,
Inc., as Sellers.
Exhibit No. 2 - Stock Sale Agreement dated April 26,
1995 between
Triumph International Overseas Ltd., various Sellers and
Catherine C.
Brawer, as agent for the Sellers.
Exhibit No. 3 - Loan Agreement dated as of April 26,
1995.
CUSIP No. 628834 10 3
Signature
After reasonable inquiry and to the best of my
knowledge and belief, I
certify that the information set forth in this Statement is
true, complete
and correct.
MAIDENFORM
WORLDWIDE, INC.
May , 1995 By:
Steven N.
Masket
Executive
Vice President
MAIDENFORM, INC.
May , 1995 By:
Steven N.
Masket
Executive
Vice President
May , 1995
Elizabeth
J. Coleman
CUSIP No. 628834 10 3 Page 10 of
234 Pages
EXHIBIT INDEX
Title of Document
Page
Number
Stock Purchase Agreement, dated April 26, 1995,
between Maidenform Worldwide, Inc. and Certain
Stockholders of NCC Industries, Inc., as Sellers
Stock Sale Agreement, dated April 26, 1995,
between Triumph International Overseas Ltd.,
various Sellers and Catherine C. Brawer, as
agent for the Sellers
Loan Agreement, dated as of April 26, 1995
STOCK PURCHASE AGREEMENT
Between
MAIDENFORM WORLDWIDE, INC.
As Buyer
and
CERTAIN STOCKHOLDERS OF NCC INDUSTRIES, INC.
as Sellers
_____________________________________
Dated as of April 26, 1995
_____________________________________
TABLE OF CONTENTS
Page
{toc \f C |
ARTICLE I DEFINITIONS 1
SECTION 1.1 Definitions 1
SECTION 1.2 Interpretation 10
ARTICLE II PURCHASE AND SALE; CLOSING 11
SECTION 2.1 Purchase and Sale of Purchased Shares
11
SECTION 2.2 Consideration 11
SECTION 2.3 Closing 11
SECTION 2.4 12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS
13
SECTION 3.1 Status of the Purchased Shares 13
SECTION 3.2 Title to the Purchased Shares 14
SECTION 3.3 Authority Relative to this Agreement 14
SECTION 3.4 No Conflicts; Consents 14
SECTION 3.5 Corporate Existence and Power 15
SECTION 3.6 Company Subsidiaries 15
SECTION 3.7 Charter Documents and Corporate Records
16
SECTION 3.8 Capitalization 17
SECTION 3.9 Reports and Financial Statements 17
SECTION 3.10 Liabilities 18
SECTION 3.11 Company Receivables 18
SECTION 3.12 Inventories 19
SECTION 3.13 Absence of Certain Changes 19
SECTION 3.14 Properties 22
SECTION 3.15 Contracts 24
SECTION 3.16 Intangible Property 27
SECTION 3.17 Claims and Proceedings 28
SECTION 3.18 Restrictions on Business Activities 29
SECTION 3.19 Taxes 29
SECTION 3.20 Employee Benefits Plans 31
SECTION 3.21 Officers, Directors and Key Employees
35
SECTION 3.22 EmploymentRelated Matters 35
SECTION 3.23 Potential Conflicts of Interest 36
SECTION 3.24 Insurance 36
SECTION 3.25 Suppliers, Customers and Contractors
37
SECTION 3.26 Compliance with Laws 37
SECTION 3.27 Permits 38
SECTION 3.28 Environmental Matters 38
SECTION 3.29 Finders; Fees 39
SECTION 3.30 Depositaries; Powers of Attorney, etc.
39
SECTION 3.31 Acquisition for Investment 40
SECTION 3.32 Disclosure 40
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER 40
SECTION 4.1 Buyer Common Stock 40
SECTION 4.2 Acquisition for Investment 40
SECTION 4.3 Authority Relative to This Agreement 41
SECTION 4.4 No Conflicts; Consents 41
SECTION 4.5 Corporate Existence and Power 42
SECTION 4.6 Subsidiaries 42
SECTION 4.7 Charter Documents 43
SECTION 4.8 Capitalization 43
SECTION 4.9 Financial Information 44
SECTION 4.10 Liabilities 44
SECTION 4.11 Receivables 45
SECTION 4.12 Inventories 45
SECTION 4.13 Absence of Certain Changes 46
SECTION 4.14 Title to Properties 48
SECTION 4.15 Contracts 51
SECTION 4.16 Intangible Property 54
SECTION 4.17 Claims and Proceedings 55
SECTION 4.18 Restrictions on Business Activities 55
SECTION 4.19 Taxes 55
SECTION 4.20 Employee Benefits Plans 57
SECTION 4.21 Officers, Directors and Key Employees
61
SECTION 4.22 Employment Related Matters 61
SECTION 4.23 Potential Conflicts of Interest 62
SECTION 4.24 Insurance 62
SECTION 4.25 Suppliers, Customers and Contractors
63
SECTION 4.26 Compliance with Laws 63
SECTION 4.27 Permits 63
SECTION 4.28 Environmental Matters 64
SECTION 4.29 Finders; Fees 65
SECTION 4.30 Disclosure 65
ARTICLE V COVENANTS AND AGREEMENTS 65
SECTION 5.1 Conduct of Business of Company 65
SECTION 5.2 Conduct of Business of Buyer 67
SECTION 5.3 Corporate Examinations and Investigations
68
SECTION 5.4 Additional Financial Statements 69
SECTION 5.5 Filings and Authorizations 70
SECTION 5.6 Efforts to Consummate 70
SECTION 5.7 Negotiations With Others 71
SECTION 5.8 Notices of Certain Events 72
SECTION 5.9 Public Announcements 72
SECTION 5.10 Confidentiality 73
SECTION 5.11 Expenses. 74
SECTION 5.12 Tax Matters 74
SECTION 5.13 Restrictive Covenant. 75
SECTION 5.14 Possible Future Ventures 77
ARTICLE VI CONDITIONS TO CLOSING 78
SECTION 6.1 Conditions to the Obligations of Sellers
and Buyer 78
SECTION 6.2 Conditions to the Obligations of Sellers
79
SECTION 6.3 Conditions to the Obligations of Buyer
81
ARTICLE VII INDEMNIFICATION 83
SECTION 7.1 Survival of Representations and Warranties
83
SECTION 7.2 Obligation of Sellers to Indemnify 84
SECTION 7.3 Obligation of Buyer to Indemnify 84
SECTION 7.4 Notice and Opportunity to Defend Third
Party Claims 85
SECTION 7.5 Limits on Indemnification 86
SECTION 7.6 Tax Impact 87
SECTION 7.7 Indemnity Sole Remedy 87
ARTICLE VIII TERMINATION 87
SECTION 8.1 Termination 87
SECTION 8.2 Effect of Termination; Right to Proceed
88
ARTICLE IX MISCELLANEOUS 89
SECTION 9.1 Notices 89
SECTION 9.2 Entire Agreement 91
SECTION 9.3 Waivers and Amendments; Non-Contractual
Remedies; Preservation of Remedies
91
SECTION 9.4 Governing Law 91
SECTION 9.5 Consent to Jurisdiction and Service of
Process 92
SECTION 9.6 Designated Buyer 92
SECTION 9.7 Binding Effect; No Assignment 92
SECTION 9.8 Exhibits 92
SECTION 9.9 Severability 93
SECTION 9.10 Counterparts 93
}
EXHIBITS
Exhibit A - List of Sellers
Exhibit B - Form of Legal Opinion of Counsel to Buyer
Exhibit C - Form of Legal Opinion of Counsel to Sellers
A. SELLER SCHEDULES
Schedule 3.1 Restrictions on Purchased Shares
Schedule 3.4 Seller Required Consents
Schedule 3.5 Jurisdictions in which Authorized to
Transact Business
Schedule 3.6 Company Subsidiaries
Schedule 3.8 Capitalization
Schedule 3.10A Certain Liabilities
Schedule 3.10B Company Debt
Schedule 3.11 Certain Company Receivables
Schedule 3.13 Recent Developments
Schedule 3.14A Company Real Property
Schedule 3.14B Company Leased Tangible Property
Schedule 3.14C Company Permitted Liens
Schedule 3.15 Contracts
Schedule 3.16 Company Intellectual Property Rights
Schedule 3.17 Claims and Proceedings
Schedule 3.19 Tax Matters
Schedule 3.20 Employee Benefit Plans
Schedule 3.22 Employment-Related Matters
Schedule 3.23 Potential Conflicts of Interest
Schedule 3.24 Insurance
Schedule 3.25A Suppliers and Customers
Schedule 3.25B Contractors
Schedule 3.27 Permits
Schedule 3.28 Environmental Matters
Schedule 3.30 Depositories; Powers of Attorney
Schedule 5.1 Certain Matters Prior to Closing
B. BUYER SCHEDULES
Schedule 4.4 Buyer Required Consents
Schedule 4.6 Buyer Subsidiaries
Schedule 4.8 Capitalization
Schedule 4.10A Liabilities
Schedule 4.10B Buyer Debt
Schedule 4.11 Certain Buyer Receivables
Schedule 4.13 Recent Developments
Schedule 4.14A Buyer Real Property
Schedule 4.14B Buyer Leased Tangible Property
Schedule 4.14C Buyer Permitted Liens
Schedule 4.15 Contracts
Schedule 4.16 Buyer Intellectual Property Rights
Schedule 4.17 Claims and Proceedings
Schedule 4.19 Taxes
Schedule 4.9 Employee Benefit Plans
Schedule 4.22 Employment - Related Matters
Schedule 4.23 Potential Conflicts of Interest
Schedule 4.25A Suppliers and Customers
Schedule 4.25B Contractors
Schedule 4.28 Environmental Matters
Schedule 5.2 Certain Matters Prior to Closing
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT dated as of April 26, 1995
between MAIDENFORM WORLDWIDE, INC., a Delaware corporation,
and each of the security-holders listed on the signature
page of this Agreement (each a "Seller" and collectively the
"Sellers"):
W I T N E S S E T H:
WHEREAS, each Seller owns the number of shares of
Common Stock, par value $1.00 per share (the "Company Common
Stock"), set out in Exhibit A next to the name of such
Seller under the caption "Total Number of Purchased Shares"
(collectively, the "Purchased Shares"), which Purchased
Shares constitute approximately 92% of the issued and
outstanding shares of capital stock of NCC Industries, Inc.,
a Delaware corporation (the "Company"); and
WHEREAS, each Seller desires to sell and Maidenform
Worldwide, Inc. desires to purchase all of the Purchased
Shares owned by such Seller on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual
promises, covenants and other agreements contained herein,
the parties hereby agree as follows:
ARTICLE I
DEFINITIONS{tc \l 1 "ARTICLE I
DEFINITIONS"}
SECTION 1.1 Definitions{tc \l 2 "SECTION 1.1
Definitions"}. (a) The following terms, as used herein,
have the following meanings:
"Acquisition Proposal" shall mean any proposal for the
acquisition of, or merger or other business combination
involving the Company or any Company Subsidiary or the sale
of the Purchased Shares or the sale of any equity interest
in, or a substantial portion of the Assets of, the Company
or any Company Subsidiary, other than the transactions
contemplated by this Agreement.
"Affiliate" of any person means any other person
directly or indirectly through one or more intermediary
persons, controlling, controlled by or under common control
with such person.
"Agreement" or "this Agreement" shall mean, and the
words "herein", "hereof" and "hereunder" and words of
similar import shall refer to, this agreement as it from
time to time may be amended.
"Ancillary Agreements" shall mean the following
instruments to be entered on the Closing Date: (i)
Retirement Agreement between Maidenform, Inc. and Robert A.
Brawer with a guaranty appended thereto of Buyer; (ii)
Employment Agreement between Maidenform, Inc. and Elizabeth
J. Coleman with a guaranty appended thereto of Buyer; (iii)
Employment Agreement between Maidenform, Inc. and Catherine
C. Brawer with a guaranty appended thereto of Buyer; (iv)
Employment Agreement between Maidenform, Inc. and Magrone
with a guaranty appended thereto of Buyer; (v) Purchase
Agreement between Robert A. Brawer and Buyer with a guaranty
appended thereto of Maidenform, Inc.; and (vi) Call
Agreement by and among the stockholders of Buyer other than
Triumph, Spiesshofer and Magrone.
"Assets" shall mean properties, rights, interests and
assets of every kind, real, personal or mixed, tangible and
intangible.
"Audit" or "audited" when used in regard to financial
statements shall mean an examination of the financial
statements by a firm of independent certified public
accountants in accordance with generally accepted auditing
standards for the purpose of expressing an opinion thereon.
"Business" in relationship to any person shall mean the
business currently conducted by such person.
"Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which
banking institutions in the Borough of Manhattan, the City
of New York, are authorized or obligated by law or executive
order to close.
"Buyer" shall mean Maidenform Worldwide, Inc., a
Delaware corporation and the successor by operation of law
to Maidenform Worldwide, Inc., a New York corporation (the
"Predecessor"). Unless specifically stated otherwise,
references herein to "Buyer" shall include the Predecessor.
"Buyer Balance Sheet" shall mean the consolidated
balance sheet of Buyer included in its audited financial
statements as at and for the fiscal year ended December 31,
1994.
"Buyer Balance Sheet Date" shall mean December 31,
1994.
"Buyer Common Stock" shall mean Buyer's Class A shares
of Common Stock, par value $.01 per share, entitling the
holders thereof to ten votes per share.
"Certificate of Incorporation" shall mean, in the case
of Buyer, its Restated Certificate of Incorporation, dated
the date hereof, and, in the case of any other corporation,
the certificate of incorporation, articles of incorporation
or charter of a corporation, howsoever denominated under the
laws of the jurisdiction of its incorporation.
"Close of Business" on any given date shall mean 5:00
p.m., Eastern Time, on such date; provided, however, that if
such date is not a Business Day, "Close of Business" shall
mean 5:00 p.m., Eastern Time, on the next succeeding
Business Day.
"Company Balance Sheet" shall mean the consolidated
balance sheet of the Company included in its audited
financial statements as at and for its fiscal year ended
December 31, 1994.
"Company Balance Sheet Date" shall mean December 31,
1994.
"Company Merger" shall mean (i) a merger of the Company
with and into Buyer or one of Buyer's Affiliates; (ii) a
merger of Buyer or one of Buyer's Affiliates with and into
the Company; (iii) any other consolidation or business
combination between the Company and Buyer or one of Buyer's
Affiliates and (iv) any one of the foregoing transactions
involving any Company Subsidiary.
"Contingency" with respect to a person shall mean any
unasserted Liability of which there is a reasonable
possibility of assertion and with respect to which the
possibility of such person incurring a Liability materially
adverse to the Condition of the Business or the Condition of
Buyer, as applicable, is not remote.
"Contract" shall mean any contract, agreement,
indenture, note, bond, lease, conditional sale contract,
mortgage, license, franchise, instrument, commitment or
other binding arrangement.
"Contractor" shall mean a person retained to design,
cut, assemble, produce or package products.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
The term "control", with respect to any person, shall
mean the power to direct the management and policies of such
person, directly or indirectly, by or through stock
ownership, agency or otherwise, or pursuant to or in
connection with an agreement, arrangement or understanding
(written or oral) with one or more other persons by or
through stock ownership, agency or otherwise; and the terms
"controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Environmental Laws" shall mean any and all statutes,
laws (including case law), codes, regulations, ordinances,
rules, judgments, orders, decrees, franchises, licenses,
agreements or any other requirement or restriction
promulgated, imposed, enacted or issued by any federal,
state, local and foreign Governmental Bodies relating to
human health or the environment, including the emission,
discharge or Release of pollutants, contaminants, Hazardous
Substances or wastes into the environment (which includes,
without limitation, ambient air, surface water, ground
water, or land), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous
Substances or wastes or the clean-up or other remediation
thereof. "Environmental Laws" shall include but not be
limited to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. 9601, et
seq.), as amended by the Superfund Amendments and
Reauthorization Act of 1986 (42 U.S.C. 9601, et seq.) as
amended ("CERCLA"); the Resource Conservation and Recovery
Act of 1976, as amended (42 U.S.C. 6901, et seq.); the
Clean Water Act (Water Pollution Control Act), as amended
(33 U.S.C. 1251, et seq.); the Clean Air Act, as amended
(42 U.S.C. 7401, et seq.); the Insecticide, Fungicide and
Rodenticide Act, Pesticide Act of 1978, as amended (7 U.S.C.
136, et seq.); the Toxic Substances Control Act of 1976, as
amended (15 U.S.C. 2601 et seq.) the Safe Drinking Water
Act (42 U.S.C. 300(f) et seq.) as amended; and the
Hazardous Materials Transportation Control Act (49 U.S.C.
1801 et seq.).
"Environmental Liabilities" shall mean all Liabilities
arising from, relating to, or otherwise in connection with
the Company Real Property or Buyer Real Property, as
applicable, which (i) arise under or relate to Environmental
Laws and (ii) arise from or relate in any way to actions
occurring or conditions existing on or prior to the Closing
Date, including but not limited to Third Party Claims and
Regulatory Actions.
"Environmental Permits" with respect to a person shall
mean those material Permits required by such person in
connection with its Business or the use and operation of the
real property owned or leased by it.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"ERISA Group" shall mean all persons which are treated
as being under common control or as a single employer with
the Company or any of its Subsidiaries or Buyer or any of
its Subsidiaries, as applicable, under Section 414(b), (c),
(m) or (o) of the Code.
"GAAP" shall mean generally accepted accounting
principles in effect on the date hereof as set forth in the
opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a
significant segment of the accounting profession of the
United States.
"Hazardous Substances" shall mean any dangerous, toxic,
radioactive, caustic or otherwise hazardous material,
pollutant, contaminant, chemical, waste or substance
defined, listed or described as any of such in or governed
by any Environmental Law, including but not limited to urea-
formaldehyde, polychlorinated biphenyls, asbestos or
asbestos-containing materials, nuclear or radioactive fuel
or waste, radon, explosives, known carcinogens, petroleum
and its derivatives, petroleum products, or any other waste,
material, substance, pollutant or contaminant having any
constituent elements displaying any of the foregoing
characteristics, or which might cause any injury to human
health or safety or to the environment or might subject the
owner or operator of the Company Real Property or Buyer Real
Property, as applicable, to any Regulatory Actions or Third
Party Claims.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"IRS" shall mean the Internal Revenue Service.
"Knowledge" with respect to (a) any individual shall
mean actual knowledge and (b) any corporation shall mean the
actual knowledge of the directors and the executive officers
of such corporation; and "knows" has a correlative meaning.
"Liability" shall mean any direct or indirect
indebtedness, liability, assessment, claim, loss, damage,
deficiency, obligation or responsibility, fixed or unfixed,
choate or inchoate, liquidated or unliquidated, secured or
unsecured, accrued, absolute, actual or potential,
contingent or otherwise (including any liability under any
guaranties, letters of credit or performance credits), of a
kind required by GAAP to be set forth on a financial
statement or in the notes thereto.
"Lien" shall mean, with respect to any Asset, any
mortgage, lien (including mechanics, warehousemen, laborers
and landlords liens), claim, pledge, charge, security
interest, preemptive right, right of first refusal, option,
judgment, title defect, or encumbrance of any kind in
respect of or affecting such Asset.
"Magrone" shall mean Frank Magrone, one of the Sellers.
"Multiemployer Plan" shall mean a multiemployer plan
(as defined in Section 4001(a)(3) of ERISA) to which any
ERISA Group member makes, or is obligated to make,
contributions for which there may be any liability.
"1934 Act" shall mean the Securities Exchange Act of
1934, as amended, and all rules and regulations promulgated
thereunder.
"1933 Act" shall mean the Securities Act of 1933, as
amended, and all rules and regulations promulgated
thereunder.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions.
"Pension Plan" shall mean a pension plan (as defined in
Section 3(2) of ERISA) which the Company or any of its
Subsidiaries or the Buyer or any of its Subsidiaries, as
applicable, sponsors, maintains or to which the Company or
any of its Subsidiaries or the Buyer or any of its
Subsidiaries, as applicable, makes or is obligated to make
contributions.
The term "person" shall mean an individual,
corporation, partnership, joint venture, association, trust,
unincorporated organization or other entity, including a
government or political subdivision or an agency or
instrumentality thereof.
"Plan" shall mean any employee benefit plan (as defined
in Section 3(3) of ERISA), severance bonus or other
incentive compensation, vacation, change of control, stock
option, stock appreciation right, service award, company
car, club membership, relocation, educational assistance,
patent award, employee loan, policy, practice or
arrangement, employment or consultancy as to which the
Company or any of its Subsidiaries or Buyer or any of its
Subsidiaries, as applicable, sponsors, maintains or makes or
is obligated to make contributions or payments or for which
there may be any liability.
"412 Plan" shall mean a pension plan (as defined in
Section 3(2) of ERISA) which any member of the applicable
ERISA Group sponsors or maintains, and is covered under
Section 412 of the Code.
"Recapitalization Transactions" shall mean,
collectively, the following transactions which are also
described in Schedule 5.2 of Buyer's Schedules: (i) the
reincorporation merger on or prior to the date hereof of the
Predecessor into Buyer (the "Reincorporation Merger"); (ii)
the redemption prior to the date hereof by the Predecessor
of 88,697 Class B shares of its common stock for a price of
$3,050,112; (iii) the merger prior to the date hereof of
Chranima, Inc., a New York corporation, with and into the
Predecessor; (iv) the payment prior to the date hereof of a
dividend by the Predecessor in the amount of $2,456,000; (v)
the redemption prior to the date hereof by Elizabeth Needle
Craft, Inc., a New York corporation, of its shares of non-
voting preferred stock; (vi) the transfer of shares (but not
the registration of such transfer) on or prior to the date
hereof held by Robert A. Brawer in Maidenform (UK) Limited
and Creaciones Textiles de Merida, S.A. de C.V. to a nominee
of Maidenform, Inc. and (vii) the filing on the date hereof
of Buyer's Certificate of Incorporation to reclassify its
capital stock and make other changes to its Certificate of
Incorporation.
"Regulatory Actions" shall mean any claim, demand,
action, suit or proceeding brought or instigated by any
Governmental Body in connection with any Environmental Law,
including, without limitation, civil, criminal and/or
administrative proceedings, and whether or not seeking
costs, damages, penalties or expenses.
"Release" shall mean the intentional or unintentional,
spilling, leaking, disposing, discharging or disturbance of,
or emitting, depositing, injecting, leaching, escaping, or
any other release or threatened release to or from, however
defined, any Hazardous Substance in violation of any
Environmental Law.
"Reportable Event" shall mean any of the events
described in Section 4043(b)(1), (2), (3), (5), (6), (8) or
(9) of ERISA.
"SEC" shall mean Securities and Exchange Commission.
"Sellers' Accountants" shall mean Coopers & Lybrand
L.L.P., independent certified public accountants, or such
other "Big 6" accounting firm selected by Sellers.
"Spiesshofer" shall mean Guenther Spiesshofer, one of
the Sellers.
"Stockholders' Agreement" shall mean the Stockholders'
Agreement among the Buyer and all its stockholders to be
entered into on the Closing Date after the consummation of
the Recapitalization Transactions and upon the acquisition
by Sellers of Buyer Common Stock.
"Subsidiary" as to any person shall mean any entity of
which securities or other ownership interests having
ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are
owned directly or indirectly through one or more
intermediaries, or both, by such person.
"Tax" (including, with correlative meaning, the terms
"Taxes" and "Taxable") shall mean (i) any net income, gross
income, gross receipts, sales, use, ad valorem, transfer,
transfer gains, franchise, profits, license, withholding,
payroll, employment, excise, severance, stamp, occupation,
premium, property or windfall profits tax, alternative or
add-on minimum tax, customs duty or other tax, fee,
assessment or charge of any kind whatsoever (including but
not limited to taxes assessed to real property and water and
sewer rents relating thereto), together with any interest
and any penalty, addition to tax or additional amount
imposed by any Governmental Body (domestic or foreign)
responsible for the imposition of any such tax (a "Taxing
Authority"), with respect to the Company, any Company
Subsidiary or the Company Real Property (or the transfer
thereof) or Buyer or any Buyer Subsidiary, as applicable;
(ii) any liability for the payment of any amount of the type
described in the immediately preceding clause (i) as a
result of the Company or any Company Subsidiary or Buyer or
any Buyer Subsidiary, as applicable, being a member of an
affiliated or combined group with any other corporation at
any time on or prior to the Closing Date and (iii) any
liability of the Company or any Company Subsidiary or Buyer
or any Buyer Subsidiary, as applicable, for the payment of
any amounts of the type described in the immediately
preceding clause (i) as a result of a contractual obligation
to indemnify any other person.
"Taxable Year" with respect to a person shall mean,
with respect to any Tax of such person, the calendar or
fiscal year, or shorter period, for which the Tax is
computed and the Tax return for such Tax is made.
"Third Party Claims" shall mean any claim, action,
demand, suit or proceeding (other than Regulatory Actions)
based on negligence, trespass, strict liability, nuisance,
toxic tort or detriment to human health or welfare and, with
respect to any of the foregoing, due to Release or other
contamination or alleged contamination, or other violation
of Environmental Law and whether or not seeking costs,
damages, penalties or expenses brought by any person or
entity other than a Governmental Body.
"Triumph" shall mean Triumph International Overseas
Limited, a Liechtenstein corporation and one of the Sellers.
"Transaction Documents" shall mean, collectively, this
Agreement, the Stockholders' Agreement, and each of the
other agreements and instruments to be executed and
delivered by all or some of the parties hereto in connection
with the consummation of the transactions contemplated
hereby.
"Unfunded Pension Liability" shall mean, as of any
determination date, the amount, if any, by which the present
value of all accrued benefits under a Plan subject to Title
IV of ERISA exceeds the fair market value of all assets of
such plan all determined using the actuarial assumptions set
forth in the Plan.
The term "voting power" when used with reference to the
capital stock of, or units of equity interests in, any
person shall mean the power under ordinary circumstances
(and not merely upon the happening of a contingency) to vote
in the election of directors of such person (if such person
is a corporation) or to participate in the management and
control of such person (if such person is not a
corporation).
"Welfare Plan" shall mean an employee welfare benefit
plan within the meaning of Section 3(1) of ERISA.
"Withdrawal Liabilities" shall mean the amount of
liability determined or which may be determined pursuant to
Section 4201 of ERISA with respect to a Multiemployer Plan.
(b) The following terms are defined in the
following sections of this Agreement:
Term Section
Asserted Liability 7.4(a)
Authorized Agent 9.5
Brawer Stock Sale Agreement 6.1(e)
Buyer's Accountants 2.4(c)
Buyer Debt 4.10(b)
Buyer ERISA Group Plans 3.20(a)
Buyer Intellectual Property Rights 4.16(a)
Buyer Products 4.17
Buyer Proposed Contracts 4.15(c)
Buyer Real Property 4.14(a)
Buyer Receivables 4.11
Buyer Required Consents 4.4
Buyer Returns 4.19(a)
Buyer Subsidiary 4.6(a)
Buyer Tangible Property 3.14(b)
Claims 3.17
Claims Notice 7.4(a)
Closing 2.3
Closing Date 2.3
Company Recital
Company Common Stock Recital
Company Debt 3.10(b)
Company Intellectual Property
Rights 3.16
Company Leased Real Property 3.14(a)
Company Owned Real Property 3.14(a)
Company Permitted Liens 3.14(d)
Company Products 3.17
Company Proposed Contracts 3.15(c)
Company Real Property 3.14(a)
Company Returns 3.19
Company Subsidiary 3.6(a)
Company Tangible Property 3.14(b)
Condition of the Business 3.5
Condition of Buyer 4.5
Contemplated Transactions 3.3
Contingencies 3.10(a)
Designated Buyer 9.6
Governmental Bodies 3.26
Indemnifying Party 7.4(a)
Indemnitee 7.4(a)
Laws 3.26
Losses 7.2
Orders 3.26
Permits 3.27
Pre-Closing Tax Period 3.19(b)
Purchase Price 2.2
Purchased Shares Recital
Representatives 5.3
Restrictive Covenants 5.13(c)
Restricted Period 5.13(a)(i)
Seller ERISA Group Plans 4.20(a)
Seller Permitted Liens 4.14(d)
Seller Required Consents 3.4
Seller Tangible Property 4.14(b)
Sellers Recital
Stipulated Amount 7.5(a)
WARN 3.22
SECTION 1.2 Interpretation{tc \l 2 "SECTION 1.2
Interpretation"}. Unless the context otherwise requires,
the terms defined in Section 1.1 shall have the meanings
herein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of
the terms defined herein. All accounting terms defined in
Section 1.1, and those accounting terms used in this
Agreement not defined in Section 1.1, except as otherwise
expressly provided herein, shall have the meanings
customarily given thereto in accordance with GAAP. When a
reference is made in this Agreement to Sections, such
reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this
Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation". The use
of the neuter gender herein shall be deemed to include the
masculine and feminine genders wherever necessary or
appropriate, the use of the masculine gender shall be deemed
to include the neuter and feminine genders and the use of
the feminine gender shall be deemed to include the neuter
and masculine genders wherever necessary or appropriate.
ARTICLE II
PURCHASE AND SALE; CLOSING{tc \l 1 "ARTICLE II
PURCHASE AND SALE; CLOSING"}
SECTION 2.1 Purchase and Sale of Purchased Shares{tc
\l 2 "SECTION 2.1 Purchase and Sale of Purchased Shares"}.
Subject to the terms and conditions set forth herein, each
Seller severally agrees to sell, transfer and deliver to
Buyer, and Buyer agrees to purchase, acquire and accept from
each Seller, the Purchased Shares of such Seller.
SECTION 2.2 Consideration{tc \l 2 "SECTION 2.2
Consideration"}. Subject to the terms and conditions set
forth herein, the purchase price (the "Purchase Price")
payable by Buyer for the Purchased Shares shall be payable
on the Closing Date to the Sellers in cash and/or in shares
of Buyer Common Stock, as indicated below. The cash portion
of the Purchase Price shall be payable by wire transfer of
immediately available funds to accounts designated by
Sellers by written notice given to Buyer at least two (2)
Business Days prior to the Closing Date.
Name of Seller
Cash portion of
Purchase Price
Number of shares of Buyer Common
Stock to be issued to such Seller
Triumph and
Spiesshofer
$26,860,496
81,925.17
Magrone
2,891,010
7,155.83
Total
$29,751,506
89,081.00
SECTION 2.3 Closing{tc \l 2 "SECTION 2.3 Closing"}.
The closing (the "Closing") of the purchase and sale of the
Purchased Shares hereunder shall take place at the offices
of Baer Marks & Upham, 805 Third Avenue, New York, New York
at 10:00 a.m., local time, on the date hereof (the time and
date of the Closing being hereinafter called the "Closing
Date"). All transactions consummated at the Closing shall
be deemed to have taken place simultaneously.
SECTION 2.4 {tc \l 2 "SECTION 2.4 "}Purchase Price
Adjustment. (a) The Purchase Price payable to Triumph
shall be increased by an amount (the "Adjustment"), if any,
equal to 45% of the excess, if any, of $110,880,000 over the
sum of (i) the aggregate cumulative consolidated earnings
before interest and taxes ("EBIT") of Buyer and its
Subsidiaries for the three-year period commencing January 1,
1995 and ending December 31, 1997 (the "Three-Year Period"),
plus (ii) the consolidated EBIT for the Company and the
Company Subsidiaries for the period from January 1, 1995
through the Closing Date, provided that (A) the amount of
the Adjustment shall not exceed $5,500,000 and (B) the
Adjustment shall be reduced by an amount equal to 8% of the
excess, if any, of $436,152,000 over the "NCC Net Sales"
(determined as provided in sub-sections (b) and (c) below)
during the Three-Year Period. The amount, if any, payable
to Triumph pursuant to the provisions of this Section 2.4
(a) shall be paid not later than April 30, 1998.
(b) In the event of the consummation of a Company
Merger, Buyer will operate the Company as a separate sales
division and will maintain separate books and records for
such division so that the determination of NCC Net Sales
will be auditable. As used in this Section 2.4(b), the
Company, or if the Company is operated as a separate sales
division of Buyer such division, is referred to herein as
the "NCC Division". For purposes hereof, "NCC Net Sales"
shall mean the total net sales (determined in accordance
with GAAP, consistently applied from year to year) of the
NCC Division to unaffiliated entities as well as
intercompany sales of the NCC Division to other divisions of
Buyer. To the extent intercompany NCC Net Sales include
sales of the NCC Division to other divisions of Buyer that
are not made on an arms-length basis, intercompany sales of
the NCC Division to other divisions of Buyer shall be
recomputed on a basis as if such sales were on terms which
were no less favorable to the NCC Division than the terms of
sales by the Company to Buyer or an Affiliate thereof prior
to Closing and shall be priced on an arms-length basis.
With respect to sales made by the NCC Division to outlet
stores of Maidenform, Inc. such pricing, consistent with
past practice, shall be on a "close-out" basis.
(c) The EBIT of Buyer and NCC Net Sales shall
each be determined by the independent certified public
accountants engaged by Buyer with respect to the applicable
calendar year for which the determination is made (the
"Buyer's Accountants") and shall be based upon Buyer's
audited consolidated financial statements for the respective
calendar year. The EBIT of the Company and Company
Subsidiaries and the NCC Net Sales for the period from
January 1, 1995 through the Closing Date shall be based on
reviewed financial statements of the Company for such period
and shall be determined by Buyer's Accountants. The Buyer's
Accountants shall determine the elements included in EBIT in
accordance with GAAP, consistently applied from year to
year; and shall compute EBIT on a basis consistent with the
methodology used in formulating the projections included as
Exhibit 3 in the Appraisal of the Capital Stock of
Maidenform Worldwide, Inc. and NCC Industries, Inc. as of
November 30, 1994 prepared by Core States Investment
Banking. Within 120 days after the end of the respective
calendar year, Buyer shall deliver to Sellers a copy of the
EBIT of Buyer and NCC Net Sales computations of Buyer's
Accountants for the respective calendar year.
(d) If Triumph does not agree with the
determinations made by Buyer's Accountants, in accordance
with the provisions of Section 2.4(c), and Triumph and Buyer
are unable to resolve such disagreements within 30 days
after receipt of such determinations, or such longer period
as the parties may mutually agree upon, the matters in
dispute shall be referred for settlement to KPMG Peat
Marwick LLP, independent certified public accountants, or
such other "Big 6" accounting firm as may be mutually agreed
upon (the "Accounting Firm"). Promptly thereafter, the
Accounting Firm shall review the matters in dispute (the
"Disputed Matters") and make any adjustments necessary to
EBIT and NCC Net Sales over the relevant periods. Each of
Triumph and Buyer will make available to the Accounting Firm
all information reasonably requested by the Accounting Firm
in connection with such review. All written communications
to or from the Accounting Firm by one party shall be
furnished simultaneously to the other party, and each party
shall be afforded reasonable opportunity to participate in
all non-written communications with the Accounting Firm in
connection with such review. Any determination by the
Accounting Firm pursuant to this Section 2.4(d) shall be
delivered by the Accounting Firm to Triumph and Buyer and
shall be final, conclusive and non-appealable. Triumph, on
the one hand, and Buyer on the other hand, shall bear the
fees and expenses of the Accounting Firm in equal shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS{tc \l 1
"ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS"}
Each of Spiesshofer and Magrone, severally, as to the
matters relating to himself and the Purchased Shares owned
by him referred to in Sections 3.1, 3.2, 3.3, 3.4 and 3.31
(it being understood and agreed that neither Spiesshofer nor
Magrone is making any representations or warranties as to
any other Section of this Agreement), and Triumph as to all
matters referred to in this Article III, represent and
warrant to Buyer that:
SECTION 3.1 Status of the Purchased Shares{tc \l 2
"SECTION 3.1 Status of the Purchased Shares"}. Except as
set forth on Schedule 3.1, the Purchased Shares are subject
to no restrictions on transferability other than
restrictions imposed by (a) the 1933 Act and (b) applicable
state securities Laws. Except as set forth on Schedule 3.1,
there are no outstanding options, warrants, calls,
preemptive rights, rights of first refusal, or other rights
to purchase or acquire from any Seller, or any plans,
contracts or commitments providing for the issuance of, or
the granting of rights to any Seller to acquire: (i) any
capital stock of the Company or (ii) any securities
convertible into or exchangeable for any capital stock of
the Company. No Seller is contractually obligated or
entitled to repurchase or otherwise acquire any outstanding
shares of capital stock of the Company.
SECTION 3.2 Title to the Purchased Shares{tc \l 2
"SECTION 3.2 Title to the Purchased Shares"}. Except as
set forth on Schedule 3.1, each Seller owns and holds title
to such Seller's Purchased Shares free and clear of any Lien
of any kind. At the Closing, Buyer will acquire title to
such Seller's Purchased Shares, free and clear of any Lien
of any kind other than Liens created by Buyer.
SECTION 3.3 Authority Relative to this Agreement{tc
\l 2 "SECTION 3.3 Authority Relative to this Agreement"}.
Each Seller has full power, capacity and authority to
execute and deliver this Agreement and each other
Transaction Document to which he or it is a party and to
consummate the transactions contemplated hereby and thereby
(the "Contemplated Transactions"). The execution and
delivery of this Agreement and the consummation of the
Contemplated Transactions to which such Seller is a party
have been duly and validly authorized by each Seller and no
other proceedings on the part of any Seller (or any other
person) are necessary to authorize the execution and
delivery by such Seller of this Agreement or the
consummation of the Contemplated Transactions to which such
Seller is a party. This Agreement has been duly and validly
executed and delivered by each Seller, and (assuming the
valid execution and delivery of this Agreement by the other
parties hereto) constitutes the legal, valid and binding
agreement of such Seller enforceable against such Seller in
accordance with its terms except as such obligations and
their enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the enforcement of creditors' rights
generally and except that the availability of equitable
remedies, including specific performance, is subject to the
discretion of the court before which any proceeding therefor
may be brought (whether at law or in equity).
SECTION 3.4 No Conflicts; Consents{tc \l 2 "SECTION
3.4 No Conflicts; Consents"}. The execution, delivery and
performance by each Seller of this Agreement and each other
Transaction Document to which he or it is a party, the
consummation of the Contemplated Transactions to which such
Seller is a party or the contemplated change of control of
the stock ownership of the Company, will not (i) violate any
provision of the Certificate of Incorporation or By-laws (or
comparable instruments) of Triumph, the Company or any of
the Company Subsidiaries; (ii) require the Sellers, the
Company or any of the Company Subsidiaries to amend any
Contract, obtain any consent, approval or action of or
waiver from, or make any filing with, or give any notice to,
any Governmental Body or any other person, except for
compliance with the HSR Act and as set forth on Schedule 3.4
(the "Seller Required Consents"); (iii) if the Seller
Required Consents are obtained, violate, conflict with or
result in the breach of any of the terms of, result in a
material modification of the effect of, or otherwise cause
the termination of, give any other contracting party the
right to terminate, or constitute (or with notice or lapse
of time or both constitute) a default under, any Contract to
which any Seller, the Company or any of the Company
Subsidiaries is a party or by or to which any of them or any
of their Assets may be bound or subject, or result in the
creation of any Lien upon the Purchased Shares or upon the
properties of the Company or any of the Company Subsidiaries
pursuant to the terms of any such Contract other than such
violations, conflicts, breaches, modifications,
terminations, rights to terminate, defaults or Liens that,
individually or in the aggregate, would not have a material
adverse effect on the Condition of the Business; (iv) if the
Seller Required Consents are obtained, violate any Law or
Order of any Governmental Body against, or binding upon, any
Seller, the Company or any of the Company Subsidiaries or
upon their respective Assets or Business other than such
violations that, individually or in the aggregate, would not
have a material adverse effect on the Condition of the
Business; (v) if the Seller Required Consents are obtained,
violate or result in the revocation or suspension of any
Permit other than such violations that, individually or in
the aggregate, would not have a material adverse effect on
the Condition of the Business; or (vi) if the Seller
Required Consents are not obtained, have a material adverse
effect on the Condition of the Business.
SECTION 3.5 Corporate Existence and Power{tc \l 2
"SECTION 3.5 Corporate Existence and Power"}. Each of
Triumph and the Company is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all requisite powers
and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as
now conducted. The Company is duly qualified to do business
as a foreign corporation and is in good standing in each
continental United States jurisdiction where the character
of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified
would not, individually or in the aggregate, have a material
adverse effect on the business, its Assets, financial
condition or the results of operations of the Company and
the Company Subsidiaries taken as a whole (collectively, the
"Condition of the Business"). The Company is duly qualified
to do business as a foreign corporation in each of the
jurisdictions listed on Schedule 3.5 hereto.
SECTION 3.6 Company Subsidiaries{tc \l 2 "SECTION 3.6
Company Subsidiaries"}. (a) Each Company Subsidiary is a
corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation
or other organization, has all corporate or other powers and
all material governmental licenses, authorizations, consents
and approvals required to carry on its business as now
conducted and is duly qualified to do business as a foreign
person and is in good standing in each jurisdiction where
the character of the property owned or leased by it or the
nature of its activities make such qualification necessary,
except for such jurisdictions where the failure to be so
qualified would not, individually or in the aggregate, have
a material adverse effect on the Condition of the Business.
(b) Schedule 3.6 sets out the name of each
Subsidiary of the Company ("Company Subsidiary"), its
jurisdiction of incorporation or other organization, each
jurisdiction in which it is duly qualified to do business as
a foreign corporation, the authorized capital stock or other
ownership interests of, and the securities issued by, each
Company Subsidiary, together with the holders of all such
outstanding securities. Except for the Company Subsidiaries
set forth on Schedule 3.6, the Company does not directly or
indirectly own any interest in any other person.
(c) Except as set forth on Schedule 3.6, all of
the outstanding capital stock or other ownership interests
of each Company Subsidiary is owned by the Company, directly
or indirectly, free and clear of any Lien and any other
limitation or restriction (including any restriction on the
right to vote, sell or otherwise dispose of such capital
stock or other ownership interests). All of the outstanding
capital stock or other ownership interests of each Company
Subsidiary is validly issued, fully paid and nonassessable
and was not issued in violation of any preemptive rights,
rights of first refusal or any other contractual or legal
restrictions of any kind. Except as set forth on Schedule
3.6, there are no outstanding (i) securities of the Company
or any Company Subsidiary convertible into or exchangeable
for capital stock or other ownership interests in any
Company Subsidiary and (ii) options, warrants, calls or
other rights to acquire from the Company or any Company
Subsidiary, and no obligation of the Company or any Company
Subsidiary to issue, any capital stock or other ownership
interests of, or any securities convertible into or
exchangeable for any capital stock of or ownership interests
in, any Company Subsidiary. Except as set out in Schedule
3.6, there are no outstanding obligations of any Company
Subsidiary to repurchase, redeem or otherwise acquire any
securities of the Company or any Company Subsidiary.
SECTION 3.7 Charter Documents and Corporate Records{tc
\l 2 "SECTION 3.7 Charter Documents and Corporate
Records"}. (a) Triumph has heretofore delivered to the
Buyer true and complete copies of the Certificate of
Incorporation (certified by the Secretaries of State or
other appropriate official of their respective jurisdictions
of incorporation) and By-laws (certified by the respective
corporation's secretary or an assistant secretary), or
comparable instruments, of Triumph, the Company and each of
the Company Subsidiaries as in effect on the date hereof.
The stock and transfer books of the Company and each of the
Company Subsidiaries have been made available to the Buyer
for its inspection and are true and complete.
(b) All financial, business and accounting books,
ledgers, accounts and official and other records relating to
the Company and each Company Subsidiary have been properly
and accurately kept and completed in all material respects,
and there are no material inaccuracies or discrepancies
contained or reflected therein. Neither the Company nor any
Company Subsidiary has any records, systems, Contracts, data
or information, recorded, stored, maintained, operated or
otherwise wholly or partly dependent upon or held by any
means (including any electronic, mechanical or photographic
process, whether computerized or not) which (including all
means of access thereto and therefrom) are not under their
exclusive ownership and direct control.
SECTION 3.8 Capitalization{tc \l 2 "SECTION 3.8
Capitalization"}. The authorized capital stock of the
Company consists of 10,000,000 shares of Common Stock, par
value $1.00 per share, and 500,000 shares of preferred
stock, par value $1.00 per share. There are: (a) 4,375,492
shares of Company Common Stock issued and outstanding,
4,042,479 of which are owned by the Sellers in the
respective amounts set forth on Exhibit A; (b) 491,349
shares of Company Common Stock held by the Company in its
treasury; and (c) no shares of preferred stock of the
Company issued and outstanding. All outstanding shares of
capital stock of the Company are duly authorized and validly
issued, are fully paid and nonassessable and were not issued
in violation of any preemptive rights, rights of first
refusal or any other contractual or legal restrictions of
any kind. There are no outstanding (i) securities of the
Company convertible into or exchangeable for shares of
capital stock or voting securities of the Company and (ii)
options, warrants, calls, preemptive rights, rights of first
refusal or other rights to acquire from the Company, and no
obligation of the Company to issue, any capital stock,
voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the
Company. There are no outstanding obligations of the
Company to repurchase, redeem or otherwise acquire any
securities of the Company or any Company Subsidiary.
SECTION 3.9 Reports and Financial Statements{tc \l 2
"SECTION 3.9 Reports and Financial Statements"}. Triumph
has previously furnished to the Buyer true and complete
copies of (i) the Company's Annual Reports on Form 10-K for
each of the two fiscal years ended December 31, 1994 and
1993 as filed with the SEC; and (ii) all other reports or
registration statements filed by the Company with the SEC
since January 1, 1993. Except for the Information Statement
pursuant to Section 14(f) of the 1934 Act furnished to
stockholders of the Company in connection with the
Contemplated Transactions, the Company has not issued or
distributed any proxy or information statements since
January 1, 1992. As of their respective dates, the
Company's Annual Reports on Form 10-K, and all other reports
filed with the SEC since January 1, 1994 did not contain any
untrue statement of a material fact, or omit to state a
material fact, required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading, which untrue
statement or omission has not been corrected or updated in a
document subsequently filed with the SEC. The consolidated
balance sheet and statements of cash flows and operations of
the Company and statements of income and retained earnings
as of and for the years ended December 31, 1994, 1993, 1992
and 1991 audited by Coopers & Lybrand, L.L.P., copies of all
of which have been furnished to Buyer, have been prepared in
accordance with GAAP applied on a consistent basis (except
as may be indicated therein or in the notes thereto), are
accurate, show all material Liabilities, and fairly present
in accordance with GAAP the consolidated financial position
of the Company and the Company Subsidiaries as of the dates
thereof and the consolidated results of operations and cash
flows (or changes in financial position, as the case may
be), of the Company and the Company Subsidiaries for each of
the periods then ended. Since January 1, 1993, the Company
has filed with the SEC all reports and registration
statements and all other filings required to be filed with
the SEC under the rules and regulations of the SEC.
SECTION 3.10 Liabilities{tc \l 2 "SECTION 3.10
Liabilities"}. (a) Except as set forth in Schedule 3.10A,
Triumph is not aware of any unasserted Contingency, except
(i) Contingencies which are accrued or reserved against in
the consolidated balance sheet of the Company as of December
31, 1994 or reflected in the notes to the audited financial
statements of the Company for the fiscal year ended December
31, 1994; and (ii) Liabilities incurred after the Company
Balance Sheet Date in the ordinary course of business and
consistent with past practice.
(b) Schedule 3.10B sets forth, as of the date
hereof, a brief description of all Liabilities of the
Company and each of its Company Subsidiaries in respect of
(i) money borrowed from and owed to any bank, financial
institution or other person; (ii) any indebtedness arising
under leases required to be capitalized under GAAP; (iii)
any indebtedness arising under purchase money obligations
and (iv) any indebtedness or potential indebtedness under
any guaranty, letter of credit or performance credit (the
indebtedness or potential indebtedness described in the
foregoing clauses being referred to, herein, collectively,
as "Company Debt"). Except as set forth on Schedule 3.10B,
all Company Debt may be repaid or prepaid upon no more than
30 days' notice without premium or penalty.
SECTION 3.11 Company Receivables{tc \l 2 "SECTION
3.11 Company Receivables"}. (a) All the accounts
receivable of the Company and each Company Subsidiary (the
"Company Receivables") reflected in the Company Balance
Sheet and all Company Receivables that have arisen since the
Company Balance Sheet Date (except such Company Receivables
as have been collected since such date) are valid and
enforceable claims, and constitute bona fide Company
Receivables resulting from the sale of goods and services in
the ordinary course of business in conformity with
applicable purchase orders, agreements and specifications.
To the knowledge of Triumph, the Company Receivables are
subject to no valid defense, offsets, returns, allowances or
credits of any kind other than in the ordinary course of
business and are fully collectible within 90 days from the
date they are invoiced except to the extent of the amount of
the reserve for doubtful accounts reflected in the Company
Balance Sheet, it being understood and agreed that nothing
contained herein shall be deemed to guarantee the
collectibility of the Company Receivables. Triumph has
heretofore delivered to Buyer a schedule as at March 31,
1995 setting forth the total amount of Company Receivables
and a schedule of the aging of such Company Receivables
based on 0-30 days, 31-60 days, 61-90 days and over 90 days.
All chargebacks with customers to which the Company or any
Company Subsidiary has agreed have been credited to the
customers concerned.
(b) Schedule 3.11 sets forth a brief description
and list (including the principal amount and maturity date)
of any loan made by the Company or any Company Subsidiary:
(i) in excess of $15,000 to any employee of the Company or
any Company Subsidiary and (ii) to any person other than
employees of the Company or any Company Subsidiary.
SECTION 3.12 Inventories{tc \l 2 "SECTION 3.12
Inventories"}. The inventories of the Company and each of
the Company Subsidiaries reflected in the Company Balance
Sheet and all inventory items acquired since the Company
Balance Sheet Date consist of raw materials, supplies, work-
in-process and finished goods of such quality and in such
quantities as are being used or are reasonably anticipated
to be usable, or are being sold or are suitable for sale, in
the ordinary course of its business. Such inventories are
valued at the lower of cost or market and were determined in
accordance with GAAP consistently applied. Since the
Company Balance Sheet Date, the Company and each of the
Company Subsidiaries have continued to replenish its
inventories in a normal and customary manner consistent with
prior practice and prudent business judgment. The Company
and each Company Subsidiary have established adequate
reserves for inventory that no longer constitutes part of
their current line. The amount of such reserves and the
methodology used to determine same have been disclosed in
writing by Triumph to Buyer with specific reference to this
Section 3.12.
SECTION 3.13 Absence of Certain Changes{tc \l 2
"SECTION 3.13 Absence of Certain Changes"}. Since the
Company Balance Sheet Date, except as set forth in this
Agreement or disclosed or referred to in Schedule 3.13, each
of the Company and the Company Subsidiaries has conducted
its business in the ordinary course consistent with past
practices and there has not been:
(a) Any event that has had or would reasonably be
expected to have a material adverse effect on the Condition
of the Business;
(b) Any declaration, setting aside or payment of
any dividend or other distribution with respect to any
shares of capital stock of the Company or any of the Company
Subsidiaries;
(c) Any amendment to the Certificate of
Incorporation or By-laws of the Company or any of the
Company Subsidiaries or any amendment to any term of any
outstanding security of the Company or any of the Company
Subsidiaries;
(d) Any (i) incurrence, assumption or guarantee
by the Company or any of the Company Subsidiaries of any
Liability other than in the ordinary course of business in
amounts and on terms consistent with past practices, (ii)
issuance or sale of any securities convertible into or
exchangeable for debt securities of the Company or any of
the Company Subsidiaries, or (iii) issuance or sale of
options or other rights to acquire from Seller, the Company
or any of the Company Subsidiaries, directly or indirectly,
debt securities of the Company or any of the Company
Subsidiaries or any securities convertible into or
exchangeable for any such debt securities;
(e) Any creation, incurrence or assumption by the
Company or any of the Company Subsidiaries of any Lien on
any Asset other than (i) Liens for Taxes not yet due or
being contested in good faith (and for which adequate
reserves have been established); (ii) Liens which do not
materially detract from the value of such Asset as now used,
or materially interfere with any present or intended use of
such Asset; or (iii) Permitted Liens.
(f) Any making or forgiving of any loan, advance
or capital contribution to or investment in any person other
than loans, advances or capital contributions to or
investments in Company Subsidiaries made in the ordinary
course of business consistent with past practices;
(g) Any damage, destruction or other casualty
loss (whether or not covered by insurance), condemnation or
other taking affecting the business or Assets of the Company
or any of the Company Subsidiaries which, individually or in
the aggregate, has had or will reasonably be expected to
have a material adverse effect on the Condition of the
Business;
(h) Except in the ordinary course of business,
any transaction or commitment made, or any Contract entered
into, by the Company or any of the Company Subsidiaries
relating to its Assets or business (including the
acquisition or disposition of any substantial Assets) or any
relinquishment by the Company or any of the Company
Subsidiaries of any Contract or other right;
(i) Any change in any method of accounting or
accounting practice by the Company or any of the Company
Subsidiaries;
(j) Any assumption or guarantee of the
obligations of any person other than a Company Subsidiary;
(k) Any grant of any severance or termination pay
to any stockholder or officer of the Company or any of the
Company Subsidiaries, any entering into of any employment,
deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any
stockholder, officer or director of the Company or any of
the Company Subsidiaries or any increase in benefits payable
under any existing severance or termination pay policies or
employment agreements, or any increase in compensation,
bonus or other benefits payable to any stockholder, officer
or director of the Company or any of the Company
Subsidiaries in each case, other than routine increases in
the ordinary course of business or disclosed to Buyer in
writing with specific reference to this Section 3.13(k) or
on any Schedule.
(l) Any labor dispute, other than routine
individual grievances, or any activity or proceeding by a
labor union or representative thereof to organize any
employees of the Company or any of the Company Subsidiaries,
which employees were not subject to a collective bargaining
agreement at the Company Balance Sheet Date, or any
lockouts, strikes, slowdowns, work stoppages or, to the
knowledge of Triumph, threats thereof by or with respect to
such employees;
(m) Any waiver of any material right under any
Contract of the type required to be set forth on any
Schedule;
(n) Except for any changes made in the ordinary
course of business, any material change in any of the
Company's or any of the Company Subsidiaries' business
policies, including advertising, investment, marketing,
pricing, purchasing, production, personnel, sales, returns,
budget or product acquisition policies;
(o) Except in the ordinary course of business,
any payment, directly or indirectly, of any material
Liability before the same became due in accordance with its
terms;
(p) Any termination or failure to renew, or the
receipt of any written threat (that was not subsequently
withdrawn) to terminate or fail to renew, any Contract that
is or was material to the Condition of the Business; or
(q) Any Contract or arrangement made by the
Company or any of the Company Subsidiaries to take any
action which, if taken prior to the date hereof, would have
made any representation or warranty in this Section untrue
or incorrect in any material respect.
SECTION 3.14 Properties{tc \l 2 "SECTION 3.14
Properties"}. (a) Schedule 3.14A sets forth a complete
list and brief description of all real property owned by the
Company or any of the Company Subsidiaries (the "Company
Owned Real Property") and all real property leased or
operated by the Company or any of the Company Subsidiaries
(the "Company Leased Real Property") (together, the Company
Owned Real Property and the Company Leased Real Property
shall be referred to as the "Company Real Property"). With
respect to the Company Owned Real Property, Schedule 3.14A
also sets forth for each Company Owned Real Property a list
of any title insurance policies, appraisal reports and
environmental reports in the possession or under the control
of the Company or any of the Company Subsidiaries, copies of
all of which have been provided to Buyer. With respect to
the Company Leased Real Property, Schedule 3.14A also sets
forth the date of each lease and any amendments thereto, the
term thereof, including any renewal options, options to
purchase, rights of first refusal, and the aggregate monthly
rental payable thereunder.
(b) With respect to the Company Real Property and
the Company's or the Company Subsidiaries' operations
thereat, except as set forth in Schedule 3.14A:
(i) To the knowledge of Triumph, there are
no violations of any Law (including but not limited to
zoning and setback requirements) where the effect of any
such violation, individually or in the aggregate, would have
a materially adverse effect on the Condition of the
Business;
(ii) The Company or the Company Subsidiaries
have obtained and complied with all Permits and Orders,
except where the failure to obtain such Permits and Orders
or comply therewith, individually or in the aggregate, would
not have a material adverse effect on the Condition of the
Business;
(iii) All buildings, structures and other
improvements located thereon that are owned or leased are in
working condition and repair, reasonable wear and tear
excepted, except where such failure to be in working
condition and repair, reasonable wear and tear excepted,
would not have a material adverse effect on the Condition of
the Business, and neither the Company nor any Company
Subsidiary has done or performed, or caused to be done or
performed, any work or required any services within the past
year except for which payment in full has been made and lien
waivers obtained;
(iv) There is no pending or, to the knowledge
of Triumph, threatened Claim (including Third Party Claims),
or any existing condition or basis which may give rise to
any such Claim, or which may otherwise result in the
imposition of a Lien or forfeiture of any of the Company
Owned Real Property, or otherwise prohibit, restrict or
materially interfere with its use as presently conducted
except for Claims which would not have a material adverse
effect on the Condition of the Business;
(v) To the knowledge of Triumph, there is no
pending or threatened Claim (including Third Party Claims),
or any existing condition or basis which may give rise to
any such Claim, or which may otherwise result in the
imposition of a Lien or forfeiture of any of the Company
Leased Real Property, or otherwise prohibit, restrict or
materially interfere with its use as presently conducted
except for Claims which would not have a material adverse
effect on the Condition of the Business,
(vi) There are no pending, or to the
knowledge of Triumph, threatened proceedings, which may
result in a total or partial condemnation, eminent domain or
other taking of any Company Owned Real Property;
(vii) To the knowledge of Triumph, there
are no pending or threatened proceedings, which may result
in a total or partial condemnation, eminent domain or other
taking of any Company Leased Real Property;
(viii) There are no claims of or rights to
possession, or any claims of adverse possession, with
respect to all or any portion of any of the Company Owned
Real Property;
(ix) To the knowledge of Triumph, there are
no claims of or rights to possession, or any claims of
adverse possession, with respect to all or any portion of
any of the Company Leased Real Property; and
(x) The Company or a Company Subsidiary has
good and insurable fee title to the Company Owned Real
Property and a valid and existing leasehold interest in the
Company Leased Real Property subject to no Liens except for
Company Permitted Liens.
(c) Triumph has heretofore provided to Buyer a
complete and correct list and description of all tangible
property (the "Company Tangible Property") owned or used by
the Company or any Company Subsidiary or which the Company
or any of the Company Subsidiaries holds an option to
acquire having a value individually of $500,000 or more or
$500,000 or more in the aggregate in case of any group of
similar items of Company Tangible Property, including,
without limitation, all machinery, sewing or cutting
machines, equipment, furniture, furnishings, leasehold
improvements, fixtures and vehicles. All Company Tangible
Property has been maintained in the ordinary course and is
in working order, reasonable wear and tear excepted, except
for a nonmaterial portion of such Company Tangible Property
that may be undergoing repairs or maintenance in the
ordinary course and except where such failure to maintain
would not have a material adverse effect on the Condition of
the Business.
(d) Schedule 3.14B sets forth the date of each
lease of Company Tangible Property and any amendments
thereto, the term thereof including renewal options, options
to purchase and the aggregate monthly rent payable
thereunder.
(e) Except as set out in Schedule 3.14C, the
Company or a Company Subsidiary has good title to all
Company Tangible Property reflected on the Company Balance
Sheet or acquired after the Company Balance Sheet Date
except for Company Tangible Property sold or disposed of
since the Company Balance Sheet Date in the ordinary course
of business consistent with past practice. The Company or a
Company Subsidiary has good title to all raw materials, work
in process or finished Company Products located at the
premises of any Contractor. Except as set forth on Schedule
3.14C, none of such Company Tangible Property is subject to
any Liens, except for the following (collectively, "Company
Permitted Liens"):
(i) Liens disclosed on the Company Balance
Sheet or the notes thereto;
(ii) Liens for Taxes not yet due or payable
or being contested in good faith (and for which adequate
reserves have been established on the Company Balance
Sheet);
(iii) Liens, easements, zoning or other
planning restrictions or limitations on use or other
irregularities in title, none of which materially detracts
from the value of such Assets as now used, or materially
interferes with any present use of such Assets;
(iv) Liens arising in the ordinary course of
business which do not materially detract from the value of
such Assets as now used or materially interfere with any
present use of such Assets; and
(v) Liens of carriers, warehousemen,
mechanics, materialmen, vendors, lessors and landlords
incurred in the ordinary course of business.
SECTION 3.15 Contracts{tc \l 2 "SECTION 3.15
Contracts"}. (a) Except for Contracts pursuant to the
terms of which there is either a current or future
obligation or right of the Company or a Company Subsidiary
to make payments or receive payments not in excess
(individually or, in the case of any group of similar items,
in the aggregate) of $50,000, Schedule 3.15 sets forth as of
the date hereof a complete and accurate list of all
Contracts to which either the Company or any of the Company
Subsidiaries is a party, or by or to which it or its Assets
are bound or subject, including, without limitation:
(i) Contracts with any current or former
employee, independent contractor, consultant, agent or other
representative or with any Affiliate of any of the
foregoing;
(ii) Contracts relating to the design of any
Company Products;
(iii) Other than in the ordinary course
of business: (A) Contracts for the sale of any of its
Assets or (B) Contracts for the grant to any person of any
preferential rights to purchase any of its Assets;
(iv) Contracts under which the Company and/or
any of the Company Subsidiaries agree to indemnify any
person;
(v) Contracts under which the Company and/or
any of the Company Subsidiaries agree to share Tax liability
of, or with, any party;
(vi) Contracts that cannot be cancelled
without material Liability, premium or penalty;
(vii) Contracts with any person to
advertise or market any of the Company's or any of the
Company Subsidiaries' Company Products other than in the
ordinary course of business;
(viii) Contracts relating to the
acquisition of any operating business or the capital shares
of any other person;
(ix) Options for the purchase or sale of any
Asset;
(x) Contracts requiring the payment to any
person of an override or similar commission or fee;
(xi) Contracts with customers, independent
suppliers, Contractors and manufacturers other than in the
ordinary course of business;
(xii) Sales agency, licensing,
manufacturer's representative or distributorship agreements;
(xiii) Contracts pursuant to which any
party is required to purchase or sell a stated portion of
its requirements or output to another party;
(xiv) Contracts for the payment of fees
or other consideration to any officer or director of the
Company or any of the Company Subsidiaries or to any other
entity in which any of the foregoing has an interest; and
(xv) Management Contracts and other similar
agreements with any person.
(b) Schedule 3.15 also sets forth as of the date
hereof a complete and accurate list of the following
Contracts to which either the Company or any of the Company
Subsidiaries is a party, or by which it or its Assets are
bound or subject:
(i) Contracts with any current or former
stockholder, officer or director that will impose, after the
Closing Date, continuing obligations on the Company or any
Company Subsidiary;
(ii) Contracts with any labor union or
association representing any employee;
(iii) Partnership or joint venture
agreements;
(iv) Contracts containing covenants not to
compete in any line of business or with any person in any
geographical area (or not to solicit or accept any business)
or covenants of any other person not to compete in any line
of business or in any geographical area with the Company or
any Company Subsidiary (or not to solicit or accept any
business);
(v) Contracts relating to any Company Debt
relating to indebtedness in excess of $250,000; and
(vi) Contracts providing rights of
exclusivity to distributors or retailers for definite or
indefinite periods for any products or product lines or for
the use of any trademark or tradename.
(c) Schedule 3.15 also lists and describes the
status of all Contracts currently in negotiation or proposed
by the Company or any of the Company Subsidiaries as to
which there exists a draft agreement, letter of intent or
similar instrument and which is of a type which if entered
into by the Company or any of the Company Subsidiaries would
be required to be listed on Schedule 3.15 or on any other
Schedule (the "Company Proposed Contracts").
(d) There are no Contracts, other than those set
forth on Schedule 3.15, on any other Schedule to this
Agreement or which are not required to be disclosed
hereunder. Except as set forth on Schedule 3.15, all
Contracts (individually or, in the case of any group of
similar Contracts, in the aggregate) material to the
Condition of the Business are valid, subsisting, in full
force and effect and binding upon the Company or any of the
Company Subsidiaries, as the case may be, and, to the
knowledge of Triumph, on the other parties thereto in
accordance with their terms, and the Company and each of the
Company Subsidiaries has paid in all material respects or
accrued all amounts due thereunder and has satisfied in all
material respects or provided for all of its liabilities and
obligations thereunder to be satisfied or provided for
through the date hereof, and is not in default under any of
them in any material respect, nor, to the knowledge of
Triumph, is any other party to any Contract (individually
or, in the case of any group of similar Contracts, in the
aggregate) material to the Condition of the Business in
default thereunder in any material respect, nor, to the
knowledge of Triumph, does any condition exist that with
notice or lapse of time or both would constitute a material
default thereunder. Except as separately identified on
Schedule 3.15 hereto, neither the Company nor any of the
Company Subsidiaries is a party to or bound by any Contract
that materially adversely affects the Condition of the
Business. Except as separately identified on Schedule 3.15
hereto or on any other Schedule, no approval or consent of
any person is needed in order that the Contracts
(individually or, in the case of any group of similar
Contracts, in the aggregate) material to the Condition of
the Business continue in full force and effect following the
consummation of the Contemplated Transactions and the
operation of the Business of the Company and the Company
Subsidiaries together with that of the Buyer and the Buyer
Subsidiaries except for such approvals or consents which, if
not obtained, would not have a material adverse effect on
the Condition of the Business. Except as set forth on
Schedule 3.15 or any other Schedule, the termination of any
Contract will not cause the Buyer, the Company or any
Company Subsidiary of the Company to incur any material
penalty, loss, expense or termination payment.
(e) There have been delivered to Buyer, true and
complete copies of (i) all of the Contracts required to be
set forth on Schedule 3.15 or on any other Schedule and (ii)
the most recent draft, letter of intent or term sheet of all
of the Company Proposed Contracts required by the provisions
of Section 3.15(c) to be set forth on Schedule 3.15.
SECTION 3.16 Intangible Property{tc \l 2 "SECTION
3.16 Intangible Property"}. (a) Schedule 3.16 sets forth
all patents, trademarks, registered copyrights, service
marks and trade names owned or used by the Company or any of
the Company Subsidiaries, all applications for any of the
foregoing, and all permits, grants and licenses or other
rights running to or from the Company or any of the Company
Subsidiaries relating to any of the foregoing, and there are
no other patents, models, industrial designs, trademarks,
copyrights, service marks and trade names that are material
to the Condition of the Business (the "Company Intellectual
Property Rights").
(b) To the knowledge of Triumph, with respect to
Company Intellectual Property Rights owned by the Company
material to the Condition of the Business: (i) all United
States renewals and other maintenance actions in respect of
the registrations set forth in Schedule 3.16 have been
appropriately filed; (ii) the Company has exercised its best
efforts to ensure compliance with all United States
registration and recording requirements, and has paid all
necessary government fees; and (iii) the United States
trademark registrations and licenses thereof are valid with
respect to Company Products that are covered by the
registrations. Triumph or, as disclosed in Schedule 3.16,
the Company owns the "Lilyette" trademark or any variant
thereof and Schedule 3.16 identifies all jurisdictions in
which such trademark has been registered or is in use.
(c) Except as set forth in Schedule 3.16 or
except for any restrictions of an immaterial nature, the
Company has the right to use, free and clear of any Claims
or rights of others, all material trade secrets, know-how,
processes, technology, blue prints, art work, films,
negatives, photographs, separations, patterns and package
and other designs utilized in the conduct of its business,
except where such failure to have such rights would not,
individually or in the aggregate, have a material adverse
effect on the Condition of the Business. The Company has
the right to use in its advertising materials, without
liability to any person, the photographs or other depictions
of models that it does use.
(d) Except as set forth on Schedule 3.16, no
material Company Intellectual Property Right is subject to
any Lien or outstanding Order or Contract restricting the
use or licensing thereof. Except as set forth on Schedule
3.16, (i) neither the Company nor any of the Company
Subsidiaries during the three years preceding the date
hereof has been sued or charged in writing with or been a
defendant in any Claim which has not been terminated prior
to the date hereof and which involves a Claim of
infringement arising out of the use, registration or
ownership of any Company Intellectual Property Rights
material to the Condition of the Business; and (ii) Triumph
has no knowledge of any such charge or Claim of any
infringement during the three years preceding the date
hereof by any other person arising out of the use,
registration or ownership of any material Company
Intellectual Property Rights.
SECTION 3.17 Claims and Proceedings{tc \l 2 "SECTION
3.17 Claims and Proceedings"}. Except as set forth on
Schedule 3.17, there are no outstanding material Orders of
any Governmental Body against or involving the Company, any
of the Company Subsidiaries or their respective Assets other
than Orders affecting the apparel industry generally.
Except as set forth on Schedule 3.17, there are no actions,
suits, claims or counterclaims or legal, administrative or
arbitral proceedings or investigations (collectively,
"Claims") (whether or not the defense thereof or Liabilities
in respect thereof are covered by insurance), pending or
threatened in writing, against or involving the Company or
any of the Company Subsidiaries or any of their respective
Assets which (i) involve a claim for the payment of money
damages of $100,000 or more; (ii) relate to employment,
regardless of amount other than workers' compensation
Claims, severance Claims or Claims under Plans; or (iii)
individually or in the aggregate, would have a material
adverse effect upon the Contemplated Transactions or upon
the Condition of the Business other than Claims affecting
the apparel industry generally. Except as set forth on
Schedule 3.17, to the knowledge of Triumph, the Company or
the Company Subsidiaries, there is no fact, event or
circumstances that would give rise to any Claim that would
be required to be set forth on Schedule 3.17 if currently
pending or threatened. All notices required to have been
given to any insurance company listed as insuring against
any Claim set forth on Schedule 3.17 have been timely and
duly given and, except as set forth on Schedule 3.17, no
insurance company has asserted in writing that such Claim is
not covered by the applicable policy relating to such Claim.
Except as set forth on Schedule 3.17 there are no material
product liability Claims against or involving the Company or
any of the Company Subsidiaries or, to the knowledge of
Triumph, any product manufactured, marketed or distributed
at any time by the Company or any of the Company
Subsidiaries ("Company Products") and no such Claims have
been settled, adjudicated or otherwise disposed of since
January 1, 1992. There are no material Claims pending or,
to the knowledge of Triumph, threatened that would give rise
to any right of indemnification on the part of any director
or officer of the Company or any of the Company Subsidiaries
or the heirs, executors or administrators of such director
or officer, against the Company or any of the Company
Subsidiaries or any successor to the business of the Company
or any of the Company Subsidiaries.
SECTION 3.18 Restrictions on Business Activities{tc
\l 2 "SECTION 3.18 Restrictions on Business Activities"}.
There is no Order binding upon the Company or any of the
Company Subsidiaries which has or would reasonably be
expected to have the effect of prohibiting or adversely
affecting (i) competition by the Company or any of the
Company Subsidiaries, (ii) any business practice of the
Company or any of the Company Subsidiaries, (iii) any
acquisition of property by the Company or any of the Company
Subsidiaries, or (iv) to the knowledge of Triumph, the
Condition of the Business.
SECTION 3.19 Taxes{tc \l 2 "SECTION 3.19 Taxes"}.
(a) Except as set forth in the Company Balance Sheet
(including the notes thereto) or on Schedule 3.19, (i) all
Tax returns, statements, applications, reports and forms
required by law to be filed with any Taxing Authority on or
before the Closing Date with respect to any Pre-Closing Tax
Period (as hereinafter defined) by or on behalf of the
Company or any Company Subsidiary (collectively, the
"Company Returns") have been timely filed through the date
hereof or will be filed when due (taking into account any
extension granted by the appropriate Taxing Authority); (ii)
as of the time of filing, the Company Returns correctly
reflected (and, as to any Company Returns not filed as of
the date hereof and required to be filed on or before the
Closing Date, will correctly reflect) the facts regarding
the income, business, Assets, operations, activities and
status of the Company, the Company Subsidiaries and any
other information required to be shown therein; (iii) the
Company and Company Subsidiaries have timely paid or made
provision for in reserves shown in the Company Balance Sheet
all Taxes that are due and payable for any period ended on
or prior to the date of the Company Balance Sheet; (iv) the
Company and Company Subsidiaries have made or on or before
the Closing Date will make provision for all Taxes payable
by the Company and Company Subsidiaries for any Pre-Closing
Tax Period for which no Company Return has been filed; (v)
the charges, accruals and reserves for Taxes reflected or
that will be reflected on the books of the Company and the
Company Subsidiaries are adequate to cover the Tax
liabilities accruing or payable by the Company and the
Company Subsidiaries in respect of any Pre-Closing Tax
Period; (vi) all Liabilities of the Company and the Company
Subsidiaries with respect to federal income Taxes have been
finally determined except for the fiscal years 1988 through
1993, the only years not closed by the expiration of the
statute of limitations; (vii) no deficiency for any Tax or
claim for additional Taxes by any Taxing Authority has been
proposed, asserted or assessed in writing against the
Company or any Company Subsidiary (or any member of any
affiliated or combined group of which the Company or any
Company Subsidiary is or has been a member); (viii) neither
the Company nor any Company Subsidiary (or any member of any
affiliated or combined group of which the Company or any
Company Subsidiary is or has been a member) has been granted
any extension or waiver of the limitation period applicable
to any Company Returns; (ix) neither the Company nor any
Company Subsidiary has filed any consent or election under
the Code, other than such consents and elections, if any,
reflected in the Company Returns or otherwise disclosed in
writing to Buyer with specific reference to this Section
3.19(a)(ix) or which could have a material adverse effect on
the Condition of the Business; (x) neither the Company nor
any Company Subsidiary has entered into or will enter into
any agreement or consent under Section 341(f) of the Code;
(xi) neither the Company nor any Company Subsidiary owns any
interest in real property in the State of New York or in any
other jurisdiction which would result, as a result of the
consummation of the Contemplated Transactions, in the
imposition of the New York State Real Property Transfer
Gains Tax for real property located in New York or a similar
tax for real property located in any other jurisdiction;
(xii) there are no Liens for Taxes upon the Assets of the
Company or any Company Subsidiary other than for Taxes not
yet due and payable; (xiii) neither the Company nor any
Company Subsidiary will be required, as a result of a change
in method of accounting for a Pre-Closing Tax Period, to
include any adjustment under Section 481(c) of the Code in
taxable income for any Tax period (or portion thereof)
ending on the Closing Date; (xiv) neither the Company nor
any Company Subsidiary has been a member of an affiliated
group other than one of which the Company was the common
parent, or filed or been included in a combined,
consolidated or unitary Company Return together other than
one filed by the Company; (xv) neither the Company nor any
Company Subsidiary is currently under any contractual
obligation to indemnify any other person with respect to
Taxes; (xvi) the Company is not and has not been a United
States real property holding corporation as defined in
Section 897(c)(2) of the Code during the applicable period
specified in Section 897(c)(1)(A)(ii) thereof; and (xvii)
since its organization on February 6, 1992, Crescent
Industries Inc. has been a possessions corporation that
qualified for the Puerto Rico and possessions tax credit and
since April 27, 1992 has been exempt from Puerto Rican
income Taxes.
(b) As used herein, "Pre-Closing Tax Period"
means any tax period (or portion thereof) ending on or
before the Closing Date.
(c) True and correct copies of the Company
Returns for the years 1991, 1992 and 1993 have been
delivered to Buyer.
(d) Neither the Company nor any Company
Subsidiary is party to any tax-sharing or tax allocation
agreement pursuant to which it is obligated to pay any
amount to anyone else.
(e) Except as set forth on Schedule 3.19, neither
the Company nor any Company Subsidiary holds or has held a
permit, registration, certificate or like instrument as a
"dealer" or other collecting agent from a state Taxing
Authority under which it collects sales tax from its
business operations and remits such tax to such Taxing
Authority.
SECTION 3.20 Employee Benefits Plans{tc \l 2 "SECTION
3.20 Employee Benefits Plans"}. (a) Schedule 3.20
contains a true and complete list of (i) all of the Plans of
the Company, any of the Company Subsidiaries, and of any
other companies or entities which constitute a member of the
Company ERISA Group, which are presently in effect or, in
the case of Pension Plans, have been in effect at any time
prior to the date hereof and for which there is any
liability; (ii) any other pension, profit sharing,
retirement, deferred compensation, stock purchase, stock
option, incentive, bonus, sabbatical leave, vacation, all
employment or severance Contracts (including, without
limitation, arrangements providing for benefits in the event
of a change of ownership in whole or in part of the
Company), disability, hospitalization, health and medical
insurance plans, relocation, child care, educational
assistance or other employee benefit plan or program which
any member of the Company ERISA Group maintains or to which
any member of the Company ERISA Group has any present or
future obligation to contribute; and (iii) separately
identifies all Plans providing retiree benefits. (The Plans
or programs described in clauses (i), (ii) and (iii)
including all non-qualified plans are herein collectively
referred to as the "Company ERISA Group Plans".) Except as
set forth in Schedule 3.20, the Company has delivered or
made available to Buyer true and complete copies of all
documents (including plan documents and related trust
agreements) as they may have been amended to the date of
delivery or availability, embodying or relating to clauses
(i), (ii) and (iii) hereinabove and a written description of
each non-written plan. Since such date of delivery or
availability, the Company ERISA Group Plans have not been
amended to materially change the terms thereof. The Company
has also delivered to Buyer true and complete copies of
annual reports (Form 5500) for the last three (3) years,
summary annual reports, summary plan descriptions and a
summary of material modifications with respect to each
Company ERISA Group Plan, as applicable.
(b) Except as listed on Schedule 3.20, the
Company ERISA Group maintains no tax qualified Pension Plans
nor has the Company ERISA Group ever maintained any other
tax-qualified Pension Plan for the benefit of employees.
(c) With respect to each 412 Plan, there has been
no failure to make any contribution or pay any amount due as
required by Section 412 of the Code, Section 302 of ERISA or
the terms of any such 412 Plan, and no request or receipt of
any funding waiver has been requested or received from the
Internal Revenue Service.
(d) Except as set forth in Schedule 3.20, no
trust has been established in connection with any 412 Plan
pursuant to Section 4049 of ERISA (as in effect on December
17, 1987) and no liabilities that would have a material
adverse effect on the Condition of the Business have been
asserted against the Company or any Company Subsidiary or
any member of the Company ERISA Group in connection with any
such 412 Plan by the PBGC or by a trustee appointed pursuant
to Section 4042(b) or (c) of ERISA, and no Lien has been
attached and neither the PBGC nor the Internal Revenue
Service has threatened to attach a Lien on any Assets of or
any member of the Company ERISA Group as a result of any
failure to comply with the Code or the Treasury regulations
thereunder or ERISA.
(e) Except as set forth on Schedule 3.20, the IRS
has issued favorable determination letters to the effect
that each qualified Company ERISA Group Plan as amended for
The Tax Reform Act of 1986 and subsequent legislation
qualifies under Section 401(a) of the Code and that the
related trusts are exempt from taxation under Section 501(a)
of the Code and such determination letters remain in effect
and have not been revoked. To the knowledge of Triumph,
nothing has occurred or is expected to occur that would
adversely affect the qualified status of any Company ERISA
Group Plan or any related trusts subsequent to the issuance
of such determination letters.
(f) Except as set forth on Schedule 3.20, all
Plans maintained by the Company or any member of the Company
ERISA Group have been and continue to be in compliance in
all material respects (i) in operation with the requirements
prescribed by any and all Laws and Orders applicable to the
Company ERISA Group Plans including but not limited to ERISA
and the Code and with any other contractual obligations and,
except as set forth in Schedule 3.20, all reports and
disclosures including Form 5500s relating to the Company
ERISA Group Plans required to be filed with or furnished to
Governmental Bodies, participants or beneficiaries prior to
the Closing Date have been or will be filed or furnished in
a timely manner and in accordance with applicable law; and
(ii) in form with those requirements of the Code and the
regulations thereunder and ERISA which must be met on the
date hereof.
(g) To the knowledge of Triumph, no member of the
Company ERISA Group nor any other "disqualified person" or
"party in interest" (as defined in Section 4975 of the Code
and Section 3 of ERISA, respectively) has engaged in any
"prohibited transaction," as such term is defined in Section
4975 of the Code or Section 406 of ERISA, which could
subject any of the Company ERISA Group Plans (or their
related trusts), any officer, director or employee of any
entity within the ERISA Group or any trustee, administrator
or any other fiduciary of any of the Company ERISA Group
Plans to a tax or penalty imposed under Section 4975 of the
Code or Section 502(i) of ERISA and which would have a
material adverse effect on the Condition of the Business.
(h) Except as set forth on Schedule 3.20, there
are no Claims (other than routine claims for benefits in the
ordinary course) pending or, to the knowledge of Triumph,
threatened against any of the Company ERISA Group Plans or
the Assets of any of the Company ERISA Group Plans or
against any fiduciary of any of the Company ERISA Group
Plans for which the Company or the Company Subsidiaries may
be directly or indirectly liable, through indemnification
obligations or otherwise.
(i) No member of the Company ERISA Group has
provided or is required to provide, security to any single-
employer plan pursuant to Section 401(a) of the Code.
(j) The consummation of the Contemplated
Transactions will not accelerate any liability under any of
the Company ERISA Group Plans because of an acceleration of
any rights or benefits to which employees may be entitled
thereunder.
(k) With respect to any Company ERISA Group Plan
that is a Welfare Plan, (i) each such Welfare Plan, the
contributions to which are claimed as a deduction under any
provision of the Code, is in compliance in all material
respects with all applicable requirements pertaining to such
deduction, (ii) with respect to any welfare benefit fund
within the meaning of Section 419 of the Code that comprises
part of a Welfare Plan, there is no disqualified benefit
within the meaning of Section 4976(b) of the Code that would
subject the Company or any of the Company Subsidiaries to a
tax under Section 4976(a) of the Code which would have a
material adverse effect on the Condition of the Business,
(iii) any Welfare Plan which is a group health plan within
the meaning of Section 5000(b) of the Code satisfies in all
material respects the requirements of Section 4980(B) of the
Code, and (iv) all employer contributions due have been
fully and timely paid or accrued on the books of the Company
or the Company Subsidiaries.
(l) Schedule 3.20 sets forth the present value of
the liability of each Company ERISA Group Plan that is a
Welfare Plan and that provides benefits or coverage
extending beyond a participant's termination of employment
with the Company, excluding the liability for those benefits
required by Section 4980B of the Code or those which are
provided at the sole expense of the participant or
beneficiary of the participant.
(m) Except as set forth on Schedule 3.20, neither
the Company nor any member of the Company ERISA Group has
incurred or reasonably expects to incur (i) any Withdrawal
Liabilities (and no event has occurred which, with the
giving of notice under Section 4219 of ERISA, would result
in Withdrawal Liability), or (ii) any Liabilities under
Title IV of ERISA with respect to any 412 Plan. Schedule
3.20 also identifies (A) each Multiemployer Plan to which
the Company or Company ERISA Group Member currently makes,
is obligated to make, or has made or been obligated to make
contributions; (B) provides a schedule of the contributions
made to each such Multiemployer Plan over the past five
years; and (C) provides a schedule of any withdrawal
liability payments which a Company ERISA Group Member is
obligated to make or has made in the last 10 years to any
Multiemployer Plan; and (D) the amount of withdrawal
liability that would be due assuming complete withdrawal
from all Multiemployer Plans to which Company or any member
of the Company ERISA Group contribute. With the exception
of the representation contained in this Section 3.20(m), any
representation contained herein with regard to Multiemployer
Plans shall be limited to matters of which the Company has
knowledge.
(n) Except as set forth in Schedule 3.20, within
the last five years, neither the Company nor any member of
the Company ERISA Group has transferred any Assets or
Liabilities of a 412 Plan subject to Title IV of ERISA which
had, at the date of such transfer, Unfunded Pension
Liabilities or has engaged in a transaction which may
reasonably be subject to Section 4212(c) of ERISA.
(o) Neither the Company nor any member of the
Company ERISA Group sponsors or maintains or has obligations
direct, contingent or otherwise, with respect to any benefit
plan that is subject to the laws of any country other than
the United States.
(p) No Company ERISA Group Plan holds securities
of the Company or the Company's Subsidiaries.
(q) There has been no Reportable Event with
respect to any 412 Plan within the last five years.
(r) With respect to any supplemental employee
retirement plans, excess benefit plans (as defined in
Section 3(36) of ERISA), severance arrangements with
individual employees, whether written or not, or other non
qualified plans or arrangements, Schedule 3.20 identifies
the individuals or class of individuals covered by each such
plan or arrangement.
(s) Except as set forth on Schedule 3.20, as of
December 31, 1994, no 412 Plan sponsored by Company or any
member of the Company ERISA Group has any amount of Unfunded
Pension Liability.
SECTION 3.21 Officers, Directors and Key Employees{tc
\l 2 "SECTION 3.21 Officers, Directors and Key Employees"}.
Sellers have provided to Buyer a schedule setting forth (a)
the name, total compensation (as reflected on the applicable
forms W-2), date of hire and salary history for the two
years ended December 31, 1994 of each existing director,
executive officer or management employee of the Company and
the Company Subsidiaries earning total compensation for the
year ended December 31, 1994, (as reflected on the
applicable forms W-2) in excess of $75,000, (b) the wage
rates and earnings of production workers employed by the
Company or any Company Subsidiary in its Cortland, New York
and Puerto Rico facilities, and (c) any payments or
commitments to pay any severance or termination pay to any
such person. Except as set forth on such schedule, the
employment of all such persons is terminable at will.
SECTION 3.22 Employment-Related Matters{tc \l 2
"SECTION 3.22 Employment-Related Matters"}. Except as set
forth in Schedule 3.22, (a) the Company and the Company
Subsidiaries are not a party to any Contract with any labor
organization or other representative of their employees; (b)
there is no unfair labor practice charge or complaint
pending or, to the knowledge of Triumph, threatened against
the Company or any of the Company Subsidiaries; (c) there is
no labor strike, slowdown, work stoppage or other material
labor controversy in effect or, to the knowledge of Triumph,
threatened against or otherwise affecting the Company or any
of the Company Subsidiaries; (d) the Company and the Company
Subsidiaries have not experienced any labor strike,
slowdown, work stoppage or similar material labor
controversy within the past three years; (e) no
representation question has been raised respecting any of
the Company's or any of the Company Subsidiaries' employees
working within the past three years, nor, to the knowledge
of Triumph, are there any campaigns being conducted to
solicit authorization from the Company's employees or any of
the Company Subsidiaries' employees to be represented by any
labor organization; (f) no collective bargaining agreement
relating to any of the Company's employees or any of the
Company Subsidiaries' employees is being negotiated other
than extensions or renewals of existing agreements set forth
in Schedule 3.22; (g) no material Claim before any
Governmental Body brought by or on behalf of any employee,
prospective employee, former employee, retiree, labor
organization or other representative of the Company's
employees or any of the Company Subsidiaries' employees, is
pending or, to the knowledge of Triumph, threatened against
the Company or any of the Company Subsidiaries; (h) to the
knowledge of Triumph, neither the Company nor any of the
Company Subsidiary is a party to, or otherwise bound by, any
material Order relating to its employees or employment
practices relating to the employees other than those
affecting the industry generally; (i) the Company and the
Company Subsidiaries are in compliance with all applicable
Laws, policies, procedures, agreements and Contracts,
relating to employment, employment practices, wages, hours,
and terms and conditions of employment, except where the
failure to comply would not, individually or in the
aggregate, have a material adverse effect on the Condition
of the Business; (j) except with respect to ongoing disputes
of a routine nature involving immaterial amounts, the
Company and the Company Subsidiaries have paid in full to
all of their employees all wages, salaries, commissions,
bonuses, benefits and other compensation due and payable to
such employees on or prior to the date hereof; (k) and the
Company and the Company Subsidiaries are in compliance with
their obligations with respect to their employees pursuant
to the Worker Adjustment and Retraining Notification Act of
1988 ("WARN"), and all other notification and bargaining
obligations arising under any collective bargaining
agreement, statute or otherwise.
SECTION 3.23 Potential Conflicts of Interest{tc \l 2
"SECTION 3.23 Potential Conflicts of Interest"}. Except as
set forth in Schedule 3.23, no officer, director or
Affiliate of the Company or any of the Company Subsidiaries,
no spouse of any such officer, director or Affiliate, nor,
to the knowledge of Triumph, no entity controlled by one or
more of the foregoing:
(a) owns, directly or indirectly, any interest in
(excepting less than 1% stock holdings for investment
purposes in securities of publicly held and traded
companies), or is an officer, director, employee or
consultant of, any person that carries on business in
competition with the Company or any of the Company
Subsidiaries;
(b) owns, directly or indirectly, in whole or in
part, any material Asset that the Company or any of the
Company Subsidiaries uses in the conduct of its business; or
(c) has any material Claim whatsoever against, or
owes any amount to, the Company or any of the Company
Subsidiaries, except for claims in the ordinary course of
business such as for accrued vacation pay and accrued
benefits under employee benefit plans.
SECTION 3.24 Insurance{tc \l 2 "SECTION 3.24
Insurance"}. Schedule 3.24 sets forth a list of all
insurance policies, fidelity and surety bonds and fiduciary
liability policies covering the Assets, Business,
operations, employees, officers and directors of the Company
and the Company Subsidiaries and true and complete copies of
all such policies and bonds have been delivered to Buyer.
Schedule 3.24 also sets forth with respect to each policy
and bond the applicable deductible amounts and any material
limitations to coverage. There is no Claim by the Company
or any of the Company Subsidiaries pending under any of such
policies or bonds as to which coverage has been questioned,
denied or disputed by the underwriters of such policies or
bonds, or requirement by any insurer to perform work which
has not been satisfied. All premiums payable under all such
policies and bonds have been paid and the Company and the
Company Subsidiaries are otherwise in compliance in all
material respects with the terms and conditions of all such
policies and bonds. Such policies of insurance and bonds
(or other policies and bonds providing substantially similar
insurance coverage) other than those relating to director
and officer liability insurance have been in effect since
January 1, 1994 and remain in full force and effect. The
insurance in effect with respect to Company Owned Real
Property is in an amount of the full replacement value of
the buildings and improvements. Triumph does not know of
any threatened termination of, premium increase with respect
to, or uncompleted requirements under any of such policies
or bonds.
SECTION 3.25 Suppliers, Customers and Contractors{tc
\l 2 "SECTION 3.25 Suppliers, Customers and Contractors"}.
Schedule 3.25A lists, by dollar volume paid for the 12
months ended December 31, 1994, the 15 largest raw material
suppliers and the 25 largest customers of the Company or
Company Subsidiary. Schedule 3.25B lists the names and
addresses of those Contractors retained by the Company or
any of the Company Subsidiaries involving payments, for the
12 months ended December 31, 1994, in excess of $50,000.
The relationships of the Company and the Company
Subsidiaries with such suppliers, customers and Contractors
are reasonable commercial working relationships and: (i) no
supplier or Contractor has refused to provide credit, or has
suspended the provision of credit, to the Company or any of
the Company Subsidiaries as a result of the failure or delay
in payment of amounts due to such suppliers or Contractors;
(ii) all amounts owing to such suppliers and Contractors, if
not in dispute, have been paid in accordance with their
respective terms; (iii) no person within the last twelve
months has threatened in writing to cancel, or otherwise
terminate, the relationship of such person with the Company
or any of the Company Subsidiaries, and (iv) no person
during the last twelve months has decreased materially or,
to the knowledge of Triumph, threatened in writing to
decrease or limit materially, its relationship with the
Company or any of the Company Subsidiaries or, to the
knowledge of Triumph, intends to decrease or limit
materially its services or supplies to the Company or any of
the Company Subsidiaries or its usage or purchase of the
services or products of the Company or any of the Company
Subsidiaries.
SECTION 3.26 Compliance with Laws{tc \l 2 "SECTION
3.26 Compliance with Laws"}. Neither the Company nor any
of the Company Subsidiaries is in violation of any
applicable order, judgment, injunction, award, citation,
decree, consent decree or writ (collectively, "Orders"), or
any applicable law, statute, code, ordinance, rule,
regulation or other requirement (collectively, "Laws"), of
any government or political subdivision thereof, whether
federal, state, local or foreign, or any agency or
instrumentality of any such government or political
subdivision, or any court or arbitrator (collectively,
"Governmental Bodies") affecting its Assets, affairs or
business, where the effect of any such violation,
individually or in the aggregate, would have a materially
adverse effect on the Condition of the Business. Neither
the Company nor any of the Company Subsidiaries has made any
illegal payment to officers or employees of any Governmental
Body, or made any illegal payment to customers for the
sharing of fees or to customers or suppliers for rebating of
charges, or engaged in any other illegal reciprocal
practice, or made any illegal payment or given any other
illegal consideration to purchasing agents or other
representatives of customers in respect of sales made or to
be made by the Company or any of the Company Subsidiaries.
SECTION 3.27 Permits{tc \l 2 "SECTION 3.27
Permits"}. The Company and the Company Subsidiaries have
obtained all licenses, permits, certificates, certificates
of occupancy, orders, authorizations and approvals of
(collectively, "Permits"), and have made all required
registrations and filings with, any Governmental Body that
are necessary to the conduct of their respective businesses,
except for such Permits which, if not in the possession of
the Company or the Company Subsidiaries, would not have a
materially adverse effect on the Condition of the Business.
All Permits material to the Condition of the Business are
listed on Schedule 3.27 and are in full force and effect; no
material violations are or have been recorded in respect of
any such Permit; and no proceeding is pending or threatened
to revoke or limit any Permit.
SECTION 3.28 Environmental Matters{tc \l 2 "SECTION
3.28 Environmental Matters"}. (a) Except as set forth in
Schedule 3.28, with respect to each of the Company and each
of the Company Subsidiaries, there has been no manufacture,
refining, storage, transport, disposal or treatment of
Hazardous Substances by such party (or, to the knowledge of
such party, its predecessor in interest), or any Release at,
on or under any Company Real Property by the Company or any
Company Subsidiary or, to knowledge of Triumph, by any other
person, in violation of any Environmental Law or which would
require remedial action under any Environmental Law; to the
knowledge of Triumph, none of the soil, ground water or
surface water of such Company Real Property is contaminated
by any Release.
(b) During the past five years neither the
Company nor any of the Company Subsidiaries has received any
written (i) notice of any violation with respect to any
Environmental Law; (ii) notice of any actual, pending or
threatened Regulatory Action involving such party, or any
present or former owner, lessee or operator of the Company
Real Property; or (iii) notice of any Third Party Claim.
(c) Except as set forth in Schedule 3.28, to the
knowledge of Triumph: (i) there are no incinerators, septic
tanks, underground tanks or cesspools located on, at or
under the Company Real Property, (ii) all sewage from the
Company Real Property is discharged into a public sanitary
sewer system, and (iii) there has been no Release by the
Company or any of the Company Subsidiaries into the
atmosphere, adjoining or adjacent to any body of water, or
on to adjacent property.
(d) Each of the Company and the Company
Subsidiaries, as applicable, has obtained, and is in
compliance with, all material Environmental Permits, except
where the failure to obtain or be in compliance with any
such Environmental Permits would not, singly or in the
aggregate, have a material adverse effect on the Condition
of the Business.
(e) Except as set forth on Schedule 3.28 or as
would not, singly or in the aggregate, have a material
adverse effect on the Condition of the Business, all such
Environmental Permits are in full force and effect, and the
Company and each Company Subsidiary has made all appropriate
filings for issuance or renewal of such Environmental
Permits.
(f) Except as set forth on Schedule 3.28 or as
would not, singly or in the aggregate, have a material
adverse effect on the Condition of the Business, there are
no facts, events, conditions, circumstances, activities,
practices, incidents, actions, omissions or plans known to
Triumph, the Company or the Company Subsidiaries that: (i)
may give rise to any Regulatory Action including the Company
or any of the Company Subsidiaries or the Company Real
Property, or (ii) is reasonably likely to form the basis of
any Third Party Claim involving the Company, any of the
Company Subsidiaries or the Company Real Property. Except
as set forth on Schedule 3.28, there are no Regulatory
Actions or Third Party Claims relating to, arising from or
otherwise affecting the Company Real Property.
SECTION 3.29 Finders; Fees{tc \l 2 "SECTION 3.29
Finders; Fees"}. Except for Tucker Anthony Incorporated
whose fees will be paid in accordance with the provisions by
Section 5.11, there is no investment banker, broker, finder
or other intermediary which has been retained by or is
authorized to act on behalf of any Seller, the Company or
any of the Company Subsidiaries who might be entitled to any
fee or commission from the Company or any of the Company
Subsidiaries upon consummation of the Contemplated
Transactions.
SECTION 3.30 Depositaries; Powers of Attorney, etc.{tc
\l 2 "SECTION 3.30 Depositaries; Powers of Attorney, etc."}
Schedule 3.30 sets forth (i) the name of each bank or
similar entity in which the Company or each of the Company
Subsidiaries has an account, lock box or safe deposit box
and the names of all persons authorized to draw thereon or
to have access thereto; and (ii) the name of each person
holding a general or special power of attorney from the
Company or each of the Company Subsidiaries and a
description of the terms thereof.
SECTION 3.31 Acquisition for Investment{tc \l 2
"SECTION 3.31 Acquisition for Investment"}. Those Sellers
who are acquiring Buyer Common Stock are acquiring such
stock for their own account and not with a present intention
to make any sale, disposition, distribution or other
transfer of Buyer Common Stock in a manner that will be in
violation of any applicable securities Laws and understand
that the Buyer Common Stock has not been registered under
the 1933 Act or under the securities Laws of any state.
SECTION 3.32 Disclosure{tc \l 2 "SECTION 3.32
Disclosure"}. Neither this Agreement, the Schedules hereto,
nor any audited or unaudited financial statements, documents
or certificates furnished or to be furnished to Buyer by or
on behalf of any Seller pursuant to this Agreement contains
any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements
contained herein or therein not misleading. There are no
facts which would materially adversely affect the Condition
of the Business which have not been set forth herein, or in
any Schedule hereto, or in any certificate or statement
furnished or to be furnished to Buyer by Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER{tc \l 1
"ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER"}
Buyer represents and warrants to Sellers that:
SECTION 4.1 Buyer Common Stock{tc \l 2 " SECTION
4.1 Buyer Common Stock"}. The Buyer Common Stock to be
issued as part of the Purchase Price is validly authorized
and, when issued and delivered in accordance with this
Agreement, will be validly issued, fully paid and non-
assessable and will not be issued in violation of any
preemptive rights, rights of first refusal or other
contractual restrictions of any kind of the shareholders of
Buyer, and the applicable Sellers will receive good title to
the Buyer Common Stock free and clear of all Liens.
SECTION 4.2 Acquisition for Investment{tc \l 2
"SECTION 4.2 Acquisition for Investment"}. Buyer is
acquiring the Purchased Shares for its own account and not
with a present intention to make any sale, disposition,
distribution or other transfer of the Purchased Shares in a
manner that will be in violation of any applicable
securities Laws and understands that the Purchased Shares
have not been registered under the 1933 Act or under the
securities Laws of any state.
SECTION 4.3 Authority Relative to This Agreement{tc
\l 2 "SECTION 4.3 Authority Relative to This Agreement"}.
Buyer has full corporate power and authority to execute and
deliver this Agreement and each other Transaction Document
to which it is a party and to consummate the Contemplated
Transactions. The execution and delivery of this Agreement
and the consummation of the Contemplated Transactions to
which Buyer is a party have been duly and validly authorized
and approved by the Board of Directors and shareholders of
Buyer and no other corporate proceedings on the part of
Buyer are necessary to authorize the execution and delivery
by Buyer of this Agreement or the consummation of the
Contemplated Transactions to which Buyer is a party. This
Agreement has been duly and validly executed and delivered
by Buyer and (assuming the valid execution and delivery of
this Agreement by the other parties hereto) constitutes the
legal, valid and binding agreement of Buyer, enforceable
against Buyer in accordance with its terms, except as such
obligations and their enforceability may be limited by
applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the enforcement
of creditors' rights generally and except that the
availability of equitable remedies, including specific
performance, is subject to the discretion of the court
before which any proceeding therefor may be brought (whether
at law or in equity).
SECTION 4.4 No Conflicts; Consents{tc \l 2 "SECTION
4.4 No Conflicts; Consents"}. Except as set forth in
Schedule 4.4, the execution, delivery and performance by
Buyer of this Agreement and each other Transaction Document
to which it is a party and the consummation of the
Contemplated Transactions to which Buyer is a party will not
(i) violate any provision of the Certificate of
Incorporation or By-laws of Buyer or any Buyer Subsidiary;
(ii) require Buyer or any Buyer Subsidiary to amend any
Contract, obtain any consent, approval or action of or
waiver from, or make any filing with, or give any notice to,
any Governmental Body or any other person, except for
compliance with the HSR Act and as set forth in Schedule 4.4
(the "Buyer Required Consents"); (iii) if the Buyer Required
Consents are obtained, violate, conflict with or result in
the breach of any of the terms of, result in a material
modification of the effect of, or otherwise cause the
termination of, give any other contracting party the right
to terminate, or constitute (or with notice or lapse of time
or both constitute) a default under, any Contract to which
Buyer or any Buyer Subsidiary is a party or by or to which
any of them or any of their Assets may be bound or subject,
or result in the creation of any Lien upon the Buyer Common
Stock being issued to Sellers or upon the properties of
Buyer or any Buyer Subsidiary pursuant to the terms of any
such Contract other than such violations, conflicts,
breaches, modifications, terminations, rights to terminate,
defaults or Liens that, individually or in the aggregate,
would not have a material adverse effect on the Condition of
Buyer; (iv) if the Buyer Required Consents are obtained,
violate any Law or Order of any Governmental Body against,
or binding upon, Buyer or any Buyer Subsidiary or upon their
respective Assets or Business other than such violations
that, individually or in the aggregate, would not have a
material adverse effect on the Condition of Buyer; (v) if
the Buyer Required Consents are obtained, violate or result
in the revocation or suspension of any Permit other than
such violations that, individually or in the aggregate,
would not have a material adverse effect on the Condition of
Buyer or (vi) if the Buyer Required Consents are not
obtained, have a material adverse effect on the Condition of
Buyer.
SECTION 4.5 Corporate Existence and Power{tc \l 2
"SECTION 4.5 Corporate Existence and Power"}. Buyer is a
corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation and
has all requisite corporate powers and all material
governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted. Buyer is duly qualified to do business as a
foreign corporation and is in good standing in each
continental United States jurisdiction where the character
of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified
would not, individually or in the aggregate, have a material
adverse effect on the business, its Assets, financial
condition or the results of operations of Buyer or the Buyer
Subsidiaries taken as a whole (collectively, the "Condition
of Buyer"). Buyer is duly qualified to do business as a
foreign corporation in each of the United States
jurisdictions listed on Schedule 4.6 hereto.
SECTION 4.6 Subsidiaries{tc \l 2 "SECTION 4.6
Subsidiaries"}. (a) Each Subsidiary of Buyer (each, a
"Buyer Subsidiary") is a corporation duly organized, validly
existing and in good standing under the laws of its
jurisdiction of incorporation or other organization, and has
all corporate or other powers and all material governmental
licenses, authorizations, consents and approvals required to
carry on its business as now conducted and is duly qualified
to do business as a foreign person and is in good standing
in each continental United States jurisdiction where the
character of the property owned or leased by it or the
nature of its activities make such qualification necessary,
except for such jurisdictions where the failure to be so
qualified would not, individually or in the aggregate, have
a material adverse effect on the Condition of Buyer.
(b) Schedule 4.6 sets out the name of each Buyer
Subsidiary, its jurisdiction of incorporation or other
organization, each United States jurisdiction in which it is
duly qualified to do business as a foreign corporation, the
authorized capital stock or other ownership interests of,
and the securities issued by, each Buyer Subsidiary,
together with the holders of all such outstanding
securities. Except for the Buyer Subsidiaries set forth on
Schedule 4.6, Buyer does not directly or indirectly own any
interest in any other person.
(c) Except as set forth on Schedule 4.6, all of
the outstanding capital stock or other ownership interests
of each Buyer Subsidiary is owned by Buyer, directly or
indirectly, free and clear of any Lien and any other
limitation or restriction (including any restriction on the
right to vote, sell or otherwise dispose of such capital
stock or other ownership interests). All of the outstanding
capital stock or other ownership interests of each Buyer
Subsidiary is validly issued, fully paid and nonassessable
and was not issued in violation of any preemptive rights,
rights of first refusal or any other contractual or legal
restrictions of any kind. Except as set forth on Schedule
4.6, there are no outstanding (i) securities of Buyer or any
Buyer Subsidiary convertible into or exchangeable for
capital stock or other ownership interests in any Buyer
Subsidiary and (ii) options, warrants, calls or other rights
to acquire from any Buyer Subsidiary, and no obligation of
Buyer or any Buyer Subsidiary to issue, any capital stock or
other ownership interests of, or any securities convertible
into or exchangeable for any capital stock of or ownership
interests in, any Buyer Subsidiary. Except as set out in
Schedule 4.6, there are no outstanding obligations of Buyer
or any Buyer Subsidiary to repurchase, redeem or otherwise
acquire any securities of the Buyer or any Buyer Subsidiary.
SECTION 4.7 Charter Documents{tc \l 2 "SECTION 4.7
Charter Documents"}. (a) Buyer has heretofore delivered to
the Sellers true and complete copies of the Certificate of
Incorporation (certified by the Secretary of State of the
State of Delaware or, if unavailable on the date hereof, by
the Secretary of Buyer) and By-laws certified by the
Secretary of Buyer in effect on the date hereof. The stock
and transfer books of Buyer and each of the Buyer
Subsidiaries have been made available to the Sellers for
their inspection and are true and complete.
(b) All financial, business and accounting books,
ledgers, accounts and official and other records relating to
Buyer and each Buyer Subsidiary have been properly and
accurately kept and completed in all material respects, and
there are no material inaccuracies or discrepancies
contained or reflected therein. Neither Buyer nor any Buyer
Subsidiary has any records, systems, Contracts, data or
information, recorded, stored, maintained, operated or
otherwise wholly or partly dependent upon or held by any
means (including any electronic, mechanical or photograph
process, whether computerized or not) which (including all
means of access thereto and therefrom) are not under their
exclusive ownership and direct control.
SECTION 4.8 Capitalization{tc \l 2 "SECTION 4.8
Capitalization"}. (a) Immediately prior to the filing of
Buyer's Certificate of Incorporation on the date hereof, the
authorized capital stock of Buyer consisted of: (i) 200,000
Class A Common Shares, par value $.01 per share, of which
145,642 shares were issued and outstanding; (ii) 1,000,000
Class B Common Shares, par value $.01 per share, of which
697,493 were issued and outstanding and of which 423,207
were owned by Subsidiaries; (iii) 100,000 First Preferred
Shares, par value $.01 per share, of which no shares were
issued and outstanding; and (d) 100,000 Second Preferred
Shares, par value $.01 per share, of which 56,670 were
issued and outstanding. All of such shares were duly
authorized and validly issued, were fully paid and
nonassessable.
(b) The Recapitalization Transactions affecting
Buyer or any United States Subsidiary have been duly and
validly consummated in accordance with applicable law except
that the Reincorporation Merger has not become effective, as
of the date hereof, under New York law. The authorized
capital stock of Buyer consists of (i) $1,500,000 shares of
Common Stock, par value $.01 per share, of which no shares
are issued or outstanding, (ii) 1,000,000 shares of Class A
Common Stock, par value $.01 per share, of which, after
giving effect to the issuance of shares thereof to the
Sellers pursuant to this Agreement, there will be 900,189
shares issued and outstanding, of which 423,207 shares are
owned by Subsidiaries, (iii) one share of Special Preferred
Stock, par value $.01 per share, of which one share is
issued and outstanding, and (iv) 500,000 shares of Preferred
Stock, par value $.01 per share, of which no shares are
issued and outstanding. All outstanding shares of capital
stock of Buyer have been duly authorized and validly issued,
fully paid and are non-assessable and have not been issued
in violation of any preemptive rights, rights of first
refusal or any other contractual legal restrictions of any
kind. Except for the restrictions contained in the
Stockholders' Agreement, there are no outstanding (A)
securities of Buyer convertible into or exchangeable for
shares of capital stock or voting securities of Buyer, and
(B) options, warrants, calls, preemptive rights, rights of
first refusal or other rights to acquire from Buyer, and no
obligation of Buyer to issue, any capital stock, voting
securities or securities convertible into or exchangeable
for capital stock or voting securities of Buyer. Except as
set forth in the Stockholders' Agreement, there are no
outstanding obligations of Buyer or any Buyer Subsidiary to
repurchase, redeem or otherwise acquire any securities of
Buyer.
SECTION 4.9 Financial Information{tc \l 2 "SECTION
4.9 Financial Information"}. The consolidated balance
sheet and statements of cash flows and operations of Buyer
and statement of income and retained earnings as of and for
the years ended December 31, 1994, 1993, 1992 and 1991
audited by Ernst & Young, copies of all of which have been
furnished to the Sellers, have been prepared in accordance
with GAAP applied on a consistent basis (except as may be
indicated therein or in the notes thereto), are accurate,
show all material Liabilities, and fairly present in
accordance with GAAP the consolidated financial position of
Buyer and the Buyer Subsidiaries as of the dates thereof and
the consolidated results of operations and cash flows (or
changes in financial position, as the case may be), of Buyer
and the Buyer Subsidiaries for each of the periods then
ended.
SECTION 4.10 Liabilities{tc \l 2 "SECTION 4.10
Liabilities"}. (a) Except as set forth in Schedule 4.10A,
Buyer and the Buyer Subsidiaries are not aware of any
unasserted Contingency, except (i) Contingencies which are
accrued or reserved against in the consolidated balance
sheet of Buyer as of December 31, 1994 or reflected in the
notes to the audited financial statements of Buyer for the
fiscal year ended December 31, 1994; and (ii) Liabilities
incurred after December 31, 1994 in the ordinary course of
business and consistent with past practice.
(b) Schedule 4.10B sets forth, as of the date
hereof, a brief description of all Liabilities of Buyer and
each Buyer Subsidiaries in respect of (i) money borrowed
from and owed to any bank, financial institution or other
person; (ii) any indebtedness arising under leases required
to be capitalized under GAAP; (iii) any indebtedness arising
under purchase money obligations and (iv) any indebtedness
or potential indebtedness under any guaranty, letter of
credit or performance credit (the indebtedness or potential
indebtedness described in the foregoing clauses being
referred to, herein, collectively, as "Buyer Debt"). Except
as set forth on Schedule 4.10B, all Buyer Debt may be repaid
or prepaid upon no more than 30 days' notice without premium
or penalty.
SECTION 4.11 Receivables{tc \l 2 "SECTION 4.11
Receivables"}. (a) All the accounts receivable of Buyer
and each Buyer Subsidiary (the "Buyer Receivables")
reflected in the Buyer Balance Sheet and all Buyer
Receivables that have arisen since the Buyer Balance Sheet
Date (except such Buyer Receivables as have been collected
since such date) are valid and enforceable claims, and
constitute bona fide Buyer Receivables resulting from the
sale of goods and services in the ordinary course of
business in conformity with applicable purchase orders ,
agreements and specifications. To Buyer's knowledge, the
Buyer Receivables are subject to no valid defense, offsets,
returns, allowances or credits of any kind other than in the
ordinary course of business and are fully collectible within
90 days from the date they are invoiced except to the extent
of the amount of the reserve for doubtful accounts reflected
in the Buyer Balance Sheet, it being understood and agreed
that nothing contained herein shall be deemed to guarantee
the collectibility of the Buyer Receivables. Buyer has
heretofore delivered to Sellers a schedule as at March 31,
1995 setting forth the total amount of Buyer Receivables and
a schedule of the aging of such Buyer Receivables based on 0-
30 days, 31-60 days, 61-90 days and over 90 days. All
chargebacks with customers to which Buyer or any Buyer
Subsidiary has agreed have been credited to the customers
concerned.
(b) Schedule 4.11 sets forth a brief description
and list (including the principal amount and maturity date)
of any loan made by Buyer or any Buyer Subsidiary: (i) in
excess of $15,000 to any employee of Buyer or any Buyer
Subsidiary and (ii) to any person other than employees of
Buyer or any Buyer Subsidiary.
SECTION 4.12 Inventories{tc \l 2 "SECTION 4.12
Inventories"}. The inventories of Buyer and of each Buyer
Subsidiary reflected in the Buyer Balance Sheet and all
inventory items acquired since the Buyer Balance Sheet Date
consist of raw materials, supplies, work-in-process and
finished goods of such quality and in such quantities as are
being used or are reasonably anticipated to be usable, or
are being sold or are suitable for sale, in the ordinary
course of its business. Such inventories are valued at the
lower of cost or market and were determined in accordance
with GAAP consistently applied. Since the Buyer Balance
Sheet Date, Buyer and each of the Buyer Subsidiaries have
continued to replenish its inventories in a normal and
customary manner consistent with prior practice and prudent
business judgment. Buyer and each Buyer Subsidiary have
established adequate reserves for inventory that no longer
constitutes part of their current line. The amount of such
reserves and the methodology used to determine same have
been disclosed in writing by Buyer to Sellers with specific
reference to this Section 4.12.
SECTION 4.13 Absence of Certain Changes{tc \l 2
"SECTION 4.13 Absence of Certain Changes"}. Since the
Buyer Balance Sheet Date, except as set forth in this
Agreement or disclosed or referred to in Schedule 4.13, each
of Buyer and the Buyer Subsidiaries has conducted its
business in the ordinary course consistent with past
practices and there has not been:
(a) Any event that has had or would reasonably be
expected to have a material adverse effect on the Condition
of Buyer;
(b) Any declaration, setting aside or payment of
any dividend or other distribution with respect to any
shares of capital stock of Buyer or any of the Buyer
Subsidiaries;
(c) Any amendment to the Certificate of
Incorporation or By-laws of Buyer or any of the Buyer
Subsidiaries or any amendment to any term of any outstanding
security of the Buyer or any of the Buyer Subsidiaries;
(d) Any (i) incurrence, assumption or guarantee
by Buyer or any of the Buyer Subsidiaries of any Liability
other than in the ordinary course of business in amounts and
on terms consistent with past practices, (ii) issuance or
sale of any securities convertible into or exchangeable for
debt securities of Buyer or any of the Buyer Subsidiaries,
or (iii) issuance or sale of options or other rights to
acquire from Buyer or any of the Buyer Subsidiaries,
directly or indirectly, debt securities of Buyer or any of
the Buyer Subsidiaries or any securities convertible into or
exchangeable for any such debt securities;
(e) Any creation, incurrence or assumption by
Buyer or any of the Buyer Subsidiaries of any Lien on any
Asset other than (i) Liens for Taxes not yet due or being
contested in good faith (and for which adequate reserves
have been established); (ii) Liens which do not materially
detract from the value of such Asset as now used, or
materially interfere with any present or intended use of
such Asset; or (iii) Permitted Liens.
(f) Any making or forgiving of any loan, advance
or capital contribution to or investment in any person other
than loans, advances or capital contributions to or
investments in Buyer Subsidiaries made in the ordinary
course of business consistent with past practices;
(g) Any damage, destruction or other casualty
loss (whether or not covered by insurance), condemnation or
other taking affecting the business or Assets of Buyer or
any of the Buyer Subsidiaries which, individually or in the
aggregate, has had or will reasonably be expected to have a
material adverse effect on the Condition of Buyer;
(h) Except in the ordinary course of business,
any transaction or commitment made, or any Contract entered
into, by Buyer or any of the Buyer Subsidiaries relating to
its Assets or business (including the acquisition or
disposition of any substantial Assets) or any relinquishment
by Buyer or any of the Buyer Subsidiaries of any Contract or
other right;
(i) Any change in any method of accounting or
accounting practice by Buyer or any of the Buyer
Subsidiaries;
(j) Any assumption or guarantee of the
obligations of any person other than a Buyer Subsidiary;
(k) Any grant of any severance or termination pay
to any stockholder or officer of Buyer or any of the Buyer
Subsidiaries, any entering into of any employment, deferred
compensation or other similar agreement (or any amendment to
any such existing agreement) with any stockholder, officer
or director of Buyer or any of the Buyer Subsidiaries or any
increase in benefits payable under any existing severance or
termination pay policies or employment agreements, or any
increase in compensation, bonus or other benefits payable to
any stockholder, officer or director of Buyer or any of the
Buyer Subsidiaries in each case, other than routine
increases in the ordinary course of business or disclosed to
Sellers in writing with specific reference to his Section
4.13(k) or on any Schedule;
(l) Any labor dispute, other than routine
individual grievances, or any activity or proceeding by a
labor union or representative thereof to organize any
employees of Buyer or any of the Buyer Subsidiaries, which
employees were not subject to a collective bargaining
agreement at the Buyer Balance Sheet Date, or any lockouts,
strikes, slowdowns, work stoppages or, to the knowledge of
Buyer, threats thereof by or with respect to such employees;
(m) Any waiver of any material right under any
Contract of the type required to be set forth on any
Schedule;
(n) Except for any changes made in the ordinary
course of business, any material change in any of Buyer's or
any of the Buyer Subsidiaries' business policies, including
advertising, investment, marketing, pricing, purchasing,
production, personnel, sales, returns, budget or product
acquisition policies;
(o) Except in the ordinary course of business,
any payment, directly or indirectly, of any material
Liability before the same became due in accordance with its
terms;
(p) Any termination or failure to renew, or the
receipt of any written threat (that was not subsequently
withdrawn) to terminate or fail to renew, any Contract that
is or was material to the Condition of Buyer; or
(q) Any Contract or arrangement made by Buyer or
any of the Buyer Subsidiaries to take any action which, if
taken prior to the date hereof, would have made any
representation or warranty in this Section untrue or
incorrect in any material respect.
SECTION 4.14 Title to Properties{tc \l 2 "SECTION
4.14 Title to Properties"}. (a) Schedule 4.14A sets forth
a complete list and brief description of all real property
owned by Buyer or any of the Buyer Subsidiaries (the "Buyer
Owned Real Property") and all real property leased or
operated by Buyer or any of the Buyer Subsidiaries if the
annual base rent thereunder exceeds $250,000 (all real
property leased or operated by Buyer or any of the Buyer
Subsidiaries (including those with an annual base rent of
less than $250,000) is hereinafter referred to as the "Buyer
Leased Real Property") (together, the Buyer Owned Real
Property and the Buyer Leased Real Property shall be
referred to as the "Buyer Real Property"). With respect to
the Buyer Owned Real Property, Schedule 4.14 also sets forth
for each Buyer Owned Real Property a list of the most recent
title insurance policies, appraisal reports and
environmental reports in the possession or under the control
of the Buyer or any of the Buyer Subsidiaries, copies of all
of which have been provided to Buyer. With respect to the
Buyer Leased Real Property with annual base rent in excess
of $250,000, Schedule 4.14A also sets forth the date of each
lease, the term thereof, the address and square footage of
the property, and the aggregate monthly rental payable
thereunder.
(b) With respect to the Buyer Real Property and
the respective operations thereat by Buyer or any Buyer
Subsidiary:
(i) To the knowledge of Buyer, there are no
violations of any Law (including but not limited to zoning
and setback requirements) where the effect of any such
violation, individually or in the aggregate, would have a
materially adverse effect on the Condition of Buyer;
(ii) Buyer or the Buyer Subsidiaries have
obtained and complied with all Permits and Orders, except
where the failure to obtain such Permits and Orders or
comply therewith, individually or in the aggregate, would
not have a material adverse effect on the Condition of
Buyer;
(iii) All buildings, structures and other
improvements located thereon that are owned or leased are in
working condition and repair, reasonable wear and tear
excepted, except where such failure to be in working
condition and repair, reasonable wear and tear excepted,
would not have a material adverse effect on the Condition of
Buyer, and neither Buyer nor any of the Buyer Subsidiaries
has done or performed, or caused to be done or performed,
any work or required any services within the past year
except for which payment in full has been made and lien
waivers obtained;
(iv) There is no pending or, to the knowledge
of Buyer, threatened Claim (including Third Party Claims),
or any existing condition or basis which may give rise to
any such Claim, or which may otherwise result in the
imposition of a Lien or forfeiture of any of the Buyer Owned
Real Property, or otherwise prohibit, restrict or materially
interfere with its use as presently conducted except for
Claims which would not have a material adverse effect on the
Condition of Buyer;
(v) To the knowledge of Buyer, there is no
pending or threatened Claim (including Third Party Claims),
or any existing condition or basis which may give rise to
any such Claim, or which may otherwise result in the
imposition of a Lien or forfeiture of any of the Buyer
Leased Real Property, or otherwise prohibit, restrict or
materially interfere with its use as presently conducted
except for Claims which would not have a material adverse
effect on the Condition of Buyer;
(vi) There are no pending, or to the
knowledge of Buyer, threatened proceedings, which may result
in a total or partial condemnation, eminent domain or other
taking of any Buyer Owned Real Property;
(vii) To the knowledge of Buyer, there
are no pending or threatened proceedings, which may result
in a total or partial condemnation, eminent domain or other
taking of any Buyer Leased Real Property;
(viii) There are no claims of or rights to
possession, or any claims of adverse possession, with
respect to all or any portion of any of the Buyer Owned Real
Property;
(ix) To the knowledge of Buyer, there are no
claims of or rights to possession, or any claims of adverse
possession, with respect to all or any portion of any of the
Buyer Leased Real Property; and
(x) Buyer or a Buyer Subsidiary has good and
insurable fee title to the Buyer Owned Real Property or a
Buyer Subsidiary and a valid and existing leasehold interest
in Buyer Leased Real Property or a Buyer Subsidiary subject
to no Liens except for Buyer Permitted Liens.
(c) The tangible property owned or used by Buyer
("Buyer Tangible Property") including, without limitation,
all machinery, sewing or cutting machines, equipment,
furniture, furnishings, leasehold improvements, fixtures and
vehicles have been maintained in the ordinary course and is
in working order, reasonable wear and tear excepted, except
for a nonmaterial portion of such Buyer Tangible Property
that may be undergoing repairs or maintenance in the
ordinary course and except where such failure to maintain
would not have a material adverse effect on the Condition of
Buyer.
(d) Schedule 4.14B sets forth, with respect to
each lease of Buyer Tangible Property with an annual base
rent in excess of $250,000, the commencement date of the
lease, and any amendment thereto, the term thereof, and the
aggregate monthly rent payable thereunder.
(e) Except as set out in Schedule 4.14C, Buyer or
a Buyer Subsidiary has good title to all Buyer Tangible
Property reflected on the Buyer Balance Sheet or acquired
after the Buyer Balance Sheet Date except for Buyer
Tangible Property sold or disposed of since the Buyer
Balance Sheet Date in the ordinary course of business
consistent with past practice. Buyer or a Buyer Subsidiary
has good title to all raw materials, work in process or
finished Buyer Products located at the premises of any
Contractor. Except as set forth on Schedule 4.14C, none of
such Buyer Tangible Property is subject to any Liens, except
for the following (collectively, "Buyer Permitted Liens"):
(i) Liens disclosed on the Buyer Balance
Sheet or the notes thereto;
(ii) Liens for Taxes not yet due or payable
or being contested in good faith (and for which adequate
reserves have been established on the Buyer Balance Sheet);
(iii) Liens, easements, zoning or other
planning restrictions or limitations on use or other
irregularities in title, none of which materially detracts
from the value of such Assets as now used, or materially
interferes with any present use of such Assets;
(iv) Liens arising in the ordinary course of
business which do not materially detract from the value of
such Assets as now used or materially interfere with any
present use of such Assets; and
(v) Liens of carriers, warehousemen,
mechanics, materialmen, vendors, lessors, and landlords
incurred in the ordinary course of business.
SECTION 4.15 Contracts{tc \l 2 " SECTION 4.15
Contracts"}. (a) Except for Contracts pursuant to the
terms of which there is either a current or future
obligation or right of Buyer or a Buyer Subsidiary to make
payments or receive payments not in excess individually of
$250,000 during any calendar year, Schedule 4.15 sets forth
as of the date hereof a complete and accurate list of all
Contracts to which either Buyer or any of the Buyer
Subsidiaries is a party, or by or to which it or its Assets
are bound or subject, including, without limitation:
(i) Contracts with any current or
former employee, independent contractor, consultant, agent
or other representative or with any Affiliate of any of the
foregoing;
(ii) Contracts relating to the design of
any Buyer Products;
(iii) Other than in the ordinary
course of business: (A) Contracts for the sale of any of
its Assets or (B) Contracts for the grant to any person of
any preferential rights to purchase any of its Assets;
(iv) Contracts under which Buyer and/or
any of the Buyer Subsidiaries agree to indemnify any person;
(v) Contracts under which Buyer and/or
any of the Buyer Subsidiaries agree to share Tax liability
of, or with, any party;
(vi) Contracts that cannot be cancelled
without material Liability, premium or penalty;
(vii) Contracts with any person to
advertise or market any of Buyer's or any of the Buyer
Subsidiaries' Products other than in the ordinary course of
business;
(viii) Contracts relating to the
acquisition of any operating business or the capital shares
of any other person;
(ix) Options for the purchase or sale of
any Asset;
(x) Contracts requiring the payment to
any person of an override or similar commission or fee;
(xi) Contracts with customers,
independent suppliers, Contractors and manufacturers other
than in the ordinary course of business;
(xii) Sales agency, licensing,
manufacturer's representative or distributorship agreements;
(xiii) Contracts pursuant to which
any party is required to purchase or sell a stated portion
of its requirements or output to another party;
(xiv) Contracts for the payment of
fees or other consideration to any officer or director of
Buyer or any of the Buyer Subsidiaries or to any other
entity in which any of the foregoing has an interest; and
(xv) Management Contracts and other
similar agreements with any person.
(b) Schedule 4.15 also sets forth as of the date
hereof a complete and accurate list of the following
Contracts to which either Buyer or any of the Buyer
Subsidiaries is a party, or by which it or its Assets are
bound or subject:
(i) Contracts with any current or
former stockholder, officer or director that impose, after
the Closing Date, continuing obligations on a Buyer or a
Buyer Subsidiary;
(ii) Contracts with any labor union or
association representing any employee;
(iii) Partnership or joint venture
agreements;
(iv) Contracts containing covenants not
to compete in any line of business or with any person in any
geographical area (or not to solicit or accept any business)
or covenants of any other person not to compete in any line
of business or in any geographical area with Buyer or any
Buyer Subsidiary (or not to solicit or accept any business);
(v) Contracts relating to any Buyer
Debt in respect of: (A) money borrowed from and owed to any
bank, financial institution or other person; (B) any
indebtedness in excess of $500,000 arising under leases
required to be capitalized under GAAP; (C) any indebtedness
in excess of $500,000 arising under purchase money
obligations and (D) any indebtedness or potential
indebtedness in excess of $500,000 under any guaranty,
letter of credit or performance credit; and
(vi) Contracts providing rights of
exclusivity to distributors or retailers for definite or
indefinite periods for any products or product lines or for
the use of any trademark or tradename.
(c) Schedule 4.15 also lists and describes the
status of all Contracts currently in negotiation or proposed
by Buyer or any of the Buyer Subsidiaries as to which there
exists a draft agreement, letter of intent or similar
instrument and which is of a type which if entered into by
Buyer or any of the Buyer Subsidiaries would be required to
be listed on Schedule 4.15 or on any other Schedule (the
"Buyer Proposed Contracts").
(d) There are no Contracts, other than those set
forth on Schedule 4.15, on any other Schedule to this
Agreement or which are not required to be disclosed
hereunder. Except as set forth on Schedule 4.15, all
Contracts (individually or, in the case of any group of
similar Contracts, in the aggregate) material to the
Condition of Buyer are valid, subsisting, in full force and
effect and binding upon Buyer or any of the Buyer
Subsidiaries, as the case may be, and, to the knowledge of
Buyer, on the other parties thereto in accordance with their
terms and Buyer and each of the Buyer Subsidiaries has paid
in all material respects or accrued amounts due thereunder
and has satisfied in all material respects or provided for
all of its liabilities and obligations thereunder to be
satisfied or provided for through the date hereof, and is
not in default under any of them in any material respect,
nor, to the knowledge of Buyer, is any other party to any
Contract (individually or, in the case of any group of
similar Contracts, in the aggregate) material to the
Condition of Buyer in default thereunder in any material
respect, nor, to the knowledge of Buyer, does any condition
exist that with notice or lapse of time or both would
constitute a material default thereunder. Except as
separately identified on Schedule 4.12 hereto, neither Buyer
nor any of the Buyer Subsidiaries is a party to or bound by
any Contract that materially adversely affects the Condition
of Buyer. Except as separately identified on Schedule 4.15
hereto or on any other Schedule, no approval or consent of
any person is needed in order that the Contracts
(individually or, in the case of any group of similar
Contracts, in the aggregate) material to the Condition of
Buyer continue in full force and effect following the
consummation of the Contemplated Transactions and the
operation of the Business of the Company and the Company
Subsidiaries together with that of the Buyer and the Buyer
Subsidiaries except for such approvals or consents which, if
not obtained, would not have a material adverse effect on
the Condition of the Buyer. Except as set forth on Schedule
4.15 or any other Schedule, the termination of any Contract
will not cause Buyer or any Buyer Subsidiary to incur any
material penalty, loss, expense or termination payment.
(e) Buyer has given Triumph access to true and
complete copies of (i) all of the Contracts required to be
set forth on Schedule 4.15 or on any other Schedule or (ii)
the most recent draft, letter of intent or term sheet of all
of the Buyer Proposed Contracts required by the provisions
of Section 4.15(c) to be set forth on Schedule 4.15.
SECTION 4.16 Intangible Property{tc \l 2 "SECTION
4.16 Intangible Property"}. (a) Buyer or the Buyer
Subsidiaries own or have the right to use all material
trademarks, tradenames, servicemarks, patents, models,
industrial designs and registered copyrights (collectively,
"Buyer Intellectual Property Rights") necessary to the
conduct of their respective businesses. Schedule 4.16 sets
forth a list of those trademarks that are material to the
Condition of Buyer.
(b) To the knowledge of Buyer, with respect to
Buyer Intellectual Property Rights material to the Condition
of Buyer (i) all United States renewals and other
maintenance actions in respect of the registration relating
to such trademarks have been appropriately filed; (ii) Buyer
or a Buyer Subsidiary has exercised its best efforts to
ensure compliance with all United States registration and
recording requirements, and has paid all necessary
government fees; and (iii) the United States trademark
registrations and licenses thereof are valid with respect to
Buyer Products that are covered by the registrations.
(c) Except for restrictions of an immaterial
nature, Buyer or Buyer Subsidiary has the right to use, free
and clear of any Claims or rights of others, all material
trade secrets, know-how, processes, technology, blue prints,
art work, films, negatives, photographs, separations,
patterns and package and other designs utilized in the
conduct of its business, except where such failure to have
such rights would not, individually or in the aggregate,
have a material adverse effect on the Condition of Buyer.
(d) Except as set forth on Schedule 4.16, no
material Buyer Intellectual Property Right is subject to any
Lien or outstanding Order or Contract restricting the use or
licensing thereof. Except as set forth on Schedule 4.16,
(i) neither Buyer nor any of the Buyer Subsidiaries during
the three years preceding the date hereof has been sued or
charged in writing with or been a defendant in any Claim
which has not been terminated prior to the date hereof and
which involves a Claim of infringement arising out of the
use, registration or ownership of any Buyer Intellectual
Property Rights material to the Condition of Buyer; and (ii)
Buyer has no knowledge of any such charge or Claim of any
infringement during the three years preceding the date
hereof by any other person arising out of the use,
registration or ownership of any material Buyer Intellectual
Property Rights.
SECTION 4.17 Claims and Proceedings{tc \l 2 "SECTION
4.17 Claims and Proceedings"}. Except as set forth on
Schedule 4.17, there are no outstanding material Orders of
any Governmental Body against or involving Buyer, any of the
Buyer Subsidiaries or their respective Assets other than
Orders affecting the apparel industry generally. Except as
set forth on Schedule 4.17, there are no Claims (whether or
not the defense thereof or Liabilities in respect thereof
are covered by insurance), pending or threatened in writing,
against or involving Buyer or any of the Buyer Subsidiaries
or any of their respective Assets which (i) involve a claim
for the payment of money damages of $100,000 or more; (ii)
relate to employment, regardless of amount, other than
workers' compensation Claims, severance Claims or Claims
under Plans or (iii) individually or in the aggregate, would
have a material adverse effect upon the Contemplated
Transactions or upon the Condition of Buyer other than
Claims affecting the apparel industry generally. Except as
set forth on Schedule 4.17, to the knowledge of Buyer, there
is no fact, event or circumstances that would give rise to
any Claim that would be required to be set forth on Schedule
4.17 if currently pending or threatened. All notices
required to have been given to any insurance company listed
as insuring against any Claim set forth on Schedule 4.17
have been timely and duly given and, except as set forth on
Schedule 4.17, no insurance company has asserted in writing
that such Claim is not covered by the applicable policy
relating to such Claim. Except as set forth on Schedule
4.17 there are no material product liability Claims against
or involving Buyer or any of the Buyer Subsidiaries or, to
the knowledge of Buyer, any product manufactured, marketed
or distributed at any time by Buyer or any of the Buyer
Subsidiaries ("Buyer Products") and no such Claims have been
settled, adjudicated or otherwise disposed of since January
1, 1992. There are no material Claims pending or, to the
knowledge of Buyer, threatened that would give rise to any
right of indemnification on the part of any director or
officer of Buyer or any of the Buyer Subsidiaries or the
heirs, executors or administrators of such director or
officer, against Buyer or any of the Buyer Subsidiaries or
any successor to the business of Buyer or any of the Buyer
Subsidiaries.
SECTION 4.18 Restrictions on Business Activities{tc
\l 2 "SECTION 4.18 Restrictions on Business Activities"}.
There is no Order binding upon Buyer or any of the Buyer
Subsidiaries which has or would reasonably be expected to
have the effect of prohibiting or adversely affecting (i)
competition by Buyer or any of the Buyer Subsidiaries, (ii)
any business practice of Buyer or any of the Buyer
Subsidiaries, (iii) any acquisition of property by Buyer or
any of the Buyer Subsidiaries, or (iv) to the knowledge of
Buyer, the Condition of Buyer.
SECTION 4.19 Taxes{tc \l 2 "SECTION 4.19 Taxes"}.
(a) Except as set forth in the Buyer Balance Sheet
(including the notes thereto) or on Schedule 4.19, (i) all
Tax returns, statements, applications, reports and forms
required by law to be filed with any Taxing Authority on or
before the Closing Date with respect to any Pre-Closing Tax
Period (as hereinafter defined) by or on behalf of Buyer or
any Buyer Subsidiary (collectively, the "Buyer Returns")
have been timely filed through the date hereof or will be
filed when due (taking into account any extension granted by
the appropriate Taxing Authority); (ii) as of the time of
filing, the Buyer Returns correctly reflected (and, as to
any Buyer Returns not filed as of the date hereof and
required to be filed on or before the Closing Date, will
correctly reflect) the facts regarding the income, business,
Assets, operations, activities and status of Buyer, the
Buyer Subsidiaries and any other information required to be
shown therein; (iii) Buyer and the Buyer Subsidiaries have
timely paid or made provision for in reserves shown in the
Buyer Balance Sheet all Taxes that are due and payable for
any period ended on or prior to the date of the Buyer
Balance Sheet; (iv) the Buyer and Buyer Subsidiaries have
made or on or before the Closing Date will make provision
for all Taxes payable by the Buyer and Buyer Subsidiaries
for any Pre-Closing Tax Period for which no Buyer Return has
been filed; (v) the charges, accruals and reserves for Taxes
reflected or that will be reflected on the books of the
Buyer and the Buyer Subsidiaries are adequate to cover the
Tax liabilities accruing or payable by Buyer and the Buyer
Subsidiaries in respect of any Pre-Closing Tax Period; (vi)
all Liabilities of Buyer and the Buyer Subsidiaries with
respect to federal income Taxes have been finally determined
except for fiscal years 1988 through 1993, the only years
not closed by the expiration of the statute of limitations;
(vii) no deficiency for any Tax or claim for additional
Taxes by any Taxing Authority has been proposed, asserted or
assessed in writing against the Buyer or any Buyer
Subsidiary (or any member of any affiliated or combined
group of which the Buyer or any Buyer Subsidiary is or has
been a member); (viii) neither Buyer nor any Buyer
Subsidiary (or any member of any affiliated or combined
group of which Buyer or any Buyer Subsidiary is or has been
a member) has been granted any extension or waiver of the
limitation period applicable to any Buyer Returns or
otherwise disclosed in writing to Triumph or which could
have a material adverse effect on the Condition of Buyer;
(ix) neither Buyer nor any Buyer Subsidiary has filed any
consent or election under the Code, other than such consents
and elections, if any, reflected in the Buyer Returns or
otherwise disclosed in writing to Sellers with specific
reference to this Section 4.19(a)(ix) or which could have a
material adverse effect on the condition of Buyer; (x)
neither Buyer nor any Buyer Subsidiary has entered into or
will enter into any agreement or consent under Section
341(f) of the Code; (xi) neither Buyer nor any Buyer
Subsidiary owns any interest in real property in the State
of New York or in any other jurisdiction which would result,
as a result of the consummation of the Contemplated
Transactions, in the imposition of the New York State Buyer
Real Property Transfer Gains Tax for real property located
in New York or a similar tax for real property located in
any other jurisdiction; (xii) there are no Liens for Taxes
upon the Assets of the Buyer or any Buyer Subsidiary other
than Taxes not yet due and payable; (xiii) neither Buyer nor
any Buyer Subsidiary will be required, as a result of a
change in method of accounting for a Pre-Closing Tax Period,
to include any adjustment under Section 481(c) of the Code
in taxable income for any Tax period (or portion thereof)
ending on the Closing Date; (xiv) neither Buyer nor any
Buyer Subsidiary has been a member of an affiliated group
other than one of which Buyer was the common parent, or
filed or been included in a combined, consolidated or
unitary Buyer Return together other than one filed by Buyer;
(xv) neither Buyer nor any Buyer Subsidiary is currently
under any contractual obligation to indemnify any other
person with respect to Taxes; (xvi) Buyer is not and has not
been a United States real property holding corporation as
defined in Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii)
thereof; and (xvii) since its organization, Buyer has been a
possessions corporation that qualified for the Puerto Rico
and possessions tax credit and since such date has been
exempt from Puerto Rican income Taxes.
(b) As used herein, "Pre-Closing Tax Period"
means any tax period (or portion thereof) ending on or
before the Closing Date.
(c) True and correct copies of the Buyer Returns
for the years 1991, 1992 and 1993 have been delivered to
Sellers.
(d) Neither Buyer nor any Buyer Subsidiary is
party to any tax-sharing or tax allocation agreement
pursuant to which it is obligated to pay any amount to
anyone else.
(e) Except with respect to sales taxes collected
at the "outlet" stores of Buyer Subsidiaries, neither Buyer
nor any Buyer Subsidiary holds or has held a permit,
registration, certificate or like instrument as a "dealer"
or other collecting agent from a state Taxing Authority
under which it collects sales tax from its business
operations and remits such tax to such Taxing Authority.
SECTION 4.20 Employee Benefits Plans{tc \l 2 "SECTION
4.20 Employee Benefits Plans"}. (a) Schedule 4.20
contains a true and complete list of (i) all of the Plans of
the Buyer, any of the Buyer Subsidiaries, and of any other
companies or entities which constitute a member of the Buyer
ERISA Group, which are presently in effect or, in the case
of Pension Plans, have been in effect at any time prior to
the date hereof and for which there is any liability; (ii)
any other pension, profit sharing, retirement, deferred
compensation, stock purchase, stock option, incentive,
bonus, sabbatical leave, vacation, all employment or
severance Contracts (including, without limitation,
arrangements providing for benefits in the event of a change
of ownership in whole or in part of the Buyer), disability,
hospitalization, health and medical insurance plans,
relocation, child care, educational assistance or other
employee benefit plan or program which any member of the
Buyer ERISA Group maintains or to which any member of the
Buyer ERISA Group has any present or future obligation to
contribute; and (iii) separately identifies all Plans
providing retiree benefits. (The Plans or programs
described in clauses (i), (ii) and (iii) including all non-
qualified plans are herein collectively referred to as the
"Buyer ERISA Group Plans".) Except as set forth in Schedule
4.20, the Buyer has delivered or made available to Sellers
true and complete copies of all documents (including plan
documents and related trust agreements) as they may have
been amended to the date of delivery or availability,
embodying or relating to clauses (i), (ii) and (iii)
hereinabove and a written description of each non-written
plan. Since such date of delivery or availability, the
Buyer ERISA Group Plans have not been amended to materially
change the terms thereof. The Buyer has also delivered to
Sellers true and complete copies of annual reports (Form
5500) for the last three (3) years, summary annual reports,
summary plan descriptions and a summary of material
modifications with respect to each Buyer ERISA Group Plan,
as applicable.
(b) Except as set forth in Schedule 4.20, the
Buyer ERISA Group maintains no tax qualified Pension Plans
nor has the Buyer ERISA Group ever maintained any other tax-
qualified Pension Plan for the benefit of employees.
(c) With respect to each 412 Plan, there has been
no failure to make any contribution or pay any amount due as
required by Section 412 of the Code, Section 302 of ERISA or
the terms of any such 412 Plan, and no request or receipt of
any funding waiver has been requested or received from the
Internal Revenue Service.
(d) Except as set forth in Schedule 4.20, no
trust has been established in connection with any 412 Plan
pursuant to Section 4049 of ERISA (as in effect on December
17, 1987) and no liabilities that would have a material
adverse effect on the Condition of the Buyer have been
asserted against the Buyer or any Buyer Subsidiary or any
member of the Buyer ERISA Group in connection with any such
412 Plan by the PBGC or by a trustee appointed pursuant to
Section 4042(b) or (c) of ERISA, and no Lien has been
attached and neither the PBGC nor the Internal Revenue
Service has threatened to attach a Lien on any Assets of or
any member of the Buyer ERISA Group as a result of any
failure to comply with the Code or the Treasury regulations
thereunder or ERISA.
(e) Except as set forth in Schedule 4.20, the IRS
has issued favorable determination letters to the effect
that each qualified Buyer ERISA Group Plan as amended for
the Tax Reform Act of 1986 and subsequent legislation
qualifies under Section 401(a) of the Code and that the
related trusts are exempt from taxation under Section 501(a)
of the Code and such determination letters remain in effect
and have not been revoked. To the knowledge of Buyer,
nothing has occurred or is expected to occur that would
adversely affect the qualified status of any Buyer ERISA
Group Plans or any related trusts subsequent to the issuance
of such determination letters.
(f) Except as set forth in Schedule 4.20, all
Plans maintained by the Buyer or any member of the Buyer
ERISA Group have been and continue to be in compliance in
all material respects (i) in operation with the requirements
prescribed by any and all Laws and Orders applicable to the
Buyer ERISA Group Plans including but not limited to ERISA
and the Code and with any other contractual obligations and,
except as set forth in Schedule 4.20, all reports and
disclosures including Form 5500s relating to the Buyer ERISA
Group Plans required to be filed with or furnished to
Governmental Bodies, participants or beneficiaries prior to
the Closing Date have been or will be filed or furnished in
a timely manner and in accordance with applicable law; and
(ii) in form with those requirements of the Code and the
regulations thereunder and ERISA which must be met on the
date hereof.
(g) To the knowledge of Buyer, no member of the
Buyer ERISA Group nor any other "disqualified person" or
"party in interest" (as defined in Section 4975 of the Code
and Section 3 of ERISA, respectively) has engaged in any
"prohibited transaction," as such term is defined in Section
4975 of the Code or Section 406 of ERISA, which could
subject any of the Buyer ERISA Group Plans (or their related
trusts), any officer, director or employee of any entity
within the ERISA Group or any trustee, administrator or any
other fiduciary of any of the Buyer ERISA Group Plans to a
tax or penalty imposed under Section 4975 of the Code or
Section 502(i) of ERISA and which would have a material
adverse effect on the Condition of the Buyer.
(h) Except as set forth in Schedule 4.20, there
are no Claims (other than routine claims for benefits in the
ordinary course) pending or, to the knowledge of Buyer,
threatened against any of the Buyer ERISA Group Plans or the
Assets of any of the Buyer ERISA Group Plans or against any
fiduciary of any of the Buyer ERISA Group Plans for which
the Buyer or the Buyer Subsidiaries may be directly or
indirectly liable, through indemnification obligations or
otherwise.
(i) No member of the Buyer ERISA Group has
provided or is required to provide, security to any single-
employer plan pursuant to Section 401(a) of the Code.
(j) The consummation of the Contemplated
Transactions will not accelerate any liability under any of
the Buyer ERISA Group Plans because of an acceleration of
any rights or benefits to which employees may be entitled
thereunder.
(k) With respect to any Buyer ERISA Group Plan
that is a Welfare Plan, (i) each such Welfare Plan, the
contributions to which are claimed as a deduction under any
provision of the Code, is in compliance in all material
respects with all applicable requirements pertaining to such
deduction, (ii) with respect to any welfare benefit fund
within the meaning of Section 419 of the Code that comprises
part of a Welfare Plan, there is no disqualified benefit
within the meaning of Section 4976(b) of the Code that would
subject the Buyer or any of the Buyer Subsidiaries to a tax
under Section 4976(a) of the Code which would have a
material adverse effect on the Condition of the Business,
(iii) any Welfare Plan which is a group health plan within
the meaning of Section 5000(b) of the Code satisfies in all
material respects all of the requirements of Section 4980(B)
of the Code, and (iv) all employer contributions due have
been fully and timely paid or accrued on the books of the
Buyer or the Buyer Subsidiaries.
(l) Schedule 4.20 sets forth the present value of
the liability of each Buyer ERISA Group Plan that is a
Welfare Plan and that provides benefits or coverage
extending beyond a participant's termination of employment
with the Buyer, excluding the liability for those benefits
required by Section 4980B of the Code or those which are
provided at the sole expense of the participant or
beneficiary of the participant.
(m) Except as set forth on Schedule 4.20, neither
the Buyer nor any member of the Buyer ERISA Group has
incurred or reasonably expects to incur (i) any Withdrawal
Liabilities (and no event has occurred which, with the
giving of notice under Section 4219 of ERISA, would result
in Withdrawal Liability), or (ii) any Liabilities under
Title IV of ERISA with respect to any 412 Plan. Schedule
4.20 also identifies (A) each Multiemployer Plan to which
the Buyer or a Buyer ERISA Group Member currently makes, is
obligated to make, or has made or been obligated to make
contributions, (B) provides a schedule of the contributions
made to each such Multiemployer Plan over the past five
years; (C) provides a schedule of any withdrawal liability
payments which a Buyer ERISA Group is obligated to make or
has made in the last 10 years to any Multiemployer Plan and
(D) the amount of withdrawal liability that would be due
assuming complete withdrawal from all Multiemployer Plans to
which Buyer or any member of the Buyer ERISA Group
contribute. With the exception of the representation
contained in this Section 4.20(m), any representation
contained herein with regard to Multiemployer Plans shall be
limited to matters of which the Company has knowledge.
(n) Except as set forth in Schedule 4.20, within
the last five years, neither the Buyer nor any member of the
Buyer ERISA Group has transferred any Assets or Liabilities
of a 412 Plan subject to Title IV of ERISA which had, at the
date of such transfer, Unfunded Pension Liabilities or has
engaged in a transaction which may reasonably be subject to
Section 4212(c) of ERISA.
(o) Neither the Buyer nor any member of the Buyer
ERISA Group sponsors or maintains or has obligations direct,
contingent or otherwise, with respect to any benefit plan
that is subject to the laws of any country other than the
United States.
(p) No Buyer ERISA Group Plan holds securities of
the Buyer or any of the Buyer's Subsidiaries.
(q) There has been no Reportable Event with
respect to any 412 Plan within the last five years.
(r) With respect to any supplemental employee
retirement plans, excess benefit plans (as defined in
Section 3(36) of ERISA), severance arrangements with
individual employees, whether written or not, or other
nonqualified plans or arrangements, Schedule 4.20 identifies
the individuals or class of individuals covered by each such
plan or arrangement.
(s) Except as set forth on Schedule 4.20, as of
December 31, 1994, no 412 Plan sponsored by Buyer or any
member of the Buyer ERISA Group has any amount of Unfunded
Pension Liability.
SECTION 4.21 Officers, Directors and Key Employees{tc
\l 2 "SECTION 4.21 Officers, Directors and Key Employees"}.
Buyer has provided to Sellers a schedule setting forth (a)
the name, total compensation (as reflected on the applicable
forms W-2), date of hire and salary history for the two
years ended December 31, 1994 of each existing director,
executive officer or management employee of Buyer or the
Buyer Subsidiaries earning total compensation for the year
ended December 31, 1994 (as reflected on the applicable
forms W-2) in excess of $75,000, and (b) any payments or
commitments to pay any severance or termination pay to any
such person. Except as set forth on such schedule, the
employment of all such persons is terminable at will.
SECTION 4.22 Employment-Related Matters{tc \l 2
"SECTION 4.22 Employment-Related Matters"}. Except as set
forth in Schedule 4.22, (a) Buyer and the Buyer Subsidiaries
are not a party to any Contract with any labor organization
or other representative of their employees; (b) there is no
unfair labor practice charge or complaint pending or, to the
knowledge of Buyer, threatened against Buyer or any of the
Buyer Subsidiaries; (c) there is no labor strike, slowdown,
work stoppage or other material labor controversy in effect
or, to the knowledge of Buyer, threatened against or
otherwise affecting Buyer or any of the Buyer Subsidiaries;
(d) Buyer and the Buyer Subsidiaries have not experienced
any labor strike, slowdown, work stoppage or similar
material labor controversy within the past three years; (e)
no material Claim before any Governmental Body brought by or
on behalf of any employee, prospective employee, former
employee, retiree, labor organization or other
representative of Buyer's employees or any of the Buyer
Subsidiaries' employees, is pending or, to the knowledge of
Buyer, threatened against Buyer or any of the Buyer
Subsidiaries; (f) to the knowledge of Buyer, neither Buyer
nor any of its Subsidiaries is a party to, or otherwise
bound by, any material Order relating to its employees or
employment practices relating to the employees other than
those affecting the industry generally; (g) Buyer and the
Buyer Subsidiaries are in compliance with all applicable
Laws, policies, procedures, agreements and Contracts,
relating to employment, employment practices, wages, hours,
and terms and conditions of employment except where the
failure to comply would not, individually, or in the
aggregate, have a material adverse effect on the Condition
of Buyer; (h) except with respect to ongoing disputes of a
routine nature, involving immaterial amounts Buyer and the
Buyer Subsidiaries have paid in full to all of their
employees all wages, salaries, commissions, bonuses,
benefits and other compensation due and payable to such
employees on or prior to the date hereof and (i) Buyer and
the Buyer Subsidiaries are in compliance with their
obligations with respect to their employees pursuant to the
WARN, and all other notification and bargaining obligations
arising under any collective bargaining agreement, statute
or otherwise.
SECTION 4.23 Potential Conflicts of Interest{tc \l 2
"SECTION 4.23 Potential Conflicts of Interest"}. Except as
set forth in Schedule 4.23, no officer, director or
Affiliate of Buyer or any of the Buyer Subsidiaries, no
spouse of any such officer, director or Affiliate, nor, to
the knowledge of any Buyer, no entity controlled by one or
more of the foregoing:
(a) owns, directly or indirectly, any interest in
(excepting less than 1% stock holdings for investment
purposes in securities of publicly held and traded
companies), or is an officer, director, employee or
consultant of, any person that carries on business in
competition with Buyer or any Buyer Subsidiary;
(b) owns, directly or indirectly, in whole or in
part, any material Asset that Buyer or any of the Buyer
Subsidiaries uses in the conduct of its business; or
(c) has any material Claim whatsoever against, or
owes any amount to, Buyer or any of the Buyer Subsidiaries,
except for claims in the ordinary course of business such as
for accrued vacation pay and accrued benefits under employee
benefit plans.
SECTION 4.24 Insurance{tc \l 2 "SECTION 4.24
Insurance"}. The insurance policies, fidelity and surety
bonds and fiduciary liability policies covering the Assets,
Business, operations, employees, officers and directors of
Buyer and the Buyer Subsidiaries are of the type and in
amounts customarily carried by persons conducting businesses
similar to those of Buyer and the Buyer Subsidiaries. There
is no Claim by Buyer or any of the Buyer Subsidiaries
pending under any of such policies or bonds as to which
coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds, or requirement by
any insurer to perform work which has not been satisfied.
All premiums payable under all such policies and bonds have
been paid and Buyer and the Buyer Subsidiaries are otherwise
in compliance in all material respects with the terms and
conditions of all such policies and bonds. Such policies of
insurance and bonds (or other policies and bonds providing
substantially similar insurance coverage) other than those
relating to director and officer liability insurance have
been in effect since January 1, 1994 and remain in full
force and effect. The insurance in effect with respect to
the Buyer Real Property is in an amount of the full
replacement value of the buildings and improvements. Buyer
does not know of any threatened termination of, premium
increase with respect to, or uncompleted requirements under
any of such policies or bonds.
SECTION 4.25 Suppliers, Customers and Contractors{tc
\l 2 "SECTION 4.25 Suppliers, Customers and Contractors"}.
Schedule 4.25A lists, by dollar volume paid for the 12
months ended December 31, 1994, the 15 largest raw material
suppliers and the 25 largest customers of Buyer or Buyer
Subsidiary. Schedule 4.25B lists the names and addresses of
those Contractors retained by Buyer or any of the Buyer
Subsidiaries involving payments, for the 12 months ended
December 31, 1994, in excess of $50,000. The relationships
of Buyer and the Buyer Subsidiaries with such suppliers,
customers and Contractors are reasonable commercial working
relationships and: (i) no supplier or Contractor has
refused to provide credit, or has suspended the provision of
credit, to Buyer or any of the Buyer Subsidiaries as a
result of the failure or delay in payment of amounts due to
such suppliers or Contractors; (ii) all amounts owing to
such suppliers and Contractors, if not in dispute, have been
paid in accordance with their respective terms; (iii) no
person within the last twelve months has threatened in
writing to cancel, or otherwise terminate, the relationship
of such person with Buyer or any of the Buyer Subsidiaries,
and (iv) no person during the last twelve months has
decreased materially or, to the knowledge of Buyer,
threatened in writing to decrease or limit materially, its
relationship with Buyer or any of the Buyer Subsidiaries or,
to the knowledge of Buyer intends to decrease or limit
materially its services or supplies to Buyer or any of the
Buyer Subsidiaries or its usage or purchase of the services
or products of Buyer or any of the Buyer Subsidiaries.
SECTION 4.26 Compliance with Laws{tc \l 2 "SECTION
4.26 Compliance with Laws"}. Neither Buyer nor any of the
Buyer Subsidiaries is in violation of any applicable Order
or Law of any Governmental Bodies affecting its Assets,
affairs or business, where the effect of any such violation,
individually or in the aggregate, would have a materially
adverse effect on the Condition of Buyer. Neither Buyer nor
any of the Buyer Subsidiaries has made any illegal payment
to officers or employees of any Governmental Body, or made
any illegal payment to customers for the sharing of fees or
to customers or suppliers for rebating of charges, or
engaged in any other illegal reciprocal practice, or made
any illegal payment or given any other illegal consideration
to purchasing agents or other representatives of customers
in respect of sales made or to be made by Buyer or any of
the Buyer Subsidiaries.
SECTION 4.27 Permits{tc \l 2 "SECTION 4.27
Permits"}. Buyer and the Buyer Subsidiaries have obtained
all Permits of, and have made all required registrations and
filings with, any Governmental Body that are necessary to
the conduct of their respective businesses, except for such
Permits which, if not in the possession of Buyer or the
Buyer Subsidiaries, would not have a materially adverse
effect on the Condition of Buyer. All Permits material to
the Condition of Buyer are in full force and effect; no
material violations are or have been recorded in respect of
any such Permit; and no proceeding is pending or threatened
to revoke or limit any such Permit.
SECTION 4.28 Environmental Matters{tc \l 2 "SECTION
4.28 Environmental Matters"}. (a) With respect to each of
Buyer and each of the Buyer Subsidiaries, there has been no
manufacture, refining, storage, transport, disposal or
treatment of Hazardous Substances by such party (or, to the
knowledge of such party, its predecessor in interest), or
any Release at, on or under, any Buyer Real Property by the
Buyer or any Buyer Subsidiary or, to Buyer's knowledge, by
any other person, in violation of any Environmental Law or
which would require remedial action under any Environmental
Law; to the knowledge of Buyer, except as set forth in
Schedule 4.28, none of the soil, ground water or surface
water of such Buyer Real Property is contaminated by any
Release.
(b) During the past five years neither Buyer nor
any of the Buyer Subsidiaries has received any written (i)
notice of any violation with respect to any Environmental
Law; (ii) notice of any actual, pending or threatened
Regulatory Action involving such party, or any present or
former owner, lessee or operator of the Buyer Real Property;
or (iii) notice of any Third Party Claim.
(c) To the knowledge of Buyer, except as set
forth in Schedule 4.28, (i) there are no incinerators,
septic tanks, underground tanks or cesspools located on, at
or under the Buyer Real Property, (ii) all sewage from the
Buyer Real Property is discharged into a public sanitary
sewer system, and (iii) there has been no Release by Buyer
or any of the Buyer Subsidiaries into the atmosphere,
adjoining or adjacent to any body of water, or on to
adjacent property.
(d) Each of Buyer and the Buyer Subsidiaries, as
applicable, has obtained, and is in compliance with, all
material Environmental Permits except where the failure to
obtain or be in compliance with any such Environmental
Permits would not, singly or in the aggregate, have a
material adverse effect on the Condition of Buyer.
(e) Except as set forth on Schedule 4.28 or as
would not, singly or in the aggregate, have a material
adverse effect on the Condition of Buyer, all such
Environmental Permits are in full force and effect, and
Buyer and each Subsidiary has made all appropriate filings
for issuance or renewal of such Environmental Permits.
(f) Except as set forth on Schedule 4.28 or as
would not, singly or in the aggregate, have a material
adverse effect on the Condition of Buyer, there are no
facts, events, conditions, circumstances, activities,
practices, incidents, actions, omissions or plans known to
Buyer or the Buyer Subsidiaries that: (i) may give rise to
any Regulatory Action including Buyer or any of the Buyer
Subsidiaries or the Buyer Real Property, or (ii) is
reasonably likely to form the basis of any Third Party Claim
involving Buyer, any of the Buyer Subsidiaries or the Buyer
Real Property. Except as set forth on Schedule 4.28, there
are no Regulatory Actions or Third Party Claims relating to,
arising from or otherwise affecting the Buyer Real Property.
SECTION 4.29 Finders; Fees{tc \l 2 "SECTION 4.29
Finders; Fees"}. Except for Corestates Investment Banking
whose fees will be paid by Buyer, there is no investment
banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf of Buyer or
any Buyer Subsidiary who might be entitled to any fee or
commission from Buyer or any Buyer Subsidiary upon
consummation of the Contemplated Transactions.
SECTION 4.30 Disclosure{tc \l 2 "SECTION 4.30
Disclosure"}. Neither this Agreement, the Schedules hereto,
nor any audited or unaudited financial statements, documents
or certificates furnished or to be furnished to Sellers by
or on behalf of Buyer pursuant to this Agreement contains
any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements
contained herein or therein not misleading. There are no
facts which would materially adversely affect the Condition
of Buyer which have not been set forth herein, or in any
Schedule hereto, or in any certificate or statement
furnished or to be furnished to Sellers by Buyer.
ARTICLE V
COVENANTS AND AGREEMENTS{tc \l 1 "ARTICLE V
COVENANTS AND AGREEMENTS"}
SECTION 5.1 Conduct of Business of Company{tc \l
2 "SECTION 5.1 Conduct of Business of Company"}. (a) From
the date hereof through the Closing Date, except as set
forth in Schedule 5.1, Triumph agrees to use reasonable
efforts to cause the Company and each Company Subsidiary:
(i) To conduct their operations according to
their ordinary and usual course of business consistent with
past practice, to preserve intact their present business
organization, to keep available the services of their
present officers and employees, to use reasonable efforts to
preserve and maintain their Assets and to use reasonable
efforts to preserve their relationships with customers,
suppliers, Contractors and others having business dealings
with them.
(ii) To maintain in the ordinary course of
business consistent with past practice and in accordance
with all Contracts, the Real Property, all their material
structures, equipment and other Tangible Property in their
present repair, order and condition, except for depletion,
depreciation and ordinary wear and tear.
(iii) To keep in full force and effect
insurance comparable in amount and scope of coverage to
insurance now carried by them.
(iv) To perform all of their obligations
under the Contracts disclosed on any Schedule hereto and not
enter into any material amendments or modifications thereof
other than in the ordinary course of business or as required
by this Agreement.
(v) To maintain their books of account and
records in the usual, regular and ordinary manner.
(vi) To comply in all material respects with
all Laws applicable to them and pay all Taxes, which become
due and payable other than Taxes contested in good faith and
for which adequate reserves have been established.
(vii) Not to incur any material Liability
nor to enter into any Contract with a value in excess of
$250,000, except in the ordinary course of business.
(viii) Not to cause or permit any Liens to
be created or any conditions to exist which may become a
Lien.
(ix) Not to undertake (nor permit to be
undertaken) any of the actions specified in Section 3.13
which are within the control of a Seller.
(x) With respect to any employees of the
Company or any Company Subsidiary not to: (A) make,
institute, agree to or change any bonus, profit sharing,
pension, retirement, severance, termination, "parachute" or
other similar arrangement or plan for employees; and (B)
otherwise than in accordance with past practices and in
similar amounts: (1) increase the compensation payable or
to become payable to any employee, and (2) accrue any bonus,
percentage of compensation or other like benefit to or for
the credit of any employee.
(xi) Not to authorize or make any capital
expenditures in excess of $250,000 or not listed on Schedule
5.1.
(xii) Not to effectuate a "plant closing"
or "mass layoff," as those terms are defined in WARN,
affecting in whole or in part any of its facilities or
operating units or any of its employees.
(b) From the date hereof through the Closing
Date, each Seller agrees to use reasonable efforts to cause
the affairs of the Company and each Company Subsidiary to be
conducted in such a manner so that the representations and
warranties of Sellers contained herein shall continue to be
true and correct on and as of the Closing Date as if made on
and as of the Closing Date.
SECTION 5.2 Conduct of Business of Buyer{tc \l 2
"SECTION 5.2 Conduct of Business of Buyer"}. (a) Except
as set forth in Schedule 5.2, from the date hereof through
the Closing Date, Buyer agrees, and will cause each Buyer
Subsidiary, to comply with all the terms and condition set
forth in Section 7 of the Stockholders' Agreement. In
addition, from the date hereof through the Closing Date,
Buyer agrees, and will cause each Buyer Subsidiary:
(i) To conduct their operations according to
their ordinary and usual course of business consistent with
past practice, to use reasonable efforts to preserve intact
their present business organization, to keep available the
services of their present officers and employees, to use
reasonable efforts to preserve and maintain their Assets and
to use reasonable efforts to preserve their relationships
with customers, suppliers, Contractors and others having
business dealings with them.
(ii) To maintain in the ordinary course of
business consistent with past practice and in accordance
with all Contracts, the Buyer Real Property, all their
material structures, equipment and other Tangible Property
in their present repair, order and condition, except for
depletion, depreciation and ordinary wear and tear.
(iii) To keep in full force and effect
insurance comparable in amount and scope of coverage to
insurance now carried by them.
(iv) To perform all of their obligations
under the Contracts disclosed on any Schedule hereto and not
enter into any material amendments or modifications thereof
other than in the ordinary course of business or as required
by this Agreement.
(v) To maintain their books of account and
records in the usual, regular and ordinary manner.
(vi) To comply in all material respects with
all Laws applicable to them and pay all Taxes, which become
due and payable other than Taxes contested in good faith and
for which adequate reserves have been established.
(vii) Not to incur any material Liability
nor to enter into any Contract with a value in excess of
$250,000, except in the ordinary course of business.
(viii) Not to cause or permit any Liens to
be created or any conditions to exist which may become a
Lien, except in the ordinary course of business.
(ix) Not to undertake (nor permit to be
undertaken) any of the actions specified in Section 4.13
which are within the control of Buyer.
(x) With respect to any employees of Buyer
or any Buyer Subsidiary not to: (A) make, institute, agree
to or change any bonus, profit sharing, pension, retirement,
severance, termination, "parachute" or other similar
arrangement or plan for employees, except in accordance with
past practices; and (B) otherwise than in accordance with
past practices and in similar amounts: (1) increase the
compensation payable or to become payable to any employee,
and (2) accrue any bonus, percentage of compensation or
other like benefit to or for the credit of any employee.
(xi) Not to authorize or make any capital
expenditures in excess of $250,000 or not listed on Schedule
5.2.
(xii) Not to effectuate a "plant closing"
or "mass layoff," as those terms are defined in WARN,
affecting in whole or in part any of its facilities or
operating units or any of its employees.
(b) From the date hereof through the Closing
Date, except in the ordinary course of business and for
changes disclosed in any Schedule or otherwise contemplated
hereby, Buyer agrees to use reasonable efforts to conduct
the affairs of Buyer (and to cause the affairs of each Buyer
Subsidiary to be conducted) in such a manner so that the
representations and warranties of Buyer contained herein
shall continue to be true and correct on and as of the
Closing Date as if made on and as of the Closing Date.
SECTION 5.3 Corporate Examinations and
Investigations{tc \l 2 "SECTION 5.3 Corporate Examinations
and Investigations"}. (a) Prior to the Closing Date,
Sellers agree that Buyer shall be entitled, through the
directors, officers, employees, attorneys, accountants,
representatives, consultants and other agents (collectively,
"Representatives") of Buyer to make such investigation of
the Assets, Businesses and operations of the Company and the
Company Subsidiaries, and such examination of the books,
records and financial condition of the Company and the
Company Subsidiaries, as Buyer reasonably deems necessary.
Any such investigation and examination shall be conducted at
reasonable times, under reasonable circumstances and upon
reasonable notice, and the Sellers shall, and shall cause
the Company and the Company Subsidiaries to, cooperate fully
therein. No investigation by Buyer shall diminish or
obviate any of the representations, warranties, covenants or
agreements of a Seller contained in this Agreement. In
order that Buyer may have full opportunity to make such
physical, business, accounting and legal review, examination
or investigation as it may reasonably deem necessary of the
affairs of the Company and the Company Subsidiaries, Sellers
shall make available and shall cause the Company and the
Company Subsidiaries to make available to the
Representatives of Buyer during such period, without however
causing any unreasonable interruption in the operations of
the Company, all such information and copies of such
documents and records concerning the affairs of the Company
and the Company Subsidiaries as such Representatives may
reasonably request, shall permit the Representatives of
Buyer access to the Assets of Company and the Company
Subsidiaries and all parts thereof and to their respective
customers, suppliers, Contractors and others, and shall
cause the Company and the Company Subsidiaries'
Representatives to cooperate fully in connection with such
review and examination.
(b) Prior to the Closing Date, Buyers agree that
Sellers shall be entitled, through their Representatives to
make such investigation of the assets, Businesses and
operations of Buyer and the Buyer Subsidiaries, and such
examination of the books, records and financial condition of
Buyer and the Buyer Subsidiaries, as Sellers reasonably deem
necessary. Any such investigation and examination shall be
conducted at reasonable times, under reasonable
circumstances and upon reasonable notice, and Buyer shall,
and shall cause the Buyer Subsidiaries to, cooperate fully
therein. No investigation by Sellers shall diminish or
obviate any of the representations, warranties, covenants or
agreements of Buyer contained in this Agreement. In order
that Sellers may have full opportunity to make such
physical, business, accounting and legal review, examination
or investigation as they may reasonably deem necessary of
the affairs of Buyer and the Buyer Subsidiaries, Buyer shall
make available and shall cause the Buyer Subsidiaries to
make available to the Representatives of Sellers during such
period, without however causing any unreasonable
interruption in the operations of Buyer or the Buyer
Subsidiaries, all such information and copies of such
documents and records concerning the affairs of Buyer and
the Buyer Subsidiaries as such Representatives may
reasonably request, shall permit the Representatives of
Sellers access to the assets of Buyer and the Buyer
Subsidiaries and all parts thereof and to their respective
customers, suppliers, Contractors and others, and shall
cause Buyer's and the Buyer Subsidiaries' Representatives to
cooperate fully in connection with such review and
examination.
SECTION 5.4 Additional Financial Statements{tc \l 2
"SECTION 5.4 Additional Financial Statements"}. (a) Prior
to the Closing Date, as soon as available and in any event
within thirty (30) calendar days after the end of each
monthly accounting period of the Company, Sellers shall
furnish Buyer, with a management report with respect to
gross sales, receivables, estimated inventories, capital
expenditures and related information if and only to the
extent such management report is prepared for the use of the
management of the Company and the Company Subsidiaries, but
in no event, in any less detail than is consistent with past
practice.
(b) Prior to the Closing Date, as soon as
available and in any event within thirty (30) calendar days
after the end of each monthly accounting period of Buyer,
Buyer shall furnish Sellers with a management report with
respect to gross sales, receivables, estimated inventories,
capital expenditures and related information if and only to
the extent such management report is prepared for the use of
the management of Buyer and Buyer Subsidiaries, but in no
event, in any less detail than is consistent with past
practice.
SECTION 5.5 Filings and Authorizations{tc \l 2
"SECTION 5.5 Filings and Authorizations"}. Sellers and
Buyer, before or promptly after the execution and delivery
of this Agreement, shall file or supply, or cause to be
filed or supplied, all notifications, reports and other
information required to be filed or supplied pursuant to the
HSR Act in connection with the Contemplated Transactions and
which are required by Law to effectuate the consummation of
the Contemplated Transactions. Sellers and Buyer shall
cooperate with each other in connection with such filing and
furnish each other with copies of such filings and any
correspondence received from any Governmental Body in
connection therewith. Sellers and Buyer, as promptly as
practicable, shall make, or cause to be made, all such other
filings and submissions under such Laws as are applicable to
them or to their respective Subsidiaries and Affiliates, as
may be required for them to consummate the Contemplated
Transactions in accordance with the terms of this Agreement.
All such filings shall comply in form and content in all
material respects with applicable Law.
SECTION 5.6 Efforts to Consummate{tc \l 2 "SECTION
5.6 Efforts to Consummate"}. (a) Subject to the terms and
conditions herein provided, each party hereto, without
payment or further consideration, shall use its reasonable,
good faith efforts to take or cause to be taken all action
and to do or cause to be done all things necessary, proper
or advisable under applicable Laws, Permits and Orders to
consummate and make effective, as soon as reasonably
practicable, the Contemplated Transactions, including, but
not limited to, the obtaining of all Seller Required
Consents and Buyer Required Consents and Permits of any
third party, whether private or governmental, required in
connection with such party's performance of such
transactions and each party hereto shall cooperate with the
other in all of the foregoing.
(b) Without limiting the generality of the
foregoing, prior to the Closing:
(i) Bill Blass, Ltd., pursuant to the
License Agreement dated as of October 1, 1989, by and
between Bill Blass, Ltd. and Wundies Enterprises, Inc.,
pursuant to the License Agreement, dated June 15, 1991
between Wundies Enterprises, Inc. and the Company, shall
have consented to (A) the continued distribution by the
Company pursuant to such Agreements of Company Products
under the name of "Bill Blass" as part of a combined
enterprise that also distributes products under the name of
"Oscar de La Renta"; (B) the change of control of the
Company contemplated by this Agreement and (C) a Company
Merger, if one is effected.
(ii) Sellers shall cause the Company to have
complied with the provisions of Section 14(f) of the 1934
Act to permit the Board of Directors of the Company to be
reconstituted as of the Closing Date with nominees
designated by Buyer.
(iii) Sellers shall use reasonable
efforts to obtain the Seller Required Consents in form that
will permit, without further consent, a Company Merger, if
one is effected; provided that the failure to obtain any
such consent in such form will not constitute a default
hereunder.
(iv) The Contracts identified by means of an
asterisk on Schedule 3.15 shall have been terminated without
liability on the part of the Company, any Company
Subsidiary, Buyer or any Buyer Subsidiary.
(c) Whenever this Agreement requires the Company
or the Company Subsidiaries to take any action (or to use
any effort to take such action) or refrain from taking any
action, such requirement shall be deemed to include an
undertaking on the part of Triumph to cause the Company or
the Company Subsidiaries concerned to take (or use the
required effort to take) or refrain from taking such action.
SECTION 5.7 Negotiations With Others{tc \l 2 "SECTION
5.7 Negotiations With Others"}. (a) From and after the
date hereof unless and until this Agreement shall have
terminated in accordance with its terms, Triumph and each of
Spiesshofer and Magrone acting solely in the capacity as
stockholders of the Company, agree that none of them will
directly or indirectly to (i) solicit, engage in discussions
or engage in negotiations with any person (other than Buyer
or any of its Affiliates) with respect to an Acquisition
Proposal; (ii) provide information to any person (other than
Buyer or any of its Affiliates) in connection with an
Acquisition Proposal; or (iii) enter into any transaction
with any person (other than Buyer or any of its Affiliates)
with respect to an Acquisition Proposal. If any Seller, the
Company, any Company Subsidiary or Representative receives
any offer or proposal to enter into discussions or
negotiations relating to any of the above, Sellers will
immediately notify Buyer in writing as to the identity of
the offeror or the party making any such proposal and the
specific terms of such offer or proposal.
(b) In addition, from and after the date hereof
unless and until this Agreement shall have been terminated
in accordance with its terms, Triumph agrees that it will
not, directly or indirectly, vote its securities in the
Company to authorize; (i) the sale of all or substantially
all of the assets of the Company to any person other than
Buyer or any of its Affiliates, or (ii) a merger or other
business combination with any Person other than Buyer or any
of its Affiliates.
(c) Neither Spiesshofer nor Magrone shall be
deemed to be in breach of the terms hereof by reason of
either or both of them taking or refusing to take any action
that, in either of his or their reasonable judgment, would
cause them, in their capacities as directors of the Company,
to breach their fiduciary duties to the Company and its
stockholders.
SECTION 5.8 Notices of Certain Events{tc \l 2
"SECTION 5.8 Notices of Certain Events"}. Prior to the
Closing Date, Sellers shall advise Buyer promptly after
learning, after the date thereof, of any management employee
of the Company or any of the Company Subsidiaries whose base
compensation in the Company's 1994 fiscal year exceeded
$75,000, who intends to cancel or otherwise terminate his or
her relationship with the Company or any of the Company
Subsidiaries. Prior to the Closing Date, Buyer shall advise
Triumph promptly after learning, after the date thereof, of
any management employee of Buyer or any Buyer Subsidiary
whose base compensation in its 1994 fiscal year exceeded
$75,000, who intends to cancel or otherwise terminate his or
her relationship with Buyer or any of the Buyer
Subsidiaries. In addition, prior to the Closing Date, each
of Sellers and Buyer shall promptly notify the other of:
(a) any notice or other communication from any
person alleging that the consent of such person is or may be
required in connection with the Contemplated Transactions;
(b) any notice or other communication from any
Governmental Body in connection with the Contemplated
Transactions; and
(c) any event, condition or circumstance
occurring from the date hereof through the Closing Date that
would constitute a violation or breach of any representation
or warranty, whether made as of the date hereof or as of the
Closing Date, or that would constitute a violation or breach
of any covenant of any party contained in this Agreement.
SECTION 5.9 Public Announcements{tc \l 2 "SECTION 5.9
Public Announcements"}. Prior to the Closing Date, Sellers
and Buyer will consult with each other before issuing any
press release or otherwise making any public statement with
respect to the Contemplated Transactions, and will not issue
any such press release or make any such public statement
without the prior approval of the other party, except as may
be required by applicable Law in which event the other party
shall have the right to review and comment upon any such
press release or public statement prior to its issuance.
The fact that a party has the foregoing right to review or
comment shall not mean that such party's consent is needed
prior to the issuance of such press release or public
statement.
SECTION 5.10 Confidentiality{tc \l 2 "SECTION 5.10
Confidentiality"}. (a) Buyer, on the one hand, and each
Seller, on the other hand, each shall hold in strict
confidence, and shall use its best efforts to cause all its
Representatives to hold in strict confidence, unless
compelled to disclose by judicial or administrative process,
or by other requirements of Law, all information concerning
the Sellers, the Company and the Company Subsidiaries (in
the case of Buyer) and Buyer and the Buyer Subsidiaries (in
the case of the Sellers) which is created or obtained prior
to, on or after the dates hereof in connection with the
Contemplated Transactions, and Buyer and Sellers each shall
not use or disclose to others, or permit the use of or
disclosure of, any such information created or obtained
except to the extent that such information can be shown (i)
to have been previously known by Buyer or any Seller as the
case may be and (ii) to have been made known to Buyer or
Seller, as the case may be, from a third-party not in breach
of any confidentiality requirement or (iii) to have been
made public through no fault of Buyer or any Seller, as the
case may be, or any of their respective Representatives, and
will not release or disclose such information to any other
person, except its officers, directors, employees,
Representatives and lending institutions who need to know
such information in connection with this Agreement and who
shall be advised of the provisions of this Section 5.10 and
shall agree to be bound by the terms hereof.
(b) In the event that a party (the "First Party")
or its Representatives are requested or required (by oral
questions, interrogatories, requests for information or
documents subpoena, civil investigative demand or similar
process) to make a disclosure in violation of the provisions
of this Section 5.10, it is agreed that the First Party will
provide the other (the "Second Party") with prompt notice of
such request(s) so that the Second Party may seek an
appropriate protective order and/or waive compliance with
the provisions of this Agreement. If in the absence of a
protective order or the receipt of a waiver hereunder, the
First Party or its Representatives are nonetheless, in the
opinion of the First Party's counsel, compelled to make any
such disclosure to any Governmental Body or else stand
liable for contempt or suffer other censure or penalty, the
First Party or its Representative may make any such
disclosure to such Governmental Body without liability
hereunder, provided, however, that such disclosure may be
made only after the First Party has given the Second Party
notice of such requirement and the Second Party has had 48
hours (or such lesser time as is reasonably available) to
obtain a protective order or restrictions on any such
requirement.
(c) If the Contemplated Transactions are not
consummated, such confidence shall be maintained except (i)
as required by Law or (b) to the extent such information is
made public through no fault of Buyer or any Seller, as the
case may be, or any of their respective Representatives. If
the Contemplated Transactions are not consummated and if
requested by any Seller or Buyer, as the case may be, Buyer
shall return to Sellers' Agent all tangible evidence of such
information regarding Sellers, the Company and the Company
Subsidiaries and Sellers shall return to Buyer all tangible
evidence of such information regarding Buyer and Buyer
Subsidiaries.
SECTION 5.11 Expenses. {tc \l 2 "SECTION 5.11
Expenses. "} (a) Buyer will pay or reimburse the Company or
Sellers, as appropriate, for the following fees and expenses
incurred in connection with the negotiation and consummation
of the Contemplated Transactions: (i) any and all sales,
gains, transfer or documentary Taxes and recording and
filing fees applicable to the transfers or deemed transfers
under applicable United States Law of any Asset located in
the United States and the Purchased Shares to Buyer; (ii)
the reasonable legal fees and expenses of counsel to
Sellers; (iii) the fees and expenses of Tucker Anthony
Incorporated under Contract numbered 33 referred to in
Schedule 3.15; (iv) up to $65,175 in respect of the fees and
expenses of Coopers & Lybrand L.L.P., in connection with
their due diligence investigation relating to the
Contemplated Transactions, and any balance of such fees and
expenses will be borne and paid by Triumph; and (v) any
other fees or expenses incurred by the Company or the
Sellers to any persons other than persons enumerated in the
foregoing subclauses of this Section 5.11(a) provided that
Buyer shall not be required to pay or reimburse fees or
expenses in accordance with the provisions of this Section
5.11(a)(v) in an amount exceeding $78,705.30 unless such
fees or expenses shall have been authorized by Buyer in
writing.
(b) Except as otherwise specifically provided
herein, Buyer and Sellers shall bear their respective
expenses incurred in connection with the preparation,
execution and performance of this Agreement and the
Contemplated Transaction, including, without limitation, all
fees and expenses of their respective Representatives.
SECTION 5.12 Tax Matters{tc \l 2 "SECTION 5.12 Tax
Matters"}. (a) From the date hereof through the Closing
Date, Sellers shall cause the Company and the Company
Subsidiaries to file in a timely manner all required Returns
to be filed on or before the Closing Date, taking into
account any extensions obtained from the appropriate taxing
authority, and pay Taxes of any kind or nature that are due
and payable thereon. From the date hereof through the
Closing Date, Buyer shall, and shall cause the Buyer
Subsidiaries to, file in a timely manner all required
Returns to be filed on or before the Closing Date, taking
into account any extensions obtained from the appropriate
taxing authority, and pay Taxes or any kind or nature that
are due and payable thereon.
(b) Between the date hereof and the Closing Date,
without the prior written consent of Buyer which consent
shall not be unreasonably withheld or delayed, neither the
Company nor any of the Company Subsidiaries shall make or
change any election, change an annual accounting period,
adopt or change any accounting method, relating to the
Company or the Company Subsidiaries or surrender any right
to claim a refund of Taxes. Between the date hereof and the
Closing Date, the Company or any Company Subsidiary shall be
permitted to file any amended Return, enter into any closing
agreement, settle any Tax Claim, consent to any extension or
waiver of the limitation period applicable to any Tax Claim
relating to the Company or any Company Subsidiaries, take
any action or omit to take any action, even if any such
election, adoption, change, amendment, agreement,
settlement, surrender, consent or other action or omission
would have the effect of increasing the current or future
Tax liability of the Company, any Company Subsidiary, Buyer
or any Affiliate of Buyer provided that promptly after
taking any such action or omitting to take any such action,
Triumph promptly gives written notice thereof to Buyer.
SECTION 5.13 Restrictive Covenant.{tc \l 2 "SECTION
5.13 Restrictive Covenant."} (a) Each of Triumph,
Spiesshofer and Magrone and, by its signature to this
Agreement, Triumph International Spiesshofer & Braun, a
Swiss Kollektivgesellschaft (partnership), agree as follows:
(i) during the seven (7) year period
commencing on the Closing Date, he or it will not, directly
or indirectly, sell or distribute for resale in the United
States (the "Territory") through any person other than Buyer
or a Buyer Subsidiary any identical style of foundation
garment distributed on the Closing Date by the Company or by
Triumph through the Company unless the Company, Buyer and
the Buyer Subsidiaries have discontinued the sale or
distribution of such style, or gross sales of such style for
the then most recently completed fiscal year shall have been
less than $25,000, in which event he or it shall have the
right to distribute such style free of any restrictions
contained in this Agreement;
(ii) during the period commencing on the
Closing Date and terminating on the date six (6) months
after the date that Triumph ceases for any reason whatsoever
(including, without limitation, by reason of voluntary
resignation of Triumph's designees or pursuant to Section
1(b) of the Stockholders Agreement) to have any designees on
the Board of Directors of Buyer and waives in writing all of
its rights under Section 8 (g) of the Stockholders
Agreement, he or it will not purchase a business which on
the date of such purchase is engaged in the foundation
garment business in the Territory; provided, however that if
he or it shall desire to engage in bona fide negotiations
with respect to the purchase of any such business prior to
he or it engaging in such negotiations, Triumph shall cause
any designees of Triumph then on the Board of Directors of
Buyer to resign from such Board and shall waive all of its
rights under Sections 8(g) and 1(b) of the Stockholders
Agreement (as well as its rights thereafter to designate
persons to serve on the Board of Directors of Buyer but
Triumph shall continue to be obligated to vote as set forth
in the Stockholders Agreement until such obligation would
otherwise terminate in accordance with the Stockholders
Agreement); provided further, however, that (I) nothing
contained in this clause (ii) shall limit his or its right
to effect a purchase of a company or business that includes
a foundation garment business in the Territory which
foundation garment business does not constitute a
significant portion of the purchased company or business if
the principal purpose of effecting such purchase is to
purchase other businesses and (II) the passive ownership of
not more than 4% of the issued and outstanding shares of a
class of securities regularly traded on a national
securities exchange or quoted in an automated inter-dealer
quotation system shall not be prohibited by this clause
(ii); and
(iii) during the two (2) year period
commencing on the Closing Date, he or it will not, directly
or indirectly, sell or distribute, or seek to sell or
distribute, to Wal-Mart, J.C. Penney, K-Mart, Sears,
Mervyns, Target Stores or Dillards any foundation garments
that will be sold by such retailers; it being understood and
agreed that nothing contained in this clause (iii) shall, or
shall be construed to, preclude Triumph or its affiliates
from selling or distributing foundation garments to, or
manufacturing foundation garments for, Mast Industries, Inc.
or Goddess which are to be sold or distributed to such
retailers so long as Triumph or its affiliates have not (x)
arranged with such retailers to buy foundation garments from
Mast Industries, Inc. or Goddess in a manner intended to
circumvent this Section 5.13(a)(iii), or (y) participated in
any way, other than having acted as a contractor or a
subcontractor, in the sale or distribution arrangements to
such retailers.
(b) Notwithstanding anything to the contrary contained
herein, (I) Triumph, Spiesshofer and Triumph International
Spiesshofer & Braun shall be permitted, directly or
indirectly, to continue to sell or otherwise provide
products, including foundation garments, to Mast Industries,
Inc. and Goddess (and to their respective successors and
affiliates) regardless of to whom Mast Industries, Inc. or
Goddess distributes or sells such products so long as
Triumph or its affiliates have not (x) arranged with such
retailers to buy foundation garments from Mast Industries,
Inc. or Goddess in a manner intended to circumvent Section
5.13(a)(iii), or (y) participated in any way, other than
having acted as a contractor or a subcontractor, in the sale
or distribution arrangement to such retailers, (II) except
as otherwise expressly prohibited by Sections 5.13 (a) (i)
and (iii) and subject to Buyer's rights, if any, pursuant to
Section 5.14 hereof, Triumph, Spiesshofer and Triumph
International Spiesshofer & Braun shall not be prohibited,
directly or indirectly, from engaging in any way in the
manufacture, sale or distribution for resale of foundation
garments, whether branded or unbranded, to retailers (or to
distributors who sell to retailers), and (III) Triumph,
Spiesshofer and Triumph International Spiesshofer & Braun
shall not be prohibited, directly or indirectly, from
engaging in the manufacture, as a contractor or
subcontractor, of foundation garments for a third party
(other than to a third party which is primarily a retailer,
or affiliated with a party that is primarily a retailer,
except that they shall not be so prohibited from acting as a
contractor or subcontractor to any such third party that is
primarily a retailer, or affiliated with a party that is
primarily a retailer, unless they are otherwise expressly
prohibited from selling or distributing to such party
pursuant to Section 5.13(a)(iii)) engaged in the sale or
distribution of foundation garments in the Territory.
(c) Each Seller acknowledges and agrees that the
restrictive covenants set forth in this Section 5.13
(collectively, the "Restrictive Covenants") are reasonable
and valid in geographical and temporal scope and in all
other respects. If any court determines that any of the
Restrictive Covenants, or any part thereof, is invalid or
unenforceable, the remainder of the Restrictive Covenants
shall not thereby be affected and shall be given full force
and effect, without regard to the invalid or unenforceable
parts.
(d) If any court determines that any of the
Restrictive Covenants, or any part thereof, is invalid or
unenforceable for any reason, such court shall have the
power to modify such Restrictive Covenant, or any part
thereof, and, in its modified form, such Restrictive
Covenant shall then be valid and enforceable.
(e) In the event of a breach or threatened breach
by a Seller of any of the covenants contained in this
Section 5.13, Buyer shall be entitled to a temporary
restraining order, a preliminary injunction and/or a
permanent injunction restraining such Seller from breaching
or continuing to breach any of said covenants.
SECTION 5.14 Possible Future Ventures.{tc \l 1
"SECTION 5.14 Possible Future Ventures."} Until the
earlier to occur of (i) the Second Sale Date (as such term
is defined in the Stockholders' Agreement) and (ii) five
years from the Closing Date, Triumph agrees that if it
wishes to appoint a distributor, agent or licensee in the
United States with respect to the foundation garments it
manufacturers or distributes under the Triumph trademark,
Triumph will so advise Buyer and give Buyer a reasonable
opportunity to conduct negotiations with respect to
Triumph's appointment of Buyer as such distributor, agent or
licensee; provided, however, that nothing contained herein
shall be construed as an obligation of Triumph to so appoint
Buyer and Buyer shall have no rights against Triumph of any
nature whatsoever arising by reason of Triumph's decision,
for any reason, not to so appoint Buyer.
{tc \l 2 ""}
ARTICLE VI
CONDITIONS TO CLOSING{tc \l 1 "ARTICLE VI
CONDITIONS TO CLOSING"}
SECTION 6.1 Conditions to the Obligations of Sellers
and Buyer{tc \l 2 "SECTION 6.1 Conditions to the
Obligations of Sellers and Buyer"}. The obligations of
Buyer and Sellers to consummate the Contemplated
Transactions are subject to the satisfaction of the
following conditions:
(a) HSR Act. Any applicable waiting period under
the HSR Act relating to the Contemplated Transactions shall
have expired.
(b) No Injunction. No provision of any
applicable Law and no Order shall prohibit the consummation
of the Contemplated Transactions.
(c) No Proceeding or Litigation. No Claim
instituted by any person (other than a Governmental Body)
including any Third Party Claim, shall have been commenced
or pending against a Seller, the Company or the Company
Subsidiaries, Buyer, any Buyer Subsidiary or any of their
respective Affiliates, associates, officers or directors
which Claim seeks to restrain, prevent, change or delay in
any material respect the Contemplated Transactions or seeks
to challenge any of the terms or provisions of this
Agreement or seeks material damages in connection with any
of such transactions or seeks to restrain or prevent the
ownership and operations by Buyer after the Closing Date of
the Company and the Company Subsidiaries.
(d) Recapitalization Transactions. Except for
the Reincorporation Merger which has not become effective in
New York on the date hereof, the Recapitalization
Transactions, affecting Buyer or any United States
Subsidiary, shall have been consummated.
(e) Stock Sale Agreement. The transactions
contemplated by the Stock Sale Agreement, dated the date
hereof, between Triumph and Catherine C. Brawer (and the
related trusts identified therein) (the "Brawer Stock Sale
Agreement") shall have closed concurrently with the Closing
hereunder.
(f) Stockholders' Agreement. The Stockholders'
Agreement shall have been executed and delivered by and to
the applicable parties.
(g) Ancillary Agreements. Each of the Ancillary
Agreements shall have executed and delivered by and to the
applicable parties.
(h) Letter Agreements. The following letter
agreements shall have been executed and delivered by and to
the applicable parties:
(i) Letter agreement among Maidenform, Inc.,
the Company and Triumph as to the use of the Lillyettes and
Lilyette trademarks;
(ii) Letter agreement between Maidenform,
Inc. and Triumph as to certain manufacturing services; and
(iii) Letter agreement between Buyer and
its stockholders in connection with the possible
reestablishment of the Predecessor.
(i) Gains Tax Filings. The parties shall have
complied with all pre-transfer audit requirements with
respect to all pre-transfer filings relating to real
property located in New York in which the Company has an
interest.
SECTION 6.2 Conditions to the Obligations of
Sellers{tc \l 2 "SECTION 6.2 Conditions to the Obligations
of Sellers"}. All obligations of Sellers hereunder are
subject, at the option of Sellers, to the fulfillment prior
to or at the Closing of each of the following further
conditions:
(a) Performance. Buyer shall have performed and
complied in all material respects with all agreements,
obligations and covenants required by this Agreement to be
performed or complied with by it at or prior to the Closing
Date.
(b) Representations and Warranties. The
representations and warranties of Buyer contained in this
Agreement and in any certificate or other writing delivered
by Buyer pursuant hereto shall be true in all material
respects at and as of the Closing Date as if made at and as
of such time (except: (i) that the representations and
warranties that are subject to a materiality qualification
shall be true in all respects (ii) to the extent such
representations and warranties speak as of an earlier time;
(iii) for the representation and warranty set forth in
Section 4.19(a)(viii); and (iv) for the failure to obtain
any Buyer Required Consents if such failure will not have a
materially adverse effect on the Condition of the Business).
(c) Cash Portion of Purchase Price. Buyer shall
have paid by wire transfer of immediately available funds to
Sellers the cash portion of the Purchase Price payable to
them.
(d) No Adverse Change. During the period from
the Buyer Balance Sheet Date to the Closing Date, there
shall not have been (i) any material adverse change in the
Condition of Buyer; (ii) any damage, destruction, casualty,
determination or other event to or affecting the Assets of
Buyer or any Buyer Subsidiary which has a material adverse
effect on the Assets or the Business of Buyer; or (iii) any
Claims or Liens filed, or to the knowledge of Buyer
threatened, against or affecting Buyer, any Buyer Subsidiary
or their respective Assets which, if adversely determined,
is reasonably likely to have a material adverse effect on
the Condition of Buyer.
(e) Delivery of Buyer Common Stock. Buyer shall
cause to be delivered to those Sellers receiving Buyer
Common Stock as part of the Purchase Price stock
certificates, registered in the names of the applicable
Sellers (with the legends required by the Stockholders'
Agreement), evidencing the shares of Buyer Common Stock to
be acquired by them.
(f) Buyer Required Consents. All Buyer Required
Consents shall have been obtained except for those
approvals, authorizations and consents which the failure to
obtain would not, individually or in the aggregate, have a
material adverse effect upon the Condition of Buyer or the
consummation of the Contemplated Transactions.
(g) Documentation. There shall have been
delivered to Sellers the following:
(i) A certificate, dated the Closing Date,
of the President or a Vice-President of Buyer confirming the
matters set forth in Section 6.2(a), (b) and (d) hereof.
(ii) A certificate, dated the Closing Date,
of the Secretary or Assistant Secretary of Buyer certifying,
among other things, that attached or appended to such
certificate (A) is a true and correct copy of its
Certificate of Incorporation and all amendments if any
thereto as of the date thereof; (B) is a true and correct
copy of its By-laws as of the date hereof; (C) is a true
copy of all corporate actions taken by it, including
resolutions of its board of directors authorizing the
execution, delivery and performance of this Agreement, and
each other document to be delivered by Buyer pursuant
hereto; and (D) are the names and signatures of its duly
elected or appointed officers who are authorized to execute
and deliver this Agreement and any certificate, document or
other instrument in connection herewith.
(iii) A signed opinion of Buyer's
counsel, dated the Closing Date and addressed to Sellers,
substantially in the form of opinion annexed as Exhibit B
hereto.
(iv) Copies of all Buyer Required Consents.
(v) The written designation, if any, by
Buyer pursuant to the provisions of Section 9.6 hereof.
(h) Environmental Matters. With respect to each
Buyer Owned Real Property that Buyer's lenders required
Buyer to deliver a Phase I Environmental report, Sellers
shall have received a copy of such reports.
SECTION 6.3 Conditions to the Obligations of Buyer{tc
\l 2 "SECTION 6.3 Conditions to the Obligations of Buyer"}.
All obligations of Buyer hereunder are subject, at their
option, to the fulfillment prior to or at the Closing of
each of the following further conditions:
(a) Performance. Sellers shall have performed
and complied in all material respects with all agreements,
obligations and covenants required by this Agreement to be
performed or complied with by them at or prior to the
Closing Date. In addition to the foregoing, whether or not
Sellers shall have used the reasonable efforts required by
Sections 5.1 and 5.6, the Company and each Company
Subsidiary shall be in actual compliance with the provisions
of Section 5.1.
(b) Representations and Warranties. The
representations and warranties of Sellers contained in this
Agreement and in any certificate or other writing delivered
by the Sellers pursuant hereto shall be true in all material
respects at and as of the Closing Date as if made at and as
of such time (except: (i) that the representations and
warranties that are subject to a materiality qualification
shall be true in all respects), (ii) for the representations
and warranties set forth in Section 3.19(a)(viii), (iii) to
the extent such representations and warranties speak of an
earlier time; and (iv) except for the failure to obtain any
Seller Required Consents if such failure will not have a
materially adverse effect on the Condition of the Business).
(c) No Adverse Change. During the period from
the Company Balance Sheet Date to the Closing Date, there
shall not have been (i) any material adverse change in the
Condition of the Business; (ii) any damage, destruction,
casualty, determination or other event to or affecting the
Assets of the Company or any Company Subsidiary which has a
material adverse effect on the Assets or the Business of the
Company; or (iii) any Claims or Liens filed, or to the
knowledge of any Seller threatened, against or affecting
the Company, any Company Subsidiary or the Assets which, if
adversely determined, is reasonably likely to have a
material adverse effect on the Condition of the Business.
(d) Environmental Matters. Buyer shall have
received a Phase I Environmental Report for each of the
Company Owned Real Properties.
(e) Payment of Gains Taxes. Buyer shall have
received evidence reasonably satisfactory to it that all
applicable real property transfer and transfer gain Taxes,
imposed in connection with the deemed transfer of the
Company Real Property, shall have been paid or tendered in
compliance with applicable Laws.
(f) Company Required Consents. All Company
Required Consents shall have been obtained except for those
approvals, authorizations and consents which the failure to
obtain would not, individually or in the aggregate, have a
material adverse effect upon the Condition of the Business
or the consummation of the Contemplated Transactions.
(g) Documentation. There shall have been
delivered to Buyer the following:
(i) the stock certificates of each Seller
representing the number of Purchased Shares set forth
opposite such Seller's name on Exhibit A, duly endorsed in
blank or accompanied by stock powers duly executed in blank,
in proper form for transfer.
(ii) A certificate dated the Closing Date, of
each Seller confirming the matters set forth in Sections
6.3(a), (b) and (c) and 3.19(a)(xvi) hereof, to the extent
applicable to such Seller.
(iii) A certificate, dated the Closing
Date, of the Secretary or Assistant Secretary of Triumph
certifying, among other things, that attached or appended to
such certificate (A) is a true and correct copy of its
Certificate of Incorporation and By-laws (or comparable
instruments) and all amendment if any thereto as of the date
thereof; (B) is a true copy of all corporate actions taken
by it, including resolutions of its board of directors (or
comparable governing body) authorizing the execution,
delivery and performance of this Agreement, and each other
document to be delivered by Triumph pursuant hereto; and (C)
are the names and signatures of its duly elected or
appointed officers who are authorized to execute and deliver
this Agreement and any certificate, document or other
instrument in connection herewith.
(iv) A certificate, dated the Closing Date,
of the Secretary or Assistant Secretary of the Company or
applicable Company Subsidiary certifying, among other
things, that attached or appended to such certificate (A) is
a true and correct copy of the Certificate of Incorporation
and By-laws (or comparable instruments) of the Company and
each of its Subsidiaries, and all amendments if any thereto
as of the date thereof; (B) are the names of the directors
and officers of the Company and each of the Company
Subsidiaries; and (C) is a true copy of all corporate
actions taken by the Board of Directors of the Company
(which actions shall have been taken prior to the date of
entering into this Agreement) to authorize the Contemplated
Transactions in accordance with Section 203 of the Delaware
General Corporation Law.
(v) The resignations, dated on or before the
Closing Date, of such directors and officers of the Company
and each Subsidiary and such trustees of Benefit Plans as
previously may have been requested by Buyer.
(vi) A signed opinion(s) of Sellers' counsel,
dated the Closing Date, addressed to Buyer, substantially in
the form of opinion annexed as Exhibit C hereto.
(vii) Copies of all Company Required
Consents, material Permits and, to the extent not previously
delivered, appraisal reports, title insurance policies and
deeds to Company Owned Real Property.
(viii) The written acceptance of the
Authorized Agent of its appointment pursuant to Section 9.5
hereof.
ARTICLE VII
INDEMNIFICATION{tc \l 1 "ARTICLE VII
INDEMNIFICATION"}
SECTION 7.1 Survival of Representations and
Warranties{tc \l 2 "SECTION 7.1 Survival of
Representations and Warranties"}. (a) Notwithstanding any
right of Buyer fully to investigate the affairs of the
Company and its Subsidiaries and notwithstanding any
knowledge of facts determined or determinable by Buyer
pursuant to such investigation or right of investigation,
Buyer has the right to rely fully upon the representations,
warranties, covenants and agreements of Seller contained in
this Agreement, or listed or disclosed on any Schedule
hereto or in any instrument delivered in connection with or
pursuant to any of the foregoing. All such representations,
warranties, covenants and agreements shall survive the
execution and delivery of this Agreement and the Closing
hereunder. Notwithstanding the foregoing, all
representations and warranties of Sellers contained in this
Agreement, on any Schedule hereto or in any instrument
delivered in connection with or pursuant to this Agreement
(other than the representations and warranties relating to:
(i) title matters, ERISA matters, Tax matters and the
matters contained in Sections 3.3 and 3.8, all of which
shall survive the Closing until the expiration of any
applicable statutes of limitation; and (ii) Environmental
Matters, which shall survive the Closing for a period of
three years after the Closing Date), shall terminate and
expire 18 months after the Closing Date; provided, however,
that the liability of Sellers shall not terminate as to any
specific claim or claims of the type referred to in Section
7.2 hereof, whether or not fixed as to Liability or
liquidated as to amount, with respect to which Sellers have
been given specific notice on or prior to the date on which
such liabilities would otherwise terminate pursuant to the
express terms of this Section 7.1(a).
(b) Notwithstanding any right of the Sellers
fully to investigate the affairs of Buyer and its
Subsidiaries and notwithstanding any knowledge of facts
determined or determinable by the Sellers pursuant to such
investigation or right of investigation, the Sellers have
the right to rely fully upon the representations,
warranties, covenants and agreements of Buyer contained in
this Agreement, or listed or disclosed on any Schedule
hereto or in any instrument delivered in connection with or
pursuant to any of the foregoing. All representations,
warranties, covenants and agreements of Buyer shall survive
the execution and delivery of this Agreement and the Closing
hereunder. Notwithstanding the foregoing, all such
representations, warranties, covenants and agreements of
Buyer (other than the representations and warranties
relating to: (i) title matters, ERISA matters, Tax matters
and the matters contained in Sections 4.3 and 4.8, all of
which shall survive the Closing until the expiration of any
applicable statutes of limitation; and (ii) Environmental
Matters, which shall survive the Closing for a period of
three years after the Closing Date), shall terminate and
expire 18 months after the Closing Date; provided, however,
that the liability of Buyer shall not terminate as to any
specific claim or claims of the type referred to in Section
7.3 hereof, whether or not fixed as to Liability or
liquidated as to amount, with respect to which Buyer has
been given specific notice on or prior to the date on which
such Liability would otherwise terminate pursuant to the
express terms of this Section 7.1(b).
SECTION 7.2 Obligation of Sellers to Indemnify{tc \l
2 "SECTION 7.2 Obligation of Sellers to Indemnify"}. Each
of Spiesshofer and Magrone, severally, as to the matters
relating to himself or the Purchased Shares owned by him
referred to in Section 3.1, 3.2, 3.3, 3.4 and 3.31 and as to
covenants relating to themselves contained in Article V (it
being understood and agreed that neither Spiesshofer nor
Magrone shall be liable under the provisions of this Section
7.2 as to any other sections of this Agreement) and Triumph
as to all matters, agree to indemnify, defend and hold
harmless Buyer (and its directors, officers, employees,
Affiliates, successors and assigns) from and against all
uninsured Claims, losses, liabilities, damages,
deficiencies, judgments, settlements, costs of investigation
or other expenses (including interest, penalties and
reasonable attorneys' fees and disbursements but excluding
indirect or consequential damages or claims for lost
profits) (collectively, the "Losses") suffered or incurred
by Buyer or any of the foregoing persons by reason of any
inaccuracy in or any breach of any representation, warranty,
covenant or agreement of Sellers contained in this Agreement
or in any Schedules or documents delivered by a Seller
pursuant to this Agreement.
SECTION 7.3 Obligation of Buyer to Indemnify{tc \l 2
"SECTION 7.3 Obligation of Buyer to Indemnify"}. (a)
Buyer agrees to indemnify, defend and hold harmless each
Seller from and against any uninsured Losses suffered by
such Seller by reason of:
(i) any inaccuracy in or breach of any
representation, warranty, covenant or agreement of Buyer
contained in this Agreement, the Brawer Stock Sale Agreement
or in any document or other papers delivered pursuant to
either of such Agreements; and
(ii) Any Claim brought by any stockholder of
the Company (other than Sellers) as a result of the
consummation of the Contemplated Transactions or the Company
Merger.
(b) For purposes of this Section 7.3, the term
"Losses" shall include any Losses suffered by Triumph under
the Brawer Stock Sale Agreement.
SECTION 7.4 Notice and Opportunity to Defend Third
Party Claims{tc \l 2 "SECTION 7.4 Notice and Opportunity
to Defend Third Party Claims"}. (a) Promptly after receipt
by any party hereto (the "Indemnitee") of notice of any
demand, claim, circumstance or Tax audit which would or
might give rise to a claim or the commencement (or
threatened commencement) of any action, proceeding or
investigation (an "Asserted Liability") that may result in a
Loss, the Indemnitee shall give prompt notice thereof (the
"Claims Notice") to the party obligated to provide
indemnification pursuant to Section 7.2 or 7.3 (the
"Indemnifying Party"). The Claims Notice shall describe the
Asserted Liability in reasonable detail and shall indicate
the amount (estimated, if necessary, and to the extent
feasible) of the Loss that has been or may be suffered by
the Indemnitee.
(b) The Indemnifying Party may elect to
compromise or defend, at its own expense and by its own
counsel, any Asserted Liability. If the Indemnifying Party
elects to compromise or defend such Asserted Liability, it
shall within thirty days (or sooner, if the nature of the
Asserted Liability so requires) notify the Indemnitee of its
intent to do so, and the Indemnitee shall cooperate, at the
expense of the Indemnifying Party, in the compromise of, or
defense against, such Asserted Liability. If the
Indemnifying Party elects not to compromise or defend the
Asserted Liability, fails to notify the Indemnitee of its
election as herein provided or contests its obligation to
indemnify under this Agreement, the Indemnitee may pay,
compromise or defend such Asserted Liability.
Notwithstanding the foregoing, neither the Indemnifying
Party nor the Indemnitee may settle or compromise any claim
over the objection of the other; provided, however, that (i)
except as set forth in the immediately succeeding clause
(ii), consent to settlement or compromise shall not be
unreasonably withheld and (ii) the Indemnifying Party may
settle any Asserted Liability by paying a money payment only
without the consent of the Indemnitee. In any event, the
Indemnitee and the Indemnifying Party may participate, at
their own expense, in the defense of such Asserted
Liability. If the Indemnifying Party chooses to defend any
claim, the Indemnitee shall make available to the
Indemnifying Party any books, records or other documents
within its control that are necessary or appropriate for
such defense.
(c) Anything in Section 7.4(b) to the contrary
notwithstanding, in the case of any Asserted Liability by
any supplier, distributor, sales agent or customer of the
Company or any of its Subsidiaries prior to the Closing in
connection with which Buyer may make a claim against Sellers
for indemnification pursuant to Section 7.2, Buyer promptly
shall give a Claims Notice with respect thereto but, unless
Buyer and the Indemnifying Party otherwise agree, Buyer
shall have the exclusive right at its option to defend, at
its own expense, any such matter, subject to the duty of
Buyer to consult with the Indemnifying Party and its
attorneys in connection with such defense and provided that
no such matter shall be compromised or settled by Buyer
without the prior consent of the Indemnifying Party, which
consent shall not be unreasonably withheld. The
Indemnifying Party shall have the right to recommend in good
faith to Buyer proposals to compromise or settle claims
brought by a supplier, distributor, sales agent or customer,
and Buyer agrees to present such proposed compromises or
settlements to such supplier, distributor or customer. All
amounts required to be paid in connection with any such
Asserted Liability and all amounts required to be paid in
connection with any such compromise or settlement consented
to by the Indemnifying Party, shall be borne and paid by the
Indemnifying Party. The parties agree to cooperate fully
with one another in the defense, compromise or settlement of
any such Asserted Liability.
SECTION 7.5 Limits on Indemnification{tc \l 2
"SECTION 7.5 Limits on Indemnification"}. Notwithstanding
anything contained in this Article VII or elsewhere in this
Agreement to the contrary:
(a) Sellers shall not have any obligation to
indemnify Buyer pursuant to Section 7.2 hereof with respect
to any Claim unless and until Buyer shall have incurred
Losses in an aggregate amount in excess of $1,000,000 (the
"Stipulated Amount") in which event Buyer shall be entitled
to be indemnified for all of its Losses commencing at $1;
provided that the foregoing limitation shall not apply to
the obligations of Triumph under Section 5.11; and provided,
further, that if any Claim is based upon a breach by Triumph
of a representation, warranty, covenant or agreement
contained in this Agreement in which the dollar thresholds
thereof are less than the dollar thresholds in the
corresponding representation, warranty, covenant or
agreement of Buyer ("Buyer's Dollar Thresholds") then the
liability of Triumph for such breach shall be determined as
if Buyer's Dollar Thresholds had applied to Triumph.
(b) Buyer shall have no obligation to indemnify
Sellers pursuant to Section 7.3 hereof with respect to any
Claim unless and until the Sellers shall have incurred
Losses in an aggregate amount in excess of the Stipulated
Amount in which event Sellers shall be entitled to be
indemnified for all of their Losses commencing at $1;
provided that the foregoing limitation shall not apply to
the obligations of Buyer under Sections 5.11 and 7.3(a)(ii).
(c) The liability hereunder of Triumph,
Spiesshofer and Magrone shall in no event exceed,
respectively, $64,422,171.45, $377,325 and $6,146,010.
Sellers may satisfy their indemnification obligations by
transferring to Buyer shares of Buyer Common Stock valued,
for this purpose, at $454.94 per share, as adjusted for any
subdivision, combination or reclassification of Buyer Common
Stock or the payment of a dividend on Buyer Common Stock in
shares of Buyer Common Stock.
(d) The liability of Buyer hereunder shall in no
event exceed $61,194,000.
SECTION 7.6 Tax Impact{tc \l 2 "SECTION 7.6 Tax
Impact"}. It is the intent of the parties that any amounts
paid under Sections 7.2 or 7.3 shall represent an adjustment
of the Purchase Price and the parties will report such
payments consistent therewith. Nevertheless, if the payment
of any Loss which Sellers are obligated to make to Buyer
pursuant to Section 7.2 of this Agreement or which Buyer is
obligated to make to Sellers pursuant to Section 7.3 of this
Agreement, is required to be reported in income by Buyer or
any of its Affiliates or Sellers or any of their Affiliates,
as applicable, then the amount of the Loss which Sellers are
obligated to pay to Buyer or which Buyer is obligated to pay
to Sellers, as applicable, shall be adjusted so that the
indemnitee is fully and completely Indemnified on an after-
tax basis.
SECTION 7.7 Indemnity Sole Remedy{tc \l 2 "SECTION
7.7 Indemnity Sole Remedy"}. With respect to any money
claim, in the absence of fraud or a suit seeking specific
performance as contemplated by this Agreement, the remedies
provided by the foregoing provisions of this Article 7,
after the Closing Date, shall be in lieu of any other
remedies to which the respective party is entitled at law or
in equity for any breach or noncompliance by a party with
the provisions of this Agreement.
ARTICLE VIII
TERMINATION{tc \l 1 "ARTICLE VIII
TERMINATION"}
SECTION 8.1 Termination{tc \l 2 "SECTION 8.1
Termination"}. If the Brawer Stock Purchase Agreement is
terminated, this Agreement shall be terminated concurrently
therewith. In addition, this Agreement may be terminated
and the Contemplated Transactions may be abandoned at any
time prior to the Closing:
(a) By mutual written consent of Sellers and
Buyer;
(b) By Sellers if (i) there has been a material
misrepresentation or breach of warranty on the part of Buyer
in the representations and warranties contained herein and
such material misrepresentation or breach of warranty, if
curable, is not cured within 15 days of written notice
thereof from Sellers (ii) Buyer has committed a material
breach of any covenant imposed upon it hereunder and fails
to cure such breach within 15 days of written notice thereof
from Sellers; or (iii) any condition to a Seller's
obligations hereunder becomes incapable of fulfillment
through no fault of such parties and is not waived by such
parties;
(c) By Buyer, if (i) there has been a material
misrepresentation or breach of warranty on the part of a
Seller in the representations and warranties contained
herein and such material misrepresentation or breach of
warranty, if curable, is not cured within 15 days of written
notice thereof from Buyer; (ii) a Seller has committed a
material breach of any covenant imposed upon it hereunder
and fails to cure such breach within 15 days of written
notice thereof from Buyer; or (iii) any condition to Buyer's
obligations hereunder becomes incapable of fulfillment
through no fault of Buyer and is not waived by Buyer.
(d) By Sellers' Agent on behalf of Sellers, or
Buyer, if the Closing shall not have occurred on or before
June 30, 1995; provided that no party may terminate this
Agreement pursuant to this clause if such party's failure
(or in the case of termination by Sellers, the failure of a
Seller) to fulfill any of its obligations under this
Agreement shall have been the reason that the Closing shall
not have occurred on or before said date; and
(e) By Sellers or by Buyer, if there shall be any
Law that makes consummation of the Contemplated Transactions
illegal or otherwise prohibited or if any Order enjoining
Buyer, or any Seller from consummating the Contemplated
Transactions is entered and such Order shall become final
and nonappealable.
SECTION 8.2 Effect of Termination; Right to Proceed{tc
\l 2 "SECTION 8.2 Effect of Termination; Right to
Proceed"}. In the event that this Agreement shall be
terminated pursuant to Section 8.1, all further obligations
of the parties under the Agreement shall terminate without
further liability of any party hereunder except (i) to the
extent that a party has made a material misrepresentation
hereunder or committed a breach of the material covenants
and agreements imposed upon it hereunder; (ii) to the extent
that any condition to a party's obligations hereunder became
incapable of fulfillment because of the breach by a party of
its obligations hereunder and (iii) that the agreements
contained in Sections 5.9, 5.10 and 5.11 shall survive the
termination hereof. In the event that a condition precedent
to its obligation is not met, nothing contained herein shall
be deemed to require any party to terminate this Agreement,
rather than to waive such condition precedent and proceed
with the Contemplated Transactions. Notwithstanding
anything to the contrary contained herein, no party shall
have any obligation to the other hereunder arising out of
the occurrence of an event or circumstance not within the
control of such party which event or circumstance resulted
in a representation or warranty of such party ceasing to be
true.
ARTICLE IX
MISCELLANEOUS{tc \l 1 "ARTICLE IX
MISCELLANEOUS"}
SECTION 9.1 Notices{tc \l 2 "SECTION 9.1 Notices"}.
(a) Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered
personally by hand or by recognized overnight courier,
telecopied or mailed (by registered or certified mail,
postage prepaid) as follows:
(i) if to Buyer, one copy to:
Maidenform Worldwide, Inc.
90 Park Avenue
New York, New York 10016
Telecopier: (212) 983-5834
Attention: Steven N. Masket
Senior Vice President and General
Counsel
with a simultaneous copy to:
Baer Marks & Upham
805 Third Avenue
New York, New York 10022
Telecopier: (212) 702-5941
Attn: Stanley E. Bloch, Esq.
(ii) if to Spiesshofer or Triumph, one copy
to:
Triumph International Overseas Limited
133 Hoi Bun Road
7th Floor Piazza Building
Kwun Tong, Kowloon
Hong Kong
Attention: Mr. W. Engelman/Mr. K.
Haertkorn
Facsimile No.: 011-852-2341-9847
-and-
Triumph International Spiesshofer &
Braun
Promenadenstrasse 26
CH-8437 Zurzach
Switzerland
Attention: Mr. Wolfgang Spiesshofer
Facsimile No.: 011-4156-499219
with a simultaneous copy to:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, New York 10112
Telecopier: (212) 698-7825
Attn: Barry A. Adelman, Esq.
(iii) if to Magrone, one copy to:
Frank Magrone
Cosmos Heights, R.D. 4
Cortland, New York 13045
with a simultaneous copy to:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, New York 10012
Telecopier: (212) 698-7825
Attn: Barry A. Adelman, Esq.
(b) Each such notice or other communication shall
be effective (i) if given by telecopier, when such telecopy
is transmitted to the telecopier number specified in Section
9.1(a) (with confirmation of transmission) or (ii) if given
by any other means, when delivered at the address specified
in Section 9.1(a). Any party by notice given in accordance
with this Section 9.1 to the other party may designate
another address (or telecopier number) or person for receipt
of notices hereunder. Notices by a party may be given by
counsel to such party.
SECTION 9.2 Entire Agreement{tc \l 2 "SECTION 9.2
Entire Agreement"}. This Agreement (including the
Stockholders' Agreement, the Schedules and Exhibits hereto)
and the collateral agreements executed in connection with
the consummation of the Contemplated Transactions contain
the entire agreement between the parties with respect to the
subject matter hereof and related transactions and supersede
all prior agreements, written or oral, with respect thereto.
SECTION 9.3 Waivers and Amendments; Non-Contractual
Remedies; Preservation of Remedies{tc \l 2 "SECTION 9.3
Waivers and Amendments; Non-Contractual Remedies;
Preservation of Remedies"}. This Agreement may be amended,
superseded, cancelled, renewed or extended, and the terms
hereof may be waived, only by a written instrument signed by
the parties hereto or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall
operate as a waiver thereof. Nor shall any waiver on the
part of any party of any such right, power or privilege, nor
any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege.
Except as otherwise provided herein, the rights and remedies
herein provided are cumulative and are not exclusive of any
rights or remedies that any party may otherwise have at law
or in equity. The rights and remedies of any party based
upon, arising out of or otherwise in respect of any
inaccuracy in or breach of any representation, warranty,
covenant or agreement contained in this Agreement shall in
no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of
any such inaccuracy or breach is based may also be the
subject matter of any other representation, warranty,
covenant or agreement contained in this Agreement (or in any
other agreement between the parties) as to which there is no
inaccuracy or breach.
SECTION 9.4 Governing Law{tc \l 2 "SECTION 9.4
Governing Law"}. This Agreement shall be governed and
construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed
entirely within such State, without regard to the conflict
of laws rules thereof.
SECTION 9.5 Consent to Jurisdiction and Service of
Process{tc \l 2 "SECTION 9.5 Consent to Jurisdiction and
Service of Process"}. The parties hereto irrevocably: (a)
agree that any suit, action or other legal proceeding
arising out of this Agreement may be brought in the courts
of the State of New York or the courts of the United States
located in New York County, New York, (b) consent to the
jurisdiction of each court in any such suit, action or
proceeding, (c) waive any objection which they, or any of
them, may have to the laying of venue of any such suit,
action or proceeding in any of such courts, and (d) waives
the right to a trial by jury in any such suit, action or
other legal proceeding. Each Seller hereby designates and
appoints Rubin Baum Levin Constant & Friedman, 30
Rockefeller Plaza, New York, New York 10112 (the "Authorized
Agent"), as its agent to accept and acknowledge on its
behalf, service of any and all process which may be served
in any such suit, action or other proceeding, and agrees
that service upon such Authorized Agent shall be deemed in
every respect service of process on a Seller or its
successors or assigns and, to the extent permitted by
applicable law, shall be taken and held to be valid personal
service. Each Seller represents and warrants that the
Authorized Agent has agreed to act as such agent for service
of process.
SECTION 9.6 Designated Buyer{tc \l 2 "SECTION 9.6
Designated Buyer"}. It is understood and agreed between the
parties that Buyer may cause one or more Affiliates, direct
or indirect Subsidiaries or other entities designated by it
(the "Designated Buyer" or Designated Buyer") to carry out
all or part of the Contemplated Transactions to be carried
out by Buyer; provided, however, that Buyer nevertheless
shall remain liable (as principal and not as guarantor) for
all of its obligations and those of any Designated Buyer
hereunder.
SECTION 9.7 Binding Effect; No Assignment{tc \l 2
"SECTION 9.7 Binding Effect; No Assignment"}. This
Agreement and all of its provisions, rights and obligations
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, heirs and
legal representatives. Except as otherwise provided in
Section 9.6, this Agreement may not be assigned by a party
without the express written consent of the others and any
purported assignment, unless so consented to, shall be void
and without effect. Nothing herein express or implied is
intended or shall be construed to confer upon or to give
anyone other than the parties hereto and their respective
heirs, legal representatives and successors any rights or
benefits under or by reason of this Agreement and no other
party shall have any right to enforce any of the provisions
of this Agreement.
SECTION 9.8 Exhibits{tc \l 2 "SECTION 9.8
Exhibits"}. All Exhibits and Schedules attached hereto are
hereby incorporated by reference into, and made a part of,
this Agreement. The disclosure contained in any one
Schedule to this Agreement, if by its description in such
Schedule is clearly applicable to other Sections of this
Agreement, will also be deemed to have been made with
respect to such other Sections even if such disclosure is
not repeated in any other Schedules.
SECTION 9.9 Severability{tc \l 2 "SECTION 9.9
Severability"}. If any provision of this Agreement for any
reason shall be held to be illegal, invalid or
unenforceable, such illegality shall not affect any other
provision of this Agreement, but this Agreement shall be
construed as if such illegal, invalid or unenforceable
provision had never been included herein.
SECTION 9.10 Counterparts{tc \l 2 "SECTION 9.10
Counterparts"}. The Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an
original as against any party whose signature appears
thereon, and all of which shall together constitute one and
the same instrument. This Agreement shall become binding
when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties
reflected hereon as the signatories.
IN WITNESS WHEREOF, the undersigned have executed this
Stock Purchase Agreement as of the date set forth above.
MAIDENFORM WORLDWIDE, INC.
By:
Steven N. Masket
Executive Vice President
TRIUMPH INTERNATIONAL OVERSEAS, LIMITED
By:
Name:
Title:
Guenther Spiesshofer
Frank Magrone
The undersigned is signing this
Agreement solely to agree to the
provisions of Section 5.13
TRIUMPH INTERNATIONAL SPIESSHOFER & BRAUN
By: _______________________________
Name:
Title:
EXHIBIT A
LIST OF SELLERS
Total Number of
Name Purchased Shares
Triumph International
Overseas Limited 3,670,779
Guenther Spiesshofer 21,500
Frank Magrone 350,200
4,042,479
88706.8
STOCK SALE AGREEMENT
STOCK SALE AGREEMENT dated as of April __, 1995 between
TRIUMPH INTERNATIONAL OVERSEAS LIMITED, a Liechtenstein
corporation ("Triumph"), and each of the security-holders
listed on the signature page of this Agreement in her or its
individual and/or fiduciary capacity as indicated on Exhibit
A to this Agreement (each a "Seller" and collectively the
"Sellers") and Catherine C. Brawer, as agent for the Sellers
(the "Agent"):
W I T N E S S E T H:
WHEREAS, each Seller owns, in part, the number of shares
of Class A Common Stock, par value $.01 per Share, ("MWI
Common Stock") of Maidenform Worldwide, Inc., a Delaware
corporation ("MWI"), set out in Exhibit A next to the name
of such Seller (collectively, the "Purchased Shares"); and
WHEREAS, each Seller desires to sell and Triumph desires
to purchase all of the Purchased Shares owned by such Seller
on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises,
covenants and other agreements contained herein, the parties
hereby agree as follows:
I PURCHASE AND SALE; CLOSING
I.1 Certain Defined Terms. Terms which are not
defined
in this Agreement shall have the respective meanings
ascribed to them in that certain Stock Purchase Agreement of
even date herewith (the "NCC Purchase Agreement") by and
among MWI, Triumph and certain other Sellers (as defined
therein).
I.2 Purchase and Sale of Purchased Shares. Subject
to
the terms and conditions set forth herein, each Seller
severally agrees to sell, transfer and deliver to Triumph,
and Triumph agrees to purchase, acquire and accept from each
Seller, the Purchased Shares of such Seller.
I.3
I.3 Consideration. Subject to the terms and
conditions
set forth herein, the purchase price (the "Purchase Price")
payable by Triumph for the Purchased Shares shall be $20
million in the aggregate, to be allocated among the Sellers
in the proportions set forth on Exhibit A. Such Purchase
Price shall be payable on the Closing Date (as hereinafter
defined) to the Sellers by wire transfer of immediately
available funds to accounts designated by Agent by written
notice given to Triumph at least two (2) Business Days prior
to the Closing Date.
I.4 Closing. The closing (the "Closing") of the
purchase
and sale of the Purchased Shares hereunder shall take place
at the offices of Baer Marks & Upham, 805 Third Avenue, New
York, New York at 10:00 a.m., local time, on the date on
which the closing under the NCC Purchase Agreement occurs
(the time and date of the Closing being hereinafter called
the "Closing Date"). All transactions consummated at the
Closing shall be deemed to have taken place simultaneously.
I.5 Appointment of Sellers' Agent. Each Seller
irrevocably appoints and authorizes Agent to do all such
acts and things as agent (and not as principal) on its
behalf and to exercise all such rights, powers and
privileges in relation to this Agreement as fully and
completely as each Seller could on its own behalf, together
with all such powers as are reasonably incidental thereto.
Each Seller agrees that the foregoing appointment and powers
are coupled with an interest and every party acting
hereunder shall be entitled to rely on any action taken or
omitted by Agent on Sellers' behalf.
II REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers severally represent and warrant to Triumph and MWI
that:
II.1 Status of the Purchased Shares. Except as set
forth
in the Stockholders' Agreement, the Purchased Shares that
are owned by such Seller are subject to no restrictions on
transferability other than restrictions imposed by (a) the
1933 Act and (b) applicable state securities Laws. Except
as set forth in the Stockholders' Agreement, as of the
Closing Date, there will be no outstanding options,
warrants, calls, preemptive rights, rights of first refusal,
or other rights to purchase or acquire from any Seller or
any plans or Contracts providing for the issuance of, or the
granting of rights to any Seller to acquire: (i) any
capital stock of MWI or (ii) any securities convertible into
or exchangeable for any capital stock of MWI. As of the
Closing Date, except as set forth in the Stockholders
Agreement, no Seller will be contractually obligated or
entitled to repurchase or otherwise acquire any outstanding
shares of capital stock of MWI.
II.2 Title to and Validity of the Purchased Shares.
The
Purchased Shares have been duly authorized, validly issued,
fully paid and are nonassessable. Each Seller owns and
holds title to such Seller's Purchased Shares free and clear
of any Lien of any kind. At the Closing, except as set
forth in the Stockholders' Agreement, Triumph will acquire
title to the Purchased Shares, free and clear of any Lien of
any kind.
II.3 Authority Relative to this Agreement. Each
Seller
has full power, capacity and authority to execute and
deliver this Agreement and each other document contemplated
hereby and to which she or it is a party (the "Transaction
Documents") and to consummate the transactions contemplated
hereby and thereby (the "Contemplated Transactions"). The
execution and delivery of this Agreement and the
consummation of the Contemplated Transactions to which such
Seller is a party have been duly and validly authorized by
each Seller that is an entity and no other proceedings on
the part of any such Seller (or any other person) are
necessary to authorize the execution and delivery by such
Seller of this Agreement or the consummation of the
Contemplated Transactions to which such Seller is a party.
This Agreement has been duly and validly executed and
delivered by each Seller, and (assuming the valid execution
and delivery of this Agreement by the other parties hereto)
constitutes the legal, valid and binding agreement of such
Seller enforceable against such Seller in accordance with
its terms except as such obligations and their
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting
the enforcement of creditors' rights generally and except
that the availability of equitable remedies, including
specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought
(whether at law or in equity).
II.4 No Conflicts; Consents. The execution and
delivery
by any Seller of this Agreement and the performance of her
or its obligations hereunder will not (i) violate any
provision of the trust agreement of any Seller which is a
trust; (ii) require any Seller to obtain any consent,
approval or action of or waiver from, or make any filing
with, or give any notice to, any Governmental Body or any
other person, except for compliance with the HSR Act (the
"MWI Required Consent"); (iii) violate, conflict with or
result in the breach of any of the terms of, result in a
material modification of the effect of, or otherwise cause
the termination of, give any other contracting party the
right to terminate, or constitute (or with notice or lapse
of time or both constitute) a default under, any material
Contract, to which any Seller is a party or by or to which
any of them may be bound or subject, or result in the
creation of any Lien upon the Purchased Shares pursuant to
the terms of any such Contract other than such violations,
conflicts, breaches, modifications, terminations, rights to
terminate, defaults or Liens that, individually or in the
aggregate, would not have a material adverse effect on the
Condition of Buyer; or (iv) if the MWI Required Consent is
obtained, violate any Law, Order or Permit of any
Governmental Body against, or binding upon, any Seller other
than such violations that, individually or in the aggregate,
would not have a material adverse effect on the Condition of
Buyer.
III
REPRESENTATIONS AND WARRANTIES OF TRIUMPH
Triumph represents and warrants to Sellers and MWI that:
III.1 Corporate Existence and Power. Triumph is
a
corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation
and has all requisite corporate powers and all material
governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted.
III.2 Acquisition for Investment. Triumph is
acquiring the Purchased Shares for its own account and not
with a present intention to make any sale, disposition,
distribution or other transfer of the Purchased Shares in a
manner that will be in violation of any applicable
securities Laws and understands that the Purchased Shares
have not been registered under the 1933 Act or under the
securities Laws of any state.
III.3 Authority Relative to This Agreement.
Triumph
has full corporate power and authority to execute and
deliver this Agreement and to consummate the Contemplated
Transactions to which it is party. The execution and
delivery of this Agreement and the consummation of the
Contemplated Transactions have been duly and validly
authorized and approved by the Board of Directors of Triumph
and no other corporate proceedings on the part of Triumph
are necessary to authorize this Agreement or the
Contemplated Transactions to which it is party. This
Agreement has been duly and validly executed and delivered
by Triumph and (assuming the legal, valid execution and
delivery of this Agreement by the other parties hereto)
constitutes the valid and binding agreement of Triumph,
enforceable against Triumph in accordance with its terms,
except as such obligations and their enforceability may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting
the enforcement of creditors' rights generally and except
that the availability of equitable remedies, including
specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought
(whether in law or at equity).
III.4 No Conflicts; Consents. Except for
compliance
with the HSR Act (referred to herein as the "NCC Required
Consent"), the execution and delivery of this Agreement by
Triumph and the performance of its obligations hereunder
will not (i) violate any provision of the Certificate of
Incorporation or By-laws of Triumph; (ii) except for
obtaining the NCC Required Consent, require Triumph to
obtain any consent, approval or action of, or make any
filing with or give any notice to, any Governmental Body or
any other person (iii) violate, conflict with or result in
the breach of any of the terms of, result in a material
modification of the effect of, or otherwise cause the
termination of or give any other contracting party the right
to terminate, or constitute (or with notice or lapse of time
or both constitute) a default under any material Contract to
which Triumph is a party or by or to which it or any of its
assets may be bound or subject, or result in the creation of
any Lien upon the Assets of Triumph pursuant to the terms of
any such Contract other than such violations, conflicts,
breaches, modifications, terminations, rights to terminate,
defaults or Liens that individually or in the aggregate,
would not have material adverse effect on the Condition of
the Business; or (iv) if the NCC Required Consent is
obtained, violate any Law, Order or Permit of any
Governmental Body against, or binding upon, Triumph other
than such violations that, individually or in the aggregate,
would not have a material adverse effect on the Condition of
the Business.
IV REPRESENTATIONS AND WARRANTIES OF MWI
In order to induce Triumph and Sellers to enter into this
Agreement, MWI hereby repeats each of the representations
and warranties made by it in Article IV of the NCC Purchase
Agreement to Triumph and Sellers as if each of such
representations or warranties had been set forth herein at
length.
V COVENANTS AND AGREEMENTS
V.1 Efforts to Consummate. Subject to the terms and
conditions herein provided, each party hereto, without
payment or further consideration, shall use its reasonable,
good faith efforts to take or cause to be taken all action
and to do or cause to be done all things necessary, proper
or advisable under applicable Laws, Permits and Orders to
consummate and make effective, as soon as reasonably
practicable, the Contemplated Transactions, and each party
hereto shall cooperate with the other in all of the
foregoing.
V.2 Notices of Certain Events. Each of Agent and
Triumph
shall promptly notify the other of:
(a) any notice or other communication from any
person
alleging that the consent of such person is or may be
required in connection with the Contemplated Transactions;
(b) any notice or other communication from any
Governmental Body in connection with the Contemplated
Transactions; and
(c) any event, condition or circumstance
occurring from
the date hereof through the Closing Date that would
constitute a violation or breach of any representation or
warranty, whether made as of the date hereof or as of the
Closing Date, or that would constitute a violation or breach
of any covenant of any party contained in this Agreement.
V.3 Public Announcements. Agent and Triumph will
consult
with each other before issuing any press release or
otherwise making any public statement with respect to the
Contemplated Transactions, and will not issue any such press
release or make any such public statement without the prior
approval of the other party, except as may be required by
applicable Law in which event the other party shall have the
right to review and comment upon any such press release or
public statement prior to its issuance. The fact that a
party has the foregoing right to review or comment shall not
mean that such party's consent is needed prior to the
issuance of such present release or public statement.
V.4 Expenses. Except as otherwise specifically
provided
herein, MWI shall bear the respective expenses of the
parties hereto in connection with the preparation, execution
and delivery of this Agreement.
VI CONDITIONS TO CLOSING
VI.1 Conditions to the Obligations of Sellers. All
obligations of Sellers hereunder are subject, at the option
of Agent, to the fulfillment prior to or at the Closing of
each of the following conditions:
(a) Closing Under NCC Purchase Agreement. The
closing
under the NCC Purchase Agreement shall have occurred, or
shall occur concurrently with the Closing hereunder.
(b) Performance. Triumph shall have performed
in all
material respects all of its obligations hereunder required
to be performed by it at or prior to the Closing Date.
(c) Representations and Warranties. The
representations
and warranties of Triumph and MWI contained in this
Agreement and in any certificate or other writing delivered
by Triumph pursuant hereto shall be true in all material
respects at and as of the Closing Date as if made at and as
of such time (except: (i) that the representations and
warranties that are subject to a materiality qualification
shall be true in all respects and (ii) to the extent such
representations and warranties speak as of an earlier time).
(d) Purchase Price. In accordance with the
provisions of
Section 1.3 hereof, Triumph shall have paid the Purchase
Price by wire transfer of immediately available funds to
Sellers.
VI.2 Conditions to the Obligations of Triumph. All
obligations of Triumph hereunder are subject, at its option,
to the fulfillment prior to or at the Closing of each of the
following conditions:
(a) Closing Under NCC Purchase Agreement. The
closing
under the NCC Purchase Agreement shall have occurred, or
shall occur concurrently with the Closing hereunder.
(b) Performance. Sellers shall have performed
in all
material respects all of their obligations hereunder
required by them at or prior to the Closing Date.
(c) Representations and Warranties. The
representations and warranties of Sellers and MWI contained
in this Agreement and in any certificate or other writing
delivered by the Sellers pursuant hereto shall be true in
all material respects at and as of the Closing Date as if
made at and as of such time (except: (i) that the
representations and warranties that are subject to a
materiality qualification shall be true in all respects and
(ii) to the extent such representations and warranties speak
of an earlier time).
(d) Delivery of Purchased Shares. Agent shall
have
caused to be delivered to Triumph certificates (with the
legends contemplated by the Stockholders' Agreement)
representing all of the Purchased Shares, together with duly
endorsed stock transfer powers.
(e) Legal Opinion. Triumph shall have received
a signed
legal opinion of counsel to Sellers, dated the Closing Date,
substantially in the form of the opinion annexed as
Exhibit B hereto.
VII INDEMNIFICATION
VII.1 Survival of Representations and Warranties.
Except for the representations and warranties set forth in
Sections 2.4 and 3.4 which shall survive for 18 months after
the Closing Date, the representations, warranties, covenants
and agreements contained herein shall survive the execution
and delivery of this Agreement and the Closing hereunder
until the expiration of any applicable statutes of
limitation.
VII.2 Obligation of Sellers to Indemnify.
Sellers
severally agree to indemnify, defend and hold harmless
Triumph (and its directors, officers, employees, Affiliates,
successors and assigns) from and against all Claims, losses,
liabilities, damages, deficiencies, judgments, settlements,
costs of investigation or other expenses (including
interest, penalties and reasonable attorneys' fees and
disbursements but excluding indirect or consequential
damages or claims for lost profits) (collectively, the
"Losses") suffered or incurred by Triumph by reason of any
material inaccuracy in or any material breach of any
representation, warranty, covenant or agreement of Sellers
contained in this Agreement or in any documents or other
papers delivered by Sellers pursuant to this Agreement.
VII.3 Obligation of Triumph to Indemnify.
Triumph
agrees to indemnify, defend and hold harmless each Seller
from and against any Losses suffered or incurred by such
Seller by reason of any material inaccuracy in or material
breach of any representation, warranty, covenant or
agreement of Triumph contained in this Agreement or in any
document or other papers delivered by Triumph pursuant to
this Agreement.
VII.4 Indemnity Sole Remedy. With respect to any
money claim, in the absence of fraud, the remedies provided
by the foregoing provisions of this Article VI shall be in
lieu of any other remedies to which the respective party is
entitled at law or in equity for any breach or noncompliance
by a party with the provisions of this Agreement.
VII.5 Remedies Prior to Closing Date.
Notwithstanding
anything to the contrary contained in this Agreement, if any
party commits a breach of any of the terms hereof, prior to
the Closing Date, of a type that would permit the non-
breaching party to terminate this Agreement, then the sole
remedy of the non-breaching party will be to terminate this
Agreement. Upon any such termination, no party will have
any further liability hereunder to the other.
VIII TERMINATION
VIII.1 Termination. If the NCC Purchase Agreement
is
terminated, this Agreement shall be terminated concurrently
therewith. In addition, this Agreement may be terminated
and the Contemplated Transactions may be abandoned at any
time prior to the Closing:
(a) By mutual written consent of Agent and
Triumph;
(b) By Agent on behalf of Sellers if (i) there
has been a
material misrepresentation or breach of warranty on the part
of Triumph in the representations and warranties contained
herein and such material misrepresentation or breach of
warranty, if curable, is not cured within 15 days of written
notice thereof from Agent; (ii) Triumph has committed a
material breach of any covenant imposed upon it hereunder
and fails to cure such breach within 15 days of written
notice thereof from Agent; or (iii) any condition to a
Seller's obligations hereunder becomes incapable of
fulfillment through no fault of such parties and is not
waived by such parties;
(c) By Triumph, if (i) there has been a
material
misrepresentation or breach of warranty on the part of a
Seller in the representations and warranties contained
herein and such material misrepresentation or breach of
warranty, if curable, is not cured within 15 days of written
notice thereof from Triumph; (ii) a Seller has committed a
material breach of any covenant imposed upon it hereunder
and fails to cure such breach within 15 days of written
notice thereof from Triumph; or (iii) any condition to
Triumph's obligations hereunder becomes incapable of
fulfillment through no fault of Triumph and is not waived by
Triumph.
IX MISCELLANEOUS
IX.1 Notices. (a) Any notice or other communication
required or permitted hereunder shall be in writing and
shall be delivered personally by hand or by recognized
overnight courier, telecopied or mailed (by registered or
certified mail, postage prepaid) as follows:
(i) if to Triumph, one copy to:
Triumph International Overseas Limited
133 Hoi Bun Road
7th Floor Piazza Building
Kwun Tong, Kowloon
Attention: Mr. W. Engelman/Mr. K.
Haertkorn
Facsimile No.: 011-852-2341-9847
-and-
Triumph International Spiesshofer & Braun
Promenadenstrasse 26
CH-8437 Zurzach
Switzerland
Attention: Mr. Wolfgang Spiesshofer
Facsimile No.: 011-4156-499219
with a simultaneous copy to:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, New York 10112
Telecopier: (212) 698-7825
Attention: Barry A. Adelman, Esq.
(ii) if to Agent or to any
Seller, one copy to:
Catherine C. Brawer
7 Quaker Lane
Chappaqua, New York 10514
with a simultaneous copy to:
Sills Cummis Zuckerman
Radin Tischman Epstein
& Gross, P.A.
One Riverfront Plaza
Newark, New Jersey 07102-
5400
Telecopier (201) 643-6500
Attn: Michael B. Tischman,
Esq.
(a) Each such notice or other communication
shall be
effective (i) if given by telecopier, when such telecopy is
transmitted to the telecopier number specified in Section
9.1(a) (with confirmation of transmission) or (ii) if given
by any other means, when delivered at the address specified
in Section 9.1(a). Any party by notice given in accordance
with this Section 9.1 to the other party may designate
another address (or telecopier number) or person for receipt
of notices hereunder. Notices by a party may be given by
counsel to such party.
IX.2 Entire Agreement. This Agreement (including the
Schedules and Exhibits hereto), as read with the NCC
Purchase Agreement, contain the entire agreement between the
parties with respect to the subject matter hereof and
related transactions and supersede all prior agreements,
written or oral, with respect thereto.
IX.3 Waivers and Amendments; Non-Contractual
Remedies;
Preservation of Remedies. This Agreement may be amended,
superseded, cancelled, renewed or extended, and the terms
hereof may be waived, only by a written instrument signed by
the parties hereto or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall
operate as a waiver thereof. Nor shall any waiver on the
part of any party of any such right, power or privilege, nor
any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege.
Except as otherwise provided herein, the rights and remedies
herein provided are cumulative and are not exclusive of any
rights or remedies that any party may otherwise have at law
or in equity. The rights and remedies of any party based
upon, arising out of or otherwise in respect of any
inaccuracy in or breach of any representation, warranty,
covenant or agreement contained in this Agreement shall in
no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of
any such inaccuracy or breach is based may also be the
subject matter of any other representation, warranty,
covenant or agreement contained in this Agreement (or in any
other agreement between the parties) as to which there is no
inaccuracy or breach.
IX.4 Governing Law. This Agreement shall be governed
and
construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed
entirely within such State, without regard to the conflict
of laws rules thereof.
IX.5 Consent to Jurisdiction and Service of Process.
The
parties hereto irrevocably: (a) agree that any suit, action
or other legal proceeding arising out of this Agreement may
be brought in the courts of the State of New York or the
courts of the United States located in New York County, New
York, (b) consent to the jurisdiction of each court in any
such suit, action or proceeding, (c) waive any objection
which they, or any of them, may have to the laying of venue
of any such suit, action or proceeding in any of such
courts, and (d) waives the right to a trial by jury in any
such suit, action or other legal proceeding. Triumph hereby
designates and appoints Rubin Baum Levin Constant &
Friedman, 30 Rockefeller Plaza, New York, New York 10112
(the "Authorized Agent"), as its agent to accept and
acknowledge on its behalf, service of any and all process
which may be served in any such suit, action or other
proceeding, and agrees that service upon such Authorized
Agent shall be deemed in every respect service of process on
Triumph or its successors or assigns and, to the extent
permitted by applicable law, shall be taken and held to be
valid personal service. Triumph represents and warrants
that the Authorized Agent has agreed to act as such agent
for service of process.
IX.6 Binding Effect; No Assignment. This Agreement
and
all of its provisions, rights and obligations shall be
binding upon and shall inure to the benefit of the parties
hereto and their respective successors, heirs and legal
representatives. This Agreement may not be assigned by a
party without the express written consent of the others and
any purported assignment, unless so consented to, shall be
void and without effect. Nothing herein express or implied
is intended or shall be construed to confer upon or to give
anyone other than the parties hereto and their respective
heirs, legal representatives and successors any rights or
benefits under or by reason of this Agreement, and no other
person shall have any right to enforce any of the provisions
of this Agreement.
IX.7 Severability. If any provision of this
Agreement for
any reason shall be held to be illegal, invalid or
unenforceable, such illegality shall not affect any other
provision of this Agreement, but this Agreement shall be
construed as if such illegal, invalid or unenforceable
provision had never been included herein.
IX.8 Counterparts. The Agreement may be executed in
any
number of counterparts, each of which shall be deemed to be
an original as against any party whose signature appears
thereon, and all of which shall together constitute one and
the same instrument. This Agreement shall become binding
when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties
reflected hereon as the signatories.
IN WITNESS WHEREOF, the undersigned have executed this
Stock Sale Agreement as of the date set forth above.
BUYER:
TRIUMPH INTERNATIONAL OVERSEAS
LIMITED
By:
Name:
Title:
SELLERS:
Catherine C. Brawer
Catherine C. Brawer, as
Agent
ARTICLE 4 TRUST U/W/O BEATRICE
COLEMAN
F/B/O THE BRAWER FAMILY
By:
Catherine C. Brawer,
Trustee
By:
Elizabeth J. Coleman,
Trustee
The undersigned is signing this
Agreement solely to agree to the
provisions of Article IV and Section 5.4 hereof.
MAIDENFORM WORLDWIDE, INC.
By:_________________________________
Name:
Title:
EXHIBIT A
LIST OF SELLERS
Name Number of Allocable
Class A Portion of
Shares of MWI Purchase
Common Stock Price
Catherine C. Brawer 27,256.14 $12,000,000
Article 4 Trust 18,170.76 8,000,000
u/w/o
Beatrice Coleman
f/b/o the
Brawer Family
TOTAL: 45,426.90 $20,000,000
LOAN AGREEMENT
Dated as of April 26, 1995
among
MAIDENFORM WORLDWIDE, INC. (a Delaware corporation)
MAIDENFORM WORLDWIDE, INC. (a New York corporation)
MAIDENFORM, INC.
BETEX, S.A.
CREACIONES TEXTILES de MERIDA, S.A. de C.V.
ELIZABETH NEEDLE CRAFT, INC.
JAMAICA NEEDLECRAFT, LTD.
MAIDENFORM INTERNATIONAL, LTD.
NICHOLAS NEEDLECRAFT, INC.
NCC INDUSTRIES, INC.
CRESCENT INDUSTRIES, INC.
collectively, the Borrowers
and
CORESTATES BANK, N.A.
NATIONSBANK, N.A.
THE CHASE MANHATTAN BANK N.A.
NATIONAL CITY BANK
NBD BANK
COMERICA BANK
EUROPEAN AMERICAN BANK
UNITED JERSEY BANK
collectively, the Banks
CORESTATES BANK, N.A., the Agent,
and the Issuing Bank
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS 2
SECTION 1.1 Certain Defined Terms 2
SECTION 1.2 Accounting Terms 21
ARTICLE II
THE FACILITIES 21
SECTION 2.1 The Facilities 21
SECTION 2.2 The Term Loan. 22
SECTION 2.3 The Revolving Credit 23
SECTION 2.4Making the Advances under the Revolving Credit
25
SECTION 2.5 Fees 27
SECTION 2.6 Mandatory Prepayment of the Term Loan 28
SECTION 2.7 Interest Rate Options 29
SECTION 2.8 Computation of Interest and Fees 29
SECTION 2.9 Payments 29
SECTION 2.10 Payment on Non-Business Days 30
SECTION 2.11Reimbursement to Banks for Cost Increases Imposed
by Law 31
SECTION 2.12Reimbursement to Banks for Increased Costs Due to
Capital Adequacy Requirements 31
SECTION 2.13 Illegality 32
SECTION 2.14Interest and Commissions After Event of Default
32
SECTION 2.15 Special Provisions for LIBO Loans 32
SECTION 2.16 Availability of Rate Quotations 34
SECTION 2.17 Prepayment 34
SECTION 2.18Letter of Credit Cash Collateral Account 35
SECTION 2.19 Letters of Credit 35
ARTICLE III
CONDITIONS OF LENDING 44
SECTION 3.1Conditions Precedent to the Initial Advance and
Term Loan Disbursement 44
SECTION 3.2Conditions Precedent to All Disbursements 50
SECTION 3.3Conditions to Issuance of Letters of Credit 50
ARTICLE IV
REPRESENTATIONS AND WARRANTIES 51
SECTION 4.1 Existence 51
SECTION 4.2 Authorization 51
SECTION 4.3 Validity 52
SECTION 4.4 Financial Information 52
SECTION 4.5 Litigation 52
SECTION 4.6 Contingent Liabilities 52
SECTION 4.7 Taxes 52
SECTION 4.8 Encumbrances 53
SECTION 4.9 Consents 53
SECTION 4.10 ERISA 53
SECTION 4.11 Ownership 55
SECTION 4.12 Subsidiaries and Ownership of Stock 55
SECTION 4.13 Margin Stock 55
SECTION 4.14 Environmental Matters 55
SECTION 4.15 Debt and Guarantees 56
SECTION 4.16 Credit Arrangements 56
SECTION 4.17 Regulation U, Etc 56
SECTION 4.18 Licenses, Permits, Etc 56
SECTION 4.19 Compliance with Laws 56
SECTION 4.20 Labor Matters 57
SECTION 4.21 Outstanding Judgments or Orders 57
SECTION 4.22 No Defaults on Other Agreements 57
SECTION 4.23 Public Utility Holding Company Act 57
SECTION 4.24 Patents. 57
SECTION 4.25 Full Disclosure 57
ARTICLE V
COVENANTS OF THE BORROWERS 58
SECTION 5.1 Use of Proceeds 58
SECTION 5.2 Financial Statements 58
SECTION 5.3 Insurance 60
SECTION 5.4 Taxes 60
SECTION 5.5 Encumbrances 60
SECTION 5.6 Compliance with Laws 61
SECTION 5.7Inspection by Banks; Future Appraisals 61
SECTION 5.8 Reports 61
SECTION 5.9 ERISA 62
SECTION 5.10 Environmental Matters 65
SECTION 5.11 Nature of Business 66
SECTION 5.12 Regulation U 66
SECTION 5.13 Disposal of Assets 66
SECTION 5.14Loans, Investments, Guarantees and Other
Contingent Liabilities 66
SECTION 5.15 Maintenance of Property 67
SECTION 5.16 Merger; Corporate Structure 67
SECTION 5.17Transactions with Affiliates and Subsidiaries
67
SECTION 5.18 Quick Ratio. 67
SECTION 5.19 Leverage Ratio 67
SECTION 5.20 Tangible Net Worth 68
SECTION 5.21 Fixed Charge Coverage Ratio
68
SECTION 5.22 Funded Debt to Operating Cash Flow. 69
SECTION 5.23 Dividends and Distributions 69
SECTION 5.24 Other Debt 69
SECTION 5.25 Licenses, Permits 70
SECTION 5.26 Fiscal Year 70
SECTION 5.27 Change of Ownership or Management 70
SECTION 5.28 RICO 70
SECTION 5.29 Indemnification 70
SECTION 5.30 Interest Rate Protection Agreements. 71
ARTICLE VI
DEFAULT 71
SECTION 6.1 Events of Default 71
SECTION 6.2Termination of Commitments; Acceleration 73
SECTION 6.3 Remedies 74
ARTICLE VII
AGENT 74
SECTION 7.1 Appointment and Authorization 74
SECTION 7.2 General Immunity 74
SECTION 7.3 Consultation with Professionals 75
SECTION 7.4 Documents 75
SECTION 7.5 Rights as a Bank 75
SECTION 7.6 Responsibility of Agent 75
SECTION 7.7 Action by Agent 75
SECTION 7.8 Notices of Event of Default, Etc 76
SECTION 7.9 Indemnification of Agent 76
SECTION 7.10 Resignation of Agent 76
ARTICLE VIII
MISCELLANEOUS 77
SECTION 8.1 No Waiver; Cumulative Remedies 77
SECTION 8.2 Waiver of Jury Trial 78
SECTION 8.3 Set-Off; Sharing of Recoveries 78
SECTION 8.4 Amendments 79
SECTION 8.5 Notices 79
SECTION 8.6 Exchange of Information among Banks 80
SECTION 8.7 Knowledge 80
SECTION 8.8 Nature of Obligations 80
SECTION 8.9 Costs and Expenses 80
SECTION 8.10 Counterparts 81
SECTION 8.11 Binding Effect 81
SECTION 8.12 Governing Law 81
SECTION 8.13 Headings 81
SECTION 8.14 Participations and Assignments 81
SECTION 8.15 Borrowers' Replacement of Banks. 82
SECTION 8.16 Judgment. 82
Exhibits:
1.1A Form of Borrowing Base Certificate
1.1B Prior Letters of Credit
2.1 The Term Loan and the Commitments
2.2 Form of Term Loan Note
2.3 Form of Revolving Credit Note
3.1(B) Matters covered by Opinion of Counsel
4.5 Litigation
4.8 Permitted Encumbrances
4.9 Consents
4.10 Employee Benefits Plans
4.11 Exceptions to Ownership
4.12 Subsidiaries and Stock Ownership
4.15 Existing Debt
4.16 Credit Arrangements
5.2 Form of Compliance Certificate
5.14 Investments
LOAN AGREEMENT, dated as of April 26, 1995, among MAIDENFORM
WORLDWIDE, INC. ("Worldwide-NY"), a New York corporation,
MAIDENFORM WORLDWIDE, INC. ("Worldwide-DE"), a Delaware
corporation, MAIDENFORM, INC. ("Maidenform"), a New York
corporation, BETEX, S.A. ("Betex"), a Costa Rican corporation,
CREACIONES TEXTILES de MERIDA, S.A. de C.V. ("Creaciones"), a
Mexican corporation, ELIZABETH NEEDLE CRAFT, INC. ("Elizabeth"),
a New York corporation, JAMAICA NEEDLECRAFT, LTD. ("Jamaica"), a
Jamaican corporation, MAIDENFORM INTERNATIONAL, LTD.
("International"), a New York corporation, NICHOLAS NEEDLECRAFT,
INC. ("Nicholas"), a New York corporation, NCC INDUSTRIES, INC.
("NCC"), a Delaware corporation, CRESCENT INDUSTRIES, INC.
("Crescent"), a Delaware corporation (Worldwide-DE, Worldwide-NY,
Maidenform, Betex, Creaciones, Elizabeth, Jamaica, International,
Nicholas, Crescent and NCC are each hereinafter referred to as a
"Borrower" and collectively as the "Borrowers"), CORESTATES BANK,
N.A. ("CoreStates"), a national banking association, NATIONSBANK,
N.A. ("Nationsbank"), a national banking association, THE CHASE
MANHATTAN BANK N.A. ("Chase"), a national banking association,
NATIONAL CITY BANK ("City"), a national banking association, NBD
BANK ("NBD"), a Michigan banking corporation, COMERICA BANK
("Comerica"), a Michigan banking corporation, EUROPEAN AMERICAN
BANK ("EAB"), a New York banking corporation and UNITED JERSEY
BANK ("UJB"), a New Jersey banking corporation (CoreStates,
Chase, City, NBD, Comerica, EAB, UJB and Nationsbank are
hereinafter each referred to as a "Bank", and collectively as the
"Banks"), CoreStates, as agent for the Banks (CoreStates, in such
capacity, and any successor agent shall be hereinafter referred
to as the "Agent"), and CoreStates, as issuing bank for the
Letters of Credit (CoreStates, in such capacity and any successor
issuing bank shall be referred to as the "Issuing Bank").
BACKGROUND
The Borrowers are engaged in the design, manufacture,
distribution and sale of women's intimate apparel. The Borrowers
have requested that the Banks provide to the Borrowers the Term
Loan and the Revolving Credit (as those terms are hereinafter
defined) and the Banks have agreed to provide the Term Loan and
the Revolving Credit on the terms and conditions herein
contained. The purposes of the Term Loan and the Revolving
Credit are to finance a portion of the purchase price for the
acquisition of 92.389% of the outstanding shares of NCC by
Worldwide-DE or Maidenform on or about the Closing Date, to
finance the acquisition of the remaining outstanding shares of
NCC by Worldwide-DE or Maidenform after the Closing Date, to
finance the fees relating to such transaction, to refinance long
term debt, to refinance existing short term debt, to finance
working capital, to provide Letters of Credit (as such term is
hereinafter defined) and for general corporate purposes.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
2.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of
the terms defined):
"Accounts" has the meaning given to such term in the
Pennsylvania Uniform Commercial Code as in effect on the date
hereof.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Margin. The Adjusted Base Rate shall change simultaneously with
each change in the Base Rate.
(a) the one-time charge, not to exceed $4,000,000.00 accrued
in the second quarter of 1995 in connection with the retirement
of Robert Brawer, or (b) a one-time charge, not to exceed
$1,500,000.00, which the Borrowers may accrue in connection with
the possible closing of its plant in Shannon, County Clare,
Ireland) before income taxes for the previous twelve (12) month
period determined (i) based on the Combined Pro Forma for that
portion of such twelve month period, if any, occurring prior to
the date of this Agreement, and (ii) otherwise on a Consolidated
basis (but expressly excluding any net amounts accrued under FASB
87) plus (A) interest, depreciation, amortization, and payments
made under operating leases during such period, minus (B) Capital
Expenditures during such period.
"Adjusted LIBO Rate" means the LIBO Rate plus the Applicable
Margin.
"Advance" has the meaning given to such term in Section 2.1
hereof.
"Affiliate" of a Borrower means any Person, except for any
Subsidiary of such Borrower, directly or indirectly controlling
or controlled by or under direct or indirect common control with
such Borrower. For the purposes of this definition, "control"
when used with respect to any Person means the power to direct
the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have the meanings correlative to the foregoing. In
addition, Triumph and its Affiliates shall be deemed Affiliates
of the Borrowers if and when Triumph or any of its Affiliates
would constitute Affiliates of the Borrowers under the first two
sentences of this definition.
"Agent" has the meaning given to such term in the
introductory paragraph hereof.
"Agent's Fee" has the meaning given to such term in Section
2.5(B) hereof.
"Agreement" means this Loan Agreement, as such document may
be modified or amended from time to time.
"Amount of Unfunded Benefit Liabilities" has the meaning
given to such term in 4001(a)(18) of ERISA.
"Applicable Margin" means for Revolving Credit Base Rate
Tranches, 0.50% per annum, for Revolving Credit LIBO Rate
Tranches, 2.25% per annum, for Term Loan Base Rate Tranches,
1.50% per annum, and for Term Loan LIBO Rate Tranches, 3.25% per
annum, provided that from and after March 31, 1996, the foregoing
shall continue in effect unless otherwise specified in accordance
with the table and text below:
With respect to the Revolving Credit:
If Fixed Charge Coverage Then
Applicable Margin is
Ratio is: If the Leverage
Ratio is: Base Rate Tranches: LIBO Rate
Tranches:
1.25 or greater and 0.60 or less
0% 1.75%
UNLESS:
1.50 or greater and 0.55 or less (.25%)
1.50%
UNLESS:
2.25 or greater and 0.50 or less (.50%)
1.25%
With respect to the Term Loan:
If Fixed Charge Coverage The
Applicable Margin is
Ratio is: If the Leverage
Ratio is: Base Rate Tranches: LIBO Rate
Tranches:
1.25 or greater and 0.60 or less
1.00% 2.75%
UNLESS:
1.50 or greater and 0.55 or less .75%
2.50%
UNLESS:
2.25 or greater and 0.50 or less .50%
2.25%
The calculation of the Applicable Margin pursuant to the above
table shall be made quarterly, commencing with the fiscal quarter
ending March 31, 1996, for the immediately preceding twelve month
period, and shall be based upon the Consolidated balance sheet
and income statement of the Borrowers for such period, provided
that for calculations made for any period which includes any time
prior to the Closing Date, such calculation shall also be based
on the portion of the Combined Pro Forma relating to such period
prior to the Closing Date. In the event that the Applicable
Margin changes, such change shall become effective, for all Loans
then existing or thereafter made, as of the first day of the
month immediately following the month in which the Borrowers'
quarterly financial statements are delivered to Agent except that
the Applicable Margin, once reset, shall remain in effect for not
less than ninety (90) days.
"Bank" and "Banks" have the meanings given to such terms in
the introductory paragraph hereof.
"Base Rate" means at any time the higher of (A) Federal
Funds Rate plus one-half percent (1/2%), or (B) the Prime Rate.
"Base Rate Loan" means each Revolving Credit Base Rate
Tranche and each Term Loan Base Rate Tranche.
"Betex" has the meaning given to such term in the
introductory paragraph hereof.
"Borrower and "Borrowers" have the meanings given to such
terms in the introductory paragraph hereof.
"Borrowing Base" at any time, means the sum of (A) 80% of
Eligible Accounts plus (B) 50% of Eligible Inventory.
"Borrowing Base Certificate" means a certificate of the
Borrowers in the form attached hereto as Exhibit 1.1A and made a
part hereof.
"Business Day" means any day other than a Saturday, Sunday,
or other day on which commercial banks in Philadelphia,
Pennsylvania, Detroit, Michigan, Princeton, New Jersey,
Charlotte, North Carolina, or New York, New York are authorized
or required to close under the laws of the Commonwealth of
Pennsylvania, the State of New York, the State of Michigan, the
State of New Jersey or State of North Carolina.
"Capital Asset" means any property or asset (real, personal
or mixed, tangible or intangible) which is of a kind subject to
an allowance for depreciation or amortization under GAAP.
"Capital Expenditures" means any expenditures made or cost
incurred by any Borrower whether paid or due and owing, for the
acquisition, purchase, alteration or improvement of any Capital
Asset under GAAP, excluding expenditures for assets acquired or
created by virtue of the purchase of NCC stock by Maidenform or
Worldwide-DE (including, without limitation, by virtue of the
financing of such purchase), however reflected on Borrowers'
Financial Statements.
(B) marketable direct obligations issued or unconditionally
guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the
United States, or the Commonwealth of Puerto Rico in each case
maturing within one year from the date of acquisition thereof,
(B) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within one
year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either
Standard & Poor's Corporation or Moody's Investors Service, Inc.,
(C) commercial paper maturing no more than one year from the date
of creation thereof and, at the time of acquisition, having the
highest rating obtainable from either Standard & Poor's
Corporation or Moody's Investors Service, Inc., (D) certificates
of deposit, demand accounts or bankers' acceptances maturing
within one year from the date of acquisition thereof issued by
any Bank or commercial banks organized under the laws of the
United States of America or any state thereof, the District of
Columbia or the Commonwealth of Puerto Rico, each having combined
capital and surplus of not less than $500,000,000.00, and (E)
repurchase agreements and reverse repurchase agreements with
securities dealers of recognized national standing relating to
any of the obligations referred to in the foregoing clause (A);
provided that the terms of such agreement comply with the
guidelines set forth in the Supervisory Policy; and further
provided that possession or control of the underlying securities
is established as provided in the Supervisory Policy.
"CERCLA" means the federal Comprehensive Environmental
Response, Compensation, and Liability Act, as amended from time
to time.
"Chase" has the meaning given to such term in the
introductory paragraph hereof.
"City" has the meaning given to such term in the
introductory paragraph hereof.
"Closing Date" means the date on which all of the conditions
precedent contained in Section 3.1 are satisfied.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means all property of the Borrowers which may
serve as collateral for any of the Liabilities under the Security
Documents or otherwise.
"Collateral Agent" means CoreStates in its capacity as
Collateral Agent under and in accordance with the Intercreditor
Agreement.
"Collateral Assignments" has the meaning given to such term
in Section 3.1(J) hereof.
"Combined Pro Forma" means the pro forma financial
statements prepared by the Borrowers and delivered and to be
delivered to the Agent and the Banks pursuant to Section 3.1 and
Section 5.2, which restate the financial condition of the
Borrowers for the five fiscal quarters prior to the fiscal
quarter in which this Agreement is executed and for the "stub"
period from April 1, 1995 to the Closing Date, by combining,
using GAAP standards of combination, the Financial Statements for
such periods with the financial statements of NCC and its
Affiliates for such periods as reflected on NCC's Form 10Q's and
Form 10K's as filed with the Securities and Exchange Commission
for the periods ending on or before March 31, 1995, and financial
statements performed for NCC for the period from April 1, 1995 to
the Closing Date.
"Comerica" has the meaning given to such term in the
introductory paragraph hereof.
"Commitment" has the meaning given to such term in Section
2.1 hereof.
"Commitment Fee" has the meaning given to such term in
Section 2.5(A) hereof.
"Consolidated" refers to the consolidation of the accounts
of the Borrowers in accordance with GAAP, including principles of
consolidation.
"Consolidating" refers to the separation of the accounts of
the Borrowers in accordance with GAAP.
"Controlled Group" means a group of employers, of which any
Borrower is a member and which group constitutes:
(C) a controlled group of corporations (as defined in 414(b)
of the Code and the Department of the Treasury regulations
thereunder); or
(D)
(D) trades or businesses (whether or not incorporated) which
are under common control (as defined in 414(c) of the Code and
the Department of the Treasury regulations thereunder); or
(E) trades or businesses (whether or not incorporated) which
constitute an affiliated service group (as defined in 414(m) of
the Code and the Department of the Treasury regulations
thereunder); or
(F) any other entity required to be aggregated with any
Borrower pursuant to 414(o) of the Code and the Department of
the Treasury regulations thereunder.
"CoreStates" has the meaning given to such term in the
introductory paragraph hereof.
"Creaciones" has the meaning given to such term in the
introductory paragraph hereof.
(G) the Borrowing Base plus the Overadvance, or (B) the
aggregate of the Banks' Commitments.
(H)
"Credit Obligation" means any obligation for the payment of
interest on or principal of borrowed money or other interest-
bearing debt (whether or not the instrument or agreement
evidencing such debt designates as "interest" payments in excess
of the original principal amount of such debt), or obligation
under any capital lease, or the installment purchase price of
property, or any obligation in respect of banker's acceptances,
other acceptances, letters of credit on which a draw has been
made, or other instruments serving a similar function issued or
accepted by financial institutions for the account of any
Borrower (whether or not incurred in connection with the
borrowing of money), and shall include, without limitation, the
Private Placement and the Subordinated Debt.
"Crescent" has the meaning given to such term in the
introductory paragraph hereof.
"Current Assets" means all assets of the Borrowers on a
Consolidated basis that would, in accordance with GAAP, be
classified as current assets of the Borrowers on a Consolidated
basis.
"Current Liabilities" means all liabilities of the Borrowers
on a Consolidated basis that would, in accordance with GAAP, be
classified as current liabilities of the Borrowers on a
Consolidated basis, including without limitation the Revolving
Credit and the current portion of the Term Loan, but excluding
the Subordinated Debt.
"Current Maturities" means those portions of Credit
Obligations of the Borrowers (other than Subordinated Debt),
including without limitation capital leases and the Term Loan
(excluding amounts payable on the Term Loan solely by virtue of
the Borrower's Net Cash Flow), that are payable within one year.
"Defined Benefit Pension Plan" means a defined benefit plan
(other than a Multiemployer Plan) as defined in 3(35) of ERISA,
subject to Title IV of ERISA.
"Defined Contribution Plan" means an individual account plan
as defined in 3(34) of ERISA.
"Delinquent Purchaser" means a Purchaser more than 50% of
whose aggregate Account indebtedness to Domestic Borrowers fails
the test for Eligible Accounts set out in clause (J) of that
definition.
"Documentary Letters of Credit" means one or more letters of
credit issued by the Issuing Bank for the account of a Borrower
in accordance with the provisions of Section 2.19 in order to
provide the primary payment mechanism in connection with the
purchase of any materials, goods or services by such Borrower.
"Dollars" and the "$" mean lawful money of the United States
of America.
"Domestic Borrower" means Worldwide-DE, Worldwide-NY,
Crescent, Elizabeth, International, Nicholas, NCC and Maidenform
or any of them.
"EAB" has the meaning given to such term in the introductory
paragraph hereof.
"Effective Date" means, for LIBO Loans, the date a Borrower
designates as the date on which a LIBO Interest Period is to
commence pursuant to Article II hereof.
(H) the Account is lawfully owned by a Domestic Borrower
free and clear of all liens, security interests or prior
assignments except as set forth in subsection (B) hereof, and
such Borrower has the right of assignment thereof and the power
to grant a security interest therein; (B) the Account is subject
to a first priority perfected security interest in favor of the
Collateral Agent; (C) the Account is valid and enforceable,
representing the undisputed indebtedness of a Purchaser to a
Domestic Borrower provided that if the Account is subject to any
defense, set-off, counter-claim, credit, allowance or adjustment,
only that portion of the Account, if any, not so subject and
otherwise eligible shall be included as an Eligible Account; (D)
the Purchaser has accepted the goods, the sale of which to such
Purchaser has given rise to the Account provided that if any part
of the goods the sale of which has given rise to an Account have
been returned, rejected, lost or damaged, only that part of the
Account, if any, representing the sale of goods not so returned,
rejected, lost or damaged, and otherwise eligible, shall be
included as an Eligible Account; (E) if the Account arises from
the sale of goods, such sale was an absolute sale and not on
consignment or on approval or on a sale-or-return basis nor
subject to any other repurchase or return agreements, and such
goods have been shipped to the Purchaser; (F) if the Account
arises from the performance of services, such services have
actually been performed; (G) the Account arose in the ordinary
course of a Domestic Borrower's business; (H) no notice of the
bankruptcy, receivership, reorganization, or insolvency of the
Purchaser owing such Account has been received by the Agent, any
Bank or any Borrower unless the Agent determines in its sole
discretion that the Purchaser's ability to pay such Account is
not compromised by such bankruptcy, receivership, reorganization
or insolvency because of post petition financing, collateral or
other adequate support for such payment; (I) an invoice has been
sent to the Purchaser for such Account; (J) the Account has
remained unpaid for less than 60 days from the due date and less
than 120 days from the date of the initial invoice for such
Account; (K) the Purchaser is not the United States Federal
government or any United States Federal governmental agency
except to the extent (1) such agency and the Account are subject
to the Federal Assignment of Claims Act, and (2) such Account has
been assigned to Collateral Agent and notice has been given
thereof under the Federal Assignment of Claims Act, provided
however that up to Two Million Dollars ($2,000,000.00) of
otherwise Eligible Accounts owing from the United States Federal
government or governmental agency thereof shall be deemed
Eligible Accounts notwithstanding their failure to satisfy
conditions (1) and/or (2) in this clause (K); (L) the Account is
not owed by a Purchaser who is, and does not arise out of
transactions between a Borrower and (1) a non-United States
government, governmental agency or government-controlled
business, (2) a Person who is not subject to the jurisdiction of
the court system of the United States and any state of the United
States or Canada, or (3) a Person who does not maintain in the
United States or Canada an office to which such Account is
invoiced, unless the payment of such Account is secured by a
letter of credit opened or confirmed by a national bank or other
bank incorporated under the laws of a state of the United States
or similar credit support in form and amount, and with terms
acceptable to the Agent in its sole discretion, which has been
assigned to the Collateral Agent pursuant to the Security
Documents unless, in any such case, the Purchaser is Triumph,
Triumph's parent corporation or one of Triumph's direct
Subsidiaries and the Agent determines, and so notifies the
Borrowers in writing, that the Purchaser is sufficiently credit-
worthy taking into account the aggregate amount of the Accounts
owed by such Purchaser and such other factors as the Agent may
determine; (M) the Purchaser for such Account has not submitted a
medium of payment therefor which has been returned uncollected
for any reason; (N) the Purchaser owing such Account is not an
Affiliate of any Borrower; (O) such Account is not a contra
Account; (P) such Account is not owed by a Delinquent Purchaser;
and (Q) such Account is otherwise acceptable to the Agent in its
reasonable discretion.
(I)
(I) is lawfully owned by a Domestic Borrower; (B) conforms in
all respects to the representations and warranties relating
thereto contained in the Security Agreement; (C) is in good
condition and repair and is not damaged, outdated or obsolete or
otherwise deemed unsalable by the Agent in its reasonable
judgment; (D) with respect to finished goods, is held for sale in
the ordinary course of business of such Borrower as conducted on
the date hereof; (E) is not being held on consignment; (F) is not
subject to a security interest other than a security interest in
favor of the Collateral Agent; and (G) is otherwise acceptable to
the Agent in its reasonable judgment.
(J)
"Elizabeth" has the meaning given to such term in the
introductory paragraph hereof.
"Employee Benefit Plan" has the meaning given to such term
in 3(3) of ERISA.
"Environmental Indemnity" has the meaning given to such term
in Section 3.1(K) hereof.
"Environmental Law" means any federal, state, or local
statute, law, ordinance, regulation, rule, standard, permit or
requirement, including but not limited to those statutes,
ordinances, laws, regulations, rules, standards, permits and
requirements promulgated under the laws of the United States of
America or any other nation, concerning or relating to the
protection of health and the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations
thereunder.
(J) any category of liabilities which includes
deposits by reference to which the LIBO Interest Rate for LIBO
Loans is to be determined or (B) any category of extension of
credit or other assets that include LIBO Loans.
(K)
"Event of Default" has the meaning given to such term in
Section 6.1 hereof.
"Facilities" means, collectively, the Term Loan and the
Revolving Credit.
"Facility Fee" has the meaning given to such term in Section
2.5(C) hereof.
"Federal Funds Rate" means for each day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) which
is the weighted average of the rates on overnight federal funds
transactions arranged on such day by federal funds brokers,
computed and released by the Federal Reserve Bank of New York (or
any successor).
"Fees" means all payments except for interest and principal
which the Borrowers are required to make to the Agent, the
Issuing Bank, and/or the Banks hereunder and shall include,
without limitation, amounts owing in connection with any
prepayment under any LIBO Loan, the Commitment Fee, the Agent's
Fee, the Facility Fee, any fees associated with the issuance of
any Letter of Credit or otherwise required under Section 2.19
hereof, the costs of hedging and any amounts payable pursuant to
Section 8.9.
"Financial Statements" means an audited Consolidated balance
sheet, statement of income and retained earnings, statement of
cash flows and statement of changes in stockholder's equity,
together with all notes pertaining thereto, and an audited
Consolidating balance sheet, statements of income and retained
earnings, all as at and for a designated period and all in
accordance with GAAP and any other statements that the Borrowers
may be required to deliver and, with respect to fiscal year
periods ending prior to the date this Agreement is executed, the
portion of the Combined Pro Forma applicable thereto.
"Fixed Charge Coverage Ratio" means at any time the ratio of
(A) Adjusted Earnings to (B) Fixed Charges.
(K) amounts paid over the prior twelve (12) months by the
Borrowers (determined on a Consolidated basis for quarters
commencing with the quarter ending September 30, 1995, determined
with reference to the Combined Pro Forma for quarters ending
prior to the date hereof, and determined on a Consolidated basis
and with reference to the Combined Pro Forma for the quarter
ending June 30, 1995) under operating leases, whether
characterized as rents or otherwise (other than payments under
such leases in respect of insurance, real estate taxes,
utilities, maintenance or similar charges, and additional
rentals, in excess of the minimum based on percentage of sales),
interest in connection with any Credit Obligation (including
without limitation the Revolving Credit and the Term Loan but
excluding the Subordinated Debt), and the cash payments,
consistent with the one-time charge accrued in the second quarter
of 1995, in connection with the retirement of Robert Brawer, and
(B) Current Maturities.
(L)
"Florida Mortgage" has the meaning given to such term in
Section 3.1(G) hereof.
"Florida Property" has the meaning given to such term in
Section 3.1(G) hereof.
(L) all Credit Obligations (including without limitation the
Term Loan and the Revolving Credit but excluding the Subordinated
Debt) which have a final maturity of one or more years from the
date of origination, (B) the maximum aggregate liability under
all guarantees other than guarantees of the tenant's obligations
to pay rent and operating expenses under operating leases, (C)
the indebtedness attributed to all capitalized leases, and (D)
short term indebtedness (other than the Subordinated Debt) which
has not been paid in full for a period of 60 consecutive days or
more during the immediately previous four fiscal quarters.
(M)
"GAAP" means generally accepted accounting principles in the
United States in effect from time to time as promulgated in
statements, opinions and pronouncements by the American Institute
of Certified Public Accountants, the Financial Accounting
Standards Board and any successor entities consistently applied;
provided however that for the purposes of the calculation of (A)
the financial covenants set forth in Article V hereof, and (B)
the Applicable Margin, FASB 109 shall not be given effect.
"Governmental Approvals" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings
with, and reports to all governmental bodies.
"Guaranties" has the meaning given to such term in Section
5.14 hereof.
"Individual Loans" has the meaning given to such term in
Section 5.14 hereof.
"Intercreditor Agreement" has the meaning given to such term
in Section 3.1(O) hereof.
"Interest Period" means a LIBO Interest Period or any period
during which the Interest Rate is the Adjusted Base Rate, as
appropriate.
"Interest Rate" means the Adjusted LIBO Rate or the Adjusted
Base Rate, as appropriate.
"Interim Financial Statements" means an unaudited
Consolidated balance sheet, statement of income and retained
earnings, statement of cash flows all as, at and for a designated
period, and, with respect to interim periods ending prior to the
date this Agreement is executed, the portion of the Combined Pro
Forma applicable thereto, and all in accordance with GAAP subject
only to usual year-end adjustments and the absence of footnotes.
"International" has the meaning given to such term in the
introductory paragraph hereof.
"Inventory" has the meaning given to such term in the
Pennsylvania Uniform Commercial Code as in effect on the date
hereof.
"Issuing Bank" has the meaning given to such term in the
introductory paragraph hereof.
"Jamaica" has the meaning given to such term in the
introductory paragraph hereof.
"Letter of Credit" means one of the Standby Letters of
Credit and/or Documentary Letters of Credit issued by the Issuing
Bank or any of the Prior Letters of Credit.
"Letter of Credit Cash Collateral Account" has the meaning
given to such term in Section 2.18 hereof.
"Letter of Credit Documents" means the documents and
instruments required by the Issuing Bank to be executed by the
Borrowers in connection with the issuance of Letters of Credit.
(a) the date on which the Letter of Credit is returned to
Issuing Bank, undrawn, for cancellation, or (b) that date which
is thirty (30) Business Days after the expiration date thereof.
"Letter of Credit Sublimit" means the least of (A) the
aggregate Commitments, (B) $5,000,000.00 or (C) such lesser
amount as reduced by the Borrowers pursuant to Section 2.3(c)
hereof.
"Leverage Ratio" means at any time the ratio of (A) Funded
Debt to (B) Tangible Net Worth plus Funded Debt.
"LIBO Interest Period" means for each LIBO Loan a period of
time, beginning on an Effective Date, of one, two, three or six
months in length (as such periods are commonly used), selected by
a Borrower by telephone or in writing (and if by telephone,
confirmed by such Borrower promptly thereafter in writing),
during which the Interest Rate is the Adjusted LIBO Rate. If a
LIBO Interest Period would otherwise end on a day that is not a
Business Day, such LIBO Interest Period shall be extended to the
next Business Day, unless such Business Day would fall in the
next calendar month, in which event such LIBO Interest Period
shall end on the immediately preceding Business Day.
"LIBO Loan" means each Revolving Credit LIBO Rate Tranche
and each Term Loan LIBO Rate Tranche.
"LIBO Rate" means, for each LIBO Loan, the rate per annum
(rounded upwards, if necessary, to the nearest 1/16th of 1%)
determined by the Agent according to the following formula:
R = X
1-Y
where R = LIBO Rate
X = London Interbank Offered Rate for such
LIBO Loan for the applicable LIBO
Interest Period
Y = Eurocurrency Reserve Requirement for such
LIBO Loan for the applicable LIBO
Interest Period
"Loan Documents" means the documents associated with this
transaction, including but not limited to this Agreement, the
Notes, the Intercreditor Agreement, the Environmental Indemnity,
the Protection Agreements, and the Security Documents.
"Loans" means all Advances under the Revolving Credit and
the Term Loan.
"London Business Day" means any Business Day on which
commercial banks are open for international business (including
dealing in Dollar deposits) in London, England, Philadelphia,
Pennsylvania and New York, New York.
"London Interbank Offered Rate" applicable to any elected
LIBO Interest Period for a LIBO Loan means the rate per annum
(rounded upwards, if necessary, to the nearest 1/16th of 1%)
quoted at approximately 11:00 a.m. London time, by the principal
London branch of the Agent two London Business Days prior to the
first day of such LIBO Interest Period for the offering to
leading banks in the London interbank market of Dollar deposits
in immediately available funds for a period, and in an amount,
comparable to the LIBO Interest Period and principal amount of
the LIBO Loan which shall be outstanding during such LIBO
Interest Period.
"Maidenform" has the meaning given to such term in the
introductory paragraph hereof.
"Majority Banks" means those Banks which are then in
compliance with their obligations hereunder holding not less than
66-2/3% of the outstanding principal amount of the aggregate
Loans of those Banks which are then in compliance with their
obligations hereunder.
"Margin Stock" has the same meaning that Regulation U of the
Board of Governors of the Federal Reserve System gives to that
term.
"Maturity Date" means March 31, 2001.
"Mortgages" means the Florida Mortgage, the New York
Mortgage and the North Carolina Mortgage.
"MPPAA" means Multiemployer Pension Plan Amendments Act of
1980, as amended from time to time.
"Multiemployer Plan" has the meaning given to such term in
4001(a)(3) of ERISA.
"Nationsbank" has the meaning given to such term in the
introductory paragraph hereof.
"NBD" has the meaning given to such term in the introductory
paragraph hereof.
"NCC" has the meaning given to such term in the introductory
paragraph hereof.
(M) cash used in the Borrowers' investing activities provided
such activities are consistent with that described in the
Borrowers' Financial Statements for fiscal year 1994 (other than
cash expended for assets acquired or created by virtue of the
purchase of NCC stock by Maidenform or Worldwide-DE), (B) cash
used to retire long term debt (other than Subordinated Debt and
principal payments on the Revolving Credit) all as determined for
the Borrowers for the preceding fiscal year period and (C) cash
payments made by the Borrowers to Sidney Goldberg, Edward
Goldberg and Ellen Goldberg pursuant to consulting agreements and
non-competition agreements with each of the above each dated
February 18, 1992.
(N)
"New York Mortgage" has the meaning given to such term in
Section 3.1(H) hereof.
"New York Property" has the meaning given to such term in
Section 3.1(H) hereof.
"Nicholas" has the meaning given to such term in the
introductory paragraph hereof.
"North Carolina Mortgage" has the meaning given to such term
in Section 3.1(I) hereof.
"North Carolina Property" has the meaning given to such term
in Section 3.1(I) hereof.
"Noteholders" means the holders of the Private Placement
Notes, which, as of the date hereof, are Massachusetts Mutual
Life Insurance Company, Principal Mutual Life Insurance Company
and TMG Life Insurance Company.
"Notes" means the Revolving Credit Notes and the Term Loan
Notes.
"Offshore Borrower" means Betex, Creaciones and Jamaica or
any of them.
"Offshore Loans" has the meaning given to such term in
Section 5.14 hereof.
"Offshore Tangible Net Worth" means without duplication (A)
the amount by which aggregate tangible assets of the Offshore
Borrowers on a Consolidated basis exceed the sum of (i) total
liabilities of the Offshore Borrowers on a Consolidated basis,
plus (ii) all obligations of the Offshore Borrowers on a
Consolidated basis with respect to contingent liabilities not
otherwise included in (i) above, minus (B) the sum of the
Offshore Borrowers' (i) loans to or interest or investments in
Triumph, Affiliates, joint ventures or partnerships, (ii)
investments in equity securities of companies if such securities
are not traded on a national securities exchange or in the
National Market System of the NASDAQ, and (iii) investments in
other securities which do not have an investment grade rating of
Baa or higher by Moody's Investors Service, Inc. or BBB or higher
by Standard and Poor's Corporation, but only the extent that the
assets described in clauses (i), (ii), or (iii) otherwise
constitute tangible assets according to GAAP.
"Operating Cash Flow" means net income from operations
(without giving effect to either extraordinary income or
extraordinary losses, or the one-time charge not to exceed
$4,000,000.00, accrued in the second quarter of 1995 in
connection with the retirement of Robert Brawer, or a one-time
charge, not to exceed $1,500,000.00, which the Borrowers may
accrue in connection with the possible closing of its plant in
Shannon, County Clare, Ireland, and expressly excluding any net
amounts accrued under FASB 87) of the Borrowers for the previous
twelve (12) month period (determined on a Consolidated basis for
quarters commencing with the quarter ending September 30, 1995,
determined with reference to the Combined Pro Forma for quarters
ending prior to the date hereof, and determined on a Consolidated
basis and with reference to the Combined Pro Forma for the
quarter ending June 30, 1995) before income taxes, plus
depreciation, amortization and interest expense.
"Other Currency" has the meaning given to such term in
Section 8.16 hereof.
"Overadvance" means an amount, not to exceed One Million
Dollars ($1,000,000.00) by which the aggregate amount of
outstanding Advances plus the Letter of Credit Liability exceeds
the Borrowing Base, provided that the Overadvance shall be zero
for the two calendar month period following any calendar month
during which at any time the amount outstanding under the
Revolving Credit plus the Letter of Credit Liability exceeds the
Borrowing Base.
"Participant Bank" means any bank to which a Bank has sold a
participation in the Loans under Section 8.14 hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" means any individual, corporation, partnership,
joint venture, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
(N) a Defined Benefit Pension Plan or Defined Contribution Plan
maintained for employees of a Borrower or any member of any
Borrower's Controlled Group, or (B) any other Employee Benefit
Plan (other than a Multiemployer Plan) maintained for employees
of a Borrower or any member of any Borrower's Controlled Group
for which the Borrowers' total potential liability is likely to
have a material adverse effect on the financial condition,
prospects, property or business of the Borrowers taken as a whole
or the Domestic Borrowers taken as a whole.
(O)
"Pledge Agreement" has the meaning given to such term in
Section 3.1(L) hereof.
"Prime Rate" means for each day, the rate of interest for
loans established and publicly announced by the Agent from time
to time as its prime rate as in effect on such day. The Prime
Rate is not necessarily the lowest rate of interest which the
Agent charges any of its customers.
"Prior Letters of Credit" means letters of credit
outstanding on the date hereof issued by the Issuing Bank and
listed on Exhibit 1.1B attached hereto and made a part hereof.
"Private Placement" means those certain loans to the
Borrowers in the original aggregate amount of $30,000,000.00 made
by the Noteholders pursuant to amended and restated note purchase
agreements dated as of April 1, 1995.
"Private Placement Notes" means the notes issued by the
Borrowers in the original principal amount of $30,000,000
pursuant to the Private Placement, becoming due on September 30,
2003.
"Proceeds" has the meaning given to such term in the
Pennsylvania Uniform Commercial Code as in effect on the date
hereof.
"Prohibited Transaction" has the meaning given to such term
in 406 of ERISA, 4975(c) of the Code and any Treasury
regulations issued thereunder.
"Properties" means the Florida Property, the New York
Property, and the North Carolina Property.
"Pro Rata Share" of a Bank means such Bank's pro rata
percentage of the Loans as set forth on Exhibit 2.1 hereof.
"Protection Agreements" means (a) any interest rate
protection agreements entered into with respect to not more than
$50,000,000.00 in principal for a term not exceeding the Maturity
Date, provided that the Borrowers' obligations thereunder shall
be limited to not more than $5,000,000.00 in the aggregate, and
(b) foreign currency exchange agreements with a maximum aggregate
exposure at any one time not exceeding $5,000,000.00 and for a
maximum term not exceeding 180 days, entered into between any
Borrower and any Bank in the ordinary course of such Borrower's
business and not for speculation.
"Purchaser" means a buyer of goods from a Borrower, or a
customer for whom services have been rendered or materials
furnished by a Borrower.
(O) Current Assets less Inventory to (B) Current Liabilities.
(P)
"Regulation D" means Regulation D of the Board of Governors
of the Federal Reserve System as amended or supplemented from
time to time.
"Reimbursement Date" has the meaning given to such term in
Section 2.19(E).
"Reportable Event" has the meaning given to such term in
4043(b) of ERISA, but does not include any event to which the
provision of 30 days notice to the PBGC is waived under
applicable regulations unless the Borrowers' potential liability
therefor is likely to have a material adverse effect on the
financial condition, prospects, property or business of the
Borrowers taken as a whole or the Domestic Borrowers taken as a
whole.
"Restricted Loans" has the meaning given to such term in
Section 5.14 hereof.
"Revolving Credit" means the credit facilities being
extended by the Banks to the Borrowers pursuant to Section 2.3
hereof.
"Revolving Credit Base Rate Tranche" means any portion of
the Revolving Credit to which the Adjusted Base Rate is
applicable.
"Revolving Credit LIBO Rate Tranche" means any portion of
the Revolving Credit to which the Adjusted LIBO Rate applies
having the same LIBO Interest Period.
"Revolving Credit Notes" has the meaning given to such term
in Section 2.3 hereof.
"Revolving Credit Tranches" means the Revolving Credit Base
Rate Tranches and the Revolving Credit LIBO Rate Tranches.
"RICO" means the Racketeer Influenced and Corrupt
Organization Act, as amended by the Comprehensive Act of 1984, 18
U.S.C. 1961-68.
"Security Agreement" has the meaning given to such term in
Section 3.1(P) hereof.
"Security Documents" means the Collateral Assignments, the
Security Agreement, the Mortgages, the Pledge Agreement, the
Trademark Agreement, any financing statements executed in
connection herewith and all other documents delivered to the
Collateral Agent in accordance with the Security Agreement.
"Standby Letters of Credit" means one or more standby
letters of credit issued by the Issuing Bank for the account of a
Borrower or any Borrowers in accordance with the provisions of
Section 2.19.
"Subordinated Debt" means indebtedness of any Borrower under
that certain note dated April 26, 1995 in the principal amount of
$2,538,896.00 payable to the Estate of Beatrice Coleman, which by
its terms is subordinated in right of payment to the Banks and
the Noteholders on terms satisfactory to the Agent.
"Subsidiary" means any corporation or other entity, more
than 50% of the voting capital stock, partnership or other
ownership interests of which is owned, directly or indirectly, by
any Borrower.
"Supervisory Policy" means the Federal Financial
Institutions Examination Council Supervisory Policy-Repurchase
Agreements of Depository Institutions with Security Dealers and
Others as adopted by the Comptroller of the Currency on
October 31, 1985.
"Tangible Assets" means all assets of the Borrowers on a
Consolidated basis that would, in accordance with GAAP, be
classified as tangible assets of the Borrowers on a Consolidated
basis.
(P) the amount by which Tangible Assets exceed Total
Liabilities, minus (B) the sum of the Borrowers' and any
Subsidiaries' (1) loans to or interests or investments in any
joint ventures or partnerships (except for joint ventures or
partnerships solely with Triumph and/or any corporation or other
entity, more than 50% of the voting equity interest of which is
owned directly by Triumph), (2) investments in equity securities
of companies if such securities are not traded on a national
securities exchange or in the National Market System of the
NASDAQ, and (3) investments in other securities which do not have
an investment grade rating of Baa or higher by Moody's Investors
Service, Inc. or BBB or higher by Standard and Poor's Corporation
but only to the extent that the assets described in clauses (1),
(2) and (3) otherwise constitute Tangible Assets according to
GAAP, plus (C) Subordinated Debt.
(Q)
"Term Loan" has the meaning given to such term in Section
2.2(A) hereof.
"Term Loan Base Rate Tranche" means each portion of the Term
Loan to which the Adjusted Base Rate is applicable.
"Term Loan LIBO Rate Tranche" means each portion of the Term
Loan to which the Adjusted LIBO Rate is applicable having the
same LIBO Interest Period.
"Term Loan Notes" has the meaning given to such term in
Section 2.2(D) hereof.
(Q) the third anniversary of the Closing Date (subject to
extension as set forth in Section 2.3(B)), or (B) the date on
which the Banks' obligations to make Advances under the Revolving
Credit are terminated in whole pursuant to the terms of this
Agreement.
(R)
"Third Party Guarantees" has the meaning given to such term
in Section 5.14 hereof.
"Total Liabilities" means the sum of all liabilities (both
direct and contingent, other than liabilities arising under the
Protection Agreements) of the Borrowers on a Consolidated basis
(and for periods prior to the Closing Date, with reference to the
Combined Pro Forma) that would, in accordance with GAAP, be
classified as liabilities of the Borrowers on a Consolidated
basis.
"Trademark Agreement" has the meaning given to such term in
Section 3.1(N) hereof.
"Triumph" means Triumph International Overseas Limited.
"UCC" means the Pennsylvania Uniform Commercial Code as in
effect from time to time.
"UJB" has the meaning given to such term in the introductory
paragraph hereof.
"Unmatured Event of Default" means and refers to any event,
act or occurrence, which with the passing of time or the giving
of notice or both, would constitute an Event of Default.
"Withdrawal Liability" has the meaning given to such term in
4201 of ERISA.
"Worldwide-DE" has the meaning given to such term in the
introductory paragraph hereof.
"Worldwide-NY" has the meaning given to such term in the
introductory paragraph hereof.
2.2 Accounting Terms. All accounting terms not
specifically defined herein shall be construed, and all financial
data submitted pursuant to this Agreement shall be prepared, in
accordance with GAAP.
ARTICLE II
THE FACILITIES
2.3 The Facilities. Subject to the terms and conditions
hereinafter provided, each Bank, for itself only, agrees: (A) to
make on the Closing Date its portion of the Term Loan in the
principal amount set forth opposite its name on Exhibit 2.1
hereto, and (B) to make its portion of advances requested under
the Revolving Credit to the Borrowers (including such sums deemed
requested by the Borrowers pursuant to Section 2.19 hereof) (such
advances under the Revolving Credit are hereinafter referred to
as the "Advances"), from time to time during the period from the
date hereof to and including the Termination Date, provided that
the aggregate outstanding principal amount of each Bank's portion
of the Advances under the Revolving Credit when added to such
Bank's participation in the Letter of Credit Liability at any
time shall not exceed the amount set forth opposite such Bank's
name under the heading "Revolving Credit" on Exhibit 2.1 hereto,
as such amount may be reduced pursuant to Section 2.3 hereof
(such respective amounts relating to the Revolving Credit being
the "Commitment" of each Bank). Each Advance of the Revolving
Credit shall be from all of the Banks ratably according to their
respective Commitments.
2.4 The Term Loan. (A) Subject to the terms and
conditions of this Agreement, the Banks shall extend to the
Borrowers a term loan in the principal amount of Fifty Million
Dollars ($50,000,000.00) (the "Term Loan"). The Term Loan shall
be advanced by the Banks on the Closing Date and shall be used by
the Borrowers for the purposes set forth in the Background
Section hereof. The Term Loan shall initially earn interest at
the Adjusted Base Rate. Amounts repaid or prepaid by the
Borrowers under the Term Loan shall not be available to the
Borrowers for reborrowing.
(A) The Borrowers shall pay interest on the principal amount
of the Term Loan outstanding from time to time at the Interest
Rate applicable to each portion of the Term Loan in accordance
with Section 2.7 hereof. The Borrowers shall repay the principal
balance of the Term Loan in quarterly installments, in the
amounts set forth below, commencing on March 31, 1996, and on the
last day of each June, September, December and March thereafter
through the Maturity Date, on which date the Borrowers shall
repay in full the unpaid principal amount of the Term Loan:
Each Quarterly
Period Principal Repayment
6/30/1996 through 3/31/1997 $2,000,000.00
6/30/1997 through 3/31/1998 $2,250,000.00
6/30/1998 through 3/31/1999 $2,500,000.00
6/30/1999 through 3/31/2000 $2,750,000.00
6/30/2000 through 3/31/2001 $3,000,000.00
(1) on or before April 30, 1996, an amount equal to 50% of
the Borrowers' Net Cash Flow for the fiscal year ending December
31, 1995 (determined in accordance with the Financial
Statements), (2) on or before April 30, 1997, an amount equal to
the lesser of (a) 25% of the Borrowers' Net Cash Flow for the
fiscal year ending December 31, 1996 (determined in accordance
with the Financial Statements), or (b) $4,000,000.00, and (3) on
or before April 30, 1998, an amount equal to the lesser of (a)
25% of the Borrowers' Net Cash Flow for the fiscal year ending
December 31, 1997 (determined in accordance with the Financial
Statements), or (b) $3,000,000.00; provided that in the event
that the Private Placement Notes or related documents require a
prepayment of the Private Placement Notes or permit the holders
thereof to require such a prepayment, then the Borrowers shall
pay to the Agent for the ratable benefit of each Bank as and when
required under this sentence an amount equal to (i) the amount
which otherwise would be payable but for this proviso times a
fraction the numerator of which shall be the aggregate principal
amount of the Term Loan then outstanding plus the aggregate
Commitments and the denominator of which shall be the sum of the
principal amount of the Private Placement Notes then outstanding
plus the aggregate principal amount of the Term Loan then
outstanding plus the aggregate of the Commitments, plus (ii) if
positive, the amount which otherwise would be payable but for
this proviso minus the amount of prepayment actually required by
the Private Placement Notes, the related documents and/or the
holders of the Private Placement Notes, and minus the amount of
prepayment required under (i). Amounts paid in accordance with
clauses (1), (2) and (3) of the immediately preceding sentence
shall be applied to the principal installments of the Term Loan
otherwise coming due on the Maturity Date and shall in no way
postpone, decrease or otherwise affect the Borrowers' obligations
to make, the regularly scheduled quarterly principal installments
on the Term Loan as set forth in the table above.
(2)
(B) The Term Loan shall earn interest at the Adjusted Base
Rate, the Adjusted LIBO Rate, or both. The Borrowers shall have
the right to convert all or a portion of the Term Loan Base Rate
Tranches to Term Loan LIBO Rate Tranches subject to Section 2.7
hereof and provided that at any time when a principal payment is
due under Section 2.2(B), there is then earning interest at the
Adjusted Base Rate an amount of the Term Loan equal to or greater
than the amount of such payment.
(C) The joint and several obligation of the Borrowers to repay
the Term Loan shall be evidenced by promissory notes of the
Borrowers dated the date hereof, each payable to the order of a
Bank in a principal amount equal to the amount set forth opposite
such Bank's name with respect to the Term Loan on Exhibit 2.1
hereto and otherwise substantially in the form of Exhibit 2.2
attached hereto (the "Term Loan Notes").
2.5 The Revolving Credit. (A) Subject to the terms and
conditions set forth in this Agreement, each Bank, for itself
only, agrees to lend to the Borrowers from time to time during
the period from the Closing Date to but not including the
Termination Date, such sums as the Borrowers may request provided
that (1) the aggregate outstanding principal amount thereof shall
not exceed at any time the amount set forth as such Bank's
Commitment on Exhibit 2.1, (2) the total outstanding principal
under the Revolving Credit when added to the Letter of Credit
Liability at any one time shall not exceed the Credit Limit, and
(3) the Letter of Credit Liability shall at no time exceed the
Letter of Credit Sublimit. If the outstanding principal under
the Revolving Credit at any time exceeds the Credit Limit, the
Borrowers shall immediately repay the amount of the excess,
together with accrued interest thereon and any amount which may
be due pursuant to Section 2.17(B) on account of such payment.
If, at any time, the aggregate Letter of Credit Liability exceeds
the Letter of Credit Sublimit, the Borrowers shall pledge to the
Agent for the benefit of the Banks cash collateral in an amount
equal to or greater than the amount by which such Letter of
Credit Liability exceeds the Letter of Credit Sublimit, which
cash collateral shall be deposited and held in the Letter of
Credit Cash Collateral Account. The Borrowers shall use the
Revolving Credit for the purposes set forth in the Background
section hereof and for no other purposes.
(A) The Borrowers shall pay interest on the principal amount
of the Revolving Credit outstanding from time to time at the
Interest Rate applicable to each Revolving Credit Tranche in
accordance with Section 2.7 hereof. On the Termination Date, the
Borrowers shall (1) repay in full (a) the aggregate principal
amount of any and all Revolving Credit Tranches, (b) the amount
of any drawings under Letters of Credit which have not been
previously reimbursed by the Borrowers and (c) all other amounts
then outstanding hereunder, or under the Revolving Credit Notes,
and (2) if there remain any unexpired Letters of Credit on such
date, deposit into the Letter of Credit Cash Collateral Account
an amount equal to or greater than (as determined by the Issuing
Bank in its sole discretion) such Letter of Credit Liability.
The Termination Date may be extended up to three times by one
year each, effective as of each of the third, fourth and fifth
anniversaries of the Closing Date provided that (1) the Borrowers
and each of the Banks consent to each such extension in writing
prior to the Termination Date (as then in effect), which consent
shall be given or withheld in the sole discretion of such party
and (2) there does not occur any Unmatured Event of Default or
Event of Default between the date of any such parties' consent
and the Termination Date (as determined without giving effect to
such new extension). With each such extension the following
anniversary of the Closing Date shall become the "Termination
Date" for purposes of this Agreement.
(B)
(B) The Borrowers shall have the right at any time and from
time to time, upon at least five (5) Business Days prior written
notice executed by each of the Borrowers to the Agent (which
shall promptly give notice thereof to each other Bank), to
terminate the Commitments in whole or reduce them in part
ratably, provided, however, that: (1) the Borrowers shall
simultaneously with such reduction pay to the Agent for the
benefit of the Banks (a) the amount by which the outstanding
principal amount of the Revolving Credit Tranches plus the Letter
of Credit Liability exceeds the Credit Limit as and if so
reduced, with such repaid principal to be applied first against
Revolving Credit Base Rate Tranches and thereafter against
Revolving Credit LIBO Rate Tranches, and (b) all accrued and
unpaid interest thereon; (2) to the extent application of this
subsection requires a paydown of any Revolving Credit LIBO Rate
Tranches prior to the end of the applicable Interest Period(s),
the Borrowers shall pay any prepayment compensation provided by
Section 2.17(B) herein; and (3) while any Letters of Credit
remain outstanding the Borrowers shall not be permitted to
terminate the Banks' Commitments in whole or reduce the Banks'
Commitments below the aggregate amount of Letter of Credit
Liability then outstanding other than as provided in Section
2.3(D) below. Any partial reduction of the Commitments shall be
in the minimum amount of $5,000,000.00 or in multiples of
$1,000,000.00 in excess thereof. Any termination or reduction of
the Commitments hereunder shall be permanent, and the Commitments
cannot thereafter be restored or increased without the written
consent of all Banks. Upon the termination of the Commitments in
whole, the Borrowers shall pay any accrued Commitment Fees and
repay the aggregate principal amount of all Revolving Credit
Tranches outstanding on such Termination Date together with
interest thereon and any other sums due hereunder including,
without limitation, under Section 2.17(B).
(C) The Borrowers shall have the right to reduce the Letter of
Credit Sublimit below the aggregate amount of the Letter of
Credit Liability only upon the Borrowers' pledge of cash
collateral in an amount equal to or greater than the amount by
which such Letter of Credit Liability exceeds the Letter of
Credit Sublimit as reduced. Such cash collateral shall be
deposited in the Letter of Credit Cash Collateral Account.
(D) Each Advance shall be in an aggregate amount of
$1,000,000.00 or in multiples of $500,000.00 in excess thereof.
Each Revolving Credit LIBO Rate Tranche shall be in an aggregate
amount of $5,000,000.00 or in multiples of $500,000.00 in excess
thereof. The Borrowers may borrow, repay and reborrow under the
Revolving Credit until the Termination Date subject to the terms
and conditions of this Agreement.
(E) The joint and several obligation of the Borrowers to repay
the Revolving Credit shall be evidenced by promissory notes of
the Borrowers dated the date hereof, each payable to the order of
a Bank in a principal amount equal to the amount set forth
opposite such Bank's name under the heading "Revolving Credit" on
Exhibit 2.1 and otherwise substantially in the form of Exhibit
2.3 attached hereto (the "Revolving Credit Notes"). In the event
that any Bank assigns all or a portion of its Commitment as
permitted under Section 8.14 hereof, the Borrowers will execute
and deliver replacement Revolving Credit Note(s) in the form of
Exhibit 2.3 upon the request of the Agent and against return of
the Revolving Credit Note being replaced.
2.6 Making the Advances under the Revolving Credit. (A) A
Borrower shall notify the Agent by telephone no later than 11:00
A.M. on the date of each proposed Advance to which only the
Adjusted Base Rate will apply, specifying the date and amount of
the proposed Advance. Subject to subsection (B) hereof, the
Agent in turn shall promptly notify each other Bank of the
proposed Advance. A Borrower shall notify the Agent, by
telephone or in writing, by 11:00 A.M. at least three London
Business Days before each proposed Advance, any portion of which
is to earn interest at the Adjusted LIBO Rate, specifying the
date and the amount of the proposed Advance, the amount of such
proposed Advance to which the Adjusted LIBO Rate will apply, and
the length of the proposed LIBO Interest Period(s). The Agent
shall in turn notify each other Bank of the proposed Advance by
11:00 A.M. on the second London Business Day preceding the
proposed Advance. Such Borrower will confirm promptly in writing
any telephonic notice of a proposed Advance. Each notice by a
Borrower to the Agent under this Section 2.4 shall constitute a
representation by the Borrowers that, at the time thereof and
giving effect to the Advance requested thereby, all conditions
precedent described in Sections 3.1 and 3.2 have been satisfied.
Subject to subsection (B) hereof, upon notice from the Agent of
the proposed Advance, each Bank shall wire transfer to the Agent,
at the Agent's office at 1345 Chestnut Street, Philadelphia,
Pennsylvania, in immediately available funds, which funds shall
be in Dollars, prior to 2:00 p.m. on the date of the proposed
Advance, an amount equal to such Bank's Pro Rata Share of such
Advance. Upon receipt of such funds by the Agent and upon
Agent's determination that the applicable conditions set forth in
Article III hereof have been fulfilled, the Agent will
immediately make such funds available to the Borrowers. The
Agent shall have no obligation to make funds available to the
Borrowers in excess of amounts received by it from the Banks.
(A) The Agent shall have the right (but not the obligation) to
make any Advance which is to earn interest only at the Adjusted
Base Rate and to which the Borrowers are entitled pursuant to
subsection (A) above, in which event the Agent shall notify each
Bank, not later than 11:00 A.M. (i) on any Business Day on which
the aggregate amount of such Advances made for the account of
Banks other than CoreStates since the last such notice differs by
more than $7,500,000.00 from the aggregate of principal payments
made by the Borrowers for the account of Bank's other than
CoreStates since the last such notice and (ii) on the last
Business Day of each calendar week of the type(s), aggregate
amount(s) and such Bank's Pro Rata Share of such Advance(s) made
solely by the Agent and principal payments made by the Borrowers
and received by the Agent during such week on Base Rate Loans.
If the amount of such Advances exceeds the amount of such
principal received, then upon receipt of such notice, each Bank
shall wire transfer to the Agent, at the Agent's office at 1345
Chestnut Street, Philadelphia, Pennsylvania, in immediately
available funds, which funds shall be in Dollars, prior to 2:00
P.M. on such date, an amount equal to such Bank's Pro Rata Share
of such excess. If the amount of such principal payments
received exceeds the amount of such Advances(s), then
simultaneously with such notice, the Agent shall wire transfer
prior to 2:00 P.M. on such date to each Bank such Bank's Pro Rata
Share of such excess. In either such case, the Agent shall be
entitled to retain all principal payments on Base Rate Loans
during such week. All interest accrued on such Advances from the
date made to the date on which the Bank's wire transfer their Pro
Rata Shares to the Agent shall be for the Agent's own account.
The Agent and the Banks reserve the right, among themselves, to
agree to settlement procedures other than set forth in this
Section 2.4, provided that such procedures shall not affect the
obligations of the Borrowers hereunder.
(B) If one or more Banks fail to make available to the Agent
such Bank's Pro Rata Share of an Advance and the Agent elects to
advance the full amount of the Advance requested by a Borrower,
the Borrowers shall be obligated to repay to the Agent for the
Agent's account the amount, with interest, so advanced by the
Agent and not advanced by the Bank(s) (i) on demand, or (ii) if
no demand is made, in amounts and at the times the Borrowers
otherwise would be obligated to repay such Advance. Unless the
Agent receives notice from a Bank prior to the date any Advance
is to be made that such Bank does not intend to make its Pro Rata
Share of such Advance available to the Agent, the Agent may (but
shall not be obligated to) assume that such Bank has made or will
make such proceeds available to the Agent when due, and the
Agent, in reliance upon such assumption, may (but shall not be
obligated to) make available to the Borrowers a corresponding
amount. If such corresponding amount is not, in fact, made
available to the Agent by such Bank on the date the Advance is
made, the Agent shall be entitled to recover such amount on
demand from such Bank (or, if such Bank fails to pay such amount
immediately upon demand, from the Borrowers) together with
interest thereon at a rate per annum equal to the Interest Rate
applicable to the Advance for each day during the period between
the date that the Agent makes the Advance and the date on which
the Bank makes its Pro Rata Share of the Advance available to the
Agent.
2.7 Fees. (A) Commitment Fee. The Borrowers shall pay to
the Agent for the benefit of each Bank a commitment fee (the
"Commitment Fee") computed at the rate of 0.50% per year on the
average daily undisbursed portion of such Bank's Commitment from
the date hereof to and including the Termination Date, provided
that, in the event the Applicable Margin is reduced from the
level applicable on the Closing Date, the Commitment Fee shall be
computed at the rate of 0.375% per year on the average daily
amount portion of such Bank's Commitment so long as such reduced
Applicable Margin is in place and no Unmatured Event of Default
or Event of Default has occurred hereunder or under the other
Loan Documents. In the event that after any such reduction in
the Commitment Fee (1) the Applicable Margin increases back to
the level in effect on the Closing Date, or (2) there occurs an
Unmatured Event of Default or an Event of Default, the Commitment
Fee shall immediately increase to the rate of 0.50% per annum.
The Commitment Fee shall be payable (1) quarterly in arrears on
the last day of March, June, September, and December in each year
during the term of the Banks' Commitments, commencing June 30,
1995, (2) on the date or dates, if any, on which the Commitments
are reduced, and (3) on the Termination Date. Each installment
of the Commitment Fee shall be deemed fully earned and non-
refundable when due. For purposes of calculation of the
Commitment Fee, the amount of Letter of Credit Liability during
the period for which the Commitment Fee is calculated shall be
deemed "disbursed" under the Revolving Credit.
(A) Agent's Fee. The Borrowers shall pay to the Agent for the
Agent's account and not for the account of any Bank an annual fee
(the "Agent's Fee") pursuant to the agreement entered into by the
Borrowers and the Agent on or before the execution of this
Agreement.
(B) Facility Fee. The Borrowers shall pay to the Agent a one-
time facility fee (the "Facility Fee") pursuant to the agreement
entered into by the Borrowers and the Agent on or before the
execution of this Agreement. The Agent shall pay to each Bank
from the Facility Fee such Bank's portion thereof in accordance
with such Bank's commitment letter previously delivered by such
Bank to the Agent. The Facility Fee shall be deemed fully earned
and non-refundable when due.
2.8 Mandatory Prepayment of the Term Loan. The Borrowers
shall pay to the Agent, for the ratable benefit of each Bank
promptly upon consummation of each of the transactions set forth
below: (A) the gross proceeds of any private placement of equity
by the Borrowers otherwise permitted hereunder, net of any
reasonable costs and expenses thereof incurred to Persons other
than any Borrower or any of their Subsidiaries or Affiliates; and
(B) the gross proceeds of any public sale of equity by the
Borrowers otherwise permitted hereunder, net of any reasonable
costs and expenses thereof incurred to Persons other than any
Borrower or any of their Subsidiaries or Affiliates, provided
that if the Private Placement Notes or related documents require
a prepayment of the Private Placement Notes or permit the holders
thereof to require such a prepayment as a result of such private
placement or public sale, then the amount the Borrowers shall be
obligated to prepay hereunder as a result of the occurrences
described in clauses (A) and/or (B) of this sentence shall be
equal to (1) the amount which otherwise would be payable but for
this proviso times a fraction the numerator of which shall be the
aggregate principal amount of the Term Loan then outstanding plus
the aggregate of the Commitments and the denominator of which
shall be the sum of the principal amount of the Private Placement
Notes then outstanding plus the principal amount of the Term Loan
then outstanding, plus the aggregate of the Commitments, plus (2)
if positive, the amount which otherwise would be payable but for
this proviso minus the amount of prepayment actually required by
the Private Placement Notes, the related documents, and/or the
holders of the Private Placement Notes, and minus the amount of
prepayment required under (1). Amounts prepaid in accordance
with this Section shall be applied when received first against
the Term Loan Base Rate Tranche, and thereafter against the Term
Loan LIBO Rate Tranches, if any. To the extent the application
of this subsection requires a paydown of any LIBO Loan prior to
the end of the applicable Interest Period(s) the Borrowers shall
pay any prepayment compensation provided by Section 2.17(B)
herein. Mandatory repayments hereunder shall in no way postpone,
decrease or otherwise affect the Borrowers' obligations to make,
the regularly scheduled quarterly principal installments on the
Term Loan as set forth in Section 2.2.
2.9 Interest Rate Options. (A) Base Rate Loans. The
Borrowers shall pay to the Agent for the account of each Bank
interest at the Adjusted Base Rate in arrears on the unpaid
principal amount of each Base Rate Loan, from the date on which
such Base Rate Loan is advanced or converted from a LIBO Loan
until such principal amount has been repaid in full, or converted
to a LIBO Loan, (1) monthly on the last day of each month
commencing with the last day of the first month after this
Agreement is executed, (2) with respect to all Revolving Credit
Base Rate Tranches, on the Termination Date, and (3) with respect
to all Term Loan Base Rate Tranches, on the Maturity Date. The
Adjusted Base Rate shall change (i) simultaneously with each
change in the Base Rate and (ii) with each change in the
Applicable Margin in accordance with the definition thereof.
(A) Conversions to LIBO Loans. By notifying the Agent at
least three London Business Days prior to an Effective Date, the
Borrowers may convert into a LIBO Loan any Base Rate Loan(s) in
an aggregate principal amount of $5,000,000.00 and multiples of
$500,000.00 in excess thereof. At the end of the applicable LIBO
Interest Period, the LIBO Loan will convert back to a Base Rate
Loan unless the Borrowers notify the Agent at least three London
Business Days before the end of the existing LIBO Interest Period
that the Borrowers are electing to continue such LIBO Loan as a
LIBO Loan and are selecting a new LIBO Interest Period.
(B) LIBO Loans. The Borrowers shall pay interest in arrears
on the unpaid principal amount of each LIBO Loan at the Adjusted
LIBO Rate, (1) if the LIBO Interest Period is for fewer than six
months, on the last day of the applicable LIBO Interest Period,
and (2) if the LIBO Interest Period is six months, on the 90th
day of such LIBO Interest Period and on the last day of such LIBO
Interest Period.
(C) Limitation on LIBO Loans. The Borrowers shall not have more
than eight LIBO Loans outstanding at any one time.
2.10 Computation of Interest and Fees. The Fees and all
interest on the Loans and other sums payable hereunder shall be
computed on the basis of a year of 360 days for the actual number
of days elapsed.
2.11 Payments. (A) The Borrowers hereby authorize the Agent
to charge directly any account, maintained by the Borrowers or
any entity comprising the Borrowers with the Agent for any
payments of principal of the Loans, amounts drawn under Letters
of Credit not reimbursed by the Borrowers, interest and Fees, and
any other amounts owing under this Agreement, under the Notes, or
under any of the Loan Documents, as and when due. In the event
that the Borrowers maintain insufficient funds in such account(s)
to meet the Borrowers' obligations hereunder when due, the
Borrowers will make all payments of principal of the Loans, all
reimbursements of drawings under Letters of Credit, all payments
of interest on the Loans and all payments of Fees, to the Agent,
for the account of the Agent and/or the Banks as appropriate, not
later than 1:00 P.M. on the applicable due date, in immediately
available funds and in Dollars.
(A) Prior to an Event of Default and the acceleration of the
Loans as set forth in Section 6.2 hereof, and provided that the
Borrowers have paid all amounts which have come due on or prior
to such applicable due date, the Agent will, by wire transfer (or
by other means mutually acceptable to the Agent and the Banks),
immediately distribute to each Bank in immediately available
funds such Bank's Pro Rata Share of the amounts in which such
Bank has an interest, so received by the Agent.
(B) After the occurrence of an Event of Default and the
acceleration of the Loans as set forth in Section 6.2 hereof, or
if the Borrowers shall have failed to pay all amounts which have
come due on or prior to such applicable due date, the Agent shall
apply all payments and collections received by it, subject to the
terms of the Intercreditor Agreement, as follows: first, to all
of the Agent's costs and expenses incurred in connection with the
collection of such payments (including, without limitation,
reasonable attorneys' fees and expenses and the fees and expenses
of the Agent's experts and consultants); second, to interest on
and principal of any amounts funded by the Agent in excess of its
Pro Rata Share as contemplated by Section 2.4; third, to accrued
and unpaid Fees (other than attorneys' fees and expenses already
paid pursuant to "first" above); fourth, to accrued interest of
each Bank ratably in accordance with its Pro Rata Share; fifth,
to (i) the outstanding principal amount of the Term Loan, to each
Bank ratably in accordance with its Pro Rata Share, (ii) the
principal amount of the Advances, and (iii) obligations under the
Protection Agreements, all on a pro rata basis; sixth, all other
amounts which shall have come due hereunder, to each Bank ratably
in accordance with its Pro Rata Share; seventh, into the Letter
of Credit Cash Collateral Account to the extent the aggregate
amount of undrawn Letters of Credit then outstanding exceed the
balance in the Letter of Credit Cash Collateral Account, eighth,
to all amounts due under any Protection Agreement, and ninth, to
the Borrowers. The allocation of amounts within each level set
forth above shall be pro rata according to the respective amounts
due each party.
2.12 Payment on Non-Business Days. Whenever any payment to
be made hereunder or under any Notes shall be stated to be due on
a day that is not a Business Day, such payment shall be made on
the next succeeding Business Day, and, except as otherwise
specifically provided herein, such extension of time shall in
such case be included in the computation of payment of interest
hereunder or under the Notes or the Fees, as the case may be.
2.13 Reimbursement to Banks for Cost Increases Imposed by
Law. (A) If any change in existing law or regulation, any new
law, change in regulatory interpretation or any other factor
having the force of law shall impose or change any tax (other
than taxes on income in general), reserve, insurance, special
deposit or similar requirements or charges with respect to funds
obtained by any Bank to make or maintain any of the Loans during
any Interest Period, and the result is to increase the cost to
such Bank of obtaining or maintaining such funds or to reduce the
return to such Bank on the Loans to which such Interest Period
applies, then such Bank shall so notify the Agent and the
Borrowers in writing, certifying the amount of, and the
computation thereof and reasons for such increased costs or
reduced return, and the Borrowers shall immediately pay to such
Bank an amount sufficient to compensate such Bank in full for
such increased costs or such reduced return.
(A) If any existing law or regulation or any new law or
regulation or regulatory interpretation or other factor having
the force of law imposes or changes any tax (other than taxes on
income in general), reserve, insurance, special deposit or
similar requirements or charges with respect to mortgages,
security agreements or other types of pledges of security, or
notes, loans, or other debts secured thereby, so as to require
the Agent or any Bank to pay, or collect, any such tax, reserve,
insurance, special deposit or similar charge, then the Borrowers
shall bear and pay the full amount thereof as and when due, and
to the extent there remains availability under the Revolving
Credit, the Borrowers hereby authorize the Banks to advance such
amounts under the Revolving Credit and to add the amount thereof
to the amount outstanding under the Revolving Credit.
2.14 Reimbursement to Banks for Increased Costs Due to
Capital Adequacy Requirements. If any law or regulation or the
interpretation thereof by any court or administrative or
governmental authority charged with the administration thereof,
or compliance by any Bank with any request or directive (whether
or not having the force of law) of any such authority, applicable
from time to time, shall (A) impose, modify, deem applicable or
result in the application of any capital maintenance, capital
ratio or similar requirements against loan commitments or other
facilities made by such Bank and the result thereof shall be to
impose upon such Bank a fee or a requirement to increase any
capital requirement applicable as a result of the making or
maintenance of its portion of the Loans (which imposition of or
increase in capital requirements may be determined by such Bank's
reasonable allocation of the aggregate of such capital
impositions or increases), or (B) subject any Bank to any tax,
duty or other charge with respect to the Loans, the Notes which
it holds, or its obligation to advance under its Commitment, or
change the basis of taxation of payments to any Bank of the
principal of or interest on the Loans or any other amounts due
under this Agreement in respect of the Loans or its obligation to
advance under its Commitment (except for changes in the rate of
tax on the overall net income of such Bank imposed by any
jurisdiction in which such Bank is obligated to pay taxes), then,
upon demand by Agent, the Borrowers shall immediately pay to such
Bank from time to time as specified by such Bank, such additional
amounts or fees which shall be sufficient to compensate such Bank
for such impositions of or increases in capital requirements or
taxes from the date of such change, together with interest on
each such amount from the date demanded until payment in full
thereof at a rate equal to 3% in excess of the Adjusted Base Rate
with respect to amounts or fees not paid when due. Upon the
occurrence of any event referred to above, a certificate setting
forth in reasonable detail the amounts necessary to compensate
such Bank, and the computation thereof, as a result of an
imposition of or increase in capital requirements or taxes
submitted by such Bank to the Borrowers shall be conclusive,
absent manifest error or bad faith, as to the amount thereof.
For purposes of the application of this Section 2.12, and in
calculating the amount necessary to compensate such Bank for any
imposition of or increase in capital requirements or taxes
hereunder, such Bank shall determine the applicability of this
provision and calculate the amount payable to it hereunder in a
manner consistent with the manner in which it shall apply and
calculate similar compensation payable to it by other borrowers
having provisions in their credit agreements comparable to this
Section 2.12.
2.15 Illegality. Notwithstanding any other provision in
this Agreement, if the adoption of any applicable law, rule, or
regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental
authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Bank (or its lending office) with any request or directive
(whether or not having the force of law) of any such authority,
central bank, or comparable agency shall make it unlawful or
impossible for any Bank (or its lending office) to maintain its
Commitment, then upon notice to the Borrowers and to the Agent by
Bank the Commitment of such Bank shall terminate.
2.16 Interest and Commissions After Event of Default. After
the occurrence of any Event of Default, (A) the Interest Rate
then in effect on the Loans shall be immediately converted to the
Adjusted Base Rate plus 3%, and (B) any Advances made or other
money advanced hereunder after the occurrence of an Event of
Default (unless and until cured or waived in writing by the Agent
with the consent of the Banks as required by Section 8.1) shall
bear interest at the Adjusted Base Rate plus 3%.
2.17 Special Provisions for LIBO Loans.
(A) Unavailability of Funds and Indeterminate Interest Rates.
If on or before the date the Banks are to make any LIBO Loan or
on or before any Effective Date (1) the Agent determines in good
faith that it is unable to obtain funds at the LIBO Rate for the
elected Interest Period for any reason, including, but not
limited to the unavailability of funds at such rate, any change
in existing law, any new law, the length of such Interest Period,
or otherwise or (2) the Agent determines in good faith that no
adequate means exists to determine the LIBO Rate for such
Interest Period, then the Agent shall so notify the Borrowers on
or before the Effective Date and the Borrowers shall have one
Business Day after notice to withdraw their request for a LIBO
Loan, and if the Borrowers fail to so withdraw their request,
then, at the Agent's option, the Borrowers shall be deemed to
have requested a Base Rate Loan or shall be required to elect an
Interest Period of a length for which the Agent may obtain funds
at the rate the adjustment of which determines the LIBO Rate.
(B) Changes Affecting Ability to Maintain Funds. If, during
any Interest Period, any change in existing law, any new law, or
any other factor beyond the control of any Bank prevents such
Bank in its good faith determination from maintaining funds at
the rate the adjustment of which determines the LIBO Rate for
such Interest Period and requires such Bank to cease so
maintaining funds actually so maintained prior to termination of
such Interest Period, then on the date of such required
cessation, the Borrowers shall be required to specify a different
Interest Rate for such Interest Period or, in the alternative, to
elect an Interest Period of a length for which all Banks may
maintain funds at the rate the adjustment of which determines the
LIBO Rate. In addition, within five days after the Agent
notifies the Borrowers of such required conversion, the Borrowers
shall reimburse each Bank (to the extent not otherwise reimbursed
pursuant to Section 2.11 hereof) for any loss or expense such
Bank has certified in writing to the Borrowers and the Agent that
such Bank has incurred as a result of any such required
cessation.
(C) Ineligible Interest Periods. If, on any date the Banks
are to make an Advance all or a portion of which is to earn
interest at the Adjusted LIBO Rate or on any Effective Date with
respect to a Revolving Credit LIBO Rate Tranche, the period of
time from such date or such Effective Date to the Termination
Date is less than an Interest Period which the Borrowers could
otherwise elect, the Borrowers will elect a Revolving Credit LIBO
Rate Tranche whose Interest Period will end on or before the
Termination Date, as necessary. If an appropriate Interest
Period is not available, then the requested Advance shall be made
at the Adjusted Base Rate. If on any date the Banks are to
convert a Term Loan Base Rate Tranche to a Term Loan LIBO Rate
Tranche or on any Effective Date with respect to a Term Loan LIBO
Rate Tranche, the period of time from such date or such Effective
Date to the Maturity Date is less than an Interest Period which
the Borrowers could otherwise elect, the Borrowers will elect a
Term Loan LIBO Rate Tranche whose Interest Period will end on or
before the Maturity Date, as necessary. If an appropriate
Interest Period is not available, then the requested Term Loan
LIBO Rate Tranche shall continue to earn interest at the Adjusted
Base Rate.
(D) Discretion of Banks as to Manner of Funding.
Notwithstanding any other provision of this Agreement, each Bank
may fund or maintain its funding of all or any part of the Loans
in any legal manner it chooses and such manner of funding shall
not in any way relieve the Borrowers of their obligations to pay
prepayment compensation in the event of a prepayment as set forth
in Section 2.17 hereof.
2.18 Availability of Rate Quotations. Notwithstanding
anything herein to the contrary, if the Agent reasonably
determines (which determination shall be conclusive) that
quotations of interest rates for the relevant deposits referred
to in the definition used to calculate the LIBO Rate are not
being provided in the relevant amounts or for the relevant
maturities for purposes of determining the rate of interest on a
LIBO Loan as provided in this Agreement, then the Agent shall
forthwith give notice thereof to the Banks and the Borrowers,
whereupon until the Agent notifies the Banks and the Borrowers
that the circumstances giving rise to such suspension no longer
exist, (A) the obligation of the Banks to make LIBO Loans shall
be suspended; and (B) the Borrowers shall repay in full the then
outstanding principal amount of each LIBO Loan, together with
accrued interest thereon, on the last day of the then current
Interest Period applicable to such LIBO Loan by remitting
sufficient funds to the Agent or by conversion to a Base Rate
Loan.
2.19 Prepayment. (A) The Borrowers may prepay Base Rate
Loans in whole or in part at any time and from time to time upon
one Business Day's notice to the Agent, without premium or
penalty.
(A) The Borrowers agree not to prepay LIBO Loans prior to the
expiration of their Interest Periods more than three (3) times in
any fiscal year, unless otherwise expressly required hereunder or
after acceleration by the Agent pursuant to Section 6.2. In the
event that the Borrowers prepay any LIBO Loan prior to the
expiration of its Interest Period, whether or not in violation of
the previous sentence, or with the consent of the Agent, or in
compliance with the express requirement of this Agreement, the
Borrowers shall pay to the Agent for the account of each Bank,
upon the request of such Bank through the Agent, such amount or
amounts as shall be sufficient to compensate it for any loss,
cost or expense which such Bank determines is attributable to:
(1) any payment, prepayment, conversion or renewal of a LIBO
Loan made by such Bank on a date other than the last day of an
Interest Period for such Loan (whether by reason of acceleration
or otherwise); or
(2) any failure by the Borrowers to borrow, convert into or
renew a LIBO Loan to be made, converted into or renewed by such
Bank on the date specified therefor pursuant to a Borrower's
prior election.
A determination of any Bank as to the amounts payable
pursuant to this Section 2.17(B) shall be conclusive absent
manifest error or bad faith.
2.20 Letter of Credit Cash Collateral Account. Cash
collateral pledged by the Borrowers pursuant to this Agreement
shall be maintained in a deposit account of the Borrowers
maintained with the Agent, over which the Agent shall have sole
control (the "Letter of Credit Cash Collateral Account"). The
Borrowers hereby grant, bargain, convey and set over to the Agent
for the benefit of the Banks a security interest in and lien upon
the Letter of Credit Cash Collateral Account and all cash and any
other assets at any time hereafter contained therein as security
for the payment and performance of all of the Borrowers'
obligations now or hereafter incurred hereunder or under the
Notes or otherwise in connection herewith. The Borrowers shall
take such action and execute and deliver such documents,
including financing statements, as the Agent may determine
necessary or desirable to further the security interest hereby
created. Provided there does not then exist an Event of Default
or Unmatured Event of Default, if at any time the funds held in
the Letter of Credit Cash Collateral Account exceed the sum of
the then existing Letter of Credit Liability plus the amount of
any yet to be issued Letters of Credit then subject to a request
by the Borrowers under Section 2.19(D) hereof, the Agent shall
remit such excess to the Borrowers. After the occurrence of an
Event of Default and acceleration of the Loans as set forth in
Section 6.2 hereof, or if the Borrowers shall have failed to pay
all amounts which have come due on or prior to such applicable
due date, the Agent shall apply all funds held in the Letter of
Credit Cash Collateral Account in the manner provided in Section
2.19(E). On the Termination Date, all monies in the Letter of
Credit Cash Collateral Account in excess of the amount required
to repay the Loans, the Letter of Credit Liability and any other
amount then owing hereunder shall be returned to the Borrowers.
2.21 Letters of Credit. (A) Letters of Credit. In
addition to requests that the Banks make Advances pursuant to
Section 2.4, the Borrowers may request, in accordance with the
provisions of this Section 2.19, that on and after the date on
which all of the conditions set forth in Section 3.3 are
satisfied to that date which is thirty one (31) days prior to the
Termination Date, the Issuing Bank issue, subject to the terms
and conditions hereof, Letters of Credit for the account of a
Borrower or any Borrowers in an aggregate amount up to the Letter
of Credit Sublimit; provided, that (1) in no event shall the
Issuing Bank be obligated to issue any Letter of Credit having an
expiration date later than the Termination Date and (2) the
Borrowers shall not request that the Issuing Bank issue any
Letter of Credit if, after giving effect to such issuance the
Letter of Credit Liability would exceed the Letter of Credit
Sublimit. The issuance of any Letter of Credit in accordance
with the provisions of this Section 2.19 shall require the
satisfaction of each condition set forth in Section 3.1 and 3.2.
Immediately (a) upon the issuance of each Letter of Credit, and
(b) upon execution hereof with respect to each Prior Letter of
Credit, each Bank shall be deemed to have, and hereby agrees to
have, irrevocably purchased from the Issuing Bank a participation
in such Letter of Credit and all drawings thereunder in an amount
equal to the amount of such Letter of Credit multiplied by such
Bank's Pro Rata Share.
(A) Evergreen Letters of Credit. Notwithstanding the
provisions of Section 2.19(A), above, the Banks hereby agree that
the Issuing Bank may issue upon the Borrowers' request, one or
more Letter(s) of Credit which by its terms may be extended for
additional periods of up to one year each provided that (1) the
initial expiration date of each such Letter of Credit is not
later than the Termination Date, and (2) renewal of such Letters
of Credit, at the Issuing Bank's discretion, shall be available
upon written request from the Borrowers to Issuing Bank at least
30 days before the date upon which notice of renewal is otherwise
required.
(B) Issuing Bank's Reporting Obligations. The Issuing Bank
agrees to provide the Banks with quarterly reports of all
outstanding Letters of Credit issued by the Issuing Bank. Such
reports shall be delivered within 15 days of the end of each
March, June, September and December, commencing with the
quarterly period ending June 30, 1995, and shall specify the
following with respect to each outstanding Letter of Credit: (1)
the letter of credit number for such Letter of Credit, (2) the
beneficiary of such Letter of Credit, (3) the date of issuance of
such Letter of Credit, (4) the original face amount of such
Letter of Credit, and (5) the then current available amount of
such Letter of Credit.
(C) Notice of Issuance or Amendment. Whenever a Borrower
desires the issuance of a Letter of Credit or the amendment of a
Letter of Credit, the Borrowers shall deliver to the Issuing Bank
no later than 11:00 A.M. at least five (5) Business Days in
advance of the proposed date of issuance or such shorter period
as may be agreed to by the Issuing Bank an executed application
for such Letter of Credit in the form customarily required by the
Issuing Bank for the issuance of letters of credit, and an
accompanying written notice which shall specify (1) a precise
description of the documents and the verbatim text of any
certificate to be presented by the beneficiary which, if
presented by the beneficiary prior to the expiration date of the
Letter of Credit, would require the Issuing Bank to make payment
under the Letter of Credit; provided, that the Issuing Bank, in
its sole judgment, may require changes in any such documents and
certificates; and provided, further, that no Letter of Credit
shall require payment against a conforming draft to be made
hereunder on the same Business Day that such draft is presented
if presentation is made after 11:00 A.M. on such Business Day,
and (2) whether the Letter of Credit is being issued for the
benefit of an Offshore Borrower. On the proposed date of
issuance of any Letter of Credit, the Issuing Bank shall
determine to the best of its knowledge whether the proposed
Letter of Credit, when added to the then outstanding Letter of
Credit Liability, would be within the Letter of Credit Sublimit
and, when added to the then outstanding Letter of Credit
Liability and outstanding Advances, would be less than the total
amount of the Commitments. Unless both such criteria are
satisfied, the Issuing Bank shall not issue the requested Letter
of Credit. The Banks and the Borrowers shall hold the Issuing
Bank harmless for any miscalculations or other errors in making
such determinations except that if such miscalculations or other
errors resulted from the gross negligence or willful misconduct
of the Issuing Bank, the Issuing Bank shall not be entitled to be
held harmless under this sentence. In the event that, upon
issuance of such proposed Letter of Credit, the Letter of Credit
Sublimit is exceeded, the Borrowers shall immediately deposit
into the Letter of Credit Cash Collateral Account the amount of
such excess. In determining whether to pay under any Letter of
Credit, the Issuing Bank shall be responsible only to determine
in good faith that the documents and certificates required to be
delivered under that Letter of Credit have been delivered and
that they comply on their face with the requirements of that
Letter of Credit. Within one (1) Business Day after receipt of a
request for issuance of a Letter of Credit, the Issuing Bank
shall notify each other Bank of the proposed issuance and the
amount of each such Bank's respective participation therein
determined in accordance with this Section 2.19 and shall send
each Bank a copy of each Standby Letter of Credit.
(D) Payment of Amounts Drawn Under Letters of Credit. In the
event of any request for drawing under any Letter of Credit by
the beneficiary thereof, the Issuing Bank shall immediately
notify the Borrowers and the Banks, and the Borrowers shall
reimburse the Issuing Bank on the day on which such drawing is
honored in immediately available funds equal to the amount of
such drawing; provided that (1) if sufficient funds are then in
the Letter of Credit Cash Collateral Account to reimburse it in
full for the amount of such drawing, the Issuing Bank shall
immediately withdraw such amount necessary to reimburse it from
the Letter of Credit Cash Collateral Account, (2) if the funds
then in the Letter of Credit Cash Collateral Account are
insufficient to reimburse the Issuing Bank in full for the amount
of such drawing, the Issuing Bank shall withdraw all of the funds
in the Letter of Credit Cash Collateral Account and the
unreimbursed balance of such drawing shall be reimbursed in
accordance with clause (3) below, and (3) if there are no funds
then in the Letter of Credit Cash Collateral Account then (a)
unless the Borrowers shall have notified the Agent prior to 11:00
A.M. on the date of such drawing that the Borrowers intend to
reimburse the Issuing Bank for the amount of such drawing with
funds other than the proceeds of Advances, the Borrowers shall be
deemed to have given notice to the Agent requesting the Banks to
make an Advance which shall earn interest at the Adjusted Base
Rate (as such rate may change from time to time) in accordance
with Section 2.4 on the day on which such drawing is honored (the
"Reimbursement Date") in an aggregate amount equal to the amount
of such drawing less the amount, if any, withdrawn from the
Letter of Credit Cash Collateral Account pursuant to clause (2)
above, and (b) subject to satisfaction or waiver of the
conditions specified in Section 3.2, the Banks shall, on the
Reimbursement Date, make an Advance, which shall earn interest at
the Adjusted Base Rate, in an aggregate amount equal to the
amount of such drawing less the amount, if any, withdrawn from
the Letter of Credit Cash Collateral Account pursuant to clause
(2) above, the proceeds of which shall be applied directly by the
Agent to reimburse the Issuing Bank for such drawing; and
provided, further, that if for any reason the proceeds of such
Advance are not received by the Issuing Bank on the Reimbursement
Date in an aggregate amount equal to the amount of such drawing,
the Borrowers shall reimburse the Issuing Bank on the day
immediately following the Reimbursement Date, in same day funds,
in an amount equal to the excess of the amount of such drawing
over the aggregate amount of such Advance, if any, which are so
received plus accrued interest on such amount at the rate set
forth in Section 2.19(G)(1) less the amount, if any, withdrawn by
the Issuing Bank pursuant to clause (2) above.
(E) Payment By Banks. In the event that the Borrowers shall
fail to reimburse the Issuing Bank as provided in Section 2.19(E)
in an amount equal to the amount of any drawing honored by it
under a Letter of Credit issued by it, the Agent shall promptly
notify each Bank of the unreimbursed amount of such drawing and
of such Bank's respective participation therein in an amount
equal to such Bank's Pro Rata Share of such unreimbursed amount.
Each Bank shall make available to the Agent for payment to the
Issuing Bank an amount equal to its respective participation
therein (including without limitation its Pro Rata Share of
accrued but unpaid interest thereon), in same day funds, at the
office of the Agent specified in such notice, not later than
11:00 A.M. on the Business Day after the date the Agent notifies
each Bank. In the event that any Bank fails to make available to
the Agent the amount of such Bank's participation in such
unreimbursed amount as provided herein, the Issuing Bank shall be
entitled to recover such amount on demand from such Bank together
with interest thereon at a rate per annum equal to the Adjusted
Base Rate for each day during the period between the
Reimbursement Date and the date on which such Bank makes
available its participation in such unreimbursed amount. The
failure of any Bank to make available to the Agent its Pro Rata
Share of any such unreimbursed amount shall not relieve any other
Bank of its obligations hereunder to make available to the Agent
its Pro Rata Share of such unreimbursed amount on the date such
unreimbursed amount is to be reimbursed. The Agent shall
distribute to each Bank which has paid all amounts payable by it
under this Section 2.19(F) with respect to the unreimbursed
amount of any drawing under any Letter of Credit issued by the
Agent, such other Bank's Pro Rata Share of all payments received
by the Agent from the Borrowers in reimbursement of drawings
honored by the Issuing Bank under such Letter of Credit when such
payments are received. Notwithstanding anything to the contrary
herein, each Bank which has paid all amounts payable by it under
this Section 2.19(F) shall have a direct right to reimbursement
of such amounts from the Borrowers subject to the procedures for
reimbursing Banks set forth in this Section 2.19.
(F) Compensation. The Borrowers agree to pay the following
amounts to the Issuing Bank with respect to each Letter of Credit
issued by the Issuing Bank:
(1) a fee calculated at the greater of (a) the Issuing Bank's
minimum charge then in effect, as published, for documentary
letters of credit generally, or (b) 0.375% of the amount of any
draw under each Documentary Letter of Credit (other than a Prior
Letter of Credit), payable to the Issuing Bank on the date of
such draw such fee to be deemed fully earned and non-refundable
when due;
(2) in the case of each Standby Letter of Credit (other than a
Prior Letter of Credit) a commission equal to the then effective
Applicable Margin with respect to Revolving Credit LIBO Rate
Tranches to be paid on the issuance of such Standby Letter of
Credit and on each anniversary of such issuance while such
Standby Letter of Credit is outstanding, such fee to be deemed
fully earned and non-refundable when due;
(3) with respect to any drawing made under any Letter of
Credit which is not reimbursed in full on the date such drawing
is made, interest, payable on demand, on the amount paid by the
Issuing Bank in respect of each such drawing from the date of the
drawing to the date such amount is reimbursed by the Borrowers
(including any such reimbursement out of the proceeds of Advances
pursuant to Section 2.19(F) or out of the Letter of Credit Cash
Collateral Account) at a rate which is at all times equal to 3%
per annum in excess of the Adjusted Base Rate for the period from
the date of such drawing to and including the Business Day on
which the Issuing Bank is reimbursed in full; and
(4) with respect to the issuance, amendment, transfer,
administration, cancellation or conversion of each Letter of
Credit and each drawing made thereunder, documentary and
processing charges in accordance with the Issuing Bank's standard
schedule for such charges in effect at the time of such issuance,
amendment, transfer, administration, cancellation or drawing, as
the case may be, or as otherwise agreed to by the Issuing Bank.
Within thirty (30) days of receipt by the Issuing Bank
of any amount described in clause (1) or (2) of this Section
2.19(G), the Issuing Bank shall distribute to the Agent and the
Agent shall distribute to each Bank its Pro Rata Share of such
amount less the Issuing Bank's fee for issuance of each such
Letter of Credit which shall be an amount equal to the greater of
(i) the Issuing Bank's minimum charge then in effect, as
published, for documentary letters of credit generally, or
(ii) 0.125% of (a) the draw under such Letter of Credit with
respect to fees under clause (1), and (b) the face amount of such
Letter of Credit with respect to fees under clause (2). Within
30 days of the execution of this Agreement, the Issuing Bank
shall distribute to the Agent and the Agent shall distribute to
each Bank its pro rata share, if any, of the fees, if any,
collected by the Issuing Bank for the issuance of the Prior
Letters of Credit based on the time period from the date of this
Agreement until the expiration of such Letters of Credit. The
Issuing Bank shall be entitled to retain for its own account
payments made pursuant to clauses (3) and (4) above.
(G) Obligations Absolute. The obligation of the Borrowers to
reimburse the Issuing Bank for drawings made under the Letters of
Credit issued by it, and the obligations of the Banks under
Section 2.19(F), shall be unconditional and irrevocable and shall
be paid strictly in accordance with the terms of this Agreement
under all circumstances including, without limitation, the
following circumstances:
(1) any lack of validity or enforceability of any Letter of
Credit;
(2) the existence of any claim, set-off, defense or other
right which any Borrower may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any
persons or entities for whom any such transferee may be acting),
the Issuing Bank, the Agent or any other Person, whether in
connection with this Agreement, the transactions contemplated
herein or any unrelated transaction (including any underlying
transaction between any Borrower or one of its Subsidiaries and
the beneficiary for which the Letter of Credit was procured);
(3) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(4) payment by the Issuing Bank under any Letter of Credit
against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of
Credit; provided, that such payment does not constitute willful
misconduct or gross negligence on the part of the Issuing Bank;
(5) any breach of this Agreement or any document delivered in
connection herewith by any party hereto or thereto; or
(6) the fact that an Event of Default or an Unmatured Event of
Default shall have occurred and be continuing.
(H) Additional Payments. If by reason of (a) any change in
any applicable law, regulation, rule, decree or regulatory
requirement or any change in the interpretation or application by
any judicial or regulatory authority of any law, regulation,
rule, decree or regulatory requirement or (b) compliance by the
Agent or any Bank with any direction, request or requirement
(whether or not having the force of law) of any governmental or
monetary authority including, without limitation, Regulation D:
(1) Issuing Bank or any Bank shall be subject to any tax,
levy, charge or withholding of any nature or to any variation
thereof or to any penalty with respect to the maintenance or
fulfillment of its obligations under this Section 2.19(I)(1),
whether directly or by such being imposed on or suffered by the
Issuing Bank or any Bank;
(2) any reserve, special deposit, premium, FDIC assessment,
capital adequacy or similar requirement is or shall be
applicable, imposed or modified in respect of any Letters of
Credit issued by the Issuing Bank or participations therein
purchased or deemed purchased by any Bank; or
(3) there shall be imposed on the Issuing Bank or any Bank any
other condition regarding this Section 2.19, any Letter of Credit
or any participation therein;
and the result of the foregoing is to directly or indirectly
increase the cost to the Issuing Bank or any Bank of issuing,
making or maintaining any Letter of Credit or of purchasing or
maintaining any participation therein, or to reduce the amount
receivable in respect thereof by the Issuing Bank or any Bank,
then and in any such case the Issuing Bank or such Bank may, at
any time within a reasonable period after the additional cost is
incurred or the amount received is reduced, notify the Borrowers,
and Borrowers shall pay on demand to the Issuing Bank or such
Bank, as the case may be, such amounts as the Issuing Bank or
such Bank may specify to be necessary to compensate the Issuing
Bank or such Bank for such additional cost or reduced receipt,
together with interest on such amount from the date demanded
until payment in full thereof at a rate equal at all times to the
Adjusted Base Rate plus 3% per annum. The determination by the
Issuing Bank or any Bank, as the case may be, of any amount due
pursuant to this Section 2.19(I) as set forth in a certificate
setting forth the calculation thereof in reasonable detail shall,
in the absence of manifest error or bad faith, be final and
conclusive and binding on all of the parties hereto.
(I) Indemnification; Nature of Issuing Bank's Duties. In
addition to amounts payable as elsewhere provided in Section
2.19, the Borrowers hereby agree to protect, indemnify and save
the Agent, the Issuing Bank and each Bank harmless from and
against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable
attorneys' fees and/or allocated costs of internal counsel) which
the Agent, Issuing Bank and each Bank may incur or be subject to
as a consequence, direct or indirect, of (1) the issuance of any
Letter of Credit, or (2) the failure of the Issuing Bank to honor
a drawing under any Letter of Credit unless due solely to the
willful misconduct of the Issuing Bank, or as a result of any act
or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority.
Without limiting the foregoing, the Issuing Bank shall have no
obligation to ascertain whether the stated purpose of any
requested Letter of Credit is permitted by this Agreement and
shall not be liable for any Borrower's use of a Letter of Credit
issued pursuant to the terms hereof in violation of the
Borrowers' covenants contained herein.
(a) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any
party in connection with the application for and issuance of such
Letters of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (b) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (c) failure of the
beneficiary of any such Letter of Credit to comply fully with
conditions required in order to draw upon such Letter of Credit,
unless (i) such failure is material and substantive, and (ii) the
Issuing Bank's payment on such Letter of Credit constitutes gross
negligence or willful misconduct; (d) errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (e) errors in interpretation of
technical terms; (f) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (g)
the misapplication by the beneficiary of any such Letter of
Credit; or (h) any consequences arising from causes beyond the
control of the Issuing Bank. None of the above shall affect,
impair, or prevent the vesting of any of the Issuing Bank's
rights or powers hereunder.
In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken
or omitted by the Issuing Bank under or in connection with the
Letters of Credit issued by it or the related certificates, if
(y) taken or omitted in good faith and (z) substantially in
accordance with the terms thereof, shall not put the Issuing Bank
under any resulting liability to the Borrowers.
As between the Agent, the Issuing Bank and the Banks,
the Issuing Bank agrees that it will take the same care as it
takes in connection with letters of credit in which it alone is
interested. However, neither the Issuing Bank nor any of its
directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them hereunder or in
connection herewith except for its or their own gross negligence
or willful misconduct.
With respect to its Commitment (if any), its Pro Rata
Share of the Term Loan and its portion of the Advances and Letter
of Credit Liability (if any), the Issuing Bank shall have the
same rights and powers hereunder as any Bank and may exercise the
same as though it were not the Issuing Bank. The Issuing Bank
may accept deposits from, lend money to and generally engage in
any kind of banking or trust business with any Borrower and any
Subsidiaries or Affiliates of such Borrower as if the Issuing
Bank were not the Issuing Bank unless otherwise prohibited by the
terms of this Agreement.
It is expressly understood and agreed that the
obligations of the Issuing Bank hereunder are only those
expressly set forth in this Agreement and that the Issuing Bank
shall be entitled to assume that no Event of Default or Unmatured
Event of Default has occurred and is continuing unless the
Issuing Bank has actual knowledge of such fact or has received
written notice from a Bank or the Borrower that such Bank or
Borrower considers that an Event of Default or Unmatured Event of
Default has occurred and is continuing and specifying the nature
thereof.
So long as the Issuing Bank shall be entitled, pursuant
to the immediately preceding paragraph, to assume that no Event
of Default or Unmatured Event of Default, has occurred and is
continuing, the Issuing Bank shall be entitled to use its
discretion with respect to exercising or refraining from
exercising any rights that may be vested in it by, or with
respect to taking or refraining from taking any action or actions
that it may be able to take under or in respect of, this
Agreement. The Issuing Bank shall incur no liability under or in
respect of this Agreement by acting upon any notice, consent,
certificate, warranty or other paper or instrument believed by it
to be genuine or authentic or to be signed by the proper party or
parties, or with respect to anything that it may do or refrain
from doing in the reasonable exercise of its judgment.
The Banks agree to indemnify the Issuing Bank (to the
extent not reimbursed by the Borrowers), ratably according to
their Pro Rata Share, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by or asserted
against the Issuing Bank in any way relating to or arising out of
this Agreement or any action taken or omitted by the Issuing Bank
under this Agreement, provided that no Bank shall be liable for
any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Issuing Bank's gross negligence
or willful misconduct.
ARTICLE III
CONDITIONS OF LENDING
2.22 Conditions Precedent to the Initial Advance and Term
Loan Disbursement. The obligation of each Bank to make the
initial Advance of its portion of the Revolving Credit, to
disburse its portion of the Term Loan and to participate in any
Letters of Credit issued hereunder is subject to each Bank having
received, on or before the day on which such Advance,
disbursement or issuance is to be made, all of the following
which shall be in form and substance satisfactory to each Bank:
(A) A copy, certified in writing as of the date hereof by
the Secretary or Assistant Secretary of each Borrower, of (1)
resolutions of the Board of Directors of such Borrower evidencing
approval of this Agreement, the Notes and the other Loan
Documents and other matters contemplated hereby and (2) each
document evidencing any other necessary corporate action and any
required approvals from governmental authorities for each entity
comprising the Borrowers with respect to this Agreement, the
Notes and the Loan Documents;
(B) Favorable opinions of outside counsel for each Borrower
acceptable to the Banks dated the date hereof in form and
substance reasonably satisfactory to the Banks covering the
matters identified in Exhibit 3.1(B) attached hereto as to each
Borrower;
(C) Favorable opinions of local counsel for the Borrowers in
such jurisdictions as the Banks and the Agent may require dated
as of the Closing Date on such matters as the Banks shall require
and in form and substance reasonably satisfactory to the Banks,
the Agent and its counsel;
(D) A certificate dated the date hereof by the Secretary or an
Assistant Secretary of each Borrower as to the names and
signatures of the officers of such Borrower authorized to sign
this Agreement, the Notes and the Loan Documents and the other
documents or certificates of such Borrower to be executed and
delivered pursuant hereto. The Agent, Issuing Bank and each Bank
may conclusively rely on, and shall be protected in acting upon,
such certificate until they shall receive a further certificate
by the Secretary or an Assistant Secretary of such Borrower
amending the prior certificate;
(E) A Revolving Credit Note payable to the order of such
Bank;
(F) A Term Loan Note payable to the order of such Bank;
(G) A mortgage (the "Florida Mortgage") on certain real
properties and improvements located in Jacksonville, Florida (the
"Florida Property") duly executed and acknowledged in form
suitable for recording;
(H) A mortgage (the "New York Mortgage") on certain real
property and improvements located in Cortlandville, New York (the
"New York Property") duly executed and acknowledged in form
suitable for recording;
(I) A mortgage (the "North Carolina Mortgage") on certain
real property and improvements located in Fayetteville, North
Carolina (the "North Carolina Property") duly executed and
acknowledged in form suitable for recording;
(J) Collateral assignments of leases assigning to the
Collateral Agent all leases and all rents, issues and profits of
the Properties (the "Collateral Assignments") duly executed and
acknowledged in form suitable for recording;
(K) An Environmental Indemnity Agreement (the
"Environmental Indemnity") whereby each Borrower shall indemnify
the Agent, the Banks and the Noteholders for any loss or
liability and costs of defense incurred as a result of any
environmental condition on any of the Borrowers' property or
otherwise relating to any Borrower as set forth in such
Environmental Indemnity;
(L) A pledge agreement pledging to the Collateral Agent all
of the issued and outstanding stock of the Subsidiaries of
Worldwide-DE, NCC and Maidenform respectively, excluding
Maidenform UK, Ltd., executed by the holders of any such stock
(the "Pledge Agreement");
(M) The original certificates of all shares pledged under
the Pledge Agreement accompanied by stock powers duly endorsed in
blank to be held in escrow by the Collateral Agent;
(N) A trademark security agreement (the "Trademark
Agreement") assigning to the Collateral Agent all registered and
unregistered trademarks, trade names and trademark or trade name
applications owned by or (to the extent permitted by the
licensor) licensed to the Borrowers duly executed and
acknowledged and in form suitable for recording;
(O) An intercreditor agreement (the "Intercreditor Agreement")
among the Agent, the Collateral Agent, the Banks and the
Noteholders;
(P) A security agreement (the "Security Agreement") from each
of the Borrowers to the Collateral Agent granting a security
interest in all of the personal property, tangible or intangible,
of each Borrower, together with the Uniform Commercial Code
financing statements executed by the Borrowers, and any other
document which the Banks may reasonably request, including
without limitation any other document for filing or otherwise, in
order to perfect the Collateral Agent's security interest in the
Collateral;
(Q) Originals of all of the Borrowers' instruments, chattel
paper and letters of credit (drawn on a bank other than a Bank),
if any, supporting any Account owed by a Purchaser meeting the
requirements of clause (L) (1), (2) or (3) of the definition of
Eligible Account (whether or not such Account otherwise qualifies
as an Eligible Account), each properly endorsed and/or assigned
to the Collateral Agent to be held in escrow by the Collateral
Agent;
(R) Landlord's waiver(s) and estoppel certificates in form and
substance satisfactory to the Agent delivered in accordance with
the Security Agreement;
(S) Payment by the Borrowers of all Fees then due;
(T) From each Borrower a certificate stating that, as of
the date hereof, no Event of Default or Unmatured Event of
Default exists;
(U) A certificate of each Borrower on behalf of such
Borrower relating to its representations and warranties set forth
in Section 4.14 hereof;
(V) A certificate duly executed by the chief financial
officer of each Borrower on behalf of such Borrower that to his
knowledge after due inquiry no material adverse change in the
financial condition or assets or operations of the Borrowers,
taken as a whole, has occurred from and after December 31, 1994;
(W) Copies of the Articles of Incorporation, Bylaws and
other charter documents of each Borrower, certified as true,
correct and complete by such Borrower's Secretary or Assistant
Secretary on behalf of such Borrower and, with respect to the
Articles of Incorporation, by the appropriate governmental
official of the jurisdiction where such Borrower was formed;
(X) With respect to each Borrower, certificates dated within
thirty (30) days of the date hereof for United States
jurisdictions and, as the Agent may require, for jurisdictions
outside the United States, issued by the Secretary of State (or
similar official) of each jurisdiction in which such Borrower is
incorporated or does business, stating that such Borrower is a
corporation duly incorporated or authorized to do business, as
the case may be, and in good standing under the laws of such
jurisdiction;
(Y) For each Borrower, a certificate dated the date of this
Agreement and executed by the President or Executive Vice
President and by the chief financial officer, in each case on
behalf of such Borrower, confirming that to their knowledge after
due inquiry (1) each of the representations and warranties made
in this Agreement by such entity are true and correct in all
material respects as of the date of this Agreement and of the
Closing Date, (2) such entity has fully performed each and every
covenant to be performed by such Borrower on or prior to the date
of this Agreement, and (3) such entity has satisfied each of the
conditions set forth in this Article III (to the extent required
to be satisfied by such entity);
(Z) Five year Consolidated projections for the Borrowers
for each year and portion thereof through the Termination Date,
and such other financial statements, reports, projections and
information as the Banks may reasonably request, all of which
shall be certified by each Borrower as of the date hereof as
representing reasonable projections of anticipated results based
upon all of the information available to them;
(AA) The Combined Pro Forma relating to the four quarters
ending December 31, 1994;
(BB) The results of Uniform Commercial Code, judgment, and
bankruptcy searches of the jurisdictions listed in Exhibit 4.8
showing no prior liens or judgments against any Borrower or any
of their assets, except as disclosed on Exhibit 4.8 hereto;
(CC) Estoppel certificates, in form and substance acceptable
to the Agent from any other Person which has provided a credit
facility to any Borrower in excess of $1,000,000.00;
(DD) The following evidence of insurance coverage:
(1) a copy of all risk casualty insurance policies in an
amount equal to 100% of the replacement value of all improvements
on the Properties and each Borrower's Inventory, fixtures and
equipment, in form and substance satisfactory to the Agent and
its counsel identifying the Collateral Agent as loss payee under
a standard mortgagee clause (with respect to real property) and a
standard lender loss payee clause (with respect to personalty);
(2) a certificate of insurance issued to the Agent evidencing
workmen's compensation and public liability insurance, insuring
the interest of each Borrower in amounts and in form and
substance satisfactory to the Agent and its counsel; and
(3) evidence of all insurance required hereunder or under the
Mortgages.
Each policy of insurance must be issued by an
insurance company satisfactory to the Agent, must not be in
arrears as to the payment of premiums, and must provide that it
will not be terminated without at least 30 days prior written
notice to the Agent;
(EE) United States Trademark lien searches showing no perfected
liens against the trademarks of the Borrowers;
(FF) Termination statements from parties holding liens which are
not permitted in accordance herewith;
(GG) An appraisal of the Properties prepared by MAI appraisers
acceptable to the Agent and otherwise satisfactory in form and
substance to the Banks and the Agent;
(HH) Policies of title insurance or "marked-up" commitments to
issue policies of title insurance, with all premiums paid, issued
by a title company satisfactory to the Banks insuring the
Mortgages, as valid first priority mortgage liens, subject only
to exceptions approved by the Banks together with reinsurance or
coinsurance agreements (as the Agent may require) and direct
access agreements with such insurers and in such amounts as the
Agent may require;
(II) To the extent required by the title insurer as a condition
to removing the "survey exception" on the title insurance
policies referred to in subsection (AI) above, recent surveys of
each of the Properties subject to Mortgages for which title
insurance is required under subsection (AI) above, prepared by a
surveyor licensed by the State where such property is located or
professional engineer acceptable to the Banks conforming to the
requirements of the title insurance issuer showing all lot and
street lines and the location of all improvements and easements
and means of ingress and egress to and from such property;
(JJ) Flood insurance for the Properties or evidence that none of
the improvements on the Properties are located in a flood hazard
area;
(KK) Copies of all easements, agreements, restrictions and
conditions pertaining to the Properties;
(LL) Copies of all material licenses, permits, and other
Governmental Approvals required for operation of the Properties
required by the Banks, the Agent or its counsel;
(MM) Phase I environmental audits of the Properties each in form
and substance and indicating results satisfactory to the Agent;
(NN) Satisfactory completion of the Agent's audit and due
diligence;
(OO) The Borrowers' December 31, 1994, Financial Statements;
(PP) Evidence that the acquisition of NCC by Worldwide-DE and/or
Maidenform has been completed and that closing has occurred under
the Private Placement;
(QQ) Certified copies of all documents related to the
acquisition of NCC by Worldwide-DE and/or Maidenform, all of
which shall be satisfactory to the Agent in form, substance and
structure;
(RR) Certified copies of all shareholder agreements, management
agreements and similar agreements relating to the present or
future ownership, operations or management of the Borrowers, or
any of them;
(SS) Certified copy of all documents evidencing the Subordinated
Debt, all in form and substance satisfactory to the Agent;
(TT) A completed Borrowing Base Certificate;
(UU) Certified copies of all documents, agreements and contracts
relating to the retirement of Robert Brawer and consequent
payments to be made by the Borrowers or any of them to him;
(VV) A certificate from the Borrowers stating that the
conditions set forth in Section 3.2 are satisfied as of the
Closing Date and that there has been no material adverse change
to the financial condition or business operations of the
Borrowers since December 31, 1994;
(WW) executed resolutions, signature cards and such other
documents required by the Issuing Bank to establish the Letter of
Credit Cash Collateral Account; and
(XX) such other documents as may be reasonably requested by the
Banks, the Agent or its counsel.
2.23 Conditions Precedent to All Disbursements. The
obligation of each Bank to disburse its portion of the Term Loan
and to make Advances under the Revolving Credit (including the
initial Advance) and the rights of the Borrowers to select
Interest Rates under Section 2.7 are subject to the further
conditions precedent that:
(A) The representations and warranties contained herein shall
be accurate on and as of the date of such Advance, disbursement
or selection as though made on and as of such date except for
changes permitted hereby or in writing by the Banks or Majority
Banks, in accordance with Sections 8.1 or 8.4, as applicable;
(B) No Event of Default or Unmatured Event of Default shall
have occurred and be continuing or will result from the making of
such Advance, disbursement or selection; and
(C) No strike, slowdown, picketing or work stoppage by
employees against any Borrower, any lockouts by any Borrower of
its employees or any other occurrence, event or condition of a
similar character which, in any such case or in the aggregate,
has a material adverse effect on the business, prospects or
financial condition of the Borrowers taken as a whole or the
Domestic Borrowers taken as a whole.
2.24 Conditions to Issuance of Letters of Credit. The
obligation of the Issuing Bank to issue any Letter of Credit
hereunder is subject to the prior or concurrent satisfaction of
all of the following conditions:
(A) On or before the date of issuance of each Letter of
Credit, the Agent shall have received (unless waived by all of
the Banks), in accordance with the provisions of Section 2.19(A),
a notice requesting the issuance of such Letter of Credit, an
executed application for such Letter of Credit in the form
customarily required by the Agent for the issuance of letters of
credit, all other information specified in Section 2.19(A), and
such other documents as the Agent may reasonably require in
connection with the issuance of such Letter of Credit;
(B) On the date of issuance of each Letter of Credit, all
conditions precedent described in Sections 3.2(A) and 3.2(B)
shall be satisfied to the same extent as though the issuance of
such Letter of Credit were the making of an Advance, and each
request by the Borrowers to the Agent to issue a Letter of Credit
shall constitute a representation by the Borrowers that at the
time thereof (1) all conditions precedent described in Sections
3.2(A) and 3.2(B) have been satisfied and (2) the sum of the
proposed Letter of Credit plus the Letter of Credit Liability
plus the Advances then outstanding would not exceed the Credit
Limit and (3) the sum of the proposed Letter of Credit plus the
Letter Credit Liability will not exceed the Letter of Credit
Sublimit; and
(C) On or before the date of issuance of such Letter of
Credit, the Borrowers shall have paid the fees required under
Section 2.19(G).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to the Agent, the
Issuing Bank and the Banks as follows:
2.25 Existence. Each Borrower is a corporation duly
incorporated, validly existing and in good standing under the
laws of its state or other jurisdiction of incorporation. Each
Borrower has all requisite power and authority, corporate and
otherwise, to conduct its business and to own its properties and
is duly qualified as a foreign corporation in good standing in
all jurisdictions in which its failure so to qualify could have a
material adverse effect on the financial condition or business of
the Borrowers taken as a whole or the Domestic Borrowers taken as
a whole; provided that Worldwide-DE is in the process of
qualifying to do business in Puerto Rico, and Borrowers hereby
agree to complete such process within thirty (30) days from the
date hereof. The Banks acknowledge that as of the date hereof,
Worldwide-NY is in the process of merging into Worldwide-DE and
Borrowers agree to complete such process within one-hundred
twenty (120) days of the date hereof.
2.26 Authorization. The execution, delivery and performance
by each Borrower of this Agreement, the Notes and the Loan
Documents have been duly authorized by all necessary corporate
action, and do not and will not violate any current provision of
any government regulation or statute, or of the charter or by-
laws of such Borrower or result in a breach of or constitute a
default under any instrument or other material agreement to which
such Borrower is a party or by which it or its properties are
bound or affected.
2.27 Validity. This Agreement constitutes, and the Notes
and the Loan Documents when duly executed and delivered will
constitute, valid and legally binding obligations of such
Borrower, enforceable in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of
creditors' rights generally and subject to the availability of
equitable remedies.
2.28 Financial Information. The Consolidated balance sheet
and statements of cash flows and operations of the Borrowers and
statement of income and retained earnings as of and for the year
ended December 31, 1994, audited by Ernst & Young (or in the case
of NCC and Crescent, Coopers & Lybrand), copies of all of which
have been furnished to the Banks, are accurate, show all
material liabilities, direct and contingent, and present fairly
the financial positions, the results of operations and cash flows
at such dates and for the periods ended on such dates, all in
accordance with GAAP. Since December 31, 1994, to the date
hereof, there has been no material adverse change to the
financial condition (other than as reflected on the Combined Pro
Forma), business or prospects of the Borrowers taken as a whole
or the Domestic Borrowers taken as a whole either in such
financial positions or in such results of operations. The
projections delivered pursuant to Section 3.1 hereof have been
prepared and delivered to the Banks in good faith, and are based
upon reasonable assumptions.
2.29 Litigation. Except as set forth in Exhibit 4.5, there
are no actions, suits or proceedings pending or, to the knowledge
of the Borrowers, threatened against any Borrower, or any of
their respective properties before any court or governmental
department, commission, board, bureau, agency or instrumentality
(domestic or foreign) which if adversely determined are likely
individually or in the aggregate to have a material adverse
effect on the business, prospects or financial condition of the
Borrowers taken as a whole or the Domestic Borrowers taken as a
whole.
2.30 Contingent Liabilities. There are no suretyship
agreements, guarantees or other contingent liabilities of any
Borrower other than guarantees and other contingent liabilities
that are disclosed in the financial statements mentioned in
Section 4.4, or identified on Exhibit 4.15 attached hereto,
except for those arising in the ordinary courses of business and
which are not in the aggregate material.
2.31 Taxes. Each Borrower has filed all tax returns and
reports required to be filed before the date of this Agreement
and has paid all taxes, assessments and charges imposed upon it
or its property, or that it is required to withhold and pay over,
to the extent that they were required to be paid before the date
of this Agreement except where (A) an extension for filing is
available and such Borrower has taken the necessary steps to
qualify for such extension, or (B) where the failure to file
would not have a material adverse effect on the business,
prospects or financial condition of any Borrower.
2.32 Encumbrances. Except as disclosed in Exhibit 4.8
attached hereto, or permitted pursuant to Section 5.5, none of
the properties or assets of any Borrower are subject to any lien,
encumbrance or security interest, other than in favor of the
Collateral Agent.
2.33 Consents. Except as set forth in Exhibit 4.9, no
authorization, consent, approval, license, exemption by or filing
(except for filings or recordings of security documents as
contemplated by Section 3.1 hereof) or registration with any
court or governmental department, commission, board (including
the Board of Governors of the Federal Reserve System), bureau,
agency or instrumentality, domestic or foreign, is or will be
necessary for the valid execution, delivery or performance by any
Borrower of this Agreement, the Notes or any of the Loan
Documents. Each Borrower has obtained all Governmental
Approvals necessary for the conduct of the Borrower's business,
and the conduct of the Borrower's business is not and has not
been in violation of any such Governmental Approval or any
applicable federal or state law, rule or regulation, the failure
of the Borrower to obtain or to comply with would, in any such
case, have a material adverse effect on any Borrower.
2.34 ERISA. As of the date hereof, the Borrowers and the
members of their Controlled Group maintain only those Defined
Benefit Pension Plans, Defined Contribution Plans and other Plans
listed on Exhibit 4.10 attached hereto and contribute to only
those Multiemployer Plans listed on Exhibit 4.10 attached hereto.
All such Defined Benefit Pension Plans and Defined Contribution
Plans, as of the date hereof, meet the minimum funding standards
of 412 of the Code, the regulations thereunder and 302 of ERISA
without regard to any funding waiver. No material Prohibited
Transaction has occurred with respect to any Plan. No Reportable
Event has occurred with respect to any Defined Benefit Pension
Plan which Reportable Event would have a material adverse effect
on the financial condition, prospects, property or business of
the Borrowers taken as a whole or the Domestic Borrowers taken as
a whole. Except as set forth in Exhibit 4.10 hereof, as of
December 31, 1994 (which, the Borrowers represent, was the last
day of the fiscal year of the Defined Benefit Pension Plan
sponsored by the Borrowers last ended), no Defined Benefit
Pension Plan sponsored by any Borrower or any member of its
Controlled Group has any Amount of Unfunded Benefit Liabilities.
No trust was established in connection with any such Defined
Benefit Pension Plan pursuant to 4049 of ERISA (as in effect on
December 17, 1987) and no liabilities which would have a material
adverse effect on the financial condition, prospects, property or
business of the Borrowers taken as a whole or the Domestic
Borrowers taken as a whole (whether or not such liability is
being litigated) have been asserted against any Borrower or any
member of its Controlled Group in connection with any such
Defined Benefit Pension Plan by the PBGC or by a trustee
appointed pursuant to 4042(b) or (c) of ERISA, and no lien has
been attached and neither the PBGC nor the Internal Revenue
Service has threatened to attach a lien on any property of any
Borrower or any member of its Controlled Group as a result of any
failure to comply with the Code or the Treasury regulations
thereunder or ERISA. All Plans maintained by any Borrower or any
member of its Controlled Group comply (A) in operation with the
applicable requirements of the Code and the regulations
thereunder and ERISA, and (B) in form with those requirements of
the Code and the regulations thereunder and ERISA which must be
met on the date hereof, unless noncompliance therewith is not
likely to have a material adverse effect on the financial
condition, prospects, property or business of the Borrowers taken
as a whole or the Domestic Borrowers taken as a whole. If any
Borrower or any member of its Controlled Group was obligated to
pay the potential Withdrawal Liabilities for which any of them
would be liable if each of them were to withdraw from the
Multiemployer Plans to which any of them makes contributions over
the period and in the amount prescribed pursuant to MPPAA, such
obligation would not have a material adverse effect on the
financial condition, prospects, property or business of the
Borrowers taken as a whole or the Domestic Borrowers taken as a
whole. There is not now, and has not been, any violation of the
Code or the regulations thereunder or ERISA with respect to the
filing of applicable reports, documents, and notices regarding
the Plans of the Borrowers or any member of its Controlled Group
with the Secretary of Labor, the Secretary of the Treasury, the
PBGC or any other governmental entity or the furnishing of such
documents to the participants or beneficiaries of the Plans the
effect of which is likely to have a material adverse effect on
the financial condition, prospects, property or business of the
Borrowers taken as a whole or the Domestic Borrowers taken as a
whole. Except as set forth in Exhibit 4.10, neither the Borrower
nor any member of its Controlled Group has any unfunded
liabilities of unfunded and uninsured "employee welfare benefit
plans" (as defined in 3(1) of ERISA) which are likely to have a
material adverse effect on the financial condition, prospects,
property or business of the Borrowers taken as a whole or the
Domestic Borrowers taken as a whole. There is not now, and has
not been, any violation of the "continuation coverage
requirements" of "group health plans" of former 162(k) of the
Code and the regulations thereunder (as in effect for tax years
beginning on or before December 31, 1988) and of 4980B of the
Code and the regulations thereunder (as in effect for tax years
beginning on or after January 1, 1989) and Part 6 of Subtitle B
of Title I of ERISA with respect to any Employee Benefit Plan of
the Borrower or of any member of its Controlled Group to which
such continuation coverage requirements apply which has a
material adverse effect directly or indirectly on the financial
condition, prospects, property or business of the Borrowers taken
as a whole or the Domestic Borrowers taken as a whole.
2.35 Ownership. Except as listed on Exhibit 4.11, the
Borrowers have title to, or valid leasehold interests in, all of
its properties and assets, real and personal, including the
properties and assets, and leasehold interests reflected on the
financial statements referred to in Section 4.4 hereof.
2.36 Subsidiaries and Ownership of Stock. Exhibit 4.12 is a
complete and accurate list of the entities comprising the
Borrowers, and shows (A) the jurisdiction of incorporation or
organization of each such entity, (B) the ownership of the
outstanding stock or other interest of Worldwide-DE and Worldwide-
NY, and (C) the chief executive office and each other business
location of each Borrower. All of the outstanding capital stock
or other interest of each Borrower has been validly issued and is
fully paid and nonassessable. Except as reflected on Exhibit
4.11 or Exhibit 4.12, Worldwide-DE owns all of the outstanding
capital stock of Maidenform and Maidenform owns all of the
outstanding capital stock of all other Borrowers, in all cases
free and clear of all liens, claims or encumbrances. No Borrower
has any Subsidiaries or Affiliates except for other Borrowers and
those Persons owning the capital stock of Worldwide-DE shown on
Exhibit 4.12.
2.37 Margin Stock. No Borrower engages in the business of
making loans for the purchase of Margin Stock.
2.38 Environmental Matters. Each Borrower is in possession
of and in compliance with all required permits and Environmental
Laws relating to the discharge or release of liquids, gases or
solids into the air, water, and soil except where non-compliance
would not have a material adverse effect on the financial
condition (including without limitation, asset value), prospects,
or business of the Borrowers taken as a whole or the Domestic
Borrowers taken as a whole. No Borrower refines, processes,
generates, stores, recycles, transports, disposes of, or releases
into the environment any "hazardous substance" as that term is
defined under Section 101(14) of CERCLA or any hazardous or toxic
substances as those terms are defined by the provisions of any
state or local environmental statute or regulation, except in the
ordinary course of its business. Each Borrower which refines,
processes, generates, stores, recycles, transports, disposes of,
or releases into the environment any such "hazardous substance"
does so in accordance with all applicable Environmental Laws
except where non-compliance would not have a material adverse
effect on the financial condition (including without limitation,
asset value), prospects, or business of the Borrowers taken as a
whole or the Domestic Borrowers taken as a whole. No Borrower
has received: (A) written or, to its knowledge oral, notice from
any governmental agency that it is a potentially responsible
party in any proceeding under CERCLA or any similar state or
local environmental statute or regulation, or (B) any written or,
to its knowledge oral, notice of violation, citation, complaint,
request for information, order, directive, compliance schedule,
notice of claim, proceeding or litigation from any party
concerning such entity's compliance with any Environmental Law
which is presently outstanding or unresolved.
2.39 Debt and Guarantees. Except as set forth in Exhibit
4.15 hereto, no Borrower has any debt and no Borrower has
guaranteed the payment or performance of the debts or obligations
of any other Person except for the guaranty of checks or other
documents for collection in the ordinary course of business or as
permitted pursuant to Section 4.16 hereof.
2.40 Credit Arrangements. Exhibit 4.16 hereto is a list,
complete and correct in all material respects, of all credit
agreements, indentures, purchase agreements, guaranties, capital
leases, and other investments, agreements and arrangements
presently in effect providing for or relating to extensions of
credit (including agreements and arrangements for the issuance of
any letters of credit or for acceptance financing) in respect of
which any Borrower is in any manner directly or contingently
obligated, excluding therefrom any single agreement relating to
the purchase of the machinery, equipment, goods and supplies made
in the ordinary course of business of less than $500,000.00; and
the maximum principal or face amount of the credit in question is
therein correctly stated and all liens of any nature are therein
correctly described.
2.41 Regulation U, Etc. The Loans will not constitute a
violation of Regulation G, T, U or X of the Board of Governors of
the Federal Reserve System. No part of the proceeds of the Loans
will be used for any purposes which violate or are inconsistent
with the provisions of any of such regulations.
2.42 Licenses, Permits, Etc. Each Borrower is in possession
of and operating in compliance with all franchises, grants,
authorizations, licenses, permits, easements, consents,
certificates and orders required for the conduct of its business
now conducted, and all of them are valid and in full force and
effect except to the extent that the failure to possess any such
franchise, grant, authorization, license, permit, easement,
consent, certificate or order does not and will not have a
material adverse effect on the financial condition, business
operations or prospects of the Borrowers taken as a whole or the
Domestic Borrowers taken as a whole.
2.43 Compliance with Laws. Each Borrower is in compliance
with all laws, rules, regulations, and orders of all Federal,
state and governmental agencies and courts (domestic and foreign)
which are applicable to it, to the conduct of its business, or to
the ownership and use of its properties except where failure to
so comply would not have a material adverse effect on the
financial condition, business or prospects of the Borrowers taken
as a whole or on the Domestic Borrowers taken as a whole.
2.44 Labor Matters. On the date of execution of this
Agreement there are no existing, or to the best of the Borrowers'
knowledge threatened or contemplated, strikes, slowdowns,
picketing or work stoppages by any employees against any
Borrower, any lockouts by any Borrower of any of its employees or
any other occurrence, event or condition of a similar character
affecting, or which may materially affect the financial condition
or results of operations of any Borrower or the Domestic
Borrowers taken as a whole.
2.45 Outstanding Judgments or Orders. Each Borrower has
satisfied all judgments against it and no Borrower is in default
with respect to any judgment, writ, injunction, decree, material
rule or regulation of any court, arbitrator or commission, board
bureau, agency or instrumentality, domestic or foreign,
pertaining to such Borrower.
2.46 No Defaults on Other Agreements. No Borrower is
subject to any charter or corporate restriction which could have
a materially adverse effect on the business, properties, assets,
operations or conditions, financial or otherwise, of the
Borrowers taken as a whole or the Domestic Borrowers taken as a
whole, and no Borrower is a party to any indenture, loan or
credit agreement or any lease or other agreement or instrument or
subject to any charter or corporate restriction which could have
a materially adverse effect on the ability of such Borrower to
carry out its obligations under the Loan Documents. No Borrower
is in default in any material respect in the performance,
observance or fulfillment of any of the material obligations,
covenants or conditions contained in any agreement or instrument
material to its business to which it is a party.
2.47 Public Utility Holding Company Act. No Borrower is a
Public Utility Holding Company within the meaning of the Public
Utility Holding Company Act.
2.48 Patents. The Borrowers do not own, have not obtained
and have not applied for any patents from the United States
Patent and Trademark Office which are valid on the date hereof.
2.49 Full Disclosure. No representation or warranty by the
Borrowers in this Agreement and no information in any statement,
certificate, schedule or other document furnished or to be
furnished to the Banks, the Agent or the Issuing Bank pursuant
hereto, contains or will contain any untrue statement of a
material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not
misleading. Except as disclosed in this Agreement and the
Exhibits attached hereto, there is no fact known to any Borrower
which it has not disclosed to the Banks, the Agent and the
Issuing Bank in writing which materially adversely affects, or,
so far as the Borrowers can now reasonably foresee, may
materially adversely affect, the business, financial condition or
results of operations of the Borrowers taken as a whole or the
Domestic Borrowers taken as a whole.
ARTICLE V
COVENANTS OF THE BORROWERS
So long as any amount due any Bank hereunder remains
outstanding, or any Bank shall have any Commitment hereunder,
unless the Majority Banks or Banks, as required under Section 8.1
hereof, shall otherwise consent in writing, each Borrower agrees
that:
2.50 Use of Proceeds. The proceeds of the Loans will be
used for the purposes set forth in the Background Section hereof.
2.51 Financial Statements. (A) The Borrowers will furnish
to each Bank, not later than 90 days after the end of each year,
Financial Statements as of and for the 12 months ending the last
day of such year, audited by Ernst & Young or other independent
certified public accountants reasonably satisfactory to the
Agent. Concurrently with such year-end Financial Statements, the
Borrowers shall furnish to each Bank a written statement by such
accounting firm stating that, nothing came to their attention
that caused them to believe that a Borrower failed to comply with
the covenants contained in Sections 5.16 through 5.24 hereof
inclusive and Sections 5.4, 5.5, 5.13, 5.14, 5.26 and 5.27 hereof
insofar as they relate to accounting matters (which statement may
contain such qualifications and limitations as are customarily
included in such a report).
(A) In addition, the Borrowers will furnish to each Bank, (i)
within sixty (60) days from the date hereof the Combined Pro
Forma for the period from January 1, 1995 through the date
hereof, and (ii) within 60 days of the close of each fiscal
quarter other than the last fiscal quarter of each fiscal year,
the Borrowers' Interim Financial Statements for such fiscal
quarter and the period then ended prepared by the Borrowers in
accordance with GAAP, consistently applied, subject only to usual
year-end adjustments and the absence of footnotes.
(B) The Borrowers will also furnish to each Bank, within 20
days of the end of each month (as of the end of each previous
calendar month) prior to the Termination Date, a completed
Borrowing Base Certificate substantially in the form of Exhibit
1.1A hereto executed by the chief financial officer(s) of the
Borrowers.
(C) With all Financial Statements and Interim Financial
Statements, the Borrowers will provide to each Bank (i) a legal
opinion form the Borrower's General Counsel (with Interim
Financial Statements) or outside counsel (with Financial
Statements) as to whether an Event of Default has occurred under
Section 6.1(J), and (ii) the certificate of the chief financial
officer of the Borrowers, which certificate shall state that such
Financial Statements or Interim Financial Statements are complete
and correct in all material respects and prepared in accordance
with GAAP, subject only to usual year-end adjustments and the
absence of footnotes in the case of Interim Financial Statements.
The Borrowers shall furnish to each Bank together with all
Financial Statements, Interim Financial Statements and the
Combined Pro Forma delivered pursuant to section 5.2(B)(i) above,
a certificate executed by its chief financial officer on behalf
of the Borrowers, which certificate shall include all necessary
calculations, which shall state that the signer: (1) has reviewed
the terms of this Agreement and has made, or caused to be made
under his supervision, a review in reasonable detail of the
transactions and condition of the Borrowers during the accounting
period covered by such Financial Statements or Interim Financial
Statements and that such review has not disclosed the existence
during or at the end of such accounting period; and (2) does not
have knowledge of the existence as at the date of the
certificate, of any condition or event which constitutes an Event
of Default or Unmatured Event of Default or if any such condition
or event existed or exists, specifying the nature and period of
existence thereof and what action the Borrowers have taken, are
taking and propose to take with respect thereto. A compliance
certificate substantially in the form of Exhibit 5.2 hereto
executed by the Borrowers' chief financial officer(s) on behalf
of the Borrowers shall be delivered to each Bank at the same time
as all Financial Statements, Interim Financial Statements and the
Combined Pro Forma delivered pursuant to Section 5.2(B)(i) above
are delivered hereunder.
(D) Promptly upon receipt thereof, the Borrowers shall deliver
to the Banks copies of any management letters or other reports
submitted to the Borrowers by independent certified public
accountants in connection with the examination of the Financial
Statements of the Borrowers or a certification by the chief
financial officer of Borrowers that there is nothing in the
certified accountant's reports indicating any material adverse
effect on the condition (financial or otherwise), business,
operations or prospects of the Borrowers taken as a whole or the
Domestic Borrowers taken as a whole.
(E) Simultaneously with the filing thereof, the Borrowers
shall deliver to the Banks copies of all notices required by law
or regulation to be filed, reports, registrations and requests
for interpretive letters or rulings filed with the Securities and
Exchange Commission.
2.52 Insurance. Each Borrower will maintain insurance with
financially sound and reputable insurance companies or
associations as required in the Security Documents and otherwise
in such amounts and covering such risks as are usually carried by
companies engaged in similar businesses and owning similar
properties in the same general areas in which such Borrower
operates or owns such properties. The Borrowers may self-insure
such risks in such amounts as the Borrowers reasonably determine
in their prudent business judgment, to the Agent's satisfaction,
provided that adequate reserves are established therefor if
required by GAAP and provided further that the Borrowers maintain
an umbrella public liability issuance policy in the amount of not
less than $35,000,000 and with deductibles of not more than
$100,000.
2.53 Taxes. Each Borrower will pay all taxes, assessments
and charges imposed upon it or its property or that it is
required to withhold and pay over when due, except where such
taxes, assessments and charges are contested in good faith and
where adequate reserves have been set aside.
2.54 Encumbrances. (A) No Borrower will create, incur,
assume or suffer to exist, any mortgage, pledge, judgment, lien
or other encumbrance of any kind upon, or any security interest
in, any of its property, or assets, including, without
limitation, patents, trademarks, copyrights or any other general
intangible except for (1) liens for taxes not yet delinquent or
being contested in good faith and by appropriate proceedings, (2)
liens solely securing the performance of bids, tender contracts,
surety and appeal bonds, or similar obligations, arising in the
ordinary course of business, provided that the Borrowers remain
in compliance with the terms of such obligations, (3) liens in
connection with workmen's or worker's compensation, unemployment
insurance or other social security obligations, (4) mechanic's,
materialman's, landlord's, carrier's, or other similar liens
arising in the ordinary course of business with respect to
obligations that are not due, or which are being contested
diligently, in good faith and by appropriate proceedings,
provided that (a) such proceedings have the effect of staying
execution on such liens, and (b) adequate reserves have been set
aside or the obligation being contested has been bonded against,
(5) the encumbrances mentioned in Section 4.8 hereof, (6)
purchase money liens in amounts not to exceed, in the aggregate,
15% of Tangible Net Worth at any time outstanding, on any Capital
Asset hereafter acquired including the assumption of any lien on
such Capital Assets existing at the time of such acquisition, any
lien incurred in connection with any conditional sale or other
title retention agreement, a capital lease, or construction loans
or permanent financing for new construction; provided that (a)
any property subject to any of the foregoing is acquired by a
Borrower in the ordinary course of its business and the lien on
any such property is created contemporaneously with such
acquisition or in accordance with the construction financing or
permanent financing of a newly constructed facility; (b) the
obligation secured by any lien so created, assumed or existing
shall not exceed 100% of the lesser of cost or fair market value
as of the time of acquisition of the property covered thereby to
the Borrower acquiring the same; and (c) each such lien shall
attach only to the Capital Asset so acquired and fixed
improvements thereon, and (7) liens in favor of the Collateral
Agent.
(A) No Borrower will agree with any Person other than the
Noteholders to restrict its ability to grant mortgages, pledges,
liens, or other encumbrances upon, or security interests in, any
of its property or assets to the Banks hereunder.
2.55 Compliance with Laws. Each Borrower will comply with
all laws and regulations applicable to it in the operation of its
business except where the failure to so comply would not have a
material adverse effect on the financial condition, business or
prospects of the Borrowers taken as a whole or the Domestic
Borrowers taken as a whole.
2.56 Inspection by Banks; Future Appraisals. (A) Each
Borrower will permit representatives of each Bank to inspect the
property and books and records of such Borrower and to make
extracts therefrom at all reasonable times and, except after the
occurrence of an Event of Default, upon reasonable prior notice
from such Bank. The Borrowers agree to reimburse the Banks for
all reasonable costs and expenses incurred in connection with any
such inspection, including without limitation a per diem charge
for the Agent's personnel at rates typically charged by the Agent
for similar services, performed after there occurs an Event of
Default or an Unmatured Event of Default or if performed prior
thereto at the request of the Majority Banks.
(A) The Agent shall have the right at any time and from
time to time as long as any Loan or any Letter of Credit is
outstanding to require that a new fair market appraisal of the
Properties or any of them be prepared by an appraiser
satisfactory to the Agent and pursuant to a methodology
acceptable to the Agent, and if required after there has occurred
an Event of Default or an Unmatured Event of Default, or if such
appraisal is required by law or regulation or by any Bank's
regulator, then the costs of each such appraisal shall be paid by
the Borrowers upon demand.
2.57 Reports. The Borrowers will furnish to the Agent and
to each Bank:
(A) As soon as possible after any Borrower has knowledge of
the occurrence of any Event of Default or Unmatured Event of
Default, a written statement by the chief executive or chief
financial officer of such Borrower on behalf of such Borrower
setting forth details of such Event of Default or Unmatured Event
of Default, stating whether or not the same is continuing and, if
so, the action that such Borrower proposes to take with respect
thereto;
(B) Immediately after receiving notice thereof, notice in
writing of all actions, suits and proceedings before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign if an adverse result thereof
could have a material adverse effect on the financial condition,
prospects, property or business of the Borrowers taken as a whole
or the Domestic Borrowers taken as a whole;
(C) As soon as practicable after any Borrower has knowledge
of the occurrence of a change in the business, properties or the
operations and condition (financial or otherwise) of such
Borrower that such Borrower considers to be materially adverse
taking all Borrowers as a whole or the Domestic Borrowers taken
as a whole, a statement by such officer setting forth details of
such material adverse change and the action that the Borrowers
propose to take with respect thereto;
(D) Copies of any information, report or notice delivered
or required to be delivered by the Borrowers to the Noteholders;
and
(E) Such other information respecting the business,
properties, condition and operations (financial or otherwise
including but not limited to management letters issued by the
Borrowers' accountants) of each Borrower as the Agent or any Bank
may at any time and from time to time reasonably request be
furnished to it.
2.58 ERISA. (A) Each Borrower and all members of its
Controlled Group will comply in all material respects with the
applicable provisions of ERISA and the Code and the regulations
thereunder with respect to any Plan including the timely filing
of required annual reports and the payment of PBGC premiums.
(A) Each Borrower will cause to be made all contributions
required to avoid any accumulated funding deficiency (as defined
in 412(a) of the Code and the regulations thereunder and
302(a) of ERISA), unless waived until after the Commitment
Termination Date, with respect to any pension plan (as defined in
3(2) of ERISA) which is subject to Part 3 of Subtitle B of Title
I of ERISA or Section 412 of the Code and the regulations
thereunder and which is maintained by the Borrower or any member
of its Controlled Group.
(B) As soon as practicable (and in any event within five
days) after any Borrower has reason to know (1) that any
Reportable Event has occurred with respect to any Defined Benefit
Pension Plan maintained by a Borrower or any member of its
Controlled Group, (2) that any Defined Benefit Pension Plan
maintained by a Borrower or any member of its Controlled Group is
to be terminated in a "distress termination" (within the meaning
of 4041(c) of ERISA), (3) that the PBGC has instituted or will
institute proceedings under Title IV of ERISA to terminate any
Defined Benefit Pension Plan maintained by a Borrower or any
member of its Controlled Group, (4) that a Borrower has incurred
Withdrawal Liability from a Multiemployer Plan maintained by it
or any member of its Controlled Group, which is likely to have a
material adverse effect on the financial condition, prospects,
property or business of the Borrowers taken as a whole or the
Domestic Borrowers taken as a whole, or (5) that any
Multiemployer Plan to which a Borrower or any member of its
Controlled Group has made contributions is in Reorganization,
such Borrower will furnish a statement to the Agent and each Bank
setting forth the details of such Reportable Event, distress
termination, termination proceedings, Withdrawal Liability, or
Reorganization, and the action that the Borrowers propose to take
with respect thereto, together with a copy of any notice of such
Reportable Event or distress termination given to the PBGC, or a
copy of any notice of termination proceedings, Withdrawal
Liability, or Reorganization received by a Borrower or any member
of its Controlled Group.
(C) Each Borrower will furnish to the Agent and each Bank
as soon as possible after receipt thereof a copy of any notice
that a Borrower or any member of its Controlled Group receives
from the PBGC, the Internal Revenue Service, the Department of
Labor, any other governmental entity or from the sponsor of any
Multiemployer Plan that sets forth or proposes any action to be
taken or determination made by the PBGC, the Internal Revenue
Service, the Department of Labor, any other governmental entity
or the sponsor of any Multiemployer Plan with respect to any Plan
or Multiemployer Plan, which is likely to have a material adverse
effect on the financial condition, prospects, property or
business of the Borrowers taken as a whole or the Domestic
Borrowers taken as a whole.
(D) Each Borrower will promptly notify the Agent and each
Bank of any material taxes, penalties, interest charges and other
financial obligations that have been assessed or otherwise
imposed, or that such Borrower has reason to believe may be
assessed or otherwise imposed, against any Borrower or any member
of its Controlled Group by the Internal Revenue Service, the
PBGC, the Department of Labor or any other governmental entity
with respect to any Plan or Multiemployer Plan, provided,
however, that no notice shall be required with respect to amounts
that have been (or will be) reflected on the applicable
Borrower's tax return.
(E) Each Borrower will promptly notify the Agent and each
Bank of the adoption of any Plan or any obligation to contribute
to any Multiemployer Plan by any Borrower or any member of its
Controlled Group if the potential liability thereunder is likely
to have a material adverse effect on the financial condition,
prospects, property or business of the Borrowers taken as a whole
or the Domestic Borrowers taken as a whole.
(F) No Borrower will withdraw, or permit any member of its
Controlled Group to withdraw, from any Multiemployer Plan to
which any of them now or hereafter contribute if the Withdrawal
Liability which would thereupon be incurred and the payments
thereupon required over the time period required would have a
material adverse effect on the financial condition, prospects,
property or business of the Borrowers or the Domestic Borrowers
taken as a whole. No Borrower will permit (1) with respect to
any Employee Benefit Plan, any Prohibited Transaction or
Prohibited Transactions under ERISA or the Code and the Treasury
regulations thereunder resulting in liability of the Borrower or
any member of its Controlled Group which individually or in the
aggregate would have a material adverse effect on the financial
condition, prospects, property or business of the Borrowers taken
as a whole or the Domestic Borrowers taken as a whole or (2) with
respect to any Defined Benefit Pension Plan, any Reportable Event
under ERISA, if upon termination of the Plan or Plans with
respect to which one or more such Reportable Events has occurred
there is or would be any liability of any of the Borrower or any
members of their Controlled Group to the PBGC which individually
or in the aggregate would have a material adverse effect on the
financial condition, prospects, property or business of the
Borrowers taken as a whole or the Domestic Borrowers taken as a
whole. In either case, the Borrowers will promptly notify the
Agent and each Bank of any such Prohibited Transaction or
Reportable Event.
(G) No Borrower will fail to make required minimum
contributions, or permit any member of its Controlled Group to
fail to make required minimum contributions with respect to a
Defined Benefit Pension Plan, resulting in a lien (as provided in
the Code or 302(f) of ERISA) against any Borrower or any member
of its Controlled Group.
(H) No Borrower will permit the adoption of a plan
amendment which results in significant underfunding (as defined
in 307 of ERISA) of a Defined Benefit Pension Plan which
requires such Borrower or any member of its Controlled Group to
provide security if such underfunding would have a material
adverse effect on the financial condition, prospects, property or
business of the Borrowers taken as a whole or the Domestic
Borrowers taken as a whole.
(I) No Borrower will acquire, or permit the acquisition by
any member of its Controlled Group of, any trade or business
which has incurred either directly or indirectly any Amount of
Unfunded Benefit Liabilities under any Defined Benefit Pension
Plan, if such acquisition would have a material adverse effect on
the financial condition, prospects, property or business of the
Borrowers taken as a whole or the Domestic Borrowers taken as a
whole.
(J) No Borrower will permit a violation of the
"continuation coverage requirements" of "group health plans" of
4980B of the Code and the regulations thereunder and Part 6 of
Subtitle B of Title I of ERISA with respect to any Employee
Benefit Plan of any Borrower or of any member of its Controlled
Group to which such continuation coverage requirements apply if
such violation would have a material adverse effect on the
financial condition, prospects, property or business of the
Borrowers taken as a whole or the Domestic Borrowers taken as a
whole.
2.59 Environmental Matters. (A) Each Borrower will obtain
and comply with all required permits, licenses, registrations,
and approvals relating to the discharge or release of liquids,
gases or solids to the environment. To the extent that such are
applicable to the operation of its business, each Borrower will
comply with all laws, rules, regulations and governmental orders
and directives relating to the generation, treatment, storage,
transportation, disposal and release into the environment and
cleanup of any "hazardous substance" as that term is defined
under Section 101(14) of CERCLA, or any hazardous or toxic
substances as defined by the provisions of any state or local
environmental statute or regulation at all premises owned or
operated by such Borrower except where the consequences of
failing to do so will not have a material adverse effect on the
financial condition, business, prospects or asset value of the
Borrowers or any of them.
(A) Each Borrower will notify the Agent and each Bank in
writing of the receipt by it of (1) any written notice from any
governmental agency that it is a potentially responsible party in
any proceeding under CERCLA or any similar state or local
environmental statute or regulation, (2) any written notice of
any claim, proceeding, litigation, order, directive, citation, or
request for information concerning its compliance with the
Environmental Laws, (3) written notice of any alleged violation
of the Environmental Laws, or (4) any information known to it
concerning any potentially materially adverse environmental
condition on, above, or beneath its premises, including but not
limited to any spilling, leaking, discharge, release, or threat
of release of any hazardous or toxic waste or substance.
2.60 Nature of Business. No Borrower will make any material
change in the nature of its business as conducted at the date of
this Agreement.
2.61 Regulation U. No Borrower will: (A) use the proceeds
of the Loan to purchase or carry any Margin Stock; (B) engage in
the business of making loans for the purchase of Margin Stock; or
(C) purchase or carry Margin Stock.
2.62 Disposal of Assets. No Borrower will dispose of any
asset except (A) Inventory in the ordinary course of business;
(B) assets (other than trademarks, patents and other intellectual
property) which have become obsolete and which are promptly
replaced with assets having similar value and utility; and (C)
assets disposed of in arms-length transactions for fair market
value (as reasonably determined by Borrowers) having an aggregate
value over the term of this Agreement of not more than Seven
Million Five Hundred Thousand Dollars ($7,500,000.00).
2.63 Loans, Investments, Guarantees and Other Contingent
Liabilities. No Borrower will (A) become liable on the
obligation of anyone except (i) by endorsement of negotiable
instruments for deposit or collection in the usual course of
business, and (ii) Domestic Borrowers may become liable as
guarantors or otherwise for the obligations of (a) other Domestic
Borrowers, (b) Offshore Borrowers in commercial transactions in
the ordinary course of business and/or (c) any other Person (the
liabilities described in this subclause (c) shall be referred to
herein as "Third Party Guarantees" and, collectively with the
liabilities described in clause (b), the "Guarantees"), or (B)
except as set forth in Exhibit 5.14 hereto, make any loan or
investment except for (i) investments in Cash Equivalents, (ii)
investments in bank deposits as otherwise permitted hereby, (iii)
loans or investments in Domestic Borrowers, (iv) Protection
Agreements in the ordinary course of Borrowers' business and not
for speculation; (v) loans or investments in Offshore Borrowers
(such loans and investments, to the extent made by Domestic
Borrowers shall be referred to as "Offshore Loans"), (vi) loans
or advances by Domestic Borrowers to officers, employees, and
shareholders of Borrowers or any of them ("Individual Loans" and,
collectively with "Offshore Loans", the "Restricted Loans"),
provided however that, without duplication and without giving
effect to that certain guarantee heretofore agreed to by certain
Borrowers with respect to the obligations of Bratex Dominicana C.
por A. to Chase Manhattan Bank not to exceed $3,000,000.00 (1)
the aggregate amount of Individual Loans outstanding at any one
time shall not exceed $2,000,000.00, (2) the maximum exposure
under Third Party Guarantees at any one time shall not exceed
$5,000,000.00 in the aggregate, and (3) the maximum exposure of
the Borrowers under Guarantees, Restricted Loans and Offshore
Tangible Net Worth collectively shall not exceed fifteen percent
(15%) of the Tangible Net Worth of the Borrowers. Except as
otherwise set forth herein, no Borrower will incur any contingent
liability, other than contingent liabilities for Documentary
Letters of Credit and Standby Letters of Credit hereunder.
2.64 Maintenance of Property. Each Borrower will maintain
all of its property in reasonably good condition and repair,
ordinary and immaterial wear and tear excepted, and keep all of
its patents, trademarks, copyrights, licenses, and permits which
are of more than nominal value in full force and effect.
2.65 Merger; Corporate Structure. No Borrower will enter
into any merger or consolidation or, without the consent of the
Majority Banks, change its corporate structure or the nature or
character of its stock, except that any Borrower may merge with
any other Borrower provided that if a Domestic Borrower merges
with an Offshore Borrower, the survivor shall be a Domestic
Borrower. No Borrower shall acquire all or a substantial portion
of the assets of any other Person. No Borrower shall create any
new Subsidiaries unless such Subsidiary becomes a Borrower or a
surety for all of the obligation of the Borrowers hereunder by
executing an agreement in form and substance reasonably
satisfactory to the Agent.
2.66 Transactions with Affiliates and Subsidiaries. (A) No
Borrower will enter into any transaction with any officer,
director or shareholder of any Borrower or any Affiliate or
Subsidiary (which is not itself a Domestic Borrower) of any
Borrower for less than full value or on terms or conditions not
less favorable than could be obtained in an arm's length
transaction with a third party.
(A) No Domestic Borrower will enter into any transaction with
an Offshore Borrower unless (1) the Domestic Borrower receives
reasonably equivalent value, and (2) the transaction is on terms
not less favorable than could be obtained in an arm's length
transaction with a third party taking into account any
opportunity for the Borrowers to minimize taxes, duties and other
similar expenses and any requirements of law imposed by the
jurisdictions in which the Borrowers operate.
2.67 Quick Ratio. The Borrowers shall maintain a Quick
Ratio of not less than 0.35 to 1.00 as of the end of each fiscal
year from and after December 31, 1995.
2.68 Leverage Ratio. The Borrowers will maintain its
Leverage Ratio at not more than the following levels at any time
during the following periods:
Maximum Leverage
Period Ratio
as of the end of each fiscal
quarter, through December 30, 1995 0.70:1
as of the end of each fiscal
quarter from December 31, 1995 through
December 30, 1996 0.65:1
as of the end of each fiscal
quarter from December 31, 1996 through
December 30, 1997 0.60:1
as of the end of each fiscal
quarter from and after
December 31, 1997 0.55:1
2.69 Tangible Net Worth. Until the Borrowers provide the
Banks with the Combined Pro Forma for the period from January 1,
1995 through the date hereof as required by subsection 5.2(B)(i)
hereof, the Borrowers will not permit Tangible Net Worth at any
time to be less than $72,000,000.00. Thereafter, the Borrowers
will not permit Tangible Net Worth at any time to be less than
(A) 90% of Tangible Net Worth as of the date hereof as disclosed
on the Combined Pro Forma, minus (B) the amount expended after
the date hereof, if any, to acquire the remaining 7.611% of the
outstanding shares of NCC stock not purchased on or about the
Closing Date as described in the Background Section hereof, which
amount shall not exceed $17.55 times the number of such shares so
purchased after the date hereof, plus (C) 70% of aggregate
Consolidated net profit after taxes since the Closing Date,
provided that Consolidated losses incurred for any reporting
period shall not be used to reduce aggregate Consolidated net
profit after taxes for purposes of this Section 5.20.
2.70 Fixed Charge Coverage Ratio. The Borrowers will not
permit the Fixed Charge Coverage Ratio for the immediately
preceding four fiscal quarters (including the fiscal quarter
ending on such date) to be less than the following amounts as of
the end of each fiscal quarter ending during the following
periods:
Minimum Fixed Charge
Period Coverage Ratio
Closing through
December 31, 1996 1.10:1
March 31, 1997 and each fiscal
quarter ending thereafter 1.25:1
2.71 Funded Debt to Operating Cash Flow. The Borrowers will
not permit the ratio of Funded Debt to Operating Cash Flow for
the immediately preceding four fiscal quarters (including the
fiscal quarter ending on such date) to be greater than the
following amounts as of the end of each fiscal quarter ending
during the following periods:
Date Maximum Ratio
Closing through
December 30, 1995 5.25:1
December 31, 1995 through
December 30, 1996 4.75:1
December 31, 1996 through
December 30, 1997 4.25:1
December 31, 1997 and each fiscal
quarter ending thereafter 4.00:1
2.72 Dividends and Distributions. Prior to June 30, 1997,
no Borrower shall make or declare any dividend upon any capital
stock of any Borrower, or return any capital to any of its
shareholders, or make or declare any other payment or
distribution, or delivery of property to any Borrower's
shareholders in their capacity as such, or redeem, return,
purchase or acquire directly or indirectly, any shares of any
Borrower's capital stock now or hereafter outstanding except (A)
for the distribution of dividends from Borrowers to Domestic
Borrowers, which shall be permitted provided that there does not
then exist after giving effect to such distribution, an Event of
Default or Unmatured Event of Default, and (B) the Borrowers
shall be entitled to purchase the remaining outstanding shares of
NCC as described in the Background Section hereof. After
June 30, 1997, Borrowers shall be entitled to make or declare
dividends upon any capital stock of any Borrower or return any
capital to any of its shareholders, or make or declare any other
payment or distribution to any Borrower's shareholders in their
capacity as such, provided that there does not exist any Event of
Default or Unmatured Event of Default at the time such dividend,
payment or distribution is made or declared, provided further
that no Event of Default or Unmatured Event of Default would
otherwise result after giving effect to the making or declaring
of such dividend, payment or distribution.
2.73 Other Debt. (A) No Borrower will incur or otherwise
permit to exist any obligation for the payment of borrowed money,
whether as borrower or guarantor, except (1) debt in connection
herewith, (2) debt in connection with the Private Placement, (3)
debt listed on Exhibit 4.15 existing as of the date hereof, (4)
purchase money indebtedness permitted under Section 5.5(A)(6),
provided that any such debt in excess of $7,500,000.00 shall only
be incurred on terms reasonably acceptable to the Agent, or (5)
debt incurred in connection with any additional private placement
which is incurred only with the consent of the Majority Banks,
which consent may be conditioned on any occurrence, circumstance
or event, including without limitation that some or all of the
gross proceeds of such debt be used to prepay the Term Loan.
(A) The Borrowers shall not enter into any substantive
amendment with respect to the Private Placement adverse to the
Banks including without limitation any amendment increasing the
principal amount outstanding thereunder, increasing the interest
or other sums payable thereunder, accelerating the payment
schedule for principal or interest or accelerating the maturity
date thereof or creating a security interest in connection
therewith (other than in favor of the Collateral Agent), unless
agreed to in writing by Majority Banks.
(B) The Borrowers shall not enter into or consent to any
amendment to the Subordinated Debt without the Majority Banks
prior written consent.
2.74 Licenses, Permits. Each Borrower will maintain the
validity, force and effect of, and operate in compliance with,
all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates and orders required for the
conduct of its businesses except to the extent that the failure
to possess any such franchise, grant, authorization, license,
permit, easement, consent, certificate or order does not and will
not have a material adverse effect on the financial condition,
business operations or prospects of such Borrowers taken as a
whole or the Domestic Borrowers taken as a whole.
2.75 Fiscal Year. Each Borrower shall maintain a fiscal
year ending on December 31.
2.76 Change of Ownership or Management. Upon completion of
the merger of Worldwide-NY into Worldwide-DE, Worldwide-DE will
at all times own all of the capital stock of Maidenform. Except
as set forth on Exhibit 4.12, Maidenform will at all times own
all of the capital stock of all of the other Borrowers except
Worldwide-DE and Worldwide-NY.
2.77 RICO. No Borrower shall engage in any conduct or take
or fail to take any action which will, or would, under the facts
and circumstances relative thereto, violate RICO.
2.78 Indemnification. Each Borrower jointly and severally
hereby indemnifies and agrees to protect, defend, and hold
harmless the Agent, the Issuing Bank, the Banks and all of their
directors, officers, employees, agents, attorneys and
shareholders from and against any and all losses, damages,
expenses or liabilities of any kind or nature and from any suits,
claims, or demands, including all reasonable counsel fees
incurred in investigating, evaluating, or defending such claims,
suffered by any of them and caused by, relating to, arising out
of, resulting from, or in any way connected with this Agreement,
the Notes, any other Loan Document and any transaction
contemplated herein or therein including, but not limited to,
claims based upon any act or omission not amounting to willful
misconduct or gross negligence by the Agent, the Issuing Bank
and/or Banks in connection with this Agreement, the Notes or any
Loan Document and any transaction contemplated herein or therein.
If any Borrower shall have knowledge of any claim or liability
hereby indemnified against, it shall promptly give written notice
to the Agent. THIS COVENANT SHALL SURVIVE THE PAYMENT OF THE
INDEBTEDNESS CREATED BY THIS AGREEMENT, THE NOTES OR THE LOAN
DOCUMENTS.
2.79 Interest Rate Protection Agreements. Within 30 days of
the Closing Date, the Borrowers will enter into Protection
Agreements with respect to the interest rate on the Term Loan
with expiration dates of no earlier than the second anniversary
of the Closing Date, at rates and with counterparties acceptable
to the Agent.
ARTICLE VI
DEFAULT
2.80 Events of Default. Each of the following shall be an
event of default ("Event of Default"):
(A) if the Borrowers shall fail to pay any principal of the
Loans when due;
(B) if the Borrowers shall fail to pay any interest on the
Loans, any Fee, any payment with respect to the Letter of Credit
Liability, or any other amount owing hereunder, under the Notes,
the Letter of Credit Documents, or the Loan Documents when due
and such failure continues for two days thereafter, provided that
the Borrowers shall not be entitled to such grace period more
often than two times in any twelve month period;
(C) if any representation or warranty made by any of the
Borrowers in this Agreement, or in any certificate, agreement,
instrument, statement or report contemplated hereby or made or
delivered pursuant hereto or in connection herewith shall prove
to have been incorrect in any material respect as of the date on
which it is made or reaffirmed;
(D) if any Borrower (i) shall fail to pay any amount owing
under any Protection Agreement as and when due after applicable
notice and grace periods, if any, (ii) shall fail to pay any
Credit Obligation owing by it, or any interest or premium
thereon, when due, whether such Credit Obligation shall become
due by scheduled maturity, by required prepayment, by
acceleration, by demand or otherwise, if the aggregate of such
Credit Obligation to which such failure relates is at least
$1,000,000.00, or (iii) shall fail to perform any term, covenant
or agreement on its part to be performed under any agreement or
instrument evidencing or securing or relating to any such Credit
Obligation when required to be performed, if the effect of such
failure is to accelerate, or to permit the holder or holders of
such Credit Obligation to accelerate the maturity of such Credit
Obligation, provided that the principal amount of such Credit
Obligation subject to acceleration is at least $1,000,000.00,
whether or not such failure to perform shall be waived by the
holder or holders of such Credit Obligation, unless such waiver
has the effect of terminating the right of such holder or holders
to accelerate the maturity of such Credit Obligation as a result
of such failure;
(E) if any Borrower is adjudicated a bankrupt or insolvent
or the equivalent under any law or admits in writing its
inability to pay its debts as they mature, or makes an assignment
for the benefit of its creditors; or if any Borrower shall apply
for or consent to the appointment of any receiver, trustee, or
similar officer or the equivalent under any law for such
applicant or for all or any substantial part of its property; or
such receiver, trustee or similar officer or the equivalent under
any law shall be appointed without the application or consent of
such party and shall continue undischarged or unstayed for a
period of 60 days; or if any Borrower shall institute (by
petition, application, answer, consent or otherwise) any
bankruptcy, insolvency, reorganization, arrangement, readjustment
of debt, dissolution, liquidation or similar proceeding relating
to it under the laws of any jurisdiction; or if any such
proceeding shall be instituted (by petition, application or
otherwise) against any Borrower and an order for relief or
similar remedy shall be entered in such proceeding or such
proceeding shall remain undismissed for a period of 60 days; or
if any judgment, writ, warrant of attachment or execution or
similar process shall be issued or levied against any substantial
portion of the properties of any Borrower and such judgment,
writ, or similar process shall not be released, vacated or fully
bonded within 30 days after its issue or levy;
(F) if (1) any Reportable Event, or any failure of
compliance required by Section 5.9 hereof, that creates a
reasonable likelihood of the termination of any Defined Benefit
Pension Plan maintained by any Borrower or any member of its
Controlled Group, or of the appointment by the appropriate United
States District Court of a trustee to administer any such Plan
has occurred and is continuing 30 days after written notice to
such effect is given to the Borrowers by the Agent, or (2) any
Borrower or any member of its Controlled Group withdraws from any
Defined Benefit Pension Plan for which it was a substantial
employer within the meaning of 4063(b) of ERISA or from any
Multiemployer Plan, or (3) the plan administrator of any Defined
Benefit Pension Plan maintained by any Borrower or any member of
its Controlled Group files with the PBGC a notice of intention to
terminate such Plan in a "distress termination" (as defined in
4041(c) of ERISA), or (4) the PBGC institutes proceedings to
terminate any such Plan or to appoint a trustee to administer any
such Plan and such proceedings remain undismissed or unstayed for
three (3) Business Days and if, in any of the cases described in
the foregoing clauses (1) to (4), the Agent further reasonably
determines in good faith that the Amount of Unfunded Benefit
Liabilities resulting upon termination of such Plan (or resulting
from the imposition of Withdrawal Liability taking into account
the payments thereupon required over the time period required)
would have a material adverse effect on the business, properties,
operations, or condition (financial or otherwise) of any Borrower
or any member of its Controlled Group, or if a lien against the
assets of any Borrower or any member of its Controlled Group was
to result under ERISA;
(G) if any Borrower shall fail to perform or observe when
due any term, covenant or agreement contained in Sections 5.6,
5.9, 5.10, 5.14, 5.15, or 5.25 of this Agreement, on its part to
be performed or observed, and such failure continues uncured for
a period of thirty (30) days from the date any Borrower first
became aware of such failure, whether by written notice from the
Agent or otherwise, or if any Borrower shall fail to perform or
observe when due any other term, covenant or agreement contained
in this Agreement, on its part to be performed or observed;
(H) if any Borrower shall incur a loss as a result of
damage, destruction or other loss of assets and the aggregate
amount of such loss, after the recovery of any applicable
insurance proceeds thereon, shall be greater than $5,000,000.00
in the aggregate during any fiscal year;
(I) if there occurs any "event of default" (as defined
therein) under the Notes, the Mortgages or any of the other Loan
Documents; or
(J) if at any time (1) Elizabeth Coleman, her husband and
issue, together with any trusts controlled by her fails to have
the ability to appoint a majority of the members of the board of
directors of Worldwide-DE, or (2) Worldwide-DE fails to have the
ability, directly or indirectly, to appoint a majority of the
members of the board of directors of each of the other Borrowers.
2.81 Termination of Commitments; Acceleration. Unless
waived pursuant to Section 8.1 hereof, if any Event of Default
other than those described in Section 6.1(E) hereof shall occur
and be continuing, then upon notice by the Agent to the
Borrowers, at the Agent's option (A) the Commitments shall
terminate, at which time the obligations of the Banks to make
Advances under the Revolving Credit shall terminate, (B) the
Issuing Bank shall not have any further obligation to issue
Letters of Credit and the Banks shall have no further obligation
to participate in any Letters of Credit thereafter issued, (C)
the Borrowers shall pledge cash collateral and deposit in the
Letter of Credit Cash Collateral Account an amount equal to or
greater than (as determined by the Agent in its sole discretion)
the amount of any Letter of Credit Liability, and/or (D) the
entire unpaid principal amount of the Loans, the entire amount of
unreimbursed drawings under Letters of Credit, all interest
accrued and unpaid thereon and all other amounts payable
hereunder shall become immediately due and payable, without
presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrowers. If any
Event of Default described in Section 6.1(E) shall occur, then
automatically and without notice each of the events described in
(A) through (D) of the preceding sentence shall occur.
2.82 Remedies. (A) Upon the occurrence and during the
continuance of any one or more Events of Default, the Agent,
Issuing Bank and the Banks may proceed to protect and enforce
their rights under this Agreement and the other Loan Documents by
exercising such remedies as are available to the Agent in respect
thereof under applicable law, either by suit in equity or by
action at law, or both, whether for specific performance of any
provision contained in this Agreement or any of the other Loan
Documents or in aid of the exercise of any power granted in this
Agreement or the other Loan Documents.
(A) Upon the occurrence and during the continuance of any one
or more Events of Default, the Agent, in addition to all the
other rights and remedies herein contained or contained in any of
the Loan Documents, shall be entitled to exercise any and all
rights available to it in law or equity.
ARTICLE VII
AGENT
2.83 Appointment and Authorization. Each Bank hereby
irrevocably appoints and authorizes the Agent to take such action
on its behalf and to exercise such powers under this Agreement as
are delegated to the Agent by the terms hereof, together with
such powers as are reasonably incidental thereto.
2.84 General Immunity. In performing its duties as Agent
hereunder, the Agent will take the same care as it takes in
connection with loans in which it alone is interested. However,
neither the Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be
taken by it hereunder or in connection herewith except for its
own gross negligence or willful misconduct.
2.85 Consultation with Professionals. The Agent may consult
with legal counsel and other professionals selected by it and
shall not be liable for any action taken or suffered in good
faith by it in accordance with the advice of such counsel and
professionals in their respective areas of expertise.
2.86 Documents. The Agent shall be under no duty to examine
or pass upon the effectiveness, genuineness or validity of this
Agreement, the Notes, or Loan Documents pursuant hereto or in
connection herewith, and the Agent shall be entitled to assume
that the same are valid, effective, genuine and what they purport
to be. The Agent specifically disclaims any representation or
warranty respecting any such provision and each Bank agrees to
undertake its own examination of such provisions.
2.87 Rights as a Bank. With respect to its Commitment and
its Pro Rata Share of the Term Loan, the Agent shall have the
same rights and powers hereunder as any Bank and may exercise the
same as though it were not the Agent. The terms "Bank" and
"Banks" shall, unless the context otherwise indicates, include
the Agent in its individual capacity. The Agent may accept
deposits from, lend money to and generally engage in any kind of
commercial banking, investment banking or trust business with any
Borrower or Affiliates of such the Borrower as if Agent were not
the Agent.
2.88 Responsibility of Agent. It is expressly understood
and agreed that the obligations of the Agent hereunder are only
those expressly set forth in this Agreement and that the Agent
shall be entitled to assume that neither an Event of Default or
Unmatured Event of Default have occurred or are continuing unless
the Agent has actual knowledge of such fact or has received
notice from a Bank or the Borrowers that such Bank or the
Borrowers considers that an Event of Default or Unmatured Event
of Default has occurred and is continuing and specifying the
nature thereof. Without limiting the foregoing, the Agent shall
have no obligation to distribute to the Banks any statements,
reports or other information received from the Borrowers pursuant
to provisions hereof which obligate the Borrowers to send such
statements, reports or other information to the Agent and the
Banks.
2.89 Action by Agent. So long as the Agent shall be
entitled, pursuant to Section 7.6 hereof, to assume that no Event
of Default or Unmatured Event of Default has occurred and is
continuing, the Agent shall be entitled to use its discretion
with respect to exercising or refraining from exercising any
rights that may be vested in it by, or with respect to taking or
refraining from taking any action or actions that it may be able
to take under or in respect of, this Agreement, the Loan
Documents, or any of them, provided that, as between the Agent
and the Banks only, after an Event of Default, Agent (A) shall be
entitled to exercise any rights or remedies granted to it
hereunder, or otherwise available to it at law or in equity
unless directed otherwise in writing by the Majority Banks (or
all of the Banks if otherwise required under Section 8.1 hereof)
and (B) upon the direction of the Majority Banks (or all of the
Banks if otherwise required under Section 8.1 hereof), shall
exercise such rights and remedies as so directed. The Agent
shall incur no liability under or in respect of this Agreement by
acting upon any notice, consent, certificate, warranty or other
paper or instrument believed by it to be genuine or authentic or
to be signed by the proper party or parties, or with respect to
anything that it may do or refrain from doing in the reasonable
exercise of its judgment, or that may seem to it to be necessary
or desirable under the circumstances.
2.90 Notices of Event of Default, Etc. In the event that
the Agent shall have acquired actual knowledge of any Event of
Default or Unmatured Event of Default, the Agent shall promptly
give notice thereof to Banks and, subject to Section 7.7 hereof,
the Agent may take such action and assert such rights with
respect to taking or refraining from taking any action or actions
that it may be able to take under or in respect of this
Agreement, the Loan Documents, or any of them as it deems to be
advisable in its sole discretion for the protection of the
interests of the Banks including, without limitation, the
exercise of rights and remedies under Article VI hereof.
2.91 Indemnification of Agent. The Banks agree to indemnify
the Agent (to the extent not reimbursed by the Borrowers),
ratably according to their Pro Rate Share, from and against any
and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever that may be imposed on, incurred by
or asserted against the Agent in any way relating to or arising
out of this Agreement, the Loan Documents, or any of them or any
action taken or omitted by the Agent under this Agreement, the
Loan Documents, or any of them provided that no Bank shall be
liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or
willful misconduct (except to the extent such gross negligence or
willful misconduct was committed at the expressed direction of
Majority Banks and, in such event, only the Majority Banks that
actually voted in favor of such direction shall be responsible
for the indemnification obligations under this Section, with the
proportionate liability of each such voting Bank to be a
fraction, the numerator of which is the Commitment and its Pro
Rata Share of the Term Loan of such voting Bank and the
denominator of which is the aggregate Commitment and Pro Rata
Share of the Term Loans of such voting Banks).
2.92 Resignation of Agent. The Agent may resign from the
performance of all of its functions and duties under this
Agreement at any time by giving 60 days' prior written notice to
the Borrowers and to the Banks whereupon the Majority Banks shall
elect another Bank as the Agent. The resignation of the Agent
of its duties as Agent shall not in any way affect its rights as
a Bank under this Agreement. Upon the resignation of the Agent,
the replacement Agent shall immediately become Issuing Bank and
assume the responsibility for the administration of all
outstanding Letters of Credit and shall issue replacement Letters
of Credit. The replacement Issuing Bank shall immediately
provide the resigning Issuing Bank with such security as the
resigning Issuing Bank deems necessary to reimburse it for
drawings under the outstanding Letters of Credit prior to the
successor Issuing Bank's issuance of replacement Letters of
Credit.
ARTICLE VIII
MISCELLANEOUS
2.93 No Waiver; Cumulative Remedies. No failure or delay on
the part of the Agent or any Bank in exercising any right, power
or remedy hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise of
any other right, power or remedy hereunder. No waiver of any
provision hereof shall be effective unless the same shall be in
writing and signed by the Majority Banks, except that all Banks
must join in (A) the deferral of the payment of any interest or
principal, Fees, or any other amounts due hereunder beyond its
due date, (B) any reduction in the Borrowers' obligation to repay
the principal amount of the Loans or any Letter of Credit
Liability or any downward change in any Interest Rate or Fees
hereunder, (C) any change in the amount of the Commitment of any
Bank, (D) any amendment to this Section 8.1 or Section 8.4, (E)
the addition of any new Borrower hereunder (except pursuant to
the terms of this Agreement), the release of any Borrower from
its obligations hereunder, or a change in the definition of the
Borrowers, (F) a change in the definition of Majority Banks, (G)
a reduction or change to the provisions of Section 5.5 hereof,
(H) any writing waiving any payment-related Event of Default
hereunder, (I) the termination of the Letter of Credit Cash
Collateral Account or the release of any funds held in such
account following the occurrence of an Event of Default which has
not been waived or cured, (J) the release of any Collateral
except in connection with the Borrowers' transfer of assets
permitted under Section 5.13 hereof, or (K) the waiver of any
rights of or against the Issuing Bank under Section 2.19. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law. In the event of a dispute between the
Borrowers and Banks concerning the principal amount outstanding
hereunder, the interest rates applicable thereto, the amounts
available under the Commitments, the payment of principal,
interest and other amounts hereunder, or concerning similar
factual matters, absent manifest error the books and records of
the Agent shall be irrebuttably presumed to be correct. In the
event of a dispute between the Borrowers and the Banks concerning
Letters of Credit or Letter of Credit Liability, or concerning
similar factual matters, absent manifest error, the books and
records of the Issuing Bank shall be irrebuttably presumed to be
correct.
2.94 Waiver of Jury Trial. EACH BORROWER AND EACH BANK
EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTIONS BROUGHT
BY ANY PARTY WITH RESPECT TO THIS AGREEMENT OR THE LOANS.
2.95 Set-Off; Sharing of Recoveries. Each Bank shall have a
right of set-off against, a lien upon and a security interest in
all property of each Borrower now or at any time in the
possession of such Bank in any capacity whatever, including, but
not limited to, any such Borrower's interest in any deposit
account, as security for all liabilities of the Borrowers
hereunder. In the event that a Bank recovers funds from any
Borrower, whether by exercise of its right of set-off or the
foreclosure of a banker's lien, such Bank agrees that all sums
recovered from such Borrower shall be recovered on behalf of all
Banks and shall be shared by the Banks according to their
respective Pro Rata Share. If a Bank makes any such recovery, it
will promptly remit to the other Banks their respective Pro Rata
Shares of such recovery. No Bank's Pro Rata Share shall have
priority over any other Bank's Pro Rata Share. If any Bank
acquires title to any assets or property of any Borrower, through
foreclosure or otherwise, title to such asset shall be taken
(unless otherwise mutually agreed upon in writing by the Banks)
by the Banks as tenants in common according to each Bank's Pro
Rata Share. If at any time, as the result of exercising such
rights or otherwise, any Bank receives a payment on account of
its portion of the Loans and participation in the Letters of
Credit in a proportion greater than similar payments on account
of the portions of the Loans and participation in Letters of
Credit held by the other Banks, the Bank which receives such
greater proportionate payment will purchase a participation in
the portions of the Loans and participations in the Letters of
Credit held by the other Banks in such amount that after such
purchase each Bank shall hold a proportionate share in the
aggregate outstanding principal balance of the Loans equal to
their respective proportionate shares in the outstanding
principal balance of the Loans and participations in the Letters
of Credit before the disproportionate payment. If, however, any
payment on account of the Loans or participations in the Letters
of Credit is rescinded or invalidated or must otherwise be
restored or returned by the recipient in a bankruptcy or
insolvency proceeding or otherwise, then any participations
purchased as a result of such payment will be rescinded.
2.96 Amendments. Any of the provisions of this Agreement
may be modified or amended in writing by any agreement or
agreements entered into by the Borrowers and the Majority Banks,
except that (A) all Banks must agree to (1) the deferral of the
payment of any interest or principal, Fees, or any other amounts
due hereunder beyond its due date, (2) any reduction in the
Borrowers' obligation to repay the principal amount of the Loans
or any Letter of Credit Liability or any reduction in any
Interest Rate or Fees hereunder, (3) any change in the amount of
the Commitment of any Bank, (4) any amendment to Section 8.1 or
this Section 8.4, (5) the addition of any new Borrower hereunder
(except pursuant to the terms of this Agreement), the release of
any Borrower from its obligations hereunder, or a change in the
definition of the Borrower, (6) a change in the definition of
Majority Banks, or (7) a reduction or change to the provisions of
Section 5.5 hereof, (8) the termination of the Letter of Credit
Cash Collateral Account or the release of any funds held in such
account following the occurrence of an Event of Default which has
not been waived or cured, (9) the release of any Collateral
except to the extent otherwise consistent with the terms of this
Agreement and the Security Documents, or (10) the amendment of
any rights or against the Issuing Bank under Section 2.19 and (B)
no such modification or amendment shall extend to or affect any
obligation not expressly modified or amended, or impair any right
of the Banks related to such obligation.
2.97 Notices. Unless this Agreement specifically provides
otherwise, all notices, requests, demands and other
communications that this Agreement requires or permits any party
to give any other party shall be in writing (including telecopy)
and shall be given to such party at its address or telecopy
number specified on the signature pages of this Agreement or at
such other address or telecopy number as shall be designated by
such party in a notice to each other party complying with the
terms of this Section. Unless this Agreement specifically
provides otherwise, all notices, requests, demands and other
communications provided for hereunder shall be effective (A) if
given by mail, three days after placing in the United States
mail, postage prepaid, certified mail, return receipt requested,
(B) if given by telecopy, when such telecopy is transmitted to
the aforesaid telecopy number and the appropriate confirmation of
receipt is received by the sender or (C) if given by any other
means, when delivered to the carrier with postage prepaid to the
aforesaid address(es); provided, however, that notices from the
Borrowers to the Agent pursuant to any of the provisions of
Article II hereof shall not be effective until received by the
Agent; and provided further, however, that notices between the
Agent and any of the Banks may be given by telephone followed,
only where otherwise required hereby, by written confirmation
within five (5) Business Days. The Agent shall be entitled to
rely on any notice, oral or written, received by it from any
Borrower as if such notice were delivered by all of the Borrowers
and in the event of conflicting notices received by the Agent
from the Borrowers, the Agent shall be entitled to rely on any
notice as if such notice were the only notice received by the
Agent. Although the Borrowers are obligated to follow any
telephonic notice made to select an Interest Rate and/or Interest
Rate Period with written confirmation, the Agent and the Banks
shall be entitled to rely on such telephonic notice whether or
not the Borrowers thereafter confirm in writing, as if the
Borrowers did, in fact, confirm in writing.
2.98 Exchange of Information among Banks. Each Bank will
promptly give each other Bank notice of any matter coming to its
attention that, in its judgment, would materially and adversely
affect the interest of any Bank in connection with this
Agreement. No Bank will be liable for failure to give any other
Bank notice under this Section unless such Bank intentionally
fails to provide such notice with the knowledge that such failure
will materially and adversely affect the interest of the other
Banks hereunder.
2.99 Knowledge. Whenever there is any reference herein to
the Borrowers' knowledge or the Borrowers being aware, it is
intended that, unless otherwise specified, to refer to the actual
knowledge of the chief executive officer, the chief financial
officer, the chairman, any vice-chairmen, the chief operating
officer, the senior vice-president- counsel and the senior vice
president-finance of any Borrower.
2.100 Nature of Obligations. (A) The obligations of
the Banks hereunder are several and not joint. Nothing contained
in this Agreement, and no action taken by any Bank pursuant
hereto, shall be deemed to create a partnership, association,
joint venture or other entity.
(A) The obligations of each Borrower under this Agreement,
the Notes and/or the Loan Documents, except as otherwise provided
herein or therein, are joint and several.
2.101 Costs and Expenses. The Borrowers agree to pay on
demand (A) all reasonable costs and expenses of the Collateral
Agent, the Issuing Bank and the Agent in connection with the
preparation, printing, execution and delivery of this Agreement,
the Notes and the Loan Documents (including without limitation
the reasonable fees and out-of-pocket expenses of counsel and
other consultants of the Agent and the costs of recording
mortgages, financing statements and other instruments to perfect
the security interests granted under the Security Documents), (B)
all reasonable costs and expenses of the Agent, Collateral Agent
and Issuing Bank in connection with the administration and/or
amendment of this Agreement, the Notes and the Loan Documents
(including without limitation the reasonable fees and out-of-
pocket expenses of counsel and other consultants and a per diem
charge for internal personnel at rates typically charged for
similar services), and (C) all reasonable costs and expenses, if
any, of the Banks, the Collateral Agent, the Issuing Bank and the
Agent in connection with the enforcement against the Borrowers of
this Agreement, the Notes and the Loan Documents (including
without limitation the reasonable fees and out-of-pocket expenses
of counsel and other consultants with respect thereto of the
Agent, the Collateral Agent, the Issuing Bank and each of the
Banks).
2.102 Counterparts. This Agreement and any amendments
thereto may be executed in any number of counterparts, all of
which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this
Agreement by signing any such counterpart.
2.103 Binding Effect. This Agreement shall become
effective when it has been executed by the Borrowers, the Agent
and the Issuing Bank and the Agent has been notified by each
Bank that such Bank has executed it. It shall thereafter be
binding upon and inure to the benefit of the Borrowers, the
Agent, the Issuing Bank and each of the Banks and their
respective successors and assigns, except that no Borrower shall
have the right to assign its rights or obligations hereunder or
any interest herein.
2.104 Governing Law. This Agreement and each Notes
shall be governed in all respects by the law of the Commonwealth
of Pennsylvania and for all purposes shall be construed in
accordance with the law of the Commonwealth of Pennsylvania. The
parties acknowledge the jurisdiction of the state, federal and
local courts located within the Commonwealth of Pennsylvania over
controversies arising from or relating to this Agreement.
2.105 Headings. Article and Section headings used in
this Agreement are for convenience only and shall not affect the
construction of this Agreement.
2.106 Participations and Assignments. Any Bank may sell
participations in its Pro Rata Share of the Loans or, with the
prior approval of the Borrowers and the Agent, which approval
shall not be unreasonably withheld, assign up to 50% of its
Commitment (but in the case of assignments, in an amount not less
than $10,000,000.00) to another Person (each such Person, a
"Participant Bank"); provided, however, that (A) the Agent, and
the Borrowers shall only be obligated to deal with the Banks and
not any of the Participant Banks; (B) any Bank that sells a
participation in the Loans or assigns an interest in its
Commitment shall be obligated to deal with its Participant Banks
with respect to all matters relating to the Loans and this
Agreement; (C) any Bank that sells a participation in the Loans
or assigns an interest in its Commitment shall perform all
obligations of such Bank under this Agreement and shall remain
responsible for fulfilling its obligations hereunder; and (D) no
such Participant Bank shall have any voting rights or rights to
consent to approve any matter hereunder; provided, however, that
in addition to the assignments and participations permitted under
this Section 8.14, any Bank may assign and pledge all or any
portion of its Loans and Notes to (1) any affiliate of such Bank
or (2) any Federal Reserve Bank as collateral security pursuant
to Regulation A of the Board of Governors of the Federal Reserve
System and any Operating Circuit issued by such Federal Reserve
Bank without obtaining the Borrowers' approval. No such sale or
assignment shall release the selling or assigning Bank from its
obligations hereunder.
2.107 Borrowers' Replacement of Banks. The Borrowers
may replace any Bank with another bank reasonably acceptable to
the Agent upon sixty (60) days notice to the Agent so long as (A)
the replacement banks assume all the obligations of the Bank
being replaced, (B) if any Bank is so replaced within twelve (12)
months after the date hereof, the Borrowers shall pay to such
replaced Bank a fee equal to $50,000.00, and (C) the Borrowers
fulfill all of their obligations to the Bank being replaced,
including any prepayment compensation due under Section 2.17
hereof.
2.108 Judgment. (A) If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due
hereunder or under any Notes in Dollars into another currency
(the "Other Currency"), the parties hereto agree, to the fullest
extent permitted by law, that the rate of exchange used shall be
that at which in accordance with normal banking procedure the
Agent could purchase the Dollars with the Other Currency on the
Business Day preceding that on which final judgment is given.
(A) The obligation of the Borrowers in respect of any sum
due from it to the Agent or any Bank hereunder or under any Notes
shall, notwithstanding any judgment in such Other Currency, be
discharged only to the extent that on the Business Day following
receipt by the Agent of any sum adjudged to be so due in the
Other Currency the Agent may in accordance with normal banking
procedures purchase the Dollars with the Other Currency; if the
amount of the Dollars so purchased is less than the sum
originally due to the Agent or any Bank in Dollars, each Borrower
agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Agent or any Bank against such loss.
(B)
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date
first above written.
MAIDENFORM WORLDWIDE, INC. Address:
(a New York Corporation)
BETEX, S.A. 90 Park Avenue
CREACIONES TEXTILES de New York, New York 10016
MERIDA, S.A. de C.V. Fax: (212) 983-5834
ELIZABETH NEEDLE CRAFT, INC. Attn: Steven Masket
JAMAICA NEEDLECRAFT, LTD.
MAIDENFORM INTERNATIONAL, LTD. With a copy to:
NICHOLAS NEEDLECRAFT, INC.
154 Avenue E
Bayonne, NJ 07002
By______________________ Fax: (201) 436-1245
Name: Attn: Ira Glazer
Title:
(as to all Borrowers listed above)
Attest:
MAIDENFORM WORLDWIDE, INC. 90 Park Avenue
(a Delaware corporation) New York, New York 10016
MAIDENFORM, INC. Fax: (212) 983-5834
NCC INDUSTRIES, INC. Attn: Steven Masket
CRESCENT INDUSTRIES, INC.
With a copy to:
By_______________________ 154 Avenue E
Name: Bayonne, NJ 07002
Title: Fax: (201) 436-1245
Attn: Ira Glazer
(as to all Borrowers listed above)
Attest:
(signatures continued on next page)
CORESTATES BANK, N.A. 1345 Chestnut Street
Philadelphia, Pennsylvania 19101
Fax: (215) 973-5831
By_______________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A. 1411 Broadway, 5th Floor
New York, New York 10018
Fax: (212) 768-9514
By_______________________
Name:
Title:
CORESTATES BANK, N.A., as Agent 1345 Chestnut Street
Philadelphia, Pennsylvania 19101
Fax: (215) 973-5831
By_________________________
Name:
Title:
NBD BANK 611 Woodward Avenue
Detroit, Michigan 48232
Fax: (313) 225-1586
By_______________________
Name:
Title:
COMERICA BANK 500 Woodward Avenue
Detroit, MI 48275-3280
Fax: (313) 222-3330
By_______________________
Name:
Title:
NATIONSBANK, N.A. Nationsbank Corporate Center
100 N. Tryon Street
Charlotte, North Carolina 28255
By_______________________ Fax: (704) 386-1270
Name:
Title:
NATIONAL CITY BANK 1900 East 9th Street
Cleveland, Ohio 44ll4-3484
Fax: (216) 687-5177
By_______________________
Name:
Title:
(signatures continued on next page)
EUROPEAN AMERICAN BANK 335 Madison Avenue
New York, New York 10017
Fax: (212) 503-2667
By:______________________
Name:
Title:
UNITED JERSEY BANK 300 Berwyn Park, Suite 211
Berwyn, Pennsylvania 19312
By:______________________ Fax: (610) 251-7874
Name:
Title:
