<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 25, 1997
REGISTRATION NO. 333-20013
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
WESTPOINT STEVENS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 2200 36-3498354
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
------------------------
507 WEST TENTH STREET
WEST POINT, GEORGIA 31833
(706) 645-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
CHRISTOPHER N. ZODROW
VICE PRESIDENT AND SECRETARY
507 WEST TENTH STREET
WEST POINT, GEORGIA 31833
(706) 645-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
Please send copies of communications to:
<TABLE>
<S> <C>
HOWARD CHATZINOFF, ESQ. ROGER MELTZER, ESQ.
WEIL, GOTSHAL & MANGES LLP CAHILL, GORDON & REINDEL
767 FIFTH AVENUE 80 PINE STREET
NEW YORK, NEW YORK 10153 NEW YORK, NEW YORK 10005
(212) 310-8000 (212) 701-3000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended ('Securities Act'), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
------------------------
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
------------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATES UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED FEBRUARY 25, 1997
PROSPECTUS
1,750,000 SHARES
[LOGO]
COMMON STOCK
------------------------
All of the 1,750,000 shares (the 'Shares') of common stock (the 'Common
Stock') offered hereby (the 'Offering') are being sold by certain stockholders
(the 'Selling Stockholders') of WestPoint Stevens Inc. ('WestPoint'). See
'Selling Stockholders.' WestPoint will not receive any proceeds from the sale of
the Shares.
WestPoint's Common Stock is traded on the Nasdaq National Market ('NASDAQ')
under the symbol 'WPSN.' On February 13, 1997, the last sale price of the Common
Stock, as reported on NASDAQ, was $29 7/8 per share.
SEE 'RISK FACTORS' ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS WHICH
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNT(1) STOCKHOLDERS(2)
<S> <C> <C> <C>
Per Share............................. $ $ $
Total(3).............................. $ $ $
</TABLE>
(1) WestPoint, WPS Investors and the Selling Stockholders have agreed to
indemnify the several Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended. See
'Underwriting.'
(2) WPS Investors has agreed to pay certain expenses of the Offering estimated
at $107,000.
(3) The Selling Stockholders have granted the Underwriters an option,
exercisable within 30 days after the date hereof, to purchase up to an
additional 250,000 shares of Common Stock, solely to cover over-allotments,
if any. If such option is exercised in full, the total Price to Public,
Underwriting Discount and Proceeds to Selling Stockholders will be $ ,
$ and $ , respectively. See 'Underwriting.'
------------------------
The Shares are offered by the several Underwriters, subject to prior sale,
when, as and if delivered to and accepted by them, and subject to the approval
of certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and reject orders in whole or in part. It is expected that delivery
of the Shares will be made in New York, New York, on or about ,
1997.
------------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
THE ROBINSON-HUMPHREY COMPANY, INC.
WHEAT FIRST BUTCHER SINGER
------------------------
The date of this Prospectus is , 1997.
<PAGE>
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
WESTPOINT AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON NASDAQ, IN THE OVER-THE-COUNTER
MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY ENGAGE IN PASSIVE
MARKET MAKING TRANSACTIONS IN THE COMMON STOCK OF WESTPOINT ON NASDAQ IN
ACCORDANCE WITH RULE 10b-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED (THE 'EXCHANGE ACT'). SEE 'UNDERWRITING.'
FORWARD-LOOKING STATEMENTS
Certain information incorporated by reference into this Prospectus under
the caption 'Risk Factors,' and elsewhere include 'forward-looking statements'
within the meaning of the Private Securities Litigation Reform Act of 1995, and
is subject to the safe harbor created by that Act. There are several important
factors that could cause actual results to differ materially from those
anticipated by the forward-looking statements contained in such discussions.
Additional information on the risk factors which could affect WestPoint's
financial results is included in this Prospectus and in other documents
incorporated by reference herein.
AVAILABLE INFORMATION
WestPoint is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the 'Commission'). Such reports, proxy
statements and other information filed by WestPoint may be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices at Seven World Trade Center, 13th Floor, New York,
New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material may be obtained from the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. In addition, material filed by WestPoint can be
inspected at the offices of the NASDAQ National Market at 1735 K Street, N.W.,
Washington, D.C. 20006-1506. The Commission maintains a Web site at
http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission, including WestPoint.
WestPoint has filed with the Commission a Registration Statement on Form
S-3 (the 'Registration Statement') under the Securities Act of 1933, as amended
(the 'Securities Act'), with respect to the Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules filed as a part thereof, as permitted
by the rules and regulations of the Commission. For further information with
respect to WestPoint and the Common Stock, reference is hereby made to such
Registration Statement, including the exhibits and schedules filed as a part
thereof. Statements contained in this Prospectus as to the contents of any
contract or other documents referred to herein are not necessarily complete and
where such contract or other document is an exhibit to the Registration
Statement, each such statement is qualified in all respects by the provisions of
such exhibit, to which reference is hereby made for a full statement of the
provisions thereof. The Registration Statement, including the exhibits filed as
a part thereof, may be inspected without charge at the public reference
facilities maintained by the Commission as set forth in the preceding paragraph.
Copies of these documents may be obtained at prescribed rates from the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents (and the amendments thereto) have been filed by
WestPoint (File No. 0-21496) and are incorporated herein by reference:
(i) WestPoint's Annual Report on Form 10-K for its fiscal year ended
December 31, 1996 (the 'Form 10-K');
(ii) WestPoint's Report on Form 8-K, filed with the Commission on
February 18, 1997; and
(iii) The description of WestPoint's Common Stock contained in
WestPoint's Registration Statement on Form 10 filed with the Commission
pursuant to Section 12 of the Exchange Act on July 1, 1993, and the
Amendment to the Registration Statement on Form 10/A filed on June 2, 1994,
including any other amendment or report filed for the purpose of updating
such description.
All documents filed by WestPoint pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering shall be deemed to be incorporated herein by
reference and to be a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference in this Prospectus shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
incorporated herein or in any other subsequently filed document that also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus. Subject
to the foregoing, all information appearing in this Prospectus is qualified in
its entirety by the information appearing in the documents incorporated by
reference herein.
Copies of all documents incorporated by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
into such documents), will be provided without charge to each person, including
any beneficial owner to whom a copy of this Prospectus has been delivered upon
the written or oral request of such person. Requests for such copies should be
directed to WestPoint, 507 West Tenth Street, West Point, Georgia 31833,
Attention: Secretary, telephone: (706) 645-4000.
3
<PAGE>
PROSPECTUS SUMMARY
WESTPOINT
WestPoint Stevens Inc. ('WestPoint') is the nation's leading manufacturer
and marketer of bed and bath home fashions products and is also a leading
domestic manufacturer of knitted sportswear fabrics. Management believes that
WestPoint is the lowest cost producer in the bed and bath home fashions products
industry in the United States and that WestPoint is able to achieve
significantly higher operating margins than its competitors as a result of its
low-cost position, well-known brand names, sophisticated distribution systems
and strong relationships with customers.
WestPoint is the largest producer in the domestic bed and bath towel
market. Management estimates that it has the largest market share (approximately
36%) of the domestic sheet and pillowcase market and the second largest market
share (approximately 35%) of the domestic bath towel market. WestPoint has
positioned itself as a single-source supplier to retailers of bed and bath
products, offering a broad assortment of products across multiple price points.
The breadth of WestPoint's products and price points allows WestPoint to provide
a comprehensive product offering for each major distribution channel, including
chain and department stores, mass merchants and specialty bed and bath stores.
WestPoint's products include decorative sheets and towels, designer sheets and
accessories, sheets and towels for institutions, blankets, private label sheets
and towels, bedskirts, bedspreads, comforters and duvet covers in a variety of
fabrics and a wide assortment of colors and patterns.
WestPoint markets its products under well-known and firmly established
trademarks, brand names and private labels, which WestPoint uses as
merchandising tools to assist its customers in coordinating their product
offerings and differentiating their products from those of their competitors.
WestPoint's trademarks include ATELIER MARTEX(Registered), MARTEX(Registered),
UTICA(Registered), STEVENS(Trademark), LADY PEPPERELL(Registered) and
VELLUX(Registered). In addition, certain products of the Home Fashions Division
are manufactured and sold pursuant to licensing agreements under designer names
that include, among others, Ralph Lauren, Sanderson, Larry Laslo, Julie Ingleman
and Halston.
BUSINESS STRATEGY
WestPoint's business strategy is to strengthen its market leadership
position by increasing awareness of its brand names, leveraging its technology
to reinforce its position as the low-cost producer, continuously innovating
ahead of the competition and expanding its international presence.
Brand Name Recognition--WestPoint's marketing abilities are becoming
increasingly important in creating sales and profit growth. In the last two
years, WestPoint has significantly raised its investment in consumer
advertising. The Martex campaign unveiled in 1995--The Bare Necessities--set a
new standard for the industry. Among its achievements are:
o More than 100 million impressions via home and shelter magazines.
o Sharply increased consumer brand recognition of Martex.
o Many advertising and industry awards, including the Gold Medallion award
from the American Marketing Effectiveness Council.
WestPoint's overall advertising strategy is to maintain the strong brand
image of all of its lines, while highlighting innovative products and important
line extensions. WestPoint targets specific market segments through national
consumer magazines and retailer catalogs.
Low-cost Producer with Fast Response Time to Customers--WestPoint intends
to maintain its position as the low-cost producer in the home fashions industry.
In the last five years, WestPoint has invested approximately $453 million in
capital expenditures to further modernize its facilities. Management believes
that this capital spending program firmly established WestPoint as the
industry's low-cost producer which enables WestPoint to introduce quality
products at attractive price points for both retailers and consumers. Technology
expenditures have also allowed WestPoint to increase production speed and become
more responsive to customer needs. In 1995 and 1996, WestPoint expanded its use
of category management software, a tool for analyzing the relationships between
stock levels, shelf positions and sales results. This technology allows
WestPoint's
4
<PAGE>
customers to reduce inventory and increase inventory turns, thus improving
profits by having the right products and quantities in stock virtually all the
time.
Other major new technological advances have made internal communications
and design much faster. WestPoint's information network now seamlessly connects
sales, merchandising, manufacturing, and administrative managers. Newly
installed digital rendering technology takes CAD (computer-assisted design)
product designs and digitally transforms them into room settings, thereby
eliminating many steps in traditional product development.
Product Innovation--WestPoint has been a leader in product innovation. For
instance, WestPoint created the wrinkle-free cotton sheet category, of which
WestPoint has the dominant market share. In addition to offering significant
growth opportunities, innovative new products provide value to consumers,
increased sales and margins for retail customers and enhanced profitability for
WestPoint.
To consumers seeking finer fashion products in the luxury category,
WestPoint has been a pioneer and market leader. Atelier Martex, WestPoint's
premium luxury brand, experienced rapid growth in 1995 and 1996 with favorable
consumer acceptance. The innovations from this line have now been introduced in
other brands and private label programs. WestPoint anticipates sustained growth
in the category and is investing in increased product development to maintain
leadership.
International Expansion--WestPoint distributes its products to Canada,
Mexico, the United Kingdom, Europe, the Middle East and the Far East.
WestPoint's Canadian subsidiary recently celebrated its 25th anniversary and has
exhibited consistent growth. WestPoint has doubled the number of distribution
outlets for its products in Canada and continues to increase its market share.
International sales currently represent approximately 3% of sales. In January
1997, WestPoint acquired P.J. Flower & Co. Limited, an English company that
manufactures, markets and distributes bed and bath linens and related home
furnishings products in Europe with approximately $20 million in annual sales.
P.J. Flower & Co. Limited is a supplier in the United Kingdom of private-label,
solid-color sheet and accessory programs and in recent years has added licensed
programs to its core offerings, including the Ralph Lauren Home Collection in
Western Europe and international rights for both Designers Guild and Caroline
Charles. WestPoint intends to increase its penetration of international markets.
------------------------
For a more detailed description of the business of WestPoint, see the
description set forth in the Form 10-K, which is incorporated herein by
reference.
WestPoint is a Delaware corporation with its principal executive offices
located at 507 West Tenth Street, West Point, Georgia 31833. WestPoint's
telephone number at such address is (706) 645-4000.
5
<PAGE>
SUMMARY FINANCIAL DATA
The summary historical financial data presented below for 1996, 1995 and
1994 were derived from the Audited Consolidated Financial Statements of
WestPoint and its subsidiaries for the years ended December 31, 1996, 1995 and
1994 (the 'Consolidated Financial Statements'), and should be read in
conjunction therewith, including the notes thereto and the other financial
information incorporated by reference to the Form 10-K and Management's
Discussion and Analysis of Financial Condition and Results of Operations.
Historical financial data presented below for 1993 was derived from WestPoint's
audited consolidated financial statements for the year ended December 31, 1993.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------
1996 1995 1994 1993(1)
-------- -------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.......................................................... $1,723.8 $1,649.9 $1,596.8 $1,501.0
Gross earnings..................................................... 397.9 384.0 368.0 355.3
Operating earnings (loss)(2)....................................... 195.6 5.0 (65.8) (258.4)
Interest expense................................................... 102.4 101.3 102.1 98.2
Income (loss) from operations before income tax expense (benefit)
and extraordinary items.......................................... 90.4 (99.4) (180.8) (372.8)
Income (loss) from operations before extraordinary items........... 57.7 (129.8) (203.4) (321.6)
Net income (loss).................................................. 57.7 (129.8) (203.4) (402.3)
Net income (loss) per common share................................. 1.81 (3.97) (6.02) (12.55)
Weighted average shares outstanding................................ 31.8 32.7 33.8 32.1
<CAPTION>
DECEMBER 31,
--------------------------------------------
1996 1995 1994 1993
-------- -------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets....................................................... $1,157.0 $1,143.0 $1,270.2 $1,512.9
Working capital(3)................................................. 140.9 115.7 122.7 159.7
Total debt......................................................... 1,099.0 1,148.0 1,083.0 1,112.5
Stockholders' equity (deficit)(4).................................. (450.4) (505.9) (337.2) (140.3)
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------
1996 1995 1994 1993(1)
-------- -------- -------- --------
(IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C> <C>
OTHER DATA:
Depreciation and amortization(5)................................... $ 77.0 $ 80.4 $ 86.2 $ 82.8
Amortization of excess reorganization value........................ -- 177.7 236.9 221.6
Restructuring expense.............................................. -- -- -- 200.0
Capital expenditures............................................... 99.9 102.2 109.0 89.0
Operating earnings before amortization of excess reorganization
value and restructuring expense(6)............................... 195.6 182.7 171.1 163.2
Operating margin before amortization of excess reorganization value
and restructuring expense(7)..................................... 11.3% 11.1% 10.7% 10.9%
</TABLE>
- ------------------
(1) The results for the year ended December 31, 1993 include restructuring
expense of $200 million ($117.8 million after minority interest and income
taxes).
(2) Operating earnings (loss) for the year ended December 31, 1995 includes
amortization of excess reorganization value of $177.7 million, for the year
ended December 31, 1994 includes amortization of excess reorganization value
of $236.9 million and for the year ended December 31, 1993 includes
restructuring expense of $200 million and amortization of excess
reorganization value of $221.6 million.
(3) Working capital for the years ended December 31, 1996, 1995, 1994 and 1993
includes the current portion of bank indebtedness and other long-term debt
of $24.0 million, $73.0 million, $48.0 million and $18.0 million,
respectively.
(4) WestPoint emerged from bankruptcy in September 1992 and adopted 'Fresh
Start' reporting. WestPoint has a deficit stockholders' equity primarily due
to the amortization from 1992 to 1995 of $656.4 million of excess
reorganization value, the loss on extinguishment of debt of $80.7 million
and restructuring expenses of $117.8 million in 1993.
(5) Excludes amortization of excess reorganization value.
(6) Such amounts are presented to facilitate comparisons between periods since
there were no charges in the 1996 period for amortization of excess
reorganization value or restructuring expense.
(7) Operating margin before amortization of excess reorganization value and
restructuring expense represents operating earnings before amortization of
excess reorganization value and restructuring expense as a percentage of net
sales for the periods presented.
6
<PAGE>
RISK FACTORS
The following factors should be considered in connection with an investment
in WestPoint Common Stock. Any one or more of such factors may cause WestPoint's
actual results for various financial reporting periods to differ materially from
those expressed in any forward-looking statements made by or on behalf of
WestPoint.
SUBSTANTIAL LEVERAGE
WestPoint is highly leveraged. WestPoint currently has significant annual
cash interest expense in connection with its obligations under its long-term
indebtedness. At December 31, 1996, WestPoint had total long-term indebtedness
of $1,075 million and a ratio of total long-term indebtedness to total
capitalization of 1.72 to 1.00.
The degree to which WestPoint is leveraged could have important
consequences to holders of the Common Stock, including, but not limited to, the
following: (i) WestPoint's ability to obtain additional financing in the future
for working capital, capital expenditures, acquisitions, general corporate
purposes or other purposes will be restricted; (ii) a significant portion of
WestPoint's cash flow from operations must be dedicated to the payment of
interest on its indebtedness, thereby reducing the funds available to WestPoint
for its operations; (iii) certain of WestPoint's borrowings are and will
continue to be at variable rates of interest, which could result in higher
interest expense in the event of an increase in interest rates; and (iv) such
indebtedness contains financial and restrictive covenants, the failure to comply
with which may result in an event of default which, if not cured or waived,
could have a material adverse effect on WestPoint.
RESTRICTIONS ON OPERATIONS
WestPoint's senior credit facility imposes certain operating and financial
restrictions on WestPoint and its subsidiaries, including, without limitation,
limitations on indebtedness, liens, sale/leaseback transactions, asset sales,
transactions with affiliates, operating leases, acquisitions and investments.
WestPoint's indentures relating to its public indebtedness also contain certain
operating and financial restrictions on WestPoint and its subsidiaries. See
'--Substantial Leverage' above. In addition, WestPoint is required under its
senior credit facility to maintain specified financial ratios and levels,
including a minimum consolidated net worth (as defined in the senior credit
facility), current ratio and ratio of EBITDA to interest expense. The
restrictive covenants contained in the senior credit facility and the indentures
and the highly leveraged position of WestPoint could limit the ability of
WestPoint to respond to changing business or economic conditions or adverse
developments affecting WestPoint's operating results.
LOSSES AND ACCUMULATED DEFICIT
WestPoint emerged from bankruptcy in September 1992 and adopted 'Fresh
Start' reporting. At December 31, 1996, WestPoint had an accumulated deficit of
$703.1 million primarily due to the amortization from 1992 to 1995 of excess
reorganization value of $656.4 million, the loss on extinguishment of debt of
$80.7 million and restructuring expenses of $117.8 million in 1993. WestPoint
has reported net income in each quarter subsequent to the complete amortization
of excess reorganization value in the third quarter of 1995. Although a
significant portion of WestPoint's losses and deficits are the result of
non-cash items, there can be no assurance that WestPoint will continue to have
net income in the future or that it will eliminate its accumulated deficit.
SEASONALITY AND CYCLICALITY
Traditionally the home fashions and apparel fabrics industries have been
seasonal, with peak sales seasons in the spring and fall. Home Fashions'
commitment to 'Strategic Partnering,' a program designed to improve customers'
operating results by leveraging WestPoint's merchandising, manufacturing and
inventory management skills, however, has facilitated a more even distribution
of products throughout the calendar year in its market segment. The home
fashions and the apparel fabrics industries are also cyclical, and WestPoint's
performance may be negatively affected by downturns in consumer spending
associated with recessionary economic environments.
7
<PAGE>
RISK OF LOSS OF MATERIAL CUSTOMER OR LICENSE
WestPoint's products are sold to mass merchants, chain stores, department
stores, specialty stores, apparel manufacturers and institutional buyers. Home
Fashions' six largest customers accounted for approximately 54% of the net sales
of Home Fashions during the fiscal year ended December 31, 1996, and 47% of the
net sales of WestPoint during such period. Each of these customers has purchased
goods from WestPoint in each of the last 10 years. Although WestPoint has no
reason to believe that it will lose the business of any of its largest
customers, a loss of any of Home Fashions' largest accounts (or a material
portion of any thereof) would have an adverse effect upon WestPoint's business,
which could be material. In addition, a loss of a significant license could have
an adverse effect upon WestPoint's business, which could be material.
RAW MATERIALS
The principal raw materials used by WestPoint in the manufacture of its
products are cotton of various grades and staple lengths and polyester in staple
form. Although WestPoint has been able to acquire sufficient quantities of
cotton for its operations in the past, any shortage in the cotton supply by
reason of weather, disease or other factors, or a significant increase in the
price of cotton or polyester, could adversely affect WestPoint's operations. To
reduce the effect of potential price fluctuations, WestPoint makes commitments
from time to time for future purchases of cotton.
COMPETITION
WestPoint participates in highly competitive industry segments. Home
Fashions competes with a number of established manufacturers and distributors of
bed and bath home fashions products and accessories. WestPoint's wholly-owned
subsidiary, Alamac Knits Fabrics, Inc., competes with other knitted fabric
mills, converters, commission knitted fabric operations and vertically
integrated apparel manufacturers. WestPoint's future success will depend to a
significant extent upon its ability to remain a low-cost producer and to remain
competitive in the areas of marketing, product development, price, quality,
brand names, manufacturing capabilities, distribution and order processing.
There can be no assurance that WestPoint will be able to compete effectively in
all of these areas; any failure to compete effectively could adversely affect
WestPoint's sales and, accordingly, its operations.
ENVIRONMENTAL AND EMPLOYEE SAFETY AND HEALTH MATTERS
WestPoint is subject to various federal, state and local environmental laws
and regulations governing, among other things, the discharge, storage, handling
and disposal of a variety of hazardous and non-hazardous substances and wastes
used in or resulting from its operations and potential remediation obligations
thereunder. Certain of WestPoint's facilities (including certain facilities no
longer owned or utilized by WestPoint) have been cited or are being investigated
with respect to alleged violations of such laws and regulations. WestPoint is
cooperating fully with relevant parties and authorities in all such matters.
WestPoint believes that it has adequately provided in its financial statements
for any expenses and liabilities that may result from such matters. WestPoint
also is insured with respect to certain of such matters. WestPoint's operations
also are governed by laws and regulations relating to employee safety and health
which, among other things, establish exposure limitations for cotton dust,
formaldehyde, asbestos and noise, and regulate chemical and ergonomic hazards in
the workplace. Although WestPoint does not expect that compliance with any of
such laws and regulations will adversely affect WestPoint's operations, there
can be no assurance that such regulatory requirements will not become more
stringent in the future or that WestPoint will not incur significant costs in
the future to comply with such requirements.
PRINCIPAL STOCKHOLDER
As of February 3, 1997, Holcombe T. Green, Jr., the Chairman of the Board
and Chief Executive Officer of WestPoint, beneficially owned 11,628,958 shares
of Common Stock (constituting approximately 37.6% of the outstanding Common
Stock), including 11,204,153 shares held directly by WPS Investors L.P. ('WPS
Investors'), of which HTG Corp., a company owned by Mr. Green ('HTG Corp.'), is
general partner. The 1,750,000 Shares offered hereby will be distributed by WPS
Investors to the Selling Stockholders (which do not include Mr. Green) and such
distribution will decrease Mr. Green's beneficial ownership of Common Stock
8
<PAGE>
accordingly (to approximately 32.0% of the outstanding Common Stock and, if the
Underwriters' over-allotment option is exercised in full, to approximately 31.1%
of the outstanding Common Stock). As a result of his beneficial ownership of
Common Stock and his positions with WestPoint, Mr. Green will continue to be
able to have significant influence on WestPoint and on matters subject to vote
by WestPoint's stockholders.
SHARES ELIGIBLE FOR FUTURE SALE
As of February 3, 1997, WestPoint had outstanding 30,916,288 shares of
Common Stock. Of these shares, 21,259,556 shares, including the 2,000,000 shares
of Common Stock covered by the Registration Statement of which this Prospectus
forms a part, will be freely tradeable without restriction under the Securities
Act upon completion of the sale of the Shares offered hereby, unless purchased
by 'affiliates' of WestPoint (as that term is defined in the rules and
regulations under the Securities Act). The remaining 9,656,732 shares of Common
Stock may not be sold unless they are registered under the Securities Act, or
unless an exemption from registration, such as the exemptions provided by Rule
144 or Rule 144A under the Securities Act, is available.
No predictions can be made as to the effect, if any, that market sales of
shares or the availability of shares for future sale will have on the market
price of shares of Common Stock prevailing from time to time. Sales of
substantial amounts of Common Stock in the public market could adversely affect
the market price of the Common Stock.
9
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Common Stock of WestPoint is listed on NASDAQ under the symbol WPSN.
Such listing became effective on August 2, 1993. Prior thereto, WestPoint's
Common Stock was not listed or admitted to unlisted trading privileges on a
national securities exchange or included for quotation through an inter-dealer
quotation system of a registered national securities association, and there was
a limited trading market for the Common Stock.
The following table sets forth the range of high (ask) and low (bid)
quotations for the Common Stock for the periods indicated, as reported by
NASDAQ:
<TABLE>
<CAPTION>
FISCAL YEAR HIGH LOW
- --------------------------------------------------------------------------------------------- ------ -------
<S> <C> <C>
1995:
First Quarter.............................................................................. $15 $13 1/8
Second Quarter............................................................................. 19 15
Third Quarter.............................................................................. 23 1/2 17 1/2
Fourth Quarter............................................................................. 22 1/2 17 3/4
1996:
First Quarter.............................................................................. $21 5/8 $17 1/2
Second Quarter............................................................................. 25 19 1/4
Third Quarter.............................................................................. 29 1/2 22 3/8
Fourth Quarter............................................................................. 30 1/4 26 1/4
1997:
First Quarter (through February 13, 1997).................................................. $33 7/8 $29
</TABLE>
On February 13, 1997, the last sale price for the Common Stock as reported
by NASDAQ was $29 7/8 per share.
WestPoint has not declared any cash dividends on its Common Stock during
the past two fiscal years or the current fiscal year. Under its existing credit
facility WestPoint is permitted to pay dividends from excess cash flow as
defined in the credit facility. WestPoint does not expect to pay dividends to
its stockholders in the near future.
As of February 3, 1997, there were approximately 13,628 holders of
WestPoint's Common Stock. Of that total, approximately 177 were stockholders of
record and approximately 13,451 held their stock in nominee name.
10
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of WestPoint at December
31, 1996. This table should be read in conjunction with the Consolidated
Financial Statements of WestPoint and the related notes thereto and other
information incorporated by reference in this Prospectus.
<TABLE>
<CAPTION>
DECEMBER 31, 1996
----------------------
(DOLLARS IN THOUSANDS)
<S> <C>
Current portion of long-term debt:
Senior Credit Facility:
Revolver............................................................................... $ 24,000
------------
------------
Long-term debt, excluding current portion:
Senior Credit Facility:
Revolver............................................................................... $ 50,000
8 3/4% Senior Notes Due 2001.............................................................. 400,000
9 3/8% Senior Subordinated Debentures Due 2005............................................ 550,000
9% Sinking Fund Debentures Due 2017....................................................... 75,000
------------
Total long-term debt................................................................... 1,075,000
------------
Stockholders' equity (deficit):
Common Stock and capital in excess of par value:
Common Stock, $.01 par value; 75,000,000 shares authorized,
34,707,250 shares issued............................................................. 329,394
Accumulated Deficit....................................................................... (703,068)
Treasury Stock; 3,855,549 shares at cost.................................................. (70,316)
Minimum Pension Liability Adjustment, net of taxes of $3,763.............................. (6,408)
------------
Total stockholders' equity (deficit)................................................... (450,398)
------------
Total capitalization................................................................... $ 624,602
------------
------------
</TABLE>
USE OF PROCEEDS
WestPoint will not receive any proceeds from the sale of the Shares by the
Selling Stockholders. See 'Selling Stockholders.'
11
<PAGE>
SELLING STOCKHOLDERS
The Shares offered hereby are owned of record, as of the date of this
Prospectus, by WPS Investors, which holds such shares for the direct or indirect
account of the Selling Stockholders. Immediately prior to the sale of Shares
hereunder by a Selling Stockholder, WPS Investors will transfer such Shares to
such Selling Stockholder. The Selling Stockholders are limited partners of Green
Capital Investors L.P. ('Green Capital'), a limited partnership which itself is
a limited partner of WPS Investors. HTG Corp. is the general partner of a
limited partnership which is the general partner of Green Capital. None of the
Shares offered hereby are being sold by, or for the account of, Mr. Green or WPS
Investors.
The Selling Stockholders listed in the table below have agreed to sell the
number of shares of Common Stock set forth opposite their respective names. The
following table sets forth as of February , 1997 the names of, and the
number of shares of Common Stock owned by, each Selling Stockholder after giving
effect to the transfer of Shares by WPS Investors to the Selling Stockholders
immediately prior to the consummation of the Offering and as adjusted to reflect
the sale of shares of Common Stock pursuant to the Offering. All information
with respect to beneficial ownership has been furnished by the respective
Selling Stockholders.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
AT FEBRUARY , 1997(1) AFTER THE OFFERING(1)
------------------------ TOTAL SHARES -----------------------
NUMBER OF PERCENTAGE TO BE SOLD NUMBER OF PERCENTAGE
SELLING STOCKHOLDERS SHARES OF CLASS IN THE OFFERING SHARES OF CLASS
- ---------------------------------------------- --------- ---------- --------------- --------- ----------
<S> <C> <C> <C> <C> <C>
General Electric Capital Corporation
(2)(3)(4)...................................
Georgia-Pacific Master Trust for Employee
Benefit Plan(2)(4)..........................
Jackson National Life Insurance
Company(2)(4)...............................
---------------
1,750,000
---------------
---------------
</TABLE>
- ------------------
(1) Excludes remaining shares of Common Stock held by WPS Investors, with
respect to which the Selling Stockholders are not deemed to have beneficial
ownership.
(2) General Electric Capital Corporation, Georgia-Pacific Master Trust for
Employee Benefit Plan and Jackson National Life Insurance Company are
limited partners of Green Capital.
(3) Excludes 251,900 shares of Common Stock owned by the General Electric
Pension Trust, as to which the Selling Stockholder disclaims beneficial
ownership.
(4) An option to purchase 250,000 additional shares solely to cover
over-allotments, if any, has been granted to the Underwriters by the Selling
Stockholders; such shares will be transferred by WPS Investors to the
Selling Stockholders immediately prior to their sale.
12
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the purchase agreement
(the 'Purchase Agreement') among WestPoint, the Selling Stockholders, WPS
Investors and the Underwriters named below (the 'Underwriters'), the Selling
Stockholders have agreed to sell to each of the Underwriters, and each of the
Underwriters severally has agreed to purchase from the Selling Stockholders, the
aggregate number of shares of Common Stock set forth opposite its name below.
<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
- ------------------------------------------------------------------------------------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................................................................
Goldman, Sachs & Co........................................................................
The Robinson-Humphrey Company, Inc.........................................................
Wheat, First Securities, Inc...............................................................
---------
Total......................................................................... 1,750,000
---------
---------
</TABLE>
In the Purchase Agreement, the several Underwriters have agreed, subject to
the terms and conditions set forth in the Purchase Agreement, to purchase all of
the shares of Common Stock being sold pursuant to the Purchase Agreement, if any
such shares of Common Stock are purchased. In the event of default by an
Underwriter, the Purchase Agreement provides that, under certain circumstances,
the purchase commitments of the non-defaulting Underwriter may be increased or
the Purchase Agreement may be terminated.
The Underwriters have advised WestPoint and the Selling Stockholders that
the Underwriters hereby propose to offer the shares of Common Stock offered
hereby to the public initially at the public offering price set forth on the
cover page of this Prospectus and to certain dealers at such price less a
concession not in excess of
$ per share of Common Stock, of which not in excess of $ per share
of Common Stock may be reallowed to certain other dealers. After the Offering,
the public offering price and concession may be changed.
The Selling Stockholders have granted an option to the Underwriters,
exercisable during the 30-day period after the date of this Prospectus, to
purchase up to an aggregate of 250,000 additional shares of Common Stock at the
public offering price set forth on the cover page of this Prospectus, less the
underwriting discount. The Underwriters may exercise this option solely to cover
over-allotments, if any, made on the sale of Common Stock offered hereby. To the
extent that the Underwriters exercise this option, each Underwriter will be
obligated, subject to certain conditions, to purchase the number of additional
shares of Common Stock proportionate to such Underwriter's initial amount
reflected in the foregoing table.
WestPoint, WPS Investors and the executive officers of WestPoint have
agreed that they will not, directly or indirectly, for a period of 90 days
following the date of this Prospectus, sell, offer to sell, grant any option for
the sale of, or otherwise dispose of, any Common Stock, without the prior
consent of the Underwriters; provided, however, that WestPoint may issue and
sell Common Stock pursuant to any employee stock option plan, stock ownership
plan or dividend reinvestment plan of WestPoint in effect on the date the
Purchase Agreement is executed, WestPoint may issue Common Stock upon the
conversion of securities or the exercise of warrants outstanding on the date the
Purchase Agreement is executed.
WestPoint, WPS Investors and the Selling Stockholders have agreed to
indemnify the Underwriters against certain liabilities, including liabilities
under the Securities Act.
In connection with this Offering, the Underwriters may engage in passive
market making transactions in the Common Stock on NASDAQ in accordance with Rule
10b-6A under the Exchange Act. Rule 10b-6A permits, upon the satisfaction of
certain conditions, underwriters participating in a distribution that are also
NASDAQ market makers in the security being distributed to engage in limited
market making transactions during the period when Rule 10b-6 under the Exchange
Act would otherwise prohibit such activity. Rule 10b-6A prohibits underwriters
engaged in passive market making, generally, from entering a bid or effecting a
purchase at a price that exceeds the highest bid for those securities displayed
on NASDAQ by a market maker that is not participating in the distribution. Under
Rule 10b-6A, each underwriter engaged in passive market making is subject to a
daily net purchase limitation equal to 30% of such entity's average daily
trading volume during the
13
<PAGE>
two full consecutive calendar months immediately preceding the date of the
filing of the registration statement under the Securities Act pertaining to the
security to be distributed.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for WestPoint
by Weil, Gotshal & Manges LLP (a partnership including professional
corporations), 767 Fifth Avenue, New York, New York 10153. Certain legal matters
in connection with the Shares will be passed upon for the Underwriters by Cahill
Gordon & Reindel (a partnership including a professional corporation), 80 Pine
Street, New York, New York 10005. Certain legal matters will be passed upon for
WPS Investors by Jones, Day, Reavis & Pogue, 3500 One Peachtree Center, Atlanta,
Georgia 30308.
EXPERTS
The consolidated financial statements of WestPoint at December 31, 1996 and
1995 and for each of the three years in the period ended December 31, 1996,
which appear in the Form 10-K, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon incorporated by
reference in this Prospectus. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
14
<PAGE>
------------------------------------------------------
------------------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS. IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATES HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Forward-Looking Statements..................... 2
Available Information.......................... 2
Incorporation of Certain Documents by
Reference.................................... 3
Prospectus Summary............................. 4
Risk Factors................................... 7
Price Range of Common Stock and Dividends...... 10
Capitalization................................. 11
Use of Proceeds................................ 11
Selling Stockholders........................... 12
Underwriting................................... 13
Legal Matters.................................. 14
Experts........................................ 14
</TABLE>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
1,750,000 SHARES
[WESTPOINT LOGO]
COMMON STOCK
---------------------------
P R O S P E C T U S
---------------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
THE ROBINSON-HUMPHREY
COMPANY, INC.
WHEAT FIRST BUTCHER SINGER
, 1997
------------------------------------------------------
------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The table sets forth the expenses expected to be incurred in connection
with the registration of the shares of Common Stock offered hereby. All amounts,
except the SEC registration and National Association of Securities Dealers, Inc.
('NASD') filing fees, are estimated.
<TABLE>
<S> <C>
SEC Registration Fee.......................................... $ 18,637
NASD Filing Fee............................................... 6,650
Legal Fees and Expenses....................................... 25,000
Accounting Fees and Expenses.................................. 45,000
Printing...................................................... 20,000
Miscellaneous................................................. 1,713
--------
Total....................................................... $107,000
--------
--------
</TABLE>
WPS Investors, on behalf of the Selling Stockholders, has agreed to bear
all of the costs of registering the shares of Common Stock under the Securities
Act, including the registration fee under the Securities Act, all other
registration and filing fees, all fees and disbursements of counsel and
accountants retained by WestPoint and all other expenses incurred by WestPoint;
such costs (or estimates thereof) have been set forth above. The Selling
Stockholders will bear certain other costs relating to the registration of the
shares of Common Stock under the Securities Act, including all underwriting
discounts and commissions, all transfer taxes and all costs of any separate
legal counsel or other advisors retained by the Selling Stockholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
(1) Section 145 of Delaware General Corporation Law. Section 145 of the
Delaware General Corporation Law ('DGCL') provides that a corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or was a
director, officer, employee, or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon
plea of nolo contendere or its equivalent, shall not, in and of itself, create a
presumption that his conduct was unlawful.
Section 145 of the DGCL also provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine upon adjudication
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery of Delaware or such other court shall deem
proper.
II-1
<PAGE>
To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in defense of any claim, issue
or matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith.
Any such indemnification (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because such person has met the applicable standard of conduct set
forth above. Such determination shall be made:
(i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceeding; or
(ii) if such a quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent legal counsel
in a written opinion; or
(iii) by the stockholders.
Section 145 of the DGCL permits a Delaware business corporation to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against such person and incurred by him in any such capacity,
or arising out of his status as such, whether or not the corporation would have
the power to indemnify such person.
(2) By-law Provisions on Indemnity. Article V of the Amended and Restated
By-laws of WestPoint, as the same may be amended from time to time (the
'By-laws'), sets forth the extent to which WestPoint's directors and officers
may be indemnified by WestPoint against liabilities which they may incur while
serving in such capacity. Article V generally provides that WestPoint shall
indemnify the directors and officers of WestPoint who are or were a party to any
threatened, pending, or contemplated action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was a director or officer of WestPoint or of another corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise, or by reason of
any action alleged to have been taken or omitted in such capacity, against
expenses (including attorneys' fees and disbursements), judgments, fines, and
amounts paid in settlement actually and reasonably incurred in connection
therewith, provided that the applicable standard of conduct set forth in Section
145 of the DGCL was met, and provided further that such indemnification shall be
limited to expenses (including attorneys' fees and disbursements) actually and
reasonably incurred in the case of an action or suit by or in the right of
WestPoint to procure a judgment in its favor. Subject to the procedures for
indemnification of directors and officers set forth in the By- laws, the
indemnification of WestPoint's directors and officers provided for therein is in
all other respects substantially similar to that provided for in Section 145 of
the DGCL. Any such indemnification shall continue as to a person who has ceased
to be a director or officer of WestPoint and shall inure to the benefit of the
heirs, executors, and administrators of such person.
(3) Indemnification Agreements. In addition, each of the directors and the
executive officers of WestPoint is entitled to indemnification from WestPoint
pursuant to separate agreements (the 'Indemnification Agreements') between
WestPoint and such persons.
WestPoint has in effect insurance policies covering all of WestPoint's
directors and officers in certain instances where by law they may not be
indemnified by WestPoint.
The above discussion of the By-laws of WestPoint and of the Indemnification
Agreements and of Section 145 of the DGCL is not intended to be exhaustive and
is qualified in its entirety by such By-laws, Indemnification Agreements and the
DGCL.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling WestPoint as
disclosed above, WestPoint has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is therefore unenforceable.
II-2
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL SCHEDULES
(A) EXHIBITS
<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF EXHIBIT
- ------ -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 -- Form of Purchase Agreement.*
1.2 -- Form of Custody Agreement.*
2.1 -- Debtors' Joint Plan of Reorganization, dated June 9, 1992, proposed by West Point Acquisition Corp.
(since renamed WestPoint Stevens Inc.), West Point Subsidiary Corp. (since renamed Valley Fashions
Subsidiary Corp.) and West Point Tender Corp. (since renamed Valley Fashions Tender Corp.),
incorporated by reference to the Current Report on Form 8-K (Commission File No. 1-4990) filed by
West Point-Pepperell, Inc. with the Commission on October 1, 1992.
4 -- Form 15 (Commission File No. 0-21496) filed by WestPoint with the Commission on May 25, 1995,
incorporated by reference herein.
5 -- Opinion of Weil, Gotshal & Manges LLP with respect to legality of the shares.*
23.1 -- Consent of Ernst & Young LLP, independent auditors.**
23.2 -- Consent of Weil, Gotshal & Manges LLP (included in the opinion filed as Exhibit 5).*
24 -- Powers of Attorney.**
</TABLE>
- ------------------
* Filed herewith
** Previously filed
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
to Section 15(d) of the Securities Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(2) That, for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed
as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of Prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.
(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being offered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT TO THE
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN ATLANTA, GEORGIA, ON THIS 25TH DAY OF FEBRUARY, 1997.
WESTPOINT STEVENS INC.
By: /s/ HOLCOMBE T. GREEN, JR.
-----------------------------------
Holcombe T. Green, Jr.
Chairman of the Board and Chief
Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS AMENDMENT TO THE
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------------------- -----------------
<S> <C> <C>
/s/ HOLCOMBE T. GREEN, JR.* Chairman of the Board and Chief February 25, 1997
- --------------------------------------------- Executive Officer (principal executive
Holcombe T. Green, Jr. officer)
/s/ MORGAN M. SCHUESSLER* Executive Vice President/Finance and February 25, 1997
- --------------------------------------------- Chief Financial Officer (principal
Morgan M. Schuessler* financial officer)
/s/ JOSEPH L. JENNINGS, JR.* Vice Chairman of the Board February 25, 1997
- ---------------------------------------------
Joseph L. Jennings, Jr.
/s/ J. NELSON GRIFFITH* Controller February 25, 1997
- --------------------------------------------- (principal accounting officer)
J. Nelson Griffith
/s/ M. KATHERINE DWYER* Director February 25, 1997
- ---------------------------------------------
M. Katherine Dwyer
/s/ JOHN G. HUDSON* Director February 25, 1997
- ---------------------------------------------
John G. Hudson
/s/ Charles W. McCall* Director February 25, 1997
- ---------------------------------------------
Charles W. McCall*
/s/ DOUGLAS T. MCCLURE, JR.* Director February 25, 1997
- ---------------------------------------------
Douglas T. McClure, Jr.
/s/ GERALD B. MITCHELL* Director February 25, 1997
- ---------------------------------------------
Gerald B. Mitchell
/s/ JOHN F. SORTE* Director February 25, 1997
- ---------------------------------------------
John F. Sorte
/s/ PHILLIP SIEGEL* Director February 25, 1997
- ---------------------------------------------
Phillip Siegel
*By: /s/ M. CLAYTON HUMPHRIES, JR.
--------------------------------------
M. Clayton Humphries, Jr.
Attorney-in-Fact
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
NUMBER DESCRIPTION OF EXHIBIT PAGE NO.
- ------ ----------------------------------------------------------------------------------------------- -----------
<S> <C> <C> <C>
1 -- Form of Purchase Agreement.*
1.2 -- Form of Custody Agreement.*
2.1 -- Debtors' Joint Plan of Reorganization, dated June 9, 1992, proposed by West Point
Acquisition Corp. (since renamed WestPoint Stevens Inc.), West Point Subsidiary Corp.
(since renamed Valley Fashions Subsidiary Corp.) and West Point Tender Corp. (since
renamed Valley Fashions Tender Corp.), incorporated by reference to the Current Report on
Form 8-K (Commission File No. 1-4990) filed by West Point-Pepperell, Inc. with the
Commission on October 1, 1992.
4 -- Form 15 (Commission File No. 0-21496) filed by WestPoint with the Commission on May 25,
1995, incorporated by reference herein.
5 -- Opinion of Weil, Gotshal & Manges LLP with respect to legality of the shares.*
23.1 -- Consent of Ernst & Young LLP, independent auditors.**
23.2 -- Consent of Weil, Gotshal & Manges LLP (included in the opinion filed as Exhibit 5).*
24 -- Powers of Attorney.**
</TABLE>
- ------------------
* Filed herewith
** Previously filed
<PAGE>
================================================================================
WESTPOINT STEVENS INC.
(a Delaware corporation)
1,750,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: February 27, 1997
================================================================================
<PAGE>
Table of Contents
Page
PURCHASE AGREEMENT...................................................
SECTION 1. Representations and Warranties.......................
(a) Representations and Warranties by the Company.................
(i) Compliance with Registration Requirements.................
(ii) Incorporated Documents....................................
(iii) Independent Accountants...................................
(iv) Financial Statements......................................
(v) No Material Adverse Change in Business....................
(vi) Good Standing of the Company..............................
(vii) Good Standing of Subsidiaries.............................
(viii) Capitalization............................................
(ix) Authorization of Agreement................................
(x) Authorization and Description of
Securities................................................
(xi) Absence of Defaults and Conflicts.........................
(xii) Absence of Labor Dispute..................................
(xiii) Absence of Proceedings....................................
(xiv) Accuracy of Exhibits......................................
(xv) Possession of Intellectual Property.......................
(xvi) Absence of Further Requirements...........................
(xvii) Possession of Licenses and Permits........................
(xviii) Title to Property.........................................
(xix) Compliance with Cuba Act..................................
(xx) Environmental Laws........................................
(b) Representations and Warranties by the Selling
Shareholders..................................................
(i) Accurate Disclosure.......................................
(ii) Authorization of Agreements...............................
(iii) Good and Marketable Title.................................
(iv) Due Execution of Custody Agreement........................
(v) Absence of Manipulation...................................
(vi) Absence of Further Requirements...........................
(vii) Restriction on Sale of Securities.........................
(viii) Certificates Suitable for Transfer........................
(ix) No Association with NASD..................................
(c) Officer's Certificates.........................................
SECTION 2. Sale and Delivery to Underwriters;
Closing...............................................
(a) Initial Securities.............................................
(b) Option Securities..............................................
(c) Payment........................................................
(d) Denominations; Registration....................................
-i-
<PAGE>
Page
SECTION 3. Covenants of the Company..............................
(a) Compliance with Securities Regulations and
Commission Requests............................................
(b) Filing of Amendments...........................................
(c) Delivery of Registration Statements............................
(d) Delivery of Prospectuses.......................................
(e) Continued Compliance with Securities Laws......................
(f) Blue Sky Qualifications........................................
(g) Rule 158.......................................................
(h) Listing........................................................
(i) Restriction on Sale of Securities..............................
(j) Reporting Requirements.........................................
SECTION 4. Payment of Expenses...................................
(a) Expenses.......................................................
(b) Expenses of the Selling Shareholders...........................
(c) Termination of Agreement.......................................
SECTION 5. Conditions of Underwriters'
Obligations...........................................
(a) Effectiveness of Registration Statement........................
(b) Opinion of Counsel for Company.................................
(c) Opinion of Counsel for the Selling
Shareholders...................................................
(d) Opinion of Counsel for Underwriters............................
(e) Officers' Certificate..........................................
(f) Certificate of Selling Shareholders............................
(g) Accountant's Comfort Letter....................................
(h) Bring-down Comfort Letter......................................
(i) No Objection...................................................
(j) Lock-up Agreements.............................................
(k) Opinion of Counsel for WPS Investors...........................
(l) Conditions to Purchase of Option Securities....................
(m) Additional Documents...........................................
(n) Termination of Agreement.......................................
SECTION 6. Indemnification.......................................
(a) Indemnification of Underwriters................................
(b) Indemnification of Company, Directors and
Officers and Selling Shareholders..............................
(c) Actions against Parties; Notification..........................
(d) Settlement without Consent if Failure to
Reimburse......................................................
SECTION 7. Contribution..........................................
SECTION 8. Representations, Warranties and
Agreements to Survive Delivery........................
SECTION 9. Termination of Agreement..............................
-ii-
<PAGE>
Page
(a) Termination; General...........................................
(b) Liabilities....................................................
SECTION 10. Default by One or More of the
Underwriters..........................................
SECTION 11. Default by one or more of the Selling
Shareholders..........................................
SECTION 12. Notices...............................................
SECTION 13. Parties...............................................
SECTION 14. Governing Law and Time................................
SECTION 15. Effect of Headings....................................
SCHEDULES
Schedule A - List of Underwriters.......................Sch A-1
Schedule B - List of Selling Shareholders...............Sch B-1
Schedule C - Pricing Information........................Sch C-1
Schedule D - List of Subsidiaries.......................Sch D-1
Schedule E - List of Persons subject to
Lock-up..................................Sch E-1
EXHIBITS
Exhibit A - Form of Opinion of Company's
Counsel....................................... A-1
Exhibit B - Form of Opinion for the
Selling Shareholders.......................... B-1
Exhibit C - Form of Lock-up Letter.......................... C-1
Exhibit D - Form of Opinion of Counsel for
WPS Investors................................. D-1
-iii-
<PAGE>
Draft of February 22, 1997
WESTPOINT STEVENS INC.
(a Delaware corporation)
[1,750,000] Shares of Common Stock
(Par Value $0.01 Per Share)
PURCHASE AGREEMENT
February 27, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
GOLDMAN, SACHS & CO.,
THE ROBINSON-HUMPHREY COMPANY, INC.
SALOMON BROTHERS INC
WHEAT, FIRST SECURITIES, INC.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
WestPoint Stevens Inc., a Delaware corporation (the "Company"), the
persons listed in Schedule B hereto (the "Selling Shareholders"), and WPS
Investors, L.P., a Georgia limited partnership ("WPS Investors") confirm their
respective agreements with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters," which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch, Goldman, Sachs & Co., The Robinson-Humphrey
Company, Inc. and Wheat, First Securities, Inc. are acting as representatives
(in such capacity, the "Representatives"), with respect to (i) the sale by the
Selling Shareholders, acting severally and not jointly, and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $0.01 per share, of the Company ("Common
Stock") set forth in Schedules A and B hereto and (ii) the grant by the Selling
Shareholders to the Underwriters, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of
<PAGE>
250,000 additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 1,750,000 shares of Common Stock (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 250,000 shares of
Common Stock subject to the option described in Section 2(b) hereof (the "Option
Securities") are hereinafter called, collectively, the "Securities."
The Company and the Selling Shareholders understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-20013) covering
the registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus,
including the
-2-
<PAGE>
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the form first furnished to the Underwriters for use in
connection with the offering of the Securities is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary prospectus dated February 14, 1997 together with the Term Sheet and
all references in this Agreement to the date of the Prospectus shall mean the
date of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement, any preliminary prospectus or the Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter and each Selling Shareholder as of
the date hereof, as of the Closing Time referred to in Section 2(c) hereof, and
as of each Date of Delivery (if any) referred to in Section 2(b) hereof, and
agrees with each Underwriter and each Selling Shareholder, as follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are
-3-
<PAGE>
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Neither the Prospectus nor any amendments or supplements
thereto at the time the Prospectus or any such amendment or supplement was
issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. If Rule 434
is used, the Company will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectus
made in reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through Merrill Lynch expressly for
use in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations
-4-
<PAGE>
of the Commission thereunder (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was
issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statement
of operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement.
(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business (a "Material Adverse Effect"), (B) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) there has been no dividend or distribution of
any
-5-
<PAGE>
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant subsidiary"
of the Company (as such term is defined in Rule 1-02 of Regulation S-X)
(each a "Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of
each such Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the preemptive
or similar rights of any securityholder of such Subsidiary. The only
subsidiaries of the Company are (a) the subsidiaries listed on Schedule D
hereto and (b) certain other subsidiaries which, considered in the
aggregate as a single Subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in
-6-
<PAGE>
the Prospectus under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus). The
shares of issued and outstanding capital stock, including the Securities
to be purchased by the Underwriters from the Selling Shareholders, have
been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock, including
the Securities to be purchased by the Underwriters from the Selling
Shareholders, was issued in violation of the preemptive or other similar
rights of any securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The Common Stock
conforms to all statements relating thereto contained in the Prospectus
and such description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to personal
liability by reason of being such a holder; and the issuance of the
Securities is not subject to the preemptive or other similar rights of any
securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which it or any of them may be bound, or to which any of the property
or assets of the Company or any subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement and compliance by
the Company with its obligations hereunder have been duly authorized by
all necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation
-7-
<PAGE>
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter or by-laws of the Company or any subsidiary or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in this
Agreement or the performance by the Company of its obligations hereunder;
the aggregate of all pending legal or governmental proceedings to which
the Company or any subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result in
a Material Adverse Effect.
-8-
<PAGE>
(xiv) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xv) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding)
or invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale
of the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such as have been already obtained
or as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws.
(xvii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and
its subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, have a Material Adverse
-9-
<PAGE>
Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xviii) Title to Property. The Company and its subsidiaries have
good and marketable title to all real property owned by the Company and
its subsidiaries and good title to all other properties owned by them, in
each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such as
(a) are described in the Prospectus or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company or any of its subsidiaries; and all of the leases and
subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectus, are in full
force and effect, and neither the Company nor any subsidiary has any
notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any subsidiary under any of the
leases or subleases mentioned above, or affecting or questioning the
rights of the Company or such subsidiary to the continued possession of
the leased or subleased premises under any such lease or sublease.
(xix) Compliance with Cuba Act. The Company has complied with, and
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as
Section 517.075 of the Florida statutes, and the rules and regulations
thereunder (collectively, the "Cuba Act") or is exempt therefrom.
(xx) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative
-10-
<PAGE>
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air,
surface water, ground-water, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to
the release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental Laws"), (B)
the Company and its subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder severally represents and warrants to each Underwriter as of
the date hereof, as of the Closing Time and as of the Date of Delivery, and
agrees with each Underwriter, as follows:
(i) Accurate Disclosure. Such Selling Shareholder is not prompted to
sell the Securities to be sold by such Selling Shareholder hereunder by
any information concerning the Company or any subsidiary of the Company
which is not set forth in the Prospectus.
(ii) Authorization of Agreements. Each Selling Shareholder has the
full right, power and authority to enter into this Agreement and a Custody
Agreement (the "Custody Agreement") and, at the Closing Time or Date of
Delivery, as the case may be, to sell, transfer and deliver the Securities
to be sold by such Selling Shareholder hereunder. The execution and
delivery of this Agreement and the Custody Agreement and the sale and
delivery of the Securities to be sold by such Selling
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Shareholder and the consummation of the transactions contemplated herein
and compliance by such Selling Shareholder with its obligations hereunder
have been duly authorized by such Selling Shareholder and do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default under, or result
in the creation or imposition of any tax, lien, charge or encumbrance upon
the Securities to be sold by such Selling Shareholder or any property or
assets of such Selling Shareholder pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license, lease or
other agreement or instrument to which such Selling Shareholder is a party
or by which such Selling Shareholder may be bound, or to which any of the
property or assets of such Selling Shareholder is subject, nor will such
action result in any violation of the provisions of the charter or by-laws
or other organizational instrument of such Selling Shareholder, if
applicable, or any applicable treaty, law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
such Selling Shareholder or any of its properties.
(iii) Good and Marketable Title. Such Selling Shareholder has and
will at the Closing Time and, if any Option Securities are purchased from
such Selling Shareholder, on the Date of Delivery have good and marketable
title to the Securities to be sold by such Selling Shareholder hereunder,
free and clear of any security interest, mortgage, pledge, lien, charge,
claim, equity or encumbrance of any kind, other than pursuant to this
Agreement; and upon delivery of such Securities and payment of the
purchase price therefor as herein contemplated, assuming each such
Underwriter has no notice of any adverse claim, each of the Underwriters
will receive good and marketable title to the Securities purchased by it
from such Selling Shareholder, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of any kind.
(iv) Due Execution of Custody Agreement. Such Selling Shareholder
has duly executed and delivered, in the form heretofore furnished to the
Representatives, the Custody Agreement with WPS Investors, as custodian
(the "Custodian"); the Custodian is authorized to deliver the Securities
to be sold by such Selling Shareholder hereunder and to accept payment
therefor.
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(v) Absence of Manipulation. Such Selling Shareholder has not taken,
and will not take, directly or indirectly, any action which is designed to
or which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
(vi) Absence of Further Requirements. No filing with, or consent,
approval, authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by such Selling Shareholder of
its obligations hereunder or in the Custody Agreement, except such as may
have previously been made or obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws.
(vii) Restriction on Sale of Securities. During a period of 90 days
from the date of the Prospectus, such Selling Shareholder will not,
without the prior written consent of Merrill Lynch, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly, any
share of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply
to the Securities to be sold hereunder.
(viii) Certificates Suitable for Transfer. Certificates for all of
the Securities to be sold by such Selling Shareholder pursuant to this
Agreement, in suitable form for transfer by delivery or accompanied by
duly executed instruments of transfer or assignment in blank with
signatures guaranteed, have been placed in custody with the Custodian with
irrevocable conditional instructions to deliver such Securities to the
Underwriters pursuant to this Agreement.
(ix) No Association with NASD. Except as previously disclosed to
Merrill Lynch or Counsel for the Underwriters
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neither such Selling Shareholder nor any of its affiliates directly, or
indirectly through one or more intermediaries, controls, or is controlled
by, or is under common control with, or has any other association with
(within the meaning of Article I, Section 1(m) of the Bylaws of the
National Association of Securities Dealers, Inc.), any member firm of the
National Association of Securities Dealers, Inc.
(c) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of the Selling Shareholders as such and
delivered to the Representatives or to counsel for the Underwriters pursuant to
the terms of this Agreement shall be deemed a representation and warranty by
such Selling Shareholder as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, each Selling Shareholder, severally and not jointly, agrees to sell to
each Underwriter, severally and not jointly, and each Underwriter, severally and
not jointly, agrees to purchase from each Selling Shareholder, at the price per
share set forth in Schedule C, that proportion of the number of Initial
Securities set forth in Schedule B opposite the name of such Selling
Shareholder, which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter, plus any additional number of Initial
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof, bears to the total number of Initial
Securities, subject, in each case, to such adjustments among the Underwriters as
the Representatives in their sole discretion shall make to eliminate any sales
or purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Selling Shareholders, acting severally and not
jointly, hereby grant an option to the Underwriters, severally and not jointly,
to purchase up to an additional 250,000 shares of Common Stock, as set forth in
Schedule B, at the price per share set forth in Schedule C, less an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities. The
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option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representatives to the
Custodian setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Representatives, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which the number of
Initial Securities set forth in Schedule A opposite the name of such Underwriter
bears to the total number of Initial Securities, subject in each case to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Cahill
Gordon & Reindel, 80 Pine Street, New York, New York 10005, or at such other
place as shall be agreed upon by the Representatives and the Company and the
Selling Shareholders, at 9:00 A.M. (Eastern time) on the third (fourth, if the
pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day
after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Representatives and the Company and the Selling
Shareholders (such time and date of payment and delivery being herein called
"Closing Time").
In addition, in the event that any or all of the Option Securities
are purchased by the Underwriters, payment of the purchase price for, and
delivery of certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representatives and the Company and the Selling Shareholders, on each Date of
Delivery as specified in the notice from the Representatives to the Company and
the Selling Shareholders.
Payment shall be made to the Selling Shareholders by wire transfer
of immediately available funds to a bank account designated by the Custodian
pursuant to each Selling Shareholder's Custody Agreement against delivery to the
Representatives for the respective accounts of the Underwriters of certificates
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for the Securities to be purchased by them. It is understood that each
Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Merrill Lynch, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter and each Selling Shareholder as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable, and will notify the Representatives
immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended Prospectus
shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule
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424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule
424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such prospectus. The Company will make
every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the Representatives
and each Selling Shareholder notice of its intention to file or prepare
any amendment to the Registration Statement (including any filing under
Rule 462(b)), any Term Sheet or any amendment, supplement or revision to
either the prospectus included in the Registration Statement at the time
it became effective or to the Prospectus, whether pursuant to the 1933
Act, the 1934 Act or otherwise, will furnish the Representatives with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use any
such document to which the Representatives or counsel for the Underwriters
shall object.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the Representatives, counsel for the Underwriters and
each Selling Shareholder, without charge, signed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of experts,
and will also deliver to the Representatives, without charge, a conformed
copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The
copies of the Registration Statement and each amendment thereto furnished
to the Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the
period when the Prospectus is
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required to be delivered under the 1933 Act or the 1934 Act, such number
of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in
the Prospectus. If at any time when a prospectus is required by the 1933
Act to be delivered in connection with sales of the Securities, any event
shall occur or condition shall exist as a result of which it is necessary,
in the opinion of counsel for the Underwriters or for the Company, to
amend the Registration Statement or amend or supplement the Prospectus in
order that the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations,
the Company will promptly prepare and file with the Commission, subject to
Section 3(b), such amendment or supplement as may be necessary to correct
such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to
the Underwriters and each Selling Shareholder such number of copies of
such amendment or supplement as the Underwriters and each Selling
Shareholder may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Representatives may
designate and to maintain such qualifications in effect for a period of
not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a
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foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect
of doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification
in effect for a period of not less than one year from the effective date
of the Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Listing. The Company will use its best efforts to effect and
maintain the quotation of the Securities on the Nasdaq National Market and
will file with the Nasdaq National Market all documents and notices
required by the Nasdaq National Market of companies that have securities
that are traded in the over-the-counter market and quotations for which
are reported by the Nasdaq National Market.
(i) Restriction on Sale of Securities. During a period of 90 days
from the date of the Prospectus, the Company will not, without the prior
written consent of Merrill Lynch, (i) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of any share of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) any shares of Common Stock issued by the Company upon the exercise
of an option or warrant or the conversion of a security outstanding on the
date hereof and referred to in the Prospectus, (B) any shares of Common
Stock issued
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or options to purchase Common Stock granted pursuant to existing employee
benefit plans of the Company referred to in the Prospectus or (C) any
shares of Common Stock issued pursuant to any non-employee director stock
plan or dividend reinvestment plan.
(j) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the
1934 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. WPS Investors will pay
or cause to be paid all expenses incident to the performance of the Company's
and the Selling Shareholders' obligations under this Agreement, including (i)
the preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectus and any amendments
or supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the Securities and
(ix) the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriters in connection with, the review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the Securities and (x) the fees and expenses incurred in connection with the
inclusion of the Securities in the Nasdaq National Markets.
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(b) Expenses of the Selling Shareholders. WPS Investors will pay all
expenses incident to the performance of the Selling Shareholders' respective
obligations under, and the consummation of the transactions contemplated by this
Agreement, including (i) any stamp duties, capital duties and stock transfer
taxes, if any, payable upon the sale of the Securities to the Underwriters, and
their transfer between the Underwriters pursuant to an agreement between such
Underwriters, and (ii) the fees and disbursements of their respective counsel
and accountants.
(c) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11 hereof, WPS Investors shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company
or any subsidiary of the Company or on behalf of any Selling Shareholder
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall
have been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rule 430A)
or, if the Company has elected to rely upon Rule 434, a Term Sheet shall
have been filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives and the Selling Shareholders shall have received the
favorable opinion, dated as of Closing Time, of Weil, Gotshal & Manges,
counsel for the
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Company, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters to the effect set forth in Exhibit A hereto
and to such further effect as counsel to the Underwriters may reasonably
request.
(c) Opinion of Counsel for the Selling Shareholders. At Closing
Time, the Representatives shall have received the favorable opinion, dated
as of Closing Time, of one or more counsel for the Selling Shareholders,
in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters to the effect set forth in Exhibit B hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Cahill Gordon & Reindel, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters with respect to the matters set forth in clauses (i),
(ii), (v) through (vii), inclusive, and the penultimate paragraph of
Exhibit A hereto. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the
State of New York, the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
its subsidiaries and certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the President or
a Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and
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correct with the same force and effect as though expressly made at and as
of Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
(f) Certificate of Selling Shareholders. At Closing Time, the
Representatives shall have received a certificate of an authorized person
each Selling Shareholder, dated as of Closing Time, to the effect that (i)
the representations and warranties of each Selling Shareholder contained
in Section 1(b) hereof are true and correct in all respects with the same
force and effect as though expressly made at and as of Closing Time and
(ii) each Selling Shareholder has complied in all material respects with
all agreements and all conditions on its part to be performed under this
Agreement at or prior to Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Representatives shall have received from Ernst & Young
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter
for each of the other Underwriters containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from Ernst & Young LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (g) of this Section, except that the
specified date referred to shall be a date not more than three business
days prior to Closing Time.
(i) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(j) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement
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substantially in the form of Exhibit C hereto signed by the persons listed
on Schedule E hereto.
(k) Opinion of Counsel for WPS Investors. At the Closing Time, the
Representatives and the Selling Shareholders shall have received the
favorable opinion, dated as of the Closing Time, of Jones, Day, Reavis &
Pogue, counsel for WPS Investors, in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of
such letter for cash of the other Underwriters to the effect set forth in
Exhibit D hereto and to such further effect as counsel to the Underwriters
may reasonably request.
(l) Conditions to Purchase of Option Securities. In the event that
the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations
and warranties of the Company and the Selling Shareholders contained
herein and the statements in any certificates furnished by the Company,
any subsidiary of the Company and the Selling Shareholders hereunder shall
be true and correct as of each Date of Delivery and, at the relevant Date
of Delivery, the Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time
pursuant to Section 5(e) hereof remains true and correct as of such
Date of Delivery.
(ii) Certificate of Selling Shareholders. A certificate, dated
such Date of Delivery, of an authorized Selling Shareholder
confirming that its certificate delivered at Closing Time pursuant
to Section 5(f) remains true and correct as of such Date of
Delivery.
(iii) Opinion of Counsel for Company. The favorable opinion of
Weil, Gotshal & Manges, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(b) hereof.
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(iv) Opinion of Counsel for the Selling Shareholder. The
favorable opinion of counsel for each Selling Shareholder in form
and substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(c) hereof.
(v) Opinion of Counsel for Underwriters. The favorable opinion
of Cahill Gordon & Reindel, counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(d) hereof.
(vi) Bring-down Comfort Letter. A letter from Ernst & Young
LLP, in form and substance satisfactory to the Representatives and
dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Representatives pursuant to
Section 5(g) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than
five days prior to such Date of Delivery.
(vii) Opinion of Counsel for WPS Investors. The favorable
opinion of Jones, Day, Reavis & Pogue, counsel for WPS Investors, in
form and substance satisfactory to counsel for the Underwriters
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(k) hereof.
(m) Additional Documents. At Closing Time and at each Date of
Delivery counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company and
the Selling Shareholders in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
-25-
<PAGE>
(n) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of Option Securities on a Date of Delivery which is after the
Closing Time, the obligations of the several Underwriters to purchase the
relevant Option Securities, may be terminated by the Representatives by
notice to the Company at any time at or prior to Closing Time or such Date
of Delivery, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section 4
and except that Sections 1, 6, 7 and 8 shall survive any such termination
and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company and WPS Investors
agree, jointly and severally, to indemnify and hold harmless each Underwriter,
each Selling Shareholder and each person, if any, who controls any Underwriter
or any Selling Shareholder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act to the extent and in the manner set forth in clauses
(i), (ii) and (iii). In addition, each Selling Shareholder, severally and not
jointly agrees to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any
-26-
<PAGE>
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 6(d) below) any
such settlement is effected with the written consent of the indemnifying
party or parties; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that (A) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company (x) by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), in the
case of indemnity of the Underwriters and persons controlling Underwriters or
(y) by any Selling Shareholder expressly for use in the Registration Statement
(or any amendment thereto), including the 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in the case of indemnity of Selling
Shareholders and persons controlling Selling Shareholders and (B) the
indemnification provided in this Section 6 by any Selling Shareholder shall be
limited to any losses, claims, damages or liabilities caused by any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information furnished in writing by such Selling
Shareholder to the Company or a Representative expressly for use in the
Registration Statement (or any amendment thereto), a preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) and to the net proceeds
received by any such Selling Shareholder from the sale of Securities hereunder.
(b) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its
-27-
<PAGE>
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, and each Selling Shareholder against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through Merrill Lynch expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of Underwriters and their controlling persons
indemnified pursuant to Section 6(a) above, counsel to the indemnified parties
shall be selected by Merrill Lynch, and, in the case of parties indemnified
pursuant to Section 6(b) above, counsel to the indemnified parties shall be
selected by the Company. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties
-28-
<PAGE>
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, WPS Investors and the Selling Shareholders on the one hand and the
Underwriters on the other hand from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, WPS Investors and the Selling Shareholders on the one hand and of
the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, WPS Investors and the
Selling Shareholders on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Selling
-29-
<PAGE>
Shareholders and the total underwriting discount received by the Underwriters,
in each case as set forth on the cover of the Prospectus, or, if Rule 434 is
used, the corresponding location on the Term Sheet bear to the aggregate initial
public offering price of the Securities as set forth on such cover.
The relative fault of the Company, WPS Investors and the Selling
Shareholders on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company, WPS
Investors or the Selling Shareholders or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company, WPS Investors, the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this Section 7. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 7 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 7(a), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission no Selling Shareholder
shall be required to contribute any amount in excess of the amount by which the
total net proceeds received by it from the sale of Securities hereunder exceeds
the amount of any damages which such Selling Shareholder has otherwise been
required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
-30-
<PAGE>
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company or such Selling Shareholder,
as the case may be. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries or the Selling Shareholders submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or controlling person, or by or on behalf of the
Company, WPS Investors or the Selling Shareholders, and shall survive delivery
of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representatives,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading
-31-
<PAGE>
in any securities of the Company has been suspended or materially limited by the
Commission or the Nasdaq National Market, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or
more of the Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the Underwriters to purchase and of the Company to sell the
Option Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting Underwriter.
-32-
<PAGE>
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the Underwriters to purchase and the Company to sell the relevant Option
Securities, as the case may be, either (i) the Representatives or (ii) the
Company and any Selling Shareholder shall have the right to postpone Closing
Time or the relevant Date of Delivery, as the case may be, for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. As used
herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
SECTION 11. Default by one or more of the Selling Shareholders. If a
Selling Shareholder shall fail at Closing Time or at a Date of Delivery to sell
and deliver the number of Securities which such Selling Shareholder or Selling
Shareholders are obligated to sell hereunder, and the remaining Selling
Shareholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number to be sold by all Selling Shareholders as set forth in Schedule B hereto,
then the Underwriters may, at option of the Representatives, by notice from the
Representatives to the Company and the non-defaulting Selling Shareholders,
either (a) terminate this Agreement without any liability on the fault of any
non-defaulting party except that the provisions of Sections 1, 4, 6, 7 and 8
shall remain in full force and effect or (b) elect to purchase the Securities
which the non-defaulting Selling Shareholders have agreed to sell hereunder. No
action taken pursuant to this Section 11 shall relieve any Selling Shareholder
so defaulting from liability, if any, in respect of such default.
In the event of a default by any Selling Shareholder as referred to
in this Section 11, each of the Representatives, the Company and the
non-defaulting Selling Shareholders shall have the right to postpone Closing
Time or Date of Delivery for a period not exceeding seven days in order to
effect any required change in the Registration Statement or Prospectus or in any
other documents or arrangements.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard
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<PAGE>
form of telecommunication. Notices to the Underwriters shall be directed to the
Representatives at North Tower, World Financial Center, New York, New York
10281-1201 , attention of Karen B. Harris, Vice President; notices to the
Company shall be directed to it at 1185 Avenue of the Americas, New York, New
York 10036, attention [ ], with a copy to Howard Chatzinoff, Esq.,
Weil, Gotshal & Manges, 767 Fifth Avenue, New York, New York 10153; notices to
Jackson National Life Insurance Company shall be directed to [ ],
attention of [ ]; notices to WPS Investors shall be directed to
[ ], attention of [ ]; notices to General Electric Capital
Corporation shall be directed to [ ], attention of [ ];
notices to Georgia-Pacific master trust for Employee Benefit Plan shall be
directed to [ ], attention of [ ].
SECTION 13. Parties. This Agreement shall each inure to the benefit
of and be binding upon the Underwriters, the Company WPS Investors, and the
Selling Shareholders and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters, WPS Investors the
Company and the Selling Shareholders and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Company, WPS
Investors and the Selling Shareholders and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
-34-
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company, WPS Investors and the Selling
Shareholders a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the Underwriters, the
Company, WPS Investors and the Selling Shareholders in accordance with its
terms.
Very truly yours,
WESTPOINT STEVENS INC.
By
------------------------------------------
Title:
WPS INVESTORS, L.P.
By: HTG CORP.
By
------------------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION
By
------------------------------------------
Name:
Title:
GEORGIA-PACIFIC MASTER TRUST FOR
EMPLOYEE BENEFIT PLAN
By
------------------------------------------
Name:
Title:
JACKSON NATIONAL LIFE INSURANCE
COMPANY
By
------------------------------------------
Name:
Title:
-35-
<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
THE ROBINSON-HUMPHREY COMPANY, INC.
WHEAT, FIRST SECURITIES, INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
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<PAGE>
SCHEDULE A
Number of
Initial
Securities
----------
Name of Underwriter
- -------------------
Merrill Lynch, Pierce, Fenner &
Smith Incorporated........................................
Goldman, Sachs & Co.........................................
The Robinson-Humphrey Company, Inc..........................
Wheat, First Securities, Inc................................
-------------
Total....................................................... 1,750,000
Sch A-1
<PAGE>
SCHEDULE B
Number of Initial Maximum Number of Option
Securities to be Sold Securities to Be Sold
--------------------- ------------------------
General Electric
Capital
Corporation........... [ ] [ ]
Georgia-Pacific Master
Trust for Employee
Benefit Plan.......... [ ] [ ]
Jackson National Life
Insurance Company..... [ ] [ ]
Total................... 1,750,000 250,000
Sch B-1
<PAGE>
SCHEDULE C
WESTPOINT STEVENS INC.
1,750,000 Shares of Common Stock
(Par Value $0.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $[ ].
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[ ], being an amount equal to the
initial public offering price set forth above less $[ ] per share;
provided that the purchase price per share for any Option Securities purchased
upon the exercise of the over-allotment option described in Section 2(b) shall
be reduced by an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial Securities but not payable on
the Option Securities.
Sch C-1
<PAGE>
SCHEDULE D
[List of subsidiaries]
Sch D-1
<PAGE>
SCHEDULE E
[List of persons and entities
subject to lock-up]
Sch E-1
<PAGE>
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to the Purchase Agreement or
pursuant to reservations, agreements or employee benefit plans referred to in
the Prospectus or pursuant to the exercise of convertible securities or options
referred to in the Prospectus); the shares of issued and outstanding capital
stock of the Company, including the Securities to be purchased by the
Underwriters from the Selling Shareholders, have been duly authorized and
validly issued and are fully paid and non-assessable; and none of the
outstanding shares of capital stock of the Company was issued in violation of
the preemptive or other similar rights of any securityholder of the Company.
(v) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the best of
our
A-1
<PAGE>
knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or threatened by the Commission.
(vii) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434 Information,
as applicable, the Prospectus, excluding the documents incorporated by reference
therein, and each amendment or supplement to the Registration Statement and
Prospectus, excluding the documents incorporated by reference therein, as of
their respective effective or issue dates (other than the financial statements
and supporting schedules included therein or omitted therefrom, as to which we
need express no opinion) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(viii) The documents incorporated by reference in the Prospectus
(other than the financial statements and supporting schedules included therein
or omitted therefrom, as to which we need express no opinion), when they were
filed with the Commission, complied as to form in all material respects with the
requirements of the 1934 Act and the rules and regulations of the Commissions
thereunder.
(ix) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which the
Company or any subsidiary is a party, or to which the property of the Company or
any subsidiary is subject, before or brought by any court or governmental agency
or body, domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the Purchase Agreement or the performance by the
Company of its obligations thereunder.
(x) The information in and the Registration Statement under Item 15,
to the extent that it constitutes matters of law, summaries of legal matters,
the Company's charter and bylaws or legal proceedings, or legal conclusions, has
been reviewed by us and is correct in all material respects.
(xi) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that are not
described as required.
(xii) All descriptions in the Registration Statement of contracts and
other documents to which the Company or its
A-2
<PAGE>
subsidiaries are a party are accurate in all material respects; to the best of
our knowledge, there are no franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be described or
referred to in the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or references
thereto are correct in all material respects.
(xiii) To the best of our knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws and no default by the
Company or any subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(xiv) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we need express
no opinion) is necessary or required in connection with the due authorization,
execution and delivery of the Purchase Agreement or for the offering, issuance,
sale or delivery of the Securities.
(xv) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the Purchase
Agreement and in the Registration Statement and compliance by the Company with
its obligations under the Purchase Agreement do not and will not, whether with
or without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined in Section
1(a)(xi) of the Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to us, to which the Company or any subsidiary is a party or by
which it or any of them may be bound, or to which any of the property or assets
of the Company or any subsidiary is subject (except for such conflicts, breaches
or defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the charter
A-3
<PAGE>
or by-laws of the Company or any subsidiary, or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their respective
properties, assets or operations.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no statement),
at the time such Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus or any amendment or supplement thereto
(except for financial statements and schedules and other financial data included
or incorporated by reference therein or omitted therefrom, as to which we need
make no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time, included
or includes an untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
A-4
<PAGE>
Exhibit B
FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) No filing with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, (other than the issuance of the order
of the Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state securities
laws, as to which we need express no opinion) is necessary or required to be
obtained by the Selling Shareholders for the performance by each Selling
Shareholder of its obligations under the Purchase Agreement or in the Custody
Agreement.
(ii) Each Custody Agreement has been duly executed and delivered by
the respective Selling Shareholders named therein and constitutes the legal,
valid and binding agreement of such Selling Shareholder.
(iii) The Purchase Agreement has been duly authorized, executed and
delivered by or on behalf of each Selling Shareholder.
(iv) The execution, delivery and performance of the Purchase
Agreement and Custody Agreement and the sale and delivery of the Securities and
the consummation of the transactions contemplated in the Purchase Agreement and
in the Registration Statement and compliance by the Selling Shareholders with
their respective obligations under the Purchase Agreement have been duly
authorized by all necessary action on the part of the Selling Shareholders and
do not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default under or
result in the creation or imposition of any tax, lien, charge or encumbrance
upon the Securities or any property or assets of the Selling Shareholders
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other instrument or agreement to which any
Selling Shareholder is a party or by which they may be bound, or to which any of
the property or assets of the Selling Shareholders may be subject nor will such
action result in any violation of the provisions of the charter or by-laws of
the Selling Shareholders, if applicable, or any law, administrative regulation,
judgment or order of any governmental agency or
B-1
<PAGE>
body or any administrative or court decree having jurisdiction over such Selling
Shareholder or any of its properties.
(v) To the best of our knowledge, each Selling Shareholder has valid
and marketable title to the Securities to be sold by such Selling Shareholder
pursuant to the Purchase Agreement, free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of any kind, and has full right,
power and authority to sell, transfer and deliver such Securities pursuant to
the Purchase Agreement. By delivery of a certificate or certificates therefor,
such Selling Shareholder will transfer to the Underwriters who have purchased
such Securities pursuant to the Purchase Agreement valid and marketable title to
such Securities, free of any adverse claim of which they did not have notice
except to the extent any of them has not acted in good faith or has been a party
to any fraud or illegality affecting the Securities and who are otherwise bona
fide purchasers for purposes of the Uniform Commercial Code.
B-2
<PAGE>
Exhibit C
____________, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
GOLDMAN SACHS & CO.
THE ROBINSON-HUMPHREY COMPANY, INC.
WHEAT, FIRST SECURITIES, INC.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by WestPoint Stevens Inc.
Dear Sirs:
The undersigned, a stockholder of WestPoint Stevens Inc., a Delaware
corporation (the "Company"), understands that Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") proposes to enter
into a Purchase Agreement (the "Purchase Agreement") with the Company, WPS
Investors, L.P. and the Selling Shareholders providing for the public offering
of shares (the "Securities") of the Company's common stock, par value $0.01 per
share (the "Common Stock"). In recognition of the benefit that such an offering
will confer upon the undersigned as a stockholder of the Company, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
Purchase Agreement that, during a period of 90 days from the date of the
Purchase Agreement, the undersigned will not, without the prior written consent
of Merrill Lynch, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of the Company's Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of 1933, as amended,
with
C-1
<PAGE>
respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise.
Very truly yours,
Signature:
--------------------------------
Print Name:
-------------------------------
C-2
<PAGE>
Exhibit D
FORM OF OPINION OF COUNSEL FOR WPS INVESTORS
TO BE DELIVERED PURSUANT TO SECTION 5(k)
(i) No filing with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, is necessary or required to be
obtained by WPS Investors for the performance by WPS Investors of its
obligations under the Purchase Agreement or in the Custody Agreement.
(ii) Each Custody Agreement has been duly executed and delivered by
WPS Investors and constitutes the legal, valid and binding agreement of WPS
Investors.
(iii) The Purchase Agreement has been duly authorized, executed and
delivered by or on behalf of WPS Investors.
(iv) The execution, delivery and performance of the Purchase
Agreement and Custody Agreement and the consummation of the transactions
contemplated in the Purchase Agreement and compliance by WPS Investors with its
obligations under the Purchase Agreement have been duly authorized by all
necessary action on the part of WPS Investors and do not and will not, whether
with or without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default under or result in the creation or
imposition of any tax, lien, charge or encumbrance upon the Securities or any
property or assets of WPS Investors pursuant to, any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license, lease or other
instrument or agreement to which WPS Investors is a party or by which it may be
bound, or to which any of the property or assets of WPS Investors may be subject
nor will such action result in any violation of the provisions of the
organizational documents of WPS Investors or any law, administrative regulation,
judgment or order of any governmental agency or body or any administrative or
court decree having jurisdiction over WPS Investors or any of its properties.
B-1
<PAGE>
WESTPOINT STEVENS INC.
CUSTODY AGREEMENT
THIS AGREEMENT, dated as of February 27, 1997, among WestPoint Stevens
Inc., a Delaware corporation (the "Company"), the undersigned stockholder of the
Company (the "Selling Stockholder") and WPS Investors, L.P., as custodian (the
"Custodian").
W I T N E S S E T H:
WHEREAS, the Company has filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-3 (the
"Registration Statement") in connection with the proposed offer and sale to the
public of shares of its Common Stock, par value $.01 per share (the "Common
Stock"), to be offered and sold by and on behalf of the Selling Stockholder and
the other selling stockholders named in the Registration Statement (the "Public
Offering"); and
WHEREAS, to induce Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Goldman, Sachs & Co., The Robinson-Humphrey Company, Inc.,
and Wheat, First Securities, Inc., the representatives (the "Representatives")
of the several underwriters of the Public Offering (the "Underwriters") to enter
into the Purchase Agreement referred to in Section 3 hereof and to assure the
Underwriters that the shares of Common Stock to be offered by the Selling
Stockholder in accordance with its previous request to the Underwriters will be
delivered to the Representatives at the closing of the Public Offering and to
provide for the orderly processing of the Registration Statement and sale of
such shares of Common Stock, it is necessary and in the best interests of the
Selling Stockholder, the other selling stockholders and the Company to enter
into the following agreement;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements hereinafter set forth and other good and valuable consideration the
receipt of which is hereby acknowledged, the parties hereto agree as follows:
1. Appointment of Custodian. The Custodian is hereby appointed to act
and to hold and dispose of the shares of the Selling Stockholder's Common Stock
to be offered and
<PAGE>
-2-
sold under the terms of the Registration Statement pursuant to the instructions
of the Selling Stockholder.
2. Deposit of Shares. As soon as possible after the execution of this
Agreement and in no event later than [ ], 1997, the Selling Stockholder shall
deposit with the Custodian certificates representing at least the number of
shares of Common Stock set forth opposite such Selling Stockholder's name on
Exhibit A hereto, registered in its name (or the names of its nominee if
properly identified) and duly endorsed in blank for transfer by separate stock
power. The stock certificates and the separate endorsed stock powers should be
delivered to the Custodian at the address set forth in Section 10 hereof for
deposit with the Custodian. Thereafter, upon the reasonable request of the
Custodian, the Selling Stockholder agrees to furnish any other documentation
which the transfer agent of the Company may request in order to assure the sale
and transfer of such shares of Common Stock. Such minimum numbers of shares of
Common Stock which are to be deposited with the Custodian by the Selling
Stockholder in accordance with the foregoing are hereinafter collectively
referred to as the "Deposit Stock." Of the shares of Deposit Stock, the number
of shares to be Initial Securities (as defined in the Purchase Agreement) is
listed in column 1 of Exhibit A hereto and the number of shares to be Option
Securities (as defined in the Purchase Agreement) is listed in Column 2 of
Exhibit A hereto.
The Deposit Stock represented by the certificates so deposited with
the Custodian by the Selling Stockholder are subject to the interests hereunder
of the Underwriters; provided, however, that until payment by the Underwriters
of the purchase price for the shares, the Selling Stockholder shall remain the
owner of the Deposit Stock and shall have the right to vote such shares and to
receive all dividends and distributions therefrom; the arrangements for the
custody and delivery of such certificates made by the Selling Stockholder
hereunder are not subject to termination by any acts of the Selling Stockholder,
or by operation of law, whether by the death or incapacity of such Selling
Stockholder or the occurrence of any other event, except as provided in Section
4 hereof; and if any such death, incapacity or any other such event shall occur
before the delivery of such shares hereunder, the Custodian is nevertheless
fully authorized and directed to deliver certificates for such shares in
accordance with the terms and conditions of this Agreement and the Purchase
Agreement (defined below) as if such death, incapacity or other event had not
<PAGE>
-3-
occurred, regardless of whether or not the Custodian shall have received notice
of such death, incapacity or other event.
3. Purchase Agreement. The Selling Stockholder acknowledges receipt of
a draft of a purchase agreement among the Company, WPS Investors, L.P., the
Selling Stockholder, the other selling stockholders and the Underwriters
relating to the offering of shares of Common Stock and the purchase thereof by
the several Underwriters, copies of which are attached hereto as Appendix II.
The definitive purchase agreement, to be in substantially the form of such draft
(the "Purchase Agreement"), will set forth the terms and conditions of the sale
and purchase of said shares and provides for the rights and responsibilities,
and the representations, warranties, covenants and indemnities, which will be
expected of the Selling Stockholder in connection therewith. It is understood
that the Purchase Agreement will be executed by the Representatives and by the
Company and WPS Investors, L.P., and by the Selling Stockholder, effective on
the date that the Registration Statement becomes effective with the Commission,
at which time the price to be paid to the Selling Stockholder by the
Underwriters for the Common Stock being offered will be inserted on Schedule C
to the Purchase Agreement.
4. Custodian. The Custodian is hereby authorized and directed to
deliver the Deposit Stock pursuant to instructions from Underwriters on the
Closing Time or Date of Delivery, as the case may be, referred to in the
Purchase Agreement upon receipt of (a) payment as set forth in the Purchase
Agreement for the Deposit Stock purchased on such Closing Time or Date of
Delivery, as the case may be, less transfer taxes, if any, and (b) instructions
from the Selling Stockholder to release such shares. The Custodian shall have no
liability whatsoever for releasing the Deposit Stock to the Underwriters in
accordance with the provisions of the foregoing sentence. If the Purchase
Agreement shall not be entered into and the transactions contemplated thereby
consummated prior to the thirtieth day after the date of this Custody Agreement
then, the Custodian is to return to the Selling Stockholder all of the Deposit
Stock held by the Custodian for the Selling Stockholder at the address set forth
on the signature page hereto, and shall destroy all stock powers relating
thereto delivered to it pursuant to Section 2 hereof. Upon the mailing of all or
a portion of the Deposit Stock to the Selling Stockholder in accordance with
this Section 4, the Custodian shall have no further responsibility hereunder.
<PAGE>
-4-
5. Representations and Warranties of Selling Stockholder. The Selling
Stockholder hereby represents and warrants to each Underwriter and the Company
as follows:
(a) Each of the representations and warranties of the Selling
Stockholder set forth in the Purchase Agreement (in substantially the form of
such agreements provided to the undersigned) is true and correct;
(b) This Agreement has been duly authorized, executed and delivered by
the Selling Stockholder and constitutes a legal and binding obligation of the
Selling Stockholder, enforceable in accordance with its terms; and
(c) The Selling Stockholder has full legal right, capacity, power and
authority to execute this Agreement, to enter into the Purchase Agreement and to
sell, transfer, assign and deliver the Common Stock to be sold by the Selling
Stockholder in accordance with the Purchase Agreement and valid and marketable
title to such Common Stock will be passed to the Underwriters pursuant to the
Purchase Agreement.
The Selling Stockholder hereby further represents and warrants that
the foregoing representations and warranties will be true and correct on the
date the Purchase Agreement is executed and at the Closing Time or the Date of
Delivery, as the case may be, referred to in the Purchase Agreement.
For purposes of rendering an opinion pursuant to the Purchase
Agreement, counsel for the Selling Stockholder may rely on the representations
and warranties of the undersigned set forth herein and in the Purchase Agreement
as if said representations and warranties had been set forth in a separate
certificate directed to said counsel at and as of the Closing Time or each Date
of Delivery.
6. Payment to Selling Stockholder.
(a) The Selling Stockholder hereby directs the Custodian to receive
payment for such Selling Stockholder's shares of Deposit Stock, all in
accordance with the terms and conditions of the Purchase Agreement and Section 4
hereof.
(b) Upon receipt of such payment from the representatives by the
Custodian, the Custodian shall promptly forward to the Selling Stockholder by
wire transfer of immediately availble funds to an account specified in writing
by the
<PAGE>
-5-
Selling Stockholder to the Custodian the purchase price for his shares of
Deposit Stock, as set forth in the Purchase Agreement as executed.
7. Return of Common Stock. The Custodian shall return to the Selling
Stockholder at the address set forth on the signature page hereto any shares of
Common Stock deposited by the Selling Stockholder which are not sold pursuant to
the Purchase Agreement promptly after the expiration of the option referred to
in Section 2(b) of the Purchase Agreement or, if earlier, after the Date of
Delivery (as defined in the Purchase Agreement). In the event the Deposit Stock
is not sold pursuant to the Purchase Agreement, then the Custodian shall
promptly return the Deposit Stock to the Selling Stockholder at the address set
forth on the signature page hereto. Upon the mailing of all or a portion of the
Deposit Stock to the Selling Stockholder in accordance with this Section 7, the
Custodian shall have no further responsibility hereunder.
8. Expenses. WPS Investors, L.P. shall pay all such expenses incident
to the Public Offering.
9. Extent of Duties and Obligations of Custodian. In all respects, the
duties and obligations of the Custodian shall be determined solely by the
express provisions of this Agreement, and the Custodian shall not be liable for
any act or failure to act on its part hereunder except for gross negligence or
willful misconduct, and shall be fully protected, as against the Selling
Stockholder and the Company, in any such action as the Custodian may take
hereunder in reliance on advice of accountants, attorneys or other independent
experts selected by it (which may include attorneys employed by the Custodian or
outside counsel). No implied covenants or obligations shall be read into this
Agreement against the Custodian. None of the provisions contained in this
Agreement shall require the Custodian to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of its
duties, or in the exercise of any of its rights or powers, hereunder.
The recitals contained herein shall be taken as the statements of the
Selling Stockholder and the Company, and the Custodian assumes no responsibility
whatsoever for the correctness of such recitals. Nothing in this Agreement,
expressed or implied, shall give or be construed to give any person, firm or
corporation, other than the parties hereto, the Underwriters, Weil, Gotshal &
Manges, as counsel to the Company, Jones, Day,
<PAGE>
-6-
Reavis & Pogue, as counsel to WPS Investors, L.P., and, Cahill Gordon & Reindel,
as counsel to the Underwriters, any legal or equitable right, remedy or claim
under or in respect to this Agreement or under or in respect of any covenant,
condition or provision herein contained.
10. Effective Date of Agreement. This Agreement shall become effective
with respect to the Selling Stockholder upon receipt of a copy of this
Agreement, duly executed by the Selling Stockholder, by the Custodian at the
following address:
[ ]
[ ]
[ ]
[ ]
[ ]
11. Definitions. The words "it" and "its" shall be construed where
appropriate, to be singular or plural, or masculine, feminine or neuter.
12. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
13. Counterparts. This Agreement may be signed in various counterparts
which together shall constitute one and the same Agreement.
14. Successors. This Agreement shall be binding upon the undersigned
and the heirs, legal representatives, distributees, successors and assigns of
the undersigned.
15. Notices. Notices to the Custodian shall not be deemed to be given
until actually received by it. Whenever the time for giving a notice falls upon
a Saturday, Sunday or holiday, such time shall be extended to the next business
day.
<PAGE>
-7-
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.
WESTPOINT STEVENS INC.
By:
----------------------------------------
Name:
Title:
WPS INVESTORS, L.P.,
as Custodian
By: HTG CORP.
By:
----------------------------------------
SELLING STOCKHOLDER
- ------------------------
Name:
Address:
<PAGE>
Exhibit A
Number of
Initial Number of Option
Selling Stockholder Securities Securities
- ------------------- ---------- ----------------
General Electric Capital
Corporation [ ] [ ]
Georgia-Pacific Master Trust [ ] [ ]
for Employee Benefit Plan
Jackson National Life [ ] [ ]
Insurance Company
Total.......... 1,750,000 250,000
========= =======
<PAGE>
[LETTERHEAD OF WEIL, GOTSHAL & MANGES LLP]
February 25, 1997
WestPoint Stevens Inc.
507 West Tenth Street
West Point, Georgia 31833
Gentlemen:
We have acted as counsel to WestPoint Stevens Inc., a Delaware
corporation (the "Company"), in connection with the preparation and
filing by the Company with the Securities and Exchange Commission of a
Registration Statement of the Company on Form S-3 (file number 33-20013)
(as amended, the "Registration Statement") under the Securities Act of
1933, as amended, with respect to the offering and sale of up to
2,000,000 shares of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), including up to 250,000 shares of Common Stock to
cover over-allotment options granted to the underwriters (collectively,
the "Shares"), upon payment of the purchase price therefor. Terms
defined in the Registration Statement and not otherwise defined herein
are used herein with the meanings as so defined.
In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of (i) the Registration
Statement, (ii) the form of the Purchase Agreement (the "Purchase
Agreement") to be entered into by and among the Company, the Selling
Stockholders listed on Schedule B to such agreement and each of the
institutions listed on Schedule A to such agreement, with respect to the
sale of the Shares and (iii) such corporate records, agreements,
documents and other instruments, and such certificates or comparable
documents of public officials and of officers and representatives of the
Company, as we have deemed relevant and necessary as a basis for the
opinion hereinafter set forth. We have also made such inquiries of such
officers and representatives as we have deemed relevant and necessary as
a basis for the opinion hereinafter set forth.
<PAGE>
Weil, Gotshal & Manges LLP
WestPoint Stevens Inc.
February 25, 1997
Page 2
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of
all documents submitted to us as originals, the conformity to original
documents of documents submitted to us as certified, conformed or
photostatic copies and the authenticity of the originals of such latter
documents. We have further assumed that the Purchase Agreement will be
executed in the form examined by us.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that the Shares are validly issued, fully
paid and nonassessable.
The opinion expressed herein is limited to the corporate laws of the
State of Delaware, and we express no opinion as to the effect on the
matters covered by this opinion of the laws of any other jurisdiction.
We consent to the use of this opinion as an exhibit to the
Registration Statement. We also consent to any and all references to our
firm in the Prospectus which is part of the Registration Statement. We
further consent to the use of this opinion as an exhibit to applications
to securities commissioners of various states of the United States for
registration or qualification of the Shares under the securities (or
"blue sky") laws of such states.
This opinion is rendered solely for your benefit in connection with
the transactions described herein. This opinion may not be used or
relied upon by any other person and may not be disclosed, quoted, filed
with a governmental agency or otherwise referred to without our prior
written consent, except as noted above.
Very truly yours,
/s/ WEIL GOTSHAL & MANGES LLP
