SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
July 14, 2005
-------------
PHILLIPS-VAN HEUSEN CORPORATION
-------------------------------
(Exact name of registrant as specified in its charter)
Delaware
--------
(State or other jurisdiction of incorporation)
001-07572 13-1166910
--------- ----------
(Commission File Number) (IRS Employer Identification Number)
200 Madison Avenue, New York, New York 10016
--------------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number (212)-381-3500
--------------
Not Applicable
--------------
(Former Name or Former Address, if Changed Since Last Report)
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On July 14, 2005, Phillips-Van Heusen Corporation (the "Company"), entered
into an Underwriting Agreement (the "Underwriting Agreement"), with the
Representatives named therein on behalf of the several Underwriters named
therein in connection with the public offering (the "Offering") of up to
6,386,365 shares of its Common Stock, par value $1.00 per share (the "Common
Stock") (in addition to an over-allotment option to purchase 957,954 additional
shares of Common Stock) by the selling stockholders named therein (the "Selling
Stockholders"). The shares of Common Stock offered by the Selling Stockholders
are issuable upon the conversion by the Selling Stockholders of shares of the
Company's Series B Convertible Preferred Stock, par value $100.00 per share (the
"Series B Convertible Preferred Stock") held by them. Such shares of Common
Stock, which will be sold pursuant to the Underwriting Agreement, have been
registered pursuant to a Registration Statement on Form S-3 (Registration No.
333-105218) filed May 14, 2003, and effective December 12, 2003. The
Registration Statement includes a Prospectus dated November 19, 2003, which is
supplemented by a Prospectus Supplement dated July 14, 2005. A copy of the
Underwriting Agreement is attached as Exhibit 1.1 to this Current Report on Form
8-K.
On July 14, 2005, the Company also entered into a Conversion Agreement (the
"Conversion Agreement") with the Selling Stockholders. Pursuant to the
Conversion Agreement, the Company agreed to make a payment to the Selling
Stockholders in the amount of $1.75 for each share of Common Stock that is based
upon conversion of the Series B Convertible Preferred Stock in connection with
the Offering (subject to certain adjustments). This payment is based upon the
net present value of the dividends that the Company would have been obligated to
pay the Selling Stockholders through February 12, 2007 (the earliest time at
which the Company believes that it would be able to force conversion of the
Series B Convertible Preferred Stock into Common Stock), net of the net present
value of the dividends payable over the same period on shares of Common Stock
into which the Series B Convertible Preferred Stock is convertible. In addition,
the Selling Stockholders have agreed to reduce the rights of the holders of the
Series B Convertible Preferred Stock to elect members of our board of directors.
The Selling Stockholders also agreed to cause any subsequent purchasers of the
Series B Convertible Preferred Stock to be bound by these provisions, and have
agreed to vote in favor at our next annual meeting of stockholders of an
amendment to our certificate of incorporation providing for this reduced board
representation. A copy of the Conversion Agreement is attached as Exhibit 10.1
to this Current Report on Form 8-K.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
EXHIBIT DESCRIPTION
1.1 Underwriting Agreement
10.1 Conversion Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PHILLIPS-VAN HEUSEN CORPORATION
By: /s/ Mark D. Fischer
--------------------------------
Mark D. Fischer, Vice President,
General Counsel and Secretary
Date: July 20, 2005
6,386,365 SHARES
PHILLIPS-VAN HEUSEN CORPORATION
SHARES OF COMMON STOCK, PAR VALUE $1.00 PER SHARE
UNDERWRITING AGREEMENT
July 14, 2005
LEHMAN BROTHERS INC.
CREDIT SUISSE FIRST BOSTON LLC
J.P. MORGAN SECURITIES INC.
BEAR, STEARNS & CO. INC.
PIPER JAFFRAY & CO.
As Representatives of the several
Underwriters named in Schedule 1 attached hereto,
c/o Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
Ladies and Gentlemen:
Certain stockholders of Phillips-Van Heusen Corporation, a Delaware
corporation (the "COMPANY"), named in SCHEDULE 2-A attached hereto (the "FIRM
SELLING STOCKHOLDERS"), propose to sell an aggregate of 6,386,365 shares (the
"FIRM Stock") of the Company's common stock, par value $1.00 per share (the
"COMMON STOCK"). In addition, certain stockholders of the Company specified in
Schedule 2-B (the "OPTION SELLING STOCKHOLDERS") propose to grant to the
underwriters (the "UNDERWRITERS") named in SCHEDULE 1 attached to this agreement
(this "AGREEMENT") an option to purchase up to an additional 957,954 shares of
the Common Stock on the terms set forth in Section 3 (the "OPTION STOCK"). The
Firm Selling Stockholders and the Option Selling Stockholders are hereinafter
collectively called the "SELLING STOCKHOLDERS". The Firm Stock and the Option
Stock, if purchased, are hereinafter collectively called the "STOCK." This is to
confirm the agreement concerning the purchase of the Stock from the Selling
Stockholders by the Underwriters.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The Company
represents, warrants and agrees that:
(a) A registration statement on Form S-3 (No. 333-105218) with respect
to the Stock has been prepared by the Company and filed in conformity with
the requirements of the Securities Act of 1933, as amended (the "SECURITIES
ACT"), and the rules and regulations promulgated thereunder (the "RULES AND
REGULATIONS") of the Securities and Exchange Commission (the "COMMISSION")
thereunder; and became effective under the Securities Act. Copies of such
registration statement and each amendment thereto have been delivered by
the Company to you as the representatives (the "REPRESENTATIVES") of
2
the Underwriters. As used in this Agreement, "EFFECTIVE TIME" means the
date and the time as of which such registration statement, or the most
recent post-effective amendment thereto, if any, was declared effective by
the Commission; "EFFECTIVE DATE" means the date of the Effective Time;
"REGISTRATION STATEMENT" means such registration statement, as amended at
the Effective Time, including any documents incorporated by reference
therein at such time and all information contained in the final prospectus
filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations and deemed to be a part of the registration statement as of the
Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; "PROSPECTUS" means such final prospectus, as supplemented and
in the form first used to confirm sales of the Stock; and "PRELIMINARY
PROSPECTUS" means each preliminary prospectus relating to the Stock,
containing the base prospectus included as part of the Registration
Statement, containing a "Subject to Completion" legend comparable to that
contained in paragraph 10 of Item 501 under Regulation S-K of the Rules and
Regulations and including the documents incorporated in such base
prospectus by reference. Reference made herein to any Preliminary
Prospectus or to the Prospectus shall be deemed to refer to and include any
documents incorporated by reference therein, as of the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and any
reference to any amendment or supplement to any such Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any document
filed under the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), after the date of such Preliminary Prospectus or the Prospectus, as
the case may be, and incorporated by reference in such Preliminary
Prospectus or the Prospectus, as the case may be; and any reference to any
amendment to the Registration Statement shall be deemed to include any
annual report of the Company filed with the Commission pursuant to Section
13(a) or 15(d) of the Exchange Act after the Effective Time that is
incorporated by reference in the Registration Statement. The Commission has
not issued any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending the effectiveness of the
Registration Statement, and no proceeding for such purpose has been
instituted or, to the Company's knowledge, threatened by the Commission.
(b) The Registration Statement conformed in all material respects at
the Effective Time and conforms in all material respects, and any
post-effective amendment to the Registration Statement filed after the date
hereof will conform in all material respects on the applicable effective
date, to the requirements of the Securities Act and the Rules and
Regulations. The Prospectus will conform in all material respects when
filed with the Commission pursuant to Rule 424(b) and on the applicable
Delivery Date (as defined in Section 5) to the requirements of the
Securities Act and the Rules and Regulations. The Registration Statement,
at the Effective Time and on the applicable Delivery Date, and the
Prospectus, as of its date and on the applicable Delivery Date, do 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 (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading; PROVIDED, that no
representation or warranty is made as to information contained in or
omitted from the Registration Statement or the Prospectus in reliance upon
and in conformity with written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion therein,
3
which information is specified in Section 10(f). The conditions for use of
Form S-3, as set forth in the General Instructions thereto, have been
satisfied.
(c) The documents incorporated by reference in the Registration
Statement and the Prospectus when filed with the Commission, conformed in
all material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder, and none of such documents
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; and any further documents so filed and
incorporated by reference in the Registration Statement and the Prospectus,
when filed with Commission, will conform in all material respects to the
requirements of the Securities Act and the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and when read
together with the other information in the Prospectus at the time the
Prospectus was filed and on the applicable Delivery Date 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,
in the light of the circumstances under which they were made, not
misleading.
(d) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus; and the Company is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of
its business requires such qualification, except where the failure to be so
qualified would not, individually or in the aggregate, have a material
adverse effect on the financial condition, business, properties or results
of operations of the Company and its subsidiaries taken as a whole (a
"MATERIAL ADVERSE EFFECT").
(e) Each of the subsidiaries listed on Schedule 3 (the "MATERIAL
SUBSIDIARIES") (i) has been duly incorporated and (ii) is an existing
corporation in good standing under the laws of the jurisdiction of its
incorporation with corporate power and authority to own its properties and
conduct its business as described in the Prospectus; and each Material
Subsidiary is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect. All of the issued and
outstanding capital stock of each Material Subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable; and,
except as disclosed in the Prospectus, except under the Company's revolving
credit facility, the Company's 7 3/4% debentures due 2023 and a lien in
favor of Mr. Calvin Klein, the capital stock of each Material Subsidiary is
owned by the Company, directly or through subsidiaries free from material
liens and encumbrances.
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and the issued shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and non-assessable,
conform, in all material respects, to the description thereof contained in
the Prospectus and were issued in
4
compliance with U.S. federal and state securities laws and not in violation
of any preemptive right, resale right, right of first refusal or similar
right.
(g) The shares of the Stock to be issued to and sold by the Selling
Stockholders under this Agreement (i) will be issued in accordance with the
Certificate of Designations, Preferences and Rights of Series B Convertible
Preferred Stock of the Company dated February 10, 2003 (the "CERTIFICATE OF
DESIGNATION"), and (ii) have been duly authorized for issuance and, at the
time such shares of the Stock are to be sold by the Selling Stockholders
will be duly and validly issued, fully paid and non-assessable and conform,
in all material respects, to the description thereof contained in the
Prospectus.
(h) This Agreement has been duly authorized, executed and delivered by
the Company.
(i) No consent, approval, authorization, registration, qualification,
or order of, or filing with, any governmental agency or body or any court
is required for the consummation of the transactions contemplated hereby in
connection with the issuance and sale of the Stock, except for such
consents, approvals, authorizations, registrations, qualifications, orders
and filings under the Securities Act, the rules and regulations of the New
York Stock Exchange or applicable state securities laws.
(j) The execution, delivery and performance by the Company of this
Agreement, and the consummation of the transactions contemplated hereby,
including without limitation, the issuance of the Stock and compliance by
the Company with the terms and provisions of this Agreement, do not and
will not conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default (or an event which with
the giving of notice or the lapse of time or both would constitute a
default) under, or result in the creation or imposition of any lien, charge
or encumbrance upon any assets or properties of the Company or any of its
subsidiaries under (i) the charter, bylaws or other organizational
documents of the Company and any of its subsidiaries, (ii) any statute,
rule, regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company or any subsidiary
of the Company or any of their properties, assets or operations or (iii)
any indenture, mortgage, loan or credit agreement, note, lease, permit,
license or other agreement or instrument to which the Company or any
subsidiary of the Company is a party or by which the Company or any such
subsidiary is bound or to which any of the assets or properties of the
Company or any of its subsidiaries are subject, except, in the case of
clauses (ii) and (iii), for such conflicts, breaches, violations or
defaults or liens, charges or encumbrances as would not, individually or in
the aggregate, have a Material Adverse Effect.
(k) Except as described or summarized in the Prospectus and with
respect to shares of the Company's common stock (i) issued to the former
stockholders of Calvin Klein, Calvin Klein (Europe), Inc., Calvin Klein
(Europe II) Corp., Calvin Klein Europe S.r.l. and CK Service Corp. in
connection with the Company's acquisition of such companies and (ii)
issuable upon conversion of the Company's Series B convertible preferred
stock, there are no contracts, agreements or understandings between the
5
Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company under the Securities Act.
(l) Except as disclosed in the Prospectus and except for the Company's
obligations to Peter J. Solomon Company L.P., there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with
the issuance and sale of the Stock contemplated by this Agreement.
(m) The Company has not sold or issued any securities that would be
integrated with the offering of the Stock contemplated by this Agreement
pursuant to the Securities Act, the Rules and Regulations or the
interpretations thereof by the Commission.
(n) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectus comply as to form
in all material respects with the requirements of Regulation S-X under the
Securities Act and present fairly, in all material respects, the financial
condition, results of operations and cash flows of the entities purported
to be shown thereby at the dates and for the periods indicated and have
been prepared in conformity with generally accepted accounting principles
in the United States applied on a consistent basis throughout the periods
involved; PROVIDED, HOWEVER, that the financial statements that are
unaudited are subject to normal year-end adjustments, require management to
make estimates and assumptions that affect the amounts reported in such
financial statements and the notes thereto and do not contain all
disclosures required in audited financial statements by accounting
principles generally accepted in the United States, including the absence
of certain footnotes.
(o) Ernst & Young LLP, who have certified certain financial statements
of the Company and its subsidiaries, are independent public accountants as
required by the Securities Act and the Rules and Regulations.
(p) The Company and each of its subsidiaries have good and marketable
title to all items of real property and other property owned by each of
them, in each case free and clear of any pledge, lien, encumbrance,
security interest or other claim of any third party or defect in title,
except (i) to the extent such would not, individually or in the aggregate,
have a Material Adverse Effect, (ii) liens described in the Prospectus and
(iii) liens under the Company's revolving credit facility, the Company's 7
3/4% debentures due 2023 and a lien in favor of Mr. Calvin Klein. Any real
property and other property held under lease by the Company or any such
subsidiary are held under valid, subsisting and enforceable leases, with no
exceptions except as would not, individually or in the aggregate, have a
Material Adverse Effect.
6
(q) The Company and each of its subsidiaries carry or are entitled to
the benefits of insurance in such amounts as, in the reasonable judgment of
the Company, are sufficient for the businesses in which they are engaged
and, except as would not have a Material Adverse Effect, all such insurance
is in full force and effect.
(r) Except as disclosed in the Prospectus, there are no pending
actions, suits, proceedings or investigations against or, to the Company's
knowledge, affecting the Company, any of its subsidiaries or any of their
respective properties, assets or operations that would reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect, or would reasonably be expected to materially and adversely affect
the ability of the Company to perform its obligations under this Agreement;
and, to the Company's knowledge, no such actions, suits or proceedings are
threatened.
(s) Except as would not, individually or in the aggregate, have a
Material Adverse Effect, no labor disturbance by the employees of the
Company or any of its subsidiaries exists or, to the knowledge of the
Company, is threatened.
(t) Except as would not, individually or in the aggregate, have a
Material Adverse Effect, the Company and each of its subsidiaries have
filed on a timely basis, or caused to be filed on a timely basis, in each
case, taking into account extensions, any and all tax returns required to
be filed by them under applicable law, which returns are complete and
correct in all material respects. Neither the Company nor any of its
subsidiaries is in default in the payment of any taxes, except as would
not, individually or in the aggregate, have a Material Adverse Effect.
(u) Neither the Company nor any of its Material Subsidiaries is (i) in
violation of its charter or by-laws, except (in the case of such Material
Subsidiaries only) as would not have a Material Adverse Effect, or (ii)
except as would not have a Material Adverse Effect, in default in the
performance of any obligation, agreement, covenant or condition contained
in any indenture, loan agreement, mortgage, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or their respective property
is bound.
(v) The Company is not an open-end investment company, unit investment
trust or face-amount certificate company that is or is required to be
registered under Section 8 of the U.S. Investment Company Act of 1940 (the
"INVESTMENT COMPANY Act"), and the Company is not and, as of the Delivery
Date will not be an "investment company" as defined in the Investment
Company Act.
(w) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, there has not been a Material Adverse Effect.
(x) The Company and its subsidiaries make and keep accurate books and
records and maintain a system of internal accounting controls over
financial reporting that the Company believes are sufficient to provide
reasonable assurance that transactions are properly authorized and recorded
and detailed records are kept which accurately and
7
fairly reflect financial activities, so as to permit the preparation of the
Company's consolidated financial statements in conformity with accounting
principles generally accepted in the United States.
(y) The Company and each of its subsidiaries have established and
maintain disclosure controls and procedures, such disclosure controls and
procedures are designed in a manner the Company believes sufficient to
ensure that the information required to be disclosed by the Company and its
subsidiaries in the reports they file or submit under the Exchange Act is
accumulated and communicated to the management of the Company and its
subsidiaries, including their respective principal executive officers and
principal financial officers, as appropriate and to the extent required by
the Rules and Regulations, to allow timely decisions regarding required
disclosure to be made and such disclosure controls and procedures are
effective in all material respects to perform the functions for which they
were established.
(z) Since the date of the most recent balance sheet of the Company and
its consolidated subsidiaries reviewed or audited by Ernst & Young LLP and
the audit committee of the board of directors of the Company, (i) the
Company has not been advised of (A) any significant deficiencies in the
design or operation of internal controls that could adversely affect the
ability of the Company and each of its subsidiaries to record, process,
summarize and report financial data, or any material weaknesses in internal
controls and (B) any fraud, whether or not material, that involves
management or other employees who have a significant role in the internal
controls of the Company and each of its subsidiaries, and (ii) since that
date, to the Company's knowledge, there have been no significant changes in
internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.
(aa) The Company has not distributed and, prior to the later to occur
of any Delivery Date and completion of the distribution of the Stock, will
not distribute any offering material in connection with the offering and
sale of the Stock other than the Preliminary Prospectus and the Prospectus.
(bb) The Company has not taken and will not take, directly or
indirectly, any action designed to or that has constituted or that could
reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the shares of the Stock.
(cc) The Stock has been approved for listing, subject to official
notice of issuance, on the New York Stock Exchange.
(dd) The Company and its subsidiaries possess certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them, except where
the failure to possess such certificates, authorities or permits would not,
individually or in the aggregate, have a Material Adverse Effect. Neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if
8
determined adversely to the Company or any of its subsidiaries, would,
individually or in the aggregate, have a Material Adverse Effect.
(ee) Except as would not, individually or in the aggregate, have a
Material Adverse Effect, or except as disclosed in the Prospectus
(including, without limitation, such disclosure as to the ownership of the
Calvin Klein brands by the Calvin Klein Trademark Trust): (i) the Company
or one if its subsidiaries own, or have a valid license to use on
reasonable terms, patents, patent rights, 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 and Internet domain names or other
intellectual property (collectively, "INTELLECTUAL PROPERTY") necessary for
the conduct of the business of the Company and its subsidiaries as now
conducted; and (ii) neither the Company nor any of its subsidiaries (X) to
the knowledge of the Company, is in violation or infringement of, or has
violated or infringed, any intellectual property rights of any other person
or (Y) 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 reasonably be
expected to render any Intellectual Property invalid or inadequate to
protect the interest of the Company or any of its subsidiaries therein. The
Company or one of its subsidiaries own the owned Intellectual Property free
and clear of any liens or encumbrances, except as disclosed in the
Prospectus, liens under the Company's revolving credit facility, liens
under the Company's 7 3/4% debentures due 2023 and a lien in favor of Mr.
Calvin Klein. As of the date of this Agreement there are not, and as of the
date of the Closing there will not be, any events which are reasonably
likely to result in a foreclosure on any such liens.
(ff) Neither the Company nor any of its Material Subsidiaries is in
violation of any statute, law, rule, regulation, judgment, order or decree
(including, without limitation environmental laws) applicable to it of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over it, except as would
not, individually or in the aggregate, have a Material Adverse Effect.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Stock shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE SELLING
STOCKHOLDERS. Each Selling Stockholder, severally and not jointly, represents,
warrants and agrees that:
(a) The Selling Stockholder has placed in custody under a custody
agreement (the "CUSTODY AGREEMENT" and, together with all other similar
agreements executed by the other Selling Stockholders, the "CUSTODY
AGREEMENTS") with The Bank of New York, as custodian (the "CUSTODIAN"), for
delivery under this Agreement, certificates of Series B convertible
preferred stock in negotiable form (with signature notarized or guaranteed
by a participant in the Securities Transfer Agents Medallion Program, the
New York Stock Exchange Medallion Signature Program or the Stock Exchange
9
Medallion Program) representing the shares of Series B convertible
preferred stock to be converted into Stock to be sold by the Selling
Stockholder hereunder.
(b) The Selling Stockholder has, and immediately prior to the
applicable Delivery Date the Selling Stockholder will have, good and valid
title to, or a valid "security entitlement" within the meaning of Section
8-501 of the New York Uniform Commercial Code (the "UCC") in respect of,
the shares of Series B convertible preferred stock to be converted into
Stock to be sold by the Selling Stockholder hereunder, free and clear of
all liens, encumbrances, equities or claims, except for any liens,
encumbrances, equities or claims arising hereunder or under the Custody
Agreement;
(c) Upon payment for the Stock to be sold by such Selling Stockholder,
delivery of such Stock, as directed by the Underwriters, to Cede & Co.
("CEDE") or such other nominee as may be designated by The Depository Trust
Company ("DTC"), registration of such Stock in the name of Cede or such
other nominee and the crediting of such Stock on the books of DTC to
securities accounts of the Underwriters (assuming that neither DTC nor any
such Underwriter has notice of any adverse claim (within the meaning of
Section 8-105 of the UCC to such Stock), (i) DTC shall be a "protected
purchaser" of such Stock within the meaning of Section 8-303 of the UCC,
(ii) under Section 8-501 of the UCC, the Underwriters will acquire a valid
security entitlement in respect of such Stock and (iii) no action based on
any "adverse claim", within the meaning of Section 8-102 of the UCC, to
such Stock may be asserted against the Underwriters with respect to such
security entitlement. For purposes of this representation, such Selling
Stockholder may assume that when such payment, delivery and crediting
occur, (A) such Stock will have been registered in the name of Cede or
another nominee designated by DTC, in each case on the Company's share
registry in accordance with its certificate of incorporation, bylaws and
applicable law, (B) DTC will be registered as a "clearing corporation"
within the meaning of Section 8-102 of the UCC and (C) appropriate entries
to the accounts of the several Underwriters on the records of DTC will have
been made pursuant to the UCC.
(d) The Selling Stockholder has duly and irrevocably executed and
delivered a power of attorney (the "POWER OF ATTORNEY" and, together with
all other similar agreements executed by the other Selling Stockholders,
the "POWERS OF ATTORNEY") appointing the Custodian and Messrs. Gregory M.
Case, John F. Megrue and Christopher K. Reilly as attorneys-in-fact, with
full power of substitution, and with full authority (exercisable by any one
or more of them) to execute and deliver this Agreement and to take such
other action as may be necessary or desirable to carry out the provisions
hereof on behalf of the Selling Stockholder.
(e) The Selling Stockholder has full right, power and authority,
corporate or otherwise, to enter into this Agreement, the Power of Attorney
and the Custody Agreement. The execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement by the Selling
Stockholder and the consummation by the Selling Stockholder of the
transactions contemplated hereby and thereby do not and will not (i)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan
10
agreement, license or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound or to
which any of the property or assets of the Selling Stockholder is subject,
(ii) result in any violation of the provisions of the charter or by-laws
(or similar organizational documents) of the Selling Stockholder or (iii)
result in any violation of any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Selling Stockholder or the property or assets of the Selling Stockholder,
except in the case of clauses (i) and (iii) for such conflicts, breaches,
violations or defaults as would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of
such Selling Stockholder to consummate the transactions contemplated by
this Agreement.
(f) Except for such consents, approvals, authorizations, orders,
filings, registrations or qualifications as may be required under the
Securities Act, the rules and regulations of the New York Stock Exchange or
applicable state securities laws in connection with the purchase and sale
of the Stock by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any court or governmental agency
or body having jurisdiction over the Selling Stockholder or the property or
assets of the Selling Stockholder is required for the execution, delivery
and performance of this Agreement, the Power of Attorney or the Custody
Agreement by the Selling Stockholder and the consummation by the Selling
Stockholder of the transactions contemplated hereby and thereby.
(g) This Agreement has been duly and validly authorized, executed and
delivered by or on behalf of the Selling Stockholder.
(h) The Power of Attorney and the Custody Agreement have been duly and
validly authorized, executed and delivered by or on behalf of the Selling
Stockholder and constitute valid and legally binding obligations of the
Selling Stockholder enforceable against the Selling Stockholder in
accordance with their terms, subject to (i) the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, (ii)
general equitable principles (whether considered in a proceeding in equity
or at law) and (iii) an implied covenant of good faith and fair dealing.
(i) The Selling Stockholder has not taken and will not take, directly
or indirectly, any action that is designed to or which has constituted or
which could reasonably be expected to cause or result in the stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the shares of the Stock.
(j) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Selling Stockholder and any person
that would give rise to a valid claim against the Selling Stockholder or
any Underwriter for a brokerage commission, finder's fee or other like
payment in connection with the issuance and sale of the Stock contemplated
by this Agreement.
(k) The Selling Stockholder has not distributed and, prior to the
later to occur of any Delivery Date and completion of the distribution of
the Stock, will not distribute
11
any offering material in connection with the offering and sale of the Stock
other than the Preliminary Prospectus and the Prospectus.
(l) The Selling Stockholder is not aware of any material information
concerning the Company that is not set forth in the Registration Statement
and the Prospectus and which has prompted such Selling Stockholder to sell
shares of the Stock.
(m) The Registration Statement, at the Effective Time and on the
applicable Delivery Date, and the Prospectus, as of its date and on the
applicable Delivery Date, do not and will not contain an untrue statement
of a material fact with respect to such Selling Stockholder or omit to
state a material fact with respect to such Selling Stockholder required to
be stated therein or necessary to make the statements therein (in the case
of the Prospectus, in the light of the circumstances under which they were
made) not misleading, which untrue statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Selling Stockholder specifically for
inclusion therein.
Any certificate signed by any officer of any Selling Stockholder and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Stock shall be deemed a representation and warranty by
such Selling Stockholder, as to matters covered thereby, to each Underwriter.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, each Firm Selling Stockholder hereby agrees to
sell the number of shares of the Firm Stock set forth opposite its name in
SCHEDULE 2-A hereto, severally and not jointly, to the several Underwriters, and
each of the Underwriters, severally and not jointly, agrees to purchase the
number of shares of the Firm Stock set forth opposite that Underwriter's name in
SCHEDULE 1 hereto. Each Underwriter shall be obligated to purchase from each
Firm Selling Stockholder, that number of shares of the Firm Stock that
represents the same proportion of the number of shares of the Firm Stock to be
sold by each Firm Selling Stockholder as the number of shares of the Firm Stock
set forth opposite the name of such Underwriter in SCHEDULE 1 represents of the
total number of shares of the Firm Stock to be purchased by all of the
Underwriters pursuant to this Agreement. The respective purchase obligations of
the Underwriters with respect to the Firm Stock shall be rounded among the
Underwriters to avoid fractional shares, as the Representatives may determine.
In addition, each Option Selling Stockholder grants to the
Underwriters an option to purchase up to the number of shares of Option Stock
set forth opposite such Option Selling Stockholder's name in SCHEDULE 2-B
hereto, severally and not jointly. Such option is granted in the event that the
Underwriters sell more than the number of shares of Firm Stock and is
exercisable as provided in Section 5 hereof. Any such election to purchase
Option Stock shall be made in proportion to the maximum number of shares of
Option Stock to be sold by each Option Selling Stockholder as set forth in
SCHEDULE 2 hereto. Each Underwriter agrees, severally and not jointly, to
purchase the number of shares of Option Stock (subject to such adjustments to
eliminate fractional shares as the Representatives may determine) that bears the
same proportion to the total number of shares of Option Stock to be sold on such
Delivery Date as the number of
12
shares of Firm Stock set forth in SCHEDULE 1 hereto opposite the name of such
Underwriter bears to the total number of shares of Firm Stock.
The price of both the Firm Stock and any Option Stock purchased by the
Underwriters shall be $31.276 per share.
The Selling Stockholders shall not be obligated to deliver any of the Firm
Stock or Option Stock, as the case may be, to be delivered on the applicable
Delivery Date, except upon payment for all such Stock to be purchased on such
Delivery Date as provided herein.
4. OFFERING OF STOCK BY THE UNDERWRITERS. Upon authorization by the
Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
5. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of and payment for the
Firm Stock shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue of
the Americas, New York, NY 10019 at 10:00 A.M., New York City time, on the
fourth full business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between the Representatives
and the Company. This date and time are sometimes referred to as the "Initial
Delivery Date." Delivery of the Firm Stock shall be made to the Representatives
for the account of each Underwriter against payment by the several Underwriters
through the Representatives of the respective aggregate purchase prices of the
Firm Stock being sold by the Firm Selling Stockholders to or upon the order of
the Firm Selling Stockholders by wire transfer in immediately available funds to
the accounts specified by the Firm Selling Stockholders. Time shall be of the
essence, and delivery at the time specified pursuant to this Agreement is a
further condition of the obligation of each Underwriter hereunder. Delivery of
the Firm Stock shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise instruct.
The option granted in Section 3 will expire 30 days after the date of this
Agreement and may be exercised in whole or from time to time in part by written
notice being given to the Company and the Option Selling Stockholders by the
Representatives; PROVIDED that if such date falls on a day that is not a
business day, the option granted in Section 3 will expire on the next succeeding
business day. Such notice shall set forth the aggregate number of shares of
Option Stock as to which the option is being exercised, the names in which the
shares of Option Stock are to be registered, the denominations in which the
shares of Option Stock are to be issued and the date and time, as determined by
the Representatives, when the shares of Option Stock are to be delivered;
PROVIDED, HOWEVER, that this date and time shall not be earlier than the Initial
Delivery Date nor earlier than the second business day after the date on which
the option shall have been exercised nor later than the fifth business day after
the date on which the option shall have been exercised. The date and time the
shares of Option Stock are delivered are sometimes referred to as an "OPTION
STOCK DELIVERY DATE," and the Initial Delivery Date and any Option Stock
Delivery Date are sometimes each referred to as a "DELIVERY DATE."
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New
13
York City time, on such Option Stock Delivery Date. Delivery of the Option Stock
shall be made to the Representatives for the account of each Underwriter against
payment by the several Underwriters through the Representatives of the
respective aggregate purchase prices of the Option Stock being sold by the
Option Selling Stockholders to or upon the order of the Option Selling
Stockholders by wire transfer in immediately available funds to the accounts
specified by the Option Selling Stockholders. Time shall be of the essence, and
delivery at the time specified pursuant to this Agreement is a further condition
of the obligation of each Underwriter hereunder. Delivery of the Firm Stock
shall be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than Commission's close of business on the
second business day following the execution and delivery of this Agreement;
to make no further amendment or any supplement to the Registration
Statement or to the Prospectus prior to the last Delivery Date except as
permitted herein; to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Stock; to advise the Representatives, promptly
after it receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use promptly reasonable
best efforts to obtain its withdrawal;
(b) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement and the computation of per share earnings), (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus and (iii) any document incorporated by reference in the
Prospectus (excluding exhibits thereto); and, if the delivery of a
prospectus is required at any time in connection with the offering or sale
of the Stock and if at such time any events shall have occurred as a result
of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not
14
misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, to notify the Representatives and
counsel for the Underwriters upon their reasonable request to file such
document and to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as the Representatives may from
time to time reasonably request of an amended or supplemented Prospectus
that will correct such statement or omission or effect such compliance;
(c) With respect to the Stock or in connection with the transactions
contemplated hereby, to file promptly with the Commission any amendment to
the Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the Representatives,
be required by the Securities Act or requested by the Commission;
(d) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424(b) of the Rules and Regulations, to furnish a copy
thereof to the Representatives and counsel for the Underwriters and obtain
the consent (not to be unreasonably withheld or delayed) of the
Representatives to the filing;
(e) As soon as practicable, to make generally available to the
Company's security holders and to deliver to the Representatives an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Securities Act and the Rules
and Regulations (including, at the option of the Company, as permitted by
Rule 158);
(f) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Stock;
PROVIDED that in connection therewith the Company shall not be required to
(i) qualify as a foreign corporation in any jurisdiction in which it would
not otherwise be required to so qualify or (ii) file a general consent to
service of process in any such jurisdiction;
(g) For a period of 90 days from the date of the Prospectus (the
"LOCK-UP PERIOD"), not to, directly or indirectly, (1) offer for sale,
sell, pledge or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the
disposition by any person at any time in the future of) any shares of
Common Stock or securities convertible into or exchangeable for Common
Stock (other than shares issued pursuant to employee benefit plans,
qualified stock option plans or other employee compensation plans existing
on the date hereof or pursuant to currently outstanding options, warrants
or rights or other securities convertible into or exchangeable for Common
Stock), or sell or grant options, rights or warrants with respect to any
shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than the grant of options pursuant to option plans and
associated rights under the
15
Company's preferred stock rights agreement, each existing on the date
hereof), (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or otherwise, (3)
file or cause to be filed a registration statement with respect to any
shares of Common Stock or securities convertible, exercisable or
exchangeable into Common Stock or any other securities of the Company or
(4) publicly disclose the intention to do any of the foregoing, in each
case without the prior written consent of Lehman Brothers Inc. and Credit
Suisse First Boston LLC, on behalf of the Underwriters, and to use
reasonable best efforts to cause each person set forth on SCHEDULE 4 hereto
to furnish to the Representatives, prior to the Initial Delivery
Date, a letter or letters, substantially in the form of EXHIBIT A hereto
(the "LOCK-UP AGREEMENTS");
7. FURTHER AGREEMENTS OF THE SELLING STOCKHOLDERS. Each Selling
Stockholder agrees:
(a) During the Lock-Up Period, not to, directly or indirectly, (1)
offer for sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device that is designed to, or could be expected to, result
in the disposition by any person at any time in the future of) any shares
of Common Stock or securities convertible into or exchangeable for Common
Stock (other than the Stock), (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or
otherwise, (3) cause to be filed a registration statement with respect to
any shares of Common Stock or securities convertible, exercisable or
exchangeable into Common Stock or any other securities of the Company or
(4) publicly disclose the intention to do any of the foregoing, in each
case without the prior written consent of Lehman Brothers Inc. and Credit
Suisse First Boston LLC, on behalf of the Underwriters.
(b) That the Stock to be sold by the Selling Stockholder hereunder,
which is represented by the certificates held in custody for the Selling
Stockholder, is subject to the interest of the Underwriters and the other
Selling Stockholders thereunder, that the arrangements made by the Selling
Stockholder for such custody are to that extent irrevocable, and that the
obligations of the Selling Stockholder hereunder shall not be terminated by
any act of the Selling Stockholder, by operation of law or the occurrence
of any other event.
(c) To deliver to the Representatives prior to the Initial Delivery
Date a properly completed and executed United States Treasury Department
Form W-8 (if the Selling Stockholder is a non-United States person and does
not have a qualified intermediary) or Form W-9 (if the Selling Stockholder
or its nominee or general partner which is a qualified intermediary is a
United States person).
8. EXPENSES. The Company agrees to pay all costs, expenses, fees and stock
transfer taxes incident to and in connection with (a) the authorization,
issuance, sale and delivery
16
of the Stock (other than taxes that are the responsibility of the Selling
Stockholders; (b) the preparation, printing and filing under the Securities Act
of the Registration Statement and any amendments and exhibits thereto, any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus; (c) the distribution of the Registration Statement as originally
filed and each amendment thereto and any post-effective amendments thereof
(including, in each case, exhibits), any Preliminary Prospectus, the Prospectus
and any amendment or supplement to the Prospectus or any document incorporated
by reference therein, all as provided in this Agreement; (d) the production and
distribution of this Agreement and any other related documents in connection
with the offering, purchase, sale and delivery of the Stock; (e) the delivery
and distribution of the Custody Agreements and the Powers of Attorney and the
reasonable fees and expenses of the Custodian (and any other attorney-in-fact);
(f) the listing of the Stock on the New York Stock Exchange; (g) the
qualification of the Stock under the securities laws of the several
jurisdictions as provided in Section 6(g) and the preparation, printing and
distribution of a Blue Sky Memorandum (including related reasonable fees and
expenses of counsel to the Underwriters); (h) the investor presentations on any
"road show" undertaken in connection with the marketing of the Stock, including,
without limitation, travel and lodging expenses of the representatives and
officers of the Company and the cost of any aircraft chartered in connection
with the road show; PROVIDED that aircraft expenses shall be shared by the
Company, Lehman Brothers Inc. and Credit Suisse First Boston LLC; (i) all other
costs and expenses incident to the performance of the obligations of the Company
under this Agreement; PROVIDED that, except as provided in this Section 8 and in
Section 13, the Underwriters shall pay their own costs and expenses, including
the costs and expenses of their counsel, any transfer taxes on the Stock which
they may sell and the expenses of advertising any offering of the Stock made by
the Underwriters. For the avoidance of doubt, (i) any and all underwriting
discounts, selling commissions and similar fees of the Underwriters shall be
paid by the Selling Stockholders and not by the Company and (ii) certain other
expenses of the Selling Stockholder shall be reimbursed by the Company pursuant
to that certain Registration Rights Agreement, dated as of February 12, 2003, by
and among the parties thereto (including the Company and the Selling
Stockholders) (the "REGISTRATION RIGHTS AGREEMENT.")
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of
the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and the
Selling Stockholders contained herein, or the accuracy in all material respects
where such representations and warranties are not qualified by materiality or
Material Adverse Effect, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a); no stop order suspending the effectiveness of
the Registration Statement or preventing or suspending the use of the
Prospectus shall have been issued and no proceeding for such purpose shall
have been initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied with or
otherwise resolved.
17
(b) No Underwriter shall have discovered or disclosed to the Company
on or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the reasonable opinion of Dewey Ballantine
LLP, counsel for the Underwriters, is material or omits to state a fact
which, in the reasonable opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Custody Agreements,
the Powers of Attorney, the Stock, the Registration Statement and the
Prospectus, and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company and the
Selling Stockholders shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon
such matters.
(d) Wachtell, Lipton, Rosen & Katz shall have furnished to the
Representatives its written opinion, as counsel to the Company, addressed
to the Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Representatives, substantially in the form
attached hereto as EXHIBIT B-1.
(e) Mark D. Fischer, Esq., General Counsel of the Company, shall have
furnished to the Representatives his written opinion addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Representatives, substantially in the form attached
hereto as EXHIBIT B-2
(f) (i) Dechert LLP shall have furnished to the Representatives its
written opinion, as counsel to certain of the Selling Stockholders,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, substantially in
the form attached hereto as EXHIBIT B-3; (ii) SJ Berwin shall have
furnished to the Representatives its written opinion, as counsel to certain
of the Selling Stockholders, addressed to the Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory to the
Representatives, substantially in the form attached hereto as EXHIBIT B-4,
and (iii) NautaDutilh N.V. shall have furnished to the Representatives its
written opinion, as counsel to certain of the Selling Stockholders,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, substantially in
the form attached hereto as EXHIBIT B-5.
(g) The Representatives shall have received from Dewey Ballantine LLP,
counsel for the Underwriters, such opinion or opinions, dated such Delivery
Date, with respect to the issuance and sale of the Stock, the Registration
Statement, the Prospectus and other related matters as the Representatives
may reasonably require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
18
(h) At the time of execution of this Agreement, the Representatives
shall have received, from Ernst & Young LLP, a letter, in form and
substance satisfactory to the Representatives, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act and
are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a
date not more than three days prior to the date hereof), the conclusions
and findings of such firm with respect to the financial information and
other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(i) With respect to the letter of Ernst & Young LLP referred to in the
preceding paragraph and delivered to the Representatives concurrently with
the execution of this Agreement (the "INITIAL LETTER"), the Company shall
have furnished to the Representatives a letter (the "BRING-DOWN LETTER") of
such accountants, addressed to the Underwriters and dated such Delivery
Date (i) confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than three
days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(j) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chief Executive Officer or
President and a Vice-President or its Executive Vice President, Finance
stating that, to their knowledge after reasonable investigation:
(i) The representations and warranties of the Company in Section
1 are true and correct on and as of such Delivery Date, or true and
correct in all material respects where such representations and
warranties are not qualified by materiality or Material Adverse
Effect, and the Company has complied in all material respects with all
its agreements contained herein and satisfied all the conditions on
its part to be performed or satisfied hereunder at or prior to such
Delivery Date; and
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for that
purpose have been instituted or, to the knowledge of such officers,
threatened;
(iii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion, (A) the Registration Statement,
as of the
19
Effective Time and as of such Delivery Date, and the Prospectus, as of
its date and as of such Delivery Date, did not and do not contain any
untrue statement of a material fact and did not and do not omit to
state a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in the
light of the circumstances under which they were made) not misleading,
and (B) since the Effective Time, no event has occurred that is
required to be set forth in a supplement or amendment to the
Registration Statement or the Prospectus that has not been so set
forth.
(k) Each Selling Stockholder (or the Custodian or one or more
attorneys-in-fact on behalf of the Selling Stockholders) shall have
furnished to the Representatives on such Delivery Date a certificate, dated
such Delivery Date, signed by, or on behalf of, the Selling Stockholder (or
the Custodian or one or more attorneys-in-fact) stating that the
representations and warranties of the Selling Stockholder contained herein
are true and correct on and as of such Delivery Date, or true and correct
in all material respects where such representations and warranties are not
qualified by materiality or Material Adverse Effect, and that the Selling
Stockholder has complied in all material respects with all its agreements
contained herein and has satisfied all the conditions on its part to be
performed or satisfied hereunder at or prior to such Delivery Date.
(l) (i) neither the Company nor any of its Material Subsidiaries shall
have sustained, since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree or (ii) except for the grant
of options or issuance of shares of Common Stock pursuant to its existing
stock incentive plans, and borrowings and letters of credit issued under
the Company's existing revolving credit facility, since such date there
shall not have been any change in the capital stock or long-term debt of
the Company or any of its Material Subsidiaries or any change, or any
development involving a prospective change, in or affecting the financial
condition, business, properties or results of operations of the Company and
its subsidiaries taken as a whole, the effect of which, in any such case
described in clause (i) or (ii), is, in the reasonable judgment of Lehman
Brothers Inc. and Credit Suisse First Boston LLC, so material and adverse
as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Stock being delivered on such Delivery Date
on the terms and in the manner contemplated in the Prospectus.
(m) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the Company
on any exchange or in the over-the-counter market, shall have been
suspended or materially limited or the settlement of such trading generally
shall have been materially disrupted or minimum prices shall have been
established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by federal
or state authorities and (iii) the United States shall have become engaged
in hostilities (except for existing hostilities in
20
Iraq and Afghanistan), there shall have been an escalation in existing
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States, or there
shall have occurred such a material adverse change in general economic,
political or financial conditions, including, without limitation, as a
result of terrorist activities after the date hereof (or the effect of
international conditions on the financial markets in the United States
shall be such), as to make it, in the judgment of Lehman Brothers Inc. and
Credit Suisse First Boston LLC, impracticable or inadvisable to proceed
with the public offering or delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(n) The New York Stock Exchange shall have approved the Stock for
listing, subject only to official notice of issuance.
(o) The Lock-Up Agreements between the Representatives and the
executive officers of the Company set forth on SCHEDULE 4, delivered to the
Representatives on or before the date of this Agreement, shall be in full
force and effect on such Delivery Date.
(p) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Company's debt
securities or preferred stock by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities or preferred stock.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
10. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Underwriter,
its directors, members, managers, partners, trustees, officers and
employees, affiliates and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act (each a "UNDERWRITER
INDEMNIFIED PARTY"), from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, but not
limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Stock) to which such Underwriter Indemnified Party
may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, including any amendment or supplement thereto or (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, any material fact required to be stated therein or necessary to
make the statements therein (in the case of the Preliminary Prospectus and
the Prospectus, in the light of the circumstances under which they were
made) not misleading and shall reimburse each
21
Underwriter Indemnified Party promptly upon demand, but in no event later
than 30 days following such demand, for any reasonable legal or other
expenses incurred by that Underwriter Indemnified Party in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; PROVIDED,
HOWEVER, that upon a final determination by a court of competent
jurisdiction that any Underwriter Indemnified Party was not entitled to
payment of such expenses by the Company pursuant to this subsection (a),
such Underwriter Indemnified Party shall reimburse such payment to the
Company; PROVIDED FURTHER, HOWEVER, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein, which
information consists solely of the information specified in Section 10(f).
Notwithstanding the foregoing, the indemnity agreement contained in this
subsection (a) with respect to any Preliminary Prospectus or Prospectus
shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) who its shall be established failed to
deliver the Prospectus to the person asserting any losses, claims, damages,
liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact required to be stated in such Preliminary Prospectus or
Prospectus or necessary to make the statements in such Preliminary
Prospectus or Prospectus in light of the circumstances in which they were
made not misleading, if (x) the Company shall have made available copies of
the Prospectus to the several Underwriters in the requisite quantity and
sufficiently in advance of the appropriate Delivery Date to permit proper
delivery of the Prospectus to such person on or prior to the appropriate
Delivery Date; (y) such misstatement or omission or alleged misstatement or
omission was cured in the Prospectus and the Prospectus was required by law
to be delivered to such person at or prior to the written confirmation of
the sale of Stock to such person and (z) the timely delivery of the
Prospectus to such person would have constituted a complete defense to the
losses, claims, damages, liabilities and judgments asserted by such person.
The foregoing indemnity agreement is in addition to any liability which the
Company may otherwise have to any Underwriter Indemnified Party except
that, with respect solely to the matters covered by this Agreement, the
foregoing indemnity supersedes any prior indemnity agreement or arrangement
pursuant to which the Company may otherwise have liability to any
Underwriter Indemnified Party.
(b) Each Selling Stockholder severally and not jointly, in proportion
to the number of shares of Stock to be sold by each of them hereunder,
shall indemnify and hold harmless each Underwriter Indemnified Party from
and against any loss, claim, damage or liability, joint or several, or any
actions in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Stock), to
which that Underwriter Indemnified Person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the
22
Prospectus including any amendment or supplement thereto, or (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or
necessary to make the statements therein (in the case of the Preliminary
Prospectus and Prospectus, in the light of the circumstances under which
they were made) not misleading, or (iii) any breach of any representation
or warranty of the Selling Stockholders in this Agreement (other than
section 2(c)); PROVIDED, HOWEVER, that, with respect to the indemnities
provided in and reimbursement obligations in connection with clauses (i)
and (ii) above, a Selling Stockholder shall be liable only with respect to
written information furnished to the Company by or on behalf of such
Selling Stockholder specifically for inclusion in the Registration
Statement, Preliminary Prospectus or Prospectus, and shall reimburse each
Underwriter Indemnified Party promptly upon demand, but in no event later
than 30 days following such demand, for any legal or other expenses
reasonably incurred by that Underwriter Indemnified Person in connection
with investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are incurred;
PROVIDED FURTHER, HOWEVER, that upon a final determination by a court of
competent jurisdiction that any Underwriter Indemnified Party was not
entitled to payment of such expenses by such Selling Stockholder pursuant
to this subsection (b), such Underwriter Indemnified Party shall reimburse
such payment to such Selling Stockholder. Notwithstanding the foregoing,
the indemnity agreement contained in this subsection (b) with respect to
any Preliminary Prospectus or Prospectus shall not inure to the benefit
of any Underwriter (or any person controlling such Underwriter) who
it shall be established failed to deliver the Prospectus to the person
asserting any losses, claims, damages, liabilities and judgments caused by
any untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact required to be stated
in such Preliminary Prospectus or Prospectus or necessary to make the
statements in such Preliminary Prospectus or Prospectus in light of the
circumstances in which they were made not misleading, in each case solely
with respect to written information furnished to the Company by or on
behalf of such Selling Stockholder specifically for inclusion therein, if
(x) copies of the Prospectus shall have been furnished to the several
Underwriters in the requisite quantity and sufficiently in advance of the
appropriate Delivery Date to permit proper delivery of the Prospectus to
such person on or prior to the appropriate Delivery Date; (y) such
misstatement or omission or alleged misstatement or omission with respect
to written information furnished to the Company by or on behalf of such
Selling Stockholder specifically for inclusion therein was cured in the
Prospectus and the Prospectus was required by law to be delivered to such
person at or prior to the written confirmation of the sale of Stock to such
person and (z) the timely delivery of the Prospectus to such person would
have constituted a complete defense to the losses, claims, damages,
liabilities and judgments asserted by such person. The foregoing indemnity
agreement is in addition to any liability that the Selling Stockholders may
otherwise have to any Underwriter Indemnified Party.
(c) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, each Selling Stockholder, their respective
directors, members, managers, partners, trustees, officers, employees, and
affiliates, and each person, if any, who controls the Company or such
Selling Stockholder within the meaning of Section 15
23
of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company, such Selling Stockholder or any such director, member, manager,
partner, trustee, officer, employee, affiliate or controlling person may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or (ii) the omission
or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, any material fact required to be stated therein or necessary to
make the statements therein not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically for
inclusion therein, which information is limited to the information set
forth in Section 10(f) and shall reimburse the Company, such Selling
Stockholder or any such director, member, manager, partner, trustee,
officer, employee, affiliate or controlling person promptly upon demand,
but in no event later that 30 days following such demand, for any legal or
other expenses reasonably incurred by the Company, such Selling Stockholder
or any such director, member, manager, partner, trustee, officer, employee,
affiliate or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; PROVIDED, HOWEVER, that
upon a final determination by a court of competent jurisdiction that the
Company, such Selling Stockholder or any such director, member, officer,
employee, affiliate or controlling person was not entitled to payment of
such expenses by such Underwriter pursuant to this subsection (a), the
Company, such Selling Stockholder or any such director, member, officer,
affiliate, employee or controlling person shall reimburse such payment to
such Underwriter. The foregoing indemnity agreement is in addition to any
liability that any Underwriter may otherwise have to the Company, such
Selling Stockholder or any such director, officer, employee or controlling
person. Notwithstanding the foregoing, the Underwriters shall not be liable
for any losses, claims, damages or liabilities arising solely out of or
solely based on the Company's failure to perform its obligations under
Section 6(a) of this Agreement.
(d) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 10, notify the
indemnifying party in writing of the claim or the commencement of that
action; PROVIDED, HOWEVER, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 10 except to the extent it has been materially prejudiced by such
failure and, PROVIDED, FURTHER, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 10. If any such claim
or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the
24
defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of
its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 10 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than
reasonable costs of investigation and reasonable costs incurred for actions
taken at the indemnifying party's request. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed in writing to the contrary; (ii) the
indemnifying party has failed within a reasonable time to retain counsel
reasonably satisfactory to the indemnified party; (iii) the indemnified
party shall have reasonably concluded that there may be legal defenses
available to it that are different from or in addition to those available
to the indemnifying party; or (iv) the named parties in any such proceeding
(including any impleaded parties) included both the indemnifying party and
the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. It is understood and agreed that the indemnifying
party shall not, in connection with any proceeding or related proceeding in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all
indemnified parties, and that all such fees and expenses shall be
reimbursed promptly, but in no event later than 30 days, following demand
from the indemnified parties for reimbursement of such fees and expenses as
they are incurred; PROVIDED, HOWEVER, that upon a final determination by a
court of competent jurisdiction that any indemnified party was not entitled
to payment of such expenses by the indemnifying party pursuant to this
subsection (d) (including because such party is not entitled to
indemnification with respect to such matter pursuant to this Section 10),
such indemnified party shall promptly reimburse such payment to the
indemnifying party. Any such separate firm for any Underwriter, its
affiliates, directors and officers and each person, if any, who controls
such Underwriter within the meaning of Section 15 of the Securities Act
shall be designated in writing by Lehman Brothers Inc. and Credit Suisse
First Boston LLC, any such separate firm for the Company, its directors and
officers and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act shall be designated in writing
by the Company and any such separate firm for any Selling Stockholder, its
directors and officers and each person, if any, who controls such Selling
Stockholder within the meaning of Section 15 of the Securities Act shall be
designated in writing by such Selling Stockholder. Each indemnified party
shall use reasonable efforts to cooperate with the indemnifying party in
the defense of any such action or claim. No indemnifying party shall,
without the prior written consent of the indemnified party (which consent
shall not be unreasonably withheld), effect any settlement or compromise or
consent to the entry of judgment with respect to any pending or threatened
action in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party unless such settlement, compromise or consent (A) includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action and (B) does not include
a statement as to or an admission of fault, culpability or failure to act
by or on behalf of any indemnified party. No indemnifying party shall be
liable for any settlement of any such
25
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment in favor of the plaintiff in any such
action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(e) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 10(a), 10(b) or 10(c) in respect of any
loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party and to the extent permitted by
applicable law, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action referred to in Section 10(a), 10(b) or 10(c), (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders, on the one hand, and the
Underwriters, on the other, from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Selling Stockholders, on the one hand, and the
Underwriters, on the other, with respect to the statements or omissions
that resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholders,
on the one hand, and the Underwriters, on the other, with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and the Selling
Stockholders, as set forth in the table on the cover page of the
Prospectus, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the
Stock purchased under this Agreement, as set forth in the table on the
cover page of the Prospectus, on the other hand, bear to the total gross
proceeds from the offering of the shares of the Stock under this Agreement,
as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
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, the Selling Stockholders or the Underwriters, the intent of
the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company,
the Selling Stockholders and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 10(e) were to
be 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 into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof, referred to above
in this Section 10(e) shall be deemed to include, for purposes of this
Section 10(e), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 10(e), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the
26
Stock underwritten by it and distributed to the public was offered to the
public exceeds the amount of any damages which such Underwriter has
otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 10(e) are several in
proportion to their respective underwriting obligations and not joint.
(f) The Underwriters severally confirm and the Company and each
Selling Stockholder acknowledges and agrees that the statements with
respect to the public offering of the Stock by the Underwriters set forth
on the cover page of, the second paragraph of the subsection entitled
"Commissions and Expenses" and the subsection entitled "Stabilization,
Short Positions and Penalty Bids" (other than the final paragraph thereof)
appearing under the caption "Underwriting" in, the Prospectus are correct
and constitute the only information concerning such Underwriters furnished
in writing to the Company by or on behalf of the Underwriters specifically
for inclusion in the Registration Statement and the Prospectus.
(g) The Company and each of the Selling Stockholders acknowledge and
agree that indemnification arrangements solely among the Selling
Stockholders and the Company shall be governed by the provisions of Article
III of the Registration Rights Agreement.
(h) Notwithstanding anything to the contrary contained herein, the
liability of any Selling Stockholder for indemnification or contribution
under this Section 10 shall not exceed an amount equal to the number of
shares of Stock sold by the Selling Stockholder hereunder multiplied by the
purchase price per share set forth in Section 3 hereof.
11. DEFAULTING UNDERWRITERS. If, on any Delivery Date, any Underwriter
defaults in the performance of its obligations under this Agreement, the
remaining non-defaulting Underwriters shall be obligated to purchase the Stock
that the defaulting Underwriter agreed but failed to purchase on such Delivery
Date in the respective proportions which the number of shares of the Firm Stock
set forth opposite the name of each remaining non-defaulting Underwriter in
SCHEDULE 1 hereto bears to the total number of shares of the Firm Stock set
forth opposite the names of all the remaining non-defaulting Underwriters in
SCHEDULE 1 hereto; PROVIDED, HOWEVER, that the remaining non-defaulting
Underwriters shall not be obligated to purchase any of the Stock on such
Delivery Date if the total number of shares of the Stock which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such date exceeds
10% of the total number of shares of the Stock to be purchased on such Delivery
Date pursuant to the terms of Section 3. If the foregoing maximum is exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Stock to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the Representatives
do not elect to purchase the shares that the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date,
27
this Agreement (or, with respect to any Option Stock Delivery Date, the
obligation of the Underwriters to purchase, and of the Option Selling
Stockholders to sell, the Option Stock) shall terminate without liability on the
part of any non-defaulting Underwriter or the Company or the Selling
Stockholders, except that the Company will continue to be liable for the payment
of expenses to the extent set forth in Sections 8 and 13. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this Agreement
unless the context requires otherwise, any party not listed in SCHEDULE 1 hereto
that, pursuant to this Section 11, purchases Stock that a defaulting Underwriter
agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Selling Stockholders for damages
caused by its default. If other Underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing Underwriter, either the Representatives
or the Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
12. TERMINATION. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
and the Selling Stockholders prior to delivery of and payment for the Firm Stock
if, prior to that time, any of the events described in Sections 9(l), 9(m) and
9(p) shall have occurred or if the Underwriters shall decline to purchase the
Stock for any reason permitted under this Agreement.
13. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If any Selling Stockholder
shall fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company or a Selling
Stockholder to perform any agreement on its part to be performed, or because any
other condition of the Underwriters' obligations hereunder required to be
fulfilled by the Company or a Selling Stockholder is not fulfilled, the Company
(in the event the Company is the cause of such failure) or a Selling Stockholder
(in the event such Selling Stockholder is the cause of such failure) will
reimburse the Underwriters for all reasonable out-of-pocket expenses (including
reasonable fees and disbursements of counsel) incurred by the Underwriters in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand and presentation of reasonable supporting documentation the Company or a
Selling Stockholder, as the case may be, shall pay the full amount thereof to
the Representatives. If this Agreement is terminated pursuant to Section 11 by
reason of the default of one or more Underwriters, neither the Company nor any
Selling Stockholder shall be obligated to reimburse any defaulting Underwriter
on account of those expenses.
14. NO FIDUCIARY DUTY. Notwithstanding any preexisting relationship,
advisory or otherwise, between the parties or any oral representations or
assurances previously or subsequently made by the Underwriters, the Company and
the Selling Stockholders acknowledge and agree that: (i) nothing herein shall
create a fiduciary or agency relationship between the Company or Selling
Stockholders, on the one hand, and the Underwriters, on the other; (ii) the
Underwriters are not acting as advisors, expert or otherwise, to either the
Company or the Selling Stockholders in connection with this offering, sale of
the Stock or any other services the Underwriters may be deemed to be providing
hereunder, including, without limitation, with respect to the public offering
price of the Stock; (iii) the relationship between the Company and
28
the Selling Stockholders, on the one hand, and the Underwriters, on the other,
is entirely and solely commercial, based on arms-length negotiations; (iv) any
duties and obligations that the Underwriters, on the one hand, and the Company
or Selling Stockholders, on the other hand, owe to each other shall be limited
to those duties and obligations specifically stated herein; and (v) the Company
and the Selling Stockholders hereby acknowledge that in connection with the
offering contemplated hereby, there may be differing interests between the
Company and the Selling Stockholders, on the one hand, and the Underwriters, on
the other hand.
The Company and the Selling Stockholders, on the one hand, and the Underwriters,
on the other hand, hereby waive and release, to the fullest extent permitted by
law, any claims that they may have against each other with respect to any breach
or alleged breach of fiduciary duty.
15. RESEARCH INDEPENDENCE. In addition, the Company and the Selling
Stockholders acknowledge that the Underwriters' research analysts and research
departments are required to be independent from their respective investment
banking divisions and are subject to certain regulations and internal policies,
and that such Underwriters' research analysts may hold and make statements or
investment recommendations and/or publish research reports with respect to the
Company and/or the offering that differ from the views of its investment
bankers. The Company and the Selling Stockholders hereby waive and release, to
the fullest extent permitted by law, any claims that the Company or the Selling
Stockholders may have against the Underwriters with respect to any conflict of
interest that may arise from the fact that the views expressed by their
independent research analysts and research departments may be different from or
inconsistent with the views or advice communicated to the Company or the Selling
Stockholders by such Underwriters' investment banking divisions. The Company and
the Selling Stockholders acknowledge that each of the Underwriters is a full
service securities firm and as such from time to time, subject to applicable
securities laws, may effect transactions for its own account or the account of
its customers and hold long or short positions in debt or equity securities of
the companies which may be the subject of the transactions contemplated by this
Agreement.
16. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by hand
delivery, mail, telex or facsimile transmission to Lehman Brothers Inc.,
745 Seventh Avenue, New York, New York 10019, Attention: Syndicate
Department (Fax: 646-497-4815), with a copy, in the case of any notice
pursuant to Section 10(d), to the Director of Litigation, Office of the
General Counsel, Lehman Brothers Inc., 399 Park Avenue, 10th Floor, New
York, New York 10022 (Fax: 212-520-0421);
(b) if to the Company, shall be delivered or sent by hand-delivery,
mail or facsimile transmission to the address of the Company set forth in
the Registration Statement, Attention: Mark D. Fischer, Esq., Vice
President, General Counsel and Secretary (Fax: 212-381-3993); and
29
(c) if to any Selling Stockholder, shall be delivered or sent by
mail, telex or facsimile transmission to such Selling Stockholder at the
address set forth on SCHEDULE 2 hereto;
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Selling Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by the
Representatives, and the Company and the Underwriters shall be entitled to act
and rely upon any request, consent, notice or agreement given or made on behalf
of the Selling Stockholders by the Custodian.
17. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure to
the benefit of and be binding upon the Underwriters, the Company, the Selling
Stockholders and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the indemnity agreements of the Company and the Selling Stockholders
contained in this Agreement shall also be deemed to be for the benefit of the
directors, members, officers and employees of the Underwriters and each person
or persons, if any, who control any Underwriter within the meaning of Section 15
of the Securities Act and (B) the indemnity agreement of the Underwriters
contained in Section 10(c) of this Agreement shall be deemed to be for the
benefit of the directors of the Company, the officers of the Company who have
signed the Registration Statement or any agreement or certification delivered in
connection therewith and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 17, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
18. SURVIVAL. The respective indemnities, representations, warranties and
agreements of the Company, the Selling Stockholders and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Stock and shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.
19. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY". For purposes
of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday, Wednesday,
Thursday or Friday that is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close and (b)
"SUBSIDIARY" has the meaning set forth in Rule 405 of the Rules and Regulations.
20. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
21. COUNTERPARTS. This Agreement may be executed via facsimile in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall
30
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.
22. HEADINGS. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
31
If the foregoing correctly sets forth the agreement among the Company, the
Selling Stockholders and the Underwriters, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
PHILLIPS-VAN HEUSEN CORPORATION
By: /s/ Mark D. Fischer
--------------------------
Name: Mark D. Fischer
Title:Vice President, General Counsel and
Secretary
THE SELLING STOCKHOLDERS NAMED IN
SCHEDULE 2 TO THIS AGREEMENT
By: /s/ Christopher K. Reilly
---------------------------
ATTORNEY-IN-FACT
Name: Christopher K. Reilly
Title:
32
LEHMAN BROTHERS INC.
CREDIT SUISSE FIRST BOSTON LLC
J.P. MORGAN SECURITIES INC.
BEAR, STEARNS & CO. INC.
PIPER JAFFRAY & CO.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By LEHMAN BROTHERS INC.
By: /s/ Dominic Rispoli
-----------------------------
AUTHORIZED REPRESENTATIVE
By CREDIT SUISSE FIRST BOSTON LLC
By: /s/ Adam Rifkin
------------------------------
AUTHORIZED REPRESENTATIVE
By J.P. MORGAN SECURITIES INC.
By: /s/ Elizabeth Myers
------------------------------
AUTHORIZED REPRESENTATIVE
By BEAR, STEARNS & CO. INC.
By: /s/ Stephen Parish
------------------------------
AUTHORIZED REPRESENTATIVE
33
By PIPER JAFFRAY & CO.
By: /s/ Christie L. Christina
-------------------------------
AUTHORIZED REPRESENTATIVE
SCHEDULE 1
Number of Shares of
Underwriters Firm Stock
- --------------------------------------------------- --------------
Lehman Brothers Inc................................ 2,394,887
Credit Suisse First Boston LLC..................... 2,235,228
J.P. Morgan Securities Inc......................... 798,296
Bear, Stearns & Co. Inc............................ 478,977
Piper Jaffray & Co................................. 478,977
Total.............................................. 6,386,365
=========
SCHEDULE 2
PART A
Number of Shares
Name and Address of Firm Selling Stockholder of Firm Stock
- ----------------------------------------------------------- ----------------
Apax Excelsior VI, L.P., at 445 Park Avenue,
New York NY 10022.......................................... 3,662,272
Apax Excelsior VI-A C.V., at 445 Park Avenue,
New York NY 10022.......................................... 299,188
Apax Excelsior VI B C.V., at 445 Park Avenue,
New York NY 10022.......................................... 199,744
Patricof Private Investment Club III, L.P.,
at 445 Park Avenue, New York NY 10022..................... 125,161
Apax Europe V-A, L.P., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands......... 1,312,578
Apax Europe V-B, L.P., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands......... 236,091
Apax Europe V C GmbH & Co. KG, at 13-15
Victoria Road, St. Peter Port GY1 3ZD, Guernsey,
Channel Islands........................................... 134,221
Apax Europe V-D, L.P., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands......... 176,895
Apax Europe V-E, L.P., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands......... 176,180
Apax Europe V-F, C.V., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands......... 30,992
Apax Europe V-G, C.V., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands......... 30,992
Apax Europe V-1, L.P., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands......... 1,001
Apax Europe V-2, L.P., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands......... 1,050
Total..................................................... 6,386,365
===============
PART B
Number of Shares
Name and Address of Option Selling Stockholder of Option Stock
- ----------------------------------------------------------- ----------------
Apax Europe V-A, L.P., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands.......... 598,756
Apax Europe V-B, L.P., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands.......... 107,697
Apax Europe V C GmbH & Co. KG, at 13-15 Victoria
Road, St. Peter Port GY1 3ZD, Guernsey, Channel
Islands.................................................... 61,227
Apax Europe V-D, L.P., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands.......... 80,694
Apax Europe V-E, L.P., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands.......... 80,368
Apax Europe V-F, C.V., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands.......... 14,138
Apax Europe V-G, C.V., at 13-15 Victoria Road,
St. Peter Port, Guernsey, Channel Islands.................. 14,138
Apax Europe V-1, L.P., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands.......... 457
Apax Europe V-2, L.P., at 13-15 Victoria Road,
St. Peter Port GY1 3ZD, Guernsey, Channel Islands.......... 479
Total...................................................... 957,954
=======
SCHEDULE 3
Calvin Klein, Inc.
Cluett Peabody Resources Corporation
Cluett Peabody & Co., Inc.
SCHEDULE 4
PERSONS DELIVERING LOCK-UP AGREEMENTS
Mark Weber
Emanuel Chirico
Bruce J. Klatsky
Francis K. Duane
Allen E. Sirkin
Michael Zaccaro
EXHIBIT A
LOCK-UP LETTER AGREEMENT
LEHMAN BROTHERS INC.
CREDIT SUISSE FIRST BOSTON LLC
J.P. MORGAN SECURITIES INC.
BEAR, STEARNS & CO. INC.
PIPER JAFFRAY & CO.
As Representatives of the several
Underwriters named in Schedule 1
to the Underwriting Agreement (defined below),
c/o Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
Ladies and Gentlemen:
The undersigned understands that you and certain other firms (the
"UNDERWRITERS") propose to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") among Phillips-Van Heusen Corporation, a Delaware
corporation (the "COMPANY"), the stockholders of the Company named in SCHEDULE 2
thereto (the "SELLING STOCKHOLDERS") and the Underwriters, providing for the
purchase by the Underwriters of shares (the "STOCK") of Common Stock, par value
$1.00 per share (the "COMMON STOCK"), of the Company and that the Underwriters
propose to reoffer the Stock to the public (the "OFFERING").
In consideration of the execution of the Underwriting Agreement by
the Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of the Lehman
Brothers Inc. and Credit Suisse First Boston LLC, on behalf of the Underwriters,
the undersigned will not, directly or indirectly, (1) offer for sale, sell,
pledge, or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in the disposition by any person at
any time in the future of) any shares of Common Stock (including, without
limitation, shares of Common Stock that may be deemed to be beneficially owned
by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and shares of Common Stock that may be issued
upon exercise of any option or warrant) or securities convertible into or
exchangeable for Common Stock (other than the Stock), (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
(3) cause to be filed a registration statement with respect to any shares of
Common Stock or securities convertible, exercisable or exchangeable into Common
Stock or any other securities of the Company or (4) publicly disclose the
intention to do any of the foregoing, for a period of 90 days after the date of
the final prospectus relating to the Offering (such 90-day period, the "LOCK-UP
PERIOD").
A-1
Notwithstanding the foregoing, the undersigned, together with all
other executive officers of the Company set forth on Schedule 4 of the
Underwriting Agreement, may offer, sell, pledge or otherwise dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in a disposition of) up to 300,000 shares of Common Stock in the
aggregate, in addition to shares of Common Stock that are scheduled to be sold
under 10b5-1 purchase plans designed to comply with Rule 10b5-1 under the
Securities Exchange Act of 1934, as amended ("10B5-1 PLANS"), that are in effect
as of the date of the Offering. For the avoidance of doubt, nothing in this
agreement shall prohibit the undersigned from (i) entering into a 10b5-1 Plan
(subject to the aggregate limit set forth in the preceding sentence with respect
to the undersigned and all other executive officers of the Company set forth on
Schedule 4 of the Underwriting Agreement), (ii) taking any and all actions on
behalf of the Company in the undersigned's capacity as a director and/or officer
of the Company, including, but not limited to, any and all actions related to
the issuance of Common Stock upon the exercise of stock options or warrants or
the conversion of securities that are convertible into Common Stock or (iii)
surrendering to the Company shares of Common Stock held by the undersigned
(which involves no sale or other disposition of such Common Stock and which
Common Stock is designated by the Company upon such surrender as treasury
shares) in satisfaction of the exercise price payable upon exercise of a stock
option granted to the undersigned.
Notwithstanding the foregoing, the undersigned may transfer shares of
Common Stock to any members of the immediate family of the undersigned; PROVIDED
in each case that the transferee agrees to be bound in writing by the
restrictions set forth herein.
In furtherance of the foregoing, the Company and its transfer agent
are hereby authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if the Company notifies the Underwriters that
it does not intend to proceed with the Offering, if the Underwriting Agreement
does not become effective, or if the Underwriting Agreement (other than the
provisions thereof which survive termination) shall terminate or be terminated
prior to payment for and delivery of the Stock, the undersigned will be released
from his obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company, the Selling
Stockholders and the Underwriters will proceed with the Offering in reliance on
this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company, the Selling Stockholders and the Underwriters.
A-2
[SIGNATURE PAGE FOLLOWS]
A-3
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this Lock-Up Letter Agreement and
that, upon request, the undersigned will execute any additional documents
necessary in connection with the enforcement hereof. Any obligations of the
undersigned shall expire upon the death of the undersigned.
Very truly yours,
By:______________________________
Name:
Title:
Dated: _______________
A-4
EXHIBIT B-1
FORM OF OPINION OF ISSUER'S COUNSEL
(i) The Company has been duly incorporated and is an existing corporation
in good standing under the laws of the State of Delaware, with corporate power
to own its properties and conduct its business as described in the Prospectus.
(ii) The Company has an authorized capitalization as set forth in the
Prospectus.
(iii) The shares of Stock to be sold by the Selling Stockholders under this
Agreement have been duly authorized and validly issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus.
(iv) Except as disclosed in the Prospectus, there are no preemptive rights
under federal or New York law or under the Delaware General Corporation Law to
subscribe for or purchase shares of the Stock pursuant to an agreement to which
the Company is a party and known to such counsel and there are no preemptive or
other rights to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock pursuant to the Company's charter
or by-laws or any agreement or other instrument known to such counsel.
(v) The Agreement has been duly and validly authorized, executed and
delivered by the Company.
(vi) The execution, delivery and performance of the Agreement by the
Company, the issue and sale of the Stock on such Delivery Date do not and will
not conflict with or result in a breach or violation of any of the terms or
provisions, or constitute a default (or an event which with the giving
of notice or the lapse of time or both would reasonably be likely to constitute
a default) under, (A) the charter or by-laws (or similar organizational
documents) of the Company; or (B) any Delaware, New York or federal statute or
any rule or regulation, or any order known to such counsel, but without having
performed a docket search, issued by any court or governmental agency or body
having jurisdiction over the Company and applicable to transactions of this
type.
(vii) To such counsel's knowledge, no consent, approval, authorization or
order of, or filing with, any governmental agency or body or any court is
required for the consummation by the Company of the transactions contemplated by
the Agreement in connection with the issuance or sale of the Stock, except for
such consents, approvals, authorizations, orders and filings under applicable
state securities laws and under the Securities Act in connection with the
issuance or sale of the Stock.
(viii) The Preliminary Prospectus and the Prospectus were filed with the
Commission pursuant to the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date specified therein. To such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for such purpose has
been instituted or threatened by the Commission.
B-1-1
(ix) The statements set forth in the Prospectus under the caption
"Description of Capital Stock" insofar as they purport to constitute a summary
of matters of law and a summary of legal matters or the documents referred to
therein, are correct summaries in all material respects.
(x) The statements set forth in the Prospectus under the caption "Material
United States Federal Income and Estate Tax Considerations for Non-U.S.
Holders," insofar as they constitute a summary of matters of United States
federal income tax law (but not insofar as they relate to any expectation,
anticipation or belief regarding status as a United States real property holding
corporation for United States federal income tax purposes), constitute an
accurate summary of the matters described under such caption in all material
respects.
(xi) The Company is not an "investment company" as defined in the U.S.
Investment Company Act of 1940.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company, the
Underwriters and their counsel and representatives of the independent public
accountants for the Company, at which conferences the contents of the
Prospectus, and related matters were discussed, and, although such counsel will
not pass upon and will not assume any responsibility for the accuracy,
completeness or fairness of the statements in the Prospectus (except as
expressly provided by such counsel), and such counsel has not otherwise verified
or made independent investigation thereof, on the basis of the foregoing
(relying as to materiality to the extent deemed appropriate upon the opinions of
officers and other representatives of the Company), no facts have come to such
counsel's attention in the course of such participation to lead such counsel to
believe that the Prospectus (other than the financial statements and related
notes thereto and supporting schedules and other financial information and
statistical information contained in the Prospectus, as to which such counsel
will express no view), at the time the Prospectus was issued and on the date of
this opinion, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent counsel deems proper, on representations and certificates of
responsible officers of the Company and upon certificates from public officials.
Such counsel may assume, to the extent counsel deems proper, that all of the
representations and warranties contained in the Agreement are accurate, true and
correct (except to the extent they contain legal conclusions that are otherwise
the subject of this opinion). Such counsel may assume, to the extent counsel
deems proper, the legal capacity of all natural persons, the genuineness of all
signatures, the authenticity of all documents submitted to such counsel as
originals and the conformity to original documents submitted to such counsel as
copies. Wherever a statement is qualified by such counsel's "knowledge", it is
intended to indicate that those attorneys at counsel's firm who have given
substantive attention to matters involving the Company do not have actual
knowledge of the inaccuracy of such statement. However, except as expressly
indicated, such counsel has not undertaken independent investigation to
determine the accuracy of any such statement and has not examined any records of
any court administrative tribunal or other similar entity in connection with
such counsel's opinion.
B-1-2
Such opinion may state that it was not intended or written for use,
and cannot be used, for the purpose of avoiding U.S. federal, State, or local
tax penalties, that it was written to support the promotion or marketing of the
matters addressed in such opinion and that each taxpayer should seek advice
based on the taxpayer's particular circumstances from an independent tax
advisor.
B-1-3
EXHIBIT B-2
FORM OF OPINION OF MARK D. FISCHER, ESQ., GENERAL COUNSEL OF THE
COMPANY
(i) The Company is duly qualified to do business as a foreign corporation
in good standing in the jurisdictions listed on an annex to the opinion.
(ii) All of the issued shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and non-assessable and
conform to the description thereof contained in the Prospectus.
(iii) Each of the Material Subsidiaries has been duly incorporated and is
an existing corporation in good standing under the laws of the jurisdiction of
its incorporation with corporate power to own its properties and conduct its
business as described in the Prospectus. All of the issued and outstanding
capital stock of each Material Subsidiary has been duly authorized and validly
issued and is fully paid and nonassessable.
(iv) The execution, delivery and performance of this Agreement by the
Company, and the consummation of the transactions contemplated thereby,
including, without limitation, the issuance and sale of the Stock, and
compliance by the Company with the terms and provisions thereof, do not and will
not result in a breach or violation of any of the terms and provisions of, or
constitute a default (or an event which with the giving of notice or the lapse
of time or both would reasonably be likely to constitute a default) under, the
charter or by-laws (or similar organizational documents) of any Material
Subsidiary or any statute or rule or regulation, or any order known to such
counsel issued by any court or governmental agency or body having jurisdiction
over any Material Subsidiary, or result in the creation or imposition of any
lien, charge or encumbrance upon any assets or properties of the Company or any
Material Subsidiaries under any indenture, mortgage, loan or credit agreement,
note, lease, permit, license or other agreement or instrument to which the
Company or any Material Subsidiaries is a party or by which the Company or any
Material Subsidiary is bound or to which any of the assets or properties of the
Company or any of its subsidiaries are subject, except for such breaches,
violations or defaults as would not, individually or in the aggregate, have a
Material Adverse Effect and the Company has full corporate power and authority
to authorize and issue the Stock as contemplated by this Agreement;
(v) Except as disclosed in the Prospectus, to such counsel's knowledge, but
without having performed a docket search, there are no pending actions, suits or
proceedings against or affecting the Company, any of its subsidiaries or any of
their respective properties that would, to such counsel's knowledge, reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect, or would reasonably be expected to materially and adversely affect the
ability of the Company to perform its obligations under this Agreement;
(vi) Except as described or summarized in the Prospectus and with respect
to shares of the Company's common stock (i) issued to the former stockholders of
Calvin Klein, Calvin Klein (Europe), Inc., Calvin Klein (Europe II) Corp.,
Calvin Klein Europe S.r.l. and CK Service Corp. in connection with the Company's
acquisition of such companies and (ii) issuable
B-2-1
upon conversion of the Company's Series B convertible preferred stock, to such
counsel's knowledge there are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the Company
to file a registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Securities Act.
(vii) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion. The
Registration Statement, at the Effective Time, and the Prospectus, as of its
date, on its face, complied as to form, in all material respects, with the
requirements of the Securities Act and the Rules and Regulations, except that
such counsel need express no opinion with respect to the financial statements or
other financial data or statistical data contained or incorporated by reference
in or omitted from the Registration Statement or the Prospectus.
In addition, such counsel shall state that he has participated in
conferences with officers and other representatives of the Company, the
Underwriters and their counsel and representatives of the independent public
accountants for the Company, at which conferences the contents of the
Registration Statement and the Prospectus, and related matters were discussed,
and, although such counsel will not pass upon and will not assume any
responsibility for the accuracy, completeness or fairness of the statements in
the Registration Statement or the Prospectus (except as expressly provided by
such counsel), and such counsel has not otherwise verified or made independent
investigation thereof, on the basis of the foregoing, no facts have come to such
counsel's attention in the course of such participation or representation of the
Company to lead such counsel to believe that (A) the Registration Statement
(other than the financial statements and related notes thereto and supporting
schedules and other financial information and statistical information contained
in the Prospectus, as to which such counsel will express no view), at the
Effective Time, contained any 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 (B) the Prospectus (other than the
financial statements and related notes thereto and supporting schedules and
other financial information and statistical information contained in the
Prospectus, as to which such counsel will express no view), at the time the
Prospectus was issued and on the date of this opinion, contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent counsel deems proper, on certificates of responsible officers of the
Company and upon certificates from public officials. Such counsel may assume, to
the extent counsel deems proper, that all of the representations and warranties
of parties other than the Company contained in the Agreement are accurate, true
and correct (except to the extent they contain legal conclusions that are
otherwise the subject of this opinion). Such counsel may assume, to the extent
counsel deems proper, the legal capacity of all natural persons, the genuineness
of all signatures, the authenticity of all documents submitted to such counsel
as originals and the conformity to original documents submitted to such counsel
as copies. Wherever a statement is qualified by
B-2-2
such counsel's "knowledge", it is intended to indicate that such counsel does
not have actual knowledge of the inaccuracy of such statement. However, except
as expressly indicated, such counsel has not undertaken independent
investigation to determine the accuracy of any such statement and has not
examined any records of any court administrative tribunal or other similar
entity in connection with such counsel's opinion.
B-2-3
EXHIBIT B-3
FORM OF OPINION OF SELLING STOCKHOLDERS' COUNSEL
1. Each Apax Delaware Fund has full limited partnership power and authority
to enter into the Transaction Documents to which it is a party. The execution,
delivery and performance by each Apax Delaware Fund of the Transaction Documents
to which such Apax Delaware Fund is a party and the consummation by such Apax
Delaware Fund of the transactions contemplated thereby do not and will not (i)
result in any violation of the provisions of the Limited Partnership Agreement
of such Apax Delaware Fund or (ii) result in any violation of any statute or any
rule or regulation of, or any order known to us issued by any court or
governmental agency or body having jurisdiction over such Apax Delaware Fund or
the property or assets of such Apax Delaware Fund and which in our experience is
generally applicable to transactions of the type described in the Underwriting
Agreement or the Limited Partnership Agreement of such Apax Delaware Fund.
2. Except for such consents, approvals, authorizations, orders, filings,
registrations or qualifications as may be required under the Securities Act, the
rules and regulations of the New York Stock Exchange or applicable state
securities laws in connection with the purchase and sale of the Stock by the
Underwriters or those which the failure to obtain would not materially adversely
affect the ability of any Apax Delaware Fund to consummate the transactions
contemplated by the Underwriting Agreement, no consent, approval, authorization
or order of, or filing or registration with, any court or governmental agency or
body having jurisdiction over any Apax Delaware Fund or the property or assets
of such Apax Delaware Fund is required for the execution, delivery and
performance of any Transaction Document by such Apax Delaware Fund and the
consummation by such Apax Delaware Fund of the transactions contemplated
thereby.
3. Each Apax Delaware Fund has duly and validly authorized, executed and
delivered each Transaction Document to which it is a party.
4. Each of the Custody Agreement and the Power of Attorney to which any
Apax Delaware Fund is a party constitutes the valid and legally binding
obligation of such Apax Delaware Fund enforceable against such Apax Delaware
Fund in accordance with its terms.
5. Each Apax Delaware Fund has the right, power and authority to sell,
assign, transfer and deliver such shares to be sold by such Apax Delaware Fund
under the Underwriting Agreement.
6. Upon payment for the Stock to be sold by each Selling Stockholder,
delivery of such Stock, as directed by the Underwriters, to Cede & Co. or such
other nominee as may be designated by DTC, registration of such Stock in the
name of Cede & Co. or such other nominee and the crediting of such Stock on the
books of DTC to securities accounts of the Underwriters (assuming that neither
DTC nor any such Underwriter has notice of any adverse claim (within the meaning
of Section 8-105 of the UCC to such Stock), (i) DTC shall be a "protected
purchaser" of such Stock within the meaning of Section 8-303 of the UCC, (ii)
under Section 8-
B-2-4
501 of the UCC, the Underwriters will acquire a valid security entitlement in
respect of such Stock and (iii) no action based on any "adverse claim," within
the meaning of Section 8-102 of the UCC, to such Stock may be asserted against
the Underwriters with respect to such security entitlement.
B-2-5
EXHIBIT B-4
FORM OF OPINION OF THE SELLING STOCKHOLDERS' U.K. COUNSEL
a. the English Partnerships have full power and authority under their
respective Partnership Agreements to enter into the Documents;
b. the Manager is a private company limited by shares duly incorporated and
validly existing under English law under registered number 04094238 with full
power under its memorandum and articles of association to act as discretionary
investment manager of the Partnerships;
c. pursuant to and upon the terms of the relevant Management Agreement, the
Manager was appointed and remains the discretionary investment manager of the
portfolio of each of the Partnerships;
d. under the terms of the Management Agreements, the Manger has the power
to enter into agreements on behalf of each of the Partnerships;
e. on the basis of (a) - (d) above, the execution and delivery of the
Documents has been duly authorized, and the Documents have been duly executed
and delivered, by the Partnerships acting through the Manager as discretionary
investment manager of the Partnerships;
f. the Powers of Attorney and the Custody Agreements constitute legally
binding obligations of the Partnerships and are enforceable against the
Partnerships in accordance with their terms;
g. assuming that the obligations and liabilities expressed to be assumed by
the Partnerships pursuant to the provisions of the Documents constitute valid
and legally binding obligations under the laws of the State of New York, USA and
[laws other than the laws of England shall not] have effect in such regard, the
entry into of the Documents and the performance of the obligations set out
therein by the Partnerships does not (i) result in a material breach or
violation of any of the terms or provisions of, or constitute a material default
under, any agreement or instrument referred to herein to which any Partnership
is a party or by which any Partnership is bound or to which any of the property
or assets of any Partnership is subject (ii) result in any violation of the
provisions of the Partnership Agreements or (iii) result in any violation of any
statute or law of England; and
h. except for such consents, approvals, authorisations, registrations or
qualifications as may be required under applicable U.S. state securities laws in
connection with the purchase and sale of stock, in connection with the
Transaction, no consent, approval, authorisation or order of, or filing or
registration with, any court or governmental agency or body having jurisdiction
over any Partnership or the property or assets of any Partnership is required
for the execution, delivery and performance of the Documents by any Partnership.
B-2-6
EXHIBIT B-5
FORM OF OPINION OF THE SELLING STOCKHOLDERS'
NETHERLANDS COUNSEL
1. Each of the Partnerships has the power to enter into the Transaction
Documents and none of the Partnerships violates any provision of its Partnership
Agreement by entering into the Transaction Documents or by performing its
obligations thereunder.
2. The General Partner is authorized to represent and bind each of the
Partnerships vis-a-vis the other parties to the Transaction Documents.
3. Each of the Partnerships has validly signed the Transaction Documents.
4. The contractual obligations of each of the Partnerships under the
Transaction Documents are enforceable against these Partnerships in the
Netherlands in accordance with their terms.
5. Entering into the Transaction Documents by the each of the Partnerships
and the performance by each of the Partnerships of its obligations thereunder
does not in itself result in a violation of Netherlands Law that would affect
the enforceability of the Transaction Documents in the Netherlands.
6. No authorization, consent or approval license or order from or notice to
or filing with any regulatory or other authority or governmental body of the
Netherlands is required by any of the Partnerships in connection with the
entering into the Transaction Documents or the performance of its obligations
thereunder, which, if not obtained or made, would affect the enforceability of
the Transaction Documents.
B-2-7
EXECUTION COPY
CONVERSION AGREEMENT
CONVERSION AGREEMENT, dated as of July 14, 2005 (the "AGREEMENT"), by and
among Phillips-Van Heusen Corporation, a Delaware corporation (the "COMPANY"),
and each of the Investors that signs a signature page annexed hereto (referred
to hereinafter collectively as the "INVESTORS" and individually as an
"INVESTOR"). Capitalized terms not otherwise defined herein have the respective
meanings set forth in the Investors' Rights Agreement, dated February 12, 2003,
by and among the Company and the Investors (the "INVESTORS' RIGHTS AGREEMENT").
W I T N E S S E T H :
WHEREAS, an offering to sell shares of Common Stock beneficially owned by
certain of the Investors in an underwritten public offering was commenced on
July 14, 2005 (the "OFFERING");
WHEREAS, concurrently with the execution and delivery of this Agreement,
each Investor has executed and delivered a Custody Agreement (the "CUSTODY
AGREEMENT") with The Bank of New York, as custodian (the "CUSTODIAN"), pursuant
to which the following materials were deposited with the Custodian: (a)
certificates representing shares of Series B Stock that will be converted into
shares of Common Stock immediately prior to close of business on the day
immediately prior to the day on which the Offering or the Over-Allotment (as
defined below), as applicable, is consummated; and (b) one or more notices in
writing requesting that all or a portion of the Series B Stock be converted into
shares of Common Stock to be sold in the Offering or the Over-Allotment, as
applicable; and
WHEREAS, it is a condition precedent to the consummation of the Offering
that the Investors and the Company enter into this Agreement to provide for
certain agreements and obligations of the parties in connection with the
Offering.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
intending to be legally bound, the parties hereto agree as follows:
1. AMENDMENT TO INVESTORS RIGHTS AGREEMENT. The Investors Rights Agreement is
hereby amended and supplemented, effective simultaneously with the conversion of
the shares of Series B Stock in connection with the Offering (pursuant to
Section 3), as follows:
(a) Section 1.1 is amended to add the following:
"Qualifying Action" shall mean either (i) the delivery by each Holder
to the Company of a copy of such Holder's duly executed and valid proxy (and any
amendment of such proxy) with respect to any meeting of the stockholders of the
Company where the proposal set forth in Section 3.5(b)or Section 3.5(c), as
applicable, is to be voted upon, provided the votes authorized in such proxy or
amendment thereof are consistent with the terms of Section 3.5(b)or 3.5(c), as
applicable, and such proxy or amendment thereof is otherwise consistent with
this Agreement, or, in the case of action by written consent, the delivery to
the Company of a duly executed written consent with respect to such matters, or
(ii) the delivery by each Holder to the
Company of a written certificate by one of its duly authorized individuals
certifying that such Holder shall attend such meeting of the stockholders of the
Company in person and vote its Voting Securities in accordance with Section
3.5(b) or 3.5(c), as applicable.
(b) A new Section 3.5 is added as follows:
SECTION 3.5 AGREEMENTS RELATING TO CONVERSION OF CERTAIN SHARES
OF SERIES B STOCK
(a) Notwithstanding any other provision contained in this Agreement
or the Certificate of Designations to the contrary, including Section 9(d)(i)
thereof, in no case shall Holders be entitled to elect more than two (2)
directors of the Company; provided, however, that if Holders are entitled to
elect no more than two (2) directors of the Company pursuant to the terms of the
Certificate of Designations and no more than one Series B Designee is a director
of the Company on December 31, 2005, then in no case shall Holders be entitled
to elect more than one (1) director of the Company.
(b) Each Holder agrees that, during the time this Agreement is in
effect, (i) at any meeting of the stockholders of the Company, however called,
or any adjournment or postponement thereof, such Holder shall be present (in
person or by proxy) and vote (or cause to be voted) all of its shares of Voting
Securities and (ii) in any action taken by written consent of the stockholders
of the Company, such Holder shall vote (or cause to be voted) all of its shares
of Common Stock in favor of resolutions of the Company's common stockholders and
all of its shares of Series B Stock in favor of resolutions of the holders of
shares of Series B Stock, as well as any other vote that may be required under
the Delaware General Corporation Law or pursuant to the Certificate of
Designations or the Investors' Rights Agreement, to amend and restate Section
9(d)(i) of the Certificate of Designation in its entirety as follows:
"Election of Directors. (A) For so long as at least thirty-five
percent (35%) of the shares of Series B Stock issued on the Original Issue
Date remain outstanding, the holders of the Series B Stock, voting as a
separate series, shall be entitled to elect two (2) Series B Directors;
and (B) if more than ten percent (10%) but less than thirty-five percent
(35%) of the shares of Series B Stock issued on the Original Issue Date
remain outstanding, the holders of the Series B Stock, voting as a
separate series, shall be entitled to elect one (1) Series B Director."
(c) Notwithstanding Section 3.5(b) to the contrary, if Holders are
entitled to elect no more than two (2) directors of the Company pursuant to the
terms of the Certificate of Designations and no more than one Series B Designee
is a director of the Company on December 31, 2005, each Holder agrees that,
during the time this Agreement is in effect, (i) at any meeting of the
stockholders of the Company held after December 31, 2005, however called, or any
adjournment or postponement thereof, such Holder shall be present (in person or
by proxy) and vote (or cause to be voted) all of its shares of Voting Securities
and (ii) in any action by written consent of the stockholders of the Company
taken after December 31, 2005, such Holder shall vote (or cause to be voted) all
of its shares of Common Stock in favor of resolutions of the Company's common
stockholders and all of its shares of Series B Stock in favor of resolutions of
the holders of shares of Series B Stock, as well as any other vote that may be
required under
the Delaware General Corporation Law or pursuant to the Certificate of
Designations or the Investors' Rights Agreement, to amend and restate Section
9(d)(i) of the Certificate of Designation in its entirety as follows:
"Election of Directors. For so long as more than ten percent (10%) of
the shares of Series B Stock issued on the Original Issue Date remain
outstanding, the holders of the Series B Stock, voting as a separate series,
shall be entitled to elect one (1) Series B Director."
(d) Solely with respect to the matter described in Sections 3.5(b)
and 3.5(c) hereof, if any Holder of record as of the record date for the
stockholder vote, or a Holder who is otherwise eligible to provide written
consent, has not taken a Qualifying Action on or prior to the third business day
prior to any meeting of the stockholders of the Company (or within ten business
days of the date on which such Holder receives a written request by the Company
for action to be taken by such Holder by written consent), where the proposal
set forth in Section 3.5(b) or Section 3.5(c) hereof is to be voted upon, such
Holder hereby irrevocably appoints the Company as its proxy (which proxy is
irrevocable and which appointment is coupled with an interest, including for
purposes of Section 212 of the Delaware General Corporation Law) to vote, or act
by written consent with respect to, all its Voting Securities solely on the
matters described in Section 3.5(b) or Section 3.5(c), and in accordance
therewith, effective from and after such third business day (or such tenth
business day, in the case of action by written consent) and until the action
with respect to the proposal set forth in Section 3.5(b) or (c) has been taken.
Each Holder agrees to execute any further agreement or form reasonably necessary
or appropriate to confirm and effectuate the grant of the proxy contained
herein.
(e) The waivers, agreements and covenants contained in this Section
3.5 shall be binding on all Holders as of the date of consummation of the
Offering, and any transferee of any such Holder, as well as subsequent
transferees.
(e) For the avoidance of doubt, nothing contained in this Section 3.5
shall require any Holder to vote (or cause its shares of Common Stock or Series
B Stock to be voted) or consent to a matter that is not specifically covered by
this Section 3.5.
2. DIRECTOR RESIGNATION. Simultaneously with the conversion of the shares of
Series B Stock in connection with the Offering (pursuant to Section 3), the
Investors shall cause the number of Series B Designees to not be more than two.
3. CONVERSION. Each Investor participating in the Offer shall, immediately upon
execution of this Agreement and prior to the close of business on the business
day immediately prior to any exercise of the underwriters' over-allotment option
in the Offering (each such exercise of the over-allotment option, the
"Over-Allotment"), as applicable, deliver to the Custodian the certificate or
certificates for the Series B Stock to be converted into Common Stock and sold
in the Offering or the Over-Allotment, as applicable, duly endorsed, together
with written notice stating that such Investor elects to convert such Series B
Stock, all in compliance with Section 6(a)(i)(A) of the Certificate of
Designations (each such delivery of certificates and notice, the "Conversion
Notice"), and shall instruct the Custodian to deliver the Conversion Notice to
the Company immediately upon receipt; PROVIDED, HOWEVER, that no shares of
Series B Stock delivered to the Custodian shall be deemed surrendered by such
Investor, or converted into
shares of Common Stock, until immediately prior to the close of business on the
day immediately prior to the day on which the Offering or the Over-Allotment, as
applicable, is consummated; and PROVIDED FURTHER, HOWEVER, that if the
underwriting agreement in connection with the Offering (the "Underwriting
Agreement") is terminated, and the Offering or the Over-Allotment, as
applicable, has not been consummated with respect to all of the shares of Common
Stock proposed to be sold in the Offering and the Over-Allotment prior to the
date of termination, (a) the surrender and conversion of the shares of Series B
Stock subject to the Conversion Notice shall be deemed null and void to the
extent the underlying shares of Common Stock have not been sold in the Offering
or the Over-Allotment, as applicable (b) the parties hereto will deem the
Offering or the Over-Allotment, as applicable, withdrawn to the extent that such
underlying shares of Common Stock have not been sold in the Offering or the
Over-Allotment, as applicable, and (c) the Company shall return to the
appropriate Investor any certificate or certificates , or issue replacement
certificates, representing shares of Series B Stock for which the underlying
shares of Common Stock were not sold in the Offering or the Over-Allotment, as
applicable.
4. PAYMENT. The Company shall pay to each Investor by wire transfer of
immediately available funds (a) $1.75 per share of Common Stock (the "Conversion
Payment") issued upon conversion of such Investor's shares of Series B Stock
pursuant to Section 3 if such conversion occurs or is deemed to occur on or
prior to July 29, 2005 and (b) $1.47 per share of Common Stock (the "Reduced
Payment") issued upon conversion of such Investor's shares of Series B Stock
pursuant to Section 3 if such conversion occurs or is deemed to occur after July
29, 2005. Each such payment shall be made within one business day after the
conversion of such shares of Series B Stock pursuant to Section 3. The Company
hereby acknowledges that the Investors have agreed to receive, after July 29,
2005, the Reduced Payment in lieu of the Conversion Payment based upon the
representation from the Company set forth in Section 7.1(f) To the extent that
any cash payment to be made by the Company pursuant to this Section 4 is to be
made to a Foreign Fund (as defined below), then the Company shall make such cash
payment directly to the general partner of such Foreign Fund, Apax Europe V GP
Co. Limited (the "General Partner"), which delivered an Internal Revenue Service
Form W-9 to the Company. In addition, to the extent that any shares of Common
Stock are to be delivered, or deemed delivered, to any Foreign Fund, then such
shares of Common Stock shall be delivered by the Company, or deemed delivered by
the Company, directly to the General Partner, which delivered an Internal
Revenue Service Form W-9 to the Company. The term "Foreign Fund" shall mean each
Investor that (1) is a non-U.S. Person and (2) did not itself deliver an
Internal Revenue Service Form W-8 to the Company in connection with the Offering
or the Over-Allotment, as applicable.
5. TAX TREATMENT. Each of the Company and the Investors shall report the
conversion of Series B Stock into Common Stock described in Section 3 and the
payment of cash described in Section 4 as integral parts of a transaction that
constitutes a reorganization as defined in Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), with the cash constituting
additional consideration subject to the provisions of Section 356(a) of the
Code.
6. TAX WITHHOLDING. The Company shall be entitled to deduct and withhold from
any distribution or payment to the Investors any amounts required to be deducted
and withheld under applicable tax Law. To the extent such amounts are so
deducted and withheld, such amounts
shall be treated for all purposes under this Agreement and any other agreement
as having been paid to the person to whom such amounts would otherwise have been
paid. The Investors agree to hold the Company and its affiliates harmless from
any and all taxes, duties, fines, penalties, assessments or other governmental
charges of whatsoever nature (including any interest, penalties or additions
thereon) arising from or in connection with the Investors' ownership or
conversion of the Series B Stock or the Common Stock that are imposed or levied
on the Company or any of its affiliates, or for which any of them is held
liable, by, or on behalf of, any taxing authority.
7. MISCELLANEOUS.
(a) EFFECT ON THE INVESTORS' RIGHTS AGREEMENT. The Investors' Rights
Agreement shall continue in full force and effect, except as amended
by this Agreement. From and after the date hereof, all references to
the Investors' Rights Agreement shall be deemed to mean the Investors'
Rights Agreement as amended by this Agreement.
(b) GOVERNING LAW. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the
State of New York applicable to contracts executed and to be performed
wholly within such State without giving effect to the choice of law
principles of such State.
(c) HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) COUNTERPARTS. This Agreement may be executed by facsimile and in two
or more counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement.
(e) TERMINATION. If the Offering is cancelled or withdrawn at any time,
this Agreement shall immediately and automatically terminate and shall
be of no further force and effect, and any and all certificates of the
Series B Stock delivered to the Company pursuant to Section 3 shall be
returned to the Investor or Investors which so delivered such
certificates and any and all certificates of Common Stock delivered to
Investors pursuant to Section 3 shall be returned to the Company. For
the avoidance of doubt, no shares of Series B Stock shall have been
deemed converted into shares of Common Stock in connection with such
Offering.
(f) Dividend. The Company hereby represents that the regular quarterly
cash dividend payable pursuant to the terms of the Series B Stock (the
"Cash Dividend") has been declared and is payable to all of the record
holders of shares of the Series B Stock on July 29, 2005.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties have cause this Agreement to be duly
executed by their respective authorized officers as of the date first written
above.
PHILLIPS-VAN HEUSEN CORPORATION
By: Mark D. Fischer
-------------------------
Name: Mark D. Fischer
Title: Vice President, General Counsel and
Secretary
APAX EXCELSIOR VI, L.P.
By: /s/ Christopher K. Reilly
-------------------------
Name: Christopher K. Reilly
Title: Attorney-in-fact
APAX EXCELSIOR VI-A C.V.
By: /s/ Christopher K. Reilly
-------------------------
Name: Christopher K. Reilly
Title: Attorney-in-fact
APAX EXCELSIOR VI-B C.V.
By: /s/ Christopher K. Reilly
-------------------------
Name: Christopher K. Reilly
Title: Attorney-in-fact
PATRICOF PRIVATE INVESTMENT CLUB
III, L.P.
By: /s/ Christopher K. Reilly
-------------------------
Name: Christopher K. Reilly
Title: Attorney-in-fact
APAX EUROPE V - A, L.P.
By: /s/ Christopher K. Reilly
-------------------------
Name: Christopher K. Reilly
Title: Attorney-in-fact
APAX EUROPE V - B, L.P.
By: /s/ Christopher K. Reilly
-------------------------
Name: Christopher K. Reilly
Title: Attorney-in-fact
APAX EUROPE V C GMBH & CO. KG
By: /s/ Christopher K. Reilly
-------------------------
Name: Christopher K. Reilly
Title: Attorney-in-fact
APAX EUROPE V - D, L.P.
By: /s/ Christopher K. Reilly
-------------------------
Name: Christopher K. Reilly
Title: Attorney-in-fact
APAX EUROPE V - E, L.P.
By: /s/ Christopher K. Reilly
-------------------------
Name: Christopher K. Reilly
Title: Attorney-in-fact
APAX EUROPE V - F, C.V.
By: /s/ Christopher K. Reilly
-------------------------
Name: Christopher K. Reilly
Title: Attorney-in-fact
APAX EUROPE V - G, C.V.
By: /s/ Christopher K. Reilly
-------------------------
Name: Christopher K. Reilly
Title: Attorney-in-fact
APAX EUROPE V - 1, L.P.
By: /s/ Christopher K. Reilly
-------------------------
Name: Christopher K. Reilly
Title: Attorney-in-fact
APAX EUROPE V - 2, L.P.
By: /s/ Christopher K. Reilly
-------------------------
Name: Christopher K. Reilly
Title: Attorney-in-fact