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Exhibit 10.2
EXECUTION COPY
QUIKSILVER, INC.
$400,000,000
6 7/8% Senior Notes due 2015
Purchase Agreement
July 14, 2005
J.P. Morgan Securities Inc.
as Representative of the
several Initial Purchasers
listed
in Schedule 1 hereto
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
Quiksilver,
Inc., a Delaware corporation (the "Company"), proposes to issue
and sell to the several Initial Purchasers
listed in Schedule 1 hereto (the
"Initial Purchasers"), for whom you are
acting as representative (the
"Representative"), $400,000,000 principal
amount of its 6 7/8% Senior Notes due
2015 (the "Securities"). The Securities
will be issued pursuant to an Indenture
to be dated as of July 22, 2005 among the
Company, the guarantors listed in
Schedule 2 hereto (the "Guarantors") and
Wilmington Trust Company, a Delaware
banking corporation, as trustee (the
"Trustee"), and will be guaranteed on an
unsecured senior basis by each of the
Guarantors (the "Guarantees").
The Securities
will be sold to the Initial Purchasers without being
registered under the Securities Act of
1933, as amended (the "Securities Act"),
in reliance upon an exemption therefrom.
The Company has prepared a preliminary
offering memorandum dated July 5, 2005 (the
"Preliminary Offering Memorandum")
and will prepare an offering memorandum
dated the date hereof (the "Offering
Memorandum") setting forth information
concerning the Company and the
Securities. Copies of the Preliminary
Offering Memorandum have been, and copies
of the Offering Memorandum will be,
delivered by the Company to the Initial
Purchasers pursuant to the terms of this
Agreement. The Company hereby confirms
that it has authorized the use of the
Preliminary Offering Memorandum and the
Offering Memorandum in connection with
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the offering and resale of the Securities
by the Initial Purchasers in the
manner contemplated by this Agreement.
Capitalized terms used but not defined
herein shall have the meanings given to
such terms in the Offering Memorandum.
References herein to the Preliminary
Offering Memorandum and the Offering
Memorandum shall be deemed to refer to and
include any document incorporated by
reference therein.
Holders of the
Securities (including the Initial Purchasers and their
direct and indirect transferees) will be
entitled to the benefits of a
Registration Rights Agreement, to be dated
the Closing Date (as defined below)
and substantially in the form attached
hereto as Exhibit A (the "Registration
Rights Agreement"), pursuant to which the
Company and the Guarantors will agree
to file one or more registration statements
with the Securities and Exchange
Commission (the "Commission") providing for
the registration under the
Securities Act of the Securities or the
Exchange Securities referred to (and as
defined) in the Registration Rights
Agreement.
The Securities
are being issued and sold in connection with the acquisition
by the Company of shares representing a
minimum of 80% of the voting and
economic interests (the "Acquisition") of
Skis Rossignol S.A. ("Rossignol" and,
together with the Company, the "Combined
Company") pursuant to a Purchase
Agreement dated as of April 12, 2005 (the
"Acquisition Agreement") and a tender
offer under French law (the "Tender
Offer"). In connection with the Acquisition,
the Company entered into (i) an Amended and
Restated Credit Agreement, dated as
of June 3, 2005, among the Company,
Quiksilver Americas, Inc., as borrower, the
Lenders named therein and JPMorgan Chase
Bank, N.A., as administrative agent
(the "Senior Credit Agreement"), providing
for a senior secured asset-based
revolving credit facility (the "Senior
Secured Facility") and (ii) a Credit
Agreement, dated as of April 12, 2005,
among the Company, the Lenders named
therein and JPMorgan Chase Bank, N.A., as
administrative agent (the "Interim
Agreement"), providing for a $350,000,000
interim facility (the "Interim
Facility"). The Securities are being issued
and sold to repay a portion of the
amounts outstanding under the Senior
Secured Facility and all of the amounts
outstanding under the Interim Facility and
to finance the Acquisition as
described in the Offering Memorandum under
the heading "Use of proceeds". For
purposes of this Agreement, the term
"Rossignol Transactions" means,
collectively, the Acquisition, entering
into the Acquisition Agreement, the
Senior Credit Agreement and the Interim
Agreement, the offering of the
Securities and the other related
transactions as described in the Offering
Memorandum under the heading "The Rossignol
acquisition".
In the event
that, prior to the Closing Date, the Company does not receive
official notice from the Autorite des
Marches Financiers (the "AMF") and
Euronext Paris that a sufficient number of
shares has been tendered in the
Tender Offer and are not withdrawable such
that the Company will own shares
representing a minimum of 80% of the voting
and economic interests of Rossignol
upon consummation of the Tender Offer, the
Company will, on or prior to the
Closing Date, execute an escrow agreement,
in the form and substance to be
agreed between the Company and the Initial
Purchasers, which shall conform in
all material respects with the description
thereof including in the Offering
Memorandum (the "Escrow Agreement"), and
will direct the deposit in an escrow
account (the "Escrow Account") with
Wilmington Trust Company, as escrow
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agent (the "Escrow Agent"), the net
proceeds of the offering of the Securities,
together with an additional $18,638,888.90,
such that the escrowed funds (the
"Escrowed Funds") are in an amount
sufficient to redeem the Securities on
November 2, 2005 in cash at a redemption
price equal to 100.0% of the principal
amount of the Securities plus accrued and
unpaid interest thereon to such date.
The Escrow Agreement shall provide that the
Escrowed Funds shall only be
released and paid out pursuant to the terms
of the Escrow Agreement.
The Company
hereby confirms its agreement with the several Initial
Purchasers concerning the purchase and
resale of the Securities, as follows:
1. Purchase and
Resale of the Securities. (a) The Company agrees to issue
and sell the Securities to the several
Initial Purchasers as provided in this
Agreement, and each Initial Purchaser, on
the basis of the representations,
warranties and agreements set forth herein
and subject to the conditions set
forth herein, agrees, severally and not
jointly, to purchase from the Company
the respective principal amount of
Securities set forth opposite such Initial
Purchaser's name in Schedule 1 hereto at a
price equal to 97.25% of the
principal amount thereof plus accrued
interest, if any, from July 22, 2005 to
the Closing Date. The Company will not be
obligated to deliver any of the
Securities except upon payment for all the
Securities to be purchased as
provided herein.
(b) The Company
understands that the Initial Purchasers intend to offer the
Securities for resale on the terms set
forth in the Offering Memorandum. Each
Initial Purchaser, severally and not
jointly, represents, warrants and agrees
that:
(i) it is a qualified institutional buyer within the meaning of
Rule
144A under the
Securities Act (a "QIB") and an accredited investor within
the meaning of
Rule 501(a) under the Securities Act;
(ii) it has not solicited offers for, or offered or sold, and will
not
solicit offers
for, or offer or sell, the Securities by means of any form
of general
solicitation or general advertising within the meaning of Rule
502(c) of
Regulation D under the Securities Act ("Regulation D") or in
any
manner involving
a public offering within the meaning of Section 4(2) of
the Securities
Act; and
(iii) it has not solicited offers for, or offered or sold, and
will
not solicit
offers for, or offer or sell, the Securities as part of their
initial offering
except:
(A) within the United States to persons whom it reasonably
believes to be QIBs in transactions pursuant to Rule 144A under
the
Securities Act ("Rule 144A") and in connection with each such sale,
it
has taken or will take reasonable steps to ensure that the
purchaser
of the Securities is aware that such sale is being made in reliance
on
Rule 144A; or
(B) in accordance with the restrictions set forth in Annex A
hereto.
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(c) Each Initial
Purchaser acknowledges and agrees that the Company and,
for purposes of the opinions to be
delivered to the Initial Purchasers pursuant
to Sections 5(f) and 5(h), counsel for the
Company and counsel for the Initial
Purchasers, respectively, may rely
(including, for purposes of the Company's
representations and warranties in Section 3
hereof) upon the accuracy of the
representations and warranties of the
Initial Purchasers, and compliance by the
Initial Purchasers with their agreements,
contained in paragraph (b) above
(including Annex A hereto), and each
Initial Purchaser hereby consents to such
reliance.
(d) The Company
acknowledges and agrees that the Initial Purchasers may
offer and sell Securities to or through any
affiliate of an Initial Purchaser
and that any such affiliate may offer and
sell Securities purchased by it to or
through any Initial Purchaser.
(e) The Company
acknowledges and agrees that the Initial Purchasers are
acting solely in the capacity of an arm's
length contractual counterparty to the
Company with respect to the offering of the
Securities contemplated hereby
(including in connection with determining
the terms of the offering) and not as
a financial advisor or a fiduciary to, or
an agent of, the Company or any other
person. Additionally, no Initial Purchaser
is advising the Company or any other
person as to any legal, tax, investment,
accounting or regulatory matters in any
jurisdiction. The Company shall consult
with its own advisors concerning such
matters and shall be responsible for making
their own independent investigation
and appraisal of the transactions
contemplated hereby, and the Initial
Purchasers shall have no responsibility or
liability to the Company with respect
thereto. Any review by the Initial
Purchasers of the Company, the transactions
contemplated hereby or other matters
relating to such transactions will be
performed solely for the benefit of the
Initial Purchasers and shall not be on
behalf of the Company.
2. Payment and
Delivery. (a) Payment for and delivery of the Securities
will be made at the offices of Simpson
Thacher & Bartlett LLP, 425 Lexington
Avenue, New York, NY at 9:00 A.M., New York
City time on July 22, 2005, or at
such other time or place on the same or
such other date, not later than the
fifth business day thereafter, as the
Representative and the Company may agree
upon in writing. The time and date of such
payment and delivery is referred to
herein as the "Closing Date".
(b) In the event
that, prior to the Closing Date, the Company does not
receive official notice from the AMF and
Euronext Paris that a sufficient number
of shares has been tendered in the Tender
Offer and are not withdrawable such
that the Company will own shares
representing a minimum of 80% of the voting and
economic interests of Rossignol upon
consummation of the Tender Offer, delivery
of the Securities by the Company shall be
made to the Initial Purchasers against
payment of the purchase price by the
Initial Purchasers, subject to the deposit
of such funds in the Escrow Account,
together with an additional $18,638,888.90
provided by the Company, such that the
Escrowed Funds are in an amount
sufficient to redeem the Securities on
November 2, 2005 in cash at a redemption
price equal to 100.0% of the principal
amount of the Securities plus accrued and
unpaid interest to such date; and payment
for the Securities
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by the Initial Purchasers shall be made
against delivery to the Initial
Purchasers of the Securities as set forth
below and effected by wire transfer of
immediately available funds to the Escrow
Account. In the event that the
Acquisition is consummated on or prior to
the Closing Date, payment for the
Securities shall be made by wire transfer
in immediately available funds to the
account(s) specified by the Company to the
Representative against delivery to
the nominee of The Depository Trust
Company, for the account of the Initial
Purchasers, of one or more global notes
representing the Securities
(collectively, the "Global Notes"), with
any transfer taxes payable in
connection with the sale of the Securities
duly paid by the Company. The Global
Notes will be made available for inspection
by the Representative not later than
1:00 P.M., New York City time, in each
case, on the business day prior to the
Closing Date.
3.
Representations and Warranties of the Company and the Guarantors.
The
Company and the Guarantors jointly and
severally represent and warrant to each
Initial Purchaser that:
(a) Offering
Memorandum. The Preliminary Offering Memorandum, as of its
date, did not, and the Offering Memorandum,
in the form first used by the
Initial Purchasers to confirm sales of the
Securities and as of the Closing
Date, will not, contain any untrue
statement of a material fact or omit to state
a material fact necessary in order to make
the statements therein, in the light
of the circumstances under which they were
made, not misleading; provided that
the Company and the Guarantors make no
representation or warranty with respect
to any statements or omissions made in
reliance upon and in conformity with
information relating to any Initial
Purchaser furnished to the Company in
writing by such Initial Purchaser through
the Representative expressly for use
in the Preliminary Offering Memorandum and
the Offering Memorandum.
(b) Incorporated
Documents. The documents incorporated by reference in the
Preliminary Offering Memorandum and the
Offering Memorandum, when filed with the
Commission, conformed or will conform, as
the case may be, in all material
respects to the requirements of the
Exchange Act and the rules and regulations
of the Commission thereunder, and did not
and will not contain any untrue
statement of a material fact or omit to
state a material fact required to be
stated therein or necessary in order to
make the statements therein, in the
light of the circumstances under which they
were made, not misleading.
(c) Financial
Statements.
(i) The financial statements and the related notes thereto of
the
Company and its
subsidiaries included or incorporated by reference in the
Preliminary
Offering Memorandum and the Offering Memorandum (A) comply as
to form in all
material respects of the accounting requirements of the
Securities Act
and Exchange Act, as applicable, and the rules and
regulations
thereunder; (B) have been prepared in accordance with U.S.
generally
accepted accounting principles ("U.S. GAAP") consistently
applied
(provided that,
the unaudited financial statements do not include all of
the information
and notes required in accordance
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with U.S. GAAP
and are subject to normal year-end adjustments); (C) are
true, accurate
and complete in all material respects; (D) present fairly in
all material
respects the financial position of the Company and its
subsidiaries as
of the dates indicated and the results of their operations
and the changes
in their cash flows for the periods specified; and (E)
disclose all
material liabilities (contingent and otherwise) of the Company
and its
subsidiaries. The other financial information relating to the
Company and its
subsidiaries included or incorporated by reference in the
Preliminary
Offering Memorandum and the Offering Memorandum has been
derived from the
accounting records of the Company and its subsidiaries and
presents fairly
in all material respects the information shown thereby.
(ii) To the Company's knowledge, the financial statements and
the
related notes
thereto of Rossignol and its subsidiaries included in the
Preliminary
Offering Memorandum and the Offering Memorandum (A) comply in
all material respects
with the applicable requirements of the Securities
Act and the
Exchange Act, as applicable, and the rules and regulations
thereunder; (B)
have been prepared in accordance with French generally
accepted
accounting principles ("French GAAP") applied on a consistent
basis throughout
the periods covered thereby; (C) have been reconciled from
French GAAP to
U.S. GAAP in accordance with U.S. GAAP; (D) are true,
accurate and
complete in all material respects; (E) present fairly in all
material
respects the financial position of Rossignol and its
subsidiaries
as of the dates
indicated and the results of their operations and changes
in their cash
flows for the periods specified; and (F) disclose all
material
liabilities (contingent and otherwise) of Rossignol and its
subsidiaries.
The other financial information relating to Rossignol and its
subsidiaries
included in the Preliminary Offering Memorandum and the
Offering
Memorandum has been derived from the accounting records of
Rossignol and
its subsidiaries and presents fairly in all material respects
the information
shown thereby.
(iii) The pro forma financial information and the related notes
thereto included
or incorporated by reference in the Preliminary Offering
Memorandum and
the Offering Memorandum have been prepared in accordance
with the
Commission's rules and guidance with respect to pro forma
financial
information, and the assumptions underlying such pro forma
financial
information are reasonable and are set forth in the Preliminary
Offering
Memorandum and the Offering Memorandum.
(d) No Material
Adverse Change. Since the date of the most recent financial
statements of the Company or Rossignol, as
applicable, included or incorporated
by reference in the Preliminary Offering
Memorandum and the Offering Memorandum,
(i) there has not been any material change
in the capital stock or long-term
debt of the Company or any of its
subsidiaries or, to the Company's knowledge,
Rossignol or any of its subsidiaries, or
any dividend or distribution of any
kind declared, set aside for payment, paid
or made by the Company or, to the
Company's knowledge, Rossignol on any class
of capital stock, or any material
adverse change in or affecting the
business,
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properties, management, financial position,
results of operations or prospects
of the Company and its subsidiaries taken
as a whole or, to the Company's
knowledge, Rossignol and its subsidiaries
taken as a whole; (ii) neither the
Company or any of its subsidiaries nor, to
the Company's knowledge, Rossignol or
any of its subsidiaries has entered into
any transaction (other than the
Acquisition) or agreement that is material
to the Combined Company and its
subsidiaries taken as a whole or incurred
any liability or obligation, direct or
contingent, that is material to the
Combined Company and its subsidiaries taken
as a whole; and (iii) neither the Company
or any of its subsidiaries nor, to the
Company's knowledge, Rossignol or any of
its subsidiaries has sustained any
material loss or interference with its
business from fire, explosion, flood or
other calamity, whether or not covered by
insurance, or from any labor
disturbance or dispute or any action, order
or decree of any court or arbitrator
or governmental or regulatory authority,
except in each case as otherwise
disclosed in the Preliminary Offering
Memorandum and the Offering Memorandum.
(e) Organization
and Good Standing. Each of the Company and its
subsidiaries and, to the Company's
knowledge, Rossignol and its subsidiaries
have been duly organized and are validly
existing and in good standing under the
laws of their respective jurisdictions of
organization, are duly qualified to
conduct business and are in good standing
in each jurisdiction in which their
respective ownership or lease of property
or the conduct of their respective
businesses requires such qualification, and
have all power and authority
(corporate, partnership, limited liability
company and otherwise) necessary to
own or hold their respective properties and
to conduct the businesses in which
they are engaged and to conduct the
businesses as currently proposed to be
conducted following the consummation of the
Acquisition as described in the
Offering Memorandum, except where the
failure to be so qualified or have such
power or authority would not, individually
or in the aggregate, have a material
adverse effect on the business, properties,
management, financial position,
results of operations or prospects of the
Company and its subsidiaries taken as
a whole or on the performance by the
Company and the Guarantors of their
obligations under the Securities and the
Guarantees (a "Material Adverse
Effect"). After consummation of the
Acquisition, the Company will not own or
control, directly or indirectly, any
corporation, association or other entity
other than the subsidiaries listed in
Schedule 3 to this Agreement.
(f)
Capitalization. The Company has a capitalization as set forth in
the
Preliminary Offering Memorandum and the
Offering Memorandum under the heading
"Capitalization"; and all the outstanding
shares of capital stock or other
equity interests of each subsidiary of the
Company have been duly and validly
authorized and issued, are fully paid and
non-assessable (except, in the case of
any foreign subsidiary, for directors'
qualifying shares and except as otherwise
described in the Offering Memorandum) and
are owned directly or indirectly by
the Company, free and clear of any lien,
charge, encumbrance, security interest,
restriction on voting or transfer or any
other claim of any third party, other
than liens, charges, encumbrances, security
interests and restrictions under the
Senior Secured Facility and the Interim
Facility.
(g) Due
Authorization.
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(i) The Company and each of the Guarantors have full right, power
and
authority to
execute and deliver this Agreement, the Securities, the
Indenture
(including each Guarantee set forth therein), the Exchange
Securities, the
Escrow Agreement and the Registration Rights Agreement
(collectively,
the "Transaction Documents") and to perform their respective
obligations
hereunder and thereunder; and all action required to be taken
for the due and
proper authorization, execution and delivery of each of the
Transaction
Documents and the consummation of the transactions contemplated
thereby has been
duly and validly taken.
(ii) At the time of entering into each of the agreements in
connection
with the
Rossignol Transactions, including without limitation, the
Acquisition
Agreement, the Senior Credit Agreement and the Interim
Agreement
(collectively, the "Rossignol Transaction Documents"), the
Company had full
right, power and authority to execute and deliver each
such agreement
or instrument; the Company has full right, power and
authority to
perform its respective obligations under each Rossignol
Transaction
Document; and all action required to be taken for the due and
proper
authorization, execution and delivery of each of the Rossignol
Transaction
Documents and the consummation of the Rossignol Transactions
has been duly
and validly taken.
(h) The
Indenture. The Indenture has been duly authorized by the
Company
and each of the Guarantors and, when duly
executed and delivered in accordance
with its terms by each of the parties
thereto, will constitute a valid and
legally binding agreement of the Company
and each of the Guarantors enforceable
against the Company and each of the
Guarantors in accordance with its terms,
except as enforceability may be limited by
applicable bankruptcy, insolvency or
similar laws affecting the enforcement of
creditors' rights generally or by
equitable principles relating to
enforceability (collectively, the
"Enforceability Exceptions"); and on the
Closing Date, the Indenture will
conform in all material respects to the
requirements of the Trust Indenture Act
of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations
of the Commission applicable to an
indenture that is qualified thereunder.
(i) The
Securities and the Guarantees. The Securities have been duly
authorized by the Company and, when duly
executed, authenticated, issued and
delivered as provided in the Indenture and
paid for as provided herein, will be
duly and validly issued and outstanding and
will constitute valid and legally
binding obligations of the Company
enforceable against the Company in accordance
with their terms, subject to the
Enforceability Exceptions, and will be entitled
to the benefits of the Indenture; and the
Guarantees have been duly authorized
by each of the Guarantors and, when the
Securities have been duly executed,
authenticated, issued and delivered as
provided in the Indenture and paid for as
provided herein, will be valid and legally
binding obligations of each of the
Guarantors, enforceable against each of the
Guarantors in accordance with their
terms, subject to the Enforceability
Exceptions, and will be entitled to the
benefits of the Indenture.
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(j) The Exchange
Securities. On the Closing Date, the Exchange Securities
(including the related guarantees) will
have been duly authorized by the Company
and each of the Guarantors and, when duly
executed, authenticated, issued and
delivered as contemplated by the
Registration Rights Agreement, will be duly and
validly issued and outstanding and will
constitute valid and legally binding
obligations of the Company, as issuer, and
each of the Guarantors, as
guarantors, enforceable against the Company
and each of the Guarantors in
accordance with their terms, subject to the
Enforceability Exceptions, and will
be entitled to the benefits of the
Indenture.
(k) Purchase and
Registration Rights Agreements. This Agreement has been
duly authorized, executed and delivered by
the Company and each of the
Guarantors; and the Registration Rights
Agreement has been duly authorized by
the Company and each of the Guarantors and,
when duly executed and delivered in
accordance with its terms by each of the
parties thereto, will constitute a
valid and legally binding agreement of the
Company and each of the Guarantors
enforceable against the Company and each of
the Guarantors in accordance with
its terms, subject to the Enforceability
Exceptions, and except that rights to
indemnity and contribution thereunder may
be limited by applicable law and
public policy.
(l) Acquisition
Agreement. The Acquisition Agreement has been duly
authorized, executed and delivered by the
Company and, to the Company's
knowledge, Rossignol, and the transactions
contemplated thereby have been duly
authorized by the Company and, to the
Company's knowledge, Rossignol; the
Acquisition Agreement constitutes a legally
valid and binding agreement of the
Company and, to the Company's knowledge,
Rossignol, enforceable against the
Company and, to the Company's knowledge,
Rossignol in accordance with its terms,
subject to the Enforceability
Exceptions.
(m) Escrow
Agreement. The Escrow Agreement and the transactions
contemplated thereby have been duly
authorized by the Company and, when duly
executed and delivered by the Company, and
when duly executed and delivered by
the Escrow Agent, the Escrow Agreement will
constitute a valid and legally
binding agreement of the Company,
enforceable against the Company in accordance
with its terms, subject to the
Enforceability Exceptions.
(n) Other
Rossignol Transaction Documents. Each of the Rossignol
Transaction Documents not referred to in
the preceding clause (l) has been duly
authorized, executed and delivered by the
Company and, to the Company's
knowledge, Rossignol, if a signatory
thereto, and constitutes a valid and
legally binding obligation of the Company,
enforceable against the Company in
accordance with its terms, subject to the
Enforceability Exceptions.
(o) Descriptions
of the Transaction Documents and the Rossignol Transaction
Documents. Each Transaction Document and
each Rossignol Transaction Document
conforms in all material respects to the
description thereof contained in the
Preliminary Offering Memorandum and the
Offering Memorandum.
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(p) No Violation
or Default. Neither the Company or any of its subsidiaries
nor, to the Company's knowledge, Rossignol
or any of its subsidiaries is (i) in
violation of its charter or by-laws or
similar organizational documents; (ii) in
default, and no event has occurred that,
with notice or lapse of time or both,
would constitute such a default, in the due
performance or observance of any
term, covenant or condition contained in
any indenture, mortgage, deed of trust,
loan agreement or other agreement or
instrument to which the Company or any of
its subsidiaries or Rossignol or any of its
subsidiaries, as applicable, is a
party or by which the Company or any of its
subsidiaries or Rossignol or any of
its subsidiaries, as applicable, is bound
or to which any of the property or
assets of the Company or any of its
subsidiaries or Rossignol or any of its
subsidiaries, as applicable, is subject; or
(iii) in violation of any law or
statute or any judgment, order, rule or
regulation of any court or arbitrator or
governmental or regulatory authority,
except, in the case of clauses (ii) and
(iii) above, for any such default or
violation that would not, individually or
in the aggregate, have a Material Adverse
Effect.
(q) No
Conflicts. The execution, delivery and performance by the
Company
and each of the Guarantors of each of the
Transaction Documents to which each is
a party; the execution, delivery and
performance by the Company and Rossignol,
if a signatory thereto, of each of the
Rossignol Transaction Documents; the
issuance and sale of the Securities
(including the Guarantees) and compliance by
the Company and each of the Guarantors with
the terms thereof; the consummation
of the transactions contemplated by the
Transaction Documents; and the
consummation of the Rossignol Transactions
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, or result in the creation or
imposition of any lien, charge or
encumbrance (other than pursuant to the
Senior Credit Agreement, the Interim
Agreement and the Escrow Agreement) upon
any property or assets, whether
currently owned or hereafter acquired, of
the Company or any of its subsidiaries
or, to the Company's knowledge, Rossignol
or any of its subsidiaries pursuant
to, any indenture, mortgage, deed of trust,
loan agreement, pledge, security
interest or other agreement or instrument
to which the Company or any of its
subsidiaries or, to the Company's
knowledge, Rossignol or any of its
subsidiaries is a party or by which the
Company or any of its subsidiaries or,
to the Company's knowledge, Rossignol or
any of its subsidiaries is bound or to
which any of the property or assets,
whether currently owned or hereafter
acquired, of the Company or any of its
subsidiaries or, to the Company's
knowledge, Rossignol or any of its
subsidiaries is subject, (ii) result in any
violation of the provisions of the charter
or by-laws or similar organizational
documents of the Company or any of its
subsidiaries or, to the Company's
knowledge, Rossignol or any of its
subsidiaries or (iii) result in the violation
or contravention of any law or statute,
treaty or any judgment, order, rule or
regulation, determination, policy statement
or interpretation of any court or
arbitrator or governmental or regulatory
authority applicable to the Company or
any of its subsidiaries or, to the
Company's knowledge, applicable to Rossignol
or any of its subsidiaries, except, in the
case of clauses (i) and (iii) above,
for any such conflict, breach, violation,
default or contravention that would
not, individually or in the aggregate, have
a Material Adverse Effect. The
execution, delivery and performance by the
Company and Rossignol, as applicable,
of each of the Rossignol Transaction
Documents and the consummation of the
Rossignol Transactions, will not result in
any material breach or violation of,
or constitute a material default or change
of
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control under, or cause the acceleration
of, any existing indebtedness of the
Company or, to the Company's knowledge,
Rossignol.
(r) No Consents
Required. No consent, approval, authorization, order,
registration or qualification of or with
any court or arbitrator or governmental
or regulatory authority is required for (i)
the execution, delivery and
performance by the Company and each of the
Guarantors of each of the Transaction
Documents to which each is a party; (ii)
the execution, delivery and performance
by the Company and Rossignol, as
applicable, of each of the Rossignol
Transaction Documents; (iii) the issuance
and sale of the Securities (including
the Guarantees) and compliance by the
Company and each of the Guarantors with
the terms thereof; (iv) the consummation of
the transactions contemplated by the
Transaction Documents; and (v) the
consummation of the Rossignol Transactions,
except for such consents, approvals,
authorizations, orders and registrations or
qualifications as may be required (x) under
applicable state securities laws in
connection with the purchase and resale of
the Securities by the Initial
Purchasers and (y) with respect to the
Exchange Securities (including the
related guarantees) under the Securities
Act and applicable state securities
laws as contemplated by the Registration
Rights Agreement.
(s) Legal
Proceedings. Except as disclosed in the Preliminary Offering
Memorandum and the Offering Memorandum,
there are no legal, governmental or
regulatory investigations, actions, suits
or proceedings pending to which the
Company or any of its subsidiaries or, to
the Company's knowledge, Rossignol or
any of its subsidiaries is a party or to
which any property of the Company or
any of its subsidiaries or, to the
Company's knowledge, Rossignol or any of its
subsidiaries is the subject that,
individually or in the aggregate, if
determined adversely to the Company,
Rossignol or any of their respective
subsidiaries, could reasonably be expected
to have a (i) Material Adverse Effect
or (ii) a Material Adverse Effect on the
performance of the Transaction
Documents or the Rossignol Transaction
Documents or the consummation of any of
the transactions contemplated hereby and
thereby; and no threats of such
investigations, actions, suits or
proceedings have been made to the Company or
any of its subsidiaries or, to the
Company's knowledge, Rossignol or any of its
subsidiaries, or, to the knowledge of the
Company and each of the Guarantors, no
such investigations, actions, suits or
proceedings are contemplated by any
governmental or regulatory authority or
threatened by others.
(t) Independent
Accountants.
(i) Deloitte & Touche LLP, who have certified certain
financial
statements of
the Company and its subsidiaries, are independent registered
public
accountants with respect to the Company and its subsidiaries
within
the meaning of
the Securities Act and the applicable published rules and
regulations
thereunder and the Public Company Accounting Oversight Board
("PCAOB").
(ii) KPMG S.A., who have certified certain financial statements
of
Rossignol and
its subsidiaries, are independent registered public
accountants with
respect to (x) Rossignol and its subsidiaries within the
meaning of all
applicable accounting standards and (y) the Company and its
subsidiaries
within
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<PAGE>
the meaning of
the Securities Act and the applicable published rules and
regulations
thereunder and the PCAOB.
(u) Title to
Real and Personal Property. Each of the Company and its
subsidiaries and, to the Company's
knowledge, Rossignol and its subsidiaries has
good and marketable title in fee simple to,
or has valid rights to lease or
otherwise use, all items of real and
personal property that are material to the
respective businesses of the Company and
its subsidiaries and Rossignol and its
subsidiaries, in each case free and clear
of all liens, encumbrances, claims and
defects and imperfections of title except
those that (i) do not materially
interfere with the use made and proposed to
be made, as described in the
Offering Memorandum, of such property by
the Company, Rossignol or their
respective subsidiaries, as applicable,
(ii) could not reasonably be expected,
individually or in the aggregate, to have a
Material Adverse Effect or (iii) are
disclosed in the Offering Memorandum.
(v) Title to
Intellectual Property. Each of the Company and its
subsidiaries or, to the Company's
knowledge, Rossignol and its subsidiaries (i)
own, possess or are licensed to use
adequate rights to use all material patents,
patent applications, trademarks, service
marks, trade names, trademark
registrations, service mark registrations,
copyrights, licenses and know-how
(including trade secrets and other
unpatented and/or unpatentable proprietary or
confidential information, systems or
procedures), including (x) all extensions,
renewals, reissues, divisions,
continuations and continuations-in-part of any of
the foregoing and (y) all rights to sue for
past, present and future
infringements of any of the foregoing,
necessary for the conduct of their
respective businesses as currently
conducted in all material respects, and the
conduct of their respective businesses does
not and will not conflict with or
infringe on, in any material respect, any
such rights of others; and (ii) except
for claims that would not have a Material
Adverse Effect, have not received any
notice of any claim of infringement of or
conflict with any such rights of
others, and no claim has been asserted and
is pending by others challenging or
questioning the use of any such rights of
the Company and its subsidiaries or,
to the knowledge of the Company, Rossignol
and its subsidiaries, as the case may
be, or the validity or effectiveness of any
such rights, nor do the Company and
its subsidiaries or, to the knowledge of
the Company, Rossignol and its
subsidiaries, know of any valid basis for
any such claim.
(w) Investment
Company Act. Neither the Company nor any of its subsidiaries
is, and after giving effect to the offering
and sale of the Securities and the
application of the proceeds thereof as
described in the Offering Memorandum none
of them will be, an "investment company" or
an entity "controlled" by an
"investment company" within the meaning of
the Investment Company Act of 1940,
as amended, and the rules and regulations
of the Commission thereunder
(collectively, "Investment Company
Act").
(x) Taxes. Each
of the Company and its subsidiaries and, to the Company's
knowledge, Rossignol and its subsidiaries
has paid all material federal, state,
local and foreign taxes and filed all
material tax returns required to be paid
or filed through the date hereof; and
except as otherwise disclosed in the
Preliminary Offering
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<PAGE>
Memorandum and the Offering Memorandum,
there is no material tax deficiency that
has been, or could reasonably be expected
to be, asserted against the Company or
any of its subsidiaries or any of their
respective properties or assets or, to
the Company's knowledge, Rossignol or any
of its subsidiaries or any of their
respective properties or assets.
(y) Licenses and
Permits. The Company and its subsidiaries and, to the
Company's knowledge, Rossignol and its
subsidiaries possess all licenses,
certificates, permits and other
authorizations issued by, and have made all
declarations and filings with, the
appropriate federal, state, local or foreign
governmental or regulatory authorities that
are necessary for the ownership or
lease of their respective properties or the
conduct of their respective
businesses as described in the Preliminary
Offering Memorandum and the Offering
Memorandum, except where the failure to
possess or make the same would not,
individually or in the aggregate, have a
Material Adverse Effect; and except as
described in the Preliminary Offering
Memorandum and the Offering Memorandum,
neither the Company or any of its
subsidiaries nor, to the Company's knowledge,
Rossignol or any of its subsidiaries has
received notice of any revocation or
modification of any such license,
certificate, permit or authorization or has
any reason to believe that any such
license, certificate, permit or
authorization will not be renewed in the
ordinary course.
(z) No Labor
Disputes. No labor disturbance by or dispute with employees of
the Company or any of its subsidiaries or,
to the Company's knowledge, Rossignol
or any of its subsidiaries exists or, to
the knowledge of the Company and each
of the Guarantors, is contemplated or
threatened.
(aa) Compliance
With Environmental Laws. The Company and its subsidiaries
(i) are and have been in compliance with
any and all applicable federal, state,
local and foreign laws, rules, regulations,
decisions and orders relating to the
protection of human health and safety, the
environment or hazardous or toxic
substances or wastes, pollutants or
contaminants (collectively, "Environmental
Laws"); (ii) have received and are in
compliance with all permits, licenses or
other approvals required of them under
applicable Environmental Laws to conduct
their respective businesses; and (iii) have
not received notice of, and are not
aware of any reasonable basis for, any
actual or potential liability or
obligations concerning the presence,
investigation, remediation, disposal or
release of, or exposure to, hazardous or
toxic substances or wastes, pollutants
or contaminants, except in any such case
for any such failure to comply with, or
failure to receive required permits,
licenses or approvals, or liability or
obligations, as would not, individually or
in the aggregate, have a Material
Adverse Effect.
(bb) Compliance
With ERISA. Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as
amended ("ERISA"), that is maintained,
administered or contributed to (or
required to be contributed to) by the
Company or any of its affiliates for
employees or former employees of the
Company or its affiliates has been
maintained in compliance with its terms and
the requirements of any applicable
statutes, orders, rules and regulations, in
all material respects, including but
not limited to ERISA and the Internal
Revenue Code of 1986, as amended (the
"Code"); no event set forth in Section
4043(c) of ERISA has
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<PAGE>
occurred during the five-year period prior
to the date on which this
representation is made with respect to any
such plan and no termination of any
such plan has occurred, and no lien in
favor of the Pension Benefit Guaranty
Corporation or a plan has arisen, during
such five-year period; no prohibited
transaction, within the meaning of Section
406 of ERISA or Section 4975 of the
Code, has occurred with respect to any such
plan excluding transactions effected
pursuant to a statutory or administrative
exemption; for each such plan that is
subject to the funding rules of Section 412
of the Code or Section 302 of ERISA,
no "accumulated funding deficiency" as
defined in Section 412 of the Code has
been incurred, whether or not waived, and
the fair market value of the assets of
each such plan (based on those assumption
used to fund such plans) exceeds the
present value of all benefits accrued under
such plan. Neither the Company nor
any of its affiliates maintains,
contributes to or is required to contribute to
any "multiemployer plan", as such term is
defined in Section 4001(a)(3) of
ERISA.
(cc) Accounting
Controls. Each of the Company and its subsidiaries and, to
the Company's knowledge, Rossignol and its
subsidiaries maintain systems of
internal accounting controls sufficient to
provide reasonable assurance that (i)
transactions are executed in accordance
with their respective management's
general or specific authorizations; (ii)
transactions are recorded as necessary
to permit preparation of financial
statements in conformity with generally
accepted accounting principles and to
maintain asset
