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Use of Proceeds The net proceeds to the Company (after deducting estimated underwriting discounts and commissions and estimated offering expenses) from the sale of 4,700,000 shares of Class A Common Stock offered hereby by the Company (at the initial public offering price of $15.00 per share) are estimated to be $65.0 million. The Company will not receive any of the proceeds from the sale of 2,000,000 shares of Class A Common Stock offered hereby by the Selling Shareholders. The Company intends to use the net proceeds to repay indebtedness outstanding under the Company's term loan facility (the "Term Loan Facility") pursuant to the Loan and Security Agreement dated as of February 3, 1997 (the "Credit Agreement"), certain notes payable to equipment vendors ("Vendor Financing"), certain other notes ("Other Notes"), and a partial repayment of indebtedness pursuant to a secured term note due 2001 (the "Term Loan due 2001"). As of October 27, 1997, the Company had approximately $34.1 million outstanding under the Term Loan Facility, $7.1 million outstanding under the Vendor Financing, $12.7 million outstanding under the Other Notes, and $11.1 million to be repaid under the Term Loan due 2001. Such borrowings bore interest as of such date at a weighted average interest rate of 8.20%, 7.91%, 8.48% and 7.47%, respectively. All such borrowings were incurred to finance the Cherokee Acquisition or the modernization of the Company's manufacturing and distribution capabilities. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources." The Company will not incur any penalty or be required to pay a premium in connection with its prepayment of the Term Loan Facility, Vendor Financing, Other Notes or the Term Loan due 2001. The Company will use the balance, if any, of the net proceeds of the Offering for general corporate purposes, including capital improvements and possible future acquisitions. See "Risk Factors--Substantial Capital Requirements" and "--Acquisition Risks." Pending application of the net proceeds as described above, the Company intends to invest its net proceeds in short-term interest-bearing, investment- grade debt securities, certificates of deposit or direct or guaranteed obligations of the U.S. government.