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6,448,018 SHARES
STAGE STORES, INC.
COMMON STOCK ($.01 PAR VALUE)
UNDERWRITING AGREEMENT
September ____, 1997
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, XXXXXXX & CO. INC.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Xxxxxxx Xxxxxx,
Xxx Xxxx, XX 00000-0000
Dear Sirs:
1. Introductory. The stockholders listed in Schedule A hereto
(collectively, the "Selling Stockholders") propose severally to sell an
aggregate of 6,448,018 outstanding shares (the "Firm Securities") of the common
stock, $.01 par value (the "Securities") of Stage Stores, Inc., a Delaware
corporation (the "Company"), and the Company also proposes to sell to the
Underwriters, at the option of the Underwriters, an aggregate of not more than
650,000 additional shares (the "Optional Securities") of the Company's
Securities as set forth below. The Firm Securities and the Optional Securities
are herein collectively called the "Offered Securities." The Company and the
Selling Stockholders hereby agree with the several Underwriters named in
Schedule B hereto (the "Underwriters") as follows:
2. Representations and Warranties of the Company and the Selling
Stockholders. (a) The Company represents and warrants to, and agrees with,
the several Underwriters that:
(i) A registration statement (No. 333-34415) relating
to the Offered Securities, including a form of prospectus, has
been filed with the Securities and Exchange Commission (the
"Commission") and either (A) has been declared effective under
the Securities Act of 1933 (the "Act") and is not proposed to
be amended or (B) is proposed to be amended by amendment or
post-effective amendment. If such registration statement (the
"initial registration statement") has been declared effective,
either (A) an additional registration statement (the
"additional registration statement") relating to the Offered
Securities may have been filed with the Commission pursuant to
Rule 462(b) ("Rule 462(b)") under the Act and, if so filed,
has become effective upon filing pursuant to such Rule and the
Offered Securities all have been duly registered under the Act
pursuant to the initial registration statement and, if
applicable, the additional registration statement or (B) such
an additional registration statement is proposed to be filed
with the Commission pursuant to Rule 462(b) and will become
effective upon
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filing pursuant to such Rule and upon such filing the Offered
Securities will all have been duly registered under the Act
pursuant to the initial registration statement and such
additional registration statement. If the Company does not
propose to amend the initial registration statement or if an
additional registration statement has been filed and the
Company does not propose to amend it, and if any
post-effective amendment to either such registration statement
has been filed with the Commission prior to the execution and
delivery of this Agreement, the most recent amendment (if any)
to each such registration statement has been declared
effective by the Commission or has become effective upon
filing pursuant to Rule 462(c) ("Rule 462(c)") under the Act
or, in the case of the additional registration statement, Rule
462(b). For purposes of this Agreement, "Effective Time" with
respect to the initial registration statement or, if filed
prior to the execution and delivery of this Agreement, the
additional registration statement means (A) if the Company has
advised the Representatives that it does not propose to amend
such registration statement, the date and time as of which
such registration statement, or the most recent post-
effective amendment thereto (if any) filed prior to the
execution and delivery of this Agreement, was declared
effective by the Commission or has become effective upon
filing pursuant to Rule 462(c), or (B) if the Company has
advised the Representatives that it proposes to file an
amendment or post-effective amendment to such registration
statement, the date and time as of which such registration
statement, as amended by such amendment or post-effective
amendment, as the case may be, is declared effective by the
Commission. If an additional registration statement has not
been filed prior to the execution and delivery of this
Agreement but the Company has advised the Representatives that
it proposes to file one, "Effective Time" with respect to such
additional registration statement means the date and time as
of which such registration statement is filed and becomes
effective pursuant to Rule 462(b). "Effective Date" with
respect to the initial registration statement or the
additional registration statement (if any) means the date of
the Effective Time thereof. The initial registration
statement, as amended at its Effective Time, including all
material incorporated by reference therein, including all
information contained in the additional registration statement
(if any) and deemed to be a part of the initial registration
statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of
the Form on which it is filed and including all information
(if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b)
("Rule 430A(b)") under the Act, is hereinafter referred to as
the "Initial Registration Statement". The additional
registration statement, as amended at its Effective Time,
including the contents of the initial registration statement
incorporated by reference therein and including all
information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to
Rule 430A(b), is hereinafter referred to as the "Additional
Registration Statement." The Initial Registration Statement
and the Additional Registration Statement are hereinafter
referred to collectively as the "Registration Statements" and
individually as a "Registration Statement". The form of
prospectus relating to the Offered Securities, as first filed
with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") under the Act or (if no such filing is
required) as included in a Registration Statement, including
all material incorporated by reference in such prospectus, is
hereinafter referred to as the "Prospectus". No document has
been or will be prepared or distributed in reliance on Rule
434 under the Act.
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(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this
Agreement: (A) on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement
conformed in all respects to the requirements of the Act and
the rules and regulations of the Commission (the "Rules and
Regulations") and did not include any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein
not misleading, (B) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement
conformed, or will conform, in all respects to the
requirements of the Act and the Rules and Regulations and did
not include, or will not include, any untrue statement of a
material fact and did not omit, or will not omit, to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading, and (C) on the
date of this Agreement, the Initial Registration Statement
and, if the Effective Time of the Additional Registration
Statement is prior to the execution and delivery of this
Agreement, the Additional Registration Statement each
conforms, and at the time of filing of the Prospectus pursuant
to Rule 424(b) or (if no such filing is required) at the
Effective Date of the Additional Registration Statement in
which the Prospectus is included, and on each Closing Date (as
hereinafter defined) each Registration Statement and the
Prospectus will conform, in all respects to the requirements
of the Act and the Rules and Regulations, and neither of such
documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of
the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement: on the Effective
Date of the Initial Registration Statement and on each Closing
Date, the Initial Registration Statement and the Prospectus
will conform in all respects to the requirements of the Act
and the Rules and Regulations, neither of such documents will
include any untrue statement of a material fact or will omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and
no Additional Registration Statement has been or will be
filed. The two preceding sentences do not apply to statements
in or omissions from a Registration Statement or the
Prospectus based upon written information furnished to the
Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed
that the only such information is that described as such in
Section 7(c) hereof.
(iii) Each of the Company and its subsidiaries, all of
which are listed on Schedule C hereto (the "Subsidiaries"),
have been duly incorporated, are validly existing as
corporations in good standing under the laws of their
respective jurisdictions of incorporation and have the
corporate power and authority to carry on their respective
businesses as described in the Prospectus and to own, lease
and operate their respective properties, and each is duly
qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the
nature of their respective business or their ownership or
leasing of property requires such qualification, except where
the failure to be so qualified would not have a material
adverse effect on the Company and its Subsidiaries, taken as a
whole, which jurisdictions are listed on Schedule C hereto.
(iv) The Company has an authorized capitalization as
set forth in the Prospectus, and the Offered Securities and
all of the issued shares of capital stock
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of the Company have been duly and validly authorized and
issued, are fully paid and nonassessable and no further
approval or authority of the stockholders or the Board of
Directors of the Company is or will be required for the
issuance and sale of the Optional Securities to be sold by the
Company as contemplated by this Agreement and the Securities
are not subject to any preemptive or similar right and conform
in all material respects to the description thereof contained
in the Prospectus. All of the issued and outstanding capital
stock of each Subsidiary of the Company, including without
limitation, Specialty Retailers, Inc., a Texas corporation
("SRI"), has been duly authorized and validly issued and is
fully paid and nonassessable and is owned by the Company,
directly or through subsidiaries, free from liens,
encumbrances and defects, except for liens described in the
Prospectus and except for liens securing indebtedness under
the Credit Agreement (as defined in the Prospectus).
(v) Except as described in the Prospectus, there are
no contracts, agreements or understandings between the Company
and any third party (whether acting in an individual,
fiduciary or other capacity) granting such third party the
right to require the Company to file a registration statement
under the Act with respect to any securities of the Company
owned or to be owned by such third party or to require the
Company to include such securities in the securities
registered pursuant to a Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act; and there are no
legal or governmental proceedings, statutes, regulations,
contracts or other documents that are required to be described
in the Registration Statements or the Prospectus or required
to be filed as exhibits to the Registration Statements that
are not described or filed as required.
(vi) On the date each Registration Statement was first
filed with the Commission, and at the Effective Time, the
Company met the conditions for the use of Form S-3 under the
Act and the Rules and Regulations.
(vii) The Company has not taken and will not take,
directly or indirectly, any action designed to or that could
cause or result in stabilization or manipulation of the price
of the Offered Securities to facilitate the sale or resale of
the Offered Securities and the Company has not distributed and
will not distribute any offering material in connection with
the offering and sale of the Offered Securities other than any
preliminary prospectus filed with the Commission or the
Prospectus or other materials, if any, permitted by the Act or
the Rules and Regulations.
(viii) The Securities are listed on the Nasdaq National
Market.
(ix) Neither the Company nor any of its Subsidiaries
is (i) in violation of its respective charter or by-laws or
(ii) in default in the performance of any obligation,
agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any other
agreement, indenture or instrument to which the Company or any
of its Subsidiaries is a party or by which it or any of them
or their respective property is bound or (iii) in violation of
any applicable law, ordinance, administrative or governmental
rule or regulation, or any order, decree or judgment of any
court or governmental agency or body having jurisdiction over
the Company or any of its Subsidiaries, which defaults and
violations in clause (ii) or (iii) would, singly or in the
aggregate,
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have a material adverse effect on the business, properties,
financial condition or results of operations of the Company
and its Subsidiaries taken as a whole.
(x) The execution and delivery by the Company of, and
performance by the Company of its obligations under, this
Agreement and the issuance and sale of the Offered Securities
will not require any consent, approval, authorization or other
order of any court, regulatory body, administrative agency or
other governmental body, except as may be required by the
rules and regulations of the National Association of
Securities Dealers, Inc. or the securities or blue sky laws of
the various states in connection with the sale of the Offered
Securities.
(xi) The execution and delivery by the Company of, and
performance by the Company of its obligations under, this
Agreement and the issuance and sale of the Offered Securities
will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any statute,
any rule, regulation or order of any governmental agency or
body or any court, domestic or foreign, having jurisdiction
over the Company or any of its Subsidiaries or any of their
respective properties, assets or operations, or any agreement
or instrument to which the Company or any Subsidiary is a
party or by which the Company or any Subsidiary is bound or to
which any of the properties of the Company or any Subsidiary
is subject, or the charter or by-laws of the Company or any
Subsidiary, except for such breaches and violations as would
not, singly or in the aggregate, have a material adverse
effect on the business, properties, financial condition or
results of operations of the Company and its Subsidiaries,
taken as a whole or on the consummation of the issuance and
sale of the Offered Securities.
(xii) This Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and
binding agreement of the Company enforceable against the
Company in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors'
rights and to general equity principles.
(xiii) Except as otherwise set forth in the Prospectus,
there are no material legal or governmental proceedings
pending to which the Company or any of its Subsidiaries is a
party or of which any of their respective property is the
subject and no legal or governmental proceedings are pending
which could have a material adverse effect on the consummation
of the transactions contemplated by this Agreement and, to the
best knowledge of the Company, no such proceedings are
threatened or contemplated.
(xiv) Neither the Company nor any of its Subsidiaries
has violated any foreign, federal, state or local law or
regulation relating to the protection of human health and
safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), nor
any federal or state law relating to discrimination in the
hiring, promotion or pay of employees nor any applicable
federal or state wages and hours laws, nor any provisions of
the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or the rules and regulations promulgated
thereunder, nor incurred any liability under Section 412 of
the Internal Revenue Code of 1986, as amended, or Title IV of
ERISA, which in each case would result in any material adverse
change in the
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business, properties, financial condition or results of
operations of the Company and its Subsidiaries, taken as a
whole.
(xv) The Company and its Subsidiaries have such
material permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("permits"), including,
without limitation, under any applicable Environmental Laws,
as are necessary to own, lease and operate their respective
properties and to conduct their business; the Company and its
Subsidiaries have fulfilled and performed all of their
material obligations with respect to such permits and no event
has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in
any other material impairment of the rights of the holder of
any such permit; and, except as described in the Prospectus,
such permits contain no restrictions that are materially
burdensome to the Company and its Subsidiaries.
(xvi) In the ordinary course of its business, the
Company conducts a periodic review of the effect of
Environmental Laws on the Company and its Subsidiaries, in the
course of which it identifies and evaluates associated costs
and liabilities (including, without limitation, any capital or
operative expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on
operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a
material adverse effect on the business, properties, financial
condition or results of operations of the Company and its
Subsidiaries, taken as a whole.
(xvii) Except as otherwise set forth in the Prospectus
or such as are not material to the business, prospects,
financial condition or results of operation of the Company and
its Subsidiaries, taken as a whole, the Company and each of
its Subsidiaries have good and marketable title, free and
clear of all liens, claims, encumbrances and restrictions
except liens for taxes not yet due and payable, to all
property and assets described in the Prospectus as being owned
by it. All leases to which the Company or any of its
Subsidiaries is a party are valid and binding and no default
has occurred or is continuing thereunder, which would result
in any material adverse change in the business, properties,
financial condition or results of operations of the Company
and its Subsidiaries taken as a whole, and the Company and its
Subsidiaries enjoy peaceful and undisturbed possession under
all such leases to which any of them is a party as lessee with
such exceptions as do not materially interfere with the use
made by the Company or any of it Subsidiaries.
(xviii) The Company and each of its Subsidiaries
maintains reasonably adequate and customary insurance for the
industry in which it operates.
(xix) The Company and each of its Subsidiaries (a) own
or have obtained valid and enforceable licenses for the U.S.
and foreign patents, patent applications, inventions,
technology, trademarks, trademark registrations, service
marks, service xxxx registrations, trade names, copyrights,
computer software, trade secrets and proprietary or other
intellectual property rights owned or used by or licensed to
it or necessary for the conduct of its business (collectively,
the "Intellectual Property"), and (b) have not received any
notice of infringement of
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or conflict with asserted rights of others with respect to any
Intellectual Property, or questioning the use or validity of
any Intellectual Property, in the case of (a) and (b) that, if
determined adversely to the Company or any of its Subsidiaries
would, singly or in the aggregate, have a material adverse
effect on the business, properties, financial condition or
results of operations of the Company and its Subsidiaries,
taken as a whole.
(xx) The consolidated financial statements of the
Company, together with related schedules and notes forming
part of the Prospectus (and any amendment or supplement
thereto), present fairly the consolidated financial position,
results of operations and cash flows of the Company and its
Subsidiaries on the basis stated in the Prospectus at the
respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have
been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods
involved, except as disclosed therein, and the other financial
and statistical information and data set forth in the
Prospectus (and any amendment or supplement thereto) is, in
all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books
and records of the Company. The unaudited pro forma combined
income statements and other pro forma financial information
(including the notes thereto) included in the Prospectus (A)
present fairly in all material respects the information shown
therein, and (B) have been prepared in accordance with the
applicable requirements of Regulation S-X promulgated under
the Exchange Act. The assumptions used in the preparation of
the pro forma combined income statements and other pro forma
financial information included in the Prospectus are
reasonable and the adjustments used therein are appropriate to
give effect to the transactions or circumstances referred to
therein and reflect the proper application of those
adjustments to the corresponding historical financial
statement amounts.
(xxi) To the knowledge of the Company, the consolidated
financial statements of X.X. Xxxxxxx Company, the separate
corporate existence of which ceased on June 26, 1997 upon
acquisition by the Company ("X.X. Xxxxxxx"), together with
related notes, incorporated by reference in the Prospectus
(and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and
cash flows of X.X. Xxxxxxx and its subsidiaries on the basis
stated in the Prospectus at the respective dates or for the
respective periods to which they apply; to the knowledge of
the Company, such statements and related notes have been
prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods
involved, except as disclosed therein.
(xxii) To the knowledge of the Company, the information
set forth in the Prospectus with respect to X.X. Xxxxxxx does
not include an 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.
(xxiii) Since the dates as of which information is
given in each Registration Statement and the Prospectus, (i)
neither the Company nor any of its Subsidiaries has incurred
any material liability or obligation (indirect, direct or
contingent) or entered into any material verbal or written
agreement or other transaction that is
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not in the ordinary course of business or that is reasonably
likely to result in a material reduction in the future
earnings of Stage and its respective subsidiaries; (ii) none
of the Company or any of its Subsidiaries has sustained any
material loss or interference with its business or properties
from fire, flood, windstorm, accident or other calamity
(whether or not covered by insurance); (iii) except as
contemplated by the Prospectus, there has been no change in
the indebtedness of the Company and no change in the capital
stock of the Company and no dividend or distribution of any
kind declared, paid or made by the Company on any class of its
capital stock; and (iv) there has been no material adverse
change, nor any development or event involving a prospective
material adverse change, in the business, properties,
financial condition or results of operations of the Company
and its Subsidiaries taken as a whole.
(xxiv) Neither the Company nor its Subsidiaries is, and
after giving effect to the issuance and sale of the Offered
Securities, will not be, 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 Investment
Company Act of 1940, as amended or a closed-end investment
company required to be registered thereunder.
(xxv) There is (i) no significant unfair labor practice
complaint pending against the Company or any of its
Subsidiaries or, to the knowledge of the Company, threatened
against any of them, before the National Labor Relations Board
or any state or local labor relations board, and no
significant grievance or more significant arbitration
proceeding arising out of or under any collective bargaining
agreement is so pending against the Company or any of its
Subsidiaries or, to the knowledge of the Company, threatened
against any of them, and (ii) no significant strike, labor
dispute, slowdown or stoppage is pending against the Company
or any of its Subsidiaries or, to the knowledge the Company,
threatened against it or any of its subsidiaries except for
such actions specified in clause (i) or (ii) above which,
singly or in the aggregate, would not have a material adverse
effect on the business, properties, financial condition or
results of operations of the Company and its Subsidiaries,
taken as a whole.
(xxvi) The Company and each of its Subsidiaries
maintains a system of internal accounting controls sufficient
to provide reasonable assurance that: (i) transactions are
executed in accordance with 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
accountability; (iii) access to assets is permitted only in
accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any
differences.
(xxvii) All material tax returns required to be filed
by the Company and each of its Subsidiaries in any
jurisdiction have been filed, other than those filings being
contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees
and other charges due pursuant to such returns or pursuant to
any assessment received by, the Company or any of its
Subsidiaries have been paid, other than those being contested
in good faith and for which adequate reserves have been
provided.
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(xxviii) Except as disclosed in the Prospectus, 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 sale of the Offered Securities.
(xxix) The Company has obtained the written agreement of
each director and executive officer of the Company listed on
Schedule D hereto, that for a period of 90 days after the date
of the public offering of the Offered Securities, such person
will not offer, sell, contract to sell, grant any option for
the sale of, establish a put equivalent position (as defined
in Rule 1a-1(h) under the Exchange Act), pledge or otherwise
dispose of, directly or indirectly, or request the filing with
the Commission of a registration statement under the Act
relating to, any shares of Securities or securities
convertible into or exchangeable or exercisable for, or any
rights to purchase or acquire, any shares of Securities, or
publicly disclose the intention to make any such offer, sale,
pledge, grant, establishment, disposal or filing request,
without the prior written consent of Credit Suisse First
Boston Corporation ("CSFBC").
(xxx) The Company and SRI are subject to Section 13 or
15(d) of the Exchange Act.
(xxxi) Price Waterhouse LLP are independent public
accountants with respect to the Company as required by the
Act and the Exchange Act. Deloitte & Touche LLP were
independent public accountants with respect to X.X. Xxxxxxx
as required by the Act and the Exchange Act.
(b) Each Selling Stockholder severally and not
jointly represents and warrants to, and agrees with, the several
Underwriters that:
(i) Such Selling Stockholder has and on each Closing
Date hereinafter mentioned will have valid and unencumbered
title to the Offered Securities to be delivered by such
Selling Stockholder on such Closing Date, free and clear of
any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind; such Selling Stockholder has full
right, power and authority to enter into this Agreement, the
Custody Agreement (the "Custody Agreement") and the
Irrevocable Power of Attorney (the "Power of Attorney")
entered into by such Selling Stockholder in connection with
the transactions contemplated hereby and to sell, assign,
transfer and deliver the Offered Securities to be delivered by
such Selling Stockholder on such Closing Date hereunder; and
upon the delivery of and payment for the Offered Securities on
each Closing Date hereunder such Selling Stockholder will pass
valid and unencumbered title to the Offered Securities to be
delivered by such Selling Stockholder to the several
Underwriters on such Closing Date.
(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this
Agreement: (A) on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement did
not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading, (B)
on the Effective Date of the Additional Registration Statement
(if any), each Registration Statement did not include, or will
not include, any untrue statement
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of a material fact and did not omit, or will not omit, to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and
(C) on the date of this Agreement, the Initial Registration
Statement and, if the Effective Time of the Additional
Registration Statement is prior to the execution and delivery
of this Agreement, the Additional Registration Statement, and
at the time of filing of the Prospectus pursuant to Rule
424(b) or (if no such filing is required) at the Effective
Date of the Additional Registration Statement in which the
Prospectus is included, and on each Closing Date (as
hereinafter defined) neither each Registration Statement nor
the Prospectus includes, or will include, any untrue statement
of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading. If the Effective
Time of the Initial Registration Statement is subsequent to
the execution and delivery of this Agreement: on the Effective
Date of the Initial Registration Statement and on each Closing
Date, neither the Initial Registration Statement nor the
Prospectus will include any untrue statement of a material
fact or will omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading. The two preceding sentences apply only to the
extent that any statements in or omissions from a Registration
Statement or the Prospectus are based on written information
furnished to the Company by such Selling Stockholder
specifically for use therein.
(iii) Except as disclosed in the Prospectus, there are
no contracts, agreements or understandings between such
Selling Stockholder and any third party 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 transactions contemplated by this
Agreement, the Custody Agreement and the Power of Attorney.
(iv) This Agreement, the Custody Agreement and the
Power of Attorney have each been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder and this
Agreement, the Custody Agreement and the Power of Attorney
each constitute the legal, valid and binding obligations of
such Selling Stockholder enforceable against such Selling
Stockholder in accordance with their respective terms (except
as rights to indemnification and contribution may be limited
by applicable federal or state law).
(v) No consent, approval, authorization, order,
registration or qualification of, or filing with, any third
party (whether acting in an individual, fiduciary or other
capacity) or any governmental or regulatory agency or body or
court is required to be obtained or made by such Selling
Stockholder for the consummation of the transactions
contemplated by this Agreement, the Custody Agreement and the
Power of Attorney in connection with the sale of the Offered
Securities, except such as have been obtained and made under
the Act and such as may be required under state securities
laws.
(vi) The execution, delivery and performance of this
Agreement, the Custody Agreement and the Power of Attorney by
such Selling Stockholder and the consummation of the
transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under (A) any
statute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having
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jurisdiction over such Selling Stockholder or any of its
properties or operations, or any agreement or instrument to
which such Selling Stockholder is a party or by which such
Selling Stockholder is bound or to which any of the properties
or operations of such Selling Stockholder is subject, or (B)
if applicable, the charter, by-laws or other organizational
documents of such Selling Stockholder, except, in the case of
clause (A), for such conflicts, breaches, violations or
defaults which could not reasonably be expected to,
individually or in the aggregate, have a material adverse
effect on the consummation of the transactions contemplated by
this Agreement, the Custody Agreement or the Power of
Attorney.
(vii) Such Selling Stockholder has not taken and will
not take, directly or indirectly, any action designed to or
that could reasonably be expected to cause or result in
stabilization or manipulation of the price of the Offered
Securities to facilitate the sale or resale of the Offered
Securities, and such Selling Stockholder has not distributed
and will not distribute any offering material in connection
with the offering and sale of the Offered Securities other
than any preliminary prospectus filed with the Commission or
the Prospectus or other materials, if any, permitted by the
Act or the Rules and Regulations.
3. Purchase, Sale and Delivery of Offered Securities. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, each Selling Stockholder agrees,
severally and not jointly, to sell to the Underwriters, and each Underwriter
agrees, severally and not jointly, to purchase from each Selling Stockholder,
at a purchase price of $[ ] per share, that number of Firm Securities
(rounded up or down, as determined by CSFBC in its discretion, in order to
avoid fractions) obtained by multiplying the number of Firm Securities set
forth opposite the name of such Selling Stockholder in Schedule A hereto by a
fraction the numerator of which is the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule B hereto and the denominator
of which is the total number of Firm Securities.
Certificates in negotiable form for the Firm Securities have been
placed in custody, for delivery under this Agreement, under Custody Agreements
made with ChaseMellon Shareholder Services, L.L.C., as custodian (the
"Custodian"). Each Selling Stockholder agrees that the shares represented by
the certificates held in custody for the Selling Stockholders under such
Custody Agreement are subject to the interests of the Underwriters hereunder,
that the arrangements made by the Selling Stockholders for such custody are to
that extent irrevocable, and that the obligations of the Selling Stockholders
hereunder shall not be terminated by operation of law, whether by the death of
any individual Selling Stockholder or the occurrence of any other event, or in
the case of a trust, by the death of any trustee or trustees or the termination
of such trust. If any individual Selling Stockholder or any such trustee or
trustees should die, or if any other such event should occur, or if any of such
trusts should terminate, before the delivery of the Firm Securities hereunder,
certificates for the Firm Securities shall be delivered by the Custodian in
accordance with the terms and conditions of this Agreement as if such death or
other event or termination had not occurred, regardless of whether or not the
Custodian shall have received notice of such death or other event or
termination.
The Custodian will deliver the Firm Securities to the Representatives
for the accounts of the Underwriters, against payment of the purchase price in
Federal (same day) funds by official bank check or checks or wire transfer to
an account at a bank acceptable to CSFBC drawn to the order of the Custodian at
the office of Xxxxx Xxxxxxxxxx, 1301 Avenue of the Americas, Xxx Xxxx, Xxx Xxxx
00000 at 10:00 A.M., New York time, on September [ ], 1997, or at such other
time not later than seven full business days thereafter as CSFBC and the
Custodian determine,
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such time being herein referred to as the "First Closing Date". The
certificates for the Firm Securities so to be delivered will be in definitive
form, in such denominations and registered in such names as CSFBC requests and
will be made available for checking and packaging at the office of Credit
Suisse First Boston Corporation, Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
0000-0000 at least 24 hours prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the Company from
time to time not more than 30 days subsequent to the date of the Prospectus,
the Underwriters may purchase all or less than all of the Optional Securities
at the purchase price per Security to be paid for the Firm Securities. Such
Optional Securities shall be purchased from the Company for the account of each
Underwriter in the same proportion as the number of Firm Securities set forth
opposite such Underwriter's name in Schedule B bears to the total number of
Firm Securities (subject to adjustment by CSFBC to eliminate fractions) and may
be purchased by the Underwriters only for the purpose of covering
over-allotments made in connection with the sale of the Firm Securities. No
Optional Securities shall be sold or delivered unless the Firm Securities
previously have been, or simultaneously are, sold and delivered. The right to
purchase the Optional Securities or any portion thereof may be exercised from
time to time and to the extent not previously exercised may be surrendered and
terminated at any time upon notice by CSFBC on behalf of the Underwriters to
the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver
the Optional Securities being purchased on each Optional Closing Date to CSFBC
for the accounts of the several Underwriters, against payment of the purchase
price in Federal (same day) funds by official bank check or checks or wire
transfer to an account at a bank acceptable to CSFBC drawn to the order of the
Company, at the office of Xxxxx Xxxxxxxxxx, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000. The certificates for the Optional Securities being
purchased on each Optional Closing Date will be in definitive form, in such
denominations and registered in such names as CSFBC requests upon reasonable
notice prior to such Optional Closing Date and will be made available for
checking and packaging at the office of Credit Suisse First Boston Corporation,
Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, at a reasonable time in
advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company and the Selling Stockholders.
The Company and each of the Selling Stockholders severally and not jointly
agree with the several Underwriters that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement,
the Company will file the Prospectus with the Commission pursuant to
and in accordance with subparagraph (1) (or, if applicable and if
consented to by CSFBC, subparagraph (4)) of Rule 424(b) not later than
the earlier of (A) the second business day following the execution and
delivery of this Agreement or (B) the fifteenth business day after the
Effective Date of the Initial Registration Statement. The Company
will advise CSFBC promptly of any such filing pursuant to Rule 424(b).
If the Effective Time of the Initial Registration Statement is prior
to the execution and delivery of this Agreement and an additional
registration statement is necessary to
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register a portion of the Offered Securities under the Act but the
Effective Time thereof has not occurred as of such execution and
delivery, the Company will file the additional registration statement
or, if filed, will file a post-effective amendment thereto with the
Commission pursuant to and in accordance with Rule 462(b) on or prior
to 10:00 P.M., New York time, on the date of this Agreement or, if
earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later
date as shall have been consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to
amend or supplement the initial or any additional registration
statement as filed or the related prospectus or the Initial
Registration Statement, the Additional Registration Statement (if any)
or the Prospectus and will not effect such amendment or
supplementation without CSFBC's consent; and the Company will also
advise CSFBC promptly of the effectiveness of each Registration
Statement (if its Effective Time is subsequent to the execution and
delivery of this Agreement) and of any amendment or supplementation of
a Registration Statement or the Prospectus and of the institution by
the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection
with sales by any Underwriter or dealer, any event occurs 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 to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company will promptly notify CSFBC of such event and will promptly
prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither CSFBC's consent
to, nor the Underwriters' delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set
forth in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the
Initial Registration Statement (or, if later, the Effective Date of
the Additional Registration Statement) which will satisfy the
provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the
end of the fourth fiscal quarter following the fiscal quarter that
includes such Effective Date, except that, if such fourth fiscal
quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(e) The Company will furnish to the Representatives copies of
each Registration Statement (two of which will be signed and will
include all exhibits), each related preliminary prospectus, and, so
long as a prospectus relating to the Offered Securities is required to
be delivered under the Act in connection with sales by any Underwriter
or dealer, the Prospectus and all amendments and supplements to such
documents, in each case in such quantities as CSFBC requests. The
Prospectus shall be so furnished on or prior to 3:00 P.M., New York
time, on the business day following the later of the execution and
delivery of this Agreement or the Effective Time of the Initial
Registration Statement. All other such documents shall be so
furnished as soon as available. The
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Company will pay the expenses of printing and distributing to the
Underwriters all such documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as
CSFBC designates and will continue such qualifications in effect so
long as required for the distribution.
(g) During the period of five years hereafter so long as the
Company is a reporting company under the Exchange Act, the Company
will furnish to the Representatives and, upon request, to each of the
other Underwriters, as soon as practicable after the end of each
fiscal year, a copy of its annual report to stockholders for such
year; and the Company will furnish to the Representatives (i) as soon
as available, a copy of each report and any definitive proxy statement
of the Company filed with the Commission under the Securities Exchange
Act of 1934 or mailed to stockholders, and (ii) from time to time,
such other information concerning the Company as CSFBC may reasonably
request.
(h) For a period of 90 days after the date of the initial
public offering of the Offered Securities, the Company will not offer,
sell, contract to sell, grant any option for the sale of, establish a
put equivalent position (as defined in Rule 1a-1(h) under the Exchange
Act), pledge or otherwise dispose of, directly or indirectly, or file
with the Commission a registration statement under the Act relating
to, any shares of Securities or securities convertible into or
exchangeable or exercisable for, or any rights to purchase or acquire,
any shares of Securities, or publicly disclose the intention to make
any such offer, sale, pledge, grant, establishment, disposal or
filing, without the prior written consent of CSFBC.
(i) The Company will pay all expenses incident to the
performance of the obligations of the Selling Stockholders and the
obligations of the Company under this Agreement, for any filing fees
and other expenses (including fees and disbursements of counsel)
incurred in connection with qualification of the Offered Securities
for sale under the laws of such jurisdictions as CSFBC designates and
the printing of memoranda relating thereto, for the filing fee
incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review by the National
Association of Securities Dealers, Inc. of the Offered Securities, for
any travel expenses of the Company's officers and employees and any
other expenses of the Company in connection with the attending or
hosting meetings with prospective purchasers of the Offered
Securities, for any transfer taxes on the sale of the Offered
Securities to the Underwriters and for expenses incurred in
distributing preliminary prospectuses and the Prospectus (including
any amendments and supplements thereto) to the Underwriters.
(j) The Selling Stockholders will deliver to CSFBC, attention:
Transactions Advisory Group on or prior to the First Closing Date a
properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
(k) The Selling Stockholders will not, for a period of 90 days
after the date of the initial public offering of the Offered
Securities, offer, sell, contract to sell, grant any option for the
sale of, establish a put equivalent position (as defined in Rule
1a-1(h) under the Exchange Act), pledge or otherwise dispose of,
directly or indirectly, or request the filing with the Commission of a
registration statement under the Act relating to, any shares of
Securities or securities convertible into or exchangeable or
exercisable for, or
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any rights to purchase or acquire, any shares of Securities, or
publicly disclose the intention to make any such offer, sale, pledge,
grant, establishment, disposal or filing, without the prior written
consent of CSFBC.
6. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm
Securities on the First Closing Date and the Optional Securities to be
purchased on each Optional Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company and the
Selling Stockholders of their obligations hereunder and to the following
additional conditions precedent:
(a) The Representatives shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to
the registration statement to be filed shortly prior to such Effective
Time), of Price Waterhouse LLP, confirming that they are independent
public accountants with respect to the Company within the meaning of
the Act and the applicable published Rules and Regulations thereunder
and stating to the effect that:
(i) in their opinion the financial statements and
schedules examined by them and included in the Registration
Statements comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published Rules and Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements included in
the Registration Statements;
(iii) on the basis of the review referred to in clause
(ii) above, a reading of the latest available interim
financial statements of the Company, inquiries of officials of
the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements
included in the Registration Statements do not comply
as to form in all material respects with the
applicable accounting requirements of the Act and the
related published Rules and Regulations or any
material modifications should be made to such
unaudited financial statements for them to be in
conformity with generally accepted accounting
principles;
(B) the information set forth in the
Prospectus under the caption "Summary Consolidated
Historical and Pro Forma Combined Financial and
Operating Data" does not agree with the amounts set
forth in the unaudited consolidated financial
statements or the audited consolidated financial
statements, as the case may be, from which it was
derived or
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were not determined on a basis substantially
consistent with that of the corresponding amounts in
the unaudited statements or the audited statements
included in the Registration Statements and the
Prospectus;
(C) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt
or decrease in stockholders' equity of the Company
and its consolidated subsidiaries or, at the date of
the latest available balance sheet read by such
accountants, there was any decrease in consolidated
net current assets or total assets, as compared with
amounts shown on the latest balance sheet included in
the Prospectus; or
(D) for the period from the closing date
of the latest income statement included in the
Registration Statements and the Prospectus to the
closing date of the latest available income statement
read by such accountants, and at a subsequent
specified date not more than three business days
prior to the date of this Agreement, there were any
decreases, as compared with the corresponding period
of the previous year and with the period of
corresponding length ended the date of the latest
income statement included in the Registration
Statements and the Prospectus, in consolidated net
sales or net operating income, or in the total or per
share amounts of consolidated income before income
tax and extraordinary items or net income;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
(iv) (A) they have read the pro forma financial
statements and other pro forma financial information included
in the Registration Statements (collectively, the "Pro Forma
Information");
(A) they have made inquiries of certain
officials of the Company who have responsibility for
financial and accounting matters about the basis for
the pro forma adjustments;
(B) they have proved the arithmetic accuracy
of the application of the pro forma adjustments to
the historical amounts in the Pro Forma Information
and whether the Pro Forma Information complies as to
form in all material respects with the accounting
requirements of the Securities Act and the related
published Rules and Regulations; and
(C) on the basis of such procedures, and
such other inquiries and procedures as may be
specified in such letter, nothing came to their
attention that caused them to believe that the Pro
Forma Information included in the Registration
Statements does not comply as to form in all material
respects with the accounting requirements of the
Securities Act and the related published Rules and
Regulations or has not been properly compiled and
that the pro forma adjustments have not been properly
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applied to the historical amounts in the compilation
of those statements; and
(v) they have compared specified dollar amounts (or
percentages derived from such dollars amounts) and other
financial information contained in the Registration Statements
with the results obtained from inquiries, a reading of such
general accounting records and other procedures specified in
such letter and have found such dollar amounts, percentages
and other financial information to be in agreement with such
results, except as otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration Statement is
subsequent to such execution and delivery, "Registration Statements"
shall mean the Initial Registration Statement and the additional
registration statement as proposed to be filed or as proposed to be
amended by the post-effective amendment to be filed shortly prior to
its Effective Time, and (iii) "Prospectus" shall mean the prospectus
included in the Registration Statements. All financial statements and
schedules included in material incorporated by reference into the
Prospectus shall be deemed included in the Registration Statements for
purposes of this subsection.
(b) The Representatives shall have received a letter,
dated the date of delivery thereof (which, if the Effective Time of
the Initial Registration Statement is prior to the execution and
delivery of this Agreement, shall be on or prior to the date of this
Agreement or, if the Effective Time of the Initial Registration
Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or
post-effective amendment to the registration statement to be filed
shortly prior to such Effective Time), of Deloitte & Touche LLP in
form and substance satisfactory to the Representatives confirming that
they were independent public accountants with respect to X.X. Xxxxxxx
within the meaning of the Securities Act and the Rules and Regulations
and to the effect that:
(i) in their opinion the consolidated financial
statements of X.X. Xxxxxxx examined by them and included in
the Registration Statements comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the related published Rules and
Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements included in
the Registration Statements;
(iii) on the basis of the review referred to in clause
(ii) above, a reading of the latest available interim
financial statements of X.X. Xxxxxxx, inquiries of officials
of X.X. Xxxxxxx who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
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(A) the unaudited financial statements
of X.X. Xxxxxxx included in the Registration
Statements do not comply as to form in all material
respects with the applicable accounting requirements
of the Securities Act and the related published Rules
and Regulations or any material modifications should
be made to such unaudited financial statements for
them to be in conformity with generally accepted
accounting principles;
(B) the information set forth in the
Prospectus under the caption "Summary Consolidated
Historical and Pro Forma Combined Financial and
Operating Data" does not agree with the amounts set
forth in the unaudited consolidated financial
statements or the audited consolidated financial
statements, as the case may be, from which it was
derived or were not determined on a basis
substantially consistent with that of the
corresponding amounts in the unaudited statements or
the audited statements included in the Registration
Statements and the Prospectus;
(C) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt
or decrease in stockholders' equity of X.X. Xxxxxxx
and its consolidated subsidiaries or, at the date of
the latest balance sheet read by such accountants,
there was any decrease in consolidated net current
assets or total assets, as compared with amounts
shown on the latest balance sheet included in the
Prospectus; or
(D) for the period from the closing date
of the latest income statement included in the
Registration Statements and the Prospectus to the
closing date of the latest available income statement
read by such accountants, and at a subsequent
specified date not more than three business days
prior to the date of this Agreement, there were any
decreases, as compared with the corresponding period
of the previous year and with the period of
corresponding length ended the date of the latest
income statement included in the Registration
Statements and the Prospectus, in consolidated net
sales, net operating income, or in the total or per
share amounts of consolidated income before
extraordinary items or net income;
except in all cases set forth in clauses (C) and (D)
above for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or
which are described in such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
with the results obtained from inquiries, a reading of such
general accounting records and other procedures specified in
such letter and have found such dollar amounts, percentages
and other financial information to be in agreement with such
results, except as otherwise specified in such letter.
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For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration Statement is
subsequent to such execution and delivery, "Registration Statements"
shall mean the Initial Registration Statement and the additional
registration statement as proposed to be filed or as proposed to be
amended by the post-effective amendment to be filed shortly prior to
its Effective Time, and (iii) "Prospectus" shall mean the prospectus
included in the Registration Statements. All financial statements and
schedules included in material incorporated by reference into the
Prospectus shall be deemed included in the Registration Statements for
purposes of this subsection.
(c) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this
Agreement, such Effective Time shall have occurred not later than
10:00 P.M., New York time, on the date of this Agreement or such later
date as shall have been consented to by CSFBC. If the Effective Time
of the Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the time the Prospectus is printed and
distributed to any Underwriter, or shall have occurred at such later
date as shall have been consented to by CSFBC. If the Effective Time
of the Initial Registration Statement is prior to the execution and
delivery of this Agreement, the Prospectus shall have been filed with
the Commission in accordance with the Rules and Regulations and
Section 5(a) of this Agreement. Prior to such Closing Date, no stop
order suspending the effectiveness of a Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of any Selling Stockholder, the
Company or the Representatives, shall be contemplated by the
Commission.
(d) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) a change in United States
or international financial, political or economic conditions or
currency exchange rates or exchange controls as would, in the judgment
of CSFBC, be likely to prejudice materially the success of the
proposed public offering or the sale of and payment for the Offered
Securities, whether in the primary market or in respect of dealings in
the secondary market, or (ii) (A) any change, or any development or
event involving a prospective change, in the business, properties,
financial condition or results of operations of the Company or any of
its Subsidiaries which, in the judgment of a majority in interest of
the Underwriters, including the Representatives, makes it impractical
or inadvisable to proceed with completion of the public offering or
the sale of and payment for the Offered Securities; (B) any
downgrading in the rating of any debt securities or preferred stock of
the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act),
or any public announcement that any such organization has under
surveillance or review its rating of any debt securities or preferred
stock of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (C) any suspension or limitation of
trading in securities generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq Stock Market, or any setting of
minimum prices for trading on such exchange or market, or any
suspension of trading of any securities of the Company or any of its
Subsidiaries on any exchange or in the over-the-counter market; (D)
any banking moratorium declared by United States Federal or
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New York authorities or the taking of any action by any Federal, state
or local government or agency in respect of its monetary or fiscal
affairs which in the judgment of a majority in interest of the
Underwriters, including the Representatives, has a material adverse
effect on the financial markets in the United States; or (E) any
outbreak or escalation of hostilities in which the United States is
involved, any declaration of war by Congress or any other national or
international calamity or emergency if, in the judgment of a majority
in interest of the Underwriters including the Representatives, the
effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Offered Securities.
(e) The Representatives shall have received an opinion, dated
such Closing Date, of Xxxxxxxx & Xxxxx, counsel for the Company, to
the effect that:
(i) The Company and each of its Subsidiaries (other
than SRI and Specialty Retailers, Inc. (NV)) listed on
Schedule C hereto is a corporation existing and in good
standing under the laws of the State of Delaware. Each of the
Company and its Subsidiaries is qualified to do business and
is in good standing in each jurisdiction listed opposite its
name on Schedule C hereto;
(ii) Each of the Company and its Subsidiaries
listed on Schedule C hereto has the corporate power to own and
lease its properties and to conduct its business as described
in the Prospectus;
(iii) This Agreement has been duly authorized,
executed and delivered by the Company;
(iv) To such counsel's knowledge, neither the
Company nor any of its Subsidiaries is in violation of its
charter or by-laws;
(v) To such counsel's knowledge, no
authorization, approval, consent or order of, or filing with,
any court or governmental body or agency is required for the
consummation by the Company of the transactions contemplated
by this Agreement, except such as have been obtained or made
under the Securities Act, state securities or Blue Sky laws or
regulations or as may be required by the NASD with respect to
the issuance and sale of the Offered Securities;
(vi) The execution and delivery by the Company of,
and performance by the Company of its obligations under, this
Agreement and the issuance and sale of the Offered Securities
will not (i) violate the charter or bylaws of the Company or
any of its Subsidiaries, (ii) breach or result in a default
under an existing obligation of the Company under, or cause an
acceleration of any obligation under or result in the
imposition or creation of (or the obligation to create or
impose) a lien with respect to, any agreement listed as an
exhibit to (A) the Annual Report on Form 10-K of the Company
for the fiscal year ended February 1, 1997 as filed with the
Commission (provided that such counsel need express no opinion
as to compliance with any financial test or cross-default
provision in any such agreements) or (B) the Registration
Statement on Form S-4 of the Company (file no. 333-27809)
declared effective on May 27, 1997 by the Commission (provided
that such counsel need express no opinion as to compliance
with any financial test or cross-default provision in any such
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agreements) or (C) the Registration Statement on Form S-4 of
the Company (file no. 333-32695) declared effective on [ ],
1997 by the Commission (provided that such counsel need
express no opinion as to compliance with any financial test or
cross-default provision in any such agreements); (iii) to such
counsel's knowledge, breach or otherwise violate any provision
in any court or administrative order, writ, judgment or decree
that names the Company or any of its Subsidiaries and is
specifically directed to any of their property; or (iv)
constitute a material violation by the Company or any of its
Subsidiaries of any applicable provision of Federal, New York
State or Delaware corporate law, statute or regulation (except
that such counsel need express no opinion in this clause (iv)
as to compliance of the Registration Statements or the
Prospectus with any disclosure requirement or prohibition
against fraud or misrepresentation and no opinion as to
whether performance of the indemnification or contribution
provisions in this Agreement would be enforceable);
(vii) To such counsel's knowledge, there is no
action, suit, proceeding or investigation before or by any
court or governmental agency or body, domestic or foreign,
pending or threatened against, the Company or any of its
Subsidiaries that (i) has caused such counsel to conclude that
such action, suit, proceeding or investigation is required to
be described in the Registration Statements or the Prospectus
but is not so described or (ii) would be reasonably likely to
adversely affect the consummation of any of the transactions
contemplated by this Agreement, including without limitation
the issuance and sale of the Offered Securities;
(viii) The Company is not, and after giving effect to
the issuance and sale of the Offered Securities, will not be,
an "investment company" as defined in the Investment Company
Act of 1940;
(ix) The Offered Securities conform in all material
respects to the description thereof contained in the
Prospectus; and the descriptions in the Prospectus under the
headings "Description of Capital Stock," and "Certain U.S.
Federal Tax Considerations for Non-U.S. Holders of Common
Stock" insofar as statements therein constitute a summary of
legal matters, documents or proceedings referred to therein,
fairly present and summarize such matters in all material
respects;
(x) The Offered Securities and all of the issued
shares of capital stock of the Company have been duly
authorized and will be, when issued and paid for in accordance
with this Agreement, validly issued, fully paid and
nonassessable and no further approval or authority of the
shareholders or the Board of Directors of the Company is or
will be required for the issuance and sale of the Optional
Securities to be sold by the Company as contemplated by this
Agreement and the Securities are not subject to any preemptive
or similar right and conform in all material respects to the
description thereof contained in the Prospectus;
(xi) Except as described in the Prospectus, there are
no contracts, agreements or understandings between the Company
and any third party (whether acting in an individual,
fiduciary or other capacity) granting such third party the
right to require the Company to file a registration statement
under the Act with respect to any securities of the Company
owned or to be owned by such third party or to require the
Company to include such securities in the securities
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registered pursuant to a Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act; and there are no
legal or governmental proceedings, statutes, regulations,
contracts or other documents that are required to be described
in the Registration Statements or the Prospectus or required
to be filed as exhibits to the Registration Statements that
are not described or filed as required; and
(xii) The Initial Registration Statement was declared
effective under the Act as of the date and time specified in
such opinion, the Additional Registration Statement (if any)
was filed and became effective under the Act as of the date
and time (if determinable) specified in such opinion, the
Prospectus either was filed with the Commission pursuant to
the subparagraph of Rule 424(b) specified in such opinion on
the date specified therein or was included in the Initial
Registration Statement or the Additional Registration
Statement (as the case may be), and, to the knowledge of such
counsel, no stop order suspending the effectiveness of a
Registration Statement or any part thereof has been issued and
no proceedings for that purpose have been instituted or are
pending or contemplated under the Act, and each Registration
Statement and the Prospectus, and each amendment or supplement
thereto, as of their respective effective or issue dates,
complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations.
Such counsel shall also include a statement to the effect that
nothing has come to such counsel's attention to cause it to believe
that (except for financial statements, the schedules included therein
and other financial or statistical data and the text under the caption
"Notice to Canadian Residents" in the Prospectus, as aforesaid) a
Registration Statement or any amendment thereto, as of its effective
date or as of such Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus or any amendment or supplement
thereto, as of its issue date or as of such Closing Date, contained
any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
In making the statement set forth in the immediately preceding
paragraph, such counsel may state that their opinion and belief are
based upon their participation in the preparation of the Registration
Statements and the Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are
without independent check or verification except as specified.
The opinion of Xxxxxxxx & Xxxxx described in paragraph (e)
above shall be rendered to you at the request of the Company and shall
so state therein.
(f) The Underwriters shall have received an opinion, dated
such Closing Date, of Xxxxx Xxxxx, Esq., Senior Counsel of the
Company, to the effect that:
(i) SRI and Specialty Retailers, Inc. (NV) are each
corporations existing and in good standing under the laws of
their respective jurisdictions of incorporation. SRI and
Specialty Retailers, Inc. (NV) each have the corporate power
to own and lease their respective properties and to conduct
their respective businesses as described in the Prospectus;
and
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(ii) The execution and delivery by the Company of, and
performance by the Company of its obligations under, this
Agreement and the issuance and sale of the Offered Securities
will not constitute a material violation by the Company or any
of its Subsidiaries of any applicable provision of Texas law,
statute or regulation.
The opinion of Xxxxx Xxxxx, Esq. described in paragraph (f) above
shall be rendered to you at the request of the Company and shall so
state therein.
(g) The Representatives shall have received an opinion, dated
such Closing Date, of counsel for each of the Selling Stockholders, to
the effect that:
(i) To the knowledge of such counsel, such Selling
Stockholder had valid and unencumbered title to the Offered
Securities delivered by such Selling Stockholder on such
Closing Date and had full right, power and authority to enter
into this Agreement, the Custody Agreement and the Power of
Attorney and to sell, assign, transfer and deliver the Offered
Securities delivered by such Selling Stockholder on such
Closing Date hereunder; and such Selling Stockholder has
passed valid and unencumbered title to the several
Underwriters to the Offered Securities purchased by them on
such Closing Date, free and clear of any adverse claim (within
the meaning of the Uniform Commercial Code) to the extent the
Underwriters are without notice of any such adverse claim;
(ii) This Agreement has been duly authorized, executed
and delivered on behalf of such Selling Stockholder;
(iii) The Custody Agreement and the Power of Attorney
with respect to such Selling Stockholder have been duly
authorized, executed and delivered by such Selling Stockholder
and constitute valid and legally binding obligations of such
Selling Stockholder enforceable in accordance with their
respective terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(iv) To the knowledge of such counsel, no consent,
approval, authorization, order, registration or qualification
of, or filing with, any third party (whether acting in an
individual, fiduciary or other capacity) or any governmental
agency or body or any court is required to be obtained or made
by such Selling Stockholder for the consummation of the
transactions contemplated by this Agreement, the Custody
Agreement and the Power of Attorney in connection with the
sale of the Offered Securities, except such as have been
obtained and made under the Act and such as may be required
under state securities laws; and
(v) The execution, delivery and performance of this
Agreement, the Custody Agreement and the Power of Attorney by
such Selling Stockholder and the consummation of the
transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under (A) to the
knowledge of such counsel, any statute, any rule, regulation
or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over such Selling
Stockholder or any of its properties or operations, or any
agreement or instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder is bound or
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to which any of the properties or operations of such Selling
Stockholder is subject, or (B) if applicable, the charter,
by-laws or other organizational documents of such Selling
Stockholder, except, in the case of clause (A), for such
conflicts, breaches, violations or defaults which could not
reasonably be expected to, individually or in the aggregate,
have a material adverse effect on the consummation of the
transactions contemplated by this Agreement, the Custody
Agreement or the Power of Attorney.
(h) The Representatives shall have received from Xxxxx
Xxxxxxxxxx, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the Registration Statements,
the Prospectus and other related matters as the Representatives may
require, and the Selling Stockholders and the Company shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(i) The Representatives shall have received a certificate,
dated such Closing Date, of Xxxxx Xxxxxx, Executive Vice President and
Chief Financial Officer of the Company and Xxxx Xxxx, Vice President,
Financial Planning of the Company in which such officers shall state
that: the representations and warranties of the Company in this
Agreement are true and correct; the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date; no stop order
suspending the effectiveness of any Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission; the Additional Registration Statement
(if any) satisfying the requirements of subparagraphs (1) and (3) or
Rule 462(b) was filed pursuant to Rule 462(b), including payment of
the applicable filing fee in accordance with Rule 111(a) or (b) under
the Act, prior to the time the Prospectus was printed and distributed
to any underwriter; and, since the date of the latest balance sheet
included in the Prospectus, there has not been any material adverse
change, or any development involving a prospective material adverse
change, in the condition, financial or otherwise, or in the earnings,
affairs or business prospects, whether or not arising in the ordinary
course of business, of the Company; since the date of the latest
balance sheet included in the Prospectus, there has not been any
change, or any development involving a prospective material adverse
change, in the capital stock or long-term debt of the Company and its
Subsidiaries from that set forth in the Prospectus; and the Company
and its Subsidiaries have no liability or obligation, direct or
contingent, which is material to the Company and its Subsidiaries,
taken as a whole, other than those reflected in the Prospectus.
(j) The Representatives shall have received a letter, dated
such Closing Date, of each of Price Waterhouse LLP and Deloitte &
Touche LLP which meets the requirements of subsections (a) and (b) of
this Section, respectively, except that the specified date referred to
in such subsection will be a date not more than three days prior to
such Closing Date for the purposes of this subsection.
The Selling Stockholders and the Company will furnish the Representatives with
such conformed copies of such opinions, certificates, letters and documents as
the Representatives reasonably request. CSFBC may in its sole discretion waive
on behalf of the Underwriters compliance with any conditions to the obligations
of the Underwriters hereunder, whether in respect of an Optional Closing Date
or otherwise.
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7. Indemnification and Contribution. (a) The Company will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below; and provided, further,
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of
any Underwriter from whom the person asserting any such losses, claims, damages
or liabilities purchased the Offered Securities concerned, to the extent that a
prospectus relating to such Offered Securities was required to be delivered by
such Underwriter under the Act in connection with such purchase and any such
loss, claim, damage or liability of such Underwriter results from the fact that
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the Prospectus correcting such untrue statement or alleged untrue statement in
or omission or alleged omission from such preliminary prospectus if the Company
had previously furnished such quantity of copies thereof to such Underwriter as
reasonably requested by or on behalf of such Underwriter.
(b) Each Selling Stockholder will severally and not jointly
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, in each case only to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with written information furnished by such Selling Stockholder specifically for
use therein; provided, however, that with respect to any untrue statement or
alleged untrue statement in or omission or alleged omission from any
preliminary prospectus the indemnity agreement contained in this subsection (b)
shall not inure to the benefit of any Underwriter from whom the person
asserting any such losses, claims, damages or liabilities purchased the Offered
Securities concerned, to the extent that a prospectus relating to such Offered
Securities was required to be delivered by such Underwriter under the Act in
connection with such purchase and any such loss, claim, damage or liability of
such Underwriter results from the fact that there was not sent or given to such
person, at or prior to the written
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confirmation of the sale of such Offered Securities to such person, a copy of
the Prospectus correcting such untrue statement or alleged untrue statement in
or omission or alleged omission from such preliminary prospectus if the Company
had previously furnished such quantity of copies thereof to such Underwriter as
reasonably requested by or on behalf of such Underwriter. Notwithstanding the
foregoing, the aggregate liability of any Selling Stockholder pursuant to the
provisions of this paragraph shall be limited to an amount equal to the
aggregate sale price received by such Selling Stockholder from the sale of such
Selling Stockholder's shares hereunder.
(c) Each Underwriter will severally and not jointly indemnify
and hold harmless the Company and each Selling Stockholder against any losses,
claims, damages or liabilities to which the Company or such Selling Stockholder
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement, the Prospectus, or any amendment
or supplement thereto, or any related preliminary prospectus, or arise out of
or are based upon the omission or the alleged omission to state therein a
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company and
each Selling Stockholder in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred, it
being understood and agreed that the only such information furnished by any
Underwriter consists of the following information in the Prospectus furnished
on behalf of each Underwriter: the last paragraph at the bottom of the cover
page concerning the terms of the offering by the Underwriters, the legend
concerning over-allotments and stabilization at the bottom of the inside front
cover page, the information appearing in the fourth paragraph under the caption
"Underwriting" with respect to concession and reallowance figures and the
information appearing in the fifth paragraph under the caption "Underwriting."
(d) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a), (b) or (c) above, notify the
indemnifying party of the commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any liability which it may have
to any indemnified party otherwise than under subsection (a), (b) or (c) above.
In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, except as provided in the
next sentence, to the extent that it may wish jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party such
indemnified party of its election so as to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof, except as provided in
the next sentence, other than reasonable costs of investigation. The
indemnified party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel has been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to assume the
defense and employ counsel or (iii) the named parties to any such action
(including any impleaded parties) include both such
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indemnified party and an indemnifying party, and such indemnified party shall
have been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to
the indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified
person, it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all such
indemnified parties, which firm shall be designated in writing by CSFBC, in the
case of subsections (a) and (b) above, or by the Company or the Selling
Stockholders, as the case may be, in the case of subsection (c) above, and that
all such fees and expenses shall be reimbursed as they are incurred). An
indemnifying party shall not be liable for any settlement of any such action
effected without the written consent of such indemnifying party but if settled
with the written consent of such indemnifying party, such indemnifying party
agrees to indemnify and hold harmless any indemnified person from and against
any loss or liability by reason of such settlement. Notwithstanding the
immediately preceding sentence, if in any case where the fees and expenses of
counsel are at the expense of the indemnifying party and an indemnified party
shall have requested the indemnifying party to reimburse the indemnified party
for such fees and expenses of counsel as incurred, such indemnifying party
agrees that it shall be liable for any settlement of any action effected
without its written consent if (i) such settlement is entered into more than
ten business days after the receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall have failed to reimburse the
indemnified party in accordance with such request for reimbursement prior to
the date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of 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 includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(e) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a), (b) or
(c) above (i) in such proportion as is 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 Securities 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 in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities 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 shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Selling
Stockholders bear to the total underwriting discounts and commissions received
by the Underwriters under this Agreement. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied in writing by the
Company, the Selling Stockholders or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid by an indemnified party as
a result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (e) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection
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with investigating or defending any action or claim which is the subject of
this subsection (e). Notwithstanding the provisions of this subsection (e),
(i) no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission and
(ii) no Selling Stockholder shall be required to contribute any amount in
excess of the amount by which the aggregate sale price received by such Selling
Stockholder from the sale of the Offered Securities hereunder exceeds the
amount of any damages or indemnification which such Selling Stockholder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The Underwriters' obligations in
this subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint. The Selling Stockholders' obligations
in this subsection (e) to contribute are several and not joint.
(f) The obligations of the Company and the Selling
Stockholders under this Section shall be in addition to any liability which the
Company and the Selling Stockholders may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed a Registration Statement and to each person, if any, who
controls the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities hereunder on either
the First or any Optional Closing Date and the aggregate number of shares of
Offered Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing
Date, CSFBC may make arrangements satisfactory to the Selling Stockholders or
the Company, as the case may be, for the purchase of such Offered Securities by
other persons, including any of the Underwriters, but if no such arrangements
are made by such Closing Date, the non-defaulting Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder,
to purchase the Offered Securities that such defaulting Underwriters agreed but
failed to purchase on such Closing Date. If any Underwriter or Underwriters so
default and the aggregate number of shares of Offered Securities with respect
to which such default or defaults occur exceeds 10% of the total number of
shares of Offered Securities that the Underwriters are obligated to purchase on
such Closing Date and arrangements satisfactory to CSFBC and the Selling
Stockholders or the Company, as the case may be, for the purchase of such
Offered Securities by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Stockholders, except as
provided in Section 9 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Selling Stockholders, of the Company or its officers and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company or any of their respective representatives, officers
or directors or any controlling
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person, and will survive delivery of and payment for the Offered Securities.
If this Agreement is terminated pursuant to Section 8 or if for any reason the
purchase of the Offered Securities by the Underwriters is not consummated, the
Company and the Selling Stockholders shall remain responsible for the expenses
to be paid or reimbursed by them pursuant to Section 5 and the respective
obligations of the Company, the Selling Stockholders, and the Underwriters
pursuant to Section 7 shall remain in effect, and if any Offered Securities
have been purchased hereunder the representations and warranties in Section 2
and all obligations under Section 5 shall also remain in effect. If the
purchase of the Offered Securities by the Underwriters is not consummated for
any reason other than solely because of the termination of this Agreement
pursuant to Section 8 or the occurrence of any event specified in clause (C),
(D) or (E) of Section 6(c)(ii), the Company will reimburse the Underwriters for
all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Offered.
Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to CSFBC at Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000,
Attention: Investment Banking Department--Transactions Advisory Group, or, if
sent to the Company, will be mailed, delivered or telegraphed and confirmed to
it at 00000 Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention: Xxxx Xxxxxx, or, if
sent to the Selling Stockholders or any of them, will be mailed, delivered or
telegraphed and confirmed to such Selling Stockholder at the address of the
Attorneys-in-Fact as set forth in the Powers of Attorney, or in each case to
such other address as the person to be notified may have requested in writing;
provided, however, that any notice to any Underwriter pursuant to Section 7
will be mailed, delivered or telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective personal representatives
and successors and the officers and directors and controlling persons referred
to in Section 7, and no other person will have any right or obligation
hereunder.
12. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this
Agreement, and any action under this Agreement taken by the Representatives
jointly or by CSFBC will be binding upon all the Underwriters. [ ]
will act for the Selling Stockholders in connection with such transactions,
and any action under or in respect of this Agreement taken by [ ]
will be binding upon all the Selling Stockholders.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
29
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If the foregoing is in accordance with the Representatives understanding of our
agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Selling
Stockholders, the Company and the several Underwriters in accordance with its
terms.
Very truly yours,
STAGE STORES, INC.
By
--------------------------------------
Name:
Title:
SELLING STOCKHOLDERS:
By
--------------------------------------
Name:
Title: Attorney-in-Fact
30
31
31
32
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, XXXXXXX & CO. INC.
Acting on behalf of themselves and as the
Representatives of the several Underwriters.
By CREDIT SUISSE FIRST BOSTON CORPORATION
By
--------------------------------------
Name:
Title:
32
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SCHEDULE A
Number of Firm
Selling Stockholder Securities to be Sold
-------------------- ---------------------
--------------
Total . . . . . . . . . . . . . . . . . . . . . . .
==============
34
SCHEDULE B
Number of Firm
Securities to be
Underwriter Purchased
----------- ------------------------
Credit Suisse First Boston Corporation
Bear Xxxxxxx & Co., Inc.
--------------
Total . . . . . . . . . . . . . . . . . . . . . . .
==============
35
SCHEDULE C
SUBSIDIARIES
Jurisdictions Where
Name Jurisdiction of Incorporation Qualified To Do Business
---- ----------------------------- ------------------------
Stage Stores, Inc. Delaware None
Specialty Retailers, Inc. Texas Alabama Minnesota
Arizona Mississippi
Colorado Missouri
Illinois Nebraska
Indiana Ohio
Iowa Oklahoma
Kansas South Dakota
Louisiana Wisconsin
Michigan Wyoming
Specialty Retailers, Inc.(NV) Nevada None
SRI Receivables Purchase
Co., Inc. Delaware None
SRI Unrestricted Sub, Inc. Delaware None
36
SCHEDULE D
EXECUTIVE OFFICERS AND DIRECTORS SUBJECT TO LOCK UP
