10,000,000 Shares
Stage Stores, Inc.
Common Stock
UNDERWRITING AGREEMENT
_________, 1996
CS FIRST BOSTON CORPORATION
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
PAINEWEBBER INCORPORATED
As representatives of the
several underwriters
named in Schedule I hereto
c/o CS First Boston Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Stage Stores, Inc., a Delaware corporation (the "Company")
proposes to sell an aggregate of 10,000,000 shares of the common stock, par
value $.01 per share of the Company (the "Firm Shares"), to the several
underwriters named in Schedule I hereto (the "Underwriters"). The Company and
the Stockholders identified on Schedule II hereto (collectively the "Selling
Stockholders") also propose to sell to the several Underwriters an aggregate of
up to 1,500,000 additional shares of common stock, par value $.01 per share of
the Company (the "Additional Shares") if requested by the Underwriters as
provided in Section 2 hereof. The Company will sell up to 750,000 shares and the
Selling Stockholders will sell up to 750,000 shares of such Additional Shares.
The Firm Shares and the Additional Shares are herein collectively called the
Shares. The shares of common stock of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
Common Stock. The Company and the Selling Stockholders are hereinafter
collectively called the Sellers.
1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively called the "Act"), a registration statement on Form S-1 including
a prospectus relating to the Shares, which may be amended. The registration
statement as amended at the time when it becomes effective, including a
registration statement
(if any) filed pursuant to Rule 462(b) under the Act increasing the size of the
offering registered under the Act and information (if any) deemed to be part of
the registration statement at the time of effectiveness pursuant to Rule 430A or
Rule 434 under the Act, is hereinafter referred to as the Registration
Statement; and the prospectus including any prospectus subject to completion
taken together with any term sheet meeting the requirements of Rule 434(a) or
Rule 434(b) under the Act in the form first used to confirm sales of Shares is
hereinafter referred to as the Prospectus.
2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell, and each Underwriter
agrees, severally and not jointly, to purchase from the Company at a price per
share of $_____ (the "Purchase Price") the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, (i)(A) the Company
agrees to sell up to 750,000 Additional Shares and (B) the Underwriters shall
have the right to purchase, severally and not jointly, up to an aggregate of
750,000 Additional Shares from the Company at the Purchase Price and (ii)(A) the
Selling Stockholders agree to sell up to 750,000 Additional Shares and (B) the
Underwriters shall have the right to purchase, severally and not jointly, up to
an aggregate of 750,000 Additional Shares from the Selling Stockholders at the
Purchase Price. Additional Shares may be purchased solely for the purpose of
covering over-allotments made in connection with the offering of the Firm
Shares. The Underwriters may exercise their right to purchase Additional Shares
in whole or in part from time to time by giving written notice thereof to the
Company and the Selling Stockholders within 30 days after the date of this
Agreement. You shall give any such notice on behalf of the Underwriters and such
notice shall specify the aggregate number of Additional Shares to be purchased
pursuant to such exercise and the date for payment and delivery thereof. The
date specified in any such notice shall be a business day (i) no earlier than
the Closing Date (as hereinafter defined), (ii) no later than ten business days
after such notice has been given and (iii) no earlier than two business days
after such notice has been given. If any Additional Shares are to be purchased,
each Underwriter, severally and not jointly, agrees to purchase from the Company
and the Selling Stockholders the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) which bears the
same proportion to the total number of Additional Shares to be purchased from
the Company and the Selling Stockholders as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I bears to the total number of
Firm Shares.
The Sellers hereby agree, severally and not jointly, and the
Company shall, concurrently with the execution of this Agreement, deliver an
agreement executed by (i) each of the directors and officers of the Company who
is not a Selling Stockholder, and (ii) each stockholder listed on Annex I
hereto, pursuant to which each such person agrees not to offer, sell, contract
to sell, grant any option to purchase, or otherwise dispose of any common stock
of the Company or any securities convertible into or exercisable or exchangeable
for such common stock or in any other manner transfer all or a portion of the
economic consequences associated with the ownership of any such common stock,
except to the Underwriters pursuant to this Agreement, for a period of 180 days
after the date of the Prospectus without the prior written consent of CS First
Boston Corporation. Notwithstanding the foregoing, during such
2
period (i) the Company may grant stock options pursuant to the Company's
existing stock option plans and (ii) the Company may issue shares of its common
stock upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof.
3. Terms of Public Offering. The Sellers are advised by you
that the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the effective date of the Registration
Statement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and
payment for the Firm Shares shall be made at 10:00 A.M., New York City time, on
the third or fourth business day unless otherwise permitted by the Commission
pursuant to Rule 15c6-1 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (the "Closing Date") following the date of the initial public
offering, at such place outside the State of New York as you shall designate.
The Closing Date and the location of delivery of and the form of payment for the
Firm Shares may be varied by agreement between you and the Sellers.
Delivery to the Underwriters of and payment for any Additional
Shares to be purchased by the Underwriters shall be made at such place as you
shall designate at 10:00 A.M., New York City time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (an "Option
Closing Date"). Any such Option Closing Date and the location of delivery of and
the form of payment for such Additional Shares may be varied by agreement
between you and the Company.
Certificates for the Shares shall be registered in such names
and issued in such denominations as you shall request in writing not later than
two full business days prior to the Closing Date or an Option Closing Date, as
the case may be. Such certificates shall be made available to you for inspection
not later than 9:30 A.M., New York City time, on the business day next preceding
the Closing Date or an Option Closing Date, as the case may be. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date or an Option Closing Date, as the case may be, with any transfer taxes
thereon duly paid by the respective Sellers, for the respective accounts of the
several Underwriters, against payment of the Purchase Price therefor by wire
transfer or certified or official bank checks payable in Federal funds to the
order of the applicable Sellers.
5. Agreements of the Company. The Company agrees with you:
(a) To use its best efforts to cause the Registration
Statement to become effective at the earliest possible time.
(b) To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) when the Registration Statement
has become effective and when any post-effective amendment to it
becomes effective, (ii) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information, (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the suspension of qualification of
the Shares for offering or sale in any jurisdiction, or the initiation
of any proceeding for such purposes, and (iv) of the
3
happening of any event during the period referred to in paragraph (e)
below which makes any statement of a material fact made in the
Registration Statement or the Prospectus untrue or which requires the
making of any additions to or changes in the Registration Statement or
the Prospectus in order to make the statements therein not misleading.
If at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make
every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time.
(c) To furnish to you, without charge, four (4) signed copies
of the Registration Statement as first filed with the Commission and of
each amendment to it, including all exhibits, and to furnish to you and
each Underwriter designated by you such number of conformed copies of
the Registration Statement as so filed and of each amendment to it,
without exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to the
Registration Statement, whether before or after the time when it
becomes effective, or to make any amendment or supplement to the
Prospectus (including the issuance or filings of any term sheet within
the meaning of Rule 434) of which you shall not previously have been
advised or to which you shall reasonably object; and to prepare and
file with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or supplement to the Prospectus
(including the issuance or filings of any term sheet within the meaning
of Rule 434) which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause
the same to become promptly effective.
(e) Promptly after the Registration Statement becomes
effective, and from time to time thereafter for such period as in the
opinion of counsel for the Underwriters a prospectus is required by law
to be delivered in connection with sales by an Underwriter or a dealer,
to furnish to each Underwriter and dealer as many copies of the
Prospectus (and of any amendment or supplement to the Prospectus) as
such Underwriter or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any event
shall occur as a result of which, in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus
to comply with any law, forthwith to prepare and file with the
Commission an appropriate amendment or supplement to the Prospectus so
that the statements in the Prospectus, as so amended or supplemented,
will not in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with law, and to
furnish to each Underwriter and to such dealers as you shall specify,
such number of copies thereof as such Underwriter or dealers may
reasonably request.
(g) Prior to any public offering of the Shares, to cooperate
with you and counsel for the Underwriters in connection with the
registration or qualification of the Shares for offer and sale by the
several Underwriters and by dealers under the state securities or Blue
Sky laws of such jurisdictions as you may request, to continue such
4
qualification in effect so long as required for distribution of the
Shares and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification.
(h) To mail and make generally available to its stockholders
as soon as reasonably practicable an earnings statement covering a
period of at least twelve months after the effective date of the
Registration Statement (but in no event commencing later than 90 days
after such date) which shall satisfy the provisions of Section 11(a) of
the Act, and to advise you in writing when such statement has been so
made available.
(i) During the period of five years after the date of this
Agreement, (i) to mail as soon as reasonably practicable after the end
of each fiscal year to the record holders of its Common Stock a
financial report of the Company and its subsidiaries on a consolidated
basis (and a similar financial report of all unconsolidated
subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year,
together with comparable information as of the end of and for the
preceding year, certified by independent certified public accountants,
and (ii) to mail and make generally available as soon as practicable
after the end of each quarterly period (except for the last quarterly
period of each fiscal year) to such holders, a consolidated balance
sheet, a consolidated statement of operations and a consolidated
statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such
period, and for the period from the beginning of such year to the close
of such quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(j) During the period referred to in paragraph (i), to furnish
to you as soon as available a copy of each report or other publicly
available information of the Company mailed to the holders of Common
Stock or filed with the Commission and such other publicly available
information concerning the Company and its subsidiaries as you may
reasonably request.
(k) To pay all costs, expenses, fees and taxes incident to (i)
the preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits),
each preliminary prospectus and all amendments and supplements to any
of them prior to or during the period specified in paragraph (e), (ii)
the printing and delivery of the Prospectus and all amendments or
supplements to it during the period specified in paragraph (e), (iii)
the printing and delivery of this Agreement, the Preliminary and
Supplemental Blue Sky Memoranda and all other agreements, memoranda,
correspondence and other documents printed and delivered in connection
with the offering of the Shares (including in each case any
disbursements of counsel for the Underwriters relating to such printing
and delivery), (iv) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of the several
states (including in each case the fees and disbursements of counsel
for the Underwriters relating to such registration or qualification and
memoranda relating thereto), (v) filings and clearance with the
5
National Association of Securities Dealers, Inc. in connection with the
offering, (vi) the listing of the Shares on the National Association of
Securities Dealers Automated Quotation system ("NASDAQ") National
Market, (vii) furnishing such copies of the Registration Statement, the
Prospectus and all amendments and supplements thereto as may be
requested for use in connection with the offering or sale of the Shares
by the Underwriters or by dealers to whom Shares may be sold and (viii)
the performance by the Sellers of their other obligations under this
Agreement.
(l) To use its best efforts to maintain the inclusion of the
Common Stock in the NASDAQ National Market (or on a national securities
exchange) for a period of five years after the effective date of the
Registration Statement.
(m) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Shares.
6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such
part became effective, did not contain and each such part, as amended
or supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Act and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph (b)
do not apply to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Act, and each
Registration Statement filed pursuant to Rule 462(b) under the Act, if
any, complied when so filed in all material respects with the Act; and
did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) The Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of
6
incorporation and has the corporate power and authority to carry on its
business as it is currently being conducted and to own, lease and
operate its 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 its business or its 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.
(e) All of the issued and outstanding shares of capital stock
of, or other ownership interests in, each of the Company's subsidiaries
have been duly and validly authorized and issued and are fully paid and
nonassessable, and are owned, directly or through other subsidiaries of
the Company, by the Company, free and clear of any lien, except for the
lien of the holders of the Company's 12 3/4 Senior Discount Debentures
due 2003 on the common stock of Specialty Retailers, Inc.;
(f) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders) have been
duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights; and the Shares to
be issued and sold by the Company hereunder have been duly authorized
and, when issued and delivered to the Underwriters against payment
therefor as provided by this Agreement, will be validly issued, fully
paid and non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights.
(g) The authorized capital stock of the Company, including the
Common Stock, conforms as to legal matters to the description thereof
contained in the Prospectus.
(h) 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 material to the conduct of
the business of the Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a party or by which it
or any of its subsidiaries or their respective property is bound which
default in this clause (iii) would have a material adverse effect on
the business and results of operations of the Company and its
subsidiaries taken as a whole.
(i) The execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require
any consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body
(except as such may be required under the Act, the NASD rules and
regulations, the rules and regulations of the NASDAQ National Market or
the securities or Blue Sky laws of the various states) and will not
conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the charter or by-laws of the Company or any of
its subsidiaries or any agreement, indenture or other instrument to
which it or any of its subsidiaries is a party or by
7
which it or any of its subsidiaries or their respective property is
bound, or violate or conflict with any laws, administrative regulations
or rulings or court decrees applicable to the Company, any of its
subsidiaries or their respective property. Which breach or violation
would have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(j) 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, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated. No
contract or document of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement is not so described or filed as required.
(k) 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 or the rules and
regulations promulgated thereunder, which in each case might result in
any material adverse change in the business, prospects, financial
condition or results of operation of the Company and its subsidiaries,
taken as a whole.
(l) The Company and each of its subsidiaries has such 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 its respective properties and to conduct its business; the
Company and each of its subsidiaries has fulfilled and performed all of
its 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 or any of its
subsidiaries.
(m) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating 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 Company and its subsidiaries, taken as a whole.
8
(n) 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 has 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 Registration Statement 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 might result in any material adverse
change in the business, prospects, financial condition or results of
operation 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 such subsidiary.
(o) The Company and each of its subsidiaries maintains
reasonably adequate insurance.
(p) Price Waterhouse LLP are independent public accountants
with respect to the Company as required by the Act and the Exchange
Act. Ernst & Young LLP are independent public accountants with respect
to Uhlmans Inc. as required by the Act and the Exchange Act.
(q) The financial statements, together with related schedules
and notes forming part of the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in
financial position of the Company and its subsidiaries on the basis
stated in the Registration Statement 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 Registration
Statement and 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.
(r) Neither the Company nor any of its subsidiaries is an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended;
(s) To such counsel's knowledge, after due inquiry, no holder
of any security of the Company has any right to require registration of
shares of Common Stock or any other security of the Company that have
not been waived;
(t) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
related to or entitling any person to purchase or otherwise to acquire
any shares of the capital stock of, or other ownership interest in, the
Company or any subsidiary thereof except as otherwise disclosed in the
Registration Statement.
9
(u) Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to be
disclosed therein by Item 404 of Regulation S-K of the Commission.
(v) 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 pending against the Company or any of its subsidiaries or, to
the knowledge of 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 could not reasonably be
expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(w) 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.
(x) 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.
(y) The Company has filed an application to list the Shares on
the NASDAQ National Market, and has received notification that the
listing has been approved, subject to notice of issuance of the Shares.
(z) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
7. Representations and Warranties of the Selling Stockholders.
Each Selling Stockholder severally represents and warrants to each
Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the Shares
to be sold by such Selling Stockholder pursuant to this Agreement and
has, and on the Option
10
Closing Date will have, good and clear title to such Shares, free of
all restrictions on transfer, liens, encumbrances, security interests
and claims whatsoever.
(b) Upon delivery of and payment for such Shares pursuant to
this Agreement, good and clear title to such Shares will pass to the
Underwriters, free of all restrictions on transfer, liens,
encumbrances, security interests and claims whatsoever.
(c) Such Selling Stockholder has, and on the Option Closing
Date will have, full legal right, power and authority to enter into
this Agreement and the Custody Agreement between the Selling
Stockholders and ____________________________________, as Custodian
(the "Custody Agreement") and to sell, assign, transfer and deliver
such Shares in the manner provided herein and therein, and this
Agreement and the Custody Agreement have been duly authorized, executed
and delivered by such Selling Stockholder and each of this Agreement
and the Custody Agreement is a valid and binding agreement of such
Selling Stockholder enforceable in accordance with its terms, except as
rights to indemnity and contribution hereunder may be limited by
applicable law.
(d) The power of attorney signed by such Selling Stockholder
appointing Xxxxxx Xxxxxxxxxx and Xxxxx Xxxxxxxxx or either one of them,
as such Selling Stockholder's attorney-in-fact to the extent set forth
therein with regard to the transactions contemplated hereby and by the
Registration Statement and the Custody Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling
Stockholder and is a valid and binding instrument of such Selling
Stockholder enforceable in accordance with its terms, and, pursuant to
such power of attorney, such Selling Stockholder has authorized Xxxxxx
Xxxxxxxxxx and Xxxxx Xxxxxxxxx, or either one of them, to execute and
deliver on such Selling Stockholder's behalf this Agreement and any
other document necessary or desirable in connection with transactions
contemplated hereby and to deliver the Shares to be sold by such
Selling Stockholder pursuant to this Agreement.
(e) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares pursuant to the distribution
contemplated by this Agreement, and other than as permitted by the Act,
the Selling Stockholder has not distributed and will not distribute any
prospectus or other offering material in connection with the offering
and sale of the Shares.
(f) The execution, delivery and performance of this Agreement
by such Selling Stockholder, compliance by such Selling Stockholder
with all the provisions hereof and the consummation of the transactions
contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as such may be
required under the Act, the NASD rules and regulations, the rules and
regulations of the NASDAQ National Market or the state securities laws
or Blue Sky laws) and will not conflict with or constitute a breach of
any of the terms or provisions of, or a default
11
under, organizational documents of such Selling Stockholder, if not an
itndividual, or any agreement, indenture or other instrument to which
such Selling Stockholder is a party or by which such Selling
Stockholder or property of such Selling Stockholder is bound, or
violate or conflict with any law, administrative regulation or ruling
or court decree applicable to such Selling Stockholder or property of
such Selling Stockholder.
(g) Such parts of the Registration Statement under the caption
"Principal Stockholders" which specifically relate to such Selling
Stockholder do not, and will not on the Option Closing Date, contain
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, in light of circumstances under which they were made, not
misleading.
(h) At any time during the period described in paragraph 5(e)
hereof, if there is any change in the information referred to in
paragraph 7(g) above, such Selling Stockholder will immediately notify
you of such change.
8. Indemnification. (a) The Company and each Selling
Stockholder, severally and not jointly, agree to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, liabilities and judgments caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriters furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use therein; provided, however, that the
foregoing indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages and liabilities and judgments purchased Shares, or
any person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended and supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or judgment. 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 purchase price received by such Selling Stockholder from the sale of
such Selling Stockholder's Shares hereunder, and the Selling Stockholders will
be liable in any case only to the extent that any such loss, claim, damage,
liability or judgment arises out of or is based upon an untrue statement or
alleged untrue statement, or omission or alleged omission, made in the
Registration Statement or Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), in reliance upon
and in conformity with information furnished to the
12
Company in writing by or through the Selling Stockholders specifically for use
in the preparation thereof.
(b) In case any action shall be brought against any
Underwriter or any person controlling such Underwriter, based upon any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement thereto and with respect to which indemnity may be
sought against the Company and/or the Selling Stockholders, such Underwriter
shall promptly notify the Company and the Selling Stockholders in writing and
the Company and the Selling Stockholders shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such indemnified
party (it being asked that Xxxxxxxx & Xxxxx will be considered satisfactory) and
payment of all fees and expenses. Any Underwriter or any such controlling person
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 such Underwriter or such controlling person unless
(i) the employment of such counsel has been specifically authorized in writing
by the Company, (ii) the Company and the Selling Stockholders 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 Underwriter or such
controlling person and the Company or the Selling Stockholders, as the case may
be, and such Underwriter or such controlling person 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 Company or the
Selling Stockholders, as the case may be, (in which case the Company and the
Selling Stockholders shall not have the right to assume the defense of such
action on behalf of such Underwriter or such controlling person, it being
understood, however, that the Company and the Selling Stockholders 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
Underwriters and controlling persons, which firm shall be designated in writing
by CS First Boston Corporation and that all such fees and expenses shall be
reimbursed as they are incurred). A Seller shall not be liable for any
settlement of any such action effected without the written consent of such
Seller but if settled with the written consent of such Seller, such Seller
agrees to indemnify and hold harmless any Underwriter and any such controlling
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 proceeding 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 claims
that are the subject matter of such proceeding.
13
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, any person controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each Selling
Stockholder and each person, if any, controlling such Selling Stockholder within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Sellers to each Underwriter but
only with reference to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus or any preliminary prospectus. In case
any action shall be brought against the Company, any of its directors, any such
officer or any person controlling the Company or any Selling Stockholder or any
person controlling such Selling Stockholder based on the Registration Statement,
the Prospectus or any preliminary prospectus and in respect of which indemnity
may be sought against any Underwriter, the Underwriter shall have the rights and
duties given to the Sellers (except that if any Seller shall have assumed the
defense thereof, such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter), and the
Company, its directors, any such officers and any person controlling the Company
and the Selling Stockholders and any person controlling such Selling
Stockholders shall have the rights and duties given to the Underwriter, by
Section 8(b) hereof.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Sellers on the one hand and the
Underwriters on the other hand from the offering of the Shares 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 Sellers and
the Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the Sellers
and the Underwriters shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by the
Sellers, and the total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Shares, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the Sellers and the Underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied 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 statement or omission.
The Sellers and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a
14
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares 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. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
(e) Each Seller hereby designates the address for notices
specified in Section 12 as the address at which process may be served in any
action, suit or proceeding which may be instituted in any state or federal court
in the State of New York by any Underwriter or person controlling an Underwriter
asserting a claim for indemnification or contribution under or pursuant to this
Section 8, and each Seller will accept the jurisdiction of such court in such
action, and waives, to the fullest extent permitted by applicable law, any
defense based upon lack of personal jurisdiction or venue.
(f) The Company hereby confirms that at its request CS First
Boston has without compensation acted as "qualified independent underwriter" (in
such capacity, the "QIU") within the meaning of Schedule E to the By-Laws of the
National Association of Securities Dealers, Inc: in connection with the offering
of the Offered Securities. The Company will indemnify and hold harmless the QIU
against any losses, claims, damages or liabilities, joint or several, to which
the QIU 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 the QIU's acting (or alleged failing to act) as such "qualified
independent underwriter" and will reimburse the QIU for any legal or other
expenses reasonably incurred by the QIU in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred.
9. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing
Date.
(b) The Registration Statement shall have become effective not
later than 5:00 p.m. (and in the case of a Registration Statement filed
under Rule 462(b) of the Act, not later than 10:00 p.m.), New York City
time, on the date of this Agreement or at such later date and time as
you may approve in writing, and at the Closing Date no stop order
suspending the effectiveness of the Registration Statement shall have
been
15
issued and no proceedings for that purpose shall have been commenced or
shall be pending before or contemplated by the Commission.
(c)(i) Since the date of the latest balance sheet included in
the Registration Statement and the Prospectus, there shall not have
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, (ii)
since the date of the latest balance sheet included in the Registration
Statement and the Prospectus there shall not have been any change, or
any development involving a prospective material adverse change, in the
capital stock or in the long-term debt of the Company from that set
forth in the Registration Statement and Prospectus, (iii) the Company
and its subsidiaries shall 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 Registration
Statement and the Prospectus and (iv) on the Closing Date you shall
have received a certificate dated the Closing Date, signed by Xxxx
Xxxxxx and Xxxxx Xxxxxx in their capacities as the Chief Executive
Officer and President and Executive Vice President/Chief Financial
Officer of the Company, confirming the matters set forth in paragraphs
(a), (b), and (c) of this Section 9.
(d) All the representations and warranties of the Selling
Stockholders contained in this Agreement shall be true and correct on
the Option Closing Date with the same force and effect as if made on
and as of the Option Closing Date and you shall have received a
certificate to such effect, dated the Option Closing Date, from each
Selling Stockholder executed by Power-of-attorney.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of Xxxxxxxx & Xxxxx, counsel for the Company and the
Selling Stockholders, to the effect that:
(i) the Company and each of its subsidiaries has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of their respective jurisdiction of
incorporation and each has the corporate power and authority
required to carry on its business as it is currently being
conducted and to own, lease and operate its properties;
(ii) the Company and each of its subsidiaries is duly
qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction listed on
Schedule III hereto;
(iii) all of the issued and outstanding shares of
capital stock of, or other ownership interests in, each of the
Company's subsidiaries have been duly and validly authorized
and issued and are fully paid and nonassessable, and are owned,
directly or through other subsidiaries of the Company, by the
Company, free and clear of any lien, except for the lien of the
holders of the Company's 12 3/4 Senior Discount Debentures due
2003 on the common stock of Specialty Retailers, Inc.;
16
(iv) all of the outstanding shares of Common Stock
(including the Shares to be sold by the Selling Stockholders)
have been duly authorized and validly issued and are fully
paid, nonassessable and, to the knowledge of such counsel, not
subject to any preemptive or similar rights;
(v) the certificates evidencing the Shares are in due
and proper form under Delaware law;
(vi) the Shares to be issued and sold by the Company
hereunder have been duly authorized, and when issued and
delivered to the Underwriters against payment therefor as
provided by this Agreement, will have been validly issued and
will be fully paid and nonassessable, and, to the knowledge of
such counsel, the issuance of such Shares is not subject to any
preemptive or similar rights;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company and each of the Selling
Stockholders and is a valid and binding agreement of the
Company and each Selling Stockholder enforceable in accordance
with its terms, except as such enforceability may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium, or
similar laws now or hereafter in effect relating to creditors'
rights and remedies generally and (ii) general equitable
principles, whether asserted in an action in law or in equity,
and that such enforceability may be subject to the discretion
of the court before which any proceedings therefor may be
brought;
(viii) the authorized capital stock of the Company,
including the Common Stock, conforms as to legal matters to the
description thereof contained in the Prospectus;
(ix) the Registration Statement has become effective
under the Act, no stop order suspending its effectiveness has
been issued and no proceedings for that purpose are, to the
knowledge of such counsel, pending before or contemplated by
the Commission;
(x) the statements under the caption "Description of
Capital Stock" in the Prospectus and Items 14 and 15 of Part II
of the Registration Statement insofar as such statements
constitute a summary of legal matters documents or proceedings
referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings;
(xi) to such counsel's knowledge, neither the Company
nor any of its subsidiaries is in violation of its respective
charter or by-laws;
(xii) 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 (or, in the case of
the Registration Rights Agreements, will be obtained or
17
made) under the Act, state securities or Blue Sky laws or
regulations or such as may be required by the NASD;
(xiii) the execution, delivery and performance of
this Agreement, compliance by the Company with all of the
provisions hereof, and the consummation of the transactions
contemplated hereby will not (i) conflict with or result in a
breach or violation of the charter or bylaws of the Company or
any of its subsidiaries, (ii) to such counsel's knowledge,
conflict with or result in a breach or violation of the terms
or provisions of, or constitute a default 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 material bond, note,
debenture or other evidence of indebtedness or any material
indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any of its subsidiaries is
a party or by which it or any of them is bound, or to which
any properties of the Company or any of its subsidiaries is or
may be subject and listed as an exhibit to the Registration
Statement, (iii) to such counsel's knowledge, contravene any
order of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or
any of their properties, or (iv) violate or conflict with any
stature, rule or regulation or administrative or court decree
applicable to the Company or any of its subsidiaries, or any
of their respective properties, in the case of clauses (ii),
(iii) and (iv), which conflict, breach, violate, default or
contravention, singly or in the aggregate with each other such
conflict, breach, violation, default or contravention, would
have a material adverse effect or would materially and
adversely affect the consummation of this Agreement or the
transactions contemplated hereby;
(xiv) 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 against or affecting the Company or any of its
subsidiaries which, would, singly or in the aggregate, have a
material adverse effect or materially and adversely affect the
consummation of this Agreement or the transactions
contemplated hereby;
(xv) after due inquiry, such counsel does not know of
any legal or governmental proceeding pending or threatened to
which the Company or any of its subsidiaries is a party or to
which any of their respective property is subject which is
required to be described in the Registration Statement or the
Prospectus and is not so described, or of any contract or
other document which is required to be described in the
Registration Statement or the Prospectus or is required to be
filed as an exhibit to the Registration Statement which is not
described or filed as required;
(xvi) neither the Company nor any of its subsidiaries
is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended;
18
(xvii) to such counsel's knowledge, after due
inquiry, no holder of any security of the Company has any
right to require registration of shares of Common Stock or any
other security of the Company that have not been waived;
(xviii) to such counsel's knowledge, there are no
outstanding options, warrants or other rights calling for the
issuance of, and no commitments, plans or arrangements to
issue, any shares of capital stock of the Company or any
security convertible into or exchangeable for capital stock of
the Company except as described in the Prospectus;
(xix) no transfer taxes are required to be paid in
connection with the sale and delivery of the Shares to the
Underwriters hereunder;
(xx) the Custody Agreement has been duly authorized,
executed and delivered by each Selling Stockholder and is a
valid and binding agreement of such Selling Stockholder
enforceable in accordance with its terms;
(xxi) each Selling Stockholder has full legal right,
power and authority, and any approval required by law (other
than any approval imposed by the applicable state securities
and Blue Sky laws) to sell, assign, transfer and deliver the
Shares to be sold by such Selling Stockholder in the manner
provided in this Agreement and the Custody Agreement;
(xxii) each Selling Stockholder has good and clear
title to the certificates for the Shares to be sold by it and
upon delivery thereof, pursuant hereto and payment therefor,
good and clear title will pass to the Underwriters, severally,
free of all restrictions on transfer, liens, encumbrances,
security interests and claims whatsoever;
(xxiii) the power of attorney signed by each Selling
Stockholder appointing Xxxxxx Xxxxxxxxxx and Xxxxx Xxxxxxxxx,
or either of them, as such Selling Stockholder's
attorney-in-fact to the extent set forth therein with regard
to the transactions contemplated hereby and by the
Registration Statement has been duly authorized, executed and
delivered by or on behalf of each Selling Stockholder and are
valid and binding instruments of such Selling Stockholder
enforceable in accordance with its terms, and pursuant to such
power of attorney, each of the Selling Stockholders has
authorized Xxxxxx Xxxxxxxxxx and Xxxxx Xxxxxxxxx, or either of
them, to execute and deliver on their behalf this Agreement
and any other document necessary or desirable in connection
with transactions contemplated hereby and to deliver the
Shares to be sold by them pursuant to this Agreement; and
(xxiv) the Registration Statement (including any
Registration Statement filed under 462(b) of the Act, if any)
and the Prospectus and any supplement or amendment thereto
(except for financial statements, the schedules included
therein and other financial or statistical data as to which no
19
opinion need be expressed) comply as to form in all material
respects with the
Act.
Xxxxxxxx & Xxxxx 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, as aforesaid) the Registration Statement and the
prospectus included therein at the time the Registration Statement became
effective contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, as amended or
supplemented, if applicable (except for financial statements, the schedules
included therein and other financial or statistical data, as aforesaid)
contained, as of its date or as of the Closing Date, any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In giving such opinion with respect to the matters covered by
clause (xxiv) and 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 Statement and
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 or one or more of
the Selling Stockholders, as the case may be, and shall so state therein.
(f) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Xxxxxx & Xxxxxxx, counsel for the
Underwriters, as to the matters referred to in clauses (vi), (vii) (but
only with respect to the Company and with respect to due authorization,
execution and delivery), (viii), (xxiii) and the statement set forth in
the final paragraph of the foregoing paragraph (e). In giving such
opinion with respect to the matters covered by clause (xxiii) and the
statement set forth in the final paragraph of the foregoing paragraph
(e) such counsel may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement
and 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.
(g) You shall have received letters on and as of the Closing
Date, in form and substance satisfactory to you, from Price Waterhouse
LLP and Ernst & Young LLP, each independent public accountants, with
respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus and
substantially in the form and substance of the letters delivered to you
by Price Waterhouse LLP and Ernst & Young LLP on the date of this
Agreement.
(h) The Company shall have delivered to you the agreements
specified in Section 2 hereof.
20
(i) The Company and the Selling Stockholders shall not have
failed at or prior to the Closing Date to perform or comply with any of
the agreements herein contained and required to be performed or
complied with by the Company at or prior to the Closing Date.
(j) You shall have received on the Option Closing Date, a
certificate of each Selling Stockholder who is not a U.S. Person to the
effect that such Selling Stockholder is not a U.S. Person (as defined
under applicable U.S. federal tax legislation), which certificate may
be in the form of a properly completed and executed United States
Treasury Department Form W-8 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof).
(k) The Company shall have accepted for payment, in accordance
with the terms of the Company's tender offer for all of its outstanding
12-3/4% Senior Discount Debentures due 2005 (the "Senior Discount
Debentures"), at least a majority in aggregate principal amount of its
Senior Discount Debentures.
The several obligations of the Underwriters to purchase any Additional Shares
hereunder are subject to the delivery to you on the applicable Option Closing
Date of such other documents as you may reasonably request with respect to such
other matters related to the issuance of such Additional Shares.
10. Effective Date of Agreement and Termination. This
Agreement shall become effective upon the later of (i) execution of this
Agreement and (ii) when notification of the effectiveness of the Registration
Statement has been released by the Commission.
This Agreement may be terminated at any time prior to the
Closing Date by you by written notice to the Sellers if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition,
financial or otherwise, of the Company and its subsidiaries, taken as a whole,
or the earnings, affairs, or business prospects of the Company and its
subsidiaries, taken as a whole, whether or not arising in the ordinary course of
business, which would, in your judgment, make it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) any
outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in your judgment, is material and
adverse and would, in your judgment, make it impracticable to market the Shares
on the terms and in the manner contemplated in the Prospectus, (iii) the
suspension or material limitation of trading in securities on the New York Stock
Exchange, the American Stock Exchange or the NASDAQ National Market or
limitation on prices for securities on any such exchange or National Market
System, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely affects,
or will materially and adversely affect, the business or operations of the
Company or any subsidiary, (v) the declaration of a banking moratorium by either
federal or New York State authorities or (vi) the taking of any action by any
federal, state or local government or agency in respect of
21
its monetary or fiscal affairs which in your opinion has a material adverse
effect on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Firm Shares
or Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 10
by an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date or on an Option Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares, or
Additional Shares, as the case may be, and the aggregate number of Firm Shares
or Additional Shares, as the case may be, with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date by all Underwriters and arrangements satisfactory to you and the
applicable Sellers for purchase of such Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter and the applicable Sellers. In any such case
which does not result in termination of this Agreement, either you or the
Sellers shall have the right to postpone the Closing Date or the applicable
Option Closing Date, as the case may be, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of any such Underwriter under this
Agreement.
11. Agreements of the Selling Stockholders. Each Selling Stockholder
severally agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes with respect to
the Shares to be sold by such Selling Stockholder; and
(b) To take all reasonable actions in cooperation with the Company and
the Underwriters to cause the Registration Statement to become effective at
the earliest possible time, to do and perform all things to be done and
performed under this Agreement prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Shares pursuant to this
Agreement.
12. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to Stage Stores,
Inc., 10201
00
Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention: Xxxx Xxxxxx, (b) if to the Selling
Stockholders, to their respective addresses set forth on Schedule II, and (c) if
to any Underwriter or to you, to you c/o CS First Boston Corporation, 00 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department, or in
any case to such other address as the person to be notified may have requested
in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Selling Stockholders,
the Company, its officers and directors and of the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Shares,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter or by or on behalf of the Sellers, the
officers or directors of the Company or any controlling person of the Sellers
(ii) acceptance of the Shares and payment for them hereunder and (iii)
termination of this Agreement.
If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Sellers to comply with the
terms or to fulfill any of the conditions of this Agreement, the Sellers agree
to reimburse the several Underwriters for all out-of-pocket expenses (including
the fees and disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Sellers, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
23
Please confirm that the foregoing correctly sets forth the
agreement between the Company and the several Underwriters.
Very truly yours,
STAGE STORES, INC.
By____________________________
Name:
Title:
THE SELLING STOCKHOLDERS NAMED IN
SCHEDULE II HERETO
By____________________________
Name:
Title: Attorney-in-fact
CS FIRST BOSTON CORPORATION
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
PAINEWEBBER INCORPORATED
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By CS FIRST BOSTON CORPORATION
By__________________________
Name:
Title:
24
SCHEDULE I
----------
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------------
CS First Boston Corporation
Bear, Xxxxxxx & Co. Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
PaineWebber Incorporated --------
Total: 10,000,000
==========
25
SCHEDULE II
-----------
Selling Stockholders
Number of Additional
Name Shares Being Sold
---- --------------------
Xxxx Capital Funds
Tyler Capital Fund, X.X.
Xxxxx Massachusetts, X.X.
Xxxxx International, L.P.-II
BCIP Associates
BCIP Trust Associates, L.P.
c/x Xxxx Venture Xxxxxxx
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Acadia Partners, L.P.
000 Xxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
--------------------
Total: 750,000
26
SCHEDULE III
------------
[To Be Provided By Xxxxxxxx & Xxxxx]
27
ANNEX I
Required Stockholder Lock-ups
Xxxx Capital Funds
Tyler Capital Fund, X.X.
Xxxxx Massachusetts, X.X.
Xxxxx International, L.P.-II
BCIP Associates
BCIP Trust Associates, L.P.
Acadia Partners, L.P.
FWHY-Coinvestment I Partner L.P.
Oak Hill
Court Square
Xxxxxxx Xxxxx
Xxxxxx Xxxxxxxxxx
Xxxx Xxxxxx
Xxxx Xxxxxx
Xxxx Xxxxxxx
Xxxxx Xxxx
Xxxxxx Xxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxxxx
Xxxxx Xxxxxxxxx
28
