__________ Shares
THE BOYDS COLLECTION, LTD.
Common Stock
UNDERWRITING AGREEMENT
----------------------
__________, 1999
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
Asrepresentatives of the several Underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The Boyds Collection, Ltd., a Maryland corporation (the "COMPANY"),
proposes to issue and sell to the several underwriters named in Schedule 1
hereto (the "UNDERWRITERS"), and certain stockholders of the Company named in
Schedule II hereto (the "SELLING STOCKHOLDERS"), severally and not jointly,
propose to sell to the several Underwriters, an aggregate of _______________
shares of the common stock, par value $0.0001 per share of the Company (the
"FIRM SHARES"), of which _____________ shares are to be issued and sold by
the Company and _____________ shares are to be sold by the Selling
Stockholders, each Selling Stockholder selling the amount set forth opposite
such Selling Stockholder's name in Schedule II hereto.
The Selling Stockholders also propose to sell to the several
Underwriters not more than an additional _____ shares, in aggregate, of their
Common Stock, par value $0.0001 per share (the "ADDITIONAL SHARES") if and to
the extent requested by the Underwriters as provided in Section 2 hereof. The
Firm Shares and the Additional Shares are hereinafter referred to
collectively as 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 sometimes referred to collectively as the
"Sellers."
SECTION 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, the "ACT"), a registration statement on Form S-1, including a
prospectus, relating to the Shares. The registration statement, as amended at
the time it became effective, including the information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to
Rule 430A under the Act, is hereinafter referred to as the "REGISTRATION
STATEMENT"; and the prospectus in the form first used to confirm sales of
Shares is hereinafter referred to as the "Prospectus". If the Company has
filed or is required pursuant to the terms hereof to file a registration
statement pursuant to Rule 462(b) under the Act registering additional shares
of Common Stock (a "RULE 462(B) REGISTRATION STATEMENT"), then, unless
otherwise specified, any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462(b) Registration Statement.
SECTION 2. AGREEMENTS TO SELL AND PURCHASE AND LOCK-UP AGREEMENTS .
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Company agrees to
issue and sell ______________ Firm Shares, (ii) each Selling Stockholder
agrees, severally and not jointly, to sell the number of Firm Shares set
forth opposite such Selling Stockholder's name in Schedule II hereto and
(iii) each Underwriter agrees, severally and not jointly, to purchase from
each Seller at a price per Share of $______ (the "PURCHASE PRICE") the number
of Firm Shares (subject to such adjustments to eliminate fractional shares as
you may determine) that bears the same proportion to the total number of Firm
Shares to be sold by such Seller as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto bears to the total
number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, each of the Selling
Stockholders, severally and not jointly, agrees to sell, and the Underwriters
shall have the right to purchase, severally and not jointly, up to ___
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 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 number of Additional Shares to be purchased pursuant to such exercise and
the date for payment and delivery thereof, which date shall be a business day
(i) no earlier than two business days after such notice has been given (and,
in any event, no earlier than the Closing Date (as hereinafter defined)) and
(ii) no later than ten business days after such notice has been given. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase from the Selling Stockholders the number of
Additional Shares (subject to such adjustments to eliminate fractional shares
as you may determine) that bears the same proportion to the total number of
Additional Shares to be purchased from 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.
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Each Seller hereby agrees not to (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other
arrangement that transfers all or a portion of the economic consequences
associated with the ownership of any Common Stock (regardless of whether any
of the transactions described in clause (i) or (ii) is to be settled by the
delivery of Common Stock, or such other securities, in cash or otherwise),
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
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. Notwithstanding the
foregoing or anything contained in this Agreement to the contrary, during
such period (i) the Company may grant stock options pursuant to the Company's
existing stock option plan and (ii) the Company may issue shares of Common
Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof. The Company also agrees not to file
any registration statement with respect to any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
for a period of 180 days after the date of the Prospectus without the prior
written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. In
addition, each Selling Stockholder agrees that, for a period of 180 days
after the date of the Prospectus without the prior written consent of
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, it will not make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock. The Company shall, prior to or concurrently
with the execution of this Agreement, deliver an agreement executed by (i)
each Selling Stockholder, (ii) each of the directors and officers of the
Company who is not a Selling Stockholder and (iii) each stockholder listed on
Annex I hereto to the effect that such person will not, during the period
commencing on the date such person signs such agreement and ending 180 days
after the date of the Prospectus, without the prior written consent of
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, (A) engage in any of the
transactions described in the first sentence of this paragraph or (B) make
any demand for, or exercise any right with respect to, the registration of
any shares of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock.
SECTION 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 execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
Of the shares of Common Stock to be offered by the Underwriters,
_________ have been reserved (the "Reserved Shares") for sale to certain
individuals, including employees, officers and directors of the Company and
other parties associated with the Company and members of their families. The
number of shares available to the general public will be reduced to the
extent those persons purchase, or confirm the purchase (either orally or in
writing) of, Reserved Shares. Any Reserved Shares not so purchased or
confirmed for purchase will be offered in the Offering.
SECTION 4. DELIVERY AND PAYMENT. The Shares shall be represented by
definitive certificates and shall be issued in such authorized denominations
and registered in such names as
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Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation shall request no later
than two business days prior to the Closing Date or the applicable Option
Closing Date (as defined below), as the case may be. The Shares shall be
delivered by or on behalf of the Sellers, with any transfer taxes thereon
duly paid by the respective Sellers, to Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation through the facilities of The Depository Trust Company
("DTC"), for the respective accounts of the several Underwriters, against
payment to the Sellers of the Purchase Price therefore by wire transfer of
Federal funds immediately available in New York City. The certificates
representing the Shares shall be made available for inspection not later than
11:30 A.M., New York City time, on the business day prior to the Closing Date
or the applicable Option Closing Date (as defined below), as the case may be,
at the office of DTC or its designated custodian (the "DESIGNATED OFFICE").
The time and date of delivery and payment for the Firm Shares shall be 9:00
A.M., New York City time, on ________, 1999 or such other time on the same or
such other date as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and
the Company shall agree in writing. The time and date of delivery and payment
for the Firm Shares are hereinafter referred to as the "CLOSING DATE". The
time and date of delivery and payment for any Additional Shares to be
purchased by the Underwriters shall be 9:00 A.M., New York City time, on the
date specified in the applicable exercise notice given by you pursuant to
Section 2 or such other time on the same or such other date as Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation and the Selling Stockholders shall
agree in writing. The time and date of delivery and payment for any
Additional Shares are hereinafter referred to as the "OPTION CLOSING DATE".
The documents to be delivered on the Closing Date or any Option Closing
Date on behalf of the parties hereto pursuant to Section 9 of this Agreement
shall be delivered at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx
Xxxx, XX 00000 and the Shares shall be delivered at the Designated Office,
all on the Closing Date or such Option Closing Date, as the case may be.
SECTION 5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, following notice to the Company of or the Company becoming
aware of (i) any request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for additional
information, (ii) 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, (iii) when any amendment to
the Registration Statement becomes effective, (iv) if the Company is required
to file a Rule 462(b) Registration Statement after the effectiveness of this
Agreement, when the Rule 462(b) Registration Statement has become effective
and (v) the happening of any event during the period referred to in Section
5(d) below which makes any statement of a material fact made in the
Registration Statement or the Prospectus untrue or which requires 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 use reasonable efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
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(b) To furnish to you three 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.
(c) To prepare the Prospectus, the form and substance of which shall be
satisfactory to you, and to file the Prospectus in such form with the
Commission within the applicable period specified in Rule 424(b) under the
Act; during the period specified in Section 5(d) below, not to file any
further amendment to the Registration Statement and not to make any amendment
or supplement to the Prospectus of which you shall not previously have been
advised or to which you shall reasonably object after being so advised; and,
during such period, to prepare and file with the Commission, promptly upon
your reasonable request, any amendment to the Registration Statement or
amendment or supplement to the Prospectus which may be necessary or advisable
in connection with the distribution of the Shares by you, and to use
reasonable efforts to cause any such amendment to the Registration Statement
to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement 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 in New York City to each Underwriter and any dealer as
many copies of the Prospectus (and of any amendment or supplement to the
Prospectus) as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriters and the Company, 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, in the opinion of counsel for the Underwriters and the
Company, it is necessary to amend or supplement the Prospectus to comply with
applicable 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 applicable law, and to furnish to each
Underwriter and to any dealer as many copies thereof as such Underwriter or
dealer may reasonably request.
(f) 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 registration or
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; provided,
however, that the Company shall not be required in connection therewith to
qualify as a foreign corporation in any jurisdiction in which it is not now
so qualified or to take any action that would subject it to general consent
to service of process or taxation other than as to matters and
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transactions relating to the Prospectus, the Registration Statement, any
preliminary prospectus or the offering or sale of the Shares, in any
jurisdiction in which it is not now so subject.
(g) To mail and make generally available to its stockholders as soon as
practicable an earnings statement (which need not be audited) covering the
twelve-month period ending March 31, 2000 that 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.
(h) During the period of three years after the date of this Agreement
unless the Company is sooner dissolved, acquired or merged out of existence,
to furnish to you as soon as available copies of all reports or other
communications furnished to the record holders of Common Stock or furnished
to or filed with the Commission or any national securities exchange on which
any class of securities of the Company is listed and such other publicly
available information concerning the Company and its subsidiaries as you may
reasonably request.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Sellers' obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel, the Company's accountants and any Selling Stockholder's
counsel (in addition to the Company's counsel) in connection with the
registration and delivery of the Shares under the Act and all other fees and
expenses in connection with the preparation, printing, filing and
distribution of the Registration Statement (including financial statements
and exhibits), any preliminary prospectus, the Prospectus and all amendments
and supplements to any of the foregoing, including the mailing and delivering
of copies thereof to the Underwriters and dealers in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery of
the Shares to the Underwriters, including any transfer or other taxes payable
thereon, (iii) all costs of printing or producing this Agreement and any
other agreements or documents in connection with the offering, purchase, sale
or delivery of the Shares, (iv) all expenses in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing
or producing any Preliminary and Supplemental Blue Sky Memoranda in
connection therewith (including the filing fees and fees and disbursements of
counsel for the Underwriters in connection with such registration or
qualification and memoranda relating thereto), (v) the filing fees and
disbursements of counsel for the Underwriters in connection with the review
and clearance of the offering of the Shares by the National Association of
Securities Dealers, Inc., (vi) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A relating to
the Common Stock and all costs and expenses incident to the listing of the
Shares on the NYSE and other national securities exchanges and foreign stock
exchanges, (vii) the cost of printing certificates representing the Shares,
(viii) the costs and charges of any transfer agent, registrar and/or
depositary, and (ix) all other costs and expenses incident to the performance
of the obligations of the Company and the Selling Stockholders hereunder for
which provision is not otherwise made in this Section. The provisions of this
Section shall not supersede or otherwise affect any agreement that the
Company and the Selling Stockholders may otherwise have for allocation of
such expenses among themselves.
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(j) To use its reasonable best efforts to list, subject to notice of
issuance, the Shares on the NYSE or other national exchange or automated
quotation system and to maintain the listing of the Shares on the NYSE or
other national exchange or automated quotation system for a period of three
years after the date of this Agreement unless the Company is sooner
dissolved, acquired or merged out of existence or does not qualify for
listing on the NYSE or other national exchange or automated quotation system.
(k) To use its reasonable 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 or any Option Closing Date, as the case may
be, and to satisfy all conditions precedent to the delivery of the Shares.
(l) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Shares, to file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on
the date of this Agreement and to pay to the Commission the filing fee for
such Rule 462(b) Registration Statement at the time of the filing thereof or
to give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement
filed after the effectiveness of this Agreement will become effective no
later than 10:00 P.M., New York City time, on the date of this Agreement; and
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) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended,
if applicable, will not contain as of the date of such amendment or
supplement 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 (other
than any Rule 462(b) Registration Statement to be filed by the Company after
the effectiveness of this Agreement) and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material respects
with the Act, (iii) if the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such Rule
462(b) Registration Statement and any amendments thereto, when they become
effective (A) will not contain as of the date of such amendment or supplement
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 and (B) will comply in all material respects with the Act and (iv)
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
7
representations and warranties set forth in this paragraph do not apply to
statements in or omissions from the Registration Statement or the Prospectus
(as amended or supplemented) 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, 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, except that the representations
and warranties set forth in this paragraph do not apply to statements in or
omissions from such preliminary prospectus based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(d) The Company has no direct or indirect subsidiaries other than Boyds
Operations, Inc., The Boyds Collection, Ltd., L.P. (the "PARTNERSHIP") and H.
C. Accents & Associates, Inc. (collectively, the "Subsidiaries") Boyds
Operations, Inc. has no assets other than its 1% general partnership interest
in the Partnership, no liabilities other than those associated with its
general partnership interest in the Partnership and has conducted no
operations other than those taken on behalf of the Partnership as its general
partner.
(e) Each of the Company and its Subsidiaries other than the Partnership
has been duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has the
corporate power and authority to conduct its business as described in the
Prospectus and to own, lease and operate its properties, except where failure
to be duly incorporated or validly existing or to have such power and
authority would not have a Material Adverse Effect (as defined below). The
Partnership has been duly formed and is validly existing as a limited
partnership in good standing under the state of Delaware and has the power
and authority to conduct its business as described in the Prospectus and to
own, lease and operate its properties, except where the failure to be duly
formed or validly existing or to have such power and authority would not have
a Material Adverse Effect. Each of the Company and its Subsidiaries is duly
qualified to do business in each jurisdiction in which the conduct of its
business requires such qualification, except where the failure to be so
qualified would not reasonably be expected to have a material adverse effect
on the business, condition (financial or otherwise) or results of operations
of the Company and its Subsidiaries, taken as a whole, (a "MATERIAL ADVERSE
EFFECT").
(f) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens granted or issued
by the Company or any of its Subsidiaries relating to or entitling any person
to purchase or otherwise to acquire any shares of the capital stock or
partnership interests of the Company or any Subsidiary, except as otherwise
disclosed in the Registration Statement.
(g) All of 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
8
paid, non-assessable and not subject to any preemptive or similar rights; and
the Shares to be issued and sold by the Company 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.
(h) All of the outstanding shares of capital stock or partnership
interests of each of the Company Subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable, and are owned by the
Company or Boyds Operations, Inc., free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature other than any
liens under the Credit Agreement, dated as of April 21, 1998, among the
Company, the several lenders from time to time parties thereto, DLJ Capital
Funding Inc., the Fuji Bank, Limited, New York Branch, and Fleet National
Bank (the "CREDIT AGREEMENT").
(i) The authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof contained in
the Prospectus under the caption "Description of Capital Stock."
(j) Neither the Company nor any of its Subsidiaries (other than the
Partnership) is in violation of its charter or by-laws and the Partnership is
not in violation of its agreement of limited partnership. Neither the Company
nor any of its Subsidiaries is (i) in default in the performance of any
obligation, agreement or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement 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
the Company or any of its Subsidiaries or their respective property is bound,
or (ii) in violation of any law, statute, rule regulation, judgment or court
decree applicable to the Company or any of its Subsidiaries, except for any
such violation or default that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(k) The execution, delivery and performance of this Agreement by the
Company, the compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not result in a
breach of, constitute a default under or violate (i) any of the terms,
conditions or provisions of the charter or by-laws of the Company or any of
its Subsidiaries (other than the Partnership) or the agreement of limited
partnership of the Partnership, (ii) any of the terms or provisions of any
document, agreement, indenture or other instrument to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any of their properties are bound, or (iii) (assuming
compliance with all applicable state securities or Blue Sky laws) any
judgment, writ, injunction, decree, order or ruling of any court or
governmental authority binding on the Company or any of its Subsidiaries or
any of their respective properties except, in the case of each of (ii) and
(iii), for such conflicts, defaults or violations that would not reasonably
be expected to have a Material Adverse Effect. No consent, approval, waiver,
license or authorization or other action by or filing with any governmental
authority is required in connection with the execution, delivery and
performance by the Company of this Agreement or the consummation by the
Company of the transactions contemplated hereby,
9
except such as (i) may be required under the state securities or Blue Sky
laws or (ii) shall have been obtained or made on or prior to the Closing Date.
(l) Except as otherwise set forth in the Registration Statement or the
Prospectus, there are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any of its
Subsidiaries is a party or of which any of their respective property is the
subject, which might reasonably be expected to result, singly or in the
aggregate, in a Material Adverse Effect.
(m) 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"), any provisions
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or any provisions of the Foreign Corrupt Practices Act or the rules and
regulations promulgated thereunder, except for such violations which, singly
or in the aggregate, would not be reasonably expected to have a Material
Adverse Effect.
(n) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any Authorization, any related constraints on operating activities
and any potential liabilities to third parties) which would, singly or in the
aggregate, have a Material Adverse Effect.
(o) Each of the Company and its Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities (each, an "AUTHORIZATION" or, collectively, "PERMITS"),
including, without limitation, under any applicable 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, as are necessary to own, lease and operate its
properties and to conduct its business in the manner described in the
Registration Statement and the Prospectus the lack of which would have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries has
received notice of any proceedings relating to the revocation or termination
of any such Permits; except where such revocation or termination of any such
Permits would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(p) Each of the Company and its Subsidiaries has good and marketable
title, free and clear of all liens, claims, encumbrances and restrictions to
all property and assets described in the Registration Statement and
Prospectus as being owned by it except for any such liens (i) for taxes not
yet due and payable or for taxes being contested in good faith and for which
adequate reserves, in accordance with generally accepted accounting
principles, have been taken; (ii) under the Credit Agreement or (iii) as
would not, individually or in the aggregate, have a Material Adverse Effect.
(q) Each of the Company and its Subsidiaries owns all rights to or has
adequate licenses or other rights to use all of the patents, trademarks,
service marks, trade names and copyrights necessary to conduct its respective
business described in the Registration Statement and Prospectus,
10
except where the failure to own or possess or have the ability to acquire any
of the foregoing would not have a Material Adverse Effect and neither the
Company nor any of its Subsidiaries has received notice of any conflict with
the asserted rights of others with respect to any patents, trademarks,
service marks, trade names or copyrights, the result of which conflict is
reasonably likely to result in a Material Adverse Effect.
(r) This Agreement has been duly authorized, executed and delivered by
the Company.
(s) Deloitte & Touche LLP, who has certified the financial statements
included in the Registration Statement and the Prospectus, is an independent
public accountant with respect to the Company and its Subsidiaries.
(t) The consolidated financial statements, together with related notes
thereto, included in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), present fairly in all material respects the
consolidated financial position and the results of operations and changes in
financial position of the Company and its Subsidiaries on the basis stated in
the Registration Statement and Prospectus at the respective dates or for the
respective periods to which they apply; 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. The other financial and statistical information and data
set forth in the Registration Statement and the Prospectus (and any amendment
or supplement thereto) are based on or derived from sources which the Company
believes to be reliable and accurate.
(u) The pro forma financial information included in the Registration
Statement and Prospectus (A) present fairly in all material respects the
information shown therein and (B) have been prepared in accordance with
applicable requirements of Regulation S-X promulgated under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"). The assumptions used
in the preparation of the pro forma financial statements included in the
Registration Statement and Prospectus are reasonable and the adjustments used
therein are appropriate to give effect to the transactions or circumstances
referred to therein.
(v) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be, an "investment company" as such term is
defined within the meaning of the Investment Company Act of 1940, as amended.
(w) Other than as otherwise disclosed in the Registration Statement and
Prospectus, there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company
to file a registration statement under the Act with respect to any securities
of the Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement.
(x) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement),
(i) there has not occurred any material adverse change or any
11
development involving a prospective material adverse change in the condition,
financial or otherwise, or the earnings, business, management or operations
of the Company and the Partnership, taken as a whole, which would have a
Material Adverse Effect and (ii) other than in the ordinary course of
business, neither the Company nor any of its Subsidiaries has incurred any
material liability or obligation, direct or contingent.
(y) Each certificate signed by any officer of the Company and delivered
to the Underwriters or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the
matters covered thereby.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF THE SELLING
STOCKHOLDERS. Each Selling Stockholder 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 Closing Date and any Option Closing Date will have, good and clear title
to such Shares, free of all restrictions on transfer, liens, encumbrances,
security interests, equities and claims whatsoever.
(b) The Shares to be sold by such Selling Stockholder have been duly
authorized and validly issued and are fully paid, non-assessable and were not
issued in violation of any preemptive or similar rights.
(c) Such Selling Stockholder has, and on the Closing Date and any
Option Closing Date will have, full legal right, power and authority, and all
authorization and approval required by law, to enter into this Agreement, and
to sell, assign, transfer and deliver the Shares to be sold by such Selling
Stockholder in the manner provided herein.
(d) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Stockholder.
(e) Upon delivery of the Shares to be sold by each of the Selling
Stockholders pursuant hereto and payment therefor in accordance with this
Agreement, and, assuming the Underwriters are acquiring the Shares in good
faith without notice of any adverse claim, within the meaning of the Uniform
Commercial Code as in effect in the State of New York, the Underwriters will
be the owner of the Shares free and clear of all liens, encumbrances, and
charges whatsoever, arising as a result of action by the Selling Stockholders.
(f) The execution, delivery and performance of this Agreement by or on
behalf of such Selling Stockholder, the compliance by such Selling
Stockholder with all the provisions hereof and the consummation of the
transactions contemplated hereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the organizational documents of such Selling Stockholder, if such Selling
Stockholder is not an individual, or any indenture, loan agreement, mortgage,
lease or other agreement or instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder or any property of
12
such Selling Stockholder is bound and which is material to the business of
such Selling Stockholder or (iii) violate or conflict with any applicable law
or any rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over such Selling Stockholder
or any property of such Selling Stockholder.
(g) The information in the Registration Statement under the caption
"Principal and Selling Stockholders" which specifically relates to such
Selling Stockholder does not, and will not on the Closing Date or any 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 the light of the circumstances under which they
were made, not misleading.
(h) At any time during the period described in Section 5(d), if there
is any change in the information referred to in Section 7(g), such Selling
Stockholder will immediately notify you of such change.
(i) Each certificate signed by or on behalf of such Selling Stockholder
and delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by such Selling Stockholder to the
Underwriters as to the matters covered thereby.
(j) The Selling Stockholder is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
SECTION 8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Underwriter,
its directors, its officers 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 any
amendment thereto), the Prospectus (or any amendment or supplement 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 Underwriter furnished in writing to the Company
by such 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 who failed to
deliver a Prospectus (as then amended or supplemented, provided by the
Company to the several Underwriters in the requisite quantity and on a timely
basis to permit proper delivery on or prior to the Closing Date) to the
person asserting any losses, claims, damages and liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in 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, if such material
misstatement or omission or alleged material
13
misstatement or omission was cured in such Prospectus and such Prospectus was
required by law to be delivered at or prior to the written confirmation of
sale to such person.
(b) Each of the Selling Stockholders agrees, jointly and severally, to
indemnify and hold harmless each Underwriter, its directors, its officers 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 to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only with
reference to information relating to such Selling Stockholder furnished in
writing by or on behalf of such Selling Stockholder expressly for use in the
Registration Statement, the Prospectus or any preliminary prospectus.
Notwithstanding the foregoing, the aggregate liability of each Selling
Stockholder pursuant to the provisions of this paragraph shall be limited to
an amount equal to the total proceeds (before deducting underwriting
discounts and commissions and expenses) received by such Selling Stockholder
from the sale of its Shares hereunder; provided, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not
inure to the benefit of any Underwriter who failed to deliver a Prospectus
(as then amended or supplemented, provided by the Company to the several
Underwriters in the requisite quantity and on a timely basis to permit proper
delivery on or prior to the Closing Date) to the persons asserting any such
losses, claims, damages and liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in 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, if such material misstatement or
omission or alleged material misstatement or omission was cured in such
Prospectus and such Prospectus was required by law to be delivered at or
prior to the written confirmation of sale to such person.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, each person, if any, who controls 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, who controls 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 such Underwriter but only with reference to information relating to such
Underwriter furnished in writing to the Company by such Underwriter through
you expressly for use in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto), or any
preliminary prospectus.
(d) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Sections 8(a), 8(b) or
8(c) (the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify
the person against whom such indemnity may be sought (the "INDEMNIFYING
PARTY") in writing and the indemnifying party shall assume the defense of
such action, including the employment of counsel reasonably satisfactory to
the indemnified party and the payment of all reasonable fees and expenses of
such counsel, as incurred (except that in the case of any action in respect
of which indemnity may be sought pursuant to Sections 8(a), 8(b) and 8(c),
the Underwriter shall not be required to assume the defense of such action
pursuant to this Section 8(d), but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such
counsel, except as provided below, shall be at the expense of such
Underwriter). Any indemnified party shall have the right to employ separate
counsel in any such action and
14
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 shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including
any impleaded parties) include both the indemnified party and the
indemnifying party, and the 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 the indemnified party). In any such case,
the indemnifying party shall not, in connection with any one 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 (i) subject to the limitations of the previous sentence, the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all Underwriters, their officers and
directors and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act,
(ii) the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for the Company, its directors,
its officers who sign the Registration Statement and all persons, if any, who
control the Company within the meaning of either such Section and (iii) the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all Selling Stockholders and all persons,
if any, who control any Selling Stockholder within the meaning of either such
Section, and all such reasonable fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the
Underwriters, their officers and directors and such control persons of any
Underwriters, such firm shall be designated in writing by Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation. In the case of any such separate firm for
the Company and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. In the case of any
such separate firm for the Selling Stockholders and such control persons of
any Selling Stockholders, such firm shall be designated in writing by the
Selling Stockholders. The indemnifying party shall indemnify and hold
harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action
(i) effected with its written consent or (ii) effected without its written
consent if the settlement is entered into more than forty (40) business days
after the indemnifying party shall have received a request from the
indemnified party for reimbursement for the reasonable fees and expenses of
counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the
indemnifying party shall have failed to (a) comply with such reimbursement
request or (b) object in writing that such reimbursement is not appropriate
or reasonable. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement or compromise of, or consent
to the entry of judgment with respect to, any pending or threatened action in
respect of which the indemnified party is or could have been a party and
indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
on claims that are or could have been the subject matter of such
15
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(e) To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient 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 8(e)(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
8(e)(i) above but also the relative fault of the Sellers, on the one hand,
and the Underwriters, on the other hand, 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, on the one hand, and the
Underwriters, on the other hand, shall be deemed to be in the same proportion
as the total net proceeds from the offering (after underwriting discounts and
commissions, but before deducting expenses) received by the Sellers, and the
total 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,
on the one hand, and the Underwriters, on the other hand, 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 by the Company or the Selling
Stockholders, on the one hand, or the Underwriters, on the other hand, 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(e) 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
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 incurred by such
indemnified party in connection with investigating or defending any matter,
including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. 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(e) are several in proportion to the respective
number of Shares purchased by each of the Underwriters hereunder and not
joint.
16
(f) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
SECTION 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) 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. The Company shall have
performed or complied in all material respects with all of the agreements
herein contained and required to be performed or complied with by the Company
at or prior to the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York
City time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by the president or any vice president and the chief
financial, operating or accounting officer of the Company to the effect that:
(i) The representations and warranties of the Company contained in
this Agreement are true and correct in all material respects as of the date
of this Agreement and as of the Closing Date (except to the extent such
representations or warranties specifically relate to an earlier date and
time) and the Company has complied in all material respects with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied under this Agreement on or prior to the Closing Date;
(ii) At the Closing Date, since the respective dates as of which
information is given in the Registration Statement and Prospectus
(exclusively of any amendment or supplement after the date hereof), there
has not occurred any event or events that, individually or in the
aggregate, would have a Material Adverse Effect; and
(iii) To the best of such person's knowledge, the sale of the
Shares hereunder has not been enjoined (temporarily or permanently).
(d) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement),
(i) there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its Subsidiaries, taken
as a whole, (ii) there shall not have been any change or any development
involving a prospective change in the capital stock or in the long-term debt
of the Company or any of its Subsidiaries and (iii) neither the Company
17
nor any of its Subsidiaries shall have incurred any liability or obligation,
direct or contingent, the effect of which, in any such case described in
clause 9(d)(i), 9(d)(ii) or 9(d)(iii), in your judgment, is material and
adverse and, in your judgment, makes it impracticable to market the Shares on
the terms and in the manner contemplated in the Prospectus.
(e) All the representations and warranties of each Selling Stockholder
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, and
you shall have received on the Closing Date a certificate dated the Closing
Date from each Selling Stockholder to such effect and to the effect that such
Selling Stockholder has complied with all of the agreements and satisfied all
of the conditions herein contained and required to be complied with or
satisfied by such Selling Stockholder on or prior to the Closing Date.
(f) You shall have received on the Closing Date an opinion (as to the
matters set forth in Annex II attached hereto), dated the Closing Date or the
Option Closing Date, as the case may be, of Xxxxxxx Xxxxxxx & Xxxxxxxx,
counsel for the Company and the Selling Stockholders. The opinion of Xxxxxxx
Xxxxxxx & Xxxxxxxx shall be rendered to you at the request of the Company and
the Selling Stockholders and shall so state therein.
(g) You shall have received on the Closing Date an opinion (as to the
matters set forth in Annex III attached hereto), dated the Closing Date or
the Option Closing Date, as the case may be, of Piper & Marbury L.L.P.,
special Maryland counsel for the Company, with respect to the Company. The
opinion of Piper & Marbury L.L.P. shall be rendered to you at the request of
the Company and shall so state therein.
(h) You shall have received on the Closing Date or any Option Closing
Date, as the case may be, an opinion, dated the Closing Date or the Option
Closing Date, as the case may be, of Xxxxxx & Xxxxxxx, counsel for the
Underwriters, in form and substance reasonably satisfactory to the
Underwriters.
(i) You shall have received, on each of the date hereof and the Closing
Date a letter dated the date hereof or the Closing Date in form and substance
satisfactory to you from Deloitte & Touche LLP, independent public
accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(j) The Company shall have delivered to you the agreements specified in
Section 2 hereof which agreements shall be in full force and effect on the
Closing Date.
(k) The Shares shall have been duly listed, subject to notice of
issuance, on the NYSE.
(l) The Company and the Selling Stockholders shall not have failed on
or prior to the Closing Date, to perform or comply with any of the agreements
herein contained and required to be
18
performed or complied with by the Company or the Selling Stockholders, as the
case may be, on or prior to the Closing Date.
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 documents as you may reasonably request with respect to
the good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such
Additional Shares.
SECTION 10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This
Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Sellers if any of the following has
occurred: (i) 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, in your judgment, makes it impracticable to
market the Shares on the terms and in the manner contemplated in the
Prospectus, (ii) the suspension or material limitation of trading in
securities or other instruments on the New York Stock Exchange, the American
Stock Exchange, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange, the Chicago Board of Trade or the Nasdaq National Market or
limitation on prices for securities or other instruments on any such exchange
or the Nasdaq National Market, (iii) the suspension of trading of any
securities of the Company on any exchange or in the over-the-counter market,
(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, prospects,
financial condition or results of operations of the Company and the
Partnership, taken as a whole, (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 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 has 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 agreed but failed or refused to purchase is not
more than one-tenth of the total number of Firm Shares or Additional Shares,
as the case may be, 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 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 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
19
of Firm Shares or Additional Shares, as the case may be, without the written
consent of such Underwriter. If on the Closing Date any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased by all
Underwriters and arrangements satisfactory to you, the Company and the
Selling Stockholders for purchase of such Firm Shares are not made within 48
hours after such default, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter, the Company or the Selling
Stockholders. 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, 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. If, on an Option Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect
to which such default occurs is more than one-tenth of the aggregate number
of Additional Shares to be purchased on such date, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation
hereunder to purchase such Additional Shares or (ii) purchase not less than
the number of Additional Shares that such non-defaulting Underwriters would
have been obligated to purchase on such date in the absence of such default.
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.
SECTION 11. AGREEMENTS OF THE SELLING STOCKHOLDERS. Each Selling
Stockholder agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes payable in
connection with the transfer of the Shares to be sold by such Selling
Stockholder to the Underwriters.
(b) To do and perform all things to be done and performed by such
Selling Stockholder under this Agreement prior to the Closing Date or any
Option Closing Date, as the case may be, and to satisfy all conditions
precedent to the delivery of the Shares to be sold by such Selling
Stockholder pursuant to this Agreement.
SECTION 12. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to The
Boyds Collection, Ltd., 000 Xxxxx Xxxxxx, XxXxxxxxxxxxx, XX 00000, (ii) if to
the Selling Stockholders, to Kohlberg Kravis Xxxxxxx & Co., 0 Xxxx 00xx
Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxx Xxxxxxxxxx and (iii) if to any
Underwriter or to you, to you c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, 000 Xxxx 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 Company, the Selling Stockholders and
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, the officers or directors of any Underwriter, any person
controlling any Underwriter, the Company, the officers or directors of the
20
Company, any person controlling the Company, any Selling Stockholder or any
person controlling such Selling Stockholder, (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, or any of
them, because of any failure or refusal on the part of any Seller to comply
with the terms or to fulfill any of the conditions of this Agreement, or if
for any reason any Seller shall be unable to perform its obligations under
this Agreement, the Sellers agree, jointly and severally, to reimburse the
several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. Notwithstanding any termination
of this Agreement, the Company shall be liable for all expenses which it has
agreed to pay pursuant to Section 5(i) hereof. The Sellers also agree,
jointly and severally, to reimburse the several Underwriters, their directors
and officers and any persons controlling any of the Underwriters for any and
all fees and expenses (including, without limitation, the fees disbursements
of counsel) incurred by them in connection with enforcing their rights
hereunder (including, without limitation, pursuant to Section 8 hereof).
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Selling
Stockholders, the Underwriters, the Underwriters' directors and officers, any
controlling persons referred to herein, the Company's directors and the
Company's officers who sign the Registration Statement 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.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
THE BOYDS COLLECTION, LTD.
By:
---------------------------------
Name:
Title:
THE SELLING STOCKHOLDERS:
KKR 1996 FUND L.P.
By: KKR Associates 1996, L.P.,
general partner
By: KKR 1996 GP L.L.C.
general partner
By:
---------------------------------
Name:
Title:
KKR PARTNERS II, L.P.
By: KKR Associates (Strata), L.P.
By: Strata LLC
general partner
By:
---------------------------------
Name:
Title:
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:
----------------------------------
Name:
Title:
SCHEDULE I
----------
Underwriters Number of Shares
to be Purchased
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Total
SCHEDULE II
-----------
Selling Stockholders
--------------------
Name Number of Firm
Shares Being Sold
KKR 1996 Fund L.P.
KKR Partners II, L.P.
Total
Annex I
[Insert names of stockholders of the Company who will be required to sign
lock ups]
Annex II
Opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx
1. The Shares to be issued and sold by the Company have been duly
authorized and, upon payment and delivery in accordance with the
Underwriting Agreement, the Shares will be validly issued, fully paid and
nonassessable.
2. Each Selling Stockholder is the sole registered owner of the
Shares to be sold by such Selling Stockholder; each Selling Stockholder has
full partnership power, right and authority to enter into the Underwriting
Agreement and to sell such Shares and upon payment for and delivery of the
Shares in accordance with the Underwriting Agreement, the Underwriters will
acquire all of the rights of each Selling Stockholder in the Shares and
will also acquire their interest in such Shares free of any adverse claim.
3. The statements made under the caption "Description of Capital
Stock" in the Prospectus and Item 15 of Part II of the Registration
Statement, insofar as they purport to constitute summaries of the terms of
the Company's capital stock, constitute accurate summaries of the terms of
such capital stock in all material respects.
4. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company and by or on behalf of each Selling Stockholder.
5. The issue and sale of the Shares by the Company, the execution
and delivery of the Underwriting Agreement by the Company and the
compliance by the Company with all of the provisions of the Underwriting
Agreement will not breach or result in a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
filed as an exhibit to the Registration Statement, nor will such action
violate any federal statute or any rule or regulation that has been issued
pursuant to any federal statute or any order known to us issued pursuant to
any federal statute or by any court or governmental agency or body or court
having jurisdiction over the Company or any of its subsidiaries or any of
their properties.
6. No consent, approval, authorization, order, registration or
qualification of or with any federal or New York governmental agency or
body or, to our knowledge, any federal or New York court is required for
the issue and sale of the Shares by the Company and the compliance by the
Company with all of the provisions of the Underwriting Agreement, except
for the registration under the Act and the Exchange Act of the Shares, and
such consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriters.
7. The sale of the Shares by the Selling Stockholders, the execution
and delivery of the Underwriting Agreement by the Selling Stockholders and
the compliance by the Selling Stockholders with all of the provisions of
the Underwriting Agreement will not breach or result in a default under any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument identified on the annexed schedule furnished to us by the
Selling
Stockholders and which each Selling Stockholder has represented lists all
material instruments to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound or to which any of the property or
assets of such Selling Stockholder is subject, nor will such action violate
the Partnership Agreements of any Selling Stockholder or any federal or New
York statute or the Delaware Revised Uniform Limited Partnership Act or any
order known to us issued pursuant to any federal or New York statute or the
Delaware Revised Uniform Limited Partnership Act by any court or
governmental agency or body or court having jurisdiction over any Selling
Stockholder or any of its properties.
8. No consent, approval, authorization, order, registration or
qualification of or with any federal or New York governmental agency or
body or any Delaware governmental agency or body acting pursuant to the
Delaware Revised Uniform Limited Partnership Act or, to our knowledge, any
federal or New York court or any Delaware court acting pursuant to the
Delaware Revised Uniform Limited Partnership Act is required for the issue
and sale of the Shares by the Selling Stockholders and the compliance by
the Selling Stockholders with all of the provisions of the Underwriting
Agreement, except for the registration under the Act and the Exchange Act
of the Shares, and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by the
Underwriters.
9. The Registration Statement has become effective under the Act and
the Prospectus was filed on ________, 19__ pursuant to Rule 424(b) of the
rules and regulations of the Commission under the Act and, to our
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued or proceeding for that purpose has been
instituted or threatened by the Commission.
10. The Boyds Collection, Ltd., L.P., which is a subsidiary of the
Company, has been duly formed and is validly existing as a limited
partnership in good standing under the laws of its jurisdiction of
formation and has full partnership power and authority to conduct its
business as described in the Registration Statement and Prospectus.
11. The Company is not an "investment company" within the meaning of
and subject to regulation under the Investment Company Act of 1940, as
amended.
12. We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement
or the Prospectus and take no responsibility therefor, except as and to the
extent set forth in paragraph 3 above. In the course of the preparation by
the Company of the Registration Statement and the Prospectus, we
participated in conferences with certain officers and employees of the
Company and with representatives of Deloitte & Touche LLP and with special
Maryland counsel to the Company. Based upon our examination of the
Registration Statement and the Prospectus, our investigations made in
connection with the preparation of the Registration Statement and the
Prospectus and our participation in the conferences referred to above, (i)
we are of the opinion that the Registration Statement, as of its effective
date, and the Prospectus, as of
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____________, 1999, complied as to form in all material respects with the
requirements of the Act and the applicable rules and regulations of the
Commission thereunder, except that in each case we express no opinion with
respect to the financial statements or other financial data contained in
the Registration Statement or the Prospectus, and (ii) we have no reason to
believe that the Registration Statement, as of its effective date,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading or that the Prospectus contains any
untrue statement of a material fact or omits 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, except that in
each case we express no belief with respect to the financial statements or
other financial data contained in the Registration Statement or the
Prospectus.
The opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx is rendered at the request of the
Company and the Selling Stockholders.
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Annex III
Opinion of Piper & Marbury L.L.P.
1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Maryland and has all
requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus.
2. The Shares to be issued and sold by the Company 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 created under the charter of
the Company or the Maryland General Corporation Law.
3. This Agreement has been duly authorized, executed and delivered
by the Company.
4. The authorized capital stock of the Company conforms as to legal
matters to the description thereof under the caption "Description of
Capital Stock" contained in the Prospectus.
5. The issue and sale of the Shares and the execution, delivery and
performance of the Underwriting Agreement by the Company, compliance by the
Company with all the provisions hereof and thereof and the consummation of
the transactions contemplated hereby and thereby will not conflict with,
constitute a default under or violate (i) any of the terms, conditions or
provisions of the charter or by-laws of the Company or (ii) to our
knowledge, any judgment writ, injunction, decree, order or ruling of any
Maryland court or Maryland governmental authority binding on the Company or
any of its respective properties except, in the case of (ii), for such
conflicts, defaults or violations that would not have a Material Adverse
Effect.
6. All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights created
under the charter of the Company or the Maryland General Corporation Law.
7. No consent, approval authorization or order of, or filing or
qualification with, any Maryland governmental agency or body acting
pursuant to the Maryland General Corporation Law or, to our knowledge, any
Maryland Court acting pursuant to the Maryland General Corporation Law, is
required in connection with the issue and sale of the Shares by the Company
or the sale of the Shares by the Selling Stockholders pursuant to the
Underwriting Agreement, except such as may be required under state
securities law, as to which we express no opinion, and those that have
already been obtained.
8. The statements in the Registration Statement and Prospectus under
the caption "Selected Provisions of Maryland Law and of Boyds' Charter and
Bylaws" and Item 14 of Part II of the Registration
Statement insofar as they purport to constitute summaries of the documents
therein and the laws and regulations or legal conclusions with respect
thereto, constitute accurate summaries of such documents and the matters
described therein in all material respects.
The opinion of Piper & Marbury L.L.P. is rendered at the request of the
Company.
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