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EXHIBIT 1.1
8,000,000 SHARES
DAVID'S BRIDAL, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
May __, 1999
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXX XXXXX XXXX XXXXXX,
INCORPORATED
As representatives 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:
David's Bridal, Inc., a Florida corporation (the "COMPANY"), proposes
to issue and sell to the several underwriters named in Schedule I hereto (the
"UNDERWRITERS"), and certain stockholders of the Company named in Schedule II
and Schedule III hereto (the "SELLING STOCKHOLDERS") severally propose to sell
to the several Underwriters, an aggregate of 8,000,000 shares of the common
stock, par value $.01 per share, of the Company (the "FIRM SHARES"), of which
1,613,000 shares are to be issued and sold by the Company and 6,387,000 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 and
Schedule III hereto. The Company and the Selling Stockholders also severally
propose to sell to the several Underwriters not more than an additional
1,200,000 shares of common stock, par value $.01 (the "ADDITIONAL SHARES") if
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
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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
1,613,000 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 and III 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, the Company and the Selling
Stockholders agree to sell the Additional Shares and the Underwriters shall have
the right to purchase, severally and not jointly, the Additional Shares in the
following manner; (i) up to 322,581 Additional Shares from the Company and (ii)
after such Additional Shares have been purchased from the Company, up to 877,419
Additional Shares proportionally from each Selling Stockholder, as specified in
Schedules II and III, in each case at the Purchase Price. Additional
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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, as applicable, who have agreed to sell Additional Shares 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, 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, severally and not jointly, agrees to purchase
first from the Company, until the Company has sold all of the Additional Shares
to be sold by it, and thereafter from 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 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.
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 ("DLJ"). The
Sellers are not subject to clauses (i) and (ii) above with respect to transfers
for family planning purposes and with respect to transfers by the Clipper
Selling Stockholders (as defined herein) to their affiliates, but only if the
transferee agrees to be subject to clauses (i) and (ii) above and such transfer
is not effective until the agreement to comply with clauses (i) and (ii) is
executed by the transferee and a copy of such agreement is received by DLJ and
by Xxxxx Xxxx & Xxxxxxxx. Notwithstanding the foregoing, 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,
other than a registration statement on Form S-8 covering common stock issuable
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pursuant to the Company's existing stock option plan, 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, and (ii) 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
Corporation, (A) engage in any of the transactions described in the first
sentence of this paragraph (subject to the exception set forth in the second
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.
The Company hereby confirms its engagement of DLJ as, and DLJ hereby
confirms its agreement with the Company to render services as, a "qualified
independent underwriter," within the meaning of Section (b)(15) of Rule 2720 of
the Conduct Rules of the National Association of Securities Dealers, Inc. (the
"NASD") with respect to the offering and sale of the Shares. DLJ, solely in its
capacity as qualified independent underwriter and not otherwise, is referred to
herein as the "QIU." As compensation for the services of the QIU hereunder, the
Company agrees to pay the QIU $2,500 on the Closing Date. The price at which the
Shares will be sold to the public shall not be higher than the maximum price
recommended by DLJ acting as QIU.
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.
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 Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
shall request not later than 9:00 A.M. on the second business day prior to the
Closing Date or the applicable Option Closing Date (as defined below), as the
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case may be. The Shares shall be delivered by or on behalf of the 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 therefor by
wire transfer of Federal or other funds immediately available in Philadelphia.
The certificates representing the Shares shall be made available for inspection
not later than 12:00 noon, New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date, 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 Company shall agree in writing. The time and date of
delivery and payment for any Additional Shares are hereinafter referred to as an
"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, Xxxxx & Bockius LLP, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, 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, (i) of any request by the Commission
for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information, (ii) 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, (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) of 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
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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 its best efforts to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(b) To furnish to you four 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 in your reasonable judgment, 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 its best 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, but no later than
90 days following the date of this Agreement, 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, 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,
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not misleading, or if, in the opinion of counsel for the Underwriters,
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 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 make generally available to its stockholders no later
than 45 days following _______, 2000, an earnings statement covering
the twelve-month period ending [March 31,] 2000 within the meaning of
the provisions of Section 11(a) of the Act and any rules promulgated
thereunder, including Rule 158 under the Act.
(h) During the period of three years after the date of this
Agreement, 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'
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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 but not including any subsequent
distribution by the Underwriters and dealers, (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 the Registration Statement and
the Prospectus, (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
memoranda relating thereto), such expenses and costs not to exceed an
aggregate of $10,000, (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 NASDAQ, National Market System, (vii) the
cost of printing certificates representing the Shares, (viii) the costs
and charges of any transfer agent or registrar, (ix) all fees and
expenses in connection with the directed share program, such fees and
expenses not to exceed an aggregate of $5,000 and (x) 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 5(i). The provisions of this Section
shall not supercede or otherwise affect any agreement that the Company
and the Selling Stockholders may otherwise have for allocation of such
expenses among themselves.
(j) To use its best efforts to list the Shares on the Nasdaq
and to maintain the listing of the Shares on the NASDAQ, National
Market System for a period of three years after the date of this
Agreement.
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(k) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Shares, and
the aggregate initial offering price of Additional Shares does not
exceed twenty percent of the maximum aggregate offering price of the
Shares set forth in the "Calculation of the Registration Fee" table
included on the front cover of the Registration Statement, to transmit
for filing a Rule 462(b) Registration Statement with the Commission
registering the Shares not so covered in compliance with Rule 462(b) in
a manner that reasonably should enable the Rule 462(b) Registration
Statement to become effective 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.
(l) the fees and expenses of the QIU (including the fees and
disbursements of counsel to the QIU), not to exceed $2,500.
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 be transmitted for filing in a fashion that reasonably should
enable the Rule 462(b) Registration Statement to 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 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 applicable requirements of the Act, (iii) if the
Company is required to file a Rule 462(b) Registration
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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 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 applicable requirements of 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 representations and
warranties set forth in this paragraph 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 of the Company and its subsidiaries 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 carry on its business as described in
the Prospectus 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 business, prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole.
(d) 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 of the Company or any of its subsidiaries, except
as otherwise disclosed in the Registration Statement.
(e) 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 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
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issuance of such Shares will not be subject to any preemptive or
similar rights.
(f) All of the outstanding shares of Classes A, B, C and D
Preferred Stock of the Company will be converted into 7,543,817 shares
of Common Stock as of the Closing Date pursuant to the Company's Third
Amended and Restated Articles of Incorporation immediately prior to or
simultaneously with the consummation of the public offering of the
Shares.
(g) All of the outstanding shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly issued
and are fully paid and non-assessable, and are owned by the Company,
directly or indirectly through one or more subsidiaries, free and clear
of any security interest, claim, lien, encumbrance or adverse interest
of any nature, except as set forth in the Prospectus and except for any
liens granted under the Second Amended and Restated Credit Agreement
among the Company and First Union National Bank, dated as of December
30, 1998, a copy of which has been filed as an Exhibit to the
Registration Statement.
(h) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(i) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which, to the knowledge of the Company, the Company or
any of its subsidiaries or their respective property is bound; except
for such violations, defaults or non-performances that, individually or
in the aggregate, would not result in a material adverse effect on the
Company and its subsidiaries taken as a whole.
(j) 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 (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 charter
or by-laws of the Company or
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any of its subsidiaries or any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to the Company
and its subsidiaries, taken as a whole, to which the Company or any of
its subsidiaries is a party or by which, to the knowledge of the
Company, the Company or any of its subsidiaries or their respective
property is bound, (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 expressly applicable to the Company, any of
its subsidiaries or their respective property or (iv) result in the
suspension, termination or revocation of any Authorization (as defined
below) of the Company or any of its subsidiaries or any other
impairment of the rights of the holder of any such Authorization.
(k) There are no legal or governmental proceedings 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 that are
required to be described in the Registration Statement or the
Prospectus and are not so described; nor are there any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not so
described or filed as required.
(l) To the knowledge of the Company, 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") or any provisions of
the Employee Retirement Income Security Act of 1974, as amended, or the
Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the
aggregate, would not have a material adverse effect on the business,
prospects, financial condition or results of operation of the Company
and its subsidiaries, taken as a whole.
(m) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other
approvals (each, an "AUTHORIZATION") of, and has made all filings with
and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals,
including, without limitation, under any applicable Environmental Laws,
as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would
not, singly or in the aggregate, have
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a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole. Each such Authorization is valid and in full force
and effect and each of the Company and its subsidiaries is in
compliance with all the terms and conditions thereof and with the rules
and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and to the knowledge of the Company,
no event has occurred (including, without limitation, the receipt of
any notice from any authority or governing body) which allows or, after
notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or which results or, after notice
or lapse of time or both, would result in any other impairment of the
rights of the Company or its subsidiaries; and such Authorizations
contain no restrictions that are burdensome to the Company or any of
its subsidiaries; except where such failure to be valid and in full
force and effect or to be in compliance, the occurrence of any such
event or the presence of any such restriction would not, singly or in
the aggregate, have a material adverse effect on the business,
prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole.
(n) To the knowledge of the Company, 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,
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 on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole.
(o) This Agreement has been duly authorized, executed and
delivered by the Company.
(p) Xxxxxx Xxxxxxxx LLP are independent public accountants
with respect to the Company and its subsidiaries as required by the
Act.
(q) The consolidated financial statements included in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto), together with related schedules and notes, present
fairly the consolidated financial position, results of operations and
changes in financial position of the Company and its subsidiaries on
the basis stated therein 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
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consistently applied throughout the periods involved, except as
disclosed therein; the supporting schedules, if any, included in the
Registration Statement present fairly in accordance with generally
accepted accounting principles the information required to be stated
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) in all material respects fairly
present the information and data so set forth.
(r) 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 in the Investment Company Act of 1940,
as amended.
(s) Except as set forth in the Registration Agreement dated as
of April 9, 1995, as amended on August 13, 1997 (the "REGISTRATION
AGREEMENT"), 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.
(t) Since January 3, 1999, 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 development involving a prospective
material adverse 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 has not been any material
adverse change or any development involving a prospective material
adverse change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor
any of its subsidiaries has incurred any material liability or
obligation, direct or contingent, other than in the ordinary course of
business.
(u) 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:
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(a) As of the date hereof, such Selling Stockholder has good
title to its shares of common and/or preferred stock of the Company, to
be sold by such Selling Stockholder upon conversion into Common Stock,
as applicable, pursuant to this Agreement and free of all adverse
claims.
(b) Upon the consummation of the public offering of the
Shares, all of such Selling Stockholder's shares of Classes A, B, C and
D Preferred Stock will have been converted, if applicable, into shares
of Common Stock pursuant to the Company's Third Amended and Restated
Articles of Incorporation.
(c) On the Closing Date, such Selling Stockholder will have
good title to the Shares to be sold by such Selling Stockholder
pursuant to this Agreement, free of all adverse claims.
(d) Such Selling Stockholder has, and on the Closing Date will
have, full legal right, power and authority, and all authorization and
approval required by law, to enter into this Agreement, the Custody
Agreement signed by such Selling Stockholder and The Bank of New York,
as Custodian, relating to the deposit of the Shares to be sold by such
Selling Stockholder (the "CUSTODY AGREEMENT") and the Power of Attorney
of such Selling Stockholder, except Clipper Capital Associates, L.P.,
Clipper/European Re, L.P., Clipper/Merban, L.P., Clipper Equity
Partners I, L.P. and Clipper/Merchant Partners, L.P. (the "CLIPPER
SELLING STOCKHOLDERS"), appointing certain individuals as such Selling
Stockholder's attorneys-in-fact (the "ATTORNEYS") to the extent set
forth therein, relating to the transactions contemplated hereby and by
the Registration Statement and the Custody Agreement (the "POWER OF
ATTORNEY") and to sell, transfer and deliver the Shares to be sold by
such Selling Stockholder in the manner provided herein and therein.
(e) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder.
(f) The Custody Agreement of such Selling Stockholder has been
duly authorized, executed and delivered by such Selling Stockholder and
is a valid and binding agreement of such Selling Stockholder,
enforceable in accordance with its terms.
(g) The Power of Attorney of such Selling Stockholder, if
applicable, has been duly authorized, executed and delivered by such
Selling Stockholder and is a valid and binding instrument of such
Selling Stockholder, but subject to any conditions or limitations set
forth therein,
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enforceable in accordance with its terms, and, pursuant to such Power
of Attorney, such Selling Stockholder has, among other things,
authorized the Attorneys, or any one of them, to execute and deliver on
such Selling Stockholder's behalf this Agreement and any other document
that they, or any one of them, may deem necessary or desirable in
connection with the transactions contemplated hereby or thereby and to
deliver the Shares to be sold by such Selling Stockholder pursuant to
this Agreement.
(h) Upon payment for the Shares to be sold by the Selling
Stockholders as provided herein, delivery of such Shares, as directed
by the Underwriters, to Cede & Co. ("Cede") or such other nominee as
may be designated by Depoistory Trust Company ("DTC"), registration of
such Shares in the name of Cede or such other nominee and on the
Company's share registry in accordance with the Company's certificate
of incorporation, by-laws and applicable law and as required by Section
8-401 of the Uniform Commercial Code as in effect in the State of New
York (the "UCC") and an indication from DTC by book entry that in the
case of each Underwriter, the Shares being purchased by or on behalf of
such Underwriter have been credited to "securities accounts" (as
defined in Section 8-501 of the UCC) of such Underwriter with DTC
(assuming that neither DTC nor any such Underwriter has notice of any
adverse claim (as such phrase is defined in Section 8-105 of the UCC)
to such Shares), (A) DTC shall be a "protected purchaser" of such
Shares within the meaning of Section 8-303 of the Uniform Commercial
Code ("UCC"), and (B) under Section 8-501 of the UCC, each Underwriter
will acquire a valid "security entitlement" (as defined in Section
8-102 of the UCC) to the Shares being so purchased by or on behalf of
such Underwriter, and, to the extent governed by the UCC, no action
based on any "adverse claim" (as defined in Section 8-102 of the UCC)
to such Shares (or security entitlement with respect thereto) may
properly be asserted against such Underwriter with respect to such
security entitlement; it being understood that for the purpose of this
representation and warranty, such Selling Stockholder may assume that
when such payment, delivery, registration and crediting occur, (x) Cede
or such other nominee is not a "securities intermediary" (as defined in
Section 8-102 of the UCC), (y) registration of such Shares in the name
of Cede or another nominee designated by DTC is effective to register
such Shares in the name of DTC for purposes of Section 8-106 (b)(2) of
the UCC, and (z) DTC is a "clearing corporation" (as defined in Section
8-102 of the UCC).
(i) The execution, delivery and performance of this Agreement
and the Custody Agreement and Power of Attorney, if any, of such
Selling Stockholder by or on behalf of such Selling Stockholder, the
compliance by such Selling Stockholder with all the provisions hereof
and thereof and the consummation of the transactions contemplated
hereby and thereby 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, to
the knowledge of such Selling Stockholder, such Selling Stockholder or
any property of such Selling Stockholder is bound 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
expressly applicable to such Selling Stockholder or any property of
such Selling Stockholder.
(j) The information in the Registration Statement under the
caption "Principal and Selling Shareholders" which specifically relates
to such Selling Stockholder does not, and will not on the Closing Date,
contain any untrue statement of a material fact or omit to state any
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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.
(k) At any time during the period described in Section 5(d),
if there is any change in the information referred to in Section 7(j),
such Selling Stockholder will immediately notify you of such change.
(l) 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.
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 Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages, liabilities and
judgments (including, without limitation, any legal or other expenses incurred
in connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
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 from whom the person asserting any such
losses, claims, damages or liabilities 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, prior or together with the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to the assertion of such losses, claims,
damages or liabilities.
(b) The Sellers agree to indemnify and hold harmless the QIU, its
directors, its officers and each person, if any, who controls the QIU within the
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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
(including, without limitation, any legal or other expenses incurred in
connection with defending or investigating any matter, including any action that
could give rise to any such losses, claims, damages, liabilities or judgments)
related to, based upon or arising out of the QIU's activities as QIU under its
engagement pursuant to Section 2 hereof, except insofar as any such losses,
claims, damages, liabilities or judgments are found in a final judgment by a
court of competent jurisdiction, not subject to further appeal, to have resulted
solely from the willful misconduct or gross negligence of the QIU.
Notwithstanding the foregoing, the indemnification provided by this Section 8(b)
relates only to the activities of DLJ as the QIU that it would not otherwise
have been engaged in but for its engagement as QIU pursuant to Section 2 hereof.
(c) The Selling Shareholders identified in Schedule II (referred to
each as a "MANAGEMENT SELLING SHAREHOLDER"), severally and not jointly, agree 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 Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any legal or other
expenses incurred in connection with investigating or defending any matter,
including any action, that could give rise to any such losses, claims, damages,
liabilities or 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 from whom the person asserting any such
losses, claims, damages or liabilities 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, prior or together with the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such losses, claims, damages or
liabilities. Notwithstanding the foregoing, (i) the liability of each Management
Selling Stockholder pursuant to this Section 8(c) shall be
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limited to an amount equal to the total net proceeds (after deducting
underwriting discounts and commissions and expenses) received by such Management
Selling Stockholder from the Underwriters for the sale of the Shares sold by
such Management Selling Stockholder hereunder and (ii) the Management Selling
Stockholders shall not be required to honor any demand for indemnity from any
Underwriter pursuant to this Section 8 unless, prior to the making of such
demand by the Underwriter, such Underwriter shall have delivered a written
demand to the Company seeking indemnity and the Company shall have failed to
perform its obligations in respect thereof pursuant to this Section 8 and such
failure shall have continued for a period of 90 days.
(d) The Selling Stockholders who are listed in Schedule III (referred
to herein as the "NON-MANAGEMENT SELLING STOCKHOLDERS"), severally and not
jointly, agree 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 Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), from and against any and all losses,
claims, damages, liabilities and judgments (including, without limitation, any
legal or other expenses incurred in connection with investigating or defending
any matter, including any action, that could give rise to any such losses,
claims, damages, liabilities or 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 from whom the person asserting
any such losses, claims, damages or liabilities 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, prior or together with the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such losses, claims, damages or
liabilities. Notwithstanding the foregoing, (i) the liability of each
Non-Management Selling Stockholder pursuant to this Section 8(d) shall be
limited to an amount equal to the total net proceeds (after deducting
underwriting discounts and commissions and expenses) received by such
Stockholder from the Underwriters for the sale of the Shares sold by such
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Stockholder hereunder, (ii) each of the Non-Management Selling Stockholders will
be liable in any such case only to the extent that such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement in or omission or alleged omission from any such document is in
reliance upon and in conformity with written information relating to such
Non-Management Selling Stockholder, furnished to the Company by such
Non-Management Selling Stockholder specifically for use therein, and (iii) the
Non-Management Selling Stockholders shall not be required to honor any demand
for indemnity from any Underwriter pursuant to this Section 8 unless, prior to
the making of such demand by the Underwriter, such Underwriter shall have
delivered a written demand to the Company seeking indemnity and the Company
shall have failed to perform its obligations in respect thereof pursuant to this
Section 8 and such failure shall have continued for a period of 90 days.
(e) 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 expressly for use in the Registration
Statement (or any amendment thereto), the Prospectus (or any amendment or
supplement thereto) or any preliminary prospectus.
(f) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8 (the "INDEMNIFIED
PARTY"), the indemnified party shall promptly notify each person against whom
such indemnity is being sought (each, an "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 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
any of Sections 8(a), 8(b), 8(c) or 8(d) and pursuant to Section 8(e), the
Underwriter shall not be required to assume the defense of such action pursuant
to this Section 8(f), 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 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 each indemnifying party, (ii)
each
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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 an 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 parties 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) the 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 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 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 fees and
expenses shall be reimbursed as they are incurred; provided, that if the QIU has
designated a separate firm of attorneys pursuant to Section 8(g) for any such
action or actions, then DLJ will not designate an additional, separate firm of
attorneys (for local counsel) pursuant to this Section 8(f). 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 Clipper Selling Stockholders and such
control persons of any Clipper Selling Stockholders, said firm shall be
designated in writing by The Clipper Group, L.P. In the case of any such
separate firm for the Selling Stockholders, other than Clipper Selling
Stockholders, and such control persons of such Selling Stockholders, such firm
shall be designated in writing by the Attorneys. 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 effected with its written consent. 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 reasonably could have been a party and indemnity or contribution may be or
could have been sought hereunder by the indemnified
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party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or reasonably could have been the subject matter of such 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.
(g) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to paragraph (b) of this
Section 8 (the "QIU INDEMNIFIED PARTY"), the QIU Indemnified Party shall
promptly notify the Sellers in writing and the Sellers shall assume the defense
of such action, including the employment of counsel reasonably satisfactory to
the QIU Indemnified Party and the payment of all fees and expenses of such
counsel, as incurred. Any QIU Indemnified Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the QIU
Indemnified Party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the Sellers, (ii) the Sellers shall have
failed to assume the defense of such action or employ counsel reasonably
satisfactory to the QIU Indemnified Party or (iii) the named parties to any such
action (including any impleaded parties) include both the QIU Indemnified Party
and the Sellers, and the QIU 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 Sellers (in which case
the Sellers shall not have the right to assume the defense of such action on
behalf of the QIU Indemnified Party). In any such case, the Sellers 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 the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all QIU
Indemnified Parties, which firm shall be designated by the QIU, and all such
fees and expenses shall be reimbursed as they are incurred; provided, that if
DLJ has designated a separate firm of attorneys pursuant to Section 8(f) for any
such action or actions, then DLJ will not designate an additional, separate firm
of attorneys (or local counsel) pursuant to this Section 8(g). The Sellers shall
indemnify and hold harmless the QIU Indemnified Party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action effected with its written consent. The Sellers shall
not, without the prior written consent of the QIU 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 QIU Indemnified
Party is or could have been a party and indemnity or contribution may be or
could have been sought hereunder by the QUI Indemnified Party, unless such
settlement, compromise or judgment (i) includes an unconditional release of the
QIU Indemnified Party from all liability on claims that are or could have been
the subject matter of such action and (ii)
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does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of the QIU Indemnified Party.
(h) 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(h)(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(h)(i) above but also the
relative fault of the respective 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 respective Sellers and the
Underwriters shall be deemed to be in the same proportion as the total net
proceeds from the offering (after deducting underwriting discounts and
commissions but before deducting expenses) received by each such Seller, 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 respective
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 or alleged omission to state a material fact relates to information
supplied by the Company, the Management Selling Stockholders, the Non-Management
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(h) 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
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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(h) are several in
proportion to the respective number of Shares purchased by each of the
Underwriters hereunder and not joint.
Notwithstanding anything in this Section 8 to the contrary, the
aggregate liability of each Selling Stockholder to the Underwriters (including
the QUI), their directors, their officers and the persons who control one or
more of the Underwriters within the meaning of Section 15 of the Act of Section
20 if the Exchange Act, pursuant to this Section 8 shall be limited to the net
proceeds (after deducting underwriting discounts and commissions and expenses)
received by such Selling Stockholder from the sale of the Shares by such Selling
Stockholder hereunder. In addition, no Selling Stockholder shall be required to
make any payment to any Underwriter or any other person under this Section 8
until such time as such Underwriter or such other person has asserted a demand
against the Company and the Company shall have failed to make such payment
within a reasonable time pursuant to the provisions of Section 8.
(i) To the extent the indemnification provided for in this Section 8
is unavailable to a QIU Indemnified Party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein, then the
Company, in lieu of indemnifying such QIU Indemnified Party, shall contribute to
the amount paid or payable by such QIU 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 Company on the one
hand and the QIU 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 Company and
the QIU 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 Company and the
QIU shall be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company as set forth in
the table on the cover page of the Prospectus, and the fee received by the QIU
pursuant to Section 2 hereof, bear to the sum of such total net proceeds. The
relative fault of the Company and the QIU 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 QIU and the parties' relative intent,
knowledge, access to information and opportunity
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to correct or prevent such statement or omission and whether the QIU's
activities as QIU under its engagement pursuant to Section 2 hereof involved any
willful misconduct or gross negligence on the part of the QIU.
The Company and the QIU agree that it would not be just and equitable
if contribution pursuant to this Section 8(i) were determined by pro rata
allocation 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 a QIU 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 QIU Indemnified Party
in connection with investigating or defending any matter that could have given
rise to such losses, claims, damages, liabilities or judgments. In no event
shall any QIU Indemnified Party be required to contribute in the aggregate an
amount exceeding the fee received by DLJ pursuant to Section 2 hereof. 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.
(j) 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 or to any QIU Indemnified Party at law or in equity, provided
that the aggregate liability of a Selling Stockholder to the Underwriters
(including the QUI), their directors, their officers and the persons who
control one or more of the Underwriters, within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, pursuant to this Section 8 and such
rights or remedies shall be limited to the net proceeds (after deducting
underwriting discounts and commissions) received by such Selling Stockholders
from the sale of the Shares by such Selling Stockholders hereunder. In
addition, no rights or remedies may be asserted against a Selling Stockholder
by any Underwriter or any such director, officer or control person until such
time as such Underwriter, director, officer or control person has asserted a
claim for payment against the Company and such claim cannot be satisfied by the
Company.
(k) Each Selling Stockholder, except the Clipper Selling Stockholders,
hereby designates David's Bridal, Inc., 00 X. Xxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, XX 00000, as its authorized agent, upon which process may be served in
any action which may be instituted in any state or federal court in the City of
New York by any Underwriter, any director or officer of any Underwriter or any
person controlling any Underwriter asserting a claim for indemnification or
contribution under or pursuant to this Section 8, and each such Selling
Stockholder 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. A copy of any such process shall be
sent or given to such Selling Stockholder, at the address for notices specified
in Section 11 hereof.
(l) Each Clipper Selling Stockholder hereby designates Clipper Capital
Associates, Inc., 000 Xxxxxxx Xxxxxx, 0xx xxxxx, Xxx Xxxx, XX 00000, as its
authorized agent, upon which process may be served in any action which may be
instituted in any state or federal court in the City of New York by any
Underwriter, any director or officer of any Underwriter or any person
controlling any Underwriter asserting a claim for indemnification or
contribution under or pursuant to this Section 8, and each such Clipper Selling
Stockholder will accept
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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. A copy of any such process shall be sent or given to such
Clipper Selling Stockholder, at the address for notices specified in Section 11
hereof.
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) 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) 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 Xxxxxx X. Erlbaum, Xxxxxx X. Xxxx and
Xxxxxx X. Xxxxxxx, in their capacities as the Chairman, the Chief
Executive Officer and President, and Chief Financial Officer of the
Company, confirming to their knowledge, the matters set forth in
Sections 6(t), 9(a) and 9(b) and that the Company has complied in all
material respects with all of the agreements and satisfied all of the
conditions herein contained and required to be complied with or
satisfied in all material respects by the Company on or prior to the
Closing Date.
(d) Since January 3, 1999, 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 nor any of its subsidiaries shall have incurred any liability
or obligation, direct or contingent other than in the ordinary course
of business, the effect of which, in any such case described in clause
9(d)(i), 9(d)(ii) or 9(d)(iii), in
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your reasonable judgment, is so material and adverse as to make 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 (or
their attorney-in-fact) 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
reasonably satisfactory to you and counsel for the Underwriters, dated
the Closing Date, of Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the
Company and the Selling Stockholders (except the Clipper Selling
Stockholders, Adwood/Kafry and Xxxxxxx Xxxxx), to the effect set forth
in Exhibit A.
The opinion of Xxxxxx, Xxxxx & Xxxxxxx LLP described in Section
9(f) above and set forth in Exhibit B 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
reasonably satisfactory to you and counsel for the Underwriters, dated
the Closing Date, of Xxxxxxxx & Xxxxx, counsel to the Clipper Selling
Stockholders, to the effect set forth in Exhibit B.
(h) You shall have received on the Closing Date an opinion
reasonably satisfactory to you and counsel for the Underwriters dated
the Closing Date, of Xxxxx Xxxxx, general counsel for First Union
Corporation, to the effect set forth in Exhibit D.
(i) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Xxxxx Xxxx & Xxxxxxxx, counsel for the
Underwriters, as to the matters referred to in Exhibit A, Sections
(iv), (v) (but only with respect to the Company), (ix) (but only with
respect to the statements under the caption "Underwriting") and (xv).
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(j) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, reasonable to you, from Xxxxxx Xxxxxxxx LLP,
independent public accountants, containing the information and
statements as set forth in Exhibit C with respect to the financial
statements and certain financial information contained in the
Registration Statement and the Prospectus.
(k) The Company shall have delivered to you the agreements
specified in the last sentence of Section 2 hereof which agreements
shall be in full force and effect on the Closing Date.
(l) The Shares shall have been duly listed, subject to notice
of issuance, on the NASDAQ, National Market System.
(m) The Company and the Selling Stockholders shall not have
failed on or prior to the Closing Date to perform or comply in any
material respect with any of the agreements herein contained and
required to be performed or complied with by the Company or the Selling
Stockholders, as the case may be, on or prior to the Closing Date.
(n) You shall have received on the Closing Date, a certificate
of each Selling Stockholder who is not a U.S. Person (as defined under
applicable U.S. federal tax legislation) to the effect that such
Selling Stockholder is not a U.S. Person, 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).
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
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the United States or elsewhere that, in your judgment, is so material and
adverse as to make 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 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 its subsidiaries, 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, or New York state 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 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
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30
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. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to David's
Bridal, Inc., 00 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxxxx 00000,
(ii) if to the Clipper Selling Stockholders, to Clipper Capital Associates,
Inc., 000 Xxxxxxx Xxxxxx, 0xx xxxxx, Xxx Xxxx, XX 00000, with a copy to Xxxxxxxx
& Xxxxx, att: Xxxxxxx X. Xxxxxxx, 000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, (iii) if to the other Selling Stockholders, to Xxxxxx X. Erlbaum and
Xxxxxx X. Xxxx c/o David's Bridal, Inc., 00 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, XX 00000 and (iv) 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, any QIU
Indemnified Party, the Company, the officers or directors of the 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.
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If for any reason the Shares are not delivered by or on behalf of any
Seller as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 10 or breach of this Agreement by any
Underwriter), the non-delivering 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 and
disbursements of counsel) incurred by them in connection with enforcing their
rights hereunder (including, without limitation, pursuant to Section 8 hereof);
provided that the adjudication of such rights is determined by a court of
competent jurisdiction, not subject to further review and appeal, and the
Underwriter involved in such a dispute is the prevailing party.
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, QIU Indemnified Parties, 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,
DAVID'S BRIDAL, INC.
By:
-----------------------------------------
Title:
CLIPPER/MERCHANT PARTNERS, L.P.
By: Clipper Capital Associates, L.P.
Its: General Partner
By: Clipper Capital Associates, Inc.
Its: General Partner
By:
-----------------------------------------
Xxxxxx X. Xxxxx
Its:
----------------------------------
CLIPPER EQUITY PARTNERS I, L.P.
By: Clipper Capital Associates, L.P.
Its: General Partner
By: Clipper Capital Associates, Inc.
Its: General Partner
By:
-----------------------------------------
Xxxxxx X. Xxxxx
Its:
----------------------------------
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33
CLIPPER/MERBAN, L.P.
By: Clipper Capital Associates, L.P.
Its: General Partner
By: Clipper Capital Associates, Inc.
Its: General Partner
By:
-----------------------------------------
Xxxxxx X. Xxxxx
Its:
----------------------------------
CLIPPER CAPITAL ASSOCIATES, L.P.
By: Clipper Capital Associates, Inc.
Its: General Partner
By:
-----------------------------------------
Xxxxxx X. Xxxxx
Its:
----------------------------------
CLIPPER/EUROPEAN RE, L.P.
By: Clipper Capital Associates, L.P.
Its: Investment General Partner
By: Clipper Capital Associates, Inc.
Its: General Partner
By:
-----------------------------------------
Xxxxxx X. Xxxxx
Its:
----------------------------------
33
34
THE SELLING STOCKHOLDERS
NAMED IN SCHEDULE II AND III
HERETO, ACTING SEVERALLY
(EXCEPT FOR THE CLIPPER
SELLING STOCKHOLDERS)
By:
-----------------------------------------
Xxxxxx X. Erlbaum
Attorney-in-fact
By:
-----------------------------------------
Xxxxxx X. Xxxx
Attorney-in-fact
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35
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXX XXXXX XXXX XXXXXX,
INCORPORATED
Acting severally on behalf of themselves and the
several Underwriters named in Schedule I
hereto
By: XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:
---------------------------------------
Xxxxx Xxxxxxxxxx
Title: Managing Director
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36
SCHEDULE I
NUMBER OF FIRM SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------------
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
---------
Total 8,000,000
=========
37
SCHEDULE II
MANAGEMENT SELLING STOCKHOLDERS
NUMBER OF
NUMBER OF FIRM ADDITIONAL SHARES
NAME SHARES BEING SOLD BEING SOLD
---- ----------------- ----------
Xxxxxx X. Erlbaum 1,205,427 165,600
Xxxxxx Xxxxxx 339,476 46,636
Xxxx X. Erlbaum 509,018 69,928
Xxxxxxx X. Erlbaum 147,810 40,305
Xxxxxx X. Xxxx 96,775 13,294
Xxxxxx X. Xxxxxxxxx 17,743 2,417
--------- -------
Total 2,316,249 338,180
========= =======
38
SCHEDULE III
NON-MANAGEMENT SELLING STOCKHOLDERS
NUMBER OF
NUMBER OF FIRM ADDITIONAL
NAME SHARES BEING SOLD SHARES BEING SOLD
---- ----------------- -----------------
Clipper Equity Partners I, L.P. 529,460 72,738
Clipper Capital Associates, L.P. 163,296 22,433
Clipper/Merchant Partners, L.P. 705,946 96,981
Clipper/European Re, L.P. 352,973 48,491
Clipper/Merban, L.P. 705,946 96,981
The Vederman Family Partnership 206,004 28,300
Xxx Erlbaum 18,207 2,501
Marc Erlbaum 18,207 2,501
Xxxxxx Erlbaum 18,207 2,501
Xxxxxxx Xxxxx 38,938 5,349
Xxxxxx Xxxxxxx 48,627 6,680
Xxxxxxxxx Xxxxx 60,567 8,320
First Union Corporation 194,753 26,754
Xxxxxxx Erlbaum and Xxxx 83,692 11,497
Erlbaum as Trustees under
the Agreement of Trust of
S.H. Erlbaum
Addwood Limited 89,540 12,300
39
SCHEDULE III (CONTINUED)
Xxxxxx Xxx Xxxxxxx Youtie, 24,333 3,342
Custodian for Haleigh R.
Xxxxxx
Xxxxxx Xxx Xxxxxxx Youtie, 29,608 4,067
Custodian for Xxxxxxx Xxxx
Youtie
Xxxxxx Xxxxxxx 48,387 6,647
Erlbaum Family L.P. 74,694 10,261
Xxxxxxx Xxxxxx, PY as 3,194 338
custodian
Xxxxxxx Xxxxxx, PY as 454 62
custodian
MCE Family Limited 66,741 9,168
Partnership
Retained Annuity Trust of 79,530 10,925
X.Xxxxxxxxx
SPWJ Associates, L.P. 79,530 10,925
Xxxx Erlbaum, Xxxx and 194,731 26,751
Xxxxxxx Erlbaum as Trustees
Xxxxx Xxxxxxxxx Trust 14,591 2,004
Xxxxx Xxxxxxxxx Trust 14,591 2,004
Xxxxx Xxxxxxxxx Trust 206,004 28,300
--------- -------
Total 4,070,751 559,121
========= =======
2
40
ANNEX I
PARTIES TO EXECUTE LOCK UPS
Xxxxxx X. Erlbaum Xxxxxx Xxx Xxxxxxx Youtie,
Custodian for Xxxxxxx X. Xxxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxx Xxxxxxx Xxxxxx,
Xxxx X. Erlbaum Custodian for Xxxxxxx Xxxx Youtie
Xxxxxxx X. Erlbaum Xxxxxx Xxxxxxx
Xxxxxx X. Xxxx Erlbaum Family L.P.
Xxxxxx X. Xxxxxxxxx Xxxxxxx Xxxxxx, PY as custodian
Xxxxxx X. Xxxxxxx Xxxxxxx Xxxxxx, PY as custodian
Xxxxx Xxxxx MCE Family Limited Partnership
Xxxx X. Xxxxxxxx Retained Annuity Trust of
X.Xxxxxxxxx
Xxxxxxx Xxxx
SPWJ Associates, L.P.
Xxxxx X. Xxxxxxx
Xxxx Erlbaum, Xxxx and
Xxxxxx X. Xxxxx Xxxxxxx Erlbaum as Trustees
Xxxxxx X. Xxxxxxx, Xx. Xxxxx Xxxxxxxxx Trust
Clipper/Merchant Partners, L.P. Xxxxx Xxxxxxxxx Trust
Clipper Equity Partners I, L.P. Xxxxx Xxxxxxxxx Trust
Clipper/Merban, X.X. Xxxxxx Erlbaum
Clipper Capital Associates, L.P. Xxxxxxx Xxxxx
Clipper/European Re, L.P. Xxxxxx Xxxxxxx
The Vederman Family Partnership Xxxxxxxxx Xxxxx
Xxx Erlbaum First Union Corporation
Marc Erlbaum
41
ANNEX I
(continued)
Xxxxxxx Erlbaum and Xxxx Addwood Limited
Erlbaum as Trustees under
the Agreement of Trust
of S.H. Erlbaum
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EXHIBIT A
Form of opinion from Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the
Company and the Selling Stockholders (except for the Clipper Selling
Stockholders and First Union Corporation), will include the following:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the state
of Florida and has the corporate power and authority to carry on its
business as described in the Prospectus and to own, lease and operate
its properties;
(ii) 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 statutory preemptive or, to such
counsel's knowledge, similar rights;
(iii) 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 statutory
preemptive or, to such counsel's knowledge, similar rights;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus;
(vi) based on the oral advisement of a member of the staff of
the Commission, 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 such counsel's knowledge,
pending before the Commission;
(vii) the statements under the captions "Stock Option Plan",
"Shares Eligible for Future Sale", and "Description of Capital Stock"
in the Prospectus and Item 14 of Part II of the Registration Statement,
insofar as such statements constitute a summary of the legal matters or
documents
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referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings;
(viii) the execution, delivery and performance of this
Agreement by the Company, the compliance by the Company with all the
provisions hereof and the consummation by the Company of the
transactions contemplated hereby will not (A) require any material
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),
(B) 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 to such counsel's knowledge, any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is material to
the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party, (C) to such counsel's
knowledge, violate or conflict with any applicable law or any rule,
regulation, or any judgment, order or decree of any court or any
governmental body or agency expressly applicable to the Company, any of
its subsidiaries or their respective property;
(iv) such counsel does not know of any legal or governmental
proceedings 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 that are required to be described in the Registration Statement
or the Prospectus and are not so described, or of any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not so
described or filed as required;
(x) 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 in the Investment Company Act of 1940,
as amended;
(xi) to such counsel's knowledge, 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 except as
set forth in the Registration Agreement dated as of June 9, 1995, as
amended on August 15, 1997.
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(xii) the Registration Statement and the Prospectus and any
supplement thereto (except for the financial statements and other
financial and statistical data included therein as to which no opinion
need be expressed) comply as to form in all material respects with the
Act; and
(xiii) upon payment pursuant to the Underwriting Agreement for
the Shares to be sold by the Selling Stockholders (except the Clipper
Selling Stockholders and First Union Corporation) pursuant thereto,
delivery of such Shares, as directed by the Underwriters, to Cede or
such other nominee as may be designated by DTC, registration of such
Shares in the name of Cede or such other nominee as may be designated
by DTC on the Company's share registry in accordance with the Company's
certificate of incorporation, bylaws and applicable law and as required
by Section 8-401 of the Uniform Commercial Code as in effect in the
State of New York ("UCC") and an indication from DTC by book entry that
in the case of each Underwriter the Shares being purchased by or on
behalf of such Underwriter have been credited to "securities accounts"
(as defined in Section 8-501 of the UCC) of such Underwriter with DTC
(assuming that neither DTC nor any such Underwriter has notice of any
adverse claim (as such phrase is defined in Section 8-105 of the UCC)
to such Shares): (A) DTC shall be a "protected purchaser" of such
Shares within the meaning of Section 8-303 of the UCC, and (B) under
Section 8-501 of the UCC, each Underwriter will acquire a valid
"security entitlement" (as defined in Section 8-102 of the UCC) to the
Shares being so purchased by or on behalf of such Underwriter, and, to
the extent governed by the UCC, no action based on any "adverse claim"
(as defined in Section 8-102 of the UCC) to such Shares (or security
entitlement with respect thereto) may properly be asserted against such
Underwriter with respect to such security entitlement; provided that
the Underwriters do not have notice of such adverse claims within the
meaning of Section 8-105 of the UCC, and it being understood that for
the purpose of this opinion, such counsel has assumed without
independent verification, that the UCC is the law applicable to the
sale of the Shares and that when such payment, delivery, registration
and crediting occur, (x) Cede or such other nominee is not a "security
intermediary" (as defined in Section 8-102 of the UCC), (y)
registration of such Shares in the name of Cede or another nominee
designated by DTC is effective to register such Shares in the name of
DTC for purposes of Section 8-106 (b)(2) of the UCC and (z) DTC is a
"clearing corporation" (as defined in Section 8-102 of the UCC).
In addition, such counsel has participated in conferences with
representatives of the Underwriters, officers and other representatives of the
Company and representatives of the independent certified public accountants of
the Company, at which conferences the contents of the Registration Statement and
the prospectus and related matters discussed and, although such counsel does not
pass upon and does not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement and the
Prospectus, on the basis of the foregoing (relying as to materiality on the
factual representations of, and discussions with, officers and other
representatives of the Company), no facts have come to such counsel's attention
which cause such counsel to believe that (i) the Registration Statement, as of
the time it became effective under Securities Act, contained an 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 (ii) the
Prospectus, as of the date thereof and as of the Closing Date, includes any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading; except that such counsel expresses no
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comment with respect to the financial statements and notes thereto, financial
schedules, and other financial and statistical information contained in the
Prospectus.
The foregoing opinions are limited to the federal laws of the United
States, the laws of the Commonwealth of Pennsylvania, and the Florida Business
Corporation Act. Such counsel's opinions in paragraph (ii) regarding the
validity of all issued shares of capital stock of the Company is based in part
on such counsel's assumption that the stock books of the Company provided to
such counsel document all issuances of capital stock of the Company since the
dates of its incorporation. No facts have come to such counsel's attention that
cause such counsel to believe that such assumption is not correct. In addition,
such counsel's opinion expressed in paragraph (i) above as to the existence in
good standing of the Company is based solely on a certificate of good standing
issued by the Secretary of State of the State of Florida, and has the meaning
imparted by such certificate.
In rendering the foregoing opinions and advisements, whenever a
statement, opinion or advisement set forth therein is qualified to "our
knowledge," or any similar phrase, it is intended to indicate that, during the
course of such counsel's representation of the Company in the subject
transaction, no information that would give such counsel current actual
knowledge of the inaccuracy of such statement, opinion or advisement has come to
the attention of those attorneys of such counsel who have rendered legal
services in connection with the preparation of the Registration Statement and
Prospectus. However, such counsel has not undertaken any independent
investigation to determine the accuracy of such statement, opinion or advisement
and no inference as to such counsel's knowledge of any matters bearing on the
accuracy of any such statement, opinion or advisement should be drawn from the
fact of such counsel's representation of the Company.
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EXHIBIT B
Form of opinion from Xxxxxxxx & Xxxxx, counsel for The Clipper Group
L.P., will include the following:
(i) Each of Clipper Capital Associates, L.P., Clipper European
Re, L.P., Clipper/Merban, L.P., Clipper Equity Partners I, L.P., and
Clipper/Merchant Partners, L.P. is a limited partnership existing and
in good standing under the __________ Act.
(ii) the General Partner of each of the Clipper Selling
Stockholders has adopted by requisite vote the resolutions necessary to
authorize such Clipper Selling Stockholder's execution, delivery and
performance of the Underwriting Agreement. Each of the Clipper Selling
Stockholders has duly executed and delivered the Underwriting Agreement
and a Custody Agreement.
(iii) Each of the Clipper Selling Stockholders has the
partnership power to enter into the Underwriting Agreement and the
Custody Agreement and to sell, assign, transfer and deliver the Clipper
Shares to be sold by such Clipper Selling Stockholder in the manner
provided in the Underwriting Agreement.
(iv) Each Custody Agreement executed by a Clipper Selling
Stockholder is a valid and binding obligation of such Clipper Selling
Stockholder and (assuming the due authorization, execution and delivery
thereof by the other parties thereto) is enforceable against such
Clipper Selling Stockholder in accordance with its terms.
(v) Upon the Underwriters' payment to the Clipper Selling
Stockholders of the purchase price specified in the Underwriting
Agreement, assuming that (i) the Clipper Shares to be sold by each
Clipper Selling Stockholder are registered securities in certificated
form and not held in any securities account or by or through a
securities intermediary within the meaning of the Uniform Commercial
Code as adopted by the State of New York (the "NYUCC"), (ii) the
certificate or certificates representing the Clipper Shares to be sold
by each such Clipper Selling Stockholder pursuant to the Underwriting
Agreement have been effectively endorsed in blank in accordance with
the NYUCC, (iii) the transfer agent, in its capacity as custodian for
the Underwriters, is not acting as a securities intermediary, (iv) Cede
& Co. is acting as DTC's nominee and is not a securities intermediary
and (v) DTC has no notice of
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any adverse claim to the Clipper Shares, then, by delivery of such
certificate or certificates to the Underwriters, each Underwriter will
be a "protected purchaser" of the Clipper Shares to be purchased
(within the meaning of Section 8-303 of the NYUCC) and will acquire its
interest in such Clipper Shares (including, without limitation, all
rights that such Clipper Selling Stockholder had or has the power to
transfer in such Clipper Shares) free of any adverse claim (assuming
the Underwriters are without notice of any adverse claim).
(vi) None of the Clipper Selling Stockholders were required to
obtain any consent, approval, authorization or order of or from any
governmental agency or body for the sale of the Clipper Shares being
sold by such Clipper Selling Stockholder or the consummation of the
transactions contemplated by the Underwriting Agreement, or the Custody
Agreement to which such Clipper Selling Stockholder is a party, except
for the order by the Commission declaring the Registration Statement
effective, and except registration of such Clipper Shares under the
Securities Act and such as may be required under state securities or
blue sky laws in connection with the offer, sale and distribution of
such Clipper Shares by the Underwriters.
(vii) the execution, delivery and performance of the
Underwriting Agreement and the Custody Agreement by each Clipper
Selling Stockholder and the sale of the Clipper Shares to you in
accordance with the Underwriting Agreement do not (A) violate the
[partnership agreement] of such Clipper Selling Stockholder or (B)
constitute a violation by such Clipper Selling Stockholder of any
applicable provision of any law, statute or regulation (except that we
express no opinion in this paragraph as to compliance with any
disclosure requirement or any prohibition against fraud or
misrepresentation or as to whether performance of the indemnification
or contribution provision in the Underwriting Agreement would be
permitted).
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EXHIBIT C
Form of comfort letter from Xxxxxx Xxxxxxxx LLP, independent public
accountants, will contain the following information and statements with respect
to the financial statements and certain financial information contained in the
Registration Statement and the Prospectus:
(i) that in their opinion the financial statements examined by
them and included or incorporated by reference in the Registration
Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the related rules and
regulations adopted by the SEC;
(ii) that they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on the unaudited
financial statements included in the Registration Statement;
(iii) that on the basis of the review referred to in clause
(ii) above, a reading of the latest available interim financial
statements of the Company, inquiries of officials of the Company who
have responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused them
to believe that:
(A) the unaudited financial statements included in the
Registration Statement do not comply as to form in all
material respects with the applicable accounting requirements
of the Act and the related rules and regulations adopted by
the SEC or any material modifications should be made to such
unaudited financial statements for them to be in conformity
with generally accepted accounting principles;
(B) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date
not more than [five] business days prior to the date of this
Agreement, there was any change in the capital stock or any
increase in long-term debt or decrease in consolidated
Stockholders' equity of the Company; or
(C) for the period from the latest income statement
included in the Prospectus to the date of the latest available
income statement read by such accountants there were any
decreases, as
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compared with the corresponding period of the previous year
included in the Prospectus, in consolidated net sales or net
operating income;
except in all cases set forth in clauses (B) and (C) above for changes,
increases or decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(iv) for specified dollar amounts (or percentages derived from
such dollar amounts) and other financial information contained in the
Registration Statement, they have performed additional procedures, as
detailed in the tickmarks contained in such letter, noting agreement
except as otherwise specified in such letter.
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EXHIBIT D
Form of opinion of counsel for First Union Corporation
Form of opinion from Xxxxx Xxxxx, general counsel for First Union
Corporation (the "CORPORATION"), will include the following:
(i) the Corporation has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the state
of [ ];
(ii) this Agreement has been duly authorized, executed and
delivered by the Corporation;
(iii) immediately prior to the sale of Shares to be sold by
the Corporation under this Agreement, the Corporation was the sole
registered owner of the Shares to be sold under this Agreement, and the
certificates evidencing all of such Shares bore no restrictive legends
other than legends relating to limitations on transferability under
Federal and state securities laws;
(iv) the Corporation has full legal right and capacity to
enter into this Agreement and the Custody Agreement and the Power of
Attorney and to sell, assign, transfer and deliver the Shares to be
sold by the Selling Stockholder in the manner provided herein and
therein;
(v) the Custody Agreement is a valid and binding agreement of
the Corporation enforceable in accordance with its terms;
(vi) the Power of Attorney is a valid and binding instrument
of the Corporation enforceable in accordance with its terms;
(vii) upon delivery of and payment for the Shares to be sold
by the Corporation pursuant to this Agreement, good title to such
Shares will pass to the Underwriters, free of all adverse claims; and
(viii) the execution, delivery and performance of this
Agreement, the Custody Agreement and Power of Attorney by the
Corporation, the compliance by the Corporation with all the provisions
hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (A) require any consent,
approval, authorization or other order of, or qualification with, any
court or governmental body or agency, (B) conflict with or constitute a
breach of any of the terms or provisions
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of, or a default under, the partnership agreement of the Corporation,
(C) violate or conflict with any applicable law or any rule,
regulation, or any judgment, order or decree of any court or any
governmental body or agency expressly applicable to the Corporation.
