EXECUTION COPY
7,482,000 SHARES
BUILD-A-BEAR WORKSHOP, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
October 27, 2004
CREDIT SUISSE FIRST BOSTON LLC
Eleven Madison Avenue,
New York, N.Y. 10010-3629
CITIGROUP GLOBAL MARKETS INC.
000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, 00000
As Representatives of the Several Underwriters,
Dear Sirs:
1. Introductory. Build-A-Bear Workshop, Inc., a Delaware corporation
("COMPANY"), proposes to issue and sell 1,500,000 shares of its common stock
("SECURITIES") and the stockholders listed in Schedule A hereto ("SELLING
STOCKHOLDERS") propose severally to sell an aggregate of 5,982,000 outstanding
shares of the Securities (such 7,482,000 shares of Securities being hereinafter
referred to as the "FIRM SECURITIES"). Certain Selling Stockholders also propose
to sell to the Underwriters named in Schedule B hereto ("UNDERWRITERS"), at the
option of the Underwriters, an aggregate of not more than 1,122,300 additional
outstanding shares of the Company's Securities, as set forth below (such
1,122,300 additional shares being hereinafter referred to as the "OPTIONAL
SECURITIES"). The Firm Securities and the Optional Securities are herein
collectively called the "OFFERED SECURITIES". As part of the offering
contemplated by this Agreement, Citigroup Global Markets Inc. has agreed to
reserve out of the Firm Securities set forth opposite its name on the Schedule B
hereto, up to 374,100 shares, for sale to parties who are not directors,
officers, or employees of the Company (collectively, "PARTICIPANTS"), as set
forth in the Prospectus under the heading "Underwriting" (the "DIRECTED SHARE
PROGRAM"). The Firm Securities to be sold by Citigroup Global Markets Inc.
pursuant to the Directed Share Program (the "DIRECTED SHARES") will be sold by
Citigroup Global Markets Inc. pursuant to this Agreement at the public offering
price. Any Directed Shares not orally confirmed for purchase by any Participants
by 8:00 A.M. New York City time on the business day following the date on which
this Agreement is executed will be offered to the public by the Underwriters as
set forth in the Prospectus. CSFB and Citigroup Global Markets Inc. are acting
as representatives (together, the "REPRESENTATIVES") of the several
Underwriters. The Company and the Selling Stockholders hereby agree with the
several Underwriters as follows:
2. Representations and Warranties of the Company and the Selling
Stockholders. (a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. 333-118142) relating to the
Offered Securities, including a form of prospectus, has been filed with
the Securities and Exchange Commission ("COMMISSION") and either (A)
has been declared effective under the Securities Act of 1933 ("ACT")
and is not proposed to be amended or (B) is proposed to be amended by
amendment or post-effective amendment. If such registration statement
(the "INITIAL REGISTRATION STATEMENT") has been declared effective,
either (A) an additional registration statement (the "ADDITIONAL
REGISTRATION STATEMENT") relating to the Offered Securities may have
been filed with the Commission pursuant to Rule 462(b) ("RULE 462(B)")
under the Act and, if so filed, has become effective upon filing
pursuant to such Rule and the Offered Securities all have been duly
registered under the Act pursuant to the initial registration statement
and, if applicable, the additional
registration statement or (B) such an additional registration statement
is proposed to be filed with the Commission pursuant to Rule 462(b) and
will become effective upon filing pursuant to such Rule and upon such
filing the Offered Securities will all have been duly registered under
the Act pursuant to the initial registration statement and such
additional registration statement. If the Company does not propose to
amend the initial registration statement or if an additional
registration statement has been filed and the Company does not propose
to amend it, and if any post-effective amendment to either such
registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent amendment (if
any) to each such registration statement has been declared effective by
the Commission or has become effective upon filing pursuant to Rule
462(c) ("RULE 462(C)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement,
"EFFECTIVE TIME" with respect to the initial registration statement or,
if filed prior to the execution and delivery of this Agreement, the
additional registration statement means (A) if the Company has advised
the Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement,
or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared
effective by the Commission or has become effective upon filing
pursuant to Rule 462(c), or (B) if the Company has advised the
Representatives that it proposes to file an amendment or post-effective
amendment to such registration statement, the date and time as of which
such registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective by
the Commission. If an additional registration statement has not been
filed prior to the execution and delivery of this Agreement but the
Company has advised the Representatives that it proposes to file one,
"EFFECTIVE TIME" with respect to such additional registration statement
means the date and time as of which such registration statement is
filed and becomes effective pursuant to Rule 462(b). "EFFECTIVE DATE"
with respect to the initial registration statement or the additional
registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its
Effective Time, including all information contained in the additional
registration statement (if any) and deemed to be a part of the initial
registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the Form
on which it is filed and including all information (if any) deemed to
be a part of the initial registration statement as of its Effective
Time pursuant to Rule 430A(b) ("RULE 430A(B)") under the Act, is
hereinafter referred to as the "INITIAL REGISTRATION STATEMENT". The
additional registration statement, as amended at its Effective Time,
including the contents of the initial registration statement
incorporated by reference therein and including all information (if
any) deemed to be a part of the additional registration statement as of
its Effective Time pursuant to Rule 430A(b), is hereinafter referred to
as the "ADDITIONAL REGISTRATION STATEMENT". The Initial Registration
Statement and the Additional Registration Statement are hereinafter
referred to collectively as the "REGISTRATION STATEMENTS" and
individually as a "REGISTRATION STATEMENT". The form of prospectus
relating to the Offered Securities, as first filed with the Commission
pursuant to and in accordance with Rule 424(b) ("RULE 424(B)") under
the Act or (if no such filing is required) as included in a
Registration Statement, is hereinafter referred to as the "PROSPECTUS".
No document has been or will be prepared or distributed in reliance on
Rule 434 under the Act.
(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement: (A)
on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all material respects to
the requirements of the Act and the rules and regulations of the
Commission ("RULES AND REGULATIONS") and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (B) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement conformed
or will conform, in all respects to the requirements of the Act and the
Rules and Regulations and did not include, or will not include, any
untrue statement of a material fact and did not omit, or will not omit,
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and (C) on the date of
this Agreement, the Initial Registration Statement and, if the
Effective Time of the Additional Registration Statement is prior to the
execution and delivery of this Agreement, the Additional Registration
Statement each conforms, and at the time of filing of
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the Prospectus pursuant to Rule 424(b) or (if no such filing is
required) at the Effective Date of the Additional Registration
Statement in which the Prospectus is included, each Registration
Statement and the Prospectus will conform, in all material respects to
the requirements of the Act and the Rules and Regulations, and neither
of such documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material fact
required to be stated therein or necessary to make the statements
therein, and, in the case of the Prospectus, in light of the
circumstances under which they were made, not misleading. If the
Effective Time of the Initial Registration Statement is subsequent to
the execution and delivery of this Agreement: on the Effective Date of
the Initial Registration Statement, the Initial Registration Statement
and the Prospectus will conform in all material respects to the
requirements of the Act and the Rules and Regulations, neither of such
documents will include any untrue statement of a material fact or will
omit to state any material fact required to be stated therein or
necessary to make the statements therein, and in the case of the
Prospectus, in light of the circumstances under which they were made,
not misleading, and no Additional Registration Statement has been or
will be filed. The two preceding sentences do not apply to statements
in or omissions from a Registration Statement or the Prospectus based
upon written information furnished to the Company by any Underwriter
through or on behalf of the Representatives specifically for use
therein, it being understood and agreed that the only such information
is that described as such in Section 7(c) hereof.
(iii) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; and
the Company is duly qualified to do business as a foreign corporation
in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, except where the lack thereof would not individually or
in the aggregate have a material adverse effect on the condition
(financial or other), business, properties or results of operations of
the Company and its Subsidiaries taken as a whole (a "MATERIAL ADVERSE
EFFECT").
(iv) Shirts Illustrated, L.L.C., Build-A-Bear Entertainment,
LLC, Build-A-Bear Workshop Franchise Holdings, Inc., Build-A-Bear
Workshop Canada Ltd. and Build-A-Bear Retail Management, Inc. (each a
"SUBSIDIARY" and collectively, the "SUBSIDIARIES") are the only
subsidiaries of the Company, each has been duly organized or
incorporated and is a validly existing limited liability company or
corporation in good standing under the laws of the jurisdiction of its
organization or incorporation, with power and authority to own, lease
and operate its properties and conduct its business as described in the
Prospectus; and each of the Subsidiaries is duly qualified to do
business as a foreign limited liability company or corporation and is
in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its businesses requires such
qualification, except where the failure to be so qualified or in good
standing would not individually or in the aggregate have a Material
Adverse Effect; all of the issued and outstanding membership interests
or shares of the Subsidiaries have been validly issued and the
membership interests or shares owned by the Company are free from
liens, encumbrances and defects; no options, warrants or other rights
to purchase, agreements or other obligations to issue or rights to
convert or exchange any obligations into membership, share or other
ownership interests in its Subsidiaries are outstanding; any operating
agreement pursuant to which the Company may hold its membership
interests or shares in its Subsidiaries is in full force and effect and
constitute a valid and legally binding agreement of the parties
thereto, enforceable against such parties in accordance with the terms
thereof, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and there has been no material breach of or default under,
and no event which with notice or lapse of time or both would
constitute a material breach of or default under, any such operating
agreement by the Company or its Subsidiaries. The Company has no
Subsidiary that is a "significant subsidiary" as such term is defined
in Rule 1-02(w) of Regulation S-X under the Act.
(v) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized and have been
(or, in the case of the Offered Securities, when
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issued in accordance with the terms of this Agreement, will be) validly
issued, fully paid and nonassessable and conform, in all material
respects, to the description thereof contained in the Prospectus; none
of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any security
holder of the Company; except as disclosed in the Prospectus, as of the
date specified therein, there were no outstanding (A) securities or
obligations of the Company or any of its Subsidiaries convertible into
or exchangeable for any capital stock of the Company, (B) warrants,
rights or options to subscribe for or purchase from the Company or any
such Subsidiaries any such capital stock or any such convertible or
exchangeable securities or obligations, or (C) obligations of the
Company or any such Subsidiaries to issue any shares of such capital
stock, any such convertible or exchangeable securities or obligations,
or any such warrants, rights or options and the stockholders of the
Company have no preemptive rights with respect to the Securities.
(vi) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(vii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.
(viii) The Securities have been approved for listing subject
to notice of issuance on the New York Stock Exchange.
(ix) No consent, approval, authorization, or order of, or
filing with, any governmental or regulatory agency or body or any court
is required to be obtained or made by the Company for the consummation
of the transactions contemplated by this Agreement in connection with
the sale of the Offered Securities, except such as have been obtained
and made under (A) the Act, (B) any additional Registration Statements,
(C) the final prospectus to be filed pursuant to Rule 424(b) and (D)
and such as may be required under state securities laws and the rules
of the National Association of Securities Dealers, Inc. ("NASD").
(x) The execution, delivery and performance of this Agreement,
and the consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms and provisions of,
or constitute a default under, (A) any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or its Subsidiaries or
any of their properties, (B) or any contract, mortgage, deed of trust,
loan or credit agreement, lease or other agreement or instrument to
which the Company or any Subsidiary is a party or by which the Company
or any such Subsidiary is bound or to which any of the properties of
the Company or its Subsidiaries is subject, or (C) the charter or
by-laws of the Company or the articles of incorporation or the
operating agreement of any such Subsidiary, except in the case of (A)
and (B) where such breach, violation or default would not (1)
individually or in the aggregate have a Material Adverse Effect and (2)
affect the execution, delivery and performance of this Agreement, and
the consummation of the transactions herein contemplated.
(xi) This Agreement has been duly authorized, executed and
delivered by the Company.
(xii) Except as disclosed in the Prospectus, the Company and
its Subsidiaries have good and marketable title to all material real
properties and valid title to all other material properties and assets
owned by them, in each case free from liens, encumbrances and defects
that would materially affect the value thereof or materially interfere
with the use made or to be made
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thereof by them; and except as disclosed in the Prospectus, the Company
and its Subsidiaries hold any leased real or personal property under
valid and enforceable material leases with no exceptions that would
materially interfere with the use made or to be made thereof by them.
(xiii) The Company and its Subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by
them, except where the lack thereof would not individually or in the
aggregate have a Material Adverse Effect, and have not received any
notice of proceedings relating to the revocation or modification of any
such certificate, authority or permit that, if determined adversely to
the Company or its Subsidiaries, would individually or in the aggregate
have a Material Adverse Effect.
(xiv) No labor dispute with the employees of the Company or
its Subsidiaries exists or, to the knowledge of the Company, is
imminent that is reasonably expected to have a Material Adverse Effect.
(xv) The Company and its Subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively,
"INTELLECTUAL PROPERTY RIGHTS") necessary to conduct the business now
operated by them, or presently employed by them, and have not received
any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that is
reasonably expected to individually or in aggregate have a Material
Adverse Effect.
(xvi) Except as disclosed in the Prospectus, neither the
Company nor its Subsidiaries is in violation of any statute, any rule,
regulation, decision or other of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "ENVIRONMENTAL LAWS"), owns or operates any
real property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the
aggregate have Material Adverse Effect; and the Company is not aware of
any pending investigation which might lead to such a claim.
(xvii) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the Company,
its Subsidiaries or any of their respective properties that are
reasonably expected to individually or in the aggregate have a Material
Adverse Effect, or to materially and adversely affect the ability of
the Company to perform its obligations under this Agreement, or which
are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are threatened
or, to the Company's knowledge, contemplated.
(xviii) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of
the Company and its Subsidiaries as of the dates shown and their
results of operations and cash flows for the periods shown, and such
financial statements have been prepared in conformity with the
generally accepted accounting principles ("GAAP") in the United States
applied on a consistent basis.
(xix) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included in the Prospectus
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
the Company and its Subsidiaries taken as a whole, and, except as
disclosed in or contemplated by the Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
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(xx) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940.
(xxi) The Company and its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the business in
which they are engaged, except for insurance policies the absence of
which would not result in a Material Adverse Effect; and neither the
Company nor its Subsidiaries has been refused any insurance coverage
sought or applied for and neither the Company nor its Subsidiaries has
any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
their business at a cost that would not have a Material Adverse Effect.
(xxii) The books, records and accounts of the Company and its
Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
the operations of, the Company and its Subsidiaries. The Company and
its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (A) transactions are
executed in accordance with management's general or specific
authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP, and to
maintain accountability for assets; (C) access to assets is permitted
only in accordance with management's general or specific authorization;
and (D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The Company has not made, and, to the
knowledge of the Company, no employee or agent of the Company has made,
any payment of the Company's funds or received or retained any funds in
violation of any applicable law, regulation or rule.
(xxiii) No relationship, direct or indirect, exists between or
among any of the Company or any affiliate of the Company, on the one
hand, and any director, officer, stockholder, customer, supplier or any
of them on the other hand, which is required by the Act or the
applicable published Rules and Regulations thereunder to be described
in the Registration Statement or the Prospectus and which is not so
described or is not described as required.
(xxiv) The Company and its officers and directors are, or upon
becoming subject to the Exchange Act will be, in compliance in all
material respects with applicable provisions of the Xxxxxxxx-Xxxxx Act
of 2002 and the rules and regulations promulgated in connection
therewith (the "XXXXXXXX-XXXXX ACT") that are effective and are
actively taking steps to provide reasonable assurance that they will be
in compliance in all material respects with other applicable provisions
of the Xxxxxxxx-Xxxxx Act upon the effectiveness of such provisions
including, but not limited to, Section 402 related to loans and
Sections 302 and 906 related to certifications.
(xxv) Neither the Company or its Subsidiaries, nor, to the
best of the Company's knowledge after due inquiry, any director,
officer, employee, agent or other person acting on behalf of the
Company or its Subsidiaries has, in the course of his or her actions
for, or on behalf of, the Company or its Subsidiaries, (a) used any
corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity or made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds, or (b) violated,
or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977, as amended, or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(xxvi) The Company has not offered, or caused the Underwriters
to offer, Securities to any person pursuant to the Directed Share
Program with the specific intent to unlawfully influence (i) a customer
or supplier of the Company to alter the customer's or supplier's level
or type of business with the Company, or (ii) a trade journalist or
publication to write or publish favorable information about the Company
or its products.
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(b) Each Selling Stockholder severally and not jointly represents and
warrants to, and agrees with, the several Underwriters that:
(i) If such Selling Stockholder is a corporation or a limited
liability company, such selling stockholder has been duly incorporated
or organized, as the case may be, and is validly existing as a
corporation or limited liability company, as the case may be, in good
standing under the laws of the jurisdiction of its incorporation or
organization, as the case may be.
(ii) Such Selling Stockholder has and on each Closing Date
hereinafter mentioned will have valid and unencumbered title to the
Offered Securities to be delivered by such Selling Stockholder on such
Closing Date and full right, power and authority to enter into this
Agreement and to sell, assign, transfer and deliver the Offered
Securities to be delivered by such Selling Stockholder on such Closing
Date hereunder; and upon the delivery of and payment for the Offered
Securities on each Closing Date hereunder the several Underwriters will
acquire valid and unencumbered title to the Offered Securities to be
delivered by such Selling Stockholder on such Closing Date.
(iii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between such Selling
Stockholder and any person that would give rise to a valid claim
against such Selling Stockholder or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with this
offering.
(c) Each senior executive selling stockholder named in Schedule D
hereto (each a "SENIOR EXECUTIVE SELLING STOCKHOLDER"), severally and not
jointly, represents and warrants to, and agrees with, the several Underwriters
that:
(i) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement: (A)
on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all material respects to
the requirements of the Act and the Rules and Regulations and did not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, (B) on the Effective Date of the
Additional Registration Statement (if any), each Registration Statement
conformed, or will conform, in all material respects to the
requirements of the Act and the Rules and Regulations and did not
include, or will not include, any untrue statement of a material fact
and did not omit, or will not omit, to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, and (C) on the date of this Agreement, the Initial
Registration Statement and, if the Effective Time of the Additional
Registration Statement is prior to the execution and delivery of this
Agreement, the Additional Registration Statement each conforms, and at
the time of filing of the Prospectus pursuant to Rule 424(b) or (if no
such filing is required) at the Effective Date of the Additional
Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all material
respects to the requirements of the Act and the Rules and Regulations,
and neither of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein, and, in the case of the Prospectus, in light of the
circumstances under which they were made, not misleading. If the
Effective Time of the Initial Registration Statement is subsequent to
the execution and delivery of this Agreement: on the Effective Date of
the Initial Registration Statement, the Initial Registration Statement
and the Prospectus will conform in all material respects to the
requirements of the Act and the Rules and Regulations, neither of such
documents will include any untrue statement of a material fact or will
omit to state any material fact required to be stated therein or
necessary to make the statements therein, and in the case of the
Prospectus, in light of the circumstances under which they were made,
not misleading, and no Additional Registration Statement has been or
will be filed. The two preceding sentences do not apply to statements
in or omissions from a Registration Statement or the Prospectus based
upon written information furnished to the Company by any Underwriter
through the Representatives
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specifically for use therein, it being understood and agreed that the
only such information is that described as such in Section 7(c) hereof.
(d) Each Selling Stockholder named in Schedule E hereto (each an "OTHER
SELLING STOCKHOLDER"), severally and not jointly, represents and warrants to,
and agrees with, the several Underwriters that:
(i) Such Other Selling Stockholder other than Hycel Partners
V, L.L.C., Xxx Xxxxxx, Xxxxx X. Xxxxx XX, Xxxx O'Xxxxxxx Xxxxx Capital
Services, L.L.C. and Xxxxxxxxxx Xxxxxxxx Xxxx has no knowledge of any
material fact, condition or information not disclosed in the Prospectus
or any supplement thereto which has adversely affected or may adversely
affect the business of the Company or any of its subsidiaries.
(ii) The sale of Securities by such Other Selling Stockholder
pursuant hereto is not prompted by any information concerning the
Company or any of its subsidiaries which is not set forth in the
Prospectus or any supplement thereto.
(iii) In respect of any statements in or omissions from the
Registration Statement or the Prospectus or any supplements thereto
made in reliance upon and in conformity with information furnished in
writing to the Company by any Selling Stockholder specifically for use
in connection with the preparation thereof, such Other Selling
Stockholder hereby makes the same representations and warranties to
each Underwriter as the Company makes to such Underwriter under
paragraph (a)(ii) of this Section other than with respect to each
Registration Statement's compliance with the requirements of the Act
and the Rules and Regulations.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company and each Selling
Stockholder agree, severally and not jointly, to sell to each Underwriter, and
each Underwriter agrees, severally and not jointly, to purchase from the Company
and each Selling Stockholder, at a purchase price of $18.60 per share, that
number of Firm Securities (rounded up or down, as determined by the
Representatives in their discretion, in order to avoid fractions) obtained by
multiplying 1,500,000 Firm Securities in the case of the Company and the number
of Firm Securities set forth opposite the name of such Selling Stockholder in
Schedule A hereto, in the case of a Selling Stockholder, in each case by a
fraction the numerator of which is the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule B hereto and the denominator
of which is the total number of Firm Securities.
Certificates in negotiable form for the Offered Securities to be sold
by the Selling Stockholders hereunder have been placed in custody, for delivery
under this Agreement, under Custody Agreements ("CUSTODY AGREEMENTS") made with
Mellon Investor Services LLC, as custodian ("CUSTODIAN"). Each Selling
Stockholder agrees that the shares represented by the certificates held in
custody for the Selling Stockholders under such Custody Agreements are subject
to the interests of the Underwriters hereunder, that the arrangements made by
the Selling Stockholders for such custody are to that extent irrevocable, and
that the obligations of the Selling Stockholders hereunder shall not be
terminated by operation of law, whether by the death of any individual Selling
Stockholder or the occurrence of any other event, or in the case of a trust, by
the death of any trustee or trustees or the termination of such trust. If any
individual Selling Stockholder or any such trustee or trustees should die, or if
any other such event should occur, or if any of such trusts should terminate,
before the delivery of the Offered Securities hereunder, certificates for such
Offered Securities shall be delivered by the Custodian in accordance with the
terms and conditions of this Agreement as if such death or other event or
termination had not occurred, regardless of whether or not the Custodian shall
have received notice of such death or other event or termination.
The Company and the Custodian will deliver the Firm Securities to the
Representatives for the accounts of the Underwriters, at the offices of Shearman
& Sterling LLP, New York, against payment of the purchase price in Federal (same
day) funds by official bank check or checks or wire transfer to an account at a
bank acceptable to the Representatives drawn to the order of Build-A-Bear
Workshop, Inc. in the case of 1,500,000 shares of Firm Securities and November
2, 2004 in the case of 5,982,000 shares of Firm
8
Securities, at the offices of Shearman & Sterling LLP, New York, at 8:30 A.M.,
New York time, on November 2, 2004 , or at such other time not later than seven
full business days thereafter as the Representatives and the Company determine,
such time being herein referred to as the "FIRST CLOSING DATE". For purposes of
Rule 15c6-1 under the Exchange Act, the First Closing Date (if later than the
otherwise applicable settlement date) shall be the settlement date for payment
of funds and delivery of securities for all the Offered Securities sold pursuant
to the offering. The certificates for the Firm Securities so to be delivered
will be in definitive form, in such denominations and registered in such names
as the Representatives request and will be made available for checking and
packaging at the above offices of Shearman & Sterling LLP at least 24 hours
prior to the First Closing Date.
In addition, upon notice from the Representatives given to the Company
and the Selling Stockholders from time to time and not more than 30 days
subsequent to the date of the Prospectus, the Underwriters may purchase all or
less than all of the Optional Securities at the purchase price per Security to
be paid for the Firm Securities. Certain Selling Stockholders agree to sell to
the Underwriters the respective numbers of Optional Securities obtained by
multiplying the number of Optional Securities specified in such notice by a
fraction the numerator of which number of shares set forth opposite the names of
such Selling Stockholders in Schedule A hereto under the caption "Number of
Optional Securities to be Sold" in the case of the Selling Stockholders and the
denominator of which is the total number of Optional Securities (subject to
adjustment by the Representatives to eliminate fractions). Such Optional
Securities shall be purchased from each specified Selling Stockholder for the
account of each Underwriter in the same proportion as the number of Firm
Securities set forth opposite such Underwriter's name bears to the total number
of Firm Securities (subject to adjustment by the Representatives to eliminate
fractions) and may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered. The
right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by the Representatives to the
Company and the Selling Stockholders.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by the
Representatives but, after the First Closing Date, shall be not earlier than
three full business days, and not later than ten full business days after
written notice of election to purchase Optional Securities is given. The
Custodian will deliver the Optional Securities being purchased on each Optional
Closing Date to the Representatives for the accounts of the several
Underwriters, at the offices of Shearman & Sterling LLP, New York, against
payment of the purchase price therefor in Federal (same day) funds by official
bank check or checks or wire transfer to an account at a bank acceptable to the
Representatives drawn to the order of Mellon Investor Services LLC in the case
of 1,122,300 Optional Securities at the above offices of Shearman & Sterling
LLP. The certificates for the Optional Securities being purchased on each
Optional Closing Date will be in definitive form, in such denominations and
registered in such names as the Representatives request upon reasonable notice
prior to such Optional Closing Date and will be made available for checking and
packaging at the above offices of Shearman & Sterling LLP at a reasonable time
in advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company and the Selling Stockholders. The
Company agrees with the several Underwriters and the Selling Stockholders that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Company will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented to
by the Representatives, subparagraph (4)) of Rule 424(b) not later than
the earlier of (i) the second business day following the execution and
delivery of this Agreement or (ii) the fifteenth business day after the
Effective Date of the Initial Registration Statement.
9
The Company will advise the Representatives promptly of any
such filing pursuant to Rule 424(b). If the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement and an additional registration statement is necessary
to register a portion of the Offered Securities under the Act but the
Effective Time thereof has not occurred as of such execution and
delivery, the Company will file the additional registration statement
or, if filed, will file a post-effective amendment thereto with the
Commission pursuant to and in accordance with Rule 462(b) on or prior
to 10:00 P.M., New York time, on the date of this Agreement or, if
earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later
date as shall have been consented to by the Representatives.
(b) The Company will advise the Representatives promptly of
any proposal to amend or supplement the initial or any additional
registration statement as filed or the related prospectus or the
Initial Registration Statement, the Additional Registration Statement
(if any) or the Prospectus and will not effect such amendment or
supplementation without the Representatives' consent, which shall not
be unreasonably withheld or delayed; and the Company will also advise
the Representatives promptly of the effectiveness of each Registration
Statement (if its Effective Time is subsequent to the execution and
delivery of this Agreement) and of any amendment or supplementation of
a Registration Statement or the Prospectus and of the institution by
the Commission of any stop order proceedings in respect of a
Registration Statement and will use its reasonable efforts to prevent
the issuance of any such stop order and to obtain as soon as possible
its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company will promptly notify the Representatives of such event and
will promptly prepare and file with the Commission, at its own expense,
an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance. Neither the
Representatives' consent to, nor the Underwriters' delivery of, any
such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the
Initial Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "Availability Date" means the
90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives a
reasonable number of copies of each Registration Statement (one of
which will be signed and will include all exhibits), each related
preliminary prospectus, and, so long as a prospectus relating to the
Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, the Prospectus and
all amendments and supplements to such documents, in each case in such
quantities as the Representatives reasonably request. The Prospectus
shall be so furnished on or prior to 3:00 P.M., New York time, on the
business day following the later of the execution and delivery of this
Agreement or the Effective Time of the Initial Registration Statement.
All other such documents shall be so furnished as soon as reasonably
available. The Company and the Selling Stockholders will pay the
expenses of printing and distributing to the Underwriters all such
documents.
10
(f) The Company, if required, will arrange for the
qualification of the Offered Securities for sale under the laws of such
jurisdictions in the United States as the Representatives designate and
in such other foreign countries as the Company and the Representatives
mutually agree and will continue such qualifications in effect so long
as required for the distribution, provided, that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction or to subject itself to taxation for doing business in any
jurisdiction where it is not now so subject..
(g) During the period of five years hereafter, the Company
will furnish to the Representatives and, upon request, to each of the
other Underwriters, as soon as practicable after the end of each fiscal
year, a copy of its annual report to stockholders for such year; and
the Company will furnish to the Representatives as soon as available, a
copy of each report and any definitive proxy statement of the Company
filed with the Commission under the Exchange Act or mailed to
stockholders, provided, however, that if any such document is
electronically filed with the SEC, it will be provided only upon
reasonable request.
(h) For the period specified below (the "LOCK-UP PERIOD"), the
Company will not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to, any additional shares
of its Securities or securities convertible into or exchangeable or
exercisable for any shares of its Securities, or publicly disclose the
intention to make any such offer, sale, pledge, disposition or filing,
without the prior written consent of the Representatives, except that
the foregoing restrictions shall not apply to (i) the filing of a
Registration Statement on Form S-8 under the Act registering Securities
issuable under any plan in effect on the date hereof, (ii) the issuance
of Securities upon the exercise of an option or the conversion of a
security outstanding on the date hereto, (iii) the granting of awards
pursuant to the Company's employee benefit plans in effect on the date
hereof, (iv) the issuance of Securities pursuant to the Company's
employee benefit plans in effect on the date hereof, (v) the issuance
of Securities pursuant to the terms of the Company's qualified
retirement plans, (vi) the issuance of the Securities to be sold
hereunder, (vii) the issuance or transfer of any Securities pursuant to
existing reservations, agreements and stock incentive plans, and (viii)
up to 1,000,000 Securities issued in connection with and as
consideration for acquisitions of unaffiliated entities or assets or
businesses from unaffiliated entities; provided, however, that in the
case of sub-clause (viii), each recipient of Securities issued or
delivered under such sub-clause execute a lock-up agreement in the form
attached hereto as Exhibit A. The initial Lock-Up Period will commence
on the date of this Agreement and continue for 180 days after the date
of the Prospectus or such earlier date that the Representatives consent
to in writing; provided, however, that if (A) during the last 17 days
of the initial Lock-Up Period, the Company releases earnings results or
material news or a material event relating to the Company occurs or (B)
prior to the expiration of the initial Lock-Up Period, the Company
announces that it will release earnings results during the 16-day
period beginning on the last day of the initial Lock-Up Period, then in
each case the Lock-Up Period will be extended until the expiration of
the 18-day period beginning on the date of release of the earnings
results or the occurrence of the material news or material event, as
applicable, unless the Representatives waive, in writing, such
extension. The Company will provide the Representatives with notice of
any announcement described in clause (B) of the preceding sentence that
gives rise to an extension of the Lock-Up Period.
(i) The Company agrees with the several Underwriters that the
Company will pay all expenses incident to the performance of the
obligations of the Company, as the case may be, under this Agreement,
for any filing fees and other expenses (including fees and
disbursements of its counsel) in connection with qualification of the
Offered Securities for sale under the laws of such jurisdictions as the
Representatives designate, subject to the terms of this Agreement, and
the printing of memoranda relating thereto, for the filing fee incident
to the review by the NASD of the Offered Securities, for any travel
expenses of the Company's officers and employees and any other expenses
of the Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities. Each Selling
Stockholder agrees with the several Underwriters that the Selling
Stockholders will pay for any transfer taxes on the sale by the Selling
11
Stockholder of the Offered Securities to the Underwriters, for Blue Sky
fees and for expenses incurred in distributing preliminary prospectuses
and the Prospectus (including any amendments and supplements thereto)
to the Underwriters. The Underwriters will pay their own expenses,
including reasonable fees and disbursements of their counsel, except
that the Company will pay the reasonable fees and disbursement of
counsel to the Underwriters in connection with qualification of the
Offered Securities for sale under the laws of such jurisdictions as the
Representatives request, subject to the terms of this Agreement, and
the printing of memoranda relating thereto.
(j) The Company agrees to pay (i) all reasonable fees and
disbursements of counsel incurred by the Underwriters in connection
with the Directed Share Program, (ii) all reasonable costs and expenses
incurred by the Underwriters in connection with the printing (or
reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of copies of the Directed Share
Program material and (iii) all stamp duties, similar taxes or duties or
other taxes, if any, incurred by the Underwriters in connection with
the Directed Share Program.
6. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders herein, to
the accuracy of the statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholders of their obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to the
registration statement to be filed shortly prior to such Effective
Time), of KPMG LLP confirming that they are registered public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and pursuant to the rules of the
Public Company Accounting Oversight Board and stating to the effect
that:
(i) in their opinion the consolidated financial
statements examined by them and included in the Registration
Statements comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
Rules and Regulations adopted by the Commission;
(ii) they have performed the procedures specified by
the standards of the Public Company Accounting Oversight Board
(United States), for the review of interim financial
information as described in Statement of Auditing Standards
No. 100, Interim Financial Information, on the unaudited
financial statements included in the Registration Statements;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
financial statements of the Company, inquiries of officials of
the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited consolidated financial
statements included in the Registration Statements do
not comply as to form in all material respects with
the applicable accounting requirements of the Act and
the related Rules and Regulations adopted by the
Commission or any material modifications should be
made to such unaudited consolidated financial
statements for them to be in conformity with
accounting principles generally accepted in the
United States of America;
12
(B) the unaudited consolidated total
revenues or in total or per share amounts of net
income for the six-month periods ended June 28, 2003
and July 3, 2004 included in the Prospectus do not
agree with the amounts set forth in the unaudited
consolidated financial statements for those same
periods or were not determined on a basis
substantially consistent with that of the
corresponding amounts in the audited statements of
income;
(C) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the capital stock or an
increase in total liabilities, an increase in
long-term debt, or a decrease in stockholders' equity
of the Company and its consolidated subsidiaries or,
at the date of the latest available balance sheet
read by such accountants, there was any decrease in
consolidated total current assets, as compared with
amounts shown on the latest balance sheet included in
the Prospectus; or
(D) for the period from the closing date of
the latest income statement included in the
Prospectus to the closing date of the latest
available income statement read by such accountants
there were any decreases, as compared with the
corresponding period of the previous year and with
the period of corresponding length ended the date of
the latest income statement included in the
Prospectus, in consolidated total revenues or in
total or per share amounts of net income;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from
the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statements is subsequent to the execution and
delivery of this Agreement, "REGISTRATION STATEMENTS" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statements is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration Statement is
subsequent to such execution and delivery, "REGISTRATION STATEMENTS"
shall mean the Initial Registration Statement and the additional
registration statement as proposed to be filed or as proposed to be
amended by the post-effective amendment to be filed shortly prior to
its Effective Time, and (iii) "PROSPECTUS" shall mean the prospectus
included in the Registration Statements.
(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New
York time, on the date of this Agreement or such later date as shall
have been consented to by the Representatives. If the Effective Time of
the Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the
13
time the Prospectus is printed and distributed to any Underwriter, or
shall have occurred at such later date as shall have been consented to
by the Representatives. If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, the Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this
Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of a Registration Statement shall have been issued that
has not been lifted and no proceedings that have not been terminated
for that purpose shall have been instituted or, to the knowledge of any
Selling Stockholder, the Company or the Representatives, shall be
contemplated by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company and its Subsidiaries taken as one enterprise which, in the
judgment of the Representatives, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities of the Company by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act), or any public announcement
that any such organization has under surveillance or review its rating
of any debt securities of the Company (other than an announcement with
positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (iii) any change in U.S. or
international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the judgment of the
Representatives, be likely to prejudice materially the success of the
proposed issue, sale or distribution of the Offered Securities, whether
in the primary market or in respect of dealings in the secondary
market; (iv) any material suspension or material limitation of trading
in securities generally on the New York Stock Exchange or the Nasdaq
Stock Market's National Market or any setting of minimum prices for
trading on either of such exchanges; (v) any suspension of trading of
any securities of the Company on any exchange or in the
over-the-counter market; (vi) any banking moratorium declared by U.S.
Federal or New York authorities; (vii) any major disruption of
settlements of securities or clearance services in the United States or
(viii) any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States, any declaration of war by
Congress or any other national or international calamity or emergency
if, in the judgment of the Representatives, the effect of any such
attack, outbreak, escalation, act, declaration, calamity or emergency
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated
such Closing Date, of Xxxxx Xxxx LLP, special counsel for the Company,
to the effect that:
(i) Based solely on a good standing certificate dated
as of the Closing Date, the Company is a validly existing
corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; and, based solely on recently dated good standing
certificates from the secretaries of state of the appropriate
jurisdictions, the Company is duly qualified to do business as
a foreign corporation in good standing in the following
states: Alabama, Arizona, Arkansas, California, Colorado,
Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois,
Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Nebraska,
Nevada, New Hampshire, New Jersey, New York, North Carolina,
Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina,
Tennessee, Texas, Utah, Virginia, Washington and Wisconsin;
(ii) The Offered Securities delivered on such Closing
Date and all other outstanding shares of the Common Stock of
the Company have been duly authorized and validly issued, are
fully paid and nonassessable and conform as to legal matters
in all material respects to the description thereof contained
in the Prospectus; none of the outstanding shares of capital
stock of the Company was issued in violation of the
14
preemptive or other similar rights of any security holder of
the Company under the General Corporation Law of the State of
Delaware, the Company's Certificate of Incorporation or any
agreement filed as an exhibit to the Registration Statement;
to the knowledge of such counsel, except as disclosed in the
Prospectus and as of the dates specified therein, there are no
outstanding (A) securities or obligations of the Company
convertible into or exchangeable for any capital stock of the
Company, (B) warrants, rights or options to subscribe for or
purchase from the Company any such capital stock or any such
convertible or exchangeable securities or obligations, or (C)
obligations of the Company to issue any shares of such capital
stock, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options;
(iii) Except as described in the Prospectus, there
are no contracts, agreements or understandings known to such
counsel 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 owned or to be owned by such person or to require the
Company to include such securities in the securities
registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act;
(iv) The Company is not and, after giving effect to
the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940;
(v) No consent, approval, authorization, or other
action by, or order of, filing with or notice to, any United
States or Missouri governmental agency or regulatory body or
any United States or Missouri court or any Delaware
governmental agency or regulatory body or United States or
Missouri court acting pursuant to the Delaware General
Corporation Law is required to be obtained or made by the
Company for the consummation of the transactions contemplated
by this Agreement in connection with the sale of the Offered
Securities, except such as have been obtained and made under
the Act and such as may be required under state securities
laws and the rules of the NASD, as to which such counsel need
not express any opinion and except where the lack thereof
would not individually or in the aggregate have a Material
Adverse Effect;
(vi) The execution and delivery of this Agreement and
the consummation of the transactions herein or therein
contemplated will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under,
(A) any federal or Missouri statute or rule or regulation
thereunder, or the Delaware General Corporation Law or any
rule or regulation thereunder, that a lawyer exercising
customary professional diligence would reasonably be expected
to recognize as applicable to the Company in a transaction of
this type, or (B) any order known to such counsel, of any
United States or Missouri governmental agency or regulatory
body or any United States or Missouri court or any Delaware
governmental agency or regulatory body or any United States or
Missouri court acting pursuant to the Delaware General
Corporation Law having jurisdiction over the Company or its
Subsidiaries or any of their properties that a lawyer
exercising customary professional diligence would reasonably
be expected to recognize as applicable to the Company in a
transaction of this type, or (C) any contract, mortgage, deed
of trust, loan or credit agreement, or any lease or other
agreement or instrument filed as an exhibit to the
Registration Statement, to which the Company or its
Subsidiaries is a party or by which the Company or its
Subsidiaries is bound or to which any of the properties of the
Company or its Subsidiaries is subject, except where such
breach, violation or default would not individually or in the
aggregate have a Material Adverse Effect, and will not violate
the charter or by-laws of the Company;
15
(vii) Such counsel has been advised that the Initial
Registration Statement was declared effective under the Act as
of the date and time specified in such opinion, the Additional
Registration Statement (if any) was filed and became effective
under the Act as of the date and time (if determinable)
specified in such opinion, the Prospectus either was filed
with the Commission pursuant to the subparagraph of Rule
424(b) specified in such opinion on the date specified therein
or was included in the Initial Registration Statement or the
Additional Registration Statement (as the case may be), and,
to the best of the knowledge of such counsel, based on
telephone inquiry with the Commission, no stop order
suspending the effectiveness of a Registration Statement or
any part thereof has been issued and no proceedings for that
purpose have been instituted or are pending or threatened
under the Act, and each Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of
their respective effective or issue dates, appear on their
face to comply as to form in all material respects with the
requirements of the Act and the Rules and Regulations; it
being understood that such counsel need express no opinion as
to the financial statements or the notes thereto or other
financial statements or financial, accounting or statistical
data contained in or omitted from the Registration Statements
or the Prospectus;
(viii) This Agreement has been duly authorized,
executed and delivered by the Company; and
(ix) The statements in the Prospectus under the
captions "Certain Relationships and Related Party
Transactions," "Description of Capital Stock" and "Shares
Eligible for Future Sale," to the extent that they constitute
matters of law or legal conclusions, and the descriptions in
the Prospectus of the contracts and other documents filed
under Exhibit 10 to the Registration Statement, have been
reviewed by such counsel and fairly present the information
disclosed therein in all material respects.
During the preparation of the Registration Statement and the
Prospectus, such counsel has participated in conferences with officers
and other representatives of the Company, representatives of the
independent accountants for the Company and you and your
representatives and counsel, at which conferences the contents of the
Prospectus, the Registration Statement and related matters were
discussed, reviewed and revised. Although such counsel is not passing
upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of such contents, and has not made any
independent investigation thereof, on the basis of the information
which was developed in the course thereof, considered in light of its
understanding of applicable law and the experience it has gained
through its practice thereunder, such counsel shall advise you that
(except to the extent specified in the foregoing opinion (ix)) nothing
has come to its attention which causes it to believe that, at the time
the Registration Statement became effective, the Registration Statement
or the Prospectus, as of its date (except as to financial statements
and related notes, financial, statistical and accounting data and
supporting schedules included therein or omitted therefrom or the
exhibits to the Registration Statement, as to which such counsel need
not express any belief), contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein
(and with respect to the Prospectus, in light of the circumstances
under which they were made), not misleading, or at the Closing Date,
the Registration Statement or the Prospectus (except as aforesaid)
contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein
or necessary to make the statements therein (and with respect to the
Prospectus, in the light of the circumstances under which they were
made) not misleading.
(e) The Representatives shall have received the Power of
Attorney executed and delivered by each Selling Stockholder ("POWER OF
ATTORNEY") and an opinion, dated such Closing Date, of Xxxxxx & Xxxxxxx
LLP, in its capacity as counsel for certain Selling Stockholders, to
the effect that:
16
(i) Each of the Selling Stockholders set forth on
Schedule F hereto (each a "GROUP A SELLING STOCKHOLDER"),
other than those who are natural persons, is a limited
partnership under the general corporation law of the State of
Delaware. Based on certificates from public officials, we
confirm that each Group A Selling Stockholder, other than
those who are natural persons, is validly existing and in good
standing under the laws of the State of Delaware;
(ii) With your consent, based solely on a review on a
date between the date hereof and the Closing Date of the stock
transfer records of the Company and a review of the
certificates representing the Securities set forth on Schedule
A hereto, the Selling Stockholders were the owners of record
on that date in the stock records of the Company of the
Securities as set forth on Schedule F hereto;
(iii) Upon physical delivery of the certificates
evidencing the shares of common stock, par value $0.01 per
share, of Build-A-Bear Workshop, Inc. listed on Schedule A
hereto (the "SECURITIES") to the Representatives in the State
of New York with stock powers duly endorsed either to the
Representatives or in blank by an effective endorsement and
payment therefor in accordance with the terms of the
Underwriting Agreement, the Representatives will become
"protected purchasers" (as defined in Section 8-303(a) of the
New York UCC) of the Securities, free of any "adverse claim"
(as defined in Section 8-102(a)(1) of the New York UCC);
(iv) For each of the Group A Selling Stockholders,
other than those who are natural persons, the execution and
delivery of the Underwriting Agreement, the Power of Attorney
and the Custody Agreement on the date hereof do not: (A)
violate the Certificate of Limited Partnership or Partnership
Agreement of each of the Group A Selling Stockholders; or (B)
result in a breach or default under any of the agreements
identified on Schedule H hereto to which such Group A Selling
Stockholder is a party;
(v) For each of the Group A Selling Stockholders,
each of the Custody Agreement and Power of Attorney have been
duly executed and delivered and with respect to the Group A
Selling Stockholders other than those who are natural persons,
have been duly authorized by all necessary organizational
action, by each such Group A Selling Stockholder;
(vi) The Custody Agreement and Power of Attorney of
each Group A Selling Stockholder each constitute a legally
valid and binding obligation of each of the Group A Selling
Stockholders enforceable against the Group A Selling
Stockholders in accordance with their respective terms; and
(vii) For each of the Group A Selling Stockholders,
this Agreement has been duly executed and delivered by an
Attorney-in-Fact under the Power of Attorney on behalf of such
Group A Selling Stockholder.
We have assumed, with your consent, that for each Group A
Selling Stockholder, other than those which are limited partnerships,
(A) each Group A Selling Stockholder has the capacity, power and
authority, as applicable, to execute, deliver and perform the Power of
Attorney, the Custody Agreement and the Underwriting Agreement, (B)
each Group A Selling Stockholder, as applicable, has duly authorized
the execution, delivery and performance of the Power of Attorney, the
Custody Agreement, and the Underwriting Agreement, (C) each Group A
Selling Stockholder has duly executed and delivered the Power of
Attorney and the Custody Agreement, and (D) such execution, delivery
and performance of the Power of Attorney, the Custody Agreement, and
the Underwriting Agreement do not (i) breach any agreement or
instrument to which the Group A Selling Stockholder is a party or (ii)
violate any law, rule or regulation applicable to such Group A Selling
Stockholder, and (iii) do not require by or on behalf of such Group A
Selling Stockholder any consent, approval or authorization to be
obtained from, or filing, registration or declaration to
17
be made with, any governmental authority which has not been duly
obtained or made. On the basis of such assumptions, each of the Power
of Attorney and the Custody Agreement constitutes a legally valid and
binding obligation of such Group A Selling Stockholder, enforceable
against the Group A Selling Stockholder in accordance with its terms;
and the Underwriting Agreement has been duly executed and delivered by
an Attorney-in-Fact under the Power of Attorney on behalf of such Group
A Selling Stockholder.
(f) The Representatives shall have received the Power of
Attorney executed and delivered by each Selling Stockholder and an
opinion, dated such Closing Date, of certain counsel, in their capacity
as counsel for certain Selling Stockholders set forth opposite their
name on Schedule G hereto (each such Selling Stockholder, a "Group B
Selling Stockholder"), to the effect that:
(i) Each of the Group B Stockholders that is a
corporation, a limited liability company, trust or limited
partnership has been duly formed, is validly existing and in
good standing under the laws of the jurisdiction of its
organization.
(ii) For each of the Group B Selling Stockholders,
the execution, delivery and performance of the Power of
Attorney, the Custody Agreement and this Agreement and the
consummation of the transactions therein and herein
contemplated will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under,
any agreement identified on Schedule I hereto to which such
Group B Selling Stockholder is a party or the charter or
by-laws or the articles of incorporation or operating
agreements of any Group B Selling Stockholder that is a
corporation, a limited liability company, trust or limited
partnership;
(g) The Representatives shall have received from Shearman &
Sterling LLP, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the incorporation of the
Company, the validity of the Offered Securities delivered on such
Closing Date, the Registration Statements, the Prospectus and other
related matters as the Representatives may require, and the Selling
Stockholders and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them
to pass upon such matters.
(h) The Representatives shall have received a certificate,
dated such Closing Date, of the Chief Executive Bear or Chief Operating
Officer Bear and Chief Financial Bear of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that:
(i) The representations and warranties of the Company
in this Agreement are true and correct;
(ii) The Company has complied with all agreements and
satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date;
(iii) No stop order suspending the effectiveness of
any Registration Statement has been issued that has not been
lifted and no proceedings for that purpose have been
instituted that have not been terminated or are contemplated
by the Commission; the Additional Registration Statement (if
any) satisfying the requirements of subparagraphs (1) and (3)
of Rule 462(b) was filed pursuant to Rule 462(b), including
payment of the applicable filing fee in accordance with Rule
111(a) or (b) under the Act, prior to the time the Prospectus
was printed and distributed to any Underwriter;
18
(iv) Subsequent to the dates of the most recent
financial statements in the Prospectus, there has been no
material adverse change, nor any development or event
involving a prospective material adverse change, in the
condition (financial or other), business, properties or
results of operations of the Company and its Subsidiaries
taken as a whole except as set forth in or contemplated by the
Prospectus or as described in such certificate;
(i) The Representatives shall have received a letter, dated
such Closing Date, of KPMG LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than three days prior to
such Closing Date for the purposes of this subsection.
(j) On or prior to the date of this Agreement, the
Representatives shall have received lockup letters from each of the
executive officers, directors and certain stockholders of the Company
listed on Schedule C hereto.
(k) The Custodian will deliver to the Representatives a letter
stating that they will deliver to each Selling Stockholder a United
States Treasury Department Form 1099 (or other applicable form or
statement specified by the United States Treasury Department
regulations in lieu thereof) on or before January 31 of the year
following the date of this Agreement.
The Selling Stockholders and the Company will furnish the Representatives with
such conformed copies of such opinions, certificates, letters and documents as
the Representatives reasonably request. The Representatives may in their its
sole discretion waive on behalf of the Underwriters compliance with any
conditions to the obligations of the Underwriters hereunder, whether in respect
of an Optional Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, members, directors, officers and
its affiliates and each person, if any who controls such Underwriter within the
meaning of Section 15 of the Act, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made (in the case of the Prospectus) not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the information described as such in subsection (c) below.
The Company agrees to indemnify and hold harmless Citigroup Global
Markets Inc., the directors, officers, employees and agents of Citigroup Global
Markets Inc. and each person, who controls Citigroup Global Markets Inc. within
the meaning of either the Act or the Exchange Act ("CITIGROUP ENTITIES"), from
and against any and all losses, claims, damages and liabilities to which they
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim), insofar as such losses,
claims damages or liabilities (or actions in respect thereof) (i) arise out of
or are based upon any untrue statement or alleged untrue statement of a material
fact contained in the prospectus wrapper material prepared by or with the
consent of the Company for distribution in foreign jurisdictions in connection
with the Directed Share Program attached to the
19
Prospectus or any preliminary prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement therein, when considered in
conjunction with the Prospectus or any applicable preliminary prospectus, not
misleading; (ii) caused by the failure of any Participant to pay for and accept
delivery of the securities which immediately following the Effective Date of the
Registration Statement, were subject to a properly confirmed agreement to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program, except that this clause (iii) shall not apply to the
extent that such loss, claim, damage or liability is finally judicially
determined to have resulted primarily from the gross negligence or willful
misconduct of the Citigroup Entities.
(b) The Senior Executive Selling Stockholders, severally and not
jointly, will indemnify and hold harmless the Company, each of the Underwriters,
and each of their respective partners, members, directors officers and
affiliates and each person who controls such Underwriters within the meaning of
Section 15 of the Act, against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Senior Executive Selling Stockholders will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by an Underwriter
through the Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the information described as such in subsection (c) below.
The Other Selling Stockholders, severally and not jointly,
will indemnify and hold harmless the Company, each of the Underwriters, and each
of their respective partners, members, directors officers and affiliates and
each person who controls such Underwriters within the meaning of Section 15 of
the Act, against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, but only in respect of losses,
liability, claims, damages or expenses arising out of any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information relating to such Other Selling Stockholder
furnished to the Company and the Representatives by such Other Selling
Stockholder specifically for use therein and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred.
The liability of each Selling Stockholder under such Selling
Stockholder's representations and warranties contained in Section 2 hereof and
under the indemnity and contribution agreements contained in this Section 7
shall be limited to an amount equal to the initial public offering price from
the sale of the Securities by such Selling Stockholder to the Underwriters. The
Company and the Selling Stockholders may agree, as among themselves and without
limiting the rights of the Underwriters under this Agreement, as to the
respective amounts of such liability for which they each shall be responsible.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act, and each
Selling Stockholder against any losses, claims, damages or liabilities to
20
which the Company or such Selling Stockholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company and
each Selling Stockholder in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the following information in the Prospectus furnished on
behalf of each Underwriter: the concession and reallowance figures appearing in
the paragraph under the caption "Underwriting" and the information contained in
the sixth, the thirteenth, the sixteenth and the eighteenth paragraphs under the
caption "Underwriting".
(d) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the failure to notify the indemnifying party shall not
relieve it from any liability that it may have under sub section (a), (b), (c)
or (e) of this Section 7 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided further that the failure to notify the indemnifying party
shall not relieve it from any liability that it may have to an indemnified party
otherwise than under subsection (a), (b), (c) or (e) of this Section 7. In case
any such action is brought against any indemnified party and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. Notwithstanding anything contained herein to the
contrary, if indemnity may be sought pursuant to the last paragraph of Section
7(a) hereof in respect of such action or proceeding, then in addition to such
separate firm for the indemnified parties, the indemnifying party shall be
liable for the reasonable fees and expenses of not more than one separate firm
(in addition to any local counsel) for Citigroup Global Markets Inc., the
directors, officers, employees and agents of Citigroup Global Markets Inc., and
all persons, if any, who control Citigroup Global Markets Inc. within the
meaning of either the Act or the Exchange Act for the defense of any losses,
claims, damages and liabilities arising out of the Directed Share Program. No
indemnifying party shall, without the prior written consent of the indemnified
party, which consent shall not be unreasonably withheld or delayed, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such (i) settlement includes
an unconditional release of such indemnified party from all liability on any
claims that are 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 an indemnified party. No indemnifying party shall be liable for
any settlement of any proceeding without its written consent, which consent
shall not be unreasonably withheld or delayed.
(e) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) above, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of the losses, claims, damages
or liabilities referred to in subsection (a), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company or the Selling Stockholders on the one hand and the Underwriters on the
other from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling
21
Stockholders on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company or each of the Selling Stockholders on
the one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company or the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Selling Stockholders or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (e) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (e). Notwithstanding the provisions of this subsection (e), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. 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 in
this subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint. The Selling Stockholders' obligations in
this subsection (e) to contribute are several and not joint.
(f) The obligations of the Company and the Selling Stockholders under
this Section shall be in addition to any liability which the Company and the
Selling Stockholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has signed a
Registration Statement to each person, if any, who controls the Company within
the meaning of the Act and to each Selling Stockholder.
(g) To the extent that any interim reimbursement payment pursuant to
this Section 7 is held to be improper by a court of competent jurisdiction, any
indemnified party that received such payment shall promptly return it to the
indemnifying party.
22
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, the
Representatives may make arrangements satisfactory to the Company and the
Selling Stockholders for the purchase of such Offered Securities by other
persons, including any of the Underwriters, but if no such arrangements are made
by such Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Offered Securities that such defaulting Underwriters agreed but failed to
purchase on such Closing Date. If any Underwriter or Underwriters so default and
the aggregate number of shares of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date
and arrangements satisfactory to the Representatives, the Company and the
Selling Stockholders for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter, the
Company or the Selling Stockholders, except as provided in Section 9 (provided
that if such default occurs with respect to Optional Securities after the First
Closing Date, this Agreement will not terminate as to the Firm Securities or any
Optional Securities purchased prior to such termination). As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Selling Stockholders, of the Company or its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company and the Selling Stockholders shall
remain responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and the respective obligations of the Company, the Selling
Stockholders, and the Underwriters pursuant to Section 7 shall remain in effect,
and if any Offered Securities have been purchased hereunder the representations
and warranties in Section 2 and all obligations under Section 5 shall also
remain in effect. If the purchase of the Offered Securities by the Underwriters
is not consummated for any reason other than solely because of the termination
of this Agreement pursuant to Section 8 or the occurrence of any event specified
in clauses (iii), (iv), (vi), (vii) or (viii) of Section 6(c), the Company will
reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives, c/o Credit Suisse First Boston LLC, Eleven Madison Avenue,
New York, N.Y. 10010-3629, Attention: Transactions Advisory Group, and Citigroup
Global Markets Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel, or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 0000 Xxxxxxxxx Xxxxxxxx Xxxxxx Xxxxx, Xx.
Xxxxx, Xxxxxxxx 00000, Attention: Xxxxxx Xxxxx, Chief Executive Bear and
Chairman of the Board, or, if sent to the Selling Stockholders or any of them,
will be mailed, delivered or telegraphed and confirmed to Xxxxxx & Xxxxxxx LLP,
000 Xxxxxxxx Xxxxxx, XX, Xxxxx 0000, Xxxxxxxxxx, XX 00000, Attention: Xxxxx X.
XxXxxxxxx; provided, however, that any notice to an Underwriter pursuant to
Section 7 will be mailed, delivered or telegraphed and confirmed to such
Underwriter.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective personal representatives and
successors and the officers and directors and controlling persons referred to in
Section 7, and no other person will have any right or obligation hereunder.
23
12. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representatives jointly will be
binding upon all the Underwriters. Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxx Xxxxxxxx and
Xxxx Xxxxxx will act for the Selling Stockholders in connection with such
transactions, and any action under or in respect of this Agreement taken by
Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxx Xxxxxxxx or Xxxx Xxxxxx will be binding upon all
the Selling Stockholders.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
24
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Selling
Stockholders, the Company and the several Underwriters in accordance with its
terms.
Very truly yours,
Smart Stuff, Inc.
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
Xxxxx/Fox, L.L.C.
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
Xxxxx/Xxx II, L.L.C.
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
Xxxxx/Fox III, L.L.C.
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
Xxxxxxxxx Partners IV, L.P.
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
Xxxxxxxxx Partners IV-A, L.P.
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
25
Xxxxxxxxx Partners IV-B, L.P.
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
Xxxxxxxxx Partners IV Special
Purpose, L.P.
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
Xxxxxxxxx Partners IV Offshore,
L.P.
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
Walnut Capital Partners, L.P.
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
Walnut Investment Partners,
L.P.
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
The Xxxxxx X Xxxxxxxx Living
Trust dated July 23, 1986
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
KCEP Ventures II, L.P.
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
26
Hycel Partners V, L.L.C.
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
Xxxxxxxxxx Xxxxxxxx Xxxx
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
Xxx Xxxxxx
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
Xxxxx X. Xxxxx XX
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
Xxxx O'Xxxxxxx Xxxxx Capital
Services, L.L.C.
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Attorney-in Fact
27
Build-A-Bear Workshop, Inc.
By /s/ Xxxxxx Xxxxx
----------------------
Name: Xxxxxx Xxxxx
Title: CEB
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON LLC
CITIGROUP GLOBAL MARKETS INC.
Acting on behalf of themselves and
as the Representatives of the
several Underwriters.
By CREDIT SUISSE FIRST BOSTON LLC
By /s/ Xxxxxxx Xxxx
Name: Xxxxxxx Xxxx
Title: Managing Director
By CITIGROUP GLOBAL MARKETS INC.
By /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Vice President
28
SCHEDULE A
NUMBER OF NUMBER OF
FIRM SECURITIES OPTIONAL
TO BE SOLD SECURITIES TO
SELLING STOCKHOLDER BE SOLD
------------------- --------------- ---------------
Smart Stuff, Inc. 100,000 352,942
Xxxxx/Fox, L.L.C 236,633 30,373
Xxxxx/Xxx II, L.L.C., 243,366 31,237
Xxxxx/Xxx III, L.L.C 47,526 6,100
Xxxxxx Xxxxx and affiliates total 627,525 420,652
Xxxxxxxxx Partners IV, L.P. 859,953 114,145
Xxxxxxxxx Partners IV-A, L.P. 301,492 40,018
Xxxxxxxxx Partners IV-B, L.P. 21,018 2,790
Xxxxxxxxx Partners IV Special Purpose, L.P. 25,787 3,423
Xxxxxxxxx Partners IV Offshore, L.P. 724,962 96,227
CP4 Principals, L.L.C. and affiliates total 1,933,212 256,603
Walnut Capital Partners, L.P. 1,176,737 155,229
Walnut Investment Partners, L.P. 359,273 47,393
Walnut Capital and affiliates total 1,536,010 202,622
The Xxxxxx X. Xxxxxxxx Living Trust 879,351 112,869
dated July 23, 1986
KCEP Ventures II, L.P. 519,822 67,164
Hycel Partners V, L.L.C 253,370 32,521
Xxxxxxxxxx Xxxxxxxx Xxxx 147,067 18,877
Xxx Xxxxxx 50,908 6,534
Xxxxx X. Xxxxx XX, 26,715 3,429
Xxxx O'Xxxxxxx Xxxxx Capital Services, L.L.C 8,020 1,029
Xxxxx X. Xxxxx XX and affiliate total 34,735 4,458
--------- ---------
Total 5,982,000 1,122,300
========= =========
SCHEDULE B
NUMBER OF
FIRM
SECURITIES TO
UNDERWRITER BE PURCHASED
----------- -------------
Credit Suisse First Boston LLC 2,730,930
Citigroup Global Markets Inc. 2,730,930
X.X. Xxxxxx Securities Inc 1,271,940
X.X. Xxxxxxx & Sons, Inc. 374,100
Xxxxxx Xxxxxx Partners LLC 374,100
---------
Total 7,482,000
=========
SCHEDULE C
EXECUTIVE OFFICERS, DIRECTORS AND CERTAIN STOCKHOLDERS SUBJECT TO LOCKUP
AGREEMENTS
Xxxxxx Xxxxx
Xxxxx Xxxxx
Xxxx Xxxxxxxx
Xxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxx Xxxx
Xxxxxx Xxxxxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxxxxx
Xxxxx Xxxx, Xx.
Xxxxxxxx Xxxxx
SCHEDULE D
SENIOR EXECUTIVE SELLING STOCKHOLDERS
Smart Stuff, Inc.
Xxxxx/Fox, L.L.C.
Xxxxx/Xxx II, L.L.C.
Xxxxx/Fox III, L.L.C.
SCHEDULE E
Xxxxxxxxx Partners IV, X.X.
Xxxxxxxxx Partners IV-A, X.X.
Xxxxxxxxx Partners IV-B, X.X.
Xxxxxxxxx Partners IV Special Purpose, X.X.
Xxxxxxxxx Partners IV Offshore, L.P.
Walnut Capital Partners, L.P.
Walnut Investment Partners, L.P.
The Xxxxxx X. Xxxxxxxx Living Trust dated July 23, 1986
Hycel Partners V, L.L.C.
Xxxxxxxxxx Xxxxxxxx Xxxx
Xxx Xxxxxx
Xxxxx X. Xxxxx XX
Xxxx O'Xxxxxxx Xxxxx Capital Services, L.L.C.
SCHEDULE F
GROUP A SELLING STOCKHOLDERS
Xxxxxxxxx Partners IV, X.X.
Xxxxxxxxx Partners IV-A, X.X.
Xxxxxxxxx Partners IV-B, L.P.
Walnut Investment Partners, L.P.
Xxx Xxxxxx
Xxxxxxxxxx Xxxxxxxx Xxxx
Xxxxx X. Xxxxx XX
SCHEDULE G
GROUP B SELLING STOCKHOLDERS
ENTITY JURISDICTION LOCAL COUNSEL
OF ORG.
Hycel Partners V, L.L.C. MO Xxxxx Xxxx LLP
St. Louis, MO
Smart Stuff, Inc. MO Xxxxxxxxxx, Xxxxxx & Xxxxxxxxx, PC
St. Louis, MO
Xxxxx/Xxx, L.L.C.
Xxxxx/Fox II, L.L.C.
Xxxxx/Xxx III, L.L.C.
Xxxx O'Xxxxxxx Xxxxx Capital Services, L.L.C. MO Xxxxxxx Xxxxxxxx Xxxxxx LLP
St. Louis, MO
Xxxxxxxxx Partners IV Special Purpose, L.P. Cayman Walkers
Islands Grand Cayman, Cayman Islands
London, England
Xxxxxxxxx Partners IV Offshore, L.P.
KCEP Ventures II, L.P. MO Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx LLP
Kansas City, MO
Walnut Capital Partners, L.P. OH Xxxxxxx, Muething & Xxxxxxx PLL
Cincinnati, OH
The Xxxxxx X. Xxxxxxxx Living Trust Dated WA Xxxxxxx Coie
July 23, 0000 Xxxxxxx, XX
SCHEDULE H
Agreements for Xxxxxxxxx Partners IV, L.P., Xxxxxxxxx Partners IV Offshore,
L.P., Xxxxxxxxx Partners IV Special Purpose, L.P., Xxxxxxxxx Partners IV-A, L.P.
and Xxxxxxxxx Partners IV-B, L.P.
- Credit Agreement dated as of May 12, 2004 between Citizens Bank of
Massachusetts and each of Xxxxxxxxx Partners IV, L.P., Xxxxxxxxx
Partners IV Offshore, L.P., Xxxxxxxxx Partners IV Special Purpose,
L.P., Xxxxxxxxx Partners IV-A, L.P. and Xxxxxxxxx Partners IV-B,
L.P., as amended by Amendment No. 1 to Credit Agreement dated as of
June 15, 2004 and as further amended by Amendment No. 2 to Credit
Agreement dated as of October 15, 2004
SCHEDULE I
Agreements for Xxxx O'Xxxxxxx Xxxxx Capital Services, L.L.C.
- Continuing Unlimited Guaranty Agreement, dated June 30, 2000, by
Xxxx O'Xxxxxxx Xxxxx Capital Services, L.L.C. in favor of Southwest
Bank of St. Louis.
- Continuing Unlimited Guaranty Agreement, dated May 28, 2004, by Xxxx
O'Xxxxxxx Xxxxx Capital Services, L.L.C. in favor of Southwest Bank
of St. Louis.
EXHIBIT A
[DATE]
BUILD-A-BEAR WORKSHOP, INC.
0000 Xxxxxxxxx Xxxxxxxx Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000-0000
CREDIT SUISSE FIRST BOSTON LLC
CITIGROUP GLOBAL MARKETS INC.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
As an inducement to the Underwriters to execute the Underwriting
Agreement, pursuant to which an offering will be made that is intended to result
in the establishment of a public market for the shares of common stock (the
"SECURITIES") of Build-A-Bear Workshop, Inc. and any successor (by merger or
otherwise) thereto, (the "COMPANY"), and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
undersigned hereby agrees that during the period specified in the following
paragraph (the "LOCK-UP PERIOD"), the undersigned will not offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, any shares of
Securities or securities convertible into or exchangeable or exercisable for any
shares of Securities, enter into a transaction which would have the same effect,
or enter into any swap, hedge or other arrangement that transfers, in whole or
in part, any of the economic consequences of ownership of the Securities,
whether any such aforementioned transaction is to be settled by delivery of the
Securities or such other securities, in cash or otherwise, or publicly disclose,
unless required by law, the intention to make any such offer, sale, pledge or
disposition, or to enter into any such transaction, swap, hedge or other
arrangement, without, in each case, the prior written consent of Credit Suisse
First Boston LLC and Citigroup Global Markets Inc. (together, the
"REPRESENTATIVES"). In addition, the undersigned agrees that, without the prior
written consent of the Representatives, it will not, during the Lock-Up Period,
make any demand for or exercise any right with respect to, the registration of
any Securities or any security convertible into or exercisable or exchangeable
for the Securities, except for the inclusion of any shares of common stock in
the Company's initial public offering to the extent permitted by the
Underwriters and as set forth in the final prospectus.
The initial Lock-Up Period will commence on the date of the Lock-Up
Agreement and continue for 180 days after the public offering date set forth on
the final prospectus used to sell the Securities (the "PUBLIC OFFERING DATE")
pursuant to the Underwriting Agreement, to which you are or expect to become
parties: provided, however, that if (1) during the last 17 days of the initial
Lock-Up Period, the Company releases earnings results or material news or a
material event relating to the Company occurs or (2) prior to the expiration of
the initial Lock-Up Period, the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the initial
Lock-Up Period, then in each case the Lock-Up Period will be extended until the
expiration of the 18 day period beginning on the date of release of the earnings
results or the occurrence of the material news or material event, as applicable,
unless the Representatives waive, in writing, such extension.
The undersigned hereby acknowledges and agrees that written notice
of any extension of the Lock-Up Period pursuant to the previous paragraph will
be delivered by the Representatives to the Company (in accordance with Section
10 of the Underwriting Agreement) and that any such notice properly delivered
will be deemed to have been given to, and received by, the undersigned. The
undersigned further
agrees that, prior to engaging in any transaction or taking any other action
that is subject to the terms of this Lock-Up Agreement during the period from
the date of this Lock-Up Agreement to and including the 34th day following the
expiration of the initial Lock-Up Period, it will give notice thereof to the
Company and will not consummate such transaction or take any such action unless
it has received written confirmation from the Company that the Lock-Up Period
(as may have been extended pursuant to the previous paragraph) has expired.
Notwithstanding the foregoing, the undersigned may:
(i) pledge any Securities in connection with a bona fide
loan transaction in which the pledgee acknowledges in
writing to be bound by the undersigned's obligations
hereunder and which pledge does not permit the pledgee
to offer, sell contract to sell, pledge or otherwise
dispose of, directly or indirectly, any shares of
Securities or securities convertible into or
exchangeable or exercisable for any shares of
Securities, enter into a transaction which would have
the same effect, or enter into any swap, hedge or other
arrangement that transfers, in whole or in part, any of
the economic consequences of ownership of the
Securities, during such Lock-Up Period;
(ii) exercise any options to purchase Securities, provided
that, if such options are exercised for Securities, such
Securities issued upon exercise shall remain subject to
this Agreement;
(iii) surrender any Securities to the Company in payment of
the exercise price of any options or to satisfy tax
withholding obligations;
(iv) sell any Securities to the Underwriters pursuant to the
Underwriting Agreement;
(v) engage in any transactions in any Securities or any
other securities convertible into, or exercisable or
exchangeable for such Securities acquired in open market
transactions after the public offering pursuant to the
Underwriting Agreement, provided that no filing by any
party under the Securities Exchange Act of 1934 shall be
required or shall be voluntarily made in connection with
subsequent sales of any Securities or such other
securities acquired in open market transactions;
(vi) transfer any Securities or Securities equivalents to any
stockholder, limited partner, member or affiliate of the
undersigned, provided that no filing by any party under
the Securities Exchange Act of 1934 shall be required to
be made or shall be voluntarily made in connection with
any such transfer during the Lock-Up Period; or
(vii) transfer any Securities or Securities equivalents to any
immediate family member of the undersigned or a trust or
limited partnership where the beneficiaries of the trust
or limited partners of the partnership are drawn solely
from a group consisting of the undersigned and immediate
family members of the undersigned,
provided that in the case of clauses (6) and (7), any such transferee or trustee
of such trust or general partner of such partnership, if applicable, agrees in
writing to be bound by the restrictions set forth herein in the same manner as
they apply to the undersigned, and provided further that any such transfer shall
not involve a disposition for value. For purposes of this paragraph, "immediate
family" shall mean spouse, domestic partner, lineal descendants (including
stepchildren and adoptive relationships), parents, siblings, mothers and
fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, aunts,
uncles, niece or nephew.
In furtherance of the foregoing, the Company and its transfer agent
and registrar are hereby authorized to place appropriate stop transfer legends
on certificates representing any of the Securities and in the stock register
reflecting the restrictions in this Agreement and to decline to make any
transfer of Securities if such transfer would constitute a violation or breach
of this Agreement.
The undersigned hereby agrees that if, during the term of this
Agreement, it requests from the Representatives to be released from any of its
obligations hereunder, the undersigned shall promptly notify the Company of such
request and the terms of such request and provide the Representatives with
written evidence of such notice prior to requesting such release.
This Agreement shall be binding on the undersigned and the
successors, heirs, personal representatives and assigns of the undersigned. This
Agreement shall lapse and become null and void if the Public Offering Date shall
not have occurred on or before December 31, 2004. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
Very truly yours,
--------------------------
Name
--------------------------
Signature
