Exhibit 1.1
TOO, INC.
2,400,000 Shares of Common Stock
Underwriting Agreement
_______________, 2002
Bear, Xxxxxxx & Co. Inc.
X.X. Xxxxxx Securities Inc.
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Too, Inc., a Delaware corporation (the "Company"), proposes to issue
and sell to the several Underwriters listed in Schedule 1 hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), an aggregate of 2,400,000 shares of Common Stock, par value
$.01 per share, of the Company (the "Underwritten Shares") and, at the option of
the Underwriters, up to an additional 360,000 shares of Common Stock of the
Company (the "Option Shares"). The Underwritten Shares and the Option Shares are
herein referred to as the "Shares". The shares of Common Stock of the Company to
be outstanding after giving effect to the sale of the Shares are herein referred
to as the "Stock". The Stock, including the Shares, will have attached thereto
rights (the "Rights") to purchase shares of Series A Junior Participating
Cumulative Preferred Stock, par value $.01 per share (the "Poison Pill
Security"), of the Company. The Rights are to be issued pursuant to a Rights
Agreement (the "Rights Agreement") dated as of August 14, 2001 between the
Company and EquiServe Trust Company, N.A.
The Company hereby confirms its agreement with the several Underwriters
concerning the purchase and sale of the Shares, as follows:
1. Registration Statement. The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"), a registration statement (File No.
333-_____) including a prospectus, relating to the Shares and Rights. Such
registration statement, as amended at the time it becomes effective, including
the information, if any, deemed pursuant to Rule 430A under the
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Securities Act to be part of the registration statement at the time of its
effectiveness ("Rule 430 Information"), is referred to herein as the
"Registration Statement"; and as used herein, the term "Preliminary Prospectus"
means each prospectus included in such registration statement (and any
amendments thereto) before it becomes effective, any prospectus filed with the
Commission pursuant to Rule 424(a) under the Securities Act and the prospectus
included in the Registration Statement at the time of its effectiveness that
omits Rule 430A Information, and the term "Prospectus" means the prospectus in
the form first used to confirm sales of the Shares. If the Company has filed an
abbreviated registration statement pursuant to Rule 462(b) under the Securities
Act (the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall be deemed to include such Rule 462
Registration Statement. Any reference in this Agreement to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Securities Act, as of the effective date of the
Registration Statement or the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and any reference to "amend", "amendment" or
"supplement" with respect to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") that are deemed to be incorporated by
reference therein. Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Registration Statement and the Prospectus.
2. Purchase of the Shares by the Underwriters.
(a) The Company agrees to issue and sell the Shares to the
several Underwriters as provided in this Agreement, and each
Underwriter, on the basis of the representations, warranties and
agreements set forth herein and subject to the conditions set forth
herein, agrees, severally and not jointly, to purchase from the Company
the respective number of Underwritten Shares set forth opposite such
Underwriter's name in Schedule 1 hereto at a price per share (the
"Purchase Price") of $ _________.
In addition, the Company agrees to issue and sell the Option
Shares to the several Underwriters as provided in this Agreement, and
the Underwriters, on the basis of the representations, warranties and
agreements set forth herein and subject to the conditions set forth
herein, shall have the option to purchase, severally and not jointly,
from the Company the Option Shares at the Purchase Price.
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If any Option Shares are to be purchased, the number of Option
Shares to be purchased by each Underwriter shall be the number of
Option Shares which bears the same ratio to the aggregate number of
Option Shares being purchased as the number of Underwritten Shares set
forth opposite the name of such Underwriter in Schedule 1 hereto (or
such number increased as set forth in Section 9 hereof) bears to the
aggregate number of Underwritten Shares being purchased from the
Company by the several Underwriters, subject, however, to such
adjustments to eliminate any fractional Shares as the Representatives
in its sole discretion shall make.
The Underwriters may exercise the option to purchase the
Option Shares in whole or from time to time in part on or before the
thirtieth day following the date of this Agreement, by written notice
from the Representatives to the Company. Any such notice shall set
forth the aggregate number of Option Shares as to which the option is
being exercised and the date and time when the Option Shares are to be
delivered and paid for which may be the same date and time as the
Closing Date (as hereinafter defined) but shall not be earlier than the
Closing Date nor later than the tenth full business day (as hereinafter
defined) after the date of such notice (unless such time and date are
postponed in accordance with the provisions of Section 9 hereof). Any
such notice shall be given at least two Business Days prior to the date
and time of delivery specified therein.
(b) The Company understands that the Underwriters intend to
make a public offering of the Shares as soon after the effectiveness of
this Agreement as in the judgment of the Representatives is advisable,
and initially to offer the Shares on the terms set forth in the
Prospectus. The Company acknowledges and agrees that the Underwriters
may offer and sell Shares to or through any affiliate of an Underwriter
and that any such affiliate may offer and sell Shares purchased by it
to or through any Underwriter.
(c) Payment for the Shares shall be made by wire transfer in
immediately available funds to the account specified by the Company to
the Representatives in the case of the Underwritten Shares, at the
offices of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, at 10:00 A.M. New York City time on _____, 2002, or at such
other time or place on the same or such other date, not later than the
fifth business day thereafter, as the Representatives and the Company
may agree upon in writing or, in the case of any Option Shares, on the
date and at the time and place specified by the Representatives in the
written notice of the Underwriters' election to purchase such Option
Shares. The time and date of such payment for the Underwritten Shares
is referred to herein
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as the "Closing Date" and the time and date for such payment for the
Option Shares, if other than the Closing Date, are herein referred to
as an "Additional Closing Date".
Payment for the Shares to be purchased on the Closing Date or
any Additional Closing Date, as the case may be, shall be made against
delivery to the Representatives for the respective accounts of the
several Underwriters of the Shares to be purchased on such date in
definitive form registered in such names and in such denominations as
the Representatives shall request in writing not later than two full
business days prior to the Closing Date or such Additional Closing
Date, as the case may be, with any transfer taxes payable in connection
with the sale of the Shares duly paid by the Company. The certificates
for the Shares will be made available for inspection and packaging by
the Representatives at the office of Xxxxx Xxxx & Xxxxxxxx set forth
above not later than 1:00 P.M., New York City time, on the business day
prior to the Closing Date or such Additional Closing Date, as the case
may be.
3. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) Preliminary Prospectus. No order preventing or suspending
the use of any Preliminary Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing
thereof, complied in all material respects with the Securities Act and
did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that the Company
makes no representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use in any
Preliminary Prospectus.
(b) Registration Statement and Prospectus. No order suspending
the effectiveness of the Registration Statement has been issued by the
Commission and no proceeding for that purpose has been initiated or
threatened by the Commission; as of the applicable effective date of
the Registration Statement and any amendment thereto, the Registration
Statement complied and will comply in all material respects with the
Securities Act, and did not and will not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and as of the applicable filing date of the Prospectus and
any amendment or supplement thereto and as of the Closing Date and as
of any Additional
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Closing Date, as the case may be, the Prospectus will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided that the Company makes no
representation and warranty with respect to any statements or omissions
made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in the Registration
Statement and the Prospectus and any amendment or supplement thereto.
(c) Incorporated Documents. The documents incorporated by
reference in the Prospectus, when they became effective or were filed
with the Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and none of such documents contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange Act,
as applicable, and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) Financial Statements. The financial statements and the
related notes thereto included or incorporated by reference in the
Registration Statement and the Prospectus comply in all material
respects with the applicable requirements of the Securities Act and the
Exchange Act, as applicable, and present fairly the financial position
of the Company and its subsidiaries as of the dates indicated and the
results of their operations and the changes in their cash flows for the
periods specified; such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods covered thereby, and the
supporting schedules included or incorporated by reference in the
Registration Statement present fairly the information required to be
stated therein; and the other financial information included or
incorporated by reference in the Registration Statement and the
Prospectus has been derived from the accounting records of the Company
and its subsidiaries and presents fairly the information shown thereby.
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(e) No Material Adverse Change. Since the date of the most
recent financial statements of the Company included or incorporated by
reference in the Registration Statement and the Prospectus, (i) there
has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries, or any dividend or distribution of
any kind declared, set aside for payment, paid or made by the Company
on any class of capital stock, or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the business, properties, management, financial position,
stockholders' equity, results of operations or prospects of the Company
and its subsidiaries taken as a whole; (ii) neither the Company nor any
of its subsidiaries has entered into any transaction or agreement that
is material to the Company and its subsidiaries taken as a whole or
incurred any liability or obligation, direct or contingent, that is
material to the Company and its subsidiaries taken as a whole; and
(iii) neither the Company nor any of its subsidiaries has sustained any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor disturbance or dispute or any action, order or decree of any
court or arbitrator or governmental or regulatory authority, except in
each case as otherwise disclosed in the Registration Statement and the
Prospectus.
(f) Organization and Good Standing. The Company and each of
its subsidiaries have been duly organized and are validly existing and
in good standing under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses
requires such qualification, and have all power and authority necessary
to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to be so
qualified or have such power or authority would not, individually or in
the aggregate, have a material adverse effect on the business,
properties, management, financial position, stockholders' equity,
results of operations or prospects of the Company and its subsidiaries
taken as a whole (a "Material Adverse Effect"). The Company does not
own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in Exhibit 21 to the
Company's Annual Report on Form 10-K for the year ended February 2,
2002.
(g) Capitalization. The Company has an authorized
capitalization as set forth in the Prospectus under the heading
"Capitalization"; all the outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable and are not subject to any pre-emptive or
similar rights; except as described in or expressly contemplated by the
Prospectus,
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there are no outstanding rights (including, without limitation,
pre-emptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock or
other equity interest in the Company or any of its subsidiaries, or any
contract, commitment, agreement, understanding or arrangement of any
kind relating to the issuance of any capital stock of the Company or
any such subsidiary, any such convertible or exchangeable securities or
any such rights, warrants or options; the capital stock of the Company
conforms in all material respects to the description thereof contained
in the Registration Statement and the Prospectus; and all the
outstanding shares of capital stock or other equity interests of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable (except as otherwise
described in the Prospectus) and are owned directly or indirectly by
the Company, free and clear of any lien, charge, encumbrance, security
interest, restriction on voting or transfer or any other claim of any
third party.
(h) Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(i) The Shares. The Shares to be issued and sold by the
Company hereunder have been duly authorized by the Company and, when
issued and delivered and paid for as provided herein, will be duly and
validly issued and will be fully paid and nonassessable and will
conform to the descriptions thereof in the Prospectus; the issuance of
the Shares is not subject to any preemptive or similar rights; the
Rights Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding agreement of
the Company enforceable against the Company in accordance with its
terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally or by equitable principles relating to enforceability; the
Rights have been duly authorized by the Company and, when issued upon
issuance of the Shares, will be validly issued; and the Poison Pill
Security has been duly authorized by the Company and validly reserved
for issuance upon the exercise of the Rights, and when issued in
accordance with such exercise in accordance with the terms of the
Rights Agreement, will be validly issued, fully paid and
non-assessable.
(j) No Violation or Default. Neither the Company nor any of
its subsidiaries is (i) in violation of its charter or by-laws or
similar organizational documents; (ii) in default, and no event has
occurred that, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement or
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other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject; or (iii) in violation of
any law or statute or any judgment, order, rule or regulation of any
court or arbitrator or governmental or regulatory authority, except, in
the case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a
Material Adverse Effect.
(k) No Conflicts. The execution, delivery and performance by
the Company of each of this Agreement, the issuance and sale of the
Shares and the consummation of the transactions contemplated by this
Agreement will not (i) conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, (ii) result in any
violation of the provisions of the charter or by-laws or similar
organizational documents of the Company or any of its subsidiaries or
(iii) result in the violation of any law or statute or any judgment,
order, rule or regulation of any court or arbitrator or governmental or
regulatory authority, except, in the case of clauses (i) and (iii)
above, for any such conflict, breach or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.
(l) No Consents Required. No consent, approval, authorization,
order, registration or qualification of or with any court or arbitrator
or governmental or regulatory authority is required for the execution,
delivery and performance by the Company of this Agreement, the issuance
and sale of the Shares and the consummation of the transactions
contemplated by this Agreement, except for the registration of the
Shares under the Securities Act and such consents, approvals,
authorizations, orders and registrations or qualifications as may be
required under applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters.
(m) Legal Proceedings. Except as described in the Prospectus,
there are no legal, governmental or regulatory investigations, actions,
suits or proceedings pending to which the Company or any of its
subsidiaries is or may be a party or to which any property of the
Company or any of its subsidiaries is or may be the subject that,
individually or in the aggregate, if determined adversely to the
Company or any of its subsidiaries, could
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reasonably be expected to have a Material Adverse Effect or materially
and adversely affect the ability of the Company to perform its
obligations under this Agreement; no such investigations, actions,
suits or proceedings are threatened or, to the best knowledge of the
Company, contemplated by any governmental or regulatory authority or
threatened by others; and (i) there are no current or pending legal,
governmental or regulatory actions, suits or proceedings that are
required under the Securities Act to be described in the Prospectus
that are not so described and (ii) there are no statutes, regulations
or contracts or other documents that are required under the Securities
Act to be filed as exhibits to the Registration Statement or described
in the Registration Statement or the Prospectus that are not so filed
or described.
(n) Independent Accountants. PricewaterhouseCoopers LLP, who
have certified certain financial statements of the Company and its
subsidiaries, are independent public accountants with respect to the
Company and its subsidiaries as required by the Securities Act.
(o) Title to Real and Personal Property. The Company and its
subsidiaries have good and marketable title in fee simple to, or have
valid rights to lease or otherwise use, all items of real and personal
property that are material to the respective businesses of the Company
and its subsidiaries, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title except
those that (i) do not materially interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries or (ii) could not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.
(p) Title to Intellectual Property. The Company and its
subsidiaries own or possess adequate rights to use all material
patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective businesses;
and the conduct of their respective businesses will not conflict in any
material respect with any such rights of others, and the Company and
its subsidiaries have not received any notice of any claim of
infringement or conflict with any such rights of others.
(q) No Undisclosed Relationships or Related-Party
Transactions. No relationship or related-party transaction, direct or
indirect, exists between or among the Company or any of its
subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its
subsidiaries, on the other including those business relationships or
related-party transactions described in the Commission's Statement
about Management's Discussion and Analysis of Financial Condition and
Results of Operations (Release Nos. 35-8056; 34-45321; FR-61), that is
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required by the Securities Act to be described in the Registration
Statement and the Prospectus and that is not so described.
(r) Investment Company Act. The Company is not and, after
giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus,
will not be required to register as an "investment company" or an
entity "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder (collectively, "Investment
Company Act").
(s) Taxes. The Company and its subsidiaries have paid all
federal, state, local and foreign taxes and filed all tax returns
required to be paid or filed through the date hereof; and except as
otherwise disclosed in the Prospectus, there is no tax deficiency that
has been, or could reasonably be expected to be, asserted against the
Company or any of its subsidiaries or any of their respective
properties or assets.
(t) Licenses and Permits. The Company and its subsidiaries
possess all licenses, certificates, permits and other authorizations
issued by, and have made all declarations and filings with, the
appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their
respective properties or the conduct of their respective businesses as
described in the Registration Statement and the Prospectus, except
where the failure to possess or make the same would not, individually
or in the aggregate, have a Material Adverse Effect; and except as
described in the Prospectus, neither the Company nor any of its
subsidiaries has received notice of any revocation or modification of
any such license, certificate, permit or authorization or has any
reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course.
(u) No Labor Disputes. No labor disturbance by or dispute with
employees of the Company or any of its subsidiaries exists or, to the
best knowledge of the Company, is contemplated or threatened.
(v) Compliance With Environmental Laws. The Company and its
subsidiaries (i) are in compliance with any and all applicable federal,
state, local and foreign laws, rules, regulations, decisions and orders
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "Environmental Laws"); (ii) have received and are in
compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses; and (iii) have not received notice of any actual or
potential
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liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or
contaminants, except in any such case for any such failure to comply,
or failure to receive required permits, licenses or approvals, or
liability as would not, individually or in the aggregate, have a
Material Adverse Effect.
(w) Compliance With ERISA. Each employee benefit plan, within
the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), that is maintained, administered or
contributed to by the Company or any of its affiliates for employees or
former employees of the Company and its affiliates has been maintained
in compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to
ERISA and the Internal Revenue Code of 1986, as amended (the "Code");
no prohibited transaction, within the meaning of Section 406 of ERISA
or Section 4975 of the Code, has occurred with respect to any such plan
excluding transactions effected pursuant to a statutory or
administrative exemption; and for each such plan that is subject to the
funding rules of Section 412 of the Code or Section 302 of ERISA, no
"accumulated funding deficiency" as defined in Section 412 of the Code
has been incurred, whether or not waived, and the fair market value of
the assets of each such plan (excluding for these purposes accrued but
unpaid contributions) exceeds the present value of all benefits accrued
under such plan determined using reasonable actuarial assumptions.
(x) Accounting Controls. The Company and its subsidiaries
maintain systems of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(y) Insurance. The Company and its subsidiaries have insurance
covering their respective properties, operations, personnel and
businesses, including business interruption insurance, which insurance
is in amounts and insures against such losses and risks as are adequate
to protect the Company and its subsidiaries and their respective
businesses; and neither the Company nor any of its subsidiaries has (i)
received notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made
in order to continue such insurance or (ii) any reason to believe that
it will not be able
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to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage at reasonable cost from similar
insurers as may be necessary to continue its business.
(z) No Unlawful Payments. Neither the Company nor any of its
subsidiaries nor, to the best knowledge of the Company, any director,
officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries has (i) used any
corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; (ii) made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or
is in violation of any provision of the Foreign Corrupt Practices Act
of 1977; or (iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(aa) No Restrictions on Subsidiaries. No subsidiary of the
Company is currently prohibited, directly or indirectly, under any
agreement or other instrument to which it is a party or is subject,
from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or
from transferring any of such subsidiary's properties or assets to the
Company or any other subsidiary of the Company.
(bb) No Broker's Fees. Neither the Company nor any of its
subsidiaries is a party to any contract, agreement or understanding
with any person (other than this Agreement) that would give rise to a
valid claim against the Company or any of its subsidiaries or any
Underwriter for a brokerage commission, finder's fee or like payment in
connection with the offering and sale of the Shares.
(cc) No Registration Rights. No person has the right to
require the Company or any of its subsidiaries to register any
securities for sale under the Securities Act by reason of the filing of
the Registration Statement with the Commission or the issuance and sale
of the Shares.
(dd) No Stabilization. The Company has not taken, directly or
indirectly, any action designed to or that could reasonably be expected
to cause or result in any stabilization or manipulation of the price of
the Shares.
(ee) Margin Rules. Neither the issuance, sale and delivery of
the Shares nor the application of the proceeds thereof by the Company
as described in the Registration Statement and the Prospectus will
violate
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Regulation T, U or X of the Board of Governors of the Federal Reserve
System or any other regulation of such Board of Governors.
(ff) Forward-Looking Statements. No forward-looking statement
(within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act) contained in the Registration Statement and
the Prospectus has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
(gg) Statistical and Market Data. Nothing has come to the
attention of the Company that has caused the Company to believe that
the statistical and market-related data included in the Registration
Statement and the Prospectus is not based on or derived from sources
that are reliable and accurate in all material respects.
4. Further Agreements of the Company. The Company covenants and agrees
with each Underwriter that:
(a) Effectiveness of the Registration Statement. The Company
will use its reasonable best efforts to cause the Registration
Statement to become effective at the earliest possible time and, if
required, will file the final Prospectus with the Commission within the
time periods specified by Rule 424(b) and Rule 430A under the
Securities Act and to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; and the Company will furnish copies of
the Prospectus to the Underwriters in New York City prior to 10:00
A.M., New York City time, on the business day next succeeding the date
of this Agreement in such quantities as the Representatives may
reasonably request.
(b) Delivery of Copies. The Company will deliver, without
charge, (i) to the Representatives, three signed copies of the
Registration Statement as originally filed and each amendment thereto,
in each case including all exhibits and consents filed therewith and
documents incorporated by reference therein; and (ii) to each
Underwriter (A) a conformed copy of the Registration Statement as
originally filed and each amendment thereto (without exhibits) and (B)
during the Prospectus Delivery Period, as many copies of the Prospectus
(including all amendments and supplements thereto and documents
incorporated by reference therein) as the Representatives may
reasonably request. As used herein, the term "Prospectus Delivery
Period" means such period of time after the first date of the public
offering of the Shares as in the opinion of
13
counsel for the Underwriters a prospectus relating to the Shares is
required by law to be delivered in connection with sales of the Shares
by any Underwriter or dealer.
(c) Amendments or Supplements. Before filing any amendment or
supplement to the Registration Statement or the Prospectus, whether
before or after the time that the Registration Statement becomes
effective, the Company will furnish to the Representatives and counsel
for the Underwriters a copy of the proposed amendment or supplement for
review and will not file any such proposed amendment or supplement to
which the Representatives reasonably objects.
(d) Notice to the Representatives. The Company will advise the
Representatives promptly, and confirm such advice in writing, (i) when
the Registration Statement has become effective; (ii) when any
amendment to the Registration Statement has been filed or becomes
effective; (iii) when any supplement to the Prospectus or any amendment
to the Prospectus has been filed; (iv) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or the receipt of any comments from the
Commission relating to the Registration Statement or any other request
by the Commission for any additional information; (v) of the issuance
by the Commission of any order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or the initiation or
threatening of any proceeding for that purpose; (vi) of the occurrence
of any event within the Prospectus Delivery Period as a result of which
the Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser,
not misleading; and (vii) of the receipt by the Company of any notice
with respect to any suspension of the qualification of the Shares for
offer and sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose; and the Company will use its best
efforts to prevent the issuance of any such order suspending the
effectiveness of the Registration Statement, preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification of the Shares and, if any such order is issued,
will obtain as soon as possible the withdrawal thereof.
(e) Ongoing Compliance of the Prospectus. If during the
Prospectus Delivery Period (i) any event shall occur or condition shall
exist 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 a material fact required to be stated therein or
necessary in order to make the
14
statements therein, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, not misleading or (ii) it is
necessary to amend or supplement the Prospectus to comply with law, the
Company will immediately notify the Underwriters thereof and forthwith
prepare and, subject to paragraph (c) above, file with the Commission
and furnish to the Underwriters and to such dealers as the
Representatives may designate, such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus
as so amended or supplemented will not, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser,
be misleading or so that the Prospectus will comply with law.
(f) Blue Sky Compliance. The Company will qualify the Shares
for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives shall reasonably request and will
continue such qualifications in effect so long as required for
distribution of the Shares; provided that the Company shall not be
required to (i) qualify as a foreign corporation or other entity or as
a dealer in securities in any such jurisdiction where it would not
otherwise be required to so qualify, (ii) file any general consent to
service of process in any such jurisdiction or (iii) subject itself to
taxation in any such jurisdiction if it is not otherwise so subject.
(g) Earning Statement. The Company will make generally
available to its security holders and the Representatives as soon as
practicable an earning statement that satisfies the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder covering a period of at least twelve months
beginning with the first fiscal quarter of the Company occurring after
the "effective date" (as defined in Rule 158) of the Registration
Statement.
(h) Clear Market. For a period of 90 days after the date of
the initial public offering of the Shares, the Company will not (i)
offer, pledge, announce the intention to sell, sell, contract to sell,
sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any shares of
Stock or any securities convertible into or exercisable or exchangeable
for Stock or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of
ownership of the Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Stock or such
other securities, in cash or otherwise, without the prior written
consent of the Representatives, other than the Shares to be sold
hereunder and any shares of Stock of the Company issued upon the
exercise of options granted under existing employee stock option plans.
15
(i) Use of Proceeds. The Company will apply the net proceeds
from the sale of the Shares as described in the Prospectus under the
heading "Use of Proceeds".
(j) No Stabilization. The Company will not take, directly or
indirectly, any action designed to or that could reasonably be expected
to cause or result in any stabilization or manipulation of the price of
the Shares.
(k) Exchange Listing. The Company will use its best efforts to
list, subject to notice of issuance, the Shares on the New York Stock
Exchange (the "Exchange").
(l) Reports. For a period of five years after the Closing
Date, the Company will furnish to the Representatives, as soon as they
are available, copies of all reports or other communications (financial
or other) furnished to holders of the Shares, and copies of any reports
and financial statements furnished to or filed with the Commission or
any national securities exchange or automatic quotation system.
5. Conditions of Underwriters' Obligations. The obligation of each
Underwriter to purchase the Underwritten Shares on the Closing Date or any
Option Shares on any Additional Closing Date, as the case may be, as provided
herein is subject to the performance by the Company of its covenants and other
obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. The Registration
Statement (or if a post-effective amendment thereto is required to be
filed under the Securities Act, such post-effective amendment) shall
have become effective, and the Representatives shall have received
notice thereof, not later than 5:00 P.M., New York City time, on the
date hereof; no order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceeding for such purpose shall
be pending before or threatened by the Commission; the Prospectus shall
have been timely filed with the Commission under the Securities Act and
in accordance with Section 4(a) hereof; and all requests by the
Commission for additional information shall have been complied with to
the reasonable satisfaction of the Representatives.
(b) Representations and Warranties. The representations and
warranties of the Company contained herein shall be true and correct on
the date hereof and on and as of the Closing Date or Additional Closing
Date, as the case may be; and the statements of the Company and its
officers made in any certificates delivered pursuant to this Agreement
16
shall be true and correct on and as of the Closing Date or any
Additional Closing Date, as the case may be.
(c) No Downgrade. Subsequent to the execution and delivery of
this Agreement, (i) no downgrading shall have occurred in the rating
accorded any securities or preferred stock of or guaranteed by the
Company or any of its subsidiaries by any "nationally recognized
statistical rating organization", as such term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act and
(ii) no such organization shall have publicly announced that it has
under surveillance or review, or has changed its outlook with respect
to, its rating of any securities or preferred stock of or guaranteed by
the Company or any of its subsidiaries (other than an announcement with
positive implications of a possible upgrading).
(d) No Material Adverse Change. Subsequent to the execution
and delivery of this Agreement, no event or condition of a type
described in Section 3(e) hereof shall have occurred or shall exist,
which event or condition is not described in the Prospectus (excluding
any amendment or supplement thereto) and the effect of which in the
judgment of the Representatives makes it impracticable or inadvisable
to proceed with the offering, sale or delivery of the Shares on the
Closing Date or any Additional Closing Date, as the case may be, on the
terms and in the manner contemplated by this Agreement and the
Prospectus.
(e) Officers' Certificate. The Representatives shall have
received on and as of the Closing Date or any Additional Closing Date,
as the case may be, a certificate of the chief financial officer or
chief accounting officer of the Company and one additional senior
executive officer of the Company who is satisfactory to the
Representatives (i) confirming that such officers have carefully
reviewed the Registration Statement and the Prospectus and, to the best
knowledge of such officers, the representation set forth in Section
3(b) hereof is true and correct, (ii) confirming that the other
representations and warranties of the Company in this Agreement are
true and correct and that 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 and (iii) to the effect set
forth in paragraphs (a), (c) and (d) above.
(f) Comfort Letters. On the date of this Agreement and on the
Closing Date or any Additional Closing Date, as the case may be,
PricewaterhouseCoopers LLP shall have furnished to the
Representatives, at the request of the Company, letters, dated the
respective dates of delivery thereof and addressed to the Underwriters,
in form and substance reasonably satisfactory to the Representatives,
containing statements and
17
information of the type customarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained or incorporated by reference in
the Registration Statement and the Prospectus; provided, that the
letter delivered on the Closing Date or any Additional Closing Date, as
the case may be, shall use a "cut-off" date no more than three business
days prior to such Closing Date or such Additional Closing Date, as the
case may be.
(g) Opinion of Counsel for the Company. ,counsel for the
Company, shall have furnished to the Representatives, at the request of
the Company, their written opinion, dated the Closing Date or any
Additional Closing Date, as the case may be, and addressed to the
Underwriters, in form and substance reasonably satisfactory to the
Representatives, to the effect set forth in Annex A hereto.
(h) Opinion of Counsel for the Underwriters. The
Representatives shall have received on and as of the Closing Date or
any Additional Closing Date, as the case may be, an opinion of Xxxxx
Xxxx & Xxxxxxxx, counsel for the Underwriters, with respect to such
matters as the Representatives may reasonably request, and such counsel
shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.
(i) No Legal Impediment to Issuance. No action shall have been
taken and no statute, rule, regulation or order shall have been
enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority that would, as of the Closing Date
or any Additional Closing Date, as the case may be, prevent the
issuance or sale of the Shares; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as
of the Closing Date or any Additional Closing Date, as the case may be,
prevent the issuance or sale of the Shares.
(j) Good Standing. The Representatives shall have received on
and as of the Closing Date or any Additional Closing Date, as the case
may be, satisfactory evidence of the good standing of the Company and
its subsidiaries in their respective jurisdictions of organization and
their good standing as foreign entities in such other jurisdictions as
the Representatives may reasonably request, in each case in writing or
any standard form of telecommunication from the appropriate
Governmental Authorities of such jurisdictions.
(k) Exchange Listing. The Shares to be delivered on the
Closing Date or any Additional Closing Date, as the case may be, shall
18
have been approved for listing on the Exchange, subject to official
notice of issuance.
(l) Lock-up Agreements. The "lock-up" agreements, each
substantially in the form of Annex B hereto, between you and the
officers and directors of the Company relating to sales and certain
other dispositions of shares of Stock or certain other securities,
delivered to you on or before the date hereof, shall be in full force
and effect on the Closing Date or any Additional Closing Date, as the
case may be.
(m) Additional Documents. On or prior to the Closing Date or
any Additional Closing Date, as the case may be, the Company shall have
furnished to the Representatives such further certificates and
documents as the Representatives may reasonably request.
(n) All opinions, letters, certificates and evidence mentioned
above or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions hereof only if they are in form and
substance reasonably satisfactory to counsel for the Underwriters.
6. Indemnification and Contribution.
(a) Indemnification of the Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter, its affiliates, directors
and officers and each person, if any, who controls such Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages
and liabilities (including, without limitation, legal fees and other
expenses incurred in connection with any suit, action or proceeding or
any claim asserted, as such fees and expenses are incurred), joint or
several, that arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (or any amendment or
supplement thereto) or any Preliminary Prospectus, or caused by any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except insofar as such losses, claims, damages or
liabilities arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon
and in conformity with any information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly 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 (b) below.
19
(b) Indemnification of the Company. Each Underwriter agrees,
severally and not jointly, to indemnify and hold harmless the Company,
its directors, its officers who signed the Registration Statement and
each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the indemnity set forth in paragraph (a) above, but
only with respect to any losses, claims, damages or liabilities that
arise out of, or are based upon, any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in
conformity with any information relating to such Underwriter furnished
to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) or any Preliminary
Prospectus, it being understood and agreed upon that the only such
information furnished by any Underwriter consists of the following
information in the Prospectus furnished on behalf of each Underwriter:
the names of the Representatives on the cover of the Prospectus, the
language regarding stabilization on the inside front cover of the
Prospectus and the fifth, eighth, ninth, tenth and twelfth paragraphs
under the caption "Underwriting".
(c) Notice and Procedures. If any suit, action, proceeding
(including any governmental or regulatory investigation), claim or
demand shall be brought or asserted against any person in respect of
which indemnification may be sought pursuant to either paragraph (a) or
(b) above, such person (the "Indemnified Person") shall promptly notify
the person against whom such indemnification may be sought (the
"Indemnifying Person") in writing; provided that the failure to notify
the Indemnifying Person shall not relieve it from any liability that it
may have under this Section 6 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 Person shall not relieve it from any liability
that it may have to an Indemnified Person otherwise than under this
Section 6. If any such proceeding shall be brought or asserted against
an Indemnified Person and it shall have notified the Indemnifying
Person thereof, the Indemnifying Person shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified
Person and any others entitled to indemnification pursuant to this
Section 6 that the Indemnifying Person may designate in such proceeding
and shall pay the fees and expenses of such counsel related to such
proceeding, as incurred. In any such proceeding, any Indemnified Person
shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person
shall have mutually agreed to the contrary; (ii) the
20
Indemnifying Person has failed within a reasonable time to retain
counsel reasonably satisfactory to the Indemnified Person; (iii) the
Indemnified Person shall have reasonably concluded that there may be
legal defenses available to it that are different from or in addition
to those available to the Indemnifying Person; or (iv) the named
parties in any such proceeding (including any impleaded parties)
include both the Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. It is understood and agreed that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the
same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be paid or
reimbursed as they are incurred. Any such separate firm for any
Underwriter, its affiliates, directors and officers and any control
persons of such Underwriter shall be designated in writing by Bear
Xxxxxxx & Co. Inc. and X.X. Xxxxxx Securities Inc. and any such
separate firm for the Company, its directors, its officers who signed
the Registration Statement and any control persons of the Company shall
be designated in writing by the Company. The Indemnifying Person shall
not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have
requested that an Indemnifying Person reimburse the Indemnified Person
for fees and expenses of counsel as contemplated by this paragraph, the
Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement
is entered into more than 30 days after receipt by the Indemnifying
Person of such request and (ii) the Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior
to the date of such settlement. No Indemnifying Person shall, without
the written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnification
could have been sought hereunder by such Indemnified Person, unless
such settlement (x) includes an unconditional release of such
Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the
subject matter of such proceeding and (y) does not include any
statement as to or any admission of fault, culpability or a failure to
act by or on behalf of any Indemnified Person.
21
(d) Contribution. If the indemnification provided for in
paragraphs (a) and (b) above is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder,
shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i)
in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the
other from the offering of the Shares or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company on
the one hand and the Underwriters on the other in connection with the
statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same respective
proportions as the net proceeds (before deducting expenses) received by
the Company from the sale of the Shares and the total underwriting
discounts and commissions received by the Underwriters in connection
therewith, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate offering price of the Shares. The
relative fault of the Company on the one hand and the Underwriters on
the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) Limitation on Liability. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant
to this Section 6 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or
payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any
legal or other expenses incurred by such Indemnified Person in
connection with any such action or claim. Notwithstanding the
provisions of this Section 6, in no event shall an Underwriter be
required to contribute any amount in excess of the amount by which the
total underwriting discounts and commissions received by such
Underwriter with respect to the offering of the Shares exceeds the
amount of any damages that such Underwriter has
22
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 Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 6 are
several in proportion to their respective purchase obligations
hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any Indemnified Person at law or in
equity.
7. Effectiveness of Agreement. This Agreement shall become effective
upon the later of (i) the execution and delivery hereof by the parties hereto
and (ii) receipt by the Company and the Representatives of notice of the
effectiveness of the Registration Statement (or, if applicable, any
post-effective amendment thereto).
8. Termination. This Agreement may be terminated in the absolute
discretion of the Representatives, by notice to the Company, if after the
execution and delivery of this Agreement and prior to the Closing Date or, in
the case any the Option Shares, prior to the relevant Additional Closing Date
(i) any domestic or international event or act or occurrence has materially
disrupted, or in the opinion of the Representatives will in the immediate future
materially disrupt, the market for the Company's securities or securities in
general; (ii) trading generally shall have been suspended or materially limited
on or by any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade; (iii)
trading of any securities issued or guaranteed by the Company shall have been
suspended on any exchange or in any over-the-counter market; (iv) a general
moratorium on commercial banking activities shall have been declared by federal
or New York State authorities or if any material disruption in commercial
banking or securities settlement or clearance services shall have occurred; or
(v) there shall have occurred any outbreak or escalation of hostilities or acts
of terrorism or there is a declaration of a national emergency or war by the
United States or there is any change in political, financial or economic
conditions or any calamity or crisis, either within or outside the United
States, that, in the judgment of the Representatives, is material and adverse
and makes it impracticable or inadvisable to proceed with the offering, sale or
delivery of the Shares on the Closing Date or the relevant Additional Closing
Date, as the case may be, on the terms and in the manner contemplated by this
Agreement and the Prospectus.
9. Defaulting Underwriter.
23
(a) If, on the Closing Date or any Additional Closing Date, as
the case may be, any Underwriter defaults on its obligation to purchase
the Shares that it has agreed to purchase hereunder on such date, the
non-defaulting Underwriters may in their discretion arrange for the
purchase of such Shares by other persons satisfactory to the Company on
the terms contained in this Agreement. If, within 36 hours after any
such default by any Underwriter, the non-defaulting Underwriters do not
arrange for the purchase of such Shares, then the Company shall be
entitled to a further period of 36 hours within which to procure other
persons satisfactory to the non-defaulting Underwriters to purchase
such Shares on such terms. If other persons become obligated or agree
to purchase the Shares of a defaulting Underwriter, either the
non-defaulting Underwriters or the Company may postpone the Closing
Date or any Additional Closing Date, as the case may be, for up to five
full business days in order to effect any changes that in the opinion
of counsel for the Company or counsel for the Underwriters may be
necessary in the Registration Statement and the Prospectus or in any
other document or arrangement, and the Company agrees to promptly
prepare any amendment or supplement to the Registration Statement and
the Prospectus that effects any such changes. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context otherwise requires, any person not listed
in Schedule 1 hereto that, pursuant to this Section 9, purchases Shares
that a defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by
the non-defaulting Underwriters and the Company as provided in
paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or any Additional Closing Date, as the
case may be does not exceed one-eleventh of the aggregate number of
Shares to be purchased on such date, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the number
of Shares that such Underwriter agreed to purchase hereunder on such
date plus such Underwriter's pro rata share (based on the number of
Shares that such Underwriter agreed to purchase on such date) of the
Shares of such defaulting Underwriter or Underwriters for which such
arrangements have not been made.
(c) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by
the non-defaulting Underwriters and the Company as provided in
paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or any Additional Closing Date, as the
case may be, exceeds one-eleventh of the aggregate amount of Shares to
be purchased on such
24
date, or if the Company shall not exercise the right described in
paragraph (b) above, then this Agreement or, with respect to any
Additional Closing Date, the obligation of the Underwriters to purchase
Shares on any Additional Closing Date, as the case may be, shall
terminate without liability on the part of the non-defaulting
Underwriters. Any termination of this Agreement pursuant to this
Section 9 shall be without liability on the part of the Company, except
that the Company will continue to be liable for the payment of expenses
as set forth in Section 10 hereof and except that the provisions of
Section 6 hereof shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company or any
non-defaulting Underwriter for damages caused by its default.
10. Payment of Expenses.
(a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company
will pay or cause to be paid all costs and expenses incident to the
performance of its obligations hereunder, including without limitation,
(i) the costs incident to the authorization, issuance, sale,
preparation and delivery of the Shares and any taxes payable in that
connection; (ii) the costs incident to the preparation, printing and
filing under the Securities Act of the Registration Statement, the
Preliminary Prospectus and the Prospectus (including all exhibits,
amendments and supplements thereto) and the distribution thereof; (iii)
the costs of reproducing and distributing of this Agreement; (iv) the
fees and expenses of the Company's counsel and independent accountants;
(v) the fees and expenses incurred in connection with the registration
or qualification and determination of eligibility for investment of the
Shares under the laws of such jurisdictions as the Representatives may
designate, and the preparation, printing and distribution of a Blue Sky
Memorandum (including the related fees and expenses of counsel for the
Underwriters); (vi) the cost of preparing stock certificates; (vii) the
costs and charges of any transfer agent and any registrar; (viii) all
expenses and application fees incurred in connection with any filing
with, and clearance of the offering by, the National Association of
Securities Dealers, Inc.; (ix) all expenses incurred by the Company in
connection with any "road show" presentation to potential investors;
and (x) all expenses and application fees related to the listing of the
Shares on the Exchange.
(b) If (i) this Agreement is terminated pursuant to Section 8,
(ii) the Company for any reason fails to tender the Shares for delivery
to the Underwriters or (iii) the Underwriters decline to purchase the
Shares
25
for any reason permitted under this Agreement, the Company agrees to
reimburse the Underwriters for all out-of-pocket costs and expenses
(including the fees and expenses of their counsel) reasonably incurred
by the Underwriters in connection with this Agreement and the offering
contemplated hereby.
11. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and any controlling persons
referred to in Section 6 hereof. Nothing in this Agreement is intended or shall
be construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
No purchaser of Shares from any Underwriter shall be deemed to be a successor
merely by reason of such purchase.
12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and the Underwriters
contained in this Agreement or made by or on behalf of the Company or the
Underwriters pursuant to this Agreement or any certificate delivered pursuant
hereto shall survive the delivery of and payment for the Shares and shall remain
in full force and effect, regardless of any termination of this Agreement or any
investigation made by or on behalf of the Company or the Underwriters.
13. Certain Defined Terms. For purposes of this Agreement, (a) except
where otherwise expressly provided, the term "affiliate" has the meaning set
forth in Rule 405 under the Securities Act; (b) the term "business day" means
any day other than a day on which banks are permitted or required to be closed
in New York City; and (c) the term "subsidiary" has the meaning set forth in
Rule 405 under the Securities Act; and (d) the term "significant subsidiary" has
the meaning set forth in Rule 1-02 of Regulation S-X under the Exchange Act.
14. Miscellaneous.
(a) Authority of the Representatives. Any action by the
Underwriters hereunder may be taken by. Bear, Xxxxxxx & Co. Inc. and
X.X. Xxxxxx Securities Inc on behalf of the Underwriters, and any such
action taken by Bear, Xxxxxxx & Co. Inc. and X.X. Xxxxxx Securities
Inc. shall be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if
mailed or transmitted and confirmed by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives c/o ___________________ (fax:______); Attention: Equity
Capital Markets.
26
Notices to the Company shall be given to it at 0000 Xxxxxx Xxxxxxx, Xxx
Xxxxxx, Xxxx 00000 (fax: (614) ____ - _______); Attention:__________.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts
(which may include counterparts delivered by any standard form of
telecommunication), each of which shall be an original and all of which
together shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any
provision of this Agreement, nor any consent or approval to any
departure therefrom, shall in any event be effective unless the same
shall be in writing and signed by the parties hereto.
(f) Headings. The headings herein are included for convenience
of reference only and are not intended to be part of, or to affect the
meaning or interpretation of, this Agreement.
27
If the foregoing is in accordance with your understanding, please
indicate your acceptance of this Agreement by signing in the space provided
below.
Accepted: __________, 2002
Very truly yours,
TOO, INC.
By:___________________________
Title:
BEAR, XXXXXXX & CO. INC.
For itself and on behalf of the
several Underwriters listed
in Schedule 1 hereto.
By___________________________
Authorized Signatory
X.X. XXXXXX SECURITIES INC.
For itself and on behalf of the
several Underwriters listed
in Schedule I hereto.
By___________________________
Authorized Signatory
28
Schedule 1
Underwriter Number of Shares
Bear, Xxxxxxx & Co. Inc. ...............
X.X. Xxxxxx Securities Inc. ............
------------------------
Total $
========================
Annex A
Form of Opinion of Counsel for the Company
i. The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion; the Prospectus
was filed with the Commission pursuant to the subparagraph of Rule 424(b) under
the Securities Act specified in such opinion on the date specified therein; and
no order suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose is pending or, to the best knowledge
of such counsel, threatened by the Commission.
ii. The Registration Statement and the Prospectus (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) comply as to form in all material respects with the
requirements of the Securities Act.
iii. The Company and each of its subsidiaries have been duly organized
and are validly existing and in good standing under the laws of their respective
jurisdictions of organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged,
except where the failure to be so qualified or have such power or authority
would not, individually or in the aggregate, have a Material Adverse Effect.
iv. The Company has an authorized capitalization as set forth in the
Prospectus under the heading "Capitalization"; all the outstanding shares of
capital stock of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable; the capital stock of the Company conforms
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus; and all the outstanding shares of
capital stock or other equity interests of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable.
v. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
vi. The Shares to be issued and sold by the Company hereunder have been
duly authorized, and when delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be validly issued, fully paid
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and non-assessable and the issuance of the Shares is not subject to any
preemptive or similar rights.
vii. Neither the Company nor any of its subsidiaries is (i) in
violation of its charter or by-laws or similar organizational documents; (ii) in
default, and no event has occurred that, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which it is a party or by
which it is bound or to which any of its property or assets is subject; or (iii)
in violation of any law or statute or any judgment, order, rule or regulation of
any court or arbitrator or governmental or regulatory authority, except in the
case of clauses (ii) for any such default or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.
viii. The execution, delivery and performance by the Company of the
Underwriting Agreement, the issuance and sale of the Shares being delivered on
the Closing Date or any Additional Closing Date, as the case may be, and
compliance by the Company with the terms of, and the consummation of the
transactions contemplated by, the Underwriting Agreement will not (i) conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, (ii) result in any violation of the provisions of the charter or
by-laws or similar organizational documents of the Company or any of its
subsidiaries or (iii) result in the violation of any law or statute or any
judgment, order or regulation of any court or arbitrator or governmental or
regulatory authority except, in the case of clauses (i) and (iii) above, for
such conflict, breach or violation that would not, individually or in the
aggregate, have a Material Adverse Effect.
ix. No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory
authority is required for the execution, delivery and performance by the Company
of the Underwriting Agreement, the issuance and sale of the Shares being
delivered on the Closing Date or any Additional Closing Date, as the case may
be, and compliance by the Company with the terms thereof and the consummation of
the transactions contemplated by the Underwriting Agreement, except for the
registration of the Shares under the Securities Act and such consents,
approvals,
A-2
authorizations, orders and registrations or qualifications as may be required
under applicable state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters.
x. To the best knowledge of such counsel, except as described in the
Prospectus, there are no legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Company or any of its
subsidiaries is or may be a party or to which any property of the Company or any
of its subsidiaries is or may be the subject which, individually or in the
aggregate, if determined adversely to the Company or any of its subsidiaries,
could reasonably be expected to have a Material Adverse Effect; and to the best
knowledge of such counsel, no such investigations, actions, suits or proceedings
are threatened or contemplated by any governmental or regulatory authority or
threatened by others.
xi. The descriptions in the Prospectus of statutes, legal, governmental
and regulatory proceedings and contracts and other documents are accurate in all
material respects; the statements in the Prospectus under the heading
"Underwriting", in the Prospectus incorporated by reference from Item 3 of Part
I of the Company's Annual Report on Form 10-K for the year ended February 2,
2002, in the Registration Statement in items 14 and 15 and the description of
the Company's Common Stock and the Rights, incorporated by reference in the
Registration Statement, to the extent that they constitute summaries of the
terms of stock, matters of law or regulation or legal conclusions, fairly
summarize the matters described therein in all material respects; and, to the
best knowledge of such counsel, (A) there are no current or pending legal,
governmental or regulatory actions, suits or proceedings that are required under
the Securities Act to be described in the Prospectus and that are not so
described and (B) there are no statutes, regulations or contracts and other
documents that are required under the Securities Act to be filed as exhibits to
the Registration Statement or described in the Prospectus and that have not been
so filed or described.
xii. The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be required to register as an "investment company" or
an entity "controlled" by an "investment company" within the meaning of the
Investment Company Act.
xiii. The documents incorporated by reference in the Prospectus or any
further amendment or supplement thereto made by the Company prior to the Closing
Date or any Additional Closing Date, as the case may be (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material respects
with
A-3
the requirements of the Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder; and such counsel has
no reason to believe that any of such documents, when such documents became
effective or were so filed, as the case may be contained, in the case of a
registration statement which became effective under the Securities Act, any
untrue statement of material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or, in the case of other documents which were filed under the Exchange with the
Commission, any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statement therein, in the light of
the circumstances under which they were made when such documents were so filed,
not misleading.
xiv. The Rights Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding agreement
of the Company enforceable against the Company, except as enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or by equitable principles relating to
enforceability; the Rights have been duly authorized by the Company, and, when
issued upon issuance of the Shares, will be validly issued; and the Poison Pill
Security has been duly authorized by the Company and validly reserved for
issuance upon the exercise of the Rights and, when issued upon such exercise in
accordance with the terms of the Rights Agreement, will be validly issued, fully
paid and non-assessable.
xv. Each of the Company and its subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders, approvals and
other authorizations from, and has made all declarations and filings with, all
Governmental Authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date hereof, and
neither the Company nor any such subsidiary has received any actual notice of
any proceeding relating to revocation or modification of any such license,
permit, certificate, consent, order, approval or other authorization, except as
described in the Registration Statement and the Prospectus; and each of the
Company and its subsidiaries is in compliance with all laws and regulations
relating to the conduct of its business as conducted as of the date of the
Prospectus.
xvi. Each of the Company and its subsidiaries owns, possesses or has
the right to use the Intellectual Property employed by it in connection with the
business conducted by it as of the date hereof.
A-4
xvii. The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as described or referred to in the Prospectus or such as
do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, existing and
enforceable leases with such exceptions as are not material and to not interfere
with the use made or proposed to be made of such property and buildings by the
Company or its subsidiaries.
xviii. Each of the Company and its subsidiaries is in compliance with
all Environmental Laws, except, in each case, where noncompliance, individually
or in the aggregate, would not have a material adverse effect on the Company and
its subsidiaries taken as a whole; there are no legal or governmental
proceedings pending, or to the knowledge of such counsel, threatened against or
affecting the Company or any of its subsidiaries under any Environmental Law
which, individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the Company and its subsidiaries taken as a whole.
Such counsel shall also state that they have participated in
conferences with representatives of the Company and with representatives of its
independent accountants and counsel at which conferences the contents of the
Registration Statement and the Prospectus and any amendment and supplement
thereto and related matters were discussed and, although such counsel assume no
responsibility for the accuracy, completeness or fairness of the Registration
Statement, the Prospectus and any amendment or supplement thereto (except as
expressly provided above), nothing has come to the attention of such counsel to
cause such counsel to believe that the Registration Statement, at the time of
its effective date (including the information, if any, deemed pursuant to Rule
430A to be part of the Registration Statement at the time of effectiveness),
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus or any amendment or supplement thereto as
of its date and the Closing Date contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
(other than the financial statements and other financial information contained
therein, as to which such counsel need express no belief).
A-5
In rendering such opinion, such counsel may rely as to matters of fact
on certificates of responsible officers of the Company and public officials that
are furnished to the Underwriters.
The opinion of __________________, described above shall be rendered to
the Underwriters at the request of the Company and shall so state therein.
A-6
Annex B
FORM OF LOCK-UP AGREEMENT
_________ ___, 2002
BEAR, XXXXXXX & CO. INC.
X.X. XXXXXX SECURITIES INC.
As Representatives of
the several Underwriters listed in
Schedule I to the Underwriting
Agreement referred to below
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re:
TOO, INC. --- Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of the several
Underwriters, propose to enter into an Underwriting Agreement (the "Underwriting
Agreement") with TOO, INC., a Delaware corporation (the "Company"), providing
for the public offering (the "Public Offering") by the several Underwriters
named in Schedule I to the Underwriting Agreement (the "Underwriters"), of
common stock, of the Company (the "Securities"). Capitalized terms used herein
and not otherwise defined shall have the meanings set forth in the Underwriting
Agreement.
In consideration of the Underwriters' agreement to purchase and make
the Public Offering of the Securities, and for other good and valuable
consideration receipt of which is hereby acknowledged, the undersigned hereby
agrees that, without the prior written consent of Bear, Xxxxxxx & Co. Inc. and
X.X. Xxxxxx Securities Inc. on behalf of the Underwriters, the undersigned will
not, during the period ending 90 days after the date of the prospectus relating
to the Public Offering (the "Prospectus"), (i) offer, pledge, announce the
intention to sell, sell, contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock, $.01 per share par value, of the Company (the "Common
Stock") or any securities convertible into or exercisable or exchangeable for
Common Stock (including
B-1
without limitation, Common Stock which may be deemed to be beneficially owned by
the undersigned in accordance with the rules and regulations of the Securities
and Exchange Commission and securities which may be issued upon exercise of a
stock option or warrant) or (2) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. In addition, the undersigned agrees that, without the prior
written consent of Bear, Xxxxxxx & Co. Inc. and X.X. Xxxxxx Securities Inc. on
behalf of the Underwriters, it will not, during the period ending 90 days after
the date of the Prospectus, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Letter Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does
not become effective, or if the Underwriting Agreement (other than the
provisions thereof which survive termination) shall terminate or be terminated
prior to payment for and delivery of the Common Stock to be sold thereunder, the
undersigned shall be released from all obligations under this Letter Agreement.
The undersigned understands that the Underwriters are entering into the
Underwriting Agreement and proceeding with the Public Offering in reliance upon
this Letter Agreement.
B-2
This lock-up agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Very truly yours,
By:_______________________________
Name:
Title:
B-3
