Exhibit 1.1
12,500,000 Shares of Common Stock
AEROPOSTALE, INC.
UNDERWRITING AGREEMENT
_________, 2002
BEAR, XXXXXXX & CO. INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Aeropostale, Inc., a corporation organized and existing under the
laws of Delaware (the "Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the several underwriters named in Schedule I
hereto (the "Underwriters") an aggregate of 1,875,000 shares (the "Company
Shares") and the persons and entities listed on Schedule II hereto (the "Selling
Stockholders") propose, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters an aggregate of 10,625,000 shares (the
"Selling Stockholder Shares" and, together with the Company Shares, the "Firm
Shares") of the Company's common stock, par value $0.01 per share (the "Common
Stock"), and for the sole purpose of covering over-allotments in connection with
the sale of the Firm Shares, at the option of the Underwriters, the Selling
Stockholders propose to sell up to an additional 1,875,000 shares (the
"Additional Shares") of Common Stock. The Firm Shares and any Additional Shares
purchased by the Underwriters are referred to herein as the "Shares." The Shares
are more fully described in the Registration Statement referred to below.
The Company, the Selling Stockholders and the Underwriters agree
that five percent (5%) of the Firm Shares to be purchased by the Underwriters
(the "Directed Shares") shall be reserved for sale by the Underwriters to
[directors, officers,] eligible employees and associates of the Company, as part
of the distribution of the Shares by the Underwriters, subject to the terms of
this Agreement, the applicable rules, regulations and interpretations of the
National Association of Securities Dealers, Inc. (the "NASD") and all other
applicable laws, rules and regulations. To the extent that such Directed Shares
are not orally confirmed for purchase by such persons by the end of the first
day after the
date of this Agreement, such Directed Shares will be offered to the public as
part of the offering contemplated hereby. Under no circumstances will either of
the Representatives or any other Underwriter be liable to the Company or to any
of the purchasers of the Directed Shares for any action taken or omitted to be
taken other than any such action or inaction resulting from the bad faith or
willful misconduct or gross negligence of any Underwriter in connection with the
transactions effected with regard to any of the purchasers of the Directed
Shares.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with each of the Underwriters as of the
date hereof and the Closing Date that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (No.
333-84056), and amendments thereto, and related preliminary prospectuses for the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of the Shares, which registration statement, as so amended (including
post-effective amendments), has been declared effective by the Commission and
copies of which have heretofore been delivered to the Underwriters. The
registration statement, as amended at the time it became effective, including
the exhibits and information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A or 434(d) under the
Securities Act, is hereinafter referred to as the "Registration Statement." If
the Company has filed or is required pursuant to the terms hereof to file a
registration statement pursuant to Rule 462(b) under the Securities Act
registering additional shares of Common Stock (a "Rule 462(b) Registration
Statement"), then, unless otherwise specified, any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration Statement, which
became effective upon filing, no other document with respect to the Registration
Statement has heretofore been filed with the Commission. No stop order
suspending the effectiveness of either the Registration Statement or the Rule
462(b) Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or, to the knowledge of the Company, threatened
by the Commission. The Company, if required by the Securities Act and rules and
regulations of the Commission thereunder (together, the "Rules and
Regulations"), proposes to file the Prospectus with the Commission pursuant to
Rule 424(b) of the Rules and Regulations. The Prospectus, in the form in which
it is to be filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, or, if the Prospectus is not to be filed with the Commission
pursuant to Rule 424(b), the Prospectus in the form included as part of the
Registration Statement at the time the Registration Statement became effective,
is hereinafter referred to as the "Prospectus," except that if any revised
prospectus or prospectus supplement shall be provided to the Underwriters by the
Company for use in connection with the offering and sale of the Shares (the
"Offering") which differs from the Prospectus (whether or not such revised
prospectus or prospectus supplement is required to be filed by the Company
pursuant to Rule 424(b) of the Rules and Regulations), the term
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"Prospectus" shall refer to such revised prospectus or prospectus supplement, as
the case may be, from and after the time it is first provided to the
Underwriters for such use; and, provided, further, that the term "Prospectus"
shall be deemed to include any wrapper or supplement thereto prepared in
connection with the distribution of any Directed Shares. Any preliminary
prospectus or prospectus subject to completion included in the Registration
Statement or filed with the Commission pursuant to Rule 424 under the Securities
Act is hereafter called a "Preliminary Prospectus." All references in this
Agreement to the Registration Statement, the Rule 462(b) Registration Statement,
a Preliminary Prospectus and the Prospectus, or any amendments or supplements to
any of the foregoing, shall be deemed to include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("XXXXX").
(b) At the time of the effectiveness of the Registration
Statement or the effectiveness of any post-effective amendment to the
Registration Statement, when the Prospectus is first filed with the Commission
pursuant to Rule 424(b) or Rule 434 of the Regulations, when any supplement to
or amendment of the Prospectus is filed with the Commission, when any document
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), was or is filed and at the Closing Date and the Additional Closing Date,
if any (as respectively defined in Section 3 hereof), the Registration Statement
and the Prospectus and any amendments thereof and supplements thereto complied
or will comply in all material respects with the applicable provisions of the
Securities Act and the Rules and Regulations and any applicable laws or
regulations of foreign jurisdictions in which the Prospectus is distributed in
connection with the offer and sale of any of the Directed Shares and did not and
will not contain an untrue statement of a material fact and did not and will not
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein (i) in the case of the Registration
Statement, not misleading and (ii) in the case of the Prospectus or any related
Preliminary Prospectus, in light of the circumstances under which they were
made, not misleading. When any related Preliminary Prospectus was first filed
with the Commission (whether filed as part of the registration statement for the
registration of the Shares or any amendment thereto or pursuant to Rule 424(a)
of the Rules and Regulations) and when any amendment thereof or supplement
thereto was first filed with the Commission, such Preliminary Prospectus and any
amendments thereof and supplements thereto complied in all material respects
with the applicable provisions of the Securities Act and the Rules and
Regulations and the Exchange Act and the respective rules and regulations
thereunder and any applicable laws or regulations of foreign jurisdictions in
which the Prospectus is distributed in connection with the offer and sale of any
of the Directed Shares and did not contain an untrue statement of a material
fact and did not omit to state any material fact required to be stated therein
or necessary in order to make the statements therein in light of the
circumstances under which they were made not misleading. No representation and
warranty is made in this subsection (b), however, with respect to any
information contained in or omitted from the Registration Statement or the
Prospectus or any related Preliminary Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with
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information furnished in writing to the Company by or on behalf of any
Underwriter specifically for use therein ("Underwriters' Information"). If Rule
434 is used, the Company will comply with the requirements of Rule 434 and the
Prospectus shall not be "materially different," as such term is used in Rule
434, from the Prospectus included in the Registration Statement at the time it
became effective.
(c) Deloitte & Touche LLP, who have certified the financial
statements and supporting schedules included or incorporated in the Registration
Statement, are independent public accountants as required by the Securities Act
and the Rules and Regulations.
(d) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as set forth
in the Registration Statement and the Prospectus, the Company has not paid any
dividends on its capital stock and there has been no material adverse change or
any development involving a prospective material adverse change on (i) the
business, prospects, properties, operations, condition (financial or other),
stockholders' equity (investment) or results of operations of the Company and
the subsidiary of the Company listed on Exhibit 21 of the Registration Statement
(the "Subsidiary"), taken as a whole; (ii) the long-term debt of the Company;
(iii) the capital stock of the Company; (iv) the Offering, or anything giving
rise to any liability or obligation on the part of the Underwriters; or (v) the
consummation of the transactions contemplated by this Agreement or the Company's
performance of its obligations hereunder (any of the events described in (i)
through (v), a "Material Adverse Change" or "Material Adverse Effect"), whether
or not arising from transactions in the ordinary course of business, and since
the date of the latest balance sheet presented in the Registration Statement and
the Prospectus, neither the Company nor the Subsidiary has incurred or
undertaken any liabilities or obligations, direct or contingent, or entered into
any transactions, which are material to the Company and the Subsidiary taken as
a whole, except for liabilities or obligations which are reflected in the
Registration Statement and the Prospectus.
(e) This Agreement and the transactions contemplated herein
and the redemption of all of the Company's outstanding shares of 121/2% Series B
redeemable preferred stock and the payment of all dividends accrued thereon with
a portion of the net proceeds of the offering of the Company Shares, as
described in the Registration Statement, and the other uses by the Company of
the proceeds of the offering of the Company Shares, as described in the
Registration Statement, have been duly and validly authorized by the Company and
this Agreement has been duly and validly executed and delivered by the Company.
(f) The execution, delivery and performance of this Agreement,
the redemption of all of the Company's outstanding shares of 12 1/2% Series B
redeemable preferred stock and the payment of all accrued dividends thereon with
a portion of the net proceeds of the offering of the Company Shares, as
described in the
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Registration Statement, and the consummation of the transactions contemplated
hereby do not and will not (i) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default (or an event which with notice
or lapse of time, or both, would constitute a default) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property,
operations or assets of the Company or the Subsidiary pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement,
instrument, franchise, license or permit to which the Company or the Subsidiary
is a party or by which the Company or the Subsidiary or their respective
properties or assets may be bound or (ii) violate or conflict with any provision
of the certificate or articles of incorporation, by-laws or other organizational
documents of the Company or the Subsidiary or any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or the Subsidiary
or any of their respective properties, operations or assets. No consent,
approval, authorization, order, registration, filing, qualification, license or
permit of or with any court or any public, governmental or regulatory agency or
body, domestic or foreign, having jurisdiction over the Company or the
Subsidiary or any of their respective properties, operations or assets or any
other third party is required for the execution, delivery and performance of
this Agreement or the consummation of the transactions contemplated hereby, by
the Registration Statement and by the Prospectus, including the issuance, sale
and delivery of the Shares to be issued, sold and delivered by the Company
hereunder, except the registration under the Securities Act of the Shares and
such consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters.
(g) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus in the column entitled "Actual"
under the caption "Capitalization" and will be, after giving effect to the
events specified under the caption "Capitalization" after the Offering, as set
forth in the column entitled "As Adjusted." All of the issued shares of capital
stock of the Company have been duly and validly authorized and issued, are fully
paid and non-assessable, were not issued in violation of or subject to any
preemptive or similar rights that entitle or will entitle any person to acquire
any Company Shares from the Company upon issuance or sale by the Company of
Company Shares in the Offering, except for such rights as may have been fully
satisfied or waived prior to the effectiveness of the Registration Statement.
The Company Shares to be delivered by the Company on the Closing Date have been
duly and validly authorized and, when delivered in accordance with this
Agreement, will be duly and validly issued, fully paid and non-assessable and
will not have been issued in violation of or subject to any preemptive or
similar rights that entitle or will entitle any person to acquire any Company
Shares from the Company upon issuance thereof by the Company. The Common Stock,
the Firm Shares and the Additional Shares conform to the descriptions thereof
contained in the Registration Statement and the Prospectus. Except as disclosed
in or specifically contemplated by the Prospectus, the Company has no
outstanding options to purchase, or any preemptive rights or other rights to
subscribe
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for or to purchase, any shares of its capital stock or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its capital
stock or any such options, rights convertible securities or obligations.
(h) The Subsidiary is the only subsidiary (as defined in Rule
405 of the Securities Act) of the Company. Each of the Company and the
Subsidiary has been duly organized and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation. All of the
issued shares of capital stock of the Subsidiary has been duly and validly
authorized and issued, are fully paid and non-assessable and are owned directly
by the Company, free and clear of all liens, charges, encumbrances equities or
claims. Each of the Company and the Subsidiary is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in which
the character or location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification necessary, except for
those failures to be so qualified or in good standing which could not reasonably
be expected to have, in the aggregate, a Material Adverse Effect. Each of the
Company and the Subsidiary has all requisite power and authority, and all
necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits (each, a "Consent" and collectively, the
"Consents") of and from all public, regulatory or governmental agencies and
bodies, to own, lease and operate its properties and conduct its business as now
being conducted and as described in the Registration Statement and the
Prospectus, except where the failure to obtain such consent approval,
authorization, order, registration, license or permit could not reasonably be
expected to have a Material Adverse Effect. No Consent contains a materially
burdensome restriction not adequately disclosed in the Registration Statement
and the Prospectus.
(i) Except as described in the Prospectus, there is no legal
or governmental proceeding, including routine litigation, to which the Company
or the Subsidiary is a party or of which any property of the Company or the
Subsidiary is the subject which, singularly or in the aggregate, if determined
adversely to the Company or the Subsidiary, is reasonably likely to have a
Material Adverse Effect, and to the Company's knowledge, no such proceeding is
threatened or contemplated by governmental authorities or threatened or
contemplated by others, and the defense of all such claims against the Company
in the aggregate, including routine litigation, is not reasonably likely to have
a Material Adverse Effect.
(j) Neither the Company nor any of its affiliates (other than
Bear Xxxxxxx Merchant Banking and any affiliate thereof which is an underwriter
in the Offering) has taken nor will any of them take, directly or indirectly,
any action which is designed to, or which has constituted or which might
reasonably be expected to, cause or result in, the stabilization or manipulation
of the price of any securities of the Company to facilitate the sale or resale
of the Shares.
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(k) Except as described in the Registration Statement, the
Company has not sold or issued any shares of Common Stock during the six-month
period preceding the date of the Prospectus, including any sales pursuant to
rule 144A under or Regulations D or S of, the Securities Act other than shares
issued pursuant to employee benefit plans, qualified stock option plans or the
employee compensation plans or pursuant to outstanding options, rights or
warrants.
(l) Except for the Subsidiary, the Company owns no capital
stock or other beneficial interest, directly or indirectly, in any corporation,
partnership, joint venture or other business entity.
(m) The financial statements, including the notes thereto, and
supporting schedules included in the Registration Statement and the Prospectus
present fairly the financial position of the Company and its consolidated
subsidiaries and the other entities for which financial statements are included
in the Registration Statement and the Prospectus as of the dates indicated and
the results of operations and cash flow for the periods specified; except as
otherwise stated in the Registration Statement, said financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved; and the
supporting schedules included in the Registration Statement present fairly in
accordance with generally accepted accounting principles the information
required to be stated therein. The other financial and statistical information
and data included in the Registration Statement and the Prospectus present
fairly the information included therein and have been prepared on a basis
consistent with that of the financial statements included in the Registration
Statement and the Prospectus and the books and records of the respective
entities presented therein.
(n) All financial information contained in the Registration
Statement and the Prospectus relating to, relying on or incorporating financial
information of the Company's predecessor company is accurate in all material
respects.
(o) No holder of securities of the Company has any
registration or other similar rights to have any equity or debt securities of
the Company registered for sale by the Company under the Registration Statement
or otherwise or included in the Offering, except for such rights as have been
waived or which are described in the Prospectus.
(p) The Company is not, and upon consummation of the
transactions contemplated hereby, and at all times up to and including the
application of net proceeds as described in the Prospectus, will not be, subject
to registration as an "investment company" under the Investment Company Act of
1940 and will not be an entity "controlled" by an "investment company" as
defined in such act.
(q) The Company and the Subsidiary have good and marketable
title in fee simple to all real property and good and marketable title to all
personal
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property owned by them, in each case free and clear of all liens, charges,
encumbrances and defects, except such as are described in the Registration
Statement and the Prospectus or such as do not materially affect the value of
such property; and any real property and buildings held under lease or sublease
by the Company and the Subsidiary are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and the Subsidiary. Neither the Company nor the Subsidiary has received
any notice of any claim adverse to their ownership of any real or personal
property or of any claim against the continued possession of any real property,
whether owned or held under lease or sublease by the Company or the Subsidiary.
(r) The Company and the Subsidiary have accurately prepared
and timely filed all federal, state and other tax returns that are required to
be filed by it and has paid or caused to be paid all taxes, assessments
(including any interest or penalties), governmental or other similar charges,
including without limitation, all sales and use taxes and all taxes which the
Company and the Subsidiary are obligated to withhold from amounts owing to
employees, creditors and third parties, that are due on or before the Closing
Date (whether or not such amounts are shown as due on any tax return), except
for any taxes, assessments and charges that do not in the aggregate exceed one
hundred thousand dollars ($100,000), not yet paid by the Company. No deficiency
assessment with respect to a proposed adjustment of the Company's or the
Subsidiary's Federal, state, or other taxes is pending or, to the best of the
Company's knowledge, threatened. There is no tax lien, whether imposed by any
federal, state, or other taxing authority, outstanding against the assets,
properties or business of the Company or the Subsidiary.
(s) There are no contracts or other documents (including,
without limitation, any voting agreement), which are required to be described in
the Prospectus or filed as exhibits to the Registration Statement or the
Prospectus by the Securities Act or by the Rules and Regulations and which have
not been so described or filed.
(t) The Company and the Subsidiary maintain a system of
internal accounting controls sufficient to provide reasonable assurances 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 accountability for assets; (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
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(u) Neither the Company nor the Subsidiary (i) is in violation
of its charter or by-laws, (ii) is in default (and no event has occurred which,
with notice or lapse of time or both, would constitute such a default) under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the
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Company or the Subsidiary) under, 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) is in
violation of any statute or any judgment, decree, order, rule or regulation of
any court or governmental or regulatory agency or body having jurisdiction over
the Company or the Subsidiary or any of their properties or assets, except any
violation or default that could not reasonably be expected to have a Material
Adverse Effect.
(v) Each of the Company and the Subsidiary owns or possesses
the right to use all patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service xxxx registrations, copyrights,
licenses, formulae, customer lists, and know-how and other intellectual property
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) ("Intellectual Property")
necessary for the conduct of their respective businesses as being conducted and
as contemplated to be conducted in the future and as described in the
Registration Statement and Prospectus and has no reason to believe that the
conduct of their respective businesses will conflict with, and have not received
any notice of any claim of conflict with, any such right of others. To the best
of the Company's knowledge, all material technical information developed by and
belonging to the Company which has not been patented has been kept confidential.
To the Company's knowledge, there is no infringement by third parties of any
such Intellectual Property; there is no pending or, to the Company's knowledge,
threatened action, suit, proceeding or claim by others challenging the Company's
or the Subsidiary's rights in or to any such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis for any such
claim; and there is no pending or, to the Company's knowledge, threatened
action, suit, proceeding or claim by others that the Company infringes or
otherwise violates any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any other fact which
would form a reasonable basis for any such claim.
(w) No labor disturbance by the employees of the Company or
the Subsidiary exists or, to the best of the Company's knowledge, is imminent
and the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its or the Subsidiary's principal suppliers,
manufacturers', customers or contractors, which, in either case, which could
reasonably be expected to have a Material Adverse Effect.
(x) No "prohibited transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time (the "Code"),
or "accumulated funding deficiency" (as defined in Section 302 of ERISA) or any
of the events set forth in Section 4043(b) of ERISA (other than events with
respect to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred
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with respect to any employee benefit plan which could reasonably be expected to
have a Material Adverse Effect; each employee benefit plan is in compliance in
all material respects with applicable law, including ERISA and the Code; the
Company has not incurred and does not expect to incur liability under Title IV
of ERISA with respect to the termination of, or withdrawal from, any "pension
plan;" and each "pension plan" (as defined in ERISA) for which the Company would
have any liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which could cause the loss of such
qualification.
(y) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission, or other release of any kind
of toxic or other wastes or other hazardous substances by, due to, or caused by
the Company (or, to the Company's knowledge, any other entity for whose acts or
omissions the Company is or may be liable) upon any other property now or
previously owned or leased by the Company or the Subsidiary, or upon any other
property, which would be a violation of any statute or any ordinance, rule,
regulation, order, judgment, decree or permit or which would, under any statute
or any ordinance, rule (including rule of common law), regulation, order,
judgment, decree or permit, or which would give rise to any liability, except
for any violation or liability which could not reasonably be expected to have,
singularly or in the aggregate with all such violations and liabilities, a
Material Adverse Effect. There has been no disposal discharge, emission or other
release of any kind onto such property or into the environment surrounding such
property of any toxic or other wastes or other hazardous substances with respect
to which the Company or the Subsidiary has knowledge. The Company has not agreed
to assume, undertake or provide indemnification for any liability of any other
person under any Environmental Law, including any obligation for cleanup or
remedial action, except as could not reasonably be expected to have a Material
Adverse Effect.
(z) Neither the Company, the Subsidiary nor, to the Company's
knowledge, any of their employees or agents has at any time during the last five
years (i) made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law or (ii) made any
payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States of any jurisdiction
thereof.
(aa) The statistical and market-related data included in the
Prospectus are based on or derived from sources which the Company reasonably and
in good faith believes are reliable and accurate.
2. Representations and Warranties of the Selling Stockholders. Each
of the Selling Stockholders severally represents and warrants to, and agrees
with each of
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the Underwriters as of the date hereof, the Closing Date and any Additional
Closing Date that:
(a) This Agreement has been duly and validly authorized,
executed and delivered by or on behalf of the Selling Stockholders and is a
valid and binding agreement of the Selling Stockholders, enforceable against
each Selling Stockholder in accordance with its terms, except as enforcement
hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.
(b) Each of the Custody Agreements and Powers of Attorney
(each, a "Custody Agreement and Power of Attorney") signed by (i) each Selling
Stockholder, (ii) the Company, as custodian (in such capacity, the "Custodian"),
and (iii) [_________], as the Selling Stockholders' attorney-in-fact (in such
capacity, the "Attorney-In-Fact"), has been duly and validly authorized,
executed and delivered by each Selling Stockholder and is a valid and binding
agreement of each Selling Stockholder, enforceable against it, him or her in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
Each Selling Stockholder agrees that the Selling Stockholder
Shares and Additional Shares, if any, to be sold by each Selling Stockholder on
deposit with the Custodian are subject to the interests of the Underwriters,
that the arrangements made for such custody are to that extent irrevocable, and
that the obligations of each Selling Stockholder hereunder shall not be
terminated, except as provided in this Agreement or in the Custody Agreement and
Power of Attorney, by any act of the Selling Stockholder, by operation of law,
by death or incapacity of such Selling Stockholder or by the occurrence of any
other event. If a Selling Stockholder should die or become incapacitated, or if
any other event should occur, before the delivery of the Selling Stockholder
Shares and Additional Shares, if any, to be sold by a Selling Stockholder
hereunder, the documents evidencing the Selling Stockholder Shares or Additional
Shares, if any, to be sold by such Selling Stockholder then on deposit with the
Custodian shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such death, incapacity or other event had not
occurred, regardless of whether or not the Custodian shall have received notice
thereof.
(c) Each Selling Stockholder is the lawful owner of the Shares
proposed to be sold by such Selling Stockholder hereunder and upon sale and
delivery of, and payment for, such Shares as provided herein, each Selling
Stockholder will convey to the Underwriters good and marketable title to such
Shares, free and clear of all liens, charges, encumbrances, equities, claims and
security interests whatsoever. Certificates for all of the Shares to be sold by
such Selling Stockholder pursuant to this Agreement, in suitable form for
transfer by delivery or accompanied by duly executed instruments of
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transfer or assignment in blank with signatures guaranteed, have been placed in
custody with the Custodian with irrevocable conditional instructions to deliver
such Shares to the Underwriters pursuant to this Agreement.
(d) Each Selling Stockholder has good and valid title to all
of the Shares which may be sold by such Selling Stockholder pursuant to this
Agreement on such date and the legal right and power and capacity, and all
authorizations and approvals required by law to enter into this Agreement and
the applicable Custody Agreement and Power of Attorney, to sell, transfer and
deliver all of the Shares which may be sold by such Selling Stockholder pursuant
to this Agreement and to comply with its, his or her other obligations hereunder
and thereunder.
(e) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Selling Stockholders of this Agreement and the consummation
by the Selling Stockholders of the transactions contemplated herein, except (i)
such as may have been obtained under the Securities Act, (ii) such as may be
required under the state securities laws or the blue sky laws or any
jurisdiction in connection with the purchase and distribution of the Shares by
the Underwriters and (iii) such other approvals as have been obtained.
(f) The execution, delivery and performance of this Agreement,
the Power of Attorney and the Custody Agreement by such Selling Stockholder and
the consummation by such Selling Stockholder of the transactions contemplated
hereby and thereby or the fulfillment of the terms hereof by the Selling
Stockholders will not conflict with, result in a breach or violation of, or
constitute a default under any law or the terms of any indenture or other
agreement or instrument to which any Selling Stockholder is party or bound, or
to which any of the property or assets of such Selling Stockholder is subject,
nor will such actions result in any violation of the provisions of the charter
or bylaws or certificate of formation or partnership agreement or the articles
of partnership, as applicable, of the Selling Stockholder or, any judgment,
order or decree applicable to any Selling Stockholder or any court or regulatory
body, administrative agency, governmental body or arbitrator having jurisdiction
over any Selling Stockholder.
(g) None of the Selling Stockholders has any registration or
other similar rights to have any equity or debt securities registered for sale
by the Company under the Registration Statement or included in the offering of
the Shares, except for such rights as have been waived or which are described in
the Registration Statement and the Prospectus.
(h) The Selling Stockholders do not own any warrants, options
or similar rights to acquire, and do not have any right or arrangement to
acquire, any capital stock, right, warrants, options or other securities from
the Company, other than those described in the Registration Statement and the
Prospectus.
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(i) All information furnished by or on behalf of the Selling
Stockholders in writing for use in the Registration Statement and Prospectus is
true, correct, and complete in all material respects and does not and will not
contain any untrue statement of a material fact; provided that this
representation and warranty is made only as to information contained in the
Registration Statement or the Prospectus under the caption "Principal and
Selling Stockholders" and relating to such Selling Stockholder.
(j) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has constituted
or which might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
(k) The Selling Stockholders have not distributed and will not
distribute, prior to the later of the Additional Closing Date, if any, and the
completion of the Underwriters' distribution of the Shares, any offering
material in connection with the offering and sale of the Shares by the Selling
Stockholders other than a Preliminary Prospectus, the Prospectus or the
Registration Statement.
(l) The representations and warranties of the Selling
Stockholders in the respective Custody Agreements and Powers of Attorney are and
will be true and correct. Any certificate signed by or on behalf of any Selling
Stockholder and delivered to the Representatives or to Underwriters' Counsel
shall be deemed to be a representation and warranty by such Selling Stockholder
to each Underwriter as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, each of the Company and the Selling Stockholders agrees to sell to
the Underwriters and the Underwriters, severally and not jointly, agree to
purchase from each of the Company and the Selling Stockholders, at a purchase
price per share of $[____], the number of Firm Shares set forth opposite the
respective names of the Underwriters in Schedule I hereto plus any additional
number of Firm Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
(b) In addition, on the basis of the representations,
warranties, covenants contained herein, but subject to the terms and conditions
set forth herein, the Selling Stockholders grant to the Underwriters, severally
and not jointly, the option to purchase up to 1,875,000 Additional Shares at the
same purchase price per share to be paid by the Underwriters to the Company and
the Selling Stockholders for the Firm Shares as set forth in this Section 3, for
the sole purpose of covering over-allotments in the sale of Firm Shares by the
Underwriters. This option may be exercised one time, in whole or in part, on or
before the thirtieth day following the date of the Prospectus, by written notice
by you to the Company and the Selling Stockholders. Such notice shall set
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forth the aggregate number of Additional Shares as to which the option is being
exercised and the date and time, as reasonably determined by you, when the
Additional Shares are to be delivered (such date and time being herein sometimes
referred to as the "Additional Closing Date"); provided, however, that the
Additional Closing Date shall not be earlier than the Closing Date or earlier
than the second full business day after the date on which the option shall have
been exercised nor later than the eighth full business day after the date on
which the option shall have been exercised (unless such time and date are
postponed in accordance with the provisions of Section 10 hereof). Certificates
for the Additional Shares shall be registered in such name or names and in such
authorized denominations as you may request in writing at least two full
business days prior to the Additional Closing Date. The Company will permit you
to examine and package such certificates for delivery at least one full business
day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter shall
be the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto (or such number increased as set forth
in Section 10 hereof) bears to the total number of Firm Shares, subject,
however, to such adjustments to eliminate any fractional shares as Bear, Xxxxxxx
& Co. Inc. in its sole discretion shall make.
If the Underwriters exercise their option under this Section 3(b) to
purchase less than all of the Additional Shares remaining, then the number of
Additional Shares to be sold to the Underwriters by each of the Selling
Stockholders shall be the number which bears the same ratio to the aggregate
number of Additional Shares being purchased as the number of Additional Shares
set forth opposite the name of such Selling Stockholder in Schedule II hereto
bears to the total number of Additional Shares, subject however, to such
adjustments to eliminate any fractional shares as Bear, Xxxxxxx & Co. Inc. in
its sole discretion shall make.
(c) Payment of the purchase price for, and delivery of
certificates for, the Shares shall be made at the office of Paul, Hastings,
Xxxxxxxx & Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
("Underwriters' Counsel") or at such other place as shall be agreed upon by
Bear, Xxxxxxx & Co. Inc., Xxxxxxx Xxxxx & Co. and the Company, at 10:00 A.M.,
New York City time on the third or fourth business day (as permitted under
Rule 15c6-1 under the Exchange Act) (unless postponed in accordance with the
provisions of Section 10 hereof) following the date of the effectiveness of
the Registration Statement (or, if the Company has elected to rely upon Rule
430A of the Regulations, the third or fourth business day (as permitted under
Rule 15c6-1 under the Exchange Act) after the determination of the public
offering price of the Shares), or such other time not later than ten business
days after such date as shall be agreed upon by Bear, Xxxxxxx & Co. Inc.,
Xxxxxxx Xxxxx & Co. and the Company (such time and date of payment and
delivery being herein called the "Closing Date").
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(d) Payment for the Shares shall be made to or upon the order
of the Company, and with respect to the Shares sold by the Selling Stockholders,
the Selling Stockholders, by wire transfer in Federal (same day) funds to the
Company and the Selling Stockholders upon delivery of certificates for the
Shares to you through the facilities of The Depository Trust Company for the
respective accounts of the several Underwriters against receipt therefor signed
by you. The Custodian is authorized to deduct the amount payable by each Selling
Stockholder under Section 5B(b) hereof from the proceeds to the Selling
Stockholders hereunder and to hold such amounts for the account of the Selling
Stockholders with the Custodian under the Custody Agreement and Power of
Attorney. Certificates for the Shares to be delivered to you shall be registered
in such name or names and shall be in such denominations as you may request at
least one business day before the Closing Date. The Company will permit you to
examine and package such certificates for delivery at least one full business
day prior to the Closing Date.
(e) The Company and the Selling Stockholders hereby confirm
their engagement of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxx
Xxxxx") as, and Xxxxxxx Xxxxx hereby confirms its agreement with the Company and
the Selling Stockholders to render services as a "qualified independent
underwriter" within the meaning of Rule 2720 of the Conduct Rules of the NASD
with respect to the offering and sale of the Shares. Xxxxxxx Xxxxx, solely in
its capacity as qualified independent underwriter and not otherwise, is referred
to herein as the "QIU."
4. Offering. Upon your authorization of the release of the Firm
Shares, the Underwriters propose to offer the Shares for sale to the public upon
the terms and conditions set forth in the Prospectus.
5. Covenants of the Company; Covenants of the Selling
Stockholders. (A) The Company covenants and agrees with each of the Underwriters
that:
(a) The Registration Statement and any amendments thereto have
become effective, and if Rule 430A is used or the filing of the Prospectus is
otherwise required under Rule 424(b), or Rule 434, the Company will file the
Prospectus (properly completed if Rule 430A has been used) pursuant to Rule
424(b) within the prescribed time period and will provide evidence satisfactory
to you of such timely filing. If the Company elects to rely on Rule 434, the
Company will prepare and file a Term Sheet that complies with the requirements
of Rule 434 and provide the Underwriters with copies of such filings prior to
their use.
The Company will notify you immediately (and, if requested by you,
will confirm such notice in writing) (i) when the Registration Statement and any
amendments thereto become effective; (ii) of any request by the Commission for
any amendment of or supplement to the Registration Statement or the Prospectus
or for any additional information; (iii) of the Company's intention to file or
prepare any amendments to the
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Registration Statement (including pursuant to Rule 462(b)), the Term Sheet or
any supplement, revision or amendment to the Registration Statement or the
Prospectus; (iv) of the mailing or the delivery to the Commission for filing of
any amendment of or supplement to the Registration Statement or the Prospectus;
(v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto or of the initiation, or the threatening, of any proceedings therefor,
it being understood that the Company shall make every reasonable effort to avoid
the issuance of any such stop order; (vi) of the receipt of any comments from
the Commission; and (vii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement
or any amendment of or supplement to the Prospectus (including the prospectus
required to be filed pursuant to Rule 424(b) or Rule 434) that differs from the
prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration Statement to
which you shall reasonably object in writing after being timely furnished in
advance a copy thereof.
(b) The Company shall comply with the Securities Act and the
Exchange Act to permit completion of the distribution as contemplated in this
Agreement, the Registration Statement and the Prospectus. If at any time when a
prospectus relating to the Shares is required to be delivered under the
Securities Act or the Exchange Act in connection with the sale of Shares, any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would, in the judgment of the Underwriters or the Company, include
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances existing at the time of delivery to the
purchaser, not misleading, or if it shall be necessary at any time to amend or
supplement the Prospectus or Registration Statement to comply with the
Securities Act or the Rules and Regulations, the Company will notify you
promptly and prepare and file with the Commission, subject to the second
paragraph of Section 5(A)(a) hereof, an appropriate amendment or supplement (in
form and substance satisfactory to you) which will correct such statement or
omission or which will effect such compliance and will use its best efforts to
have any amendment to the Registration Statement declared effective as soon as
possible.
(c) The Company will promptly deliver to each of the
Representatives and Underwriters' Counsel a signed copy of the Registration
Statement, including all consents and exhibits filed therewith and all
amendments thereto, and the Company will promptly deliver to each of the
Underwriters such number of copies of any Preliminary Prospectus, the
Prospectus, the Registration Statement, and all amendments of and supplements to
such documents, if any, as you may reasonably request. Prior to
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10:00 A.M., New York time, on the second business day after the date of this
Agreement and from time to time thereafter the Company will furnish the
Underwriters with copies of the Prospectus in New York City in such quantities
as you may reasonably request.
(d) The Company shall promptly deliver to each of the
Underwriters and to Underwriters' Counsel copies of the Preliminary Prospectus,
and the Company consents to the use and delivery of the Preliminary Prospectus
by the Underwriters in accordance with Rule 430 and Section 5(b) of the
Securities Act. The Company shall also furnish to each of the Underwriters
copies of the final Prospectus as requested by any of the Underwriters.
(e) The Company will use its best efforts, in cooperation with
you, at or prior to the time of effectiveness of the Registration Statement, to
qualify the Shares for offering and sale under the securities laws relating to
the offering or sale of the Shares of such jurisdictions (domestic or foreign)
as you may designate and to maintain such qualification in effect for so long as
required for the distribution thereof; except that in no event shall the Company
be obligated in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process.
(f) The Company will make generally available to its security
holders and to the Underwriters as soon as practicable, but in any event not
later than eighteen months after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Securities Act), an earnings
statement of the Company and the Subsidiary (which need not be audited)
complying with Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158).
(g) During the period of 180 days from the date of the
Prospectus, the Company will not, directly or indirectly, without your prior
written consent, issue, offer, sell, agree to offer or sell, solicit offers to
purchase, grant any call option or purchase any put option with respect to,
pledge, borrow or otherwise dispose of, make any short sale or maintain any
short position, establish or increase a "put equivalent position" or liquidate
or decrease a "call equivalent position" (in each case within the meaning of
Section 16 of the Exchange Act, and all rules and regulations promulgated
thereunder), or otherwise enter into any swap, derivative transaction or other
transaction or arrangement that transfers to another, in whole or in part, any
of the economic consequences of ownership of the Common Stock (whether or not
such transaction is to be settled by delivery of Common Stock, other securities,
cash or other consideration) or otherwise dispose of, any Common Stock (or any
securities convertible into, exercisable or exchangeable for Common Stock) or
interest therein of the Company or of any of the Subsidiaries, and the Company
will obtain the undertaking of each of its officers and directors and such of
its stockholders as have been heretofore designated by you and listed on
Schedule II attached hereto not to engage in any of the aforementioned
transactions on their own behalf, other than (1) the Company's sale of Company
Shares
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hereunder and the Company's issuance of Common Stock upon (i) the 376.328-
for-one split of the Company's stock and non-voting common stock immediately
prior to Closing and (ii) the grant and exercise of options under, or the
issuance and sale of shares pursuant to, employee stock option plans in effect
upon the Closing, as described in the Registration Statement and (2) transfers
by such officers, directors and stockholders of any Common stock (i) to any
parents, mother-in-law or father-in-law, husband or wife, brother or sister,
sister-in-law or brother-in-law, son-in-law or daughter-in-law and children of
such officers, directors or stockholders or (ii) to a trust for the direct or
indirect benefit of such officer, director or stockholder, provided that any
such transferee, including the trustee of any such trust, agrees to be bound in
writing by the restrictions set forth herein and confirms in writing that it has
been subject to such restrictions since the date hereof, and provided further
that any such transfer shall not involve a disposition for value.
(h) During the period of three years from the effective date
of the Registration Statement, the Company will furnish to you copies of all
reports or other communications (financial or other) furnished to security
holders, and to deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the Commission or
any national securities exchange on which any class of securities of the Company
is listed; and (ii) such additional information concerning the business and
financial condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the extent
the accounts of the Company and the Subsidiary are consolidated in reports
furnished to its security holders generally or to the Commission).
(i) The Company will apply the net proceeds it receives from
the sale of the Company Shares as set forth under the caption "Use of Proceeds"
in the Prospectus.
(j) The Company will use its best efforts to effect and
maintain the listing of the Shares on the New York Stock Exchange.
(k) The Company, during the period when the Prospectus is
required to be delivered under the Securities Act or the Exchange Act, will file
all documents required to be filed with the Commission pursuant to the Exchange
Act within the time periods required by the Exchange Act and the rules and
regulations thereunder.
(l) The Company hereby agrees that it will ensure that any
Directed Shares required to be restricted by the NASD or the NASD rules from
sale, transfer, assignment, pledge or hypothecation for a period of three months
following the date of this Agreement will be so restricted. At the request of
the Underwriters, the Company will direct the transfer agent to place a stop
transfer restriction upon such securities for such period of time. Should the
Company release, or seek to release, from such restrictions any of the Directed
Shares, the Company agrees to reimburse the
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Underwriters for any reasonable expenses (including, without limitation, legal
expenses) they incur in connection with such release.
B. Each Selling Stockholder covenants and agrees with each
Underwriter to:
(a) deliver to the Representatives prior to the Closing Date,
a properly completed and executed United States Treasury Department Form W-8 (if
the Selling Stockholder is a non-United States Person) or Form W-9 (if the
Selling Stockholder is a United States Person);
(b) promptly notify the Company and the Representatives if, at
any time prior to the date on which the distribution of the Shares as
contemplated herein and in the Prospectus has been completed, as determined by
the Representatives, such Selling Stockholder has knowledge of the occurrence of
any event as a result of which the Prospectus or the Registration Statement, in
each case as then amended or supplemented, would include an untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(c) cooperate to the extent necessary to cause the
Registration Statement or any post-effective amendment thereto to become
effective at the earliest possible time and to do and perform all things to be
done and performed under this Agreement prior to the Closing Date and to satisfy
all conditions precedent to the delivery of the Shares pursuant to this
Agreement;
(d) pay or to cause to be paid all transfer taxes, stamp
duties and other similar taxes with respect to the Shares, if any, to be sold by
such Selling Stockholder; and
(e) deliver to Bear, Xxxxxxx & Co. Inc. and Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated on or prior to the date of this Agreement
each lock-up agreement referenced in Section 7(k) hereof.
6. Payment of Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
the Company and the Selling Stockholders hereby agree to pay all costs and
expenses incident to the performance of their respective obligations hereunder,
including the following: (i) all expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers and the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Securities Act; (ii)
the cost of producing any Agreement among Underwriters, this Agreement, the blue
sky memoranda, closing documents (including any compilations
-19-
thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the Shares; (iii) all expenses in connection with the
qualification of the Shares for offering and sale under state securities laws as
provided in Section 5(A)(e) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the blue sky survey; (iv) all fees and expenses in connection
with listing the Shares on the New York Stock Exchange; (v) all travel expenses
of the Company's officers and employees and any other expense of the Company
incurred in connection with attending or hosting meetings with prospective
purchasers of the Shares; (vi) any stock transfer taxes incurred in connection
with this Agreement or the Offering; (vii) the filing fees incident to, and the
fees and disbursements of counsel for the Underwriters in connection with,
securing any required review by the NASD of the terms of the sale of the Shares;
(viii) all costs and expenses of the Underwriters, including the reasonable fees
and disbursements of counsel for the Underwriters, in connection with matters
related to the Directed Shares; (ix) the fees and expenses of the QIU; and (x)
the fees of the Custodian and other fees and expenses related to the offering of
Shares by the Selling Stockholders. The Company also will pay or cause to be
paid: (i) the cost of preparing stock certificates; (ii) the cost and charges of
any transfer agent or registrar; and (iii) all other costs and expenses incident
to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section 6. It is understood, however, that
except as provided in this Section 6, and Sections 8 and 13 hereof, the
Underwriters will pay all of their own costs and expenses, including the
reasonable fees of their counsel, stock transfer taxes on resale of any of the
Shares by them, and any advertising expenses connected with any offers they may
make. Notwithstanding anything to the contrary in this Section 6, in the event
that this Agreement is terminated pursuant to Section 7 hereof, or subsequent to
a Material Adverse Change, the Company will pay all out-of pocket expenses of
the Underwriters incurred in connection herewith.
7. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Shares, as provided herein, shall
be subject to the accuracy of the representations and warranties of the Company
and the Selling Stockholders herein contained, as of the date hereof and as of
the Closing Date (for purposes of this Section 7 "Closing Date" shall refer to
the Closing Date for the Firm Shares and any Additional Closing Date, if
different, for the Additional Shares), to the absence from any certificates,
opinions, written statements or letters furnished to you or to Underwriters'
Counsel pursuant to this Section 7 of any misstatement or omission, to the
performance by the Company and the Selling Stockholders of their respective
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Registration Statement shall have become effective and
all necessary approvals from the New York Stock Exchange shall have been
received not later than, if pricing pursuant to Rule 430A: 5:30 P.M., New York
time, on the date of this Agreement or at such later time and date as shall have
been consented to in writing by you; if the Company shall have elected to rely
upon Rule 430A or Rule 434 of the
-20-
Regulations, the Prospectus shall have been filed with the Commission in a
timely fashion in accordance with Section 5(A)(a) hereof and a form of the
Prospectus containing information relating to the description of the Shares and
the method of distribution and similar matters shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period; and, at or
prior to the Closing Date no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof shall have been
issued and no proceedings therefor shall have been initiated or threatened by
the Commission.
(b) At the Closing Date, you shall have received (i) the
written opinion of Xxxxxxxx & Xxxxx, counsel for the Company, dated the Closing
Date addressed to the Underwriters in a form reasonably satisfactory to
Underwriters' Counsel; and (ii) the written opinion of Xxxxxxxx & Xxxxx, counsel
for the Selling Stockholders, dated the Closing Date addressed to the
Underwriters in a form reasonably satisfactory to Underwriters' Counsel.
(c) All proceedings taken in connection with the sale of the
Firm Shares and the Additional Shares as herein contemplated shall be
satisfactory in form and substance to you and to Underwriters' Counsel, and the
Representatives shall have received from Underwriters' Counsel a favorable
opinion, dated as of the Closing Date with respect to the issuance and sale of
the Shares, the Registration Statement and the Prospectus and such other related
matters as you may require, and the Company shall have furnished to
Underwriters' Counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(d) At the Closing Date, you shall have received a certificate
of the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date, to the effect that (i) the condition set forth in subsection
(a) of this Section 7 has been satisfied, (ii) as of the date hereof and as of
the Closing Date the representations and warranties of the Company set forth in
Section 1 hereof are accurate, (iii) as of the Closing Date all agreements,
conditions and obligations of the Company to be performed or complied with
hereunder on or prior thereto have been duly performed or complied with, (iv)
the Company and the Subsidiary have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, (v) subsequent
to the respective dates as of which information is given in the Registration
Statement and the Prospectus there has not been any Material Adverse Change, and
(vi) no stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereof has been issued and no proceedings therefor
have been initiated or threatened by the Commission.
(e) At the time this Agreement is executed and at the Closing
Date, you shall have received a comfort letter, from Deloitte & Touche LLP,
independent
-21-
public accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date addressed to the Underwriters and in form
and substance satisfactory to the Underwriters and Underwriters' Counsel.
(f) You shall have also received from Deloitte & Touche LLP, a
letter stating that the Company's system of internal accounting controls taken
as a whole is sufficient to meet the broad objectives of internal accounting
control insofar as those objectives pertain to the prevention or detection of
errors or irregularities in amounts that would be material in relation to the
financial statements of the Company and the Subsidiary.
(g) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any change in the capital
stock or long-term debt of the Company or the Subsidiary or any change, or any
development involving a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business, properties or
prospects of the Company and the Subsidiary taken as a whole, including, without
limitation, the occurrence of a fire, flood, explosion or other calamity at any
of the properties owned or leased by the Company or the Subsidiary, the effect
of which, in any such case described above, is, in the judgment of the
Underwriters, so material and adverse as to make it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares on the terms
and in the manner contemplated in the Prospectus (exclusive of any supplement).
(h) You shall have received a lock-up agreement from each
person listed on Schedule II hereto substantially in the form attached hereto as
Annex I.
(i) At the Closing Date, the Shares shall have been approved
for listing on the New York Stock Exchange.
(j) The NASD shall have confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the Underwriting
terms and arrangements.
(k) At the Closing Date, you shall have received a certificate
of an authorized representative of the Selling Stockholders, dated the Closing
Date, to the effect that the representations and warranties of the Selling
Stockholders set forth in Section 2 hereof are accurate and that each of the
Selling Stockholders has complied with all agreements and satisfied all
conditions on his or her part to be performed or satisfied hereunder at or prior
to the Closing Date.
(l) The Company shall have furnished the Underwriters and
Underwriters' Counsel with such other certificates, opinions or other documents
as they may have reasonably requested.
-22-
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 7 shall not be reasonably
satisfactory in form and substance to you and to Underwriters' Counsel, all
obligations of the Underwriters hereunder may be cancelled by you at, or at any
time prior to, the Closing Date, and the obligations of the Underwriters to
purchase the Additional Shares may be cancelled by you at, or at any time prior
to, the Additional Closing Date. Notice of such cancellation shall be given to
the Company in writing, or by telephone. Any such telephone notice shall be
confirmed promptly thereafter in writing.
8. Indemnification.
(a) (i) The Company shall indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act
against any and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement for the registration of the Shares, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the Company will not be liable
in any such case to the extent but only to the extent that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through you
expressly for use therein. This indemnity agreement will be in addition to any
liability which the Company may otherwise have including under this Agreement.
(ii) In connection with the offer and sale of the Directed Shares, the Company
agrees, promptly upon a request in writing, to indemnify and hold harmless the
Underwriters from and against any and all losses, liabilities, claims, damages
and expenses incurred by it as a result of (i) the failure of the Direct Shares
purchasers to pay for and accept delivery of the Directed Shares which, by the
end of the day following the date of this Agreement, were subject to a properly
confirmed agreement to purchase such Directed Shares; (ii) the failure of any
Directed Shares purchasers that are also employees of the Company to purchase by
the end of the first day after the date of this Agreement any Directed Shares
that were allocated to such
-23-
employees; or (iii) and any applicable laws or regulations of foreign
jurisdictions in which the Prospectus is distributed in connection with the
offer and sale of any of the Directed Shares.
(b) Each Selling Stockholder shall, severally and not jointly,
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act against any and all losses, liabilities,
claims, damages and expenses whatsoever as incurred (including but not limited
to reasonable attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact relating to such Selling Stockholder included in
the Registration Statement for the registration of the Shares, as originally
filed or any amendment thereof, or any related Preliminary Prospectus or the
Prospectus, or in any supplement thereto or amendment thereof or arise out of or
are based upon the omission or alleged omission to state therein a material fact
relating to such Selling Stockholder required to be stated therein or necessary
to make the statements therein not misleading provided, however, that such
Selling Stockholder will not be liable in any such case to the extent but only
to the extent that any such loss, liability, claim, damage or expense arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company expressly for use therein, it being
agreed that the only such information is that which is included under the
heading "Principal and Selling Stockholders" which relates to such Selling
Stockholder; and provided, further, that in no such case shall any Selling
Stockholder be liable or responsible for any amount in excess of the proceeds
(net of the underwriting discount) applicable to the Shares sold by such Selling
Stockholder pursuant to the transactions contemplated hereby. This indemnity
agreement will be in addition to any liability which any Selling Stockholder may
otherwise have including under this Agreement.
(c) In addition to and without limitation of the Company's and
each Selling Stockholder's obligation to indemnify the QIU as an underwriter,
the Company and each of the Selling Stockholders also agrees to indemnify and
hold harmless the QIU within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses,
liabilities, claims, damages and expenses whatsoever as incurred as a result of
the QIU's participation as a "qualified independent underwriter" within the
meaning of Rule 2720 of the Conduct Rules of the NASD in connection with the
offering of the Shares; provided that in no such case shall any Selling
Stockholder be liable or responsible for any amount in excess of the proceeds
(net of the underwriting discount) applicable to the Shares sold by such Selling
-24-
stockholder pursuant to the transactions contemplated hereby. This indemnity
agreement will be in addition to any liability which any Selling Stockholder may
otherwise have including under this Agreement.
(d) Each Underwriter severally, and not jointly, shall
indemnify and hold harmless the Company, each Selling Stockholder, each of the
directors of the Company, each of the officers of the Company who shall have
signed the Registration Statement, and each other person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, against any losses, liabilities, claims, damages and
expenses whatsoever as incurred (including but not limited to reasonable
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim, and any and all amounts paid in settlement of any claim or litigation),
joint or several, to which they or any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the registration of
the Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein; provided,
however, that in no case shall any Underwriter be liable or responsible for any
amount in excess of the underwriting discount applicable to the Shares purchased
by such Underwriter hereunder. This indemnity will be in addition to any
liability which any Underwriter may otherwise have including under this
Agreement. The Company acknowledges that the statements set forth in the [__]
paragraphs on the cover page and in the [__] paragraphs under the caption
"Underwriting" in the Prospectus constitute the only information furnished in
writing by or on behalf of any Underwriter expressly for use in the Registration
Statement relating to the Shares as originally filed or in any amendment
thereof, any related preliminary prospectus or the Prospectus or in any
amendment thereof or supplement thereto, as the case may be.
(e) Promptly after receipt by an indemnified party under
subsection (a), (b), (c) or (d) above of notice of any claims or the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection,
notify each party against whom indemnification is to be sought in writing of the
claim or the commencement thereof (but the failure so to notify an indemnifying
party shall not relieve the indemnifying party from any liability which it may
have under this Section 8 to the extent that it is not
-25-
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability that such indemnifying party may have otherwise than on
account of the indemnity agreement hereunder). In case any such claim or action
is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, an indemnifying party may participate at its own
expense in the defense of such action, and to the extent it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party; provided, however, that counsel to the
indemnifying party shall not (except with the written consent of the indemnified
party) also be counsel to the indemnified party. Notwithstanding the foregoing,
the indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action,
(iii) the indemnifying party does not diligently defend the action after
assumption of the defense, or (iv) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties; and provided, further, that if indemnity is sought
pursuant to Section 8(c) hereof, then, in addition to the fees and expenses of
such counsel for the indemnified parties, the indemnifying party shall be liable
for the reasonable fees and expenses of not more than one counsel (in addition
to any local counsel) separate from its own counsel and that of the other
indemnified parties for the QIU in its capacity as a "qualified independent
underwriter" and all persons, if any, who control the QIU within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances if, in
the reasonable judgment of the QIU, there may exist a conflict of interest
between the QIU and the other indemnified parties. Any such separate counsel for
the QIU and such control persons of the QIU shall be designated in writing by
the QIU. No indemnifying party shall, without the prior written consent of the
indemnified parties, effect any settlement or compromise of, or consent to the
entry of judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could have
been sought under Section 8 or 9 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (x) (i) includes an unconditional release of the indemnified party from
all liability arising out of such litigation, investigation, proceeding or
claim, and (ii) does not include a statement as to, or an admission of, fault,
-26-
culpability or a failure to act, by or on behalf of the indemnified party, and
(y) the indemnifying party reaffirms its obligations pursuant to this Agreement.
9. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 8 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, each indemnifying
party shall contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provision (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company and each Selling Stockholder,
any contribution received by the Company and/or each Selling Stockholder from
persons, other than the Underwriters, who may also be liable for contribution,
including persons who control the Company and/or the Selling Stockholder within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, officers of the Company who signed the Registration Statement and directors
of the Company) as incurred to which the Company, each Selling Stockholder and
one or more of the Underwriters may be subject, in such proportions as are
appropriate to reflect the relative benefits received by the Company, each
Selling Stockholder and the Underwriters under this Agreement or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 8 hereof, in such proportions as are appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company, each Selling Stockholder and the Underwriters in connection with
the statements or omissions or in connection with the violation of any
applicable laws or regulations of foreign jurisdictions where Directed Shares
have been offered which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, each Selling Stockholder
and the Underwriters shall be deemed to be in the same proportion as (x) the
total proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company and such Selling
Stockholder, respectively, bear to (y) the underwriting discount received by the
respective Underwriters, respectively, in each case as set forth in the table on
the cover page of the Prospectus.
The relative fault of each of the Company, any Selling Stockholder and of
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Selling Stockholder or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission or any violation of any
-27-
applicable laws or regulation of foreign jurisdictions where Directed Shares
have been offered.
The Company, the Selling Stockholders and the Underwriters agree that
Xxxxxxx Xxxxx & Co. will not receive any additional benefits hereunder for
serving as the QIU in connection with the offering and sale of the Shares,
except as provided in Section 8(d).
The Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
9. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 9 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 9, (i) no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Shares are underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement, and (ii) no person guilty of fraudulent
misrepresentation (within in 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. For purposes of this Section 9, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, 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, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company and any Selling Stockholder, as
applicable, subject in each case to clauses (i) and (ii) of the immediately
preceding sentence. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties, notify each party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have under this Section 9 or otherwise. The obligations of the
Underwriters to contribute pursuant to this Section 9 are several in proportion
to the respective number of Shares purchased by each of the Underwriters
hereunder and not joint.
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10. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such default relates
do not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, the Firm Shares or Additional Shares to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
the respective proportions which the numbers of Firm Shares set forth opposite
their respective names in Schedule I hereto bear to the aggregate number of Firm
Shares set forth opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of
the Firm Shares or Additional Shares, as the case may be, you may in your
discretion arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within five calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 10, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Selling Stockholders to sell the Additional Shares shall thereupon
terminate, without liability on the part of the Company or the Selling
Stockholders with respect thereto (except in each case as provided in Sections
6, 8(a) and 9 hereof with respect to the Company and Sections 8(b) and 9 hereof
with respect to the Selling Stockholders) or the Underwriters, but nothing in
this Agreement shall relieve a defaulting Underwriter or Underwriters of its or
their liability, if any, to the other Underwriters and the Company and the
Selling Stockholders for damages occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to
which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Company shall have the right to postpone the Closing Date or
Additional Closing Date, as the case may be for a period, not exceeding five
business days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the opinion
of Underwriters' Counsel, may thereby be made necessary or advisable. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 10 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares and Additional Shares.
11. Default by Selling Stockholders.
-29-
(a) If any Selling Stockholder shall fail to sell and deliver
the number of Shares which such Selling Stockholder is obligated to sell
hereunder, and the remaining Selling Stockholders do not exercise the right
hereby granted to increase, pro rata or otherwise, the number of Shares to be
sold by them hereunder to the total number to be sold by all Selling
Stockholders as set forth in Schedule II hereto, then the Underwriters may, at
option of the Representatives, by notice from the Representatives to the Company
and the non-defaulting Selling Stockholder(s), either (a) terminate this
Agreement without any liability on the fault of any non-defaulting party except
that the provisions of Sections 6, 8, 9 and 12 shall remain in full force and
effect or (b) elect to purchase the Shares which the non-defaulting Selling
Stockholder(s) have agreed to sell hereunder. No action taken pursuant to this
Section 11 shall relieve any Selling Stockholder so defaulting from liability,
if any, in respect of such default.
(b) In the event that the Firm Shares or Additional Shares to
which the default relates are to be sold by the non-defaulting Underwriters, you
or the Company shall have the right to postpone the Closing Date or Additional
Closing Date, as the case may be for a period, not exceeding five business days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the opinion
of Underwriters' Counsel, may thereby be made necessary or advisable.
12. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Underwriters, and the Company and
the Selling Stockholders contained in this Agreement or in certificates of
officers of the Company or any Subsidiary submitted hereto or thereto, including
the agreements contained in Section 6, the indemnity agreements contained in
Section 8 and the contribution agreements contained in Section 9, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof or by or on
behalf of the Company or the Selling Stockholders, any of their officers and
directors or any controlling person thereof, and shall survive delivery of and
payment for the Shares to and by the Underwriters. The representations contained
in Section 1 and the agreements contained in Sections 6, 8, 9, 12 and 13(d)
hereof shall survive the termination of this Agreement, including termination
pursuant to Section 10, 11 or 13 hereof.
13. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the later of
when (i) you and the Company shall have received notification of the
effectiveness of the Registration Statement or (ii) the execution of this
Agreement. If either the public offering price or the purchase price per Share
has not been agreed upon prior to 5:00 P.M., New York City time, on the fifth
full business day after the Registration Statement shall have become effective,
this Agreement shall thereupon terminate without liability to
-30-
the Company, the Selling Stockholders or the Underwriters except as herein
expressly provided. Until this Agreement becomes effective as aforesaid, it may
be terminated by the Company by notifying you or by you notifying the Company.
Notwithstanding the foregoing, the provisions of this Section 13 and of Sections
1, 6, 8 and 9 hereof shall at all times be in full force and effect.
(b) You shall have the right to terminate this Agreement, by
notice to the Company and the Selling Stockholders, at any time prior to the
Closing Date the obligations of the Underwriters to purchase the Additional
Shares at any time prior to the Additional Closing Date, as the case may be, if
(A) any domestic or international event or act or occurrence has materially
disrupted, or in your opinion will in the immediate future materially disrupt,
the market for the Company's securities or securities in general; or (B) if
trading on the New York Stock Exchange or on the American Stock Exchange shall
have been suspended or made subject to material limitations, or minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices
for securities shall have been required, on the New York Stock Exchange or on
the American Stock Exchange by the New York Stock Exchange or by the American
Stock Exchange or by order of the Commission or any other governmental authority
having jurisdiction; or (C) if a banking moratorium has been declared by any
state or federal authority or if any material disruption in commercial banking
or securities settlement or clearance services shall have occurred; or (D) any
downgrading shall have occurred in the Company's corporate credit rating or the
rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization" as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act or if any such organization
shall have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities; or (E) if there has been since the time of the execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus (excluding any supplement thereto), any Material Adverse Effect, or
(F) (i) if there shall have occurred any outbreak or escalation of hostilities
or acts of terrorism involving the United States or there is a declaration of a
national emergency or war by the United States or (ii) if there shall have been
any other calamity or crisis or any change in political, financial or economic
conditions if the effect of any such event in (i) or (ii) as in your judgment
makes it impracticable or inadvisable to proceed with the offering, sale and
delivery of the Firm Shares or the Additional Shares, as the case may be, on the
terms and in the manner contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 13
shall be in writing.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 13(a) hereof or (ii) Section 10(b)), or if the sale of the
Shares provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth
-31-
herein is not satisfied or because of any refusal, inability or failure on the
part of the Company to perform any agreement herein or comply with any provision
hereof, the Company will, subject to demand by you, reimburse the Underwriters
for all out-of-pocket expenses (including the fees and expenses of their
counsel), incurred by the Underwriters in connection herewith.
14. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing, and:
(a) if sent to any Underwriter, shall be mailed, delivered, or
faxed and confirmed in writing, to such Underwriter c/o Bear, Xxxxxxx & Co.
Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Capital
Markets and to Xxxxxxx Xxxxx & Co., [______________________________________],
New York, NY [_____], Attention: [_________________], with a copy to Paul,
Hastings, Xxxxxxxx & Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
(b) if sent to the Company or the Selling Stockholders, shall
be mailed, delivered, or faxed and confirmed in writing to Company at the
addresses set forth in the Registration Statement, Attention: Xxxxxx X. Xxxxxx,
with a copy to Xxxxxxxx X. Xxxxx, Citicorp Center, 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, XX 00000, Attention: Xxxxxx X. Xxxxx, Esq.;
provided, however, that any notice to an Underwriter pursuant to Section 8 shall
be delivered or sent by mail or facsimile transmission to such Underwriter at
its address set forth in its acceptance facsimile to you, which address will be
supplied to any other party hereto by you upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof.
15. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Underwriters, the Company, the Selling Stockholders
and the controlling persons, directors, officers, employees and agents referred
to in Sections 8 and 9 hereof, and their respective successors and assigns, and
no other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors, and said controlling persons, directors,
officers, employees, agents and their heirs and legal representatives, and it is
not for the benefit of any other person, firm or corporation. The term
"successors and assigns" shall not include a purchaser, in its capacity as such,
of Shares from any of the Underwriters.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
-32-
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be delivered by facsimile and shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
19. Time is of the Essence. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
[signature page follows]
-33-
If the foregoing correctly sets forth the understanding
between you and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us. It is understood that your acceptance of this letter on behalf of each of
the Underwriters is pursuant to the authority set forth in a form of Agreement
among Underwriters, the form of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
AEROPOSTALE, INC.
By:
----------------------------------------------
Xxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
Each of the Selling Stockholders:
By:
-------------------------------------------------
Name:
Title: Attorney-In-Fact for the Selling
Stockholders
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
By:
-------------------------------------------------
Name:
Title:
XXXXXXX LYNCH,
PIERCE, XXXXXX & XXXXX INCORPORATED
By:
-------------------------------------------------
Name:
Title:
On behalf of themselves and the other Underwriters named in Schedule I hereto.
-34-
SCHEDULE I
NAME OF UNDERWRITER NUMBER OF FIRM SHARES
TO BE PURCHASED
Bear, Xxxxxxx & Co. Inc....................................... ---------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ........... ---------------
Banc of America Securities.................................... ---------------
U.S. Bancorp Xxxxx Xxxxxxx ................................... ---------------
Wachovia Securities .......................................... ---------------
[Names of other Underwriters to come] ---------------
Total:..............................................
===============
I-1
SCHEDULE II
SELLING STOCKHOLDERS
NUMBER OF FIRM
NAME SHARES NUMBER OF ADDITIONAL SHARES TOTAL
Bear Xxxxxxx MB 1998-1999
Pre-Fund, LLC 8,276,640 954,048 9,230,688
Xxxxxx X. Xxxxxx 111,948 88,052 200,000
Xxxxxx Family 1999
Irrevocable GST Trust 224,339 176,452 400,791
Xxxxxxx X. Xxxxxx 100,754 79,246 180,000
Xxxxx X. Xxxxxxx 219,156 172,374 391,530
Xxxx X. Xxxxx 312,500 245,794 558,294
SI-MSSD, LLC 1,379,663 159,034 1,538,697
---------- --------- ----------
Total: 10,625,000 1,875,000 12,500,000
I-1
SCHEDULE III
NAMES OF STOCKHOLDERS SUBJECT TO THE LOCK-UP PROVISION
Bear Xxxxxxx MB 1998-1999 Pre-Fund, LLC
SI-MSSD, LLC
Xxxxx Xxxxxxxx
Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx X. Xxxxxxxxxx
Xxxxx Xxxxx
Xxxxxxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxxx Xxxxxxx
Xxxxxx Family 1999 Irrevocable GST Trust
Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxxx
Xxxx X. Xxxxx
Xxxxx X. Xxxxx
Xxxx Xxxxx (Trust)
Xxxx Xxxxxxx
Xxx Xxxxx
Xxxxxxx Xxxxx-Xxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxx
Xxxx Xxxxx
Xxxx Xxxxxxxxxx
Xxxx Xxxxxxxxx/Xxxxxxxxxx
Xxxxx Xxxxx
Xxxxxx Xxxxxxxx
XX-1
ANNEX I
_______________ __, 2002
BEAR, XXXXXXX & CO. INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
as Representatives
of the several Underwriters
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Equity Capital Markets
Aeropostale, Inc. Lock-Up Agreement
Ladies and Gentlemen:
We refer to the proposed Underwriting Agreement (the "Underwriting
Agreement"), between Aeropostale, Inc., a Delaware corporation (the "Company"),
and you as representatives of the Underwriters named therein (the
"Underwriters") relating to an underwritten public offering (the "Offering") of
common stock, $.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned hereby agrees that, without the prior
written consent of Bear, Xxxxxxx & Co. Inc. and Xxxxxxx Xxxxx & Co., the
undersigned will not, directly or indirectly, during the period from the date
hereof until one hundred eighty (180) days from the date of the final prospectus
for the Offering (the "Lock-Up Period"), (i) offer, sell, agree to offer or
sell, solicit offers to purchase, grant any call option or purchase any put
option with respect to, pledge, borrow or otherwise dispose of, or (ii) make any
short sale or maintain any short position, establish or increase a "put
equivalent position" or liquidate or decrease a "call equivalent position" with
respect to, any Relevant Security (in each case within the meaning of Section 16
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder), or otherwise enter into any swap,
derivative transaction or other transaction or arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
any Relevant Security (whether or not such transaction is to be settled by
delivery of Relevant Securities, other securities, cash or other consideration)
other than any transfer of Relevant Securities to any parents, mother-in-law or
father-in-law, husband or wife, brother or sister, sister-in-law or
brother-in-law, son-in-law or daughter-in-law and children of the undersigned or
to a trust for the direct or indirect benefit of the undersigned, PROVIDED that
any such transferee, including the trustee of any such trust agrees to be bound
in writing by the restrictions set forth herein, and provided that any such
transfer shall not involve a disposition for value. As used herein "Relevant
Security" means the Common Stock, any other equity security of the Company or
the
Subsidiary and any security convertible into, or exercisable or exchangeable
for, any Common Stock or other such equity security.
The undersigned hereby further agrees that, during the Lock-up Period,
the undersigned (x) will not file or participate in the filing with the
Securities and Exchange Commission of any registration statement, or circulate
or participate in the circulation of any preliminary or final prospectus or
other disclosure document with respect to any proposed offering or sale of a
Relevant Security and (y) will not exercise any rights the undersigned may have
to require registration with the Securities and Exchange Commission of any
proposed offering or sale of a Relevant Security.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this letter agreement and that this
letter agreement constitutes the legal, valid and binding obligation of the
undersigned, enforceable in accordance with its terms. Upon request, the
undersigned will execute any additional documents necessary in connection with
enforcement hereof. Any obligations of the undersigned shall be binding upon the
successors and assigns of the undersigned from the date first above written.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York. Delivery of a signed copy of this letter
by telecopier or facsimile transmission shall be effective as delivery of the
original hereof.
Very truly yours,
By: _______________________________
Print Name: _______________________
