Exhibit 1.1
2,100,000 Shares
NOODLE KIDOODLE, INC.
Common Stock
UNDERWRITING AGREEMENT
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[DATE]
PAINEWEBBER INCORPORATED
XXXXXX & XXXXXXX, INC.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
Noodle Kidoodle, Inc., a [New York] corporation (the "Company"),
and the persons named in Schedule I (the "Selling Shareholders") propose to
sell an aggregate of 2,100,000 shares (the "Firm Shares") of the Company's
Common Stock, $[.001] par value per share (the "Common Stock"), of which
2,000,000 shares are to be issued and sold by the Company and an aggregate
of 100,000 shares are to be sold by the Selling Shareholders in the
respective amounts set forth opposite their respective names in Schedule I,
in each case to you and to the other underwriters named in Schedule II
(collectively, the "Underwriters"), for whom you are acting as
representatives (the "Representatives"). The Company has also agreed to
grant to you and the other Underwriters an option (the "Option") to
purchase up to an additional 315,000 shares of Common Stock (the "Option
Shares") on the terms and for the purposes set forth in Section 1(b). The
Firm Shares and the Option Shares are hereinafter collectively referred to
as the "Shares."
The initial public offering price per share for the Shares and
the purchase price per share for the Shares to be paid by the several
Underwriters shall be agreed upon by the Company, the Selling Shareholders
and the Representatives, acting on behalf of the several Underwriters, and
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such agreement shall be set forth in a separate written instrument
substantially in the form of Exhibit A hereto (the "Price Determination
Agreement"). The Price Determination Agreement may take the form of an
exchange of any standard form of written telecommunication among the Com-
pany, the Selling Shareholders and the Representatives and shall specify
such applicable information as is indicated in Exhibit A hereto. The
offering of the Shares will be governed by this Agreement, as supplemented
by the Price Determination Agreement. From and after the date of the
execution and delivery of the Price Determination Agreement, this Agreement
shall be deemed to incorporate, and, unless the context otherwise
indicates, all references contained herein to "this Agreement" and to the
phrase "herein" shall be deemed to include the Price Determination
Agreement.
Each Selling Shareholder has executed and delivered a Custody
Agreement and a Power of Attorney in the form attached hereto as Exhibit B
(collectively, the "Agreement and Power of Attorney") pursuant to which
each Selling Shareholder has placed his Firm Shares in custody and
appointed the persons designated therein as a committee (the "Committee")
with authority to execute and deliver this Agreement on behalf of such
Selling Shareholder and to take certain other actions with respect thereto
and hereto.
The Company and the Selling Shareholders confirm as follows their
respective agreements with the Representatives and the several other Under-
writers.
1. Agreement to Sell and Purchase.
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(a) On the basis of the respective representations,
warranties and agreements of the Company and the Selling Shareholders
herein contained and subject to all the terms and conditions of this Agree-
ment, (i) the Company and each of the Selling Shareholders, severally and
not jointly, agree to sell to the several Underwriters and (ii) each of the
Underwriters, severally and not jointly, agrees to purchase from the
Company and the Selling Shareholders, at the purchase price per share for
the Firm Shares to be agreed upon by the Representatives, the Company and
the Selling Shareholders in accordance with Section 1(c) or 1(d) and set
forth in the Price Determination Agreement, the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule II, plus such
additional number of Firm Shares which such Underwriter may become
obligated to
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purchase pursuant to Section 9 hereof. Schedule II may be attached to the
Price Determination Agreement.
(b) Subject to all the terms and conditions of this
Agreement, the Company grants the Option to the several Underwriters to
purchase, severally and not jointly, up to 315,000 Option Shares from the
Company at the same price per share as the Underwriters shall pay for the
Firm Shares. The Option may be exercised only to cover over-allotments in
the sale of the Firm Shares by the Underwriters and may be exercised in
whole or in part at any time (but not more than once) on or before the 45th
day after the date of this Agreement (or, if the Company has elected to
rely on Rule 430A, on or before the 45th day after the date of the Price
Determination Agreement), upon written or telegraphic notice (the "Option
Shares Notice") by the Representatives to the Company no later than
12:00 noon, New York City time, at least two and no more than five business
days before the date specified for closing in the Option Shares Notice (the
"Option Closing Date") setting forth the aggregate number of Option Shares
to be purchased and the time and date for such purchase. On the Option
Closing Date, the Company will issue and sell to the Underwriters the
number of Option Shares set forth in the Option Shares Notice, and each
Underwriter will purchase such percentage of the Option Shares as is equal
to the percentage of Firm Shares that such Underwriter is purchasing, as
adjusted by the Representatives in such manner as they deem advisable to
avoid fractional shares.
(c) The initial public offering price per share for the
Firm Shares and the purchase price per share for the Firm Shares to be paid
by the several Underwriters shall be agreed upon and set forth in the Price
Determination Agreement. In the event such price has not been agreed upon
and the Price Determination Agreement has not been executed by the close of
business on the fourteenth business day following the date on which the
Registration Statement becomes effective, this Agreement shall terminate
forthwith, without liability of any party to any other party except that
Section 7 shall remain in effect.
2. Delivery and Payment. Delivery of the Firm Shares shall be
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made to the Representatives for the accounts of the Underwriters against
payment of the purchase price by certified or official bank checks payable
in New York Clearing House (next-day) funds to the order of each of the
Company and the Committee at the office of PaineWebber
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Incorporated, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Such
payment shall be made at 10:00 a.m., New York City time, on the third busi-
ness day (or if pricing of the offering occurs after 4:30 p.m. Eastern
Standard Time, the fourth business day) after the date on which the first
bona fide offering of the Shares to the public is made by the Underwriters
or at such time on such other date, not later than ten business days after
such date, as may be agreed upon by the Company and the Representatives
(such date is hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of the Option
Shares against payment by the Underwriters (in the manner specified above)
will take place at the offices specified above for the Closing Date at the
time and date (which may be the Closing Date) specified in the Option
Shares Notice.
Certificates evidencing the Shares shall be in definitive form
and shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the
Closing Date or the Option Closing Date, as the case may be, by written
notice to the Company. For the purpose of expediting the checking and
packaging of certificates for the Shares, the Company agrees to make such
certificates available for inspection at least 24 hours prior to the
Closing Date or the Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with
the issuance and delivery of the Firm Shares and Option Shares by the
Company to the respective Underwriters shall be borne by the Company. The
cost of tax stamps, if any, in connection with the sale of the Firm Shares
by the Selling Shareholders shall be borne by the Selling Shareholders.
The Company and the Selling Shareholders will pay and save each Underwriter
and any subsequent holder of the Shares harmless from any and all liabil-
ities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original
issuance or sale to such Underwriter of the Firm Shares and Option Shares.
3. Representations and Warranties of the Company. The Company
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represents, warrants and covenants to each Underwriter that:
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(a) A registration statement (Registration No. ) on
Form S-1 relating to the Shares, including a preliminary prospectus and
such amendments to such registration statement as may have been required to
the date of this Agreement, has been prepared by the Company under the
provisions of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (collectively referred to as the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. The term "preliminary
prospectus" as used herein means a preliminary prospectus as contemplated
by Rule 430 or Rule 430A ("Rule 430A") of the Rules and Regulations
included at any time as part of the registration statement. Copies of such
registration statement and amendments and of each related preliminary
prospectus have been delivered to the Representatives. The term "Registra-
tion Statement" means the registration statement as amended at the time it
becomes or became effective (the "Effective Date"), including financial
statements and all exhibits and any information deemed to be included by
Rule 430A or Rule 434 of the Rules and Regulations. If the Company files a
registration statement to register a portion of the Shares and relies on
Rule 462(b) of the Rules and Regulations for such registration statement to
become effective upon filing with the Commission (the "Rule 462 Regis-
tration Statement"), then any reference to the "Registration Statement"
shall be deemed to include the Rule 462 Registration Statement, as amended
from time to time. The term "Prospectus" means the prospectus as first
filed with the Commission pursuant to Rule 424(b) of the Rules and Regula-
tions or, if no such filing is required, the form of final prospectus
included in the Registration Statement at the Effective Date.
(b) On the Effective Date, the date the Prospectus is first
filed with the Commission pursuant to Rule 424(b) (if required), at all
times subsequent to and including the Closing Date and, if later, the
Option Closing Date and when any post-effective amendment to the Registra-
tion Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall have filed
with the Commission any amendment or supplement thereto), including the
financial statements included in the Prospectus, did or will comply with
all applicable provisions of the Act and the Rules and Regulations and will
contain all statements required to be stated therein in accordance with the
Act and the Rules and Regulations. On the Effective Date and when
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any post-effective amendment to the Registration Statement becomes
effective, no part of the Registration Statement or any such amendment did
or will contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed with
the Commission and at the Closing Date and, if later, the Option Closing
Date, the Prospectus did not or will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the state-
ments therein, in the light of the circumstances under which they were
made, not misleading. The foregoing representations and warranties in this
Section 3(b) do not apply to any statements or omissions made in reliance
on and in conformity with information relating to any Underwriter furnished
in writing to the Company by the Representatives specifically for inclusion
in the Registration Statement or Prospectus or any amendment or supplement
thereto. For all purposes of this Agreement, the amounts of the selling
concession and reallowance set forth in the Prospectus constitute the only
information relating to any Underwriter furnished in writing to the Company
by the Representatives specifically for inclusion in the preliminary
prospectus, the Registration Statement or the Prospectus. The Company has
not distributed any offering material in connection with the offering or
sale of the Shares other than the Registration Statement, the preliminary
prospectus, the Prospectus or any other materials, if any, permitted by the
Act.
(c) As of the Effective Date, the Company has made and
completed all filings required under the Securities Exchange Act of 1934,
as amended, (the "Exchange Act"), and the rules and regulations thereunder
(the "Exchange Act Rules and Regulations") and such filings conform in all
material respects with the applicable provisions of the Exchange Act and
the Exchange Act Rules and Regulations.
(d) The only subsidiaries (as defined in the Rules and
Regulations) of the Company are the subsidiaries listed on Exhibit 21 to
the Registration Statement (the "Subsidiaries"). The Company and each of
its Subsidiaries is, and at the Closing Date will be, a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The Company and each of its Subsidiaries
has, and at the Closing Date will
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have, full power and authority to conduct all the activities conducted by
it, to own or lease all the assets owned or leased by it and to conduct its
business as described in the Registration Statement and the Prospectus.
The Company and each of its Subsidiaries is, and at the Closing Date will
be, duly licensed or qualified to do business and in good standing as a
foreign corporation in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned or leased
by it makes such licensing or qualification necessary. All of the
outstanding shares of capital stock of the Subsidiaries have been duly
authorized and validly issued, and are fully paid and non-assessable and
are owned by the Company free and clear of all liens, encumbrances and
claims whatsoever. Except for the stock of the Subsidiaries and as dis-
closed in the Registration Statement, the Company does not own, and at the
Closing Date will not own, directly or indirectly, any shares of stock or
any other equity or long-term debt securities of any corporation or have
any equity interest in any firm, partnership, joint venture, association or
other entity. Complete and correct copies of the certificate of incorpora-
tion and of the by-laws of the Company and each of its Subsidiaries and all
amendments thereto have been delivered to the Representatives, and no
changes therein will be made subsequent to the date hereof and prior to the
Closing Date or, if later, the Option Closing Date.
(e) The outstanding shares of Common Stock have been, and
the Shares to be issued and sold by the Company upon such issuance will be,
duly authorized, validly issued, fully paid and nonassessable and will not
be subject to any preemptive or similar right. The description of the
Common Stock in the Registration Statement and the Prospectus is, and at
the Closing Date will be, complete and accurate in all respects. Except as
set forth in the Prospectus, the Company does not have outstanding, and at
the Closing Date will not have outstanding, any options to purchase, or any
rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any
shares of Common Stock, any shares of capital stock of any Subsidiary or
any such warrants, convertible securities or obligations.
(f) The financial statements and schedules included in the
Registration Statement or the Prospectus present fairly the consolidated
financial condition of the Company as of the respective dates thereof and
the consolidated results of operations and cash flows of the
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Company for the respective periods covered thereby, all in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the entire period involved, except as otherwise disclosed in the
Prospectus. The pro forma financial statements and other pro forma
financial information included in the Registration Statement or the Pros-
pectus (i) present fairly in all material respects the information shown
therein, (ii) have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements and
(iii) have been properly computed on the bases described therein. The
assumptions used in the preparation of the pro forma financial statements
and other pro forma financial information included in the Registration
Statement or the Prospectus are reasonable and the adjustments used therein
are appropriate to give effect to the transactions or circumstances
referred to therein. No other financial statements or schedules of the
Company are required by the Act or the Rules and Regulations to be included
in the Registration Statement or the Prospectus. Xxxxxxx Xxxxxxxxx (the
"Accountants") who have reported on such financial statements and
schedules, are independent accountants with respect to the Company as
required by the Act and the Rules and Regulations. The statements included
in the Registration Statement with respect to the Accountants pursuant to
Rule 509 of Regulation S-K of the Rules and Regulations are true and
correct in all material respects.
(g) The Company maintains a system of internal accountings
control sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management's general or specific authoriza-
tion; (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.
(h) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and
prior to the Closing Date, except as set forth in or contemplated by the
Registration Statement and the Prospectus, (i) there has not been and will
not have been any change in the capitalization of the Company, or in
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the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries,
arising for any reason whatsoever, (ii) neither the Company nor any of its
Subsidiaries has incurred nor will it incur any material liabilities or
obligations, direct or contingent, nor has it entered into nor will it
enter into any material transactions other than pursuant to this Agreement
and the transactions referred to herein and (iii) the Company has not and
will not have paid or declared any dividends or other distributions of any
kind on any class of its capital stock.
(i) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company
Act of 1940, as amended.
(j) Except as set forth in the Registration Statement and
the Prospectus, there are no actions, suits or proceedings pending or
threatened against or affecting the Company or any of its Subsidiaries or
any of their respective officers in their capacity as such, before or by
any Federal or state court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, wherein an
unfavorable ruling, decision or finding might materially and adversely
affect the Company or any of its Subsidiaries or its business, properties,
business prospects, condition (financial or otherwise) or results of
operations.
(k) The Company and each of its Subsidiaries has, and at
the Closing Date will have, (i) all governmental licenses, permits,
consents, orders, approvals and other authorizations necessary to carry on
its business as contemplated in the Prospectus, (ii) complied in all
respects with all laws, regulations and orders applicable to it or its
business and (iii) performed all its obligations required to be performed
by it, and is not, and at the Closing Date will not be, in default, under
any indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement, lease, contract or other agree-
ment or instrument (collectively, a "contract or other agreement") to which
it is a party or by which its property is bound or affected. To the best
knowledge of the Company and each of its Subsidiaries, no other party under
any contract or other agreement to which it is a party is in default in any
respect thereunder. Neither the Company nor
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any of its Subsidiaries is, nor at the Closing Date will any of them be, in
violation of any provision of its certificate of incorporation or by-laws.
(l) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is
required in connection with the authorization, issuance, transfer, sale or
delivery of the Shares by the Company, in connection with the execution,
delivery and performance of this Agreement by the Company or in connection
with the taking by the Company of any action contemplated hereby, except
such as have been obtained under the Act or the Rules and Regulations and
such as may be required under state securities or Blue Sky laws or the by-
laws and rules of the National Association of Securities Dealers, Inc. (the
"NASD") in connection with the purchase and distribution by the
Underwriters of the Shares to be sold by the Company.
(m) The Company has full corporate power and authority to
enter into this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company and is enforceable against the Company in
accordance with the terms hereof. The performance of this Agreement and
the consummation of the transactions contemplated hereby and the
application of the net proceeds from the offering and sale of the Shares to
be sold by the Company in the manner set forth in the Prospectus under "Use
of Proceeds" will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company or any of its
Subsidiaries pursuant to the terms or provisions of, or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, or give any other party a right to terminate any of its obligations
under, or result in the acceleration of any obligation under, the
certificate of incorporation or by-laws of the Company or any of its
Subsidiaries, any contract or other agreement to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any of its properties is bound or affected, or violate or
conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to
the business or properties of the Company or any of its Subsidiaries.
(n) The Company and each of its Subsidiaries has good and
marketable title to all properties and assets
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described in the Prospectus as owned by it, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in the
Prospectus or are not material to the business of the Company or its
Subsidiaries. The Company and each of its Subsidiaries has valid,
subsisting and enforceable leases for the properties described in the
Prospectus as leased by it, with such exceptions as are not material and do
not materially interfere with the use made and proposed to be made of such
properties by the Company and such Subsidiaries.
(o) There is no document or contract of a character
required to be described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement which is not
described or filed as required. All such contracts to which the Company or
any Subsidiary is a party have been duly authorized, executed and delivered
by the Company or such Subsidiary, constitute valid and binding agreements
of the Company or such Subsidiary and are enforceable against the Company
or such Subsidiary in accordance with the terms thereof.
(p) No statement, representation, warranty or covenant made
by the Company in this Agreement or made in any certificate or document
required by this Agreement to be delivered to the Representatives was or
will be, when made, inaccurate, untrue or incorrect.
(q) Neither the Company nor any of its directors, officers
or controlling persons has taken, directly or indirectly, any action
intended, or which might reasonably be expected, to cause or result, under
the Act or otherwise, in, or which has constituted, stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares.
(r) No holder of securities of the Company has rights to
the registration of any securities of the Company because of the filing of
the Registration Statement.
(s) Prior to the Closing Date, the Shares will be duly
delisted from the American Stock Exchange and duly authorized for listing
on the [Nasdaq National Market] upon official notice of issuance.
(t) Neither the Company nor any of its Subsidiaries is
involved in any material labor dispute nor,
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to the knowledge of the Company, is any such dispute threatened.
(u) The Company and its Subsidiaries own, or are licensed
or otherwise have the full exclusive right to use, all material trademarks
and trade names which are used in or necessary for the conduct of their
respective businesses as described in the Prospectus. No claims have been
asserted by any person to the use of any such trademarks or trade names or
challenging or questioning the validity or effectiveness of any such
trademark or trade name. The use, in connection with the business and
operations of the Company and its Subsidiaries of such trademarks and trade
names does not, to the Company's knowledge, infringe on the rights of any
person.
(v) Neither the Company nor any of its Subsidiaries nor, to
the Company's knowledge, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary
or received or retained any funds in violation of any law, rule or
regulation or of a character required to be disclosed in the Prospectus.
(w) The Company has complied, and until the completion of
the distribution of the Shares, will comply with all of the provisions of
(including, without limitation, filing all forms required by)
Section 517.075 of the Florida Securities and Investor Protection Act and
regulation 3E-900.001 issued thereunder with respect to the offering and
sale of the Shares.
(x) Except as described in detail on Schedule III, neither
the Company nor any of its Subsidiaries has incurred, or reasonably expects
to incur any liability under Title IV of the Employee Retirement Income
Security Act ("ERISA") arising in connection with the termination,
insolvency or reorganization of, or a complete or partial withdrawal from,
any plan covered or previously covered by Title IV of ERISA including,
without limitation,any "multi-employer plan" as defined in Section 3(37) of
ERISA (a "Multi-Employer Plan"). If a "complete withdrawal" by the Company
and all of its Subsidiaries were to occur as of this date with respect to
each Multi-Employer Plan as to which the Company or its Subsidiaries has an
obligation to make contributions or otherwise has any liability, none of
the Company and any of its Subsidiaries
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would incur an aggregate withdrawal liability under Title IV of ERISA in
excess of $____.
4. Representations and Warranties of the Selling Shareholders.
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Each Selling Shareholder, severally and not jointly, represents, warrants
and covenants to each Underwriter that:
(a) Such Selling Shareholder has full power and authority
to enter into this Agreement and the Agreement and Power of Attorney. All
authorizations and consents necessary for the execution and delivery by
such Selling Shareholder of the Agreement and Power of Attorney, and for
the execution of this Agreement on behalf of such Selling Shareholder, have
been given. Each of the Agreement and Power of Attorney and this Agreement
has been duly authorized, executed and delivered by or on behalf of such
Selling Shareholder and constitutes a valid and binding agreement of such
Selling Shareholder and is enforceable against such Selling Shareholder in
accordance with the terms thereof and hereof.
(b) Such Selling Shareholder now has, and at the time of
delivery thereof hereunder will have, (i) good and marketable title to the
Shares to be sold by such Selling Shareholder hereunder, free and clear of
all liens, encumbrances and claims whatsoever (other than pursuant to the
Agreement and Power of Attorney), and (ii) full legal right and power, and
all authorizations and approvals required by law, to sell, transfer and
deliver such Shares to the Underwriters hereunder and to make the
representations, warranties and agreements made by such Selling Shareholder
herein. Upon the delivery of and payment for such Shares hereunder, such
Selling Shareholder will deliver good and marketable title thereto, free
and clear of all liens, encumbrances and claims whatsoever.
(c) On the Closing Date or the Option Closing Date, as the
case may be, all stock transfer or other taxes (other than income taxes)
which are required to be paid in connection with the sale and transfer of
the Shares to be sold by such Selling Shareholder to the several
Underwriters hereunder will have been fully paid or provided for by such
Selling Shareholder and all laws imposing such taxes will have been fully
complied with.
(d) The performance of this Agreement and the consummation
of the transactions contemplated hereby
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will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of such Selling Shareholder pursuant to
the terms or provisions of, or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, or result in the
acceleration of any obligation under, if such Selling Shareholder is a
corporation or partnership, the organizational documents of such Selling
Shareholder, or, as to all such Selling Shareholders, any contract or other
agreement to which such Selling Shareholder is a party or by which such
Selling Shareholder or any of its property is bound or affected, or under
any ruling, decree, judgment, order, statute, rule or regulation of any
court or other governmental agency or body having jurisdiction over such
Selling Shareholder or the property of such Selling Shareholder.
(e) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is
required for the consummation by such Selling Shareholder of the
transactions on its part contemplated herein and in the Agreement and Power
of Attorney, except such as have been obtained under the Act or the Rules
and Regulations and such as may be required under state securities or Blue
Sky laws or the by-laws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Shares to be sold by
such Selling Shareholder.
(f) The sale of the Shares proposed to be sold by such
Selling Shareholder is not prompted by any knowledge of any material fact
or condition not set forth in the Registration Statement or the Prospectus
which has adversely affected, or may adversely affect, the business,
properties, business prospects, condition (financial or otherwise) or
results of operations of the Company.
(g) All information with respect to such Selling
Shareholder contained in the Registration Statement and the Prospectus (as
amended or supplemented, if the Company shall have filed with the
Commission any amendment or supplement thereto) complied and will comply
with all applicable provisions of the Act and the Rules and Regulations,
contains and will contain all statements required to be stated therein in
accordance with the Act and the Rules and Regulations, and does not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein not misleading.
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(h) To the best knowledge of such Selling Shareholder, the
representations and warranties of the Company contained in Section 3 are
true and correct.
(i) Other than as permitted by the Act and the Rules and
Regulations, such Selling Shareholder has not distributed and will not
distribute any preliminary prospectus, the Prospectus or any other offering
material in connection with the offering and sale of the Shares. Such
Selling Shareholder has not taken, directly or indirectly, any action
intended, or which might reasonably be expected, to cause or result in,
under the Act or otherwise, or which has caused or resulted in, stabili-
zation or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(j) Certificates in negotiable form for the Firm Shares to
be sold hereunder by such Selling Shareholder have been placed in custody,
for the purpose of making delivery of such Firm Shares under this
Agreement, under the Agreement and Power of Attorney which appoints
as custodian (the "Custodian") for each Selling Shareholder.
--------------
Such Selling Shareholder agrees that the Shares represented by the certif-
icates held in custody for him or it under the Agreement and Power of
Attorney are for the benefit of and coupled with and subject to the
interest hereunder of the Custodian, the Committee, the Underwriters, each
other Selling Shareholder and the Company, that the arrangements made by
such Selling Shareholder for such custody and the appointment of the
Custodian and the Committee by such Selling Shareholder are irrevocable,
and that the obligations of such Selling Shareholder hereunder shall not be
terminated by operation of law, whether by the death, disability,
incapacity or liquidation of any Selling Shareholder or the occurrence of
any other event. If any Selling Shareholder should die, become disabled or
incapacitated or be liquidated or if any other such event should occur
before the delivery of the Shares hereunder, certificates for the Shares
shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement and actions taken by the Committee and the
Custodian pursuant to the Agreement and Power of Attorney shall be as valid
as if such death, liquidation, incapacity or other event had not occurred,
regardless of whether or not the Custodian or the Committee, or either of
them, shall have received notice thereof.
16
5. Agreements of the Company and the Selling Shareholders. The
------------------------------------------------------
Company and the Selling Shareholders (as to Sections 5(i), (j), (n), (o),
(p) and (q)) agree, severally and not jointly, with the several Under-
writers as follows:
(a) The Company will not, either prior to the Effective
Date or thereafter during such period as the Prospectus is required by law
to be delivered in connection with sales of the Shares by an Underwriter or
dealer, file any amendment or supplement to the Registration Statement or
the Prospectus, unless a copy thereof shall first have been submitted to
the Representatives within a reasonable period of time prior to the filing
thereof and the Representatives shall not have objected thereto in good
faith.
(b) The Company will use its best efforts to cause the
Registration Statement to become effective, and will notify the
Representatives promptly, and will confirm such advice in writing, (1) when
the Registration Statement has become effective and when any post-effective
amendment thereto becomes effective, (2) of any request by the Commission
for amendments or supplements to the Registration Statement or the
Prospectus or for additional information, (3) of the issuance by the
Commission of any stop order suspending the effectiveness of the Regis-
tration Statement or the initiation of any proceedings for that purpose or
the threat thereof, (4) of the happening of any event during the period
mentioned in the second sentence of Section 5(e) that in the judgment of
the Company makes any statement made in the Registration Statement or the
Prospectus untrue or that requires the making of any changes in the
Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not
misleading and (5) of receipt by the Company or any representative of the
Company of any other communication from the Commission relating to the
Company, the Registration Statement, any preliminary prospectus or the
Prospectus. If at any time the Commission shall issue any order suspending
the effectiveness of the Registration Statement, the Company will make
every reasonable effort to obtain the withdrawal of such order at the
earliest possible moment. The Company will use its best efforts to comply
with the provisions of and make all requisite filings with the Commission
pursuant to Rule 430A and to notify the Representatives promptly of all
such filings.
17
(c) The Company will furnish to the Representatives,
without charge, two signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and
schedules, and all exhibits thereto and will furnish to the
Representatives, without charge, for transmittal to each of the other
Underwriters, a copy of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules but without
exhibits.
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to
time, the Company will deliver to each of the Underwriters, without charge,
as many copies of the Prospectus or any amendment or supplement thereto as
the Representatives may reasonably request. The Company consents to the
use of the Prospectus or any amendment or supplement thereto by the several
Underwriters and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for any period of
time thereafter during which the Prospectus is required by law to be deliv-
ered in connection therewith. If during such period of time any event
shall occur which in the judgment of the Company or counsel to the
Underwriters should be set forth in the Prospectus in order to make any
statement therein, in the light of the circumstances under which it was
made, not misleading, or if it is necessary to supplement or amend the
Prospectus to comply with law, the Company will forthwith prepare and duly
file with the Commission an appropriate supplement or amendment thereto,
and will deliver to each of the Underwriters, without charge, such number
of copies thereof as the Representatives may reasonably request.
(f) Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Representatives and
counsel to the Underwriters in connection with the registration or
qualification of the Shares for offer and sale under the securities or Blue
Sky laws of such jurisdictions as the Representatives may request;
provided, that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take
any action which would subject it to general service of process in any
jurisdiction where it is not now so subject.
18
(g) During the period of five years commencing on the
Effective Date, the Company will furnish to the Representatives and each
other Underwriter who may so request copies of such financial statements
and other periodic and special reports as the Company may from time to time
distribute generally to the holders of any class of its capital stock, and
will furnish to the Representatives and each other Underwriter who may so
request a copy of each annual or other report it shall be required to file
with the Commission.
(h) The Company will make generally available to holders of
its securities as soon as may be practicable but in no event later than the
last day of the fifteenth full calendar month following the calendar
quarter in which the Effective Date falls, an earnings statement (which
need not be audited but shall be in reasonable detail) for a period of
12 months ended commencing after the Effective Date, and satisfying the
provisions of Section 11(a) of the Act (including Rule 158 of the Rules and
Regulations).
(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company and
the Selling Shareholders, jointly and severally, will pay, or reimburse if
paid by the Representatives, all costs and expenses incident to the
performance of the obligations of the Company and the Selling Shareholders
under this Agreement, including but not limited to costs and expenses of or
relating to (1) the preparation, printing and filing of the Registration
Statement and exhibits to it, each preliminary prospectus, the Prospectus
and any amendment or supplement to the Registration Statement or the
Prospectus, (2) the preparation and delivery of certificates representing
the Shares, (3) the printing of this Agreement, the Agreement Among Under-
writers, any Dealer Agreements, any Underwriters' Questionnaire and the
Agreement and Power of Attorney, (4) furnishing (including costs of
shipping, mailing and courier) such copies of the Registration Statement,
the Prospectus and any preliminary prospectus, and all amendments and
supplements thereto, as may be requested for use in connection with the
offering and sale of the Shares by the Underwriters or by dealers to whom
Shares may be sold, (5) the listing of the Shares by the [Nasdaq National
Market], (6) any filings required to be made by the Underwriters with the
NASD, and the fees, disbursements and other charges of counsel for the
Underwriters in connection therewith, (7) the registration
19
or qualification of the Shares for offer and sale under the securities or
Blue Sky laws of such jurisdictions designated pursuant to Section 5(f),
including the fees, disbursements and other charges of counsel to the
Underwriters in connection therewith, and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (8) counsel to the
Company and counsel to the Selling Shareholders, (9) the transfer agent for
the Shares and (10) the Accountants.
(j) If this Agreement shall be terminated by the Company or
the Selling Shareholders pursuant to any of the provisions hereof
(otherwise than pursuant to Section 9) or if for any reason the Company or
any Selling Shareholder shall be unable to perform its obligations
hereunder, the Company and the Selling Shareholders, jointly and severally,
will reimburse the several Underwriters for all out-of-pocket expenses
(including the fees, disbursements and other charges of counsel to the
Underwriters) reasonably incurred by them in connection herewith.
(k) The Company will not at any time, directly or
indirectly, take any action intended, or which might reasonably be
expected, to cause or result in, or which will constitute, stabilization of
the price of the shares of Common Stock to facilitate the sale or resale of
any of the Shares.
(l) The Company will apply the net proceeds from the
offering and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds."
(m) The Company will not, and will cause each of its
executive officers, directors and each beneficial owner of more than 5% of
the outstanding shares of Common Stock to enter into agreements with the
Representatives in the form set forth in Exhibit C to the effect that they
will not, for a period of 150 days after the commencement of the public
offering of the Shares, without the prior written consent of PaineWebber
Incorporated, sell, contract to sell or otherwise dispose of any shares of
Common Stock or rights to acquire such shares (other than pursuant to
employee stock option plans or in connection with other employee incentive
compensation arrangements).
(n) The Selling Shareholders will not, for a period of 150
days after the commencement of the public
20
offering of the Shares, without the prior written consent of PaineWebber
Incorporated, sell, contract to sell or otherwise dispose of any shares of
Common Stock, other than pursuant to bona fide gifts to persons who agree
in writing with PaineWebber Incorporated to be bound by the provisions of
this Section 5(n).
(o) The Selling Shareholders will not, without the prior
written consent of PaineWebber Incorporated, make any bid for or purchase
any shares of Common Stock during the [120]-day period following the date
hereof.
(p) As soon as any Selling Shareholder is advised thereof,
such Selling Shareholder will advise PaineWebber Incorporated and confirm
such advice in writing, (1) of receipt by such Selling Shareholder, or by
any representative of such Selling Shareholder, of any communication from
the Commission relating to the Registration Statement, the Prospectus or
any preliminary prospectus, or any notice or order of the Commission
relating to the Company or any of the Selling Shareholders in connection
with the transactions contemplated by this Agreement and (2) of the
happening of any event during the period from and after the Effective Date
that in the judgment of such Selling Shareholder makes any statement made
in the Registration Statement or the Prospectus untrue or that requires the
making of any changes in the Registration Statement or the Prospectus in
order to make the statements therein, in light of the circumstances in
which they were made, not misleading.
(q) The Selling Shareholders will deliver to PaineWebber
Incorporated and the Managers prior to or on the Effective Date a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof).
6. Conditions of the Obligations of the Underwriters. In
-------------------------------------------------
addition to the execution and delivery of the Price Determination
Agreement, the obligations of each Underwriter hereunder are subject to the
following conditions:
(a) Notification that the Registration Statement has become
effective shall be received by PaineWebber Incorporated not later than
5:00 p.m., New York
21
City time, on the date of this Agreement or at such later date and time as
shall be consented to in writing by PaineWebber Incorporated and all
filings required by Rule 424 of the Rules and Regulations and Rule 430A
shall have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualifi-
cation or registration of the Shares under the securities or Blue Sky laws
of any jurisdiction shall be in effect and no proceeding for such purpose
shall be pending before or threatened or contemplated by the Commission or
the authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such
authorities shall have been complied with to the satisfaction of the staff
of the Commission or such authorities and (iv) after the date hereof no
amendment or supplement to the Registration Statement or the Prospectus
shall have been filed unless a copy thereof was first submitted to
PaineWebber Incorporated and PaineWebber Incorporated did not object
thereto in good faith, and PaineWebber Incorporated shall have received
certificates, dated the Closing Date and the Option Closing Date and signed
by the Chief Executive Officer or the Chairman of the Board of Directors of
the Company and the Chief Financial Officer of the Company (who may, as to
proceedings threatened, rely upon the best of their information and
belief), to the effect of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not
have been a material adverse change in the general affairs, business,
business prospects, properties, management, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, in each case other than as set forth in or contemplated
by the Registration Statement and the Prospectus and (ii) neither the
Company nor any of its Subsidiaries shall have sustained any material loss
or interference with its business or properties from fire, explosion, flood
or other casualty, whether or not covered by insurance, or from any labor
dispute or any court or legislative or other governmental action, order or
decree, which is not set forth in the Registration State-
22
ment and the Prospectus, if in the judgment of PaineWebber Incorporated any
such development makes it impracticable or inadvisable to consummate the
sale and delivery of the Shares by the Underwriters at the initial public
offering price.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have
been no litigation or other proceeding instituted against the Company or
any of its Subsidiaries or any of their respective officers or directors in
their capacities as such, before or by any Federal, state or local court,
commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, in which litigation or proceeding an unfavorable
ruling, decision or finding would materially and adversely affect the
business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries
taken as a whole.
(e) Each of the representations and warranties of the
Company and the Selling Shareholders contained herein shall be true and
correct in all material respects at the Closing Date and, with respect to
the Option Shares, at the Option Closing Date, as if made at the Closing
Date and, with respect to the Option Shares, at the Option Closing Date,
and all covenants and agreements herein contained to be performed on the
part of the Company and the Selling Shareholders and all conditions herein
contained to be fulfilled or complied with by the Company and the Selling
Shareholders at or prior to the Closing Date and, with respect to the
Option Shares, at or prior to the Option Closing Date, shall have been duly
performed, fulfilled or complied with.
(f) PaineWebber Incorporated shall have received opinions,
each dated the Closing Date and, with respect to the Option Shares, the
Option Closing Date, and satisfactory in form and substance to counsel for
the Underwriters, from Kramer, Levin, Naftalis, Nessen, Xxxxx & Xxxxxxx,
counsel to the Company, to the effect set forth in Exhibit D and from
_______________, counsel to the Selling Shareholders, to the effect set
forth in Exhibit E.
(g) PaineWebber Incorporated shall have received an
opinion, dated the Closing Date and the Option Closing Date, from Xxxx,
Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel to the Underwriters, with
respect to the Registra
23
tion Statement, the Prospectus and this Agreement, which opinion shall be
satisfactory in all respects to PaineWebber Incorporated.
(h) On the date of the Prospectus, the Accountants shall
have furnished to PaineWebber Incorporated a letter, dated the date of its
delivery, addressed to PaineWebber Incorporated and in form and substance
satisfactory to PaineWebber Incorporated, confirming that they are
independent accountants with respect to the Company as required by the Act
and the Rules and Regulations and with respect to the financial and other
statistical and numerical information contained in the Registration
Statement. At the Closing Date and, as to the Option Shares, the Option
Closing Date, the Accountants shall have furnished to PaineWebber
Incorporated a letter, dated the date of its delivery, which shall confirm,
on the basis of a review in accordance with the procedures set forth in the
letter from the Accountants, that nothing has come to their attention
during the period from the date of the letter referred to in the prior
sentence to a date (specified in the letter) not more than five days prior
to the Closing Date and the Option Closing Date which would require any
change in their letter dated the date of the Prospectus, if it were
required to be dated and delivered at the Closing Date and the Option
Closing Date.
(i) At the Closing Date and, as to the Option Shares, the
Option Closing Date, there shall be furnished to PaineWebber Incorporated
an accurate certificate, dated the date of its delivery, signed by each of
the Chief Executive Officer and the Chief Financial Officer of the Company,
in form and substance satisfactory to PaineWebber Incorporated, to the
effect that:
(i) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus and (A) as of
the date of such certificate, such documents are true and correct in
all material respects and do not omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein not untrue or misleading and (B) since the
Effective Date, no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein not untrue or misleading in any material respect.
24
(ii) Each of the representations and warranties of the
Company contained in this Agreement were, when originally made, and
are, at the time such certificate is delivered, true and correct in
all material respects.
(iii) Each of the covenants required herein to be
performed by the Company on or prior to the date of such certificate
has been duly, timely and fully performed and each condition herein
required to be complied with by the Company on or prior to the
delivery of such certificate has been duly, timely and fully complied
with.
(j) At the Closing Date and, as to the Option Shares, the
Option Closing Date, there shall have been furnished to PaineWebber
Incorporated an accurate certificate, dated the date of its delivery,
signed by the Committee on behalf of each of the Selling Shareholders, in
form and substance satisfactory to PaineWebber Incorporated, to the effect
that the representations and warranties of each of the Selling Shareholders
contained herein are true and correct in all material respects on and as of
the date of such certificate as if made on and as of the date of such
certificate, and each of the covenants and conditions required herein to be
performed or complied with by the Selling Shareholders on or prior to the
date of such certificate has been duly, timely and fully performed or
complied with.
(k) On or prior to the Closing Date, PaineWebber
Incorporated shall have received the executed agreements referred to in
Section 5(m).
(l) The Shares shall be qualified for sale in such states
as PaineWebber Incorporated may reasonably request, each such qualification
shall be in effect and not subject to any stop order or other proceeding on
the Closing Date and the Option Closing Date.
(m) Prior to the Closing Date, the Shares shall have been
duly authorized for listing by the [Nasdaq National Market] upon official
notice of issuance.
(n) The Company and the Selling Shareholders shall have
furnished to PaineWebber Incorporated such certificates, in addition to
those specifically mentioned herein, as PaineWebber Incorporated may have
reasonably
25
requested as to the accuracy and completeness at the Closing Date and the
Option Closing Date of any statement in the Registration Statement or the
Prospectus as to the accuracy at the Closing Date and the Option Closing
Date of the representations and warranties of the Company and the Selling
Shareholders herein, as to the performance by the Company and the Selling
Shareholders of its and their respective obligations hereunder, or as to
the fulfillment of the conditions concurrent and precedent to the
obligations hereunder of PaineWebber Incorporated.
7. Indemnification.
---------------
(a) Each of the Company and the Selling Shareholders,
jointly and severally, will indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter and each
person, if any, who controls each Underwriter within the meaning of Sec-
tion 15 of the Act or Section 20 of the Exchange Act from and against any
and all losses, claims, liabilities, expenses and damages (including any
and all investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding between any of the indemnified parties and any indemnifying
parties or between any indemnified party and any third party, or otherwise,
or any claim asserted), to which they, or any of them, may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based on any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus or
the omission or alleged omission to state in such document a material fact
required to be stated in it or necessary to make the statements in it not
misleading, provided that the Company and the Selling Shareholders will not
be liable to the extent that such loss, claim, liability, expense or damage
arises from the sale of the Shares in the public offering to any person by
an Underwriter and is based on an untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company
by PaineWebber Incorporated on behalf of any Underwriter expressly for
inclusion in the Registration Statement, any preliminary prospectus or the
Prospectus. This indemnity
26
agreement will be in addition to any liability that the Company or any
Selling Shareholder might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Company, the Selling Shareholders, each person, if any, who controls the
Company or the Selling Shareholders within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, each director of the Company and
each officer of the Company who signs the Registration Statement to the
same extent as the foregoing indemnity from the Company and the Selling
Shareholders to each Underwriter, but only insofar as losses, claims,
liabilities, expenses or damages arise out of or are based on any untrue
statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by PaineWebber Incorporated on behalf
of such Underwriter expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus. This indemnity will be in
addition to any liability that each Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be
indemnified under this Section 7 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim
is to be made against an indemnifying party or parties under this Sec-
tion 7, notify each such indemnifying party of the commencement of such
action, enclosing a copy of all papers served, but the omission so to
notify such indemnifying party will not relieve it from any liability that
it may have to any indemnified party under the foregoing provisions of this
Section 7 unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. If
any such action is brought against any indemnified party and it notifies
the indemnifying party of its commencement, the indemnifying party will be
entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of
the commencement of the action from the indemnified party, jointly with any
other indemnifying party similarly notified, to assume the defense of the
action, with counsel satisfactory to the indemnified party, and after
notice from the indemnifying party to the indemnified party of its election
to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below
and except for the reasonable costs of inves-
27
tigation subsequently incurred by the indemnified party in connection with
the defense. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of
such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized
in writing by the indemnifying party, (2) the indemnified party has reason-
ably concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (3) a
conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party
(in which case the indemnifying party will not have the right to direct the
defense of such action on behalf of the indemnified party) or (4) the
indemnifying party has not in fact employed counsel to assume the defense
of such action within a reasonable time after receiving notice of the com-
mencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying
party or parties shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified
party or parties. All such fees, disbursements and other charges will be
reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or
claim effected without its written consent (which consent will not be
unreasonably withheld). No indemnifying party shall, without the prior
written consent of each indemnified party, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 7 (whether
or not any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising or that may arise out of such claim,
action or proceeding.
(d) In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 7 is applicable in accordance with its terms but
for any reason is held to be unavailable from the
28
Company, the Selling Shareholders or the Underwriters, the Company, the
Selling Shareholders and the Underwriters will contribute to the total
losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding
or any claim asserted, but after deducting any contribution received by the
Company or the Selling Shareholders from persons other than the Under-
writers, such as persons who control the Company or the Selling
Shareholders within the meaning of the Act, officers of the Company who
signed the Registration Statement and directors of the Company, who also
may be liable for contribution) to which the Company or the Selling
Shareholders and any one or more of the Underwriters may be subject in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company and Selling Shareholders on the one hand and the
Underwriters on the other. The relative benefits received by the Company
and the Selling Shareholders on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Company and the Selling Shareholders bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. If, but only if,
the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such pro-
portion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the
Company and the Selling Shareholders, on the one hand, and the Under-
writers, on the other, with respect to the statements or omissions which
resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations
with respect to such offering. Such relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or PaineWebber Incorporated on behalf
of the Underwriters, the intent of the parties and their relative knowl-
edge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 7(d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for
29
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid
or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to
above in this Section 7(d) shall be deemed to include, for purpose of this
Section 7(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7(d), no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts received by it, and no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) will be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 7(d) are several in proportion to
their respective underwriting obligations and not joint. For purposes of
this Section 7(d), any person who controls a party to this Agreement within
the meaning of the Act will have the same rights to contribution as that
party, and each officer of the Company who signed the Registration
Statement will have the same rights to contribution as the Company, subject
in each case to the provisions hereof. Any party entitled to contribution,
promptly after receipt of notice of commencement of any action against such
party in respect of which a claim for contribution may be made under this
Section 7(d), will notify any such party or parties from whom contribution
may be sought, but the omission so to notify will not relieve the party or
parties from whom contribution may be sought from any other obligation it
or they may have under this Section 7(d). No party will be liable for
contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in
this Section 7 and the representations and warranties of the Company and
the Selling Shareholders contained in this Agreement shall remain operative
and in full force and effect regardless of (i) any investigation made by or
on behalf of the Underwriters, (ii) acceptance of any of the Shares and
payment therefor or (iii) any termination of this Agreement.
8. Termination. The obligations of the several Underwriters
-----------
under this Agreement may be terminated at any time prior to the Closing
Date (or, with respect to the
30
Option Shares, on or prior to the Option Closing Date), by notice to the
Company from PaineWebber Incorporated, without liability on the part of any
Underwriter to the Company or any Selling Shareholder, if, prior to
delivery and payment for the Shares (or the Option Shares, as the case may
be), in the sole judgment of PaineWebber Incorporated, (i) trading in any
of the equity securities of the Company shall have been suspended by the
Commission, by an exchange that lists the Shares or by the Nasdaq Stock
Market, (ii) trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum or maximum prices shall
have been generally established on such exchange, or additional material
governmental restrictions, not in force on the date of this Agreement,
shall have been imposed upon trading in securities generally by such
exchange or by order of the Commission or any court or other governmental
authority, (iii) a general banking moratorium shall have been declared by
either Federal or New York State authorities or (iv) any material adverse
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any
outbreak or material escalation of hostilities or declaration by the United
States of a national emergency or war or other calamity or crisis shall
have occurred, the effect of any of which is such as to make it, in the
sole judgment of PaineWebber Incorporated, impracticable or inadvisable to
market the Shares on the terms and in the manner contemplated by the
Prospectus.
9. Substitution of Underwriters. If any one or more of the
----------------------------
Underwriters shall fail or refuse to purchase any of the Firm Shares which
it or they have agreed to purchase hereunder, and the aggregate number of
Firm Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate
number of Firm Shares, the other Underwriters shall be obligated,
severally, to purchase the Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase, in the proportions
which the number of Firm Shares which they have respectively agreed to
purchase pursuant to Section 1 bears to the aggregate number of Firm Shares
which all such non-defaulting Underwriters have so agreed to purchase, or
in such other proportions as PaineWebber Incorporated may specify; provided
that in no event shall the maximum number of Firm Shares which any Under-
writer has become obligated to purchase pursuant to Section 1 be increased
pursuant to this Section 9 by more than one-ninth of the number of Firm
Shares agreed to be
31
purchased by such Underwriter without the prior written consent of such
Underwriter. If any Underwriter or Underwriters shall fail or refuse to
purchase any Firm Shares and the aggregate number of Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase exceeds one-tenth of the aggregate number of the Firm Shares and
arrangements satisfactory to PaineWebber Incorporated, the Company and the
Committee for the purchase of such Firm Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter, or the Company or any Selling
Shareholder for the purchase or sale of any Shares under this Agreement.
In any such case either PaineWebber Incorporated or the Company and the
Committee shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken pursuant to
this Section 9 shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
10. Miscellaneous. Notice given pursuant to any of the
-------------
provisions of this Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (a) if to the Company, at the
office of the Company, 000 Xxxxx Xxxxxxx, Xxxxxxxxxxx Xxx Xxxx 00000,
Attention: Xxxxxxx Xxxx, (b) if to any Selling Shareholder,
[_______________________], or (c) if to the Underwriters, to PaineWebber
Incorporated at the offices of PaineWebber Incorporated, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Finance Depart-
ment. Any such notice shall be effective only upon receipt. Any notice
under Section 8 or 9 may be made by telex or telephone, but if so made
shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company and the Selling Shareholders and of the
controlling persons, directors and officers referred to in Section 7, and
their respective successors and assigns, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term
"successors and assigns" as used in this Agreement shall not include a
purchaser, as such purchaser, of Shares from any of the several
Underwriters.
32
With respect to any obligation of the Company and the Selling
Shareholders hereunder to make any payment, to indemnify for any liability
or to reimburse for any expense, notwithstanding the fact that such
obligation is a joint and several obligation of the Company and the Selling
Shareholders, the Underwriters (or any other person to whom such payment,
indemnification or reimbursement is owed) may pursue the Company with
respect thereto prior to pursuing any Selling Shareholder.
All representations, warranties and agreements of the Company and
the Selling Shareholders contained herein or in certificates or other
instruments delivered pursuant hereto, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of
any Underwriter or any of their controlling persons and shall survive
delivery of and payment for the Shares hereunder.
Any action required or permitted to be taken by the
Representatives under this Agreement may be taken by them jointly or by
PaineWebber Incorporated.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF
LAWS PRINCIPLES OF SUCH STATE. This Agreement may be signed in two or more
counterparts with the same effect as if the signatures thereto and hereto
were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
The Company, the Selling Shareholders and the Underwriters each
hereby irrevocably waive any right they may have to a trial by jury in
respect of any claim based upon or arising out of this Agreement or the
transactions contemplated hereby.
This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by
PaineWebber Incorporated and the Company.
33
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Selling Shareholders and the several
Underwriters.
Very truly yours,
NOODLE KIDOODLE, INC.
By:
-------------------------
Title:
THE SELLING SHAREHOLDERS NAMED
IN SCHEDULE I ATTACHED HERETO
By: The Committee
By:
-------------------------
34
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
XXXXXX & XXXXXXX, INC.
Acting on behalf of
themselves and as the
Representatives of the
other several Underwriters
named in Schedule II hereof.
By: PAINEWEBBER INCORPORATED
By:
------------------------
Title:
By: XXXXXX & XXXXXXX, INC.
By:
------------------------
Title:
35
SCHEDULE I
SELLING SHAREHOLDERS
Total
Name of Number of
Selling Firm Shares
Shareholder to be Sold
----------- -----------
[100,000]
[Xxxxxxx Xxxxxxxx]
SCHEDULE II
UNDERWRITERS
Number of
Names of Firm Shares
Underwriters to be Purchased
------------ ---------------
PaineWebber Incorporated
Xxxxxx & Xxxxxxx
Total . . . . . . . . . . . . . . . . . [2,100,000]
===========
EXHIBIT A
NOODLE KIDOODLE, INC.
_____________________
PRICE DETERMINATION AGREEMENT
-----------------------------
[Date]
PAINEWEBBER INCORPORATED
XXXXXX & XXXXXXX, INC.
As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated ______,
199___ (the "Underwriting Agreement"), among Noodle Kidoodle, Inc., a
[Delaware] corporation (the "Company"), the Selling Shareholders named in
Schedule I thereto or hereto (the "Selling Shareholders"), and the several
Underwriters named in Schedule II thereto or hereto (the "Underwriters"),
for whom PaineWebber Incorporated and Xxxxxx & Xxxxxxx, Inc. are acting as
Representatives (the "Representatives"). The Underwriting Agreement
provides for the purchase by the Underwriters from the Company and the
Selling Shareholders, subject to the terms and conditions set forth
therein, of an aggregate of 2,100,000 shares (the "Firm Shares") of the
Company's common stock, par value [$.001] per share. This Agreement is the
Price Determination Agreement referred to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the
undersigned agree with the Representatives as follows:
1. The public offering price per share for the ___ Shares
shall be $_______.
2. The purchase price per share for the Firm Shares to be
paid by the several Underwriters shall be $_______ representing an amount
equal to the public offering price set forth above, less $______ per share.
The Company represents and warrants to each of the Underwriters
that the representations and warranties of
2
the Company set forth in Section 3 of the Underwriting Agreement are
accurate as though expressly made at and as of the date hereof.
The Selling Shareholders represent and warrant to each of the
Underwriters that the representations and warranties of the Selling
Shareholders set forth in Section 4 of the Underwriting Agreement are
accurate as though expressly made at and as of the date hereof.
As contemplated by the Underwriting Agreement, attached as
Schedule II is a completed list of the several Underwriters, which shall be
a part of this Agreement and the Underwriting Agreement.
This Agreement shall be governed by the law of the State of New
York without regard to the conflict of laws principles of such State.
If the foregoing is in accordance with your understanding of the
agreement among the Underwriters, the Company and the Selling Shareholders,
please sign and return to the Company a counterpart hereof, whereupon this
instrument along with all counterparts and together with the Underwriting
Agreement shall be a binding agreement among the Underwriters, the Company
and the Selling Shareholders in accordance with its terms and the terms of
the Underwriting Agreement.
Very truly yours,
NOODLE KIDOODLE, INC.
By:
-------------------------
Title:
3
THE SELLING SHAREHOLDERS NAMED IN
SCHEDULE I TO THE UNDERWRITING AGREEMENT
By: The Committee
By:
----------------------
Confirmed as of the date
first above mentioned:
PAINEWEBBER INCORPORATED
XXXXXX & XXXXXXX, INC.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule II hereof.
By: PAINEWEBBER INCORPORATED
By:
------------------------
Title:
BY: XXXXXX & XXXXXXX, INC.
By:
------------------------
EXHIBIT B
POWER OF ATTORNEY
NOODLE KIDOODLE, INC.
Common Stock
[Names and Addresses of Committee]
Dear Ladies and Gentlemen:
The undersigned understands that Noodle Kidoodle, Inc., a [New
York] corporation (the "Company"), intends to file a registration statement
(the "Registration Statement") under the Securities Act of 1933, as amended
(the "Act"), in connection with the proposed public offering and sale by
the Company, the undersigned (the "Selling Shareholder") and certain other
Selling Shareholders of the Company's Common Stock, par value [$.001] per
share (the "Common Stock").
The Selling Shareholder desires to sell certain shares of Common
Stock and to include such shares among the shares covered by the
Registration Statement. The number of shares of Common Stock which the
undersigned desires to sell (the "Shares") are set forth beneath the
signature of the Selling Shareholder below.
Concurrently with the execution and delivery of this Power of
Attorney, the undersigned is delivering to you, or requesting the Company
to deliver to you, certificates for the Shares, which you are authorized to
deposit with ____________, as custodian (the "Custodian"), pursuant to a
custody agreement in the form attached as Attachment A hereto (the "Custody
Agreement").
1. In connection with the foregoing, the Selling Shareholder
hereby makes, constitutes and appoints you collectively, and each of you,
individually (a "Member") and each of your respective substitutes under
Section 3, the true and lawful attorneys-in-fact of the undersigned (the
Members or any of them or their respective substitutes, being herein
referred to collectively as the "Committee"), with full power and
authority, in the name and on behalf of the Selling Shareholder:
(a) To enter into the Custody Agreement and deposit with
the Custodian pursuant thereto the certificates
2
for the Shares delivered to the Committee concurrently herewith;
(b) For the purpose of effecting the sale of the Shares, to
execute and deliver (i) an Underwriting Agreement (the "Underwriting
Agreement"), by and among the Company, the other Selling Shareholders and
the Representatives (the "Representatives"), selected by the Company, of
the several Underwriters (the "Underwriters") and (ii) a Price
Determination Agreement (as defined in the Underwriting Agreement), by and
among the Company, the other Selling Shareholders and the Representatives
of the several Underwriters;
(c) To endorse, transfer and deliver certificates for the
Shares to or on the order of the Representatives or to their nominee or
nominees, and to give such orders and instructions to the Custodian as the
Committee may in its sole discretion determine with respect to (i) the
transfer on the books of the Company of the Shares in order to effect such
sale (including the names in which new certificates for such Shares are to
be issued and the denominations thereof); (ii) the delivery to or for the
account of the Representatives of the certificates for the Shares against
receipt by the Custodian of the full purchase price to be paid therefor;
(iii) the remittance to the Selling Shareholder of the Selling Share-
holder's share of the proceeds, after payment of expenses described in the
Underwriting Agreement, from any sale of Shares; and (iv) the return to the
Selling Shareholder of certificates representing the number of Shares (if
any) deposited with the Custodian but not sold by the Selling Shareholder
under the Registration Statement for any reason;
(d) To retain ____________________[(who are also counsel to
the Company)] as legal counsel for the Selling Shareholders in connection
with any and all matters referred to herein;
(e) To take for the Selling Shareholder all steps deemed
necessary or advisable by the Committee in connection with the registration
of the Shares under the Act, including without limitation filing amendments
to the Registration Statement, requesting acceleration of effectiveness of
the Registration Statement, advising the Securities and Exchange Commission
that the reason the Selling Shareholder is offering the Shares for sale is
to diversify the Selling Shareholder's investments and to assist the
Company in enlarging the public market for the Common Stock, informing said
Commission that the Selling Shareholder has no knowledge of any material
adverse information with regard to the current and prospective operations
of the Company which is not stated in the
3
Registration Statement, and such other steps as the Committee may in its
absolute discretion deem necessary or advisable;
(f) To make, acknowledge, verify and file on behalf of the
Selling Shareholder applications, consents to service of process and such
other undertakings or reports as may be required by law with state
commissioners or officers administering state securities or Blue Sky laws
and to take any other action required to facilitate the qualification of
the Shares under the securities or Blue Sky laws of the jurisdictions in
which the Shares are to be offered;
(g) If necessary, to endorse (in blank or otherwise) on
behalf of the Selling Shareholder the certificate or certificates
representing the Shares, or a stock power or powers attached to such
certificate or certificates; and
(h) To make, execute, acknowledge and deliver all such
other contracts, orders, receipts, notices, requests, instructions,
certificates, letters and other writings and, in general, to do all things
and to take all action which the Committee in its sole discretion may
consider necessary or proper in connection with or to carry out the
aforesaid sale of Shares, as fully as could the Selling Shareholder if
personally present and acting.
2. This Power of Attorney and all authority conferred hereby is
granted and conferred subject to and in consideration of the interests of
the Company, the Representatives, the Underwriters and the other Selling
Shareholders and, for the purpose of completing the transactions contem-
plated by this Power of Attorney, this Power of Attorney and all authority
conferred hereby shall be irrevocable and shall not be terminated by any
act of the Selling Shareholder or by operation of law, whether by the
death, disability, incapacity or liquidation of the Selling Shareholder or
by the occurrence of any other event or events (including without limita-
tion the termination of any trust or estate for which the Selling
Shareholder is acting as a fiduciary or fiduciaries), and if, after the
execution hereof, the Selling Shareholder shall die or become disabled or
incapacitated or is liquidated, or if any other such event or events shall
occur before the completion of the transactions contemplated by this Power
of Attorney, the Committee shall nevertheless be authorized and directed to
complete all such transactions as if such death, disability, incapacity,
liquidation or other event or events had not occurred and regardless of
notice thereof.
3. Each Member shall have full power to make and substitute any
person in the place and stead of such Member,
4
and the Selling Shareholder hereby ratifies and confirms all that each
Member or substitute or substitutes shall do by virtue of these presents.
All actions hereunder may be taken by any one Member or his substitute. In
the event of the death, disability or incapacity of any Member, the
remaining Member or Members shall appoint a substitute therefor.
4. The Selling Shareholder hereby represents, warrants and
covenants that:
(a) All information furnished to the Company by or on
behalf of the Selling Shareholder for use in connection with the
preparation of the Registration Statement is and will be true and correct
in all material respects and does not and will not omit any material fact
necessary to make such information not misleading;
(b) The Selling Shareholder, having full right, power and
authority to do so, has duly executed and delivered this Power of Attorney;
(c) The Selling Shareholder has carefully reviewed the
Registration Statement and will carefully review each amendment thereto
immediately upon receipt thereof from the Company and will promptly advise
the Company in writing if:
(i) The name and address of the Selling Shareholder is not
properly set forth in each preliminary prospectus (collectively, the
"Preliminary Prospectus") contained in the Registration Statement and
the prospectuses (collectively, the "Prospectus") contained in the
Registration Statement at the time it becomes effective;
(ii) The Selling Shareholder has reason to believe that
(A) any information furnished to the Company by or on behalf of the
Selling Shareholder for use in connection with the Registration
Statement or the Prospectus or any Preliminary Prospectus is not true
and complete; and (B) any Preliminary Prospectus, the Prospectus and
any supplements thereto contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(iii) The Selling Shareholder knows of any material
adverse information with regard to the current or prospective
operations of the Company or any of its subsidiaries which is not
disclosed in any Pre-
5
liminary Prospectus, the Prospectus or the Registration Statement; or
(iv) Except as indicated in the Prospectus, the Selling
Shareholder knows of any arrangements made or to be made by any
person, or of any transaction already effected, (A) to limit or
restrict the sale of shares of the Common Stock during the period of
the public distribution, (B) to stabilize the market for the Common
Stock or (C) for withholding commissions, or otherwise to hold any
other person responsible for the distribution of the Selling
Shareholder's participation;
(d) In connection with the offering of the Shares, the
Selling Shareholder has not taken and will not take, directly or
indirectly, any action intended to, or which might reasonably be expected
to, cause or result in stabilization or manipulation of the price of the
Shares to facilitate the sale or resale of the Shares;
(e) The Selling Shareholder has not distributed and will
not distribute any prospectus or other offering material in connection with
the offering and sale of the Shares other than a Preliminary Prospectus, a
Prospectus or other material permitted by the Act;
(f) The Selling Shareholder will notify the Company in
writing immediately of any changes in the foregoing information which
should be made as a result of developments occurring after the date hereof
and prior to the Closing Date under the Underwriting Agreement, and the
Committee may consider that there has not been any such development unless
advised to the contrary;
(g) The Selling Shareholder has, and at the time of
delivery of the Shares to the Representatives and the Managers it will
have, full power and authority to enter into this Power of Attorney, to
carry out the terms and provisions hereof and to make all the
representations, warranties and covenants contained herein; and
(h) This Power of Attorney is the valid and binding
agreement of the Selling Shareholder and is enforceable against the Selling
Shareholder in accordance with its terms.
5. The representations, warranties and covenants of the Selling
Shareholder in this Power of Attorney are made for the benefit of, and may
be relied upon by, [the other Selling Shareholders,] the Committee, the
Company and its counsel, and their representatives, agents and counsel, the
Custodian, the Underwriters and the Representatives.
6
6. The Committee shall be entitled to act and rely upon any
statement, request, notice or instructions respecting this Power of
Attorney given to it by the Selling Shareholder, not only as to the
authorization, validity and effectiveness thereof, but also as to the truth
and acceptability of any information therein contained.
It is understood that the Committee assumes no responsibility or
liability to any person other than to deal with the Shares deposited with
it and the proceeds from the sale of the Shares in accordance with the
provisions hereof. The Committee makes no representations with respect to
and shall have no responsibility for the Registration Statement, the
Prospectus or any Preliminary Prospectus nor, except as herein expressly
provided, for any aspect of the offering of Common Stock, and it shall not
be liable for any error of judgment or for any act done or omitted or for
any mistake of fact or law except for its own negligence or bad faith. The
Selling Shareholder agrees to indemnify the Committee for and to hold the
Committee harmless against any loss, claim, damage or liability incurred on
its part arising out of or in connection with it acting as the Committee
under this Power of Attorney, as well as the cost and expense of
investigating and defending against any such loss, claim, damage or
liability, except to the extent such loss, claim, damage or liability is
due to the negligence or bad faith of the Member seeking indemnification.
The Selling Shareholder agrees that the Committee may consult with counsel
of its own choice (who may be counsel for the Company) and it shall have
full and complete authorization and protection for any action taken or
suffered by it hereunder in good faith and in accordance with the opinion
of such counsel.
It is understood that the Committee may, without breaching any
express or implied obligation to the Selling Shareholder hereunder,
release, amend or modify any other Power of Attorney granted by any other
Selling Shareholder.
7. It is understood that the Committee shall serve entirely
without compensation.
8. This Power of Attorney shall be governed by the laws of the
State of New York without regard to the conflict of laws principles of such
State.
This Power of Attorney may be signed in two or more counterparts
with the same effect as if the signature thereto and hereto were upon the
same instrument.
In case any provision in this Power of Attorney shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
7
This Power of Attorney shall be binding upon the Committee and
the Selling Shareholder and the heirs, legal representatives, distributees,
successors and assigns of the Selling Shareholder.
Dated: __________, 19__
Very truly yours,
_____________________________*/
_____________________________*/
Signature(s) of Selling
Shareholder(s)
_____________________________
(Address)
SHARES TO BE SOLD:
_____ shares of Common Stock
ACKNOWLEDGED AND ACCEPTED:
THE COMMITTEE:
______________________________
______________________________
______________________________
______________________________
--------------------
*/1 To be signed in exactly the same manner as the shares are registered.
NOTE: SIGNATURES MUST BE NOTARIZED
Selling Shareholders should use the appropriate form for the
state in which they are located.
Attachment A
CUSTODY AGREEMENT
-----------------
CUSTODY AGREEMENT, dated ________, 19__, among
___________________________, as Custodian (the "Custodian"), and the
person[s] listed on Annex I hereto ([each] a "Selling Shareholder" [and
collectively the "Selling Shareholders"]).
Noodle Kadoodle, Inc., a Delaware corporation (the "Company"),
intends to file a Registration Statement (the "Registration Statement")
with the Securities and Exchange Commission to register for sale to the
public under the Securities Act of 1933, as amended (the "Act"), shares of
the Company's common stock, [$.001] par value per share (the "Common
Stock").
The shares to be covered by the Registration Statement shall
consist of (a) up to ________ shares of Common Stock to be sold by the
Company and (b) up to ________ shares of Common Stock (the "Shares") to be
sold by the Selling Shareholders.
[Each of] the Selling Shareholder[s] has executed and delivered a
Power of Attorney (the "Power of Attorney") naming _____________,
____________ and _______________, and each of them, as his attorney-in-fact
(the "Committee"), for certain purposes, including the execution, delivery
and performance of this Agreement in his name, place and xxxxx, in
connection with the proposed sale by each Selling Shareholder of the number
of Shares set forth opposite such Selling Shareholder's name in Annex I.
1. A custody arrangement is hereby established by the Selling
Shareholders with the Custodian with respect to the Shares, and the
Custodian is hereby instructed to act in accordance with this Agreement and
any amendments or supplements hereto authorized by the Committee.
2. There are herewith delivered to the Custodian, and the
Custodian hereby acknowledges receipt of, certificates representing the
Shares, which certificates have been endorsed in blank or are accompanied
by duly executed stock powers, in each case with all signatures guaranteed
by a commercial bank or trust company or by a member firm of the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. or a member of the
National Association of Securities Dealers, Inc. Such certificates are to
be held by the Custodian for the account of the Selling Shareholders and
are to be disposed of by the Custodian in accordance with this Agreement.
2
3. The Custodian is authorized and directed by the Selling
Shareholder[s]:
(a) To hold the certificates representing the Shares
delivered by the Selling Shareholder[s] in its custody;
(b) On or immediately prior to the settlement date for any
Shares sold pursuant to the Registration Statement (the "Closing Date"), to
cause such Shares to be transferred on the books of the Company into such
names as the Custodian shall have been instructed by the Representatives
(the "Representatives") of the several Underwriters (the "Underwriters");
to cause to be issued, against surrender of the certificates for the
Shares, a new certificate or certificates for such Shares, free of any
restrictive legend, registered in such name or names; to deliver such new
certificates representing such Shares to the Representatives, as instructed
by the Representatives on the Closing Date for their account or accounts
against full payment therefor; and to give receipt for such payment;
(c) To disburse such payments in the following manner:
(i) to itself, as agent for the Selling Shareholder[s], a reserve amount to
be designated in writing by the Committee from which amount the Custodian
shall pay, as soon as reasonably practicable, (A) the Selling Shareholders'
proportionate share of all expenses of the offering and sale of the Shares
as provided in the Underwriting Agreement by and among the Company, the
Selling Shareholder[s] and the Representatives, (B) its reasonable [charges
and] disbursements for acting hereunder with respect to the sale of the
Shares and (C) any applicable stock transfer taxes; and (ii) to [each]
Selling Shareholder, pursuant to the written instructions of the Committee,
(A) on the Closing Date, a sum equal to the share of the proceeds to which
such Selling Shareholder is entitled, as determined by the Committee, less
the reserve amount designated by any Committee, and (B) promptly after all
proper charges, disbursements, costs and expenses shall have been paid, any
remaining balance of the amount reserved under clause (i) above. Before
making any payment from the amount reserved under clause (i) above, except
payments made pursuant to subclause (B) of clause (ii) above, the Custodian
shall request and receive the written approval of the Committee. To the
extent the expenses referred to in subclause (A) of clause (i) above exceed
the amount reserved, the Selling Shareholders shall remain liable for their
proportionate share of such expenses.
4. Subject in each case to the indemnification obligations set
forth in Section 7, in the event Shares of any Selling Shareholder are not
sold [prior to ____________,
3
19__], the Custodian shall deliver to such Selling Shareholder as soon as
practicable after [such date] termination of the offering of the Shares,
certificates representing such Shares deposited by such Selling Share-
holder. Certificates returned to any Selling Shareholder shall be returned
with any related stock powers, and any new certificates issued to the
Selling Shareholders with respect to such Shares shall bear any appropriate
legend reflecting the unregistered status thereof under the Act.
5. This Agreement is for the express benefit of the Company and
the Selling Shareholders, the Underwriters and the Representatives. The
obligations and authorizations of the Selling Shareholders hereunder are
irrevocable and shall not be terminated by any act of any Selling Share-
holder or by operation of law, whether by the death, disability, incapacity
or liquidation of any Selling Shareholder or by the occurrence of any other
event or events (including without limitation the termination of any trust
or estate for which any Selling Shareholder is acting as a fiduciary or
fiduciaries), and if after the execution hereof any Selling Shareholder
shall die or become disabled or incapacitated or is liquidated, or if any
other event or events shall occur before the delivery of such Selling
Shareholder's Shares hereunder to the Representatives, such Shares shall be
delivered to the Representatives in accordance with the terms and condi-
tions of this Agreement, as if such event had not occurred, regardless of
whether or not the Custodian shall have received notice of such event.
6. Until payment of the purchase price for the Shares has been
made to the Selling Shareholders or to the Custodian, the Selling
Shareholders shall remain the owner of (and shall retain the right to
receive dividends and distributions on, and to vote) the number of Shares
delivered by each of them to the Custodian hereunder. Until such payment
in full has been made or until the offering of Shares has been terminated,
each Selling Shareholder agrees that it will not give, sell, pledge,
hypothecate, grant any lien on, transfer, deal with or contract with
respect to the Shares and any interests therein.
7. The Custodian shall assume no responsibility to any person
other than to deal with the certificates for the Shares and the proceeds
from the sale of the Shares represented thereby in accordance with the
provisions hereof, and the Selling Shareholders, severally and not jointly,
hereby agree to indemnify the Custodian for and to hold the Custodian
harmless against any and all losses, claims, damages or liabilities
incurred on its part arising out of or in connection with it acting as the
Custodian pursuant hereto, as well as the cost and expenses of
investigating and defending any such losses, claims, damages
4
or liabilities, except to the extent such losses, claims, damages or
liabilities are due to the negligence or bad faith of the Custodian. The
Selling Shareholders agree that the Custodian may consult with counsel of
its own choice (who may be counsel for the Company), and the Custodian
shall have full and complete authorization and protection for any action
taken or suffered by the Custodian hereunder in good faith and in
accordance with the opinion of such counsel.
8. Each of the Selling Shareholders, jointly and not severally,
hereby represents and warrants that: (a) it has, and at the time of
delivery of its Shares to the Representatives it will have, full power and
authority to enter into this Agreement and the Power of Attorney, to carry
out the terms and provisions hereof and thereof and to make all of the
representations, warranties and agreements contained herein and therein;
and (b) this Agreement and the Power of Attorney are the valid and binding
agreements of such Selling Shareholder and are enforceable against such
Selling Shareholder in accordance with their respective terms.
9. The Custodian's acceptance of this Agreement by the
execution hereof shall constitute an acknowledgement by the Custodian of
the authorization herein conferred and shall evidence the Custodian's
agreement to carry out and perform this Agreement in accordance with its
terms.
10. The Custodian shall be entitled to act and rely upon any
statement, request, notice or instruction with respect to this Agreement
given to it on behalf of each of the Selling Shareholders if the same shall
be made or given to the Custodian by the Committee, not only as to the
authorization, validity and effectiveness thereof, but also as to the truth
and acceptability of any information therein contained.
11. This Agreement may be executed in two or more counterparts
with the same effect as if the signatures thereto and hereto were upon the
same instrument. Execution by the Custodian of one counterpart hereof and
its delivery thereof to the Committee shall constitute the valid execution
of this Agreement by the Custodian.
12. This Agreement shall be binding upon the Custodian, each of
the Selling Shareholders and the respective heirs, legal representatives,
distributees, successors and assigns of the Selling Shareholders.
13. This Agreement shall be governed by the laws of the State of
New York without regard to the conflict of laws principles of such State.
5
14. Any notice given pursuant to this Agreement shall be deemed
given if in writing and delivered in person, or if given by telephone or
telegraph if subsequently confirmed by letter: (i) if to a Selling
Shareholder, to his address set forth in Annex I; and (ii) if to the
Custodian, to it at ___________________.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
-------------------------
-------------------------,
as Custodian
THE SELLING SHAREHOLDERS
LISTED IN ANNEX I HERETO:
By: The Committee
By:
----------------------
Annex I
-------
Names and Addresses of
Selling Shareholders Shares to be Sold
---------------------- -----------------
__________________
Total . . . . . . . . . . . . . . .
==================
Exhibit C
[DATE]
PAINEWEBBER INCORPORATED
XXXXXX & XXXXXXX, INC.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
In consideration of the agreement of the several Underwriters,
for which PaineWebber Incorporated and Xxxxxx & Xxxxxxx, Inc. (the
"Representatives") intend to act as representatives, to underwrite a
proposed public offering (the "Offering") of 2,100,000 shares of Common
Stock, par value $.001 per share (the "Common Stock") of Noodle Kidoodle,
Inc., a New York corporation, as contemplated by a registration statement
with respect to such shares filed with the Securities and Exchange
Commission on Form S-1, the undersigned hereby agrees that the undersigned
will not, for a period of 150 days after the commencement of the public
offering of such shares, without the prior written consent of PaineWebber
Incorporated, offer to sell, sell, contract to sell, grant any option to
sell, or otherwise dispose of, or require the Company to file with the
Securities and Exchange Commission a registration statement under the
Securities Act of 1933 to register, any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or warrants or
other rights to acquire shares of Common Stock of which the undersigned is
now, or may in the future become, the beneficial owner (within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934) (other than
pursuant to employee stock option plans or in connection with other
employee incentive compensation arrangements).
Very truly yours,
By:________________________
Print Name: ________________________
EXHIBIT D
Form of Opinion of
Counsel to the Company
----------------------
1. The Company and each of its Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has full corporate power and
authority to conduct all the activities conducted by it, to own or lease
all the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus. The Company is
the sole record owner and, to our knowledge, the sole beneficial owner of
all of the capital stock of each of its Subsidiaries.
2. All of the outstanding shares of Common Stock have been, and
the Shares, when paid for by the Underwriters in accordance with the terms
of the Agreement, will be, duly authorized, validly issued, fully paid and
nonassessable and will not be subject to any preemptive or similar right
under (i) the statutes, judicial and administrative decisions, and the
rules and regulations of the governmental agencies of the State of
[Delaware], (ii) the Company's certificate of incorporation or by-laws or
(iii) any instrument, document, contract or other agreement referred to in
the Registration Statement or any instrument, document, contract or
agreement filed as an exhibit to the Registration Statement. Except as
described in the Registration Statement or the Prospectus, to the best of
our knowledge, there is no commitment or arrangement to issue, and there
are no outstanding options, warrants or other rights calling for the
issuance of, any share of capital stock of the Company or any Subsidiary to
any person or any security or other instrument that by its terms is
convertible into, exercisable for or exchangeable for capital stock of the
Company.
3. No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is
required in connection with the authorization, issuance, transfer, sale or
delivery of the Shares by the Company, in connection with the execution,
delivery and performance of the Agreement1/ by the Company or in
-
connection with the taking by the Company of any action contemplated
thereby [or, if so required, all such consents, approvals, authorizations
and orders, [specifying the same] have been obtained and are in full force
and effect], except such as have been obtained under the Act and
--------------------
1/ All references in this opinion to the Agreement shall include the
- Price Determination Agreement.
2
the Rules and Regulations and such as may be required under state
securities or "Blue Sky" laws or by the by-laws and rules of the NASD in
connection with the purchase and distribution by the Underwriters of the
Shares to be sold by the Company.
4. The authorized, issued and outstanding capital stock of the
Company is as set forth in the Registration Statement and the Prospectus
under the caption "Capitalization." The description of the Common Stock
contained in the Prospectus is complete and accurate in all material
respects. The form of certificate used to evidence the Common Stock is in
due and proper form and complies with all applicable statutory
requirements.
5. The Registration Statement and the Prospectus comply in all
material respects as to form with the requirements of the Act and the Rules
and Regulations (except that we express no opinion as to financial state-
ments, schedules and other financial data contained in the Registration
Statement or the Prospectus).
6. To the best of our knowledge, any instrument, document,
lease, license, contract or other agreement (collectively, "Documents")
required to be described or referred to in the Registration Statement or
the Prospectus has been properly described or referred to therein and any
Document required to be filed as an exhibit to the Registration Statement
has been filed as an exhibit thereto or has been incorporated as an exhibit
by reference in the Registration Statement; and no default exists in the
due performance or observance of any material obligation, agreement,
covenant or condition contained in any Document filed or required to be
filed as an exhibit to the Registration Statement.
7. To the best of our knowledge, except as disclosed in the
Registration Statement or the Prospectus, no person or entity has the right
to require the registration under the Act of shares of Common Stock or
other securities of the Company by reason of the filing or effectiveness of
the Registration Statement.
8. To the best of our knowledge, the Company is not in
violation of, or in default with respect to, any law, rule, regulation,
order, judgment or decree, except as may be described in the Prospectus or
such as in the aggregate do not now have and will not in the future have a
material adverse effect upon the operations, business or assets of the
Company and the Subsidiaries, taken as a whole.
9. All descriptions in the Prospectus of statutes, regulations
or legal or governmental proceedings are
3
accurate and fairly present the information required to be shown.
10. The Company has full corporate power and authority to enter
into the Agreement, and the Agreement has been duly authorized, executed
and delivered by the Company, is a valid and binding agreement of the
Company and, except for the indemnification and contribution provisions
thereof, as to which we express no opinion, is enforceable against the
Company in accordance with the terms thereof.
11. The execution and delivery by the Company of, and the
performance by the Company of its agreements in, the Agreement do not and
will not (i) violate the certificate of incorporation or by-laws of the
Company, (ii) breach or result in a default under, cause the time for
performance of any obligation to be accelerated under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the
assets of the Company or any of its Subsidiaries pursuant to the terms of,
(x) any indenture, mortgage, deed of trust, loan agreement, bond, deben-
ture, note agreement, capital lease or other evidence of indebtedness of
which we have knowledge, (y) any voting trust arrangement or any contract
or other agreement to which the Company is a party that restricts the
ability of the Company to issue securities and of which we have knowledge
or (z) any Document filed as an exhibit to the Registration Statement,
(iii) breach or otherwise violate any existing obligation of the Company
under any court or administrative order, judgment or decree of which we
have knowledge or (iv) violate applicable provisions of the [General
Corporation Law of the State of Delaware or] any statute or regulation [of
the State of New York] or of the United States.
12. Delivery of certificates for the Shares will transfer valid
and marketable title thereto to each Underwriter that has purchased such
Shares in good faith and without notice of any adverse claim with respect
thereto.
13. The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940,
as amended.
14. The Shares have been duly authorized for [inclusion on the
Nasdaq National Market].
15. The disclosures in the Prospectus concerning the effects of
federal, state and local statutes and regulations and legal or governmental
proceedings on the Company's business as currently conducted and as
4
contemplated are correct in all material respects and fairly present the
information required to be disclosed therein.
16. We hereby confirm to you that we have been advised by the
Commission that the Registration Statement has become effective under the
Act and that no order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or is pending, threatened or contemplated.
17. We hereby further confirm to you that there are no actions,
suits, proceedings or investigations pending or, to our knowledge, overtly
threatened in writing against the Company or any of its Subsidiaries, or
any of their respective officers or directors in their capacities as such,
before or by any court, governmental agency or arbitrator which (i) seek to
challenge the legality or enforceability of the Agreement, (ii) seek to
challenge the legality or enforceability of any of the Documents filed, or
required to be filed, as exhibits to the Registration Statement, (iii) seek
damages or other remedies with respect to any of the Documents filed, or
required to be filed, as exhibits to the Registration Statement,
(iv) except as set forth in or contemplated by the Registration Statement
and the Prospectus, seek money damages in excess of $100,000 or seek to
impose criminal penalties upon the Company, any of its Subsidiaries or any
of their respective officers or directors in their capacities as such and
of which we have knowledge or (v) seek to enjoin any of the business
activities of the Company or any of its Subsidiaries or the transactions
described in the Prospectus and of which we have knowledge.
We have participated in the preparation of the Registration
Statement and the Prospectus and, without assuming any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, nothing has come to our attention that causes us to believe that,
both as of the Effective Date and as of the Closing Date and the Option
Closing Date, the Registration Statement or any amendment thereto contained
or contains any untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that any Prospectus or any
amendment or supplement thereto, at the time such Prospectus was issued, at
the time any such amended or supplemented Prospectus was issued, at the
Closing Date and the Option Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading
5
(except that we express no opinion as to financial statements, schedules
and other financial data contained in the Registration Statement or the
Prospectus.
The foregoing opinion is subject to the qualification that the
enforceability of the Agreement may be: (i) subject to bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally; and (ii) subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding at
law or in equity) including principles of commercial reasonableness or
conscionability and an implied covenant of good faith and fair dealing.
This letter is furnished by us solely for your benefit in
connection with the transactions referred to in the Agreement and may not
be circulated to, or relied upon by, any other person, except that this
letter may be relied upon by your counsel in connection with the opinion
letter to be delivered to you pursuant to Section 5(f) of the Agreement.
EXHIBIT E
Form of Opinion
of Counsel to the
Selling Shareholders
--------------------
1. Each of the Selling Shareholders has full power and
authority to enter into the Agreement and the Agreement and Power of
Attorney and to sell, transfer and deliver such Shares pursuant to the
Agreement and the Agreement and Power of Attorney. All authorizations and
consents necessary for the execution and delivery of the Agreement and the
Agreement and Power of Attorney on behalf of each of the Selling
Shareholders has been given. The delivery of the Shares on behalf of the
Selling Shareholders pursuant to the terms of the Agreement and payment
therefor by the Underwriters will transfer good and marketable title to the
Shares to the several Underwriters purchasing the Shares, free and clear of
all liens, encumbrance and claims whatsoever.
2. Each of the Agreement and the Agreement and Power of Attor-
ney has been duly authorized, executed and delivered by or on behalf of
each of the Selling Shareholders, is a valid and binding agreement of each
Selling Shareholder and, except for the indemnification and contribution
provisions of the Agreement, the Agreement and the Agreement and Power of
Attorney are enforceable against the Selling Shareholders in accordance
with the terms thereof.
3. No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is
required in connection with the authorization, issuance, transfer, sale or
delivery of the Shares by or on behalf of the Selling Shareholders, in
connection with the execution, delivery and performance of the
Agreement1/ and the Agreement and Power of Attorney by or on behalf of
-
the Selling Shareholders or in connection with the taking by or on behalf
of the Selling Shareholders of any action contemplated thereby [or, if so
required, all such consents, approvals, authorizations and orders [speci-
fying the same] have been obtained and are in full force and effect],
except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under state securities or "Blue
Sky" laws or by the by-laws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Shares to be sold by
the Selling Shareholders.
--------------------
1/ All refere1nces in this opinion to the Agreement shall include the
- Price Determination Agreement.
2
4. The execution and delivery by the Selling Shareholders of,
and the performance by the Selling Shareholders of their agreements in, the
Agreement and the Agreement and Power of Attorney, do not and will not
(i) violate the certificate of incorporation or by-laws of any corporate
Selling Shareholder, (ii) breach or result in a default under, cause the
time for performance of any obligation to be accelerated under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
of the assets of any Selling Shareholder pursuant to the terms of, (x) any
indenture, mortgage, deed of trust, loan agreement, bond, debenture, note
agreement, capital lease or other evidence of indebtedness of which we have
knowledge, (y) any voting trust arrangement or any contract or other
agreement to which any Selling Shareholder is a party that restricts the
ability of any such Selling Shareholder to issue securities and of which we
have knowledge or (2) any other contract or other agreement of which we
have knowledge, (iii) breach or otherwise violate any existing obligation
of any Selling Shareholder under any court or administrative order,
judgment or decree of which we have knowledge or (iv) violate applicable
provisions of any statute or regulation in the States of [Delaware and New
York or of the United States.
5. There are no transfer or similar taxes payable in connection
with the sale and delivery of the Shares by the Selling Shareholders to the
several Underwriters, except as specified in such opinion.
The foregoing opinion is subject to the qualification that the
enforceability of the Agreement and the Agreement and Power of Attorney may
be: (i) subject to bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally; and (ii) subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity), including principles of
commercial reasonableness or conscionability and an implied covenant of
good faith and fair dealing.
This letter is furnished by us solely for your benefit in
connection with the transactions referred to in the Agreement and may not
be circulated to, or relied upon by, any other person, except that this
letter may be relied upon by your counsel in connection with the opinion
letter to be delivered to you pursuant to Section 6(g) of the Agreement.
