1
EXHIBIT 1.1
JAKKS PACIFIC, INC.
2,700,000 SHARES(1)
COMMON STOCK
($.001 PAR VALUE)
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UNDERWRITING AGREEMENT
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
, ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
Advest, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc.
DLJdirect Inc.
As Representatives of the several Underwriters
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
JAKKS Pacific, Inc., a Delaware corporation (the "Company"), and the
persons named in Schedule I hereto (the "Selling Stockholders") propose to sell
to the several underwriters named in Schedule II hereto (the "Underwriters"),
for whom you (the "Representatives") are acting as representatives, a total of
2,700,000 shares of Common Stock, $.001 par value ("Common Stock"), of the
Company (said shares to be sold by the Company and the Selling Stockholders
collectively are hereinafter called the "Underwritten Securities"). Of the
2,700,000 shares of Underwritten Securities, 2,200,000 are being sold by the
Company and 500,000 by the Selling Stockholders. The Company and the Selling
Stockholders also propose to grant to the Underwriters an option to purchase up
to 405,000 additional shares of Common Stock to cover over-allotments (the
"Option Securities"; the Option Securities, together with the Underwritten
Securities, are hereinafter called the "Securities"). Of the 405,000 Option
Securities, 330,000 are being offered by the Company and 75,000 by the Selling
Stockholders; in the event that the Underwriters do not purchase all of the
Option Securities, the Company and the Selling Stockholders will sell their
respective pro rata portions of the Option Securities actually purchased. To the
extent there are no additional Underwriters listed on Schedule II other than
you, the terms Representatives and Underwriters, shall mean either the singular
or plural as the context requires. The use of the neuter in this Agreement shall
include the feminine and masculine wherever appropriate. Certain terms used
herein are defined in Section 18 hereof.
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1Plus an option to purchase from the Company and the Selling Stockholders up to
405,000 additional shares of Common Stock to cover over-allotments.
2
1. Representations and Warranties.
(a) The Company. The Company represents and warrants to, and agrees with,
each Underwriter as set forth below in this Section 1:
(i) Registration Statement; Amendments; Final Prospectus. The Company
meets the requirements for the use of Form S-3 under the Act and has
prepared and filed with the Commission a registration statement
(Registration Number 333- ) on Form S-3, including a related
preliminary prospectus, for the registration under the Act of the offering
and sale of the Securities. The Company may have filed one or more
amendments thereto, including a related preliminary prospectus, each of
which has previously been furnished to you. The Company will next file with
the Commission either (1) prior to the Effective Date of such registration
statement, a further amendment to such registration statement (including
the form of final prospectus) or (2) after the Effective Date of such
registration statement, a final prospectus in accordance with Rules 430A
and 424(b). In the case of clause (2), the Company has included in such
registration statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the
Prospectus. As filed, such amendment and form of final prospectus, or such
final prospectus, shall contain all Rule 430A Information, together with
all other such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has advised
you, prior to the Execution Time, will be included or made therein.
(ii) Compliance. On the Effective Date, the Registration Statement
did or will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein) and
on any date on which Option Securities are purchased, if such date is not
the Closing Date (a "settlement date"), the Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable
requirements of the Act and the Exchange Act and the respective rules
thereunder; on the Effective Date and at the Execution Time, the
Registration Statement did not or will not 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 not
misleading; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), did or will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date and any settlement date,
the Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to the
information contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) in reliance upon and in conformity
with information furnished herein or in writing to the Company by or on
behalf of any Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Prospectus (or any
supplement thereto).
(iii) Subsidiaries. The subsidiaries of the Company (the
"Subsidiaries") listed in Exhibit 21 to the Company's Annual Report on Form
10-KSB most recently filed with the Commission, ▇▇▇▇ Corporation, a
California corporation, Flying Colors Toy, Inc., a Michigan corporation and
JAKKS Acquisition II, Inc., are the only material subsidiaries of the
Company.
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(iv) Due Organization. Each of the Company and the Subsidiaries has
been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is organized with
full corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification.
(v) Capitalization of Subsidiaries. All the outstanding shares of
capital stock of each Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable and, except as otherwise set
forth in the Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through wholly
owned Subsidiaries or through a designated nominee of the Company, free and
clear of any security interests, claims, liens or encumbrances, except that
all of the outstanding shares of each of the Subsidiaries have been pledged
in connection with the issuance of the Company's Convertible Debentures
described in the Prospectus.
(vi) Capitalization. The authorized, issued and outstanding capital
stock of the Company, as of September 30, 1999, was as set forth under the
caption "Capitalization" in the Prospectus and there will be no material
change in such authorized, issued and outstanding capital stock prior to
the Closing Date. The capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus. The
outstanding shares of capital stock of the Company have been duly and
validly authorized and issued free of preemptive rights, and are fully paid
and nonassessable. The Securities being sold hereunder by the Company and
by the Selling Stockholders have been duly and validly authorized and, when
issued and delivered to and paid for by the Underwriters pursuant to this
Agreement, will be duly issued, fully paid and nonassessable. The
Securities have been approved for listing on the Nasdaq National Market
upon notice of issuance. The certificates for the Securities are in valid
and sufficient form; no holder of capital stock of the Company is entitled
to preemptive or other rights to subscribe for the Securities and, except
as set forth in the Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to convert
any obligations into or exchange any securities for, shares of capital
stock of or other ownership interests in the Company are outstanding.
(vii) Registration Statement. There is no franchise, contract or
other document of a character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements in the Prospectus under
the headings "Risk Factors--Our ability to issue "blank check" preferred
stock and our obligation to make severance payments could prevent or delay
takeovers", "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Impact of Year 2000", "Certain Relationships and
Related Transactions" and "Description of Securities" fairly summarize the
matters therein described.
(viii) Due Authorization. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes its legal, valid and
binding obligation.
(ix) Investment Company. The Company is not and, after giving effect
to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940, as amended.
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(x) Consents. No consent, approval, authorization, filing with or
order of any court or governmental agency or body is required to be
obtained or made by the Company or the Selling Stockholders in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated herein and in the
Prospectus.
(xi) Market Manipulation. The Company has not taken and will not
take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result, under
the Exchange Act or otherwise, in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Securities.
(xii) No Conflicts. Neither the issue and sale of the Securities nor
the consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, or result in a
breach or violation of, or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of the Subsidiaries
pursuant to, (A) the charter or by-laws of the Company or any of the
Subsidiaries, (B) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company or any
of the Subsidiaries is a party or bound or to which its or their property
is subject or (C) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of the Subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any of the
Subsidiaries or any of its or their properties.
(xiii) Registration Rights. The Company has registered all applicable
securities of any persons or entities which have registration rights,
except that the Company has not registered the shares underlying the
warrant issued to Worldwide Wrestling Federation Entertainment Inc.
(formerly, Titan Sports Inc.) on June 30, 1999.
(xiv) Financial Statements. The consolidated financial statements of
the Company and its consolidated subsidiaries included or incorporated by
reference in the Prospectus and the Registration Statement present fairly
in all material respects the financial condition, results of operations and
cash flows of the Company and its consolidated subsidiaries as of the dates
and for the periods indicated. Such consolidated financial statements
comply as to form with the applicable accounting requirements of the Act,
the Exchange Act and the respective rules and regulations of the Commission
thereunder and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein).
(xv) Litigation. No action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator involving the
Company or any of the Subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (A) could reasonably
be expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby or (B) could reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and the Subsidiaries, taken as a
whole, except as set forth in or contemplated in the Prospectus (exclusive
of any supplement thereto).
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(xvi) Properties. Each of the Company and the Subsidiaries owns or
leases all such properties as are necessary to the conduct of its
operations as currently conducted.
(xvii) Violations. Neither the Company nor any of the Subsidiaries is
in violation or default of (A) any provision of its charter or bylaws, (B)
the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject or (C) any statute, law, rule, regulation, judgment,
order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
the Company or any of the Subsidiaries or any of its or their properties,
as applicable, except for any such violation or default which would not,
singly or in the aggregate, result in a material adverse change in the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and the Subsidiaries, taken as a whole, except as
set forth in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(xviii) Accountants. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, Certified Public
Accountants, A Professional Corporation, which have certified the
consolidated financial statements of the Company and its consolidated
subsidiaries and delivered their report with respect to the consolidated
financial statements and schedules included or incorporated by reference in
the Prospectus, are independent accountants with respect to the Company
within the meaning of the Act and the rules and regulations of the
Commission thereunder. ▇▇▇▇▇▇ & ▇▇▇▇▇, LLP, Certified Public Accountants,
which have certified the financial statements of the Flying Colors division
of Flying Colors Toys, Inc. and delivered their report with respect to the
financial statements included in the Prospectus, are independent
accountants with respect to the Company within the meaning of the Act and
the rules and regulations of the Commission thereunder.
(xix) Taxes. Except as set forth in or contemplated by the Prospectus
(exclusive of any supplement thereto), the Company and the Subsidiaries
have filed all foreign, federal, state and local tax returns that are
required to be filed by it or them or have requested extensions thereof
(except in any case in which the failure so to file would not have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and the
Subsidiaries, taken as a whole, and have paid all taxes required to be paid
by it and them, and any other assessment, fine or penalty levied against it
or them, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested
in good faith or which would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and the Subsidiaries, taken as a whole,.
(xx) Labor Relations. No labor disturbance exists or is threatened or
imminent that could reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and the Subsidiaries, taken as a
whole, except as set forth in or contemplated in the Prospectus (exclusive
of any supplement thereto).
(xxi) Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses in
which the Company and the Subsidiaries are engaged; neither the Company nor
any such Subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such Subsidiary has any reason
to believe that it
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will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a currently anticipated cost that
would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and
the Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
(xxii) Dividends. No Subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distribution on such Subsidiary's capital
stock, from repaying to the Company any loans or advances to such
Subsidiary from the Company or from transferring any of such Subsidiary's
property or assets to the Company or any other Subsidiary of the Company.
(xxiii) Permits. Except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto), the Company and the
Subsidiaries (A) possess all certificates, authorizations and permits,
whether from federal, state or foreign regulatory authorities, necessary to
conduct their respective businesses, except where the failure to possess
such certificates, authorizations and permits would not, singly or in the
aggregate, result in a material adverse change in the condition (financial
or otherwise), prospects, earnings, business or properties of the Company
and the Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business and (B) have not received
any notice of proceedings relating to the revocation or modification of any
such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and
the Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(xxiv) Internal Systems Controls. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (C) access to assets is permitted only in accordance
with management's general or specific authorization; and (D) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxv) Intellectual Property. The Company and the Subsidiaries own or
have obtained licenses or other rights for all patents, patent
applications, trade and service marks, trade names, copyrights, inventions,
trade secrets, technology, know-how and other intellectual properties
(collectively, the "Intellectual Property"), necessary for the conduct of
their businesses as now conducted or as proposed to be conducted in the
Prospectus, except where the failure to so own or obtain licenses or other
rights would not singly or in the aggregate have a material adverse effect
on the condition (financial or otherwise), prospects, earnings, businesses
or properties of the Company and the Subsidiaries, taken as a whole. Except
as set forth in the Prospectus, (A) there are no rights of third parties to
any such Intellectual Property that would materially impair the rights of
the Company or any Subsidiary therein; (B) to the Company's knowledge,
there is no material infringement by third parties of any such Intellectual
Property; (C) there is no pending or, to the Company's knowledge,
threatened action, suit, proceeding or claim by others challenging the
Company's or any Subsidiary's
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rights in or to any such Intellectual Property, and the Company is unaware
of any facts which would form a reasonable basis for any such claim; (D)
there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of
any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; and (E) there is no
pending or, to the Company's knowledge, threatened action, suit, proceeding
or claim by others that the Company or any of the Subsidiaries infringes or
otherwise violates any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any fact which
would form a reasonable basis for any such claim.
(xxvi) Relationship with Underwriters. Except as disclosed in the
Registration Statement and the Prospectus, the Company (A) does not have
any material lending or other relationship with any bank affiliate or
lending affiliate of ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
and (B) does not intend to use any of the proceeds from the sale of the
Securities hereunder to repay any outstanding debt owed to any affiliate of
any of the Underwriters.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company,
as to matters covered thereby, to each Underwriter.
(b) Selling Stockholders. Each Selling Stockholder severally represents
and warrants to, and agrees with, each Underwriter as set forth below in this
Section 1:
(i) Title. Such Selling Stockholder is the lawful owner of the
Securities to be sold by it hereunder and upon sale and delivery of, and
payment for, such Securities, as provided herein, such Selling Stockholder
will convey to the Underwriters good and marketable title to such
Securities, free and clear of all liens, encumbrances, equities and claims
whatsoever.
(ii) Market Manipulation. Such Selling Stockholder has not taken and
will not take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result, under
the Exchange Act or otherwise, in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Securities.
(iii) Consents and Approvals. No consent, approval, authorization or
order of any court, governmental agency or body or other person is required
for the consummation by such Selling Stockholder of the transactions
contemplated herein, except such as may have been obtained under the Act
and such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters and such other approvals as have been obtained.
(iv) No Violation. Neither the sale of the Securities being sold by
such Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by such Selling Stockholder nor the
fulfillment of the terms hereof by such Selling Stockholder will conflict
with, result in a breach or violation of, or constitute a default under any
law or the terms of any indenture or other agreement or instrument to which
such Selling Stockholder is a party or by which he is bound, or any
judgment, order or decree applicable to such Selling Stockholder of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over such Selling Stockholder.
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Any certificate signed by any representative of a Selling Stockholder and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by such Selling Stockholder, as to the matters covered thereby, to each
Underwriter.
2. Purchase and Sale.
(a) Purchase Price. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, (i) the Company agrees
to sell 2,200,000 shares of Underwritten Securities, as well as up to 330,000
shares of Option Securities, (ii) each Selling Stockholder agrees, severally and
not jointly, to sell the number of Underwritten Securities and Option Securities
set forth opposite the name of each such Selling Stockholder on Schedule I
hereto and (iii) each Underwriter agrees, severally and not jointly, to
purchase, at a purchase price of $ per share, the amount of the Underwritten
Securities set forth opposite such Underwriter's name in Schedule II hereto.
(b) Option Grant. Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, (i) the Company agrees to
grant an option to the several Underwriters to purchase, severally and not
jointly, up to 330,000 shares of Option Securities and (ii) each Selling
Stockholder hereby grants an option to the several Underwriters to purchase,
severally and not jointly, the number of Option Securities set forth opposite
the name of each such Selling Stockholder on Schedule I, all of which shall be
exercised at the same purchase price per share as the Underwriters shall pay for
the Underwritten Securities. Said options may be exercised only to cover
over-allotments in the sale of the Underwritten Securities by the Underwriters.
Said options may be exercised in whole or in part at any time on or before the
30th day after the date of the Prospectus upon written notice by the
Representatives to the Company setting forth the number of shares of the Option
Securities as to which the several Underwriters are exercising the options and
the settlement date. In the event that the Underwriters exercise less than their
full over-allotment option, (A) the number of shares of the Option Securities to
be purchased by each Underwriter shall be the same percentage of the total
number of shares of the Option Securities to be purchased by the several
Underwriters as such Underwriter is purchasing of the Underwritten Securities,
subject to such adjustments as you in your absolute discretion shall make to
eliminate any fractional shares, and (B) the Company and each Selling
Stockholder shall sell that number of Option Securities based on the same,
respective percentage of Option Securities which they offered had the
Underwriters exercised their full over-allotment option.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 AM, New York City time, on
, 1999, or at such time on such later date not more than three
Business Days after the foregoing date as the Representatives shall designate,
which date and time may be postponed by agreement among the Representatives, the
Company and the Selling Stockholders or as provided in Section 9 hereof (such
date and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Representatives
for the respective accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the respective aggregate
purchase prices of the Securities being sold by the Company and each of the
Selling Stockholders to or upon the order of the Company and the Custodian (as
defined in the Custody Agreement) on behalf of the Selling Stockholders,
respectively, by wire transfer payable in same-day funds to the accounts
specified by the Company and an Attorney-in-Fact (as defined in the Custody
Agreement) on behalf of the
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Selling Stockholders. Delivery of the Underwritten Securities and the Option
Securities shall be made through the facilities of the Depository Trust Company,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ unless the Representatives shall
otherwise instruct.
Each Selling Stockholder will pay all applicable state transfer taxes, if
any, involved in the transfer to the several Underwriters of the Securities to
be purchased by them from such Selling Stockholder and the respective
Underwriters will pay any additional stock transfer taxes involved in further
transfers.
If the option provided for in Section 2(b) hereof is exercised after the
third Business Day prior to the Closing Date, the Company and the Selling
Stockholders will deliver the Option Securities (at the expense of the Company)
to the Representatives on the date specified by the Representatives (which shall
be on the third Business Day after exercise of said option) for the respective
accounts of the several Underwriters, against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Company and the Selling Stockholders, as appropriate, by
wire transfer payable in same-day funds to the accounts specified by the Company
and the Selling Stockholders. If settlement for the Option Securities occurs
after the Closing Date, the Company and the Selling Stockholders will deliver to
the Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. The several Underwriters propose to offer
the Securities for sale to the public as set forth in the Prospectus.
5. Agreements.
(a) Agreements by the Company. The Company agrees with the several
Underwriters that:
(i) Effectiveness; Filing of Amendments. The Company will use its
best efforts to cause the Registration Statement, if not effective at the
Execution Time, and any amendment thereof, to become effective. Prior to
the termination of the offering of the Securities, the Company will not
file any amendment of the Registration Statement or supplement to the
Prospectus or any Rule 462(b) Registration Statement unless the Company has
furnished you a copy for your review prior to filing and will not file any
such proposed amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, if the Registration Statement has become
or becomes effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed with
the Commission pursuant to the applicable paragraph of Rule 424(b) within
the time period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly advise the
Representatives (A) when the Registration Statement, if not effective at
the Execution Time, shall have become effective, (B) when the Prospectus,
and any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration
Statement shall have been filed with the Commission, (C) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (D) of
any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or for
any supplement to the Prospectus or for any additional information, (E) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
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threatening of any proceeding for that purpose and (F) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The Company
will use its best efforts to prevent the issuance of any such stop order or
the suspension of any such qualification and, if issued, to obtain as soon
as possible the withdrawal thereof.
(ii) Amendments. If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to
amend the Registration Statement or supplement the Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, the
Company promptly will (A) notify the Representatives of any such event; (B)
prepare and file with the Commission, subject to the second sentence of
Section 5(a)(i) hereof, an amendment or supplement which will correct such
statement or omission or effect such compliance; and (C) supply any
supplemented Prospectus to you in such quantities as you may reasonably
request.
(iii) Earnings Statement. As soon as practicable, the Company will
make generally available to its security holders and to the Representatives
an earnings statement or statements of the Company and the Subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule 158
under the Act.
(iv) Copies of the Registration Statement. The Company will furnish,
without charge, to the Representatives and counsel for the Underwriters
signed copies of the Registration Statement (including exhibits thereto)
and to each other Underwriter a copy of the Registration Statement (without
exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of each
Preliminary Prospectus and the Prospectus and any supplement thereto as the
Representatives may reasonably request. The Company will pay the expenses
of printing and producing all documents relating to the offering.
(v) Qualification of Securities. The Company will arrange, if
necessary, for the qualification of the Securities for sale under the laws
of such jurisdictions as the Representatives may designate, will maintain
such qualifications in effect so long as required for the distribution of
the Securities and will pay any fee of the National Association of
Securities Dealers, Inc. (the "NASD") in connection with NASD's review of
the offering; 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 that would subject it to service of process in suits,
other than those arising out of the offering or sale of the Securities, in
any jurisdiction where it is not now so subject.
(vi) Lock-Up. The Company will not, without the prior written consent
of the Representatives, for a period commencing on the date of the final
prospectus relating to the offering contemplated by the Registration
Statement and continuing for 180 days thereafter, offer, sell, offer to
sell, solicit an offer to buy, contract to sell, encumber, distribute,
pledge, grant any option for the sale of, or otherwise transfer or dispose
of, directly or indirectly, in one or a series of transactions (or enter
into any transaction which is designed to, or reasonably might be expected
to, result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Company or
any
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affiliate of the Company) any shares of Common Stock, any options or
warrants to purchase any shares of Common Stock or any securities
convertible or exercisable into or exchangeable for shares of Common Stock;
provided, however, that (i) the Company may make automatic annual grants of
options to its non-employee directors and may make grants of options and
issue and sell Common Stock pursuant to any director or employee stock
option plan, stock ownership plan or dividend reinvestment plan of the
Company in effect at the Execution Time, (ii) the Company may issue Common
Stock issuable upon the exercise of warrants outstanding at the Execution
Time and (iii) the Company may issue shares in connection with an
acquisition made by the Company and approved by the Company's Board of
Directors provided that the holders of such issued shares agree to be bound
by the provisions set forth in this section 5(a)(vi).
(vii) Market Manipulation. The Company will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
(viii) Certificate, Letters and Opinions. The Company will cause (i)
the certificate and the letters to be delivered to the several Underwriters
pursuant to paragraphs (b) and (e) of Section 6 at the Execution Time and
the Closing Date, also to be addressed to the directors of the Company and
(ii) each opinion of counsel delivered to the Underwriters pursuant to
paragraph (b) of Section 6 on the Closing Date to be accompanied by a
letter from the counsel authorizing the directors to rely upon such opinion
to the same extent as if it had been addressed to them.
(ix) Effectiveness. If the Registration Statement at the Execution
Time does not cover all of the Shares, the Company will file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time,
on the date of this Agreement and to pay to the Commission the filing fee
for such Rule 462(b) Registration Statement at the time of the filing
thereof or to give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Act.
(b) Agreements of the Selling Stockholders. Each Selling Stockholder
agrees with the several Underwriters that:
(i) Lock-Up. The Selling Stockholders shall have executed the form of
Lock-up Agreement attached hereto as Exhibit B.
(ii) Notice of Change. Such Selling Stockholder will advise you
promptly, and if requested by you, will confirm such advice in writing, so
long as delivery of a prospectus relating to the Securities by an
underwriter or dealer may be required under the Act, of (A) any material
change in the Company's condition (financial or otherwise), prospects,
earnings, business or properties which comes to the attention of such
Selling Stockholder or (B) any material change in the information set forth
in the Registration Statement or the Prospectus relating to such Selling
Stockholder.
(iii) Market Manipulation. Such Selling Stockholder will not take any
action designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
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(c) Fees and Expenses. The Company agrees to pay the costs and expenses
relating to the following matters: (i) the preparation, printing or reproduction
and filing with the Commission of the Registration Statement (including the
financial statements therein and the exhibits thereto), each Preliminary
Prospectus, the Prospectus, and each amendment or supplement to any of them;
(ii) the printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
Registration Statement, each Preliminary Prospectus, the Prospectus, and all
amendments or supplements to any of them, as may, in each case, be reasonably
requested for use in connection with the offering and sale of the Securities;
(iii) the preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes in
connection with the original issuance or the sale of the Securities; (iv) the
printing (or reproduction) and delivery of this Agreement, any other
underwriting-related agreement, any blue sky memorandum and all other agreements
or documents printed (or reproduced) and delivered in connection with the
offering of the Securities; (v) the listing of the Securities on the Nasdaq
National Market; (vi) any registration or qualification of the Securities for
offer and sale under the securities or blue sky laws of the several states
(including filing fees and the reasonable fees and expenses of counsel for the
Underwriters relating to such registration and qualification); (vii) any filings
required to be made with the NASD (including filing fees and the reasonable fees
and expenses of counsel for the Underwriters relating to such filings, which
fees, together with the counsel fees described in subparagraph (vi) shall not
exceed $5,000); (viii) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to
prospective purchasers of the Securities; (ix) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company; and (x) all other costs and expenses incident
to the performance by the Company of its obligations hereunder. Each Selling
Stockholder agrees to pay the fees and expenses of its counsel (including local
and special counsel) and all costs and expenses, other than those set forth
above, incident to the performance of his obligations hereunder.
6. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company and the Selling Stockholders made in any certificates pursuant to
the provisions hereof, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder and to the following
additional conditions:
(a) Effective Time. If the Registration Statement has not become
effective prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become effective
not later than 10:00 PM New York City time on the date of determination of
the public offering price. If the Company is required to file a Rule 462(b)
Registration Statement after the Execution Time, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York
City time, on the date of this Agreement. If filing of the Prospectus, or
any supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the manner and within
the time period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
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(b) Opinion of Counsel to the Company. The Company shall have
furnished to the Representatives the opinion of Feder, Kaszovitz, Isaacson,
Weber, ▇▇▇▇▇ & Bass LLP, counsel for the Company, dated the Closing Date
and addressed to the Representatives, to the effect that:
(i) Organization. Each of the Company and each of its Subsidiaries
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
organized, with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business
as described in the Prospectus, and is duly qualified to do business as
a foreign corporation and is in good standing under the laws of each
jurisdiction set forth on a schedule to such opinion.
(ii) Capitalization of Subsidiaries. All the outstanding shares of
capital stock of each Subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable and, except as otherwise
set forth in the Prospectus, all outstanding shares of capital stock of
the Subsidiaries are held of record by the Company, either directly or
through wholly owned subsidiaries, free and clear of any perfected
security interest and, to the knowledge of such counsel, after due
inquiry, any other security interest, claim, lien or encumbrance, except
that the shares of JP (HK) Limited, JAKKS Pacifice (HK) Limited and Road
Champs Ltd. are owned of record by ▇▇▇▇ ▇▇▇▇▇▇▇▇, as nominee of the
Company, and the Company.
(iii) Capital Stock. The capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock (including the
Securities being sold hereunder by the Selling Stockholders) have been
duly and validly authorized and issued and are fully paid and
nonassessable; the Securities being sold hereunder by the Company have
been duly and validly authorized, and, when issued and delivered to and
paid for by the Underwriters pursuant to this Agreement, will be fully
paid and nonassessable; all of the Securities have been approved for
listing on the Nasdaq National Market; the form of certificates for the
Securities complies with the requirements of the Delaware General
Corporation Law; the holders of outstanding shares of capital stock of
the Company are not entitled to preemptive or other rights to subscribe
for the Securities; and, except as set forth in the Prospectus, no
options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or other
ownership interests in the Company are, to the knowledge of such
counsel, outstanding.
(iv) Litigation. To the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator involving
the Company or any of the Subsidiaries or its or their property of a
character required to be disclosed in the Registration Statement that is
not adequately disclosed in the Prospectus, and there is no franchise,
contract or other document of a character required to be described in
the Registration Statement or Prospectus, or to be filed as an exhibit
thereto, that is not described or filed as required.
(v) Effectiveness; Compliance. Such counsel has been advised that
the Registration Statement has become effective under the Act; any
required filing of the Prospectus, and any supplements thereto, pursuant
to Rule 424(b) has been made in the manner and
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within the time period required by Rule 424(b); to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that purpose have been
instituted or threatened and the Registration Statement and the
Prospectus (other than the financial statements and other financial
information contained therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the applicable
requirements of the Act and the Exchange Act and the respective rules
thereunder.
(vi) Due Authorization. This Agreement has been duly authorized,
executed and delivered by the Company.
(vii) Investment Company. The Company is not and, after giving
effect to the offering and sale of the Securities and the application of
the proceeds thereof as described in the Prospectus, will not be, an
"investment company" as defined in the Investment Company Act of 1940,
as amended.
(viii) Consents. No consent, approval, authorization, filing with
or order of any court or governmental agency or body is required for the
consummation by the Company or the Selling Stockholders of the
transactions contemplated herein, except such as have been obtained
under the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated in this
Agreement and in the Prospectus and such other approvals (specified in
such opinion) as have been obtained.
(ix) Conflicts. Neither the issue and sale of the Securities, nor
the consummation of any other of the transactions herein contemplated
nor the fulfillment of the terms hereof will, in any material respect,
conflict with, result in a breach or violation of or imposition of any
lien, charge or encumbrance upon any property or assets of the Company
or the Subsidiaries pursuant to, (A) the charter or by-laws of the
Company or the Subsidiaries, or (B) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement
or other agreement, obligation, condition, covenant or instrument, known
to such counsel, to which the Company or any of the Subsidiaries is a
party or bound or to which its or their property is subject, or (C) any
statute, law, rule, regulation, judgment, order or decree applicable to
the Company or any of the Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or the Subsidiaries or any of its
or their properties.
(x) Registration Statement. The statements under the captions
"Certain Relationships and Related Transactions," "Business--Government
and Industry Regulation" and "Description of Securities" in the
Prospectus and Items 14 and 15 of Part II of the Registration Statement,
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly represent the
information called for with respect to such legal matters, documents and
proceedings.
(xi) Violations. Neither the Company nor any of the Subsidiaries
is in violation or default of (A) any provision of its charter or
bylaws, (B) the terms of any indenture, contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to
which its property is subject or (C) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative
agency, governmental body,
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arbitrator or other authority having jurisdiction over the Company or
any of the Subsidiaries or any of its or their properties, as
applicable, except for any such violation or default which would not,
singly or in the aggregate, result in a material adverse change in the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and the Subsidiaries, taken as a whole, except
as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(xii) No Registration Rights. The Company has registered all
applicable securities of any persons or entities which have registration
rights, except that the Company has not registered the shares underlying
the warrant issued to Worldwide Wrestling Federation Entertainment, Inc.
(formerly Titan Sports, Inc.) on June 30, 1999.
Such counsel shall further state that they have no reason to believe that
on the Effective Date or at the Execution Time the Registration Statement
contains or contained any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus as of
its date and on the Closing Date includes or included any untrue statement
of a material fact or omitted or omits to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading
(in each case, other than the financial statements and other financial
information contained therein, as to which such counsel need express no
belief).
In rendering the foregoing opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than
the State of New York, the Federal laws of the United States or the General
Corporation Law of the State of Delaware, to the extent they deem proper
and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of the Company
and public officials. References to the Prospectus in this paragraph 6(b)
include any supplements thereto at the Closing Date. The opinion of any
such other counsel shall be rendered to the Underwriters at the request of
the Company and shall so state therein and shall further state that counsel
for the Underwriters may rely upon such opinion in rendering their opinion
to the Underwriters.
(c) Opinion of Counsel to the Selling Stockholders. Each of the
Selling Stockholders shall have furnished to the Representatives the
opinion of its counsel (who shall be acceptable to the Representatives)
dated the Closing Date and addressed to the Representatives, to the effect
that:
(i) Due Authorization. This Agreement has been duly authorized,
executed and delivered by such Selling Stockholder. Such Selling
Stockholder has full legal right and authority to sell, transfer and
deliver, in the manner provided in this Agreement, the Securities being
sold by it hereunder.
(ii) Title. Such Selling Stockholder is the lawful owner of the
Securities to be sold by it hereunder and has good and valid title to
such Securities, free and clear of all liens, encumbrances, equities or
claims. The Securities being sold hereunder by such Selling Stockholder
has been transferred to each Underwriter that has purchased such
Securities without notice of an adverse claim thereto (within the
meaning of the Uniform Commercial Code of the State of New York).
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(iii) No Consent. All consents, approvals, authorizations and
filings required to be made or obtained by such Selling Stockholder for
the sale and delivery of the Securities being sold by it to the
Underwriters hereunder have been made or obtained, as the case may be.
(iv) No Conflict. Neither the sale of the Securities being sold by
such Selling Stockholder, nor the consummation of the transactions
herein contemplated by such Selling Stockholder nor the fulfillment of
the terms hereof by such Selling Stockholder will result in a breach or
violation of, or constitute a default under, (A) the charter or by-laws
or other organizational documents of such Selling Stockholder, or (B)
the terms of any indenture or other agreement or instrument, to which
such Selling Stockholder is a party or by which it or its properties are
bound, or (C) any law, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over such Selling Stockholder.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of New York, the Federal laws of the United States and the General
Corporation Law of the State of Delaware, to the extent they deem proper
and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to
counsel for the Underwriters, and (B) as to matters of fact, to the extent
they deem proper, on certificates of officers or other representatives of
such Selling Stockholder and public officials. The opinion of any such
other counsel shall be rendered to the Underwriters at the request of such
Selling Stockholder and shall so state therein and shall further state that
counsel for the Underwriters may rely upon such opinion in rendering their
opinion to the Underwriters.
(d) Opinion of Counsel to the Underwriters. The Representatives shall
have received from ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, such opinion or opinions, dated the Closing Date and
addressed to the Representatives, with respect to the issuance and sale of
the Securities, the Registration Statement, the Prospectus (together with
any supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company and each Selling Stockholder shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(e) Certificate from the Company. The Company shall have furnished to
the Representatives a certificate of the Company, signed by the Chairman of
the Board or the President and the principal financial or accounting
officer of the Company, dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the Registration
Statement, the Prospectus, any supplements to the Prospectus and this
Agreement and that:
(i) Bring-down of Representations and Warranties. The
representations and warranties of the Company in this Agreement that are
qualified as to materiality shall be true and correct and all other
representations and warranties of the Company in this Agreement shall be
true and correct in all material respects on and as of the Closing Date
with the same effect as if made on the Closing Date and the Company has
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied by it at or prior to the Closing Date.
(ii) Stop Orders. The Company has not received or become aware of
the issuance of any stop order suspending the effectiveness of the
Registration Statement, nor, to the Company's knowledge, have
proceedings for that purpose been instituted or threatened.
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(iii) Adverse Change. Since the respective dates as of which the
information is given in the Prospectus, other than set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (x) there shall have not
occurred any change or any development involving a prospective change in
condition, financial or otherwise, or the earnings, business, management
or operations of the Company and the Subsidiaries, taken as a whole, (y)
there shall not have been any change or any development involving a
prospective change in the capital stock or in the long-term debt of the
Company or any of the Subsidiaries and (z) neither the Company nor any
of its subsidiaries shall have incurred any liability or obligation,
direct or contingent, the effect of which, in any such case described in
clause 6(e)(iii)(x), 6(e)(iii)(y) or 6(e)(iii)(z), in your judgment, is
material and adverse and, in your reasonable judgment, makes it
impracticable to market the Securities on the terms and in the matter
contemplated in the Prospectus.
(f) Certificate from the Selling Stockholders. Each Selling
Stockholder shall have furnished to the Representatives a certificate,
signed by a duly authorized person and dated the Closing Date, to the
effect that the representations and warranties of such Selling Stockholder
in this Agreement that are qualified as to materiality shall be true and
correct and all other representations and warranties of such Selling
Stockholder in this Agreement shall be true and correct in all material
respects on and as of the Closing Date to the same effect as if made on the
Closing Date and such Selling Stockholder has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied by it at or prior to the Closing Date.
(g) Accountant's Letters. At the Execution Time and at the Closing
Date, the Company shall have caused ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Certified Public
Accountants, A Professional Corporation and ▇▇▇▇▇▇ & ▇▇▇▇▇, LLP to furnish
to the Representatives letters, dated respectively as of the Execution Time
and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the applicable published
rules and regulations thereunder and covering other customary matters with
respect to the Registration Statement, the Preliminary Prospectus and the
Prospectus.
(h) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in Section 6(g) hereof or (ii) any
change, or any development involving a prospective change, in or affecting
the condition (financial or otherwise), earnings, business or properties of
the Company and the Subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth
in or contemplated in the Prospectus (exclusive of any supplement thereto)
the effect of which, in any case referred to in clause (i) or (ii) above,
is, in the sole judgment of the Representatives, so material and adverse as
to make it impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of any
supplement thereto).
(i) Lock-Up Agreements. At or prior to the Execution Time, a letter
substantially in the form of Exhibit B hereto, shall have been furnished to
the Representatives by each officer and director of the Company.
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(j) Listing of Securities. The Securities shall have been approved
for listing on the Nasdaq National Market upon official notice of issuance.
(k) Additional Information. Prior to the Closing Date, the Company
and the Selling Stockholders shall have furnished to the Representatives
such further information, certificates and documents as the Representatives
may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Company and each Selling Stockholder in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered
at the office of ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP, counsel for the Underwriters, at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company or any Selling Stockholder to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally through ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation on demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities. The Company
also agrees to reimburse the Underwriters, their directors and officers and any
persons controlling any of the Underwriters for any and all reasonable fees and
expenses (including, without limitation, the fees and disbursements of counsel)
incurred by them in connection with enforcing their rights hereunder (including,
without limitation, pursuant to Section 8 hereof). If the Company is required to
make any payments to the Underwriters under this Section 7 because of any
Selling Stockholder's refusal, inability or failure to satisfy any condition to
the obligations of the Underwriters set forth in Section 6, the Selling
Stockholders pro rata in proportion to the percentage of Securities to be sold
by each shall reimburse the Company on demand for all amounts so paid.
8. Indemnification and Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and
all losses, claims, damages or liabilities, joint or several, 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, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or in
any amendment thereof, or in any Preliminary Prospectus or the Prospectus,
or in any amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state
-18-
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therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company specifically for inclusion therein by
or on behalf of any Underwriter through the Representatives. This indemnity
agreement will be in addition to any liability which the Company may
otherwise have.
(b) Indemnification by Selling Stockholders. Each Selling Stockholder
agrees to indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter, and each person who
controls any Underwriter within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity to each
Underwriter. Notwithstanding the foregoing, no Selling Stockholder shall be
liable under this Section 8 for an amount which exceeds the amount of
proceeds received by such Selling Stockholder from the sale of its portion
of the Underwritten Securities. This indemnity agreement will be in
addition to any liability which any Selling Stockholder may otherwise have.
(c) Indemnification by Underwriters. Each Underwriter severally and
not jointly agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signs the Registration Statement, and
each person who controls the Company within the meaning of either the Act
or the Exchange Act and each Selling Stockholder, to the same extent as the
foregoing indemnities to each Underwriter, but only with reference to
written information relating to such Underwriter furnished to the Company
by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in paragraph (a)
above. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have.
(d) Notice of Action. Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against
the indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof. The indemnifying party shall be
entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying
party shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except as set
forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the indemnified party in
an action, the indemnified party shall have the right to employ separate
counsel (including local counsel), and the indemnifying party shall bear
the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party,
(iii) the indemnifying party shall not have employed counsel reasonably
-19-
20
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An indemnifying
party will not, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(e) Contribution. In the event that the indemnity provided in
paragraph (a), (b) or (c) of this Section 8 is unavailable or insufficient
to hold harmless an indemnified party for any reason, the Company and the
Underwriters severally agree to contribute to the aggregate of the losses,
claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively, "Losses") to which the Company and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company, the Selling Stockholders and
the Underwriters from the offering of the Securities; provided, however,
that in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or
commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence
is unavailable for any reason, the Company, the Selling Stockholders and
the Underwriters severally shall contribute in such proportion as is
appropriate to reflect the relative fault of the Company, the Selling
Stockholders and the Underwriters in connection with the statements or
omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in
each case as set forth on the cover page of the Prospectus and under the
heading "Underwriting", and the Company shall be deemed to receive all
remaining benefits (which shall be deemed to be equal to the total net
proceeds from the Offering (before deducting expenses) received by it and
the Selling Stockholders. Relative fault shall be determined by reference
to, among other things, whether any untrue or any alleged untrue statement
of a material fact or the omission or alleged omission to state a material
fact relates to information provided by the Company, the Selling
Stockholders or the Underwriters, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (e), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 8, each person who controls an Underwriter within
the meaning of either the Act or the Exchange Act and each director,
officer, employee and agent of an Underwriter shall have the same rights to
contribution as such Underwriter, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of
the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of
this paragraph (e).
-20-
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9. Default by an Underwriter. If any one or more Underwriters shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the aggregate
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set
forth in Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any nondefaulting
Underwriter, the Selling Stockholders or the Company. In the event of a default
by any Underwriter as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company, the Selling
Stockholders and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. Termination. This Agreement may be terminated at any time on or prior
to the Closing Date by you by written notice to the Company if any of the
following has occurred: (i) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions or
in the financial markets of the United States or elsewhere that, in your
judgment, is material and adverse and, in your judgment, makes it impracticable
to market the Securities on the terms and in the manner contemplated in the
Prospectus, (ii) the suspension or material limitation of trading in securities
or other instruments on the New York Stock Exchange, the American Stock
Exchange, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange, the Chicago Board of Trade or the Nasdaq National Market or limitation
on prices for securities or other instruments on any such exchange or Nasdaq
National Market, (iii) the suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your opinion materially or adversely affects, or will materially or adversely
affect, the business, prospects, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole, (v) the declaration of a
banking moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Stockholder and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
any Selling Stockholder or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 5(c), 7 and 8
hereof shall survive the termination or cancellation of this Agreement.
-21-
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The provision of Sections 5(a)(vi) and 5(b)(i) shall terminate upon the
termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and:
(1) if sent to the Representatives, will be mailed, delivered or
telefaxed to ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Fax number:
(▇▇▇) ▇▇▇-▇▇▇▇) (with a copy forwarded to ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(Fax number: (▇▇▇) ▇▇▇-▇▇▇▇));
(2) if sent to the Company, will be mailed, delivered or telefaxed to
JAKKS Pacific, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (Fax number: (▇▇▇) ▇▇▇-▇▇▇▇) (with a copy to
Feder, Kaszovitz, Isaacson, Weber, ▇▇▇▇▇ & Bass LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (Fax number: (212)
888-7776)); or
(3) if sent to any Selling Stockholder, will be mailed, delivered or
telefaxed and confirmed to it at the address set forth in Schedule I
hereto.
13. Successors and Reliance. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
17. Submission to Jurisdiction, Etc. (a) To the fullest extent permitted
by applicable law, the Company and the Selling Stockholders irrevocably submit
to the jurisdiction of any federal or state court in the City, County and State
of New York, United States of America, in any suit or proceeding based on or
arising under this Agreement, the Custody Agreement, the Registration Statement,
the Prospectus or any Preliminary Prospectus, and irrevocably agree that all
claims in respect of any such suit or proceeding may be determined in any such
court. The Company and the Selling Stockholders irrevocably and fully waive the
defense of an inconvenient forum to the maintenance of such suit or proceeding.
They hereby irrevocably designate and appoint ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Process
Agent"), as their authorized agent upon whom process may be served in any such
suit or proceeding, it being understood that the designation and appointment of
the Process Agent as such authorized agent shall become effective immediately
without any further action on the part of the Selling Stockholders. The Selling
Stockholders represent to the Underwriters that they have notified the Process
Agent of such designation and appointment and that the Process Agent has
accepted the same in writing. The Selling Stockholders hereby irrevocably
authorize and direct the Process Agent to accept such service. They further
agree that service of process upon the Process Agent and written notice of said
service to the Selling Stockholders mailed by prepaid
-22-
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registered first-class mail or delivered to the Process Agent at its principal
office, shall be deemed in every respect effective service of process upon the
Selling Stockholders in any such suit or proceeding. Nothing herein shall affect
the right of any Underwriter or any person controlling such Underwriter to serve
process in any other manner permitted by law. The Selling Stockholders further
agree to take any and all action, including the execution and filing of any and
all such documents and instruments as may be necessary to continue the
designation and appointment of the Process Agent in full force and effect so
long as they have any outstanding obligations under this Agreement or the
Custody Agreement. If for any reason the Process Agent is no longer able to
serve as such authorized agent, the Selling Stockholders shall appoint another
agent reasonably satisfactory to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation. To the extent that the Selling Stockholders have or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether through service of note, attachment prior to judgment, attachment in
aid of execution, executor or otherwise) with respect to themselves or their
properties, they hereby irrevocably waive such immunity in respect of their
obligations under this Agreement and the Custody Agreement, to the extent
permitted by law.
(b) The obligation of the parties to make payments hereunder is in U.S.
dollars (the "Obligation Currency") and such obligation shall not be discharged
or satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency or any other
realization in such other currency, whether as proceeds of set-off, security,
guarantee, distributions, or otherwise, except to the extent to which such
tender, recovery or realization shall result in the effective receipt by the
party which is to receive such payment of the full amount of the Obligation
Currency expressed to be payable hereunder, and the party liable to make such
payment agrees to indemnify the party which is to receive such payment (as an
additional, separate and independent cause of action) for the amount (if any) by
which such effective receipt shall fall short of the full amount of the
Obligation Currency expressed to be payable hereunder and such obligation to
indemnify shall not be affected by judgment being obtained for any other sums
due under this Agreement.
18. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"amend," "amendment" or "supplement" with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall mean and
include the filing of any document under the Exchange Act after the
Effective Date, or the issue date of any Preliminary Prospectus or the
Prospectus, as the case may be, deemed to be incorporated therein by
reference.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Custody Agreement" shall mean the Custody Agreement and Power of
Attorney, substantially in the form of Exhibit A attached hereto, which
will be executed by each of the Selling Stockholders in connection with
their respective sales of Common Stock pursuant to this Underwriting
Agreement.
-23-
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"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in Section 1(a)(i) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information. Such term shall include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 which were filed on or
before the issue date of such Preliminary Prospectus.
"Prospectus" shall mean the prospectus relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date. Such term shall include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed on or before the issue date of such Prospectus.
"Registration Statement" shall mean the registration statement
referred to in Section 1(a)(i) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A and the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 which are filed on or before the Effective Date.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the initial registration statement.
-24-
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If the foregoing Underwriting Agreement is in accordance with your
understanding of our agreement, please sign and return to us the enclosed
duplicate hereof, whereupon this letter and your acceptance shall represent a
binding agreement among the Company and the several Underwriters.
Very truly yours,
JAKKS Pacific, Inc.
By:
------------------------------------
Name:
Title:
SELLING STOCKHOLDERS:
--------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
The foregoing Underwriting Agreement is hereby confirmed and accepted as of
the date first above written.
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
ADVEST, INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INC.
DLJDIRECT INC.
Acting on behalf of themselves and as the
Representatives of the other several Underwriters
named in Schedule II hereof.
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
By:
--------------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
-25-
26
SCHEDULE I TO UNDERWRITING AGREEMENT
NUMBER OF
UNDERWRITTEN NUMBER OF OPTION
SELLING STOCKHOLDERS SECURITIES TO BE SOLD SECURITIES TO BE SOLD
▇▇▇▇ ▇▇▇▇▇▇▇▇................................... 250,000 60,000
c/o JAKKS Pacific, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇............................... 100,000 15,000
c/o JAKKS Pacific, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇................................. 45,000
c/o JAKKS Pacific, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇............................... 45,000
c/o JAKKS Pacific, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇................................. 60,000
c/o JAKKS Pacific, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
------- ------
Total................................ 500,000 75,000
======= ======
S-1
27
SCHEDULE II TO UNDERWRITING AGREEMENT
NUMBER OF NUMBER OF
UNDERWRITTEN SECURITIES OPTION SECURITIES
UNDERWRITERS TO BE PURCHASED TO BE PURCHASED
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation........................
Advest, Inc.....................................
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc....................
DLJDirect Inc...................................
--------- -------
Total................................ 2,700,000 405,000
========= =======
S-1
28
EXHIBIT A
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇.▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(NAMES OF SELLING
STOCKHOLDERS)
CUSTODY AGREEMENT AND POWER OF ATTORNEY
FOR SALE OF COMMON STOCK OF
JAKKS PACIFIC, INC.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
As Attorney-in-Fact as provided herein
▇/▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, Isaacson, Weber, ▇▇▇▇▇ & Bass LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
------------------------------------, as Custodian as provided herein
Gentlemen:
The undersigned stockholders (the "Selling Stockholders") of JAKKS Pacific,
Inc., a Delaware corporation (the "Company"), propose to sell shares of Common
Stock, $.001 par value, of the Company ("Common Stock") to certain underwriters
(the "Underwriters") for whom ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation, Advest, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc. and DLJdirect Inc. will
act as the representatives (the "Representatives"). The shares are being
registered for distribution under a Registration Statement on Form S-3 (the
"Registration Statement") for distribution by the Underwriters to the public at
a price and on terms to be hereafter determined. It is understood that at this
time there is no commitment on the part of the Underwriters to purchase any
shares of Common Stock and no assurance that an offering of Common Stock will
take place. The shares of Common Stock which the undersigned propose to sell to
the Underwriters pursuant to the Underwriting Agreement (hereinafter defined)
are referred to herein as the "Securities".
1. Appointment and Powers of Attorney-in-Fact.
A. Each of the undersigned hereby irrevocably constitutes and appoints
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Attorney-in-Fact") as his agent and attorney-in-fact, with
full power of substitution with respect to all matters arising in connection
with the public offering and sale by the undersigned of the Securities,
including, but not limited to, the power and authority on behalf of the
undersigned to do or cause to be done any of the following things:
(i) negotiate, determine and agree upon (a) the price at which the
Securities will be initially offered to the public by the Underwriters
pursuant to the Underwriting Agreement, (b) the underwriting discount with
respect to the Securities, and (c) the price at which the Securities will
be sold to the Underwriters by the Selling Stockholders pursuant to the
Underwriting Agreement;
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(ii) execute and deliver on behalf of the undersigned an Underwriting
Agreement (the "Underwriting Agreement"), substantially in the form of the
draft dated , 1999, delivered to the undersigned
herewith, receipt of which is acknowledged, but with such insertions,
changes (including a change in the number of shares of Common Stock to be
sold by the undersigned), additions or deletions as the Attorney-in-Fact,
acting in his sole discretion, shall approve, which approval shall be
conclusively evidenced by the execution and delivery of the Underwriting
Agreement by an Attorney-in-Fact, including the making of all
representations and agreements provided in the Underwriting Agreement to be
made by, and the exercise of all authority thereunder vested in, the
undersigned;
(iii) sell, assign, transfer and deliver the Securities to the
Underwriters pursuant to the Underwriting Agreement and deliver to the
Underwriters certificates for the Securities so sold;
(iv) endorse (in blank or otherwise) on behalf of the undersigned the
certificate or certificates for the Securities to be sold by the
undersigned pursuant to the Underwriting Agreement or to execute and
deliver a stock power(s) with respect to such certificates;
(v) take any and all steps deemed necessary or desirable by the
Attorney-in-Fact in connection with the registration of the Securities
under the Securities Act of 1933, as amended (the "Securities Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and under
the securities or "blue sky" laws of various states and jurisdictions,
including, without limitation, the giving or making of such undertakings,
representations and agreements and the taking of such other steps as the
Attorney-in-Fact may deem necessary or advisable;
(vi) instruct the Company and the Custodian, as hereinafter defined,
on all matters pertaining to the sale of the Securities and delivery of
certificates therefor;
(vii) make any assurances, communications and reports (including in
the form of a signed certificate pursuant to Section 6(f) of the
Underwriting Agreement) for and on behalf of the undersigned to the
Underwriters, which may be necessary or advisable for facilitating the sale
of the Securities, or to appropriate state or governmental authorities,
which may be necessary or advisable for effecting the registration of the
Securities under the state securities or blue sky laws;
(viii) provide, in accordance with the Underwriting Agreement, for the
payment of any expenses of the offering and sale of the Common Stock
covered by the Registration Statement to be paid by the Selling
Stockholders;
(ix) exercise any power conferred upon, and to take any action
authorized to be taken by, the undersigned pursuant to the Underwriting
Agreement, in the sole discretion of the Attorney-in-Fact; and
(x) otherwise take all actions and do all things necessary or proper,
required, contemplated or deemed advisable or desirable by the
Attorney-in-Fact in his discretion, including the execution and delivery of
any documents, and generally act for and in the name of the undersigned
with respect to the sale of the Securities to the Underwriters and the
offering of the Securities by the Underwriters as fully as could the
undersigned if then personally present and acting.
B. Power to Act. The Attorney-in-Fact may act alone in exercising the
rights and powers conferred on him by this Custody Agreement and Power of
Attorney (the "Agreement"). The
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Attorney-in-Fact is hereby empowered to determine, individually, in his sole and
absolute discretion, the time or times when, the purposes for which, and the
manner in which, any power herein conferred upon him shall be exercised.
C. Reliance. The Custodian, the Underwriters, the Company and all other
persons dealing with the Attorney-in-Fact as such may rely and act upon any
writing believed in good faith to be signed by the Attorney-in-Fact.
D. Compensation. The Attorney-in-Fact shall not receive any compensation
for his services rendered hereunder, except that he shall be entitled to cause
the Custodian to pay, from the proceeds payable to the undersigned, each of the
undersigned's proportionate share of any out-of-pocket expenses incurred under
this Agreement.
2. Appointment of Custodian; Deposit of Securities.
A. Deposit of Certificates. In connection with and to facilitate the sale
of the Securities to the Underwriters, each of the undersigned hereby appoints
as custodian (the "Custodian") and herewith deposits
with the Custodian one or more certificates for Common Stock that in the
aggregate represent not less than the total number of Securities to be sold by
him to the Underwriters, which number is set forth on Schedule I hereto. Each
such certificate so deposited on the date hereof is in negotiable and proper
deliverable form, endorsed in blank with the signature of the undersigned or the
Attorney-in-Fact thereon guaranteed by a commercial bank or trust company in the
United States or by a member firm of the Nasdaq National Market, or is
accompanied by a duly executed stock power or powers in blank, bearing the
signature of the undersigned or the Attorney-in-Fact so guaranteed. The
Custodian is hereby authorized and directed, subject to the instructions of the
Attorney-in-Fact, (a) to hold in custody the certificate or certificates
deposited herewith, (b) to deliver or to authorize the Company's transfer agent
to deliver the certificate or certificates deposited hereunder (or replacement
certificate(s) for the Securities) to or at the direction of the
Attorney-in-Fact in accordance with the terms of the Underwriting Agreement and
(c) to return or cause the Company's transfer agent to return to the undersigned
new certificate(s) for the shares of Common Stock represented by any certificate
deposited hereunder which are not sold pursuant to the Underwriting Agreement.
B. Retention of Rights of Ownership. Until the Securities have been
delivered to the Underwriters against payment therefor in accordance with the
Underwriting Agreement, the undersigned shall retain all rights of ownership
with respect to the Securities deposited hereunder, including the right to vote
and to receive all dividends and payment thereon, except the right to retain
custody of or dispose of such Securities, which right is subject to this
Agreement, lock-up agreements between each of the undersigned and Advest, Inc.
and the Underwriting Agreement.
C. Compensation. The Custodian shall be entitled to customary
compensation for the services to be rendered hereunder as set forth in Schedule
II attached hereto. Such compensation shall be paid to the Custodian by the
Company.
3. Sale of Securities; Remitting Net Proceeds.
A. Delivery of Securities upon Payment. The Attorney-in-Fact is hereby
authorized and directed to deliver or cause the Custodian or the Company's
transfer agent to deliver certificates for the Securities to the
Representatives, as provided in the Underwriting Agreement, against delivery to
the Attorney-in-Fact for the account of the undersigned of the purchase price of
the Securities, at the time and in the funds specified in the Underwriting
Agreement. The Attorney-in-Fact is
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authorized, on behalf of the undersigned, to accept and acknowledge receipt of
the payment of the purchase price for the Securities and shall promptly deposit
such proceeds with the Custodian. After reserving an amount of such proceeds for
fees and expenses as provided below, the Custodian shall promptly remit to the
undersigned their respective, proportionate shares of the proceeds.
B. Retention of Fees and Expenses. Before any proceeds of the sale of the
Securities are remitted to the undersigned, the Attorney-in-Fact is authorized
and empowered to direct the Custodian to reserve from the proceeds an amount
determined by the Attorney-in-Fact to be sufficient to pay all expenses of the
Selling Stockholders, which amount shall be allocated between the undersigned
according to their respective, proportionate shares of the proceeds. The Selling
Stockholders' expenses shall include those items, if any, of expense of the
offering and sale of the Common Stock to be borne by them as provided in the
Underwriting Agreement. The Custodian is authorized to pay such expenses from
the amount reserved for that purpose pursuant to the written direction of the
Attorney-in-Fact. After payment of expenses from this reserve, the Custodian
will remit to the undersigned their respective, proportionate shares of any
balance. To the extent expenses exceed the amount reserved, the Selling
Stockholders shall remain liable for their respective, proportionate shares of
such expenses.
4. Representations, Warranties and Agreements. Each of the undersigned
represents and warrants to, and agrees with each other, the Company, the
Attorney-in-Fact, the Custodian and the Underwriters as follows:
A. Authority. Each of the undersigned has full legal right, power
and authority to enter into and perform this Agreement and the Underwriting
Agreement and to sell, transfer, assign and deliver the Securities to be
sold by him pursuant to the Underwriting Agreement, free and clear of all
liens, encumbrances, equities and claims whatsoever. If either of
undersigned is acting as a fiduciary, officer, partner, or agent, he is
enclosing with this Agreement certified copies of the appropriate
instruments pursuant to which the undersigned is authorized to act
hereunder.
B. Bring-down of Representations, Warranties and Covenants. Each of
the undersigned has reviewed the representations and warranties to be made
by the undersigned as a Selling Stockholder contained in the Underwriting
Agreement, and hereby represents, warrants and covenants that each of such
representations and warranties is true and correct as of the date hereof
and, except as the undersigned shall have notified the Attorney-in-Fact and
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation pursuant to paragraph F
of the attached instructions, will be true and correct at all times from
the date hereof through and including the time of the closing of the sale
of the Securities to the Underwriters. Each of the undersigned will
promptly notify the Attorney-in-Fact of any development that would make any
such representation or warranty untrue.
C. Absence of Changes. Each of the undersigned has reviewed the
Registration Statement, including the preliminary prospectus included
therein, and (i) the undersigned have no knowledge of any material adverse
information with regard to the current and prospective operations of the
Company or the Subsidiaries (as defined in the Underwriting Agreement)
except as disclosed in such preliminary prospectus, (ii) the information
contained in such preliminary prospectus with respect to the undersigned is
true and correct, and (iii) to the best of the knowledge and belief of the
undersigned, such preliminary prospectus does not contain any misstatement
of a material fact or omit to state any material fact.
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32
D. Non-affiliation. Neither of the undersigned is directly or
indirectly an affiliate of or associated with any member of the National
Association of Securities Dealers, Inc.
E. Lock-up. The undersigned will not sell, offer to sell, contract
to sell or otherwise dispose of any shares of Common Stock (or any
securities convertible into or exercisable or exchangeable for shares of
Common Stock) except in accordance with the terms of the Lock-Up Agreement
referred to in Section 5(b)(i) of the Underwriting Agreement.
F. Indemnification. Upon execution and delivery of the Underwriting
Agreement by the Attorney-in-Fact on behalf of each of the undersigned,
each of the undersigned agrees to indemnify and hold harmless the
Underwriters, the Company, each of its directors and each of its officers
who signs the Registration Statement, and each person, if any, who controls
any Underwriter or the Company, and to contribute to amounts paid as a
result of losses, claims, damages, liabilities and expenses, as provided in
Section 8 of the Underwriting Agreement.
G. Agreement to be Bound. Upon execution and delivery of the
Underwriting Agreement by each of the undersigned or the Attorney-in-Fact
on behalf of him, each of the undersigned agrees to be bound by and to
perform each of the covenants and agreements made by each of the
undersigned as a Selling Stockholder in the Underwriting Agreement.
H. Additional Information. Each of the undersigned agrees to deliver
to the Attorney-in-Fact such documentation as the Attorney-in-Fact, the
Company, the other Selling Stockholder or the Underwriters or any of their
respective counsel may reasonably request in order to effectuate any of the
provisions hereof or of the Underwriting Agreement, all of the foregoing to
be in form and substance satisfactory in all respects to the requesting
party.
The foregoing representations, warranties and agreements are made for the
benefit of, and may be relied upon by, each of the undersigned with respect to
the other Selling Stockholder, the Attorney-in-Fact, the Company, the Custodian,
the Underwriters and their respective representatives, agents and counsel and
are in addition to, and not in limitation of, the representations, warranties
and agreements of the Selling Stockholders in the Underwriting Agreement.
5. Irrevocability of Instruments; Termination of this Agreement.
A. Irrevocability. This Agreement, the deposit of the Securities pursuant
hereto and all authority hereby conferred, is granted, made and conferred
subject to and in consideration of (i) the interests of the Attorney-in-Fact,
the Underwriters and the Company for the purpose of completing the transactions
contemplated hereunder and by the Underwriting Agreement and (ii) the completion
of the registration of Common Stock pursuant to the Registration Statement and
the other acts of the above-mentioned parties from the date hereof to and
including the execution and delivery of the Underwriting Agreement in
anticipation of the sale of Common Stock, including the Securities, to the
Underwriters. The Attorney-in-Fact is hereby further vested with an estate,
right, title and interest in and to the Securities deposited herewith for the
purpose of irrevocably empowering and securing to him authority sufficient to
consummate said transactions. Accordingly, this Agreement shall be irrevocable
prior to the Closing Date (as defined in the Underwriting Agreement), and shall
remain in full force and effect until that date. The undersigned further agree
that this Agreement shall not be terminated by operation of law or upon the
occurrence of any event whatsoever, including the death, disability or
incompetence of either or both of the undersigned. If any event referred to in
the preceding sentence shall occur, whether with or without notice thereof to
the Attorney-in-Fact, the Custodian, any of the Underwriters or any other
person, the Attorney-in-Fact and the Custodian nevertheless shall be authorized
and empowered to deliver
A-5
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and deal with the Securities deposited under this Agreement by the undersigned
in accordance with the terms and provisions of the Underwriting Agreement and
this Agreement as if such event had not occurred.
B. Termination. If the sale of the Securities contemplated by this
Agreement is not completed by the 60th day after the date of the Prospectus (as
defined in the Underwriting Agreement), this Agreement shall terminate (without
affecting any lawful action of the Attorney-in-Fact or the Custodian prior to
such termination or the agreement of the undersigned to indemnify the
Attorney-in-Fact and the Custodian), and the Attorney-in-Fact shall cause the
Custodian to return to the undersigned all certificates for the Securities
deposited hereunder, but only after having received payment of each of the
undersigned's proportionate part of any expenses to be paid or borne by the
Selling Stockholders. The undersigned hereby covenant with the Attorney-in-Fact
and with each other that if for any reason the sale of the Securities
contemplated hereby shall not be consummated, each of the undersigned shall pay
his proportionate share of all expenses payable by the Selling Stockholders
hereunder or under the Underwriting Agreement.
6. Liability and Indemnification of the Attorney-in-Fact and
Custodian. The Attorney-in-Fact and the Custodian assume no responsibility or
liability to the undersigned or to any other person, other than to deal with the
Securities, the proceeds from the sale of the Securities and any other shares of
Common Stock deposited with the Custodian pursuant to the terms of this
Agreement in accordance with the provisions hereof. The duties and obligations
of the Custodian shall be limited to and determined solely by the express
provisions of this Agreement, and no implied duties or obligations shall be read
into this Agreement against the Custodian. The undersigned hereby agree to
indemnify and hold harmless the Attorney-in-Fact and the Custodian, and their
respective officers, agents, successors, assigns and personal representatives
with respect to any act or omission of or by any of them in good faith in
connection with any and all matters within the scope of this Agreement or the
Underwriting Agreement; provided, however, that the Attorney-in-Fact and the
Custodian may be liable to the undersigned for any such act or omission to the
extent attributable to gross negligence or fraud. The Custodian may consult with
counsel of its own choice and 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.
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7. Interpretation.
A. Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements of each of the undersigned contained
herein and in the Underwriting Agreement shall survive the sale and delivery of
the Securities and the termination of this Agreement.
B. Governing Law. The validity, enforceability, interpretation and
construction of this Agreement shall be determined in accordance with the laws
of the State of New York applicable to contracts made and to be performed within
the State of New York, and this Agreement shall inure to the benefit of, and be
binding upon, the undersigned and the undersigned's respective heirs, executors,
administrators, successors and assigns, as the case may be.
C. Validity. Wherever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any such provision shall be prohibited by or invalid under applicable
law, it shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
D. Usage. The use of the masculine gender in this Agreement includes the
feminine and neuter, and the use of the singular includes the plural, wherever
appropriate.
E. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered, shall constitute an
original and all together shall constitute one instrument.
F. Binding Effect. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by and against, the respective successors, heirs,
personal representatives and assigns of the parties hereto.
A-7
35
IN WITNESS WHEREOF, the undersigned have executed this Custody Agreement
and Power of Attorney this day of November, 1999.
--------------------------------------------------------------------------------------
Selling Stockholder: Guaranteed by(2):
(1) By:
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Name:
Title:
Name and address to which notices and
funds shall be sent:
Name:
Address:
(Street)
(City) (State) (Zip)
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
ACCEPTED by the Attorney-in-Fact as of ACCEPTED by the Custodian as of the date
the date above set forth: above set forth:
By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By:
Name:
Title:
--------------------------------------------------------------------------------------
SEE THE ATTACHED INSTRUCTIONS
------------------------------
(1) NOTE: Please sign exactly as your name appears on your stock certificate(s).
(2) NOTE: The signature must be guaranteed by a commercial bank or trust company
in the United States or by a member firm of the Nasdaq National
Market.
A-8
36
--------------------------------------------------------------------------------------
Selling Stockholder: Guaranteed by(2):
(1) By:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name:
Title:
Name and address to which notices and
funds shall be sent:
Name:
Address:
(Street)
(City) (State) (Zip)
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
ACCEPTED by the Attorney-in-Fact as of ACCEPTED by the Custodian as of the date
the date above set forth: above set forth:
By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By:
Name:
Title:
--------------------------------------------------------------------------------------
SEE THE ATTACHED INSTRUCTIONS
------------------------------
(1) NOTE: Please sign exactly as your name appears on your stock certificate(s).
(2) NOTE: The signature must be guaranteed by a commercial bank or trust company
in the United States or by a member firm of the Nasdaq National
Market.
A-9
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--------------------------------------------------------------------------------------
Selling Stockholder: Guaranteed by(2):
(1) By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name:
Title:
Name and address to which notices and
funds shall be sent:
Name:
Address:
(Street)
(City) (State) (Zip)
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
ACCEPTED by the Attorney-in-Fact as of ACCEPTED by the Custodian as of the date
the date above set forth: above set forth:
By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By:
Name:
Title:
--------------------------------------------------------------------------------------
SEE THE ATTACHED INSTRUCTIONS
------------------------------
(1) NOTE: Please sign exactly as your name appears on your stock certificate(s).
(2) NOTE: The signature must be guaranteed by a commercial bank or trust company
in the United States or by a member firm of the Nasdaq National
Market.
A-10
38
--------------------------------------------------------------------------------------
Selling Stockholder: Guaranteed by(2):
(1) By:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name:
Title:
Name and address to which notices and
funds shall be sent:
Name:
Address:
(Street)
(City) (State) (Zip)
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
ACCEPTED by the Attorney-in-Fact as of ACCEPTED by the Custodian as of the date
the date above set forth: above set forth:
By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By:
Name:
Title:
--------------------------------------------------------------------------------------
SEE THE ATTACHED INSTRUCTIONS
------------------------------
(1) NOTE: Please sign exactly as your name appears on your stock certificate(s).
(2) NOTE: The signature must be guaranteed by a commercial bank or trust company
in the United States or by a member firm of the Nasdaq National
Market.
A-11
39
--------------------------------------------------------------------------------------
Selling Stockholder: Guaranteed by(2):
(1) By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name:
Title:
Name and address to which notices and
funds shall be sent:
Name:
Address:
(Street)
(City) (State) (Zip)
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
ACCEPTED by the Attorney-in-Fact as of ACCEPTED by the Custodian as of the date
the date above set forth: above set forth:
By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By:
Name:
Title:
--------------------------------------------------------------------------------------
SEE THE ATTACHED INSTRUCTIONS
------------------------------
(1) NOTE: Please sign exactly as your name appears on your stock certificate(s).
(2) NOTE: The signature must be guaranteed by a commercial bank or trust company
in the United States or by a member firm of the Nasdaq National
Market.
A-12
40
INSTRUCTIONS
(FOR COMPLETING THE CUSTODY AGREEMENT AND POWER OF ATTORNEY)
A. You have been sent five copies of the Custody Agreement and Power of
Attorney (the "Agreement"). Please complete and return four copies of the
Agreement and stock certificate(s) as set forth in paragraph D below. A fully
executed copy of the Agreement will be returned to you; a fully executed copy of
the Agreement and your stock certificate(s) will be retained by the Custodian;
and a fully executed copy of the Agreement will be delivered to each
Attorney-in-Fact and to Counsel for the Underwriters.
B. Complete Schedule I attached hereto.
C. Each copy of the Agreement and each stock certificate or stock power
deposited hereunder must be executed by you (or by the Attorney-in-Fact) with
your signature on the Agreement and the stock certificate(s) or the accompanying
stock power guaranteed by a commercial bank or trust company in the United
States or any broker which is a member firm of the Nasdaq National Market. The
stock certificate(s) or stock power and the Agreement should be signed exactly
as your name appears on your stock certificate(s).
D. Endorsed stock certificate(s) or stock certificate(s) with stock powers
attached along with all four executed copies of the completed Agreement should
be promptly returned by hand delivery or by certified mail appropriately insured
to the Custodian at:
c/o [ ]
If sent through the mail, it is recommended that the certificate(s) not be
endorsed, but an executed stock power be sent under separate cover from the
certificate(s).
E. If any certificate that you submit represents a greater number of
Securities than the aggregate number of Securities which you agree to sell
pursuant to the Underwriting Agreement (including any additional shares which
you agree to sell), the Custodian will cause to be delivered to you in due
course, but not earlier than ten days after the final closing for the purchase
of Securities by the Underwriters pursuant to the exercise by the Underwriters
of the over-allotment option described in the Underwriting Agreement, a
certificate for the excess number of shares.
F. For purposes of discharging your obligations under Section 6(f) of the
Underwriting Agreement and Section 4B of the Agreement please contact ▇▇▇▇▇
▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation by phone at (212)
▇▇▇-▇▇▇▇ or by facsimile at (▇▇▇) ▇▇▇-▇▇▇▇ if any information or representation
included in the foregoing Agreement or the Underwriting Agreement should change,
or if you become aware of any new information, at any time prior to termination
of the period applicable to you referred to in Section 6(b)(ii) of the
Underwriting Agreement.
A-13
41
EXHIBIT B
JAKKS PACIFIC, INC.
LOCK-UP AGREEMENT
November , 1999
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
Advest, Inc.
▇▇▇▇▇▇, ▇▇▇▇▇▇ & Company
DLJdirect Inc.
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned understands that ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation, Advest, Inc., ▇▇▇▇▇▇, ▇▇▇▇▇▇ & Company and DLJdirect Inc., as
Representatives of the several underwriters (the "UNDERWRITERS"), propose to
enter into an Underwriting Agreement with JAKKS Pacific, Inc. (the "COMPANY"),
providing for the public offering (the "PUBLIC OFFERING") of common stock, par
value $.001 per share (the "COMMON STOCK") of the Company.
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned,
during the period commencing on the date hereof and ending 180 days after the
date of the final prospectus relating to the Public Offering:
(i) agrees not to (x) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
(including, without limitation, shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock which may
be deemed to be beneficially owned by the undersigned in accordance with
the rules and regulations of the Securities and Exchange Commission) or (y)
enter into any swap or other arrangement that transfers all or a portion of
the economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (x) or
(y) is to be settled by the delivery of Common Stock, or such other
securities, in cash or otherwise), without the prior written consent of
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation;
(ii) agrees not to make any demand for, or exercise any right with
respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock, without the prior written consent of ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation; and
(iii) authorizes the Company to cause the transfer agent to decline to
transfer and/or to note stop transfer restrictions on the transfer books
and records of the Company with respect to any shares of Common Stock and
any securities convertible into or exercisable or exchangeable for Common
Stock for which the undersigned is the record holder and, in the
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42
case of any such shares or securities for which the undersigned is the
beneficial but not the record holder, agrees to cause the record holder to
cause the transfer agent to decline to transfer and/or to note stop
transfer restrictions on such books and records with respect to such shares
or securities.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into the agreements set forth herein, and
that, upon request, the undersigned will execute any additional documents
necessary or desirable in connection with the enforcement hereof. All authority
herein conferred or agreed to be conferred shall survive the death or incapacity
of the undersigned and any obligations of the undersigned shall be binding upon
the heirs, personal representatives, successors, and assigns of the undersigned.
Very truly yours,
--------------------------------------
(Name -- Please Type)
(Address)
(Social Security or Taxpayer
Identification No.)
B-2