3,500,000 SHARES OF COMMON STOCK
SYMS CORP
UNDERWRITING AGREEMENT
November ___, 1997
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
Salomon Brothers Inc
as Representatives of the
several Underwriters named
in Schedule I hereto
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Ladies and Gentlemen:
Upon the terms and subject to the conditions herein set forth, the ▇▇ ▇▇▇▇
Foundation (the "Foundation") and ▇▇ ▇▇▇▇ (through the ▇▇ ▇▇▇▇ aka ▇▇ ▇▇▇▇ Merns
Revocable Living Trust referred to in Section 2.B(a) below) (collectively, the
"Firm Share Sellers") propose to sell to the several underwriters named in
Schedule I hereto (the "Underwriters"), for whom you are acting as
representatives, an aggregate of 3,500,000 shares (the "Firm Shares") of the
Common Stock, $.05 par value (the "Common Stock"), of Syms Corp, a New Jersey
corporation (the "Company"). In addition, ▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ (collectively, the "Option Share Sellers") propose to grant to the
Underwriters the option (the "Option") to purchase from the Option Share Sellers
an aggregate of up to 525,000 additional shares of Common Stock (the "Option
Shares") for the purposes set forth herein. The number of Firm Shares to be sold
by each Firm Share Seller is set forth opposite the name of such Firm Share
Seller in Schedule II hereto and the maximum number of Option Shares that may be
purchased by the Underwriters from each Option Share Seller upon exercise of the
Option is set forth opposite the name of such Option Share Seller in Schedule II
hereto. The Firm Shares and the Option Shares are referred to collectively
herein as the "Shares" and the Firm Share Sellers and the Option Share Sellers
are referred to collectively herein as the "Selling Stockholders." The Company
and the Selling Stockholders hereby confirm their agreements with the
Underwriters as follows:
1. UNDERWRITERS AND REPRESENTATIVES. The term "Underwriters", as used
herein, refers collectively to you and the other underwriters named in Schedule
I annexed hereto and made a part hereof and the term "Representatives" refers to
you in your capacity as representatives of the Underwriters. Except
as may be expressly set forth below, any reference to you in this Agreement
shall be solely in your capacity as Representatives, and the Company and the
Selling Stockholders shall be entitled to act and rely upon any statement,
request, notice, consent, waiver or agreement made or given by Bear, ▇▇▇▇▇▇▇ &
Co. Inc. ("Bear ▇▇▇▇▇▇▇") purportedly on behalf of the Representatives or any
Underwriter.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDERS.
A. The Company and the Firm Share Sellers, jointly and severally, represent
and warrant to each Underwriter as follows:
(a) The Company meets the requirements for the use of Form S-3 under
the Securities Act of 1933, as amended (the "Act"), and has prepared and
filed with the Securities and Exchange Commission (the "Commission"),
pursuant to the Act and the rules and regulations promulgated by the
Commission thereunder (the "Regulations"), a registration statement on Form
S-3 (File No. 333-38711) relating to the Shares and one amendment thereto,
each including a preliminary prospectus. The Company next proposes to file
with the Commission, after the effectiveness of such registration
statement, a final prospectus in accordance with Rules 430A and 424(b)(1)
or 424(b)(4) of the Regulations, the documents so filed in either case to
include all Rule 430A Information (as hereinafter defined) and to conform,
in content and form, to the last printer's proof thereof furnished to and
approved by the Representatives immediately prior to such filing. As used
in this Agreement, (i) the term "Effective Date" means the date that the
registration statement hereinabove referred to is declared effective by the
Commission, (ii) the term "Registration Statement" means such registration
statement as last amended prior to the time the same was declared effective
by the Commission, including all exhibits and schedules thereto, all
documents (including financial statements, financial schedules and
exhibits) incorporated therein by reference and all Rule 430A Information
deemed to be included therein at the Effective Date pursuant to Rule 430A
of the Regulations, (iii) the term "Rule 430A Information" means
information with respect to the Shares and the public offering thereof
permitted, pursuant to the provisions of paragraph (a) of Rule 430A of the
Regulations, to be omitted from the form of prospectus included in the
Registration Statement at the time it is declared effective by the
Commission, (iv) the term "Prospectus" means the form of final prospectus
relating to the Shares first filed with the Commission pursuant to Rule
424(b) of the Regulations or, if no filing pursuant to Rule 424(b) is
required, the form of final prospectus included in the Registration
Statement at the Effective Date and (v) the term
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"preliminary prospectus" means any preliminary prospectus (as described in
Rule 430 of the Regulations) with respect to the Shares that omits Rule
430A Information. Any reference herein to any preliminary prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 that were
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or before the date of such preliminary prospectus or the date of
the Prospectus, as the case may be, except that any such documents shall be
deemed to be modified or superseded to the extent that a statement
contained in such preliminary prospectus or the Prospectus or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference therein modifies or supersedes such statement (all such documents
being hereinafter referred to as the "Incorporated Documents").
(b) On the Effective Date, the date the Prospectus is first filed with
the Commission pursuant to Rule 424(b) of the Regulations (if required), at
all times subsequent thereto to and including the Closing Date and, if
later, the Additional Closing Date (each as hereinafter defined), when any
post-effective amendment to the Registration Statement becomes effective or
any supplement to the Prospectus is filed with the Commission, and during
such longer period as the Prospectus may be required to be delivered in
connection with sales of Shares by the Underwriters or a dealer, the
Registration Statement and the Prospectus (as amended or supplemented if
the Company shall have filed with the Commission an amendment or supplement
thereto) complied and will comply in all material respects with the
applicable provisions of the Act and the Regulations, and did not and will
not contain an 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 made therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading. When any
preliminary prospectus was first filed with the Commission (whether filed
as part of the Registration Statement or an amendment thereof or pursuant
to Rule 424(a) of the Regulations) and when any amendment thereof or
supplement thereto was first filed with the Commission, such preliminary
prospectus and any amendments thereof and supplements thereto complied in
all material respects with the applicable provisions of the Act and the
Regulations and did not contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under
which they were made, not misleading. No representation and warranty,
however, is made in this paragraph (b) with respect to written
3
information contained in or omitted from the Registration Statement, the
Prospectus, any preliminary prospectus, or any amendment or supplement in
reliance upon and in conformity with information furnished to the Company
by or on behalf of the Representatives with respect to the Underwriters and
the plan of distribution of the Shares expressly for use in connection with
the preparation thereof. Each of the Incorporated Documents, when the same
was first filed with the Commission, complied in all material respects with
the applicable provisions of the Exchange Act and the rules and regulations
of the Commission thereunder and any further documents so filed and
incorporated by reference will, when they are filed with the Commission,
comply in all material respects with the applicable provisions of the
Exchange Act and such rules and regulations. None of such filed documents
when they were filed (or, if an amendment with respect thereto was filed,
when such amendment was filed), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of circumstances under
which they were made, not misleading, and no such further document, when it
is filed with the Commission, will contain an untrue statement of a
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they
were made, not misleading.
(c) Each contract, agreement, instrument, lease, license or other
document required to be described in the Registration Statement or the
Prospectus or in any Incorporated Document has been properly described in
all material respects. Each contract, agreement, instrument, lease,
license, or other document required to be filed as an exhibit to the
Registration Statement has been filed with the Commission as an exhibit to,
or has been incorporated by reference as an exhibit into, the Registration
Statement.
(d) Deloitte & Touche LLP, whose reports have been filed with the
Commission and appear in the Prospectus, are independent public accountants
with regard to the Company, as required by and within the meaning of the
Act and the Regulations. The consolidated financial statements of the
Company and its subsidiaries contained in the Registration Statement and
the Prospectus fairly present the consolidated financial position, results
of operations and cash flows of the Company and its subsidiaries, and the
other information purported to be shown therein, at the respective dates
and for the respective periods to which they apply. Those financial
statements have been prepared in accordance with generally accepted
accounting principles ("GAAP") consistently applied throughout the periods
involved, and
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are, in all material respects, prepared in accordance with the books and
records of the Company and its subsidiaries. No other financial statements
are required by Form S-3 or otherwise to be included or incorporated by
reference in the Registration Statement or the Prospectus.
(e) Subsequent to the respective dates as of which information is
given in the Registration Statement, except as set forth in the
Registration Statement, there has not been any material adverse change in
the business, properties, operations, condition (financial or other) or
results of operations of the Company and its subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary course of
business, and since the date of the latest balance sheet of the Company
included or incorporated by reference in the Registration Statement,
neither the Company nor any of its subsidiaries (A) has incurred or
undertaken any liabilities or obligations, direct or contingent, that are,
individually or in the aggregate, material to the Company and its
subsidiaries taken as a whole, or (B) entered into any transaction not in
the ordinary course of business that is material to the Company and its
subsidiaries taken as a whole; and the Company has not declared or paid any
dividend on or made any distribution of or with respect to any shares of
its capital stock or redeemed, purchased or otherwise acquired or agreed to
redeem, purchase or otherwise acquire any shares of its or its
subsidiaries' capital stock.
(f) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement. This
Agreement has been duly and validly authorized, executed and delivered by
the Company and is a legal and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding
at law or in equity), and except insofar as rights to indemnification and
contribution contained herein may be limited by federal or state securities
laws or related public policy.
(g) The Company's execution and delivery of, and its performance of
its obligations under, this Agreement and the consummation of the
transactions contemplated hereby will not (i) conflict with or result in a
breach of any of the terms and provisions of, or constitute a default (or
an event which with notice or lapse of time, or both, would
5
constitute a default) or require consent under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to the terms of,
any agreement, instrument, franchise, license or permit to which the
Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries or its or their respective properties or assets may
be bound and that is material to the Company and its subsidiaries taken as
a whole, or (ii) violate or conflict with any provision of the certificate
of incorporation, by-laws or similar governing instruments of the Company
or any of its subsidiaries or (iii) violate or conflict with any judgment,
decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their respective properties or
assets, except for those violations that individually or in the aggregate
would not have a material adverse effect on the financial condition,
results of operations or business of the Company and its subsidiaries taken
as a whole (hereafter, a "Material Adverse Effect").
(h) No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their respective properties or
assets is required for the Company's execution and delivery of, and its
performance of its obligations under, this Agreement and the consummation
of the transactions contemplated hereby, except the registration of the
Shares under the Act, and such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses and permits as may be
required under state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters. No consent of any party to
any material contract, agreement, instrument, lease, license, arrangement
or understanding to which the Company or any subsidiary is a party, or to
which any of their respective properties or assets is subject, is required
for the Company's execution and delivery of, and its performance of its
obligations under, this Agreement or for the sale or delivery by the
Selling Stockholders of the Shares as contemplated hereby.
(i) All of the currently outstanding shares of Common Stock, including
the Shares, and the outstanding shares of capital stock of each of the
Company's subsidiaries, have been duly authorized and validly issued, are
fully paid and nonassessable and were not issued in violation of or subject
to any preemptive rights. The Company had, at August 30,
6
1997, an authorized and outstanding capitalization as set forth in the
Registration Statement and as shall be set forth in the Prospectus. The
Common Stock conforms to the description thereof set forth in the
Registration Statement and as shall be set forth in the Prospectus. The
Company owns directly or indirectly all of the outstanding capital stock of
each of its subsidiaries, free and clear of all claims, liens, security
interests, pledges, charges, encumbrances, stockholders agreements and
voting trusts.
(j) There is no commitment, plan or arrangement to issue, and no
outstanding option, warrant or other right calling for the issuance of, any
shares of capital stock of the Company or of any subsidiary of the Company
or any security or other instrument that, by its terms, is convertible
into, exercisable or exchangeable for or evidences the right to acquire
shares of the capital stock of the Company or any subsidiary of the
Company, except as described in the Registration Statement and as shall be
described in the Prospectus.
(k) The Company has no subsidiaries other than those listed in
Schedule III hereto. The Company and each of its subsidiaries has been duly
organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and is duly qualified and in
good standing as a foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification necessary,
except for those failures to be so qualified or in good standing as a
foreign corporation that will not in the aggregate have a Material Adverse
Effect. The Company and each of its subsidiaries has all requisite power
and authority, and all necessary consents, approvals, authorizations,
orders, registrations, filings, qualifications, licenses and permits of and
from all public, regulatory or governmental agencies and bodies, to own,
lease and operate its properties and conduct its business as now being
conducted and as described in the Registration Statement and as shall be
described in the Prospectus (except for those the absence of which,
individually or in the aggregate would not have a Material Adverse Effect),
and no such consent, approval, authorization, order, registration,
qualification, license or permit contains a materially burdensome
restriction that is not adequately disclosed in the Registration Statement
and Prospectus.
(l) Neither the Company nor any of its subsidiaries, nor to the best
knowledge of the Company, any other party, is in violation or breach of, or
in default (nor has an event occurred that with notice, lapse of time or
both,
7
would constitute a default) with respect to complying with, any material
provision of any contract, agreement, instrument, lease, license,
arrangement, or understanding that is material to the Company and its
subsidiaries taken as a whole, except for such violations, breaches and
defaults as, individually or in the aggregate, would not have a Material
Adverse Effect; and each such contract, agreement, instrument, lease,
license, arrangement, and understanding is in full force and effect, and is
the legal, valid, and binding obligation of the Company or such subsidiary,
as the case may be, and (subject to applicable bankruptcy, insolvency, and
other laws affecting the enforceability of creditors' rights generally) is
enforceable as to the Company or such subsidiary, as the case may be, in
accordance with its terms. The Company and each of its subsidiaries enjoys
peaceful and undisturbed possession in all material respects under all
material leases and licenses under which it is operating. Neither the
Company nor any of its subsidiaries is in violation of its certificate of
incorporation, by-laws or similar governing instrument.
(m) Except as disclosed in the Registration Statement and as may be
described in the Prospectus, there is no litigation, arbitration, claim,
governmental or other proceeding or investigation pending or, to the best
knowledge of the Company, threatened with respect to the Company or any
subsidiary thereof, or any of their respective operations, businesses,
properties or assets, that, individually or in the aggregate, if adversely
determined, would have a Material Adverse Effect. Neither the Company nor
any subsidiary thereof is, or, to the best knowledge of the Company, with
the giving of notice or lapse of time or both will be, in violation of or
non-compliance with the requirements of any permit or license that is
material to its business or the provisions of any law, rule, regulation,
order, judgment or decree, including, but without limitation thereto, all
applicable federal, state and local laws and regulations relating to (i)
zoning, land use, protection of the environment, human health and safety or
hazardous or toxic substances, wastes, pollutants or contaminants and (ii)
employee or occupational safety, discrimination in hiring, promotion or pay
of employees, employee hours and wages or employee benefits, except for
such violations or failures of compliance that, individually or in the
aggregate, would not have a Material Adverse Effect.
(n) Each of the Company and its subsidiaries has (i) good and
marketable title to all real and personal properties and assets owned by
it, free and clear of all liens, security interests, pledges, charges,
encumbrances,
8
and mortgages and (ii) valid, subsisting and enforceable leases for all
real and personal properties leased by them, in each case, subject to such
exceptions as, individually or in the aggregate, do not have and are not
reasonably likely to have a Material Adverse Effect. No real property
owned, leased, licensed, or used by the Company or a subsidiary thereof
lies in an area that is, or to the best knowledge of the Company will be,
subject to zoning, use, or building code restrictions that would prohibit,
and no state of facts relating to the actions or inaction of another person
or entity or his or its ownership, leasing, licensing, or use of any real
or personal property exists that would prevent, the continued effective
ownership, leasing, licensing, or use of such real property in the business
of the Company or such subsidiary as presently conducted or as the
Prospectus indicates is contemplated to be conducted subject to such
exceptions as, individually or in the aggregate, do not have and are not
reasonably likely to have a Material Adverse Effect.
(o) All material patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, franchises, and other
intangible properties and assets (all of the foregoing being herein called
"Intangibles") that the Company or any subsidiary thereof owns or has
pending, or under which the Company or any such subsidiary is licensed, are
in good standing, are uncontested and are set forth in the Registration
Statement or the Incorporated Documents. Neither the Company nor any such
subsidiary has received notice of its alleged infringement of the asserted
rights of others with respect to Intangibles. To the best knowledge of the
Company, there is no infringement by others of any Intangibles of the
Company or any subsidiary that has or may in the future have a Material
Adverse Effect.
(p) To the knowledge of the Company and the Selling Stockholders,
neither the Company nor any subsidiary thereof, nor any director, officer
or employee of the Company or any such subsidiary has, directly or
indirectly, used any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity;
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(q) No person has the right by contract or otherwise to require
registration under the Act of shares of Common
9
Stock or other securities of the Company because of the filing or
effectiveness of the Registration Statement.
(r) Neither the Company nor any of its officers, directors or
affiliates (as defined in the Regulations) has taken or will take, directly
or indirectly, prior to the termination of the offering of the Shares
contemplated by this Agreement, any action designed to stabilize or
manipulate the price of any security of the Company, or that has caused or
resulted in, or that might reasonably be expected to cause or result in,
stabilization or manipulation of the price of the Common Stock.
(s) Neither the Company nor any of its subsidiaries is, or intends to
conduct its business in such a manner that it would become, an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(t) Except as may be set forth in the Prospectus, neither the Company
nor any Selling Stockholder has incurred any liability for a fee,
commission, or other compensation on account of the employment of a broker
or finder in connection with the transactions contemplated by this
Agreement.
(u) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions by or
involving the Company or any of its subsidiaries are executed in accordance
with management's general or specific authorization, (ii) such transactions
are recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets, (iii)
access to the respective assets of the Company and each of its subsidiaries
is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(v) Other than as disclosed in the Registration Statement and as shall
be disclosed in the Prospectus, no labor dispute with employees of the
Company or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent that, individually or in the aggregate, is or is
reasonably likely to have a Material Adverse Effect, and the Company is not
aware of any existing or imminent labor disturbance by the employees of any
of its principal vendors that reasonably can be expected to have a Material
Adverse Effect.
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(w) (A) All United States Federal income tax returns of the Company
and each of its subsidiaries required by law to be filed have been filed
and all taxes shown by those returns or otherwise assessed that are due and
payable have been paid, except assessments against which appeals have been
or will be promptly taken and (B) the Company and its subsidiaries have
filed all other tax returns that are required to have been filed by them
pursuant to the applicable laws of all other jurisdictions, except, as to
each of the foregoing clauses (A) and (B), insofar as the failure to file
such returns, individually and in the aggregate, would not have a Material
Adverse Effect, and the Company and its subsidiaries have paid all taxes
due pursuant to said returns or pursuant to any assessment received by the
Company or any such subsidiary, except for such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been
provided in accordance with GAAP. The charges, accruals and reserves on the
consolidated books of the Company and its subsidiaries in respect of any
tax liability for any years not finally determined are adequate to meet any
assessments or re-assessments for additional tax for any years not finally
determined, except to the extent of any inadequacy that would not have a
Material Adverse Effect.
(x) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which the
Company and its subsidiaries are engaged. The Company has no reason to
believe it will not be able to renew its existing insurance coverage from
the same or similar insurers as may be necessary to continue its business.
(y) Except as disclosed in the Registration Statement and as shall be
disclosed in the Prospectus, there are no business relationships or related
party transactions of the nature described in Item 404 of Regulation S-K of
the Commission involving the Company or any other persons referred to in
such Item 404, except for transactions that would be considered immaterial
under said Item 404.
B. Each of the Selling Stockholders, severally and not jointly and as to
such Selling Stockholder only, represents and warrants to each Underwriter, the
Company and each of the other Selling Stockholders as follows:
(a) Those of the Shares to be sold to the Underwriters hereunder by ▇▇
▇▇▇▇ (i) are owned beneficially by ▇▇ ▇▇▇▇ and of record by The ▇▇ ▇▇▇▇ aka
▇▇ ▇▇▇▇ Merns Revocable Living Trust (the "Trust") created by ▇▇ ▇▇▇▇, as
settlor, under the laws of the State of New York, by a Trust
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Indenture dated March 17, 1989, as amended and restated May 23, 1995 and
further amended August 12, 1996 (the "Trust Indenture"), and (ii) will be
so sold for the benefit of ▇▇ ▇▇▇▇, as beneficiary of the Trust, by the
Trust. The Trust has been duly and validly formed and is a legal and valid
revocable trust under the laws of the State of New York and the Trustee has
full power and authority under the terms of the Trust Indenture, in the
name and on behalf of the Trust, to execute and deliver this Agreement and
to sell and deliver those of the Shares as are to be sold and delivered by
the Trust pursuant hereto. All references herein to ▇▇ ▇▇▇▇ in his capacity
as a Selling Stockholder (including as a Firm Share Seller and as an Option
Share Seller) shall be deemed to refer to and include ▇▇ ▇▇▇▇ individually,
the Trust and ▇▇ ▇▇▇▇ in his capacity as Trustee of the Trust.
(b) The Foundation is a non-profit corporation duly organized and
validly existing in good standing under the laws of the State of New
Jersey.
(c) The execution and delivery of this Agreement and, in the case of
▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, the Deposit Agreement (as hereinafter
defined) by such Selling Stockholder and the performance by such Selling
Stockholder of such Selling Stockholder's obligations hereunder and
thereunder does not and will not (i) conflict with or result in the breach
of any of the terms and provisions of, or constitute a default (or an event
which with notice or lapse of time, or both, would constitute a default) or
require consent under, any material agreement, instrument, franchise,
license or permit to which such Selling Stockholder is a party or by which
such Selling Stockholder or any of such Selling Stockholder's property or
assets is bound, or (ii) violate or conflict with any judgment, decree,
order, statute, rule or regulation of any court or any public, governmental
or regulatory agency or body having jurisdiction over such Selling
Stockholder or such Selling Stockholder's properties or assets, or (iii) in
the case of the Foundation, violate or conflict with any provision of its
certificate of incorporation, by-laws or similar governing instrument, or
(iv) in the case of the Trust, violate or conflict with any provision of
the Trust Indenture.
(d) Such Selling Stockholder has, and at the time of delivery to the
Underwriters of those of the Shares as are to be sold by such Selling
Stockholder hereunder will have, full legal right, power, authority and
capacity, and, except as required under the Act and state securities laws,
all necessary consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses and permits of and from all regulatory or
governmental agencies and
12
bodies as are required, to execute and deliver this Agreement and, in the
case of ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, the Deposit Agreement, to perform
such Selling Stockholder's obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby, including the
sale and delivery of those of the Shares as are to be sold by such Selling
Stockholder hereunder. No consent of any party to any material contract,
agreement, instrument, lease, license, arrangement or understanding to
which such Selling Stockholder is a party, or to which any of such Selling
Stockholder's properties or assets is subject, is required for the
execution, delivery or performance of this Agreement or for the issuance,
sale and delivery by such Selling Stockholder of those of the Shares as are
to be sold by such Selling Stockholder hereunder.
(e) Each of ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as an Option Share
Seller, has caused certificates in negotiable form for not less than the
maximum number of Option Shares that she or he has agreed to sell hereunder
to be deposited in custody with ▇▇ ▇▇▇▇ pursuant to a Deposit Agreement and
Power of Attorney substantially in the form annexed hereto as Exhibit A
(the "Deposit Agreement") for delivery to or upon the order of the
Underwriters pursuant to this Agreement. Pursuant to such Deposit
Agreement, each of ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ has appointed ▇▇ ▇▇▇▇ to
act as such Option Share Seller's attorney-in-fact (the
"Attorney-in-Fact"), with full power and authority, in the name and on
behalf of such Option Share Seller, to execute and deliver one or more
counterparts of this Agreement and such other agreements, certificates,
instruments and documents as may be necessary or appropriate to deliver to
or upon the order of the Underwriters of the Option Shares to be sold by or
for the account of such Option Share Seller hereunder, to receive the
proceeds of such sale from the Representatives for the account of such
Option Share Seller, to remit such proceeds to such Option Share Seller and
otherwise to act in the name and on behalf of such Option Share Seller in
respect of the consummation of the transactions contemplated hereby as
fully as if such Option Share Seller were so acting personally. The
arrangements made by each of ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ for deposit of
such certificates with the Attorney-in-Fact pursuant to the Deposit
Agreement and grant by each of ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ to the
Attorney-in-Fact of the power of attorney provided in the Deposit Agreement
are, to the extent therein set forth, irrevocable and may not be
terminated, whether by operation of law or the death or incapacity of ▇▇▇▇▇
▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as the case may be, or the occurrence of any
other event. If either ▇▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ should die or become
incapacitated or if any other such event should occur before
13
the delivery to the Underwriters of those of the Option Shares as are to be
sold by her or him hereunder, the certificates for such Shares shall be so
delivered on behalf of ▇▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as the case may be,
in accordance with the terms and conditions of this Agreement and the
Deposit Agreement, and all actions taken by the Attorney-in-Fact pursuant
to the power of attorney granted by ▇▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as the
case may be, in the Deposit Agreement shall be as valid as if such death,
incapacity or other event had not occurred, regardless of whether or not
the Attorney-in-Fact shall have received notice of such death, incapacity
or other event.
(f) This Agreement and, in the case of ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, the Deposit Agreement has been duly and validly executed and
delivered by or on behalf of such Selling Stockholder (and, in the case of
the Foundation, all corporate action required for such execution and
delivery has been duly and validly taken) and is a valid and binding
obligation of such Selling Stockholder, enforceable against such Selling
Stockholder in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity), and except insofar as rights to indemnification and contribution
contained herein may be limited by federal or state securities laws or
related public policy.
(g) Such Selling Stockholder has, and on the Closing Date will have,
good and valid title to those of the Shares to be sold by such Selling
Stockholder pursuant to this Agreement, free and clear of all liens,
adverse claims, security interests, restrictions on transfer, shareholders'
agreements and voting trusts, and, upon the delivery of and payment for
such Shares as herein contemplated, each Underwriter will receive good and
valid title to those of such Shares as are purchased by it from such
Selling Stockholder, free and clear of all liens, adverse claims, security
interests, restrictions on transfer, shareholders' agreements and voting
trusts.
(h) Such Selling Stockholder has not taken and will not take, directly
or indirectly, any action that constituted, was designed to constitute or
reasonably might be expected to cause or result in stabilization or
manipulation of the market price of the Common Stock.
14
(i) The sale of Shares by such Selling Stockholder pursuant to this
Agreement has not been prompted or motivated by any adverse information
concerning the Company or its prospects known to such Selling Stockholder
that is not set forth in the Registration Statement or the Prospectus.
(j) When the Registration Statement shall become effective, when any
post-effective amendment to the Registration Statement becomes effective,
when the Prospectus is first filed with the Commission pursuant to Rule
424(b) of the Regulations, when any supplement to the Prospectus is filed
with the Commission and at each of the Closing Date and the Additional
Closing Date, and during such longer period as the Prospectus may be
required to be delivered in connection with sales of Shares by the
Underwriters or any dealer, such parts of the Registration Statement and
the Prospectus and any amendments thereof and supplements thereto as relate
to such Selling Stockholder and are based upon information furnished to the
Company by or on behalf of such Selling Stockholder expressly for use
therein did not and 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 made therein (in the case of the
Prospectus, in the light of the circumstances under which they were made)
not misleading.
3. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a)(i) Subject to the terms and conditions herein set forth, each of
the Firm Share Sellers, severally and not jointly, agrees to sell to the
Underwriters the number of Firm Shares set forth opposite the name of such
Firm Share Seller in Schedule II hereto and, subject to the terms and
conditions set forth herein and in reliance upon the representations and
warranties of the Company and the Selling Stockholders contained herein,
each of the Underwriters, severally and not jointly, agrees to purchase
from the Firm Share Sellers the aggregate number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto, all at a
purchase price per share of $________ (the "Purchase Price"). The number of
Firm Shares to be purchased from each Firm Share Seller by each Underwriter
(as adjusted by Bear ▇▇▇▇▇▇▇ to eliminate fractions) shall be determined by
multiplying the number of Firm Shares to be sold by such Firm Share Seller
by a fraction, the numerator of which is the number of Firm Shares set
opposite the name of such Underwriter in Schedule I annexed hereto and the
denominator of which is the total number of Firm Shares.
15
(ii) Delivery of the Firm Shares and payment of the Purchase Price
therefor shall be made at the offices of Bear, ▇▇▇▇▇▇▇ & Co. Inc. at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other location in the New
York City metropolitan area as Bear ▇▇▇▇▇▇▇ shall determine and advise the
Company and the Firm Sellers upon at least two full business days' notice
in writing. Such delivery and payment shall be made at 10:00 A.M., New York
City time, on the [__________] full business day following the
determination of the Purchase Price, or at such other time as may be agreed
upon by Bear ▇▇▇▇▇▇▇, the Company and the Selling Stockholders. The time
and date of such delivery and payment are herein called the "Closing Date".
Delivery of the Firm Shares shall be made to or upon the order of Bear
▇▇▇▇▇▇▇, for the respective accounts of the Underwriters, against payment
to the respective accounts of the Firm Share Sellers, of the aggregate
Purchase Price therefor, by wire transfer of same day funds to such account
as the Attorney-in-Fact shall have designated in writing to Bear ▇▇▇▇▇▇▇ at
least two business days prior to the Closing Date.
(iii) Certificates for the Firm Shares shall be registered in such
name or names and in such authorized denominations as Bear ▇▇▇▇▇▇▇ may
request in writing at least two full business days prior to the Closing
Date, provided that, if so specified by the Representatives, the Firm
Shares may be represented by a global certificate registered in the name of
Cede & Co., as nominee of the Depositary Trust Company ("Cede"). Bear
▇▇▇▇▇▇▇ shall be permitted to examine and package such certificates for
delivery at least one full business day prior to the Closing Date, unless
the Firm Shares are to be represented by a global certificate.
(b)(i) The Option Share Sellers hereby grant to the Underwriters an
option (the "Option") to purchase the Option Shares from the Option Share
Sellers, at the Purchase Price and upon the terms herein set forth, for the
sole purpose of covering over-allotments in the offering of the Firm Shares
by the Underwriters. The Option shall be exercisable by the Underwriters,
on one occasion only, at any time before the expiration of 30 days from the
date of the Prospectus, for the purchase of all or part of the Option
Shares, such exercise to be made by notice, given by Bear ▇▇▇▇▇▇▇ to the
Attorney-in-Fact in the manner specified in Section 13 hereof, which notice
shall set forth the aggregate number of Option Shares with respect to which
the Option is being exercised, the denominations and the name or names in
which certificates evidencing the Option Shares so purchased are to be
registered, and the date and time of delivery of such Option Shares, which
date may be at or subsequent to the Closing Date and shall not be less than
two nor more than
16
ten days after such notice (unless otherwise mutually agreed to by Bear
▇▇▇▇▇▇▇, the Company and ▇▇ ▇▇▇▇). The maximum number of Option Shares that
each Option Share Seller shall be obligated to sell upon exercise of the
Option by the Underwriters is set forth opposite the name of such Option
Share Seller in Schedule II hereto. If the Option is exercised for less
than all of the Option Shares, then the number of Option Shares to be sold
by and purchased from each Option Share Seller (as adjusted by Bear ▇▇▇▇▇▇▇
to eliminate fractions) shall be determined by multiplying the total number
of Option Shares set forth opposite such Option Share Seller's name in
Schedule II hereto by a fraction, of which the numerator is the aggregate
number of Option Shares with respect to which the Option is exercised and
the denominator is the total number of Option Shares. The aggregate number
of Option Shares to be purchased from the Option Share Sellers by each
Underwriter (as adjusted by Bear ▇▇▇▇▇▇▇ to eliminate fractions) shall be
determined by multiplying the total number of Option Shares with respect to
which the Option is exercised by a fraction, of which the numerator is the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I annexed hereto and the denominator is the total number of Firm
Shares.
(ii) Delivery of the Option Shares so purchased and payment of the
purchase price therefor shall be made at the offices of Bear, ▇▇▇▇▇▇▇ & Co.
Inc. at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other location
in the New York City metropolitan area as Bear ▇▇▇▇▇▇▇ shall determine and
advise the Company and the Option Share Sellers upon at least two full
business days' notice in writing. Such delivery and payment shall be made
at 10:00 A.M., New York City time, on the date designated in such notice or
at such other time and date as may be agreed upon by Bear ▇▇▇▇▇▇▇, the
Option Share Sellers and the Company. The time and date of such delivery
and payment are herein called the "Additional Closing Date". Delivery of
Option Shares with respect to which the Option is exercised shall be made
to or upon the order of Bear ▇▇▇▇▇▇▇, for the respective accounts of the
several Underwriters, against payment to ▇▇ ▇▇▇▇, in his capacity as
Trustee of the Trust and as the Attorney-in-Fact for ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, for the respective accounts of the Option Share Sellers, of the
aggregate Purchase Price therefor, by wire transfer of same day funds to
the account designated by the Attorney-in-Fact as provided in paragraph
(a)(ii) of this Section 3.
(iii) Certificates for the Option Shares purchased by the
Underwriters, when so delivered, shall be registered in such name or names
and in such authorized denominations as Bear ▇▇▇▇▇▇▇ shall have requested
in the notice of exercise of the Option, provided that, if so specified by
Bear
17
▇▇▇▇▇▇▇, such Option Shares may be represented by a global certificate
registered in the name of Cede. Bear ▇▇▇▇▇▇▇ will be permitted to examine
and package such certificates for delivery at least one full business day
prior to the Additional Closing Date, unless the Option Shares are to be
represented by a global certificate.
(c) The Underwriters shall not be obligated to purchase any Firm
Shares from the Firm Sellers except upon tender to the Underwriters by the
Firm Sellers of all of the Firm Shares and the Underwriters shall not be
obligated to purchase any Option Shares from the Option Sellers except upon
tender to the Underwriters by the Option Sellers of all of the Option
Shares specified in the notice of exercise of the Option. The Firm Sellers
shall not be obligated to sell or deliver any Firm Shares, and the Option
Sellers shall not be obligated to sell and deliver any Option Shares,
except in each case upon tender of payment by the Underwriters for all the
Firm Shares or the Option Shares, as the case may be, agreed to be
purchased by the Underwriters hereunder.
4. OFFERING. The Company has been advised by Bear ▇▇▇▇▇▇▇ that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Underwriting
Agreement have become effective as in the judgment of Bear ▇▇▇▇▇▇▇ is advisable.
The Company is further advised by Bear ▇▇▇▇▇▇▇ that the Shares are to be offered
to the public initially at a price of $_____ per share and to certain selected
dealers at a price that represents a concession not in excess of $ _____ per
share, and that any Underwriter may allow, and such dealers may reallow, a
further concession, not in excess of $_____ a share, to any Underwriter or to
certain other dealers, and that after the initial offering of the Shares the
public offering price and such concessions may be changed by the
Representatives, on behalf of the Underwriters.
5. COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDERS.
A. The Company covenants and agrees with each Underwriter as follows:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective as promptly as possible and to maintain it in
effect. If the Registration Statement has become or becomes effective
pursuant to Rule 430A of the Regulations, or filing of the Prospectus with
the Commission is otherwise required under Rule 424(b) of the Regulations,
the Company will file the Prospectus, properly completed, with the
Commission pursuant to Rule 424(b) of the Regulations within the time
period therein
18
prescribed and will provide evidence satisfactory to the Representatives of
such timely filing. The Company will promptly advise the Representatives,
and confirm such advice in writing, (1) when the Registration Statement or
any post-effective amendment thereto has become effective, (2) of the
initiation or threatening of any proceedings for, or receipt by the Company
of any notice with respect to, the suspension of the qualification of the
Shares for sale in any jurisdiction or the issuance by the Commission of
any order suspending the effectiveness of the Registration Statement and
(3) of receipt by the Company or any representative of or attorney for the
Company of any other communications from the Commission relating to the
Company, the Registration Statement, any preliminary prospectus, the
Prospectus or the transactions contemplated by this Agreement. The Company
will make every reasonable effort to prevent the issuance of an order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto and, if any such order is issued, to
obtain its lifting as soon as possible. The Company will not file any
amendment to the Registration Statement or any amendment of or supplement
to the Prospectus before or after the Effective Date to which the
Representatives shall reasonably object in writing after being timely
furnished in advance a copy thereof unless the Company shall conclude, upon
the advice of counsel, that any such amendment must be filed at a time
prior to obtaining such consent.
(b) During the period of time when the Prospectus is required to be
delivered under the Act, the Company shall comply with all requirements
imposed upon it by the Act, as now or hereafter amended, and by the
Regulations, as from time to time in force, so far as may be necessary to
permit the continuance of sales of and dealings in the Shares as
contemplated by the provisions hereof and by the Prospectus. If, at any
time when a prospectus relating to the Shares is required to be delivered
under the Act, any event shall occur as a result of which the Prospectus as
then amended or supplemented shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading, or if it
shall be necessary at any time to amend the Registration Statement or
supplement the Prospectus to comply with the Act and the Regulations, the
Company shall notify the Representatives promptly and prepare and file with
the Commission an appropriate post-effective amendment to the Registration
Statement or supplement to the Prospectus (in either case, in form and
substance reasonably satisfactory to the Representatives) that will correct
such untrue statement or such omission and will use its best efforts to
have any such post-effective
19
amendment to the Registration Statement declared effective as soon as
possible.
(c) The Company shall promptly deliver to the Representatives two
manually-signed copies of the Registration Statement, including exhibits
and all documents incorporated by reference therein and all amendments
thereto, and to those persons (including the Representatives and counsel
for the Underwriters) whom the Representatives identify to the Company,
such number of conformed copies of the Registration Statement, each
preliminary prospectus, the Prospectus, all amendments of and supplements
to such documents, if any, and all documents incorporated by reference in
the Registration Statement and the Prospectus or any amendment thereof or
supplement thereto, without exhibits, as the Representatives reasonably may
request.
(d) If and to the extent such qualification or registration may be
necessary, the Company shall cooperate with the Underwriters and Weil,
Gotshal & ▇▇▇▇▇▇ LLP ("Underwriters' Counsel") in connection with their
efforts to qualify or register the Shares for sale under the securities (or
"Blue Sky") laws of such jurisdictions as the Representatives shall
request, will execute such applications and documents and furnish such
information as may be reasonably required for such purpose and will comply
with such laws so as to continue such qualification in effect for so long
as may be required to complete the distribution of the Shares; provided,
however, that the Company shall not be required to qualify as a foreign
corporation in any jurisdiction or to file a consent to service of process
in any jurisdiction in any action other than one arising out of the
offering or sale of the Shares in such jurisdiction.
(e) The Company shall make generally available (within the meaning of
Section 11(a) of the Act) to its security holders and to the
Representatives, in such numbers as the Representatives may reasonably
request for distribution to the Underwriters, as soon as practicable but in
no event later than 45 days after the end of the Company's fiscal quarter
in which the first anniversary of the Effective Date occurs, an earnings
statement, covering a period of at least twelve consecutive full calendar
months commencing after the Effective Date, that satisfies the provisions
of Section 11(a) of the Act and Rule 158 of the Regulations.
(f) During a period of 90 days from the date of this Agreement, the
Company will not, without the prior written consent of Bear ▇▇▇▇▇▇▇, issue,
sell, offer or agree to sell, or otherwise dispose of, directly or
indirectly, any shares of Common Stock (or any securities convertible into,
20
exchangeable for or evidencing the right to purchase shares of Common Stock
or Class B Common Stock) other than the grant of options and the issuance
of Common Stock upon the exercise of options under the Company's stock
option plan or pursuant to any other employee benefit plan or program. In
addition, the Company has obtained and delivered to Bear ▇▇▇▇▇▇▇ a letter
from (i) each of its directors, each of its executive officers and each
member of the family of ▇▇ ▇▇▇▇ who, beneficially or of record, owns shares
of Common Stock, pursuant to which such person shall agree that, during the
period of 90 days from the date of the Prospectus, without the prior
written consent of Bear ▇▇▇▇▇▇▇, such person will not sell, offer or agree
to sell, or otherwise dispose of, directly or indirectly, any shares of
Common Stock (or any securities convertible into, exchangeable for or
evidencing the right to purchase shares of Common Stock).
(g) During the three years following the Effective Date, the Company
will furnish to the Representatives, in such numbers as the Representatives
may reasonably request for distribution to the Underwriters, copies of (i)
all reports to its stockholders and (ii) all reports, financial statements,
and proxy or information statements filed by the Company with the
Commission or any national securities exchange.
(h) The Company will continue to comply with all registration, filing,
and reporting requirements of the Exchange Act that may from time to time
be applicable to the Company.
(i) The Company will comply with all provisions of all undertakings
contained in the Registration Statement.
(j) Prior to the Closing Date and, if the Option is exercised, until
the Additional Closing Date, the Company will not issue any press release
or other communication or hold any press conference with respect to the
offering of the Shares, or the financial condition, results of operations,
business or prospects of the Company, without the Representatives' prior
consent, which shall not unreasonably be withheld.
B. Each Selling Stockholder, severally and not jointly, covenants and
agrees with each Underwriter and the Company as follows:
(a) During the period of 90 days from the date of the Prospectus, such
Selling Stockholder will not, without the prior written consent of Bear
▇▇▇▇▇▇▇, sell, offer or agree to sell, or otherwise dispose of or grant to
any third party the right to acquire any shares of Common Stock, or
purchase
21
from any third party the right to sell to such third party any shares of
Common Stock, other than those of the Shares as are to be sold by such
Selling Stockholder hereunder.
(b) If, within the time during which a prospectus is required under
the Act to be delivered in connection with sales of the Shares, such
Selling Stockholder shall believe or have any reasonable grounds to believe
that the Prospectus as then amended or supplemented includes any untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements made therein, in
the light of the circumstances under which they were made, not misleading,
or that any representation of such Selling Stockholder contained in this
Agreement is untrue, such Selling Stockholder shall notify you and the
Company promptly to such effect.
(c) Prior to the termination of the offering of the Shares
contemplated by this Agreement, such Selling Stockholder will not take,
directly or indirectly, any action designed to stabilize or manipulate the
market price of the Common Stock, or that might reasonably be expected to
cause or result in stabilization or manipulation of the market price of the
Common Stock.
(d) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Internal Revenue Code of 1986,
as amended, such Selling Stockholder shall deliver to you on or prior to
the Closing Date, a properly completed and executed United States Treasury
Department Form W-9, as applicable (or other applicable form or statement
specified by Treasury Department Regulations in lieu thereof).
6. PAYMENT OF EXPENSES. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including those in connection with (i)
preparing, printing, duplicating, filing and distributing the Registration
Statement (including all amendments thereof and exhibits thereto), each
preliminary prospectus, the Prospectus and any supplements thereto, this
Agreement, the Deposit Agreement and all related agreements, and all other
documents relating to the public offering of the Shares (including those
supplied to the Underwriters in quantities as hereinabove stated), (ii) the
transfer and delivery of the Shares to the Underwriters, excluding any transfer
or other taxes payable thereon (which shall be paid by the Selling
Stockholders), (iii) the qualification, if any, of the Shares under state
securities laws, and (iv) the review of the terms of the public offering of
22
the Shares by the National Association of Securities Dealers Inc. and the
reasonable fees and disbursements of counsel for the Underwriters in connection
therewith. The Selling Stockholders, pro rata in accordance with the ratio that
the number of Shares sold by each to the Underwriters bears to the total number
of Shares purchased by the Underwriters, shall reimburse the Company, out of the
net proceeds from the sale of the Shares, for such portion of the foregoing
costs and expenses as shall be mutually agreed upon by the Company and the
Selling Stockholders.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Shares, as provided herein,
shall be subject to the accuracy of the representations and warranties of the
Company and the Selling Stockholders herein contained, as of the date hereof, as
of the Closing Date and, with respect to the Option Shares, as of the Additional
Closing Date, to the absence from any certificates, opinions, written statements
or letters furnished pursuant to this Section 7 to the Representatives or to
Underwriters' Counsel of any qualification or limitation not previously approved
in writing by the Representatives, to the performance by the Company and the
Selling Stockholders of their respective obligations hereunder, and to the
following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 P.M., New York City time, on the date of this Agreement or at
such later time and date as shall have been consented to in writing by Bear
▇▇▇▇▇▇▇, any post-effective amendments to the Registration Statement
required to be filed by the Company prior to the Closing Date shall have
become effective and no stop order suspending the effectiveness of the
Registration Statement or any such post-effective amendment shall have been
issued and no proceedings therefor shall have been initiated or threatened
by the Commission. If the Company shall have relied upon Rule 430A of the
Regulations, the Prospectus shall have been filed with the Commission in a
timely fashion in accordance with the provisions of subsection 5.A(a)
hereof. All filings required by Rule 424 of the Regulations shall have been
made but no such filing shall have been made without your consent.
(b) At the Closing Date (and, with respect to the Option Shares, the
Additional Closing Date), you shall have received the written opinion of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ and ▇▇▇▇ LLP, counsel for the Company and the
Selling Stockholders, dated the date of its delivery, addressed to the
Underwriters, in form and scope satisfactory to Weil, Gotshal & ▇▇▇▇▇▇ LLP
("Underwriters' Counsel"), substantially to the effect set forth in Exhibit
B hereto.
23
In rendering such opinion, such counsel may (i) limit its opinions to
the laws of the States of New Jersey and New York, the corporate laws of
the State of Delaware and the federal laws of the United States of America
and (ii) rely (A) as to matters involving the application of laws other
than the laws referred to in clause (i), to the extent such counsel deems
proper and to the extent specified in its opinion letter, if at all, upon
the written opinion or opinions (in form and scope reasonably satisfactory
to Underwriters' Counsel) of other counsel reasonably acceptable to
Underwriters' Counsel, knowledgeable and qualified to opine with respect to
the applicable laws; and (B) as to matters of fact, to the extent they deem
proper, on certificates of the Selling Stockholders and of responsible
officers of the Company and certificates or other written statements of
officers of departments of various jurisdictions having custody of
documents respecting the corporate existence or good standing of the
Company and its subsidiaries. The opinion of counsel for the Company shall
specifically state that the opinion of any such other counsel is in form
and scope satisfactory to counsel for the Company and that, in such
counsel's opinion, such counsel and the Underwriters are justified in
relying thereon. A copy of the opinion of any such other counsel shall be
delivered to Underwriters' Counsel.
(c) At the Closing Date (and, with respect to the Option Shares, the
Additional Closing Date), the Representatives shall have received a
certificate, executed by each of the Chief Executive Officer and the Chief
Financial Officer of the Company, dated the date of its delivery, to the
effect that the conditions set forth in subsection (a) of this Section 7
have been satisfied, that as of the date of such certificate the
representations and warranties of the Company set forth in subsection 2.A
hereof are accurate and the obligations of the Company to be performed
hereunder on or prior to the Closing Date have been duly performed.
(d) At the Closing Date (and, with respect to the Option Shares, the
Additional Closing Date), the Representatives shall have received a
certificate executed by each Selling Stockholder, dated the date of its
delivery, to the effect that the representations and warranties of such
Selling Stockholder set forth in Section 2 hereof are accurate and that the
obligations of such Selling Stockholder to be performed hereunder on or
prior to the Closing Date have been duly performed.
(e) At the time this Agreement is executed and at the Closing Date
(and, with respect to the Option Shares, the Additional Closing Date), you
shall have received a letter,
24
from Deloitte & Touche LLP, dated the date of its delivery, addressed to
the Underwriters and in form and substance reasonably satisfactory to you,
to the effect that: (i) they are independent accountants with respect to
the Company within the meaning of the Act and the Regulations; (ii) in
their opinion, the consolidated financial statements of the Company and its
subsidiaries audited by such firm and included in the Registration
Statement and the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act and the applicable
Regulations; (iii) on the basis of procedures (but not an audit made in
accordance with generally accepted auditing standards) consisting of a
reading of the latest available unaudited interim consolidated financial
statements of the Company and its subsidiaries, a reading of the minutes of
meetings and consents of the stockholders and boards of directors of the
Company and the subsidiaries and the committees of such boards subsequent
to March 1, 1997, inquiries of certain officials of the Company and its
subsidiaries who have responsibility for financial and accounting matters
of such companies with respect to transactions and events subsequent to
March 1, 1997, and other specified procedures and inquiries to a date not
more than five days prior to the date of such letter, nothing has come to
their attention that would cause them to believe that: (A) the unaudited
historical consolidated financial statements of the Company, its
subsidiaries and their predecessors included in the Registration Statement
and the Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the published rules
and regulations thereunder or that any material modification should be made
to such unaudited consolidated financial statements for them to be in
conformity with GAAP; (B) with respect to the period subsequent to March 1,
1997 there were, as of the date of the most recent available monthly
consolidated financial data of the Company and the subsidiaries, if any,
and as of a specified date not more than five days prior to the date of
such letter, any changes in the capital stock or increases in long-term
debt of the Company or any decrease in shareholders' equity of the Company,
in each case as compared with the amounts shown in the most recent balance
sheet included in the Registration Statement and the Prospectus except for
changes or decreases that the Registration Statement and the Prospectus
disclose have occurred or may occur; or (C) that during the period from
March 1, 1997 to the date of the most recent available monthly consolidated
financial data of the Company and its subsidiaries, if any, and to a
specified date not more than five days prior to the date of such letter,
there was any decrease, as compared with the corresponding period in the
prior fiscal year, in total revenues, or total or per share
25
net income, except for decreases that the Prospectus discloses have
occurred or may occur; and (iv) stating that they have compared specific
dollar amounts, numbers of shares, percentages of revenues and earnings and
other financial information pertaining to the Company and its subsidiaries
set forth in the Prospectus, which have been specified by you prior to the
date of this Agreement, to the extent that such dollar amounts, numbers,
percentages and information may be derived from the general accounting and
financial records that are subject to the internal control policies and
procedures of the Company's and its subsidiaries' accounting systems or
that have been derived directly from such accounting records by analysis or
computation, and excluding any questions requiring an interpretation by
legal counsel, with the results obtained from the application of specified
readings, inquiries, and other appropriate procedures specified by you
(which procedures do not constitute an examination in accordance with
generally accepted auditing standards) set forth in such letter, and found
them to be in agreement.
(f) All proceedings taken in connection with the sale of the Shares as
herein contemplated shall be reasonably satisfactory in form and substance
to the Representatives and to Underwriters' Counsel, and the
Representatives shall have received from Underwriters' Counsel a written
opinion, dated as of the Closing Date with respect to the sale of the Firm
Shares, and dated as of the Additional Closing Date with respect to the
sale of the Option Shares, as to such matters as the Representatives
reasonably may require, and the Company and the Selling Stockholders shall
have furnished to Underwriters' Counsel such documents as Underwriters'
Counsel reasonably may have requested for the purpose of enabling
Underwriters' Counsel to pass upon such matters.
(g) The National Association of Securities Dealers, Inc., upon review
of the terms of the underwriting arrangements for the public offering of
the Shares, shall have raised no objections thereto.
(h) At the time this Agreement is executed, the Company shall have
furnished to the Underwriters the letters referred to in subsection 5.A(f),
in form and substance satisfactory to Underwriters' Counsel.
(i) Prior to the Closing Date and, with respect to the Option Shares,
the Additional 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.
26
If any of the conditions specified in this Section 7 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements, or letters furnished to the Representatives or to
Underwriters' Counsel pursuant to this Section 7 shall not be in all material
respects reasonably satisfactory in form and substance to the Representatives
and in form and scope to Underwriters' Counsel, all obligations of the
Underwriters hereunder not theretofore discharged may be canceled by the
Representatives at, or at any time prior to, the Closing Date and with respect
to the Option Shares, the Additional Closing Date. Notice of such cancellation
shall be given to the Company and the Selling Stockholders in writing, or by
telephone or telephonic facsimile transmission, confirmed in writing.
8. INDEMNIFICATION.
(a) The Company and the Firm Share Sellers jointly and severally, agree to
indemnify and hold harmless each Underwriter, and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against any and all losses, liabilities, claims,
damages and expenses whatsoever (including but not limited to attorneys' fees
and any and all expenses reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation, provided that such settlement was effected with the Company's
written consent in accordance with subsection (d) of this Section 8), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or any Preliminary Prospectus, or in
any supplement thereto or amendment thereof, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading; provided, however, that neither the Company nor any of the Selling
Stockholders shall be liable under this subsection 8(a) to any Underwriter in
any such case to the extent but only to the extent that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
the Company (i) by or on your behalf with respect to the Underwriters or (ii) by
or on behalf of any Selling Stockholder with respect to such Selling
Stockholder, in each such case for inclusion in the Registration Statement, the
Prospectus, any Preliminary Prospectus or any amendment or
27
supplement; and provided further, that with respect to any Preliminary
Prospectus, such indemnity shall not inure to the benefit of any Underwriter (or
the benefit of any person controlling such Underwriter) if the person asserting
any such losses, liabilities, claims, damages or expenses purchased the Shares
that are the subject thereof from such Underwriter and if such person was not
sent or given a copy of the Prospectus at or prior to confirmation of the sale
of such Shares to such person in any case where such sending or giving is
required by the Act and the untrue statement or omission of a material fact
contained in such Preliminary Prospectus was corrected in the Prospectus. These
indemnity agreements will be in addition to any liability that the Company or
the Selling Stockholders may otherwise have to any Underwriter or to any
controlling person of such Underwriter, including under this Agreement.
(b) Each Selling Stockholder, severally, agrees to indemnify and hold
harmless each Underwriter, the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statement, and each other person, if any, who controls the Company or any
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any losses, liabilities, claims, damages and expenses
whatsoever (including but not limited to attorneys' fees and any and all
expenses reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation) to which they or any
of them may become subject under the Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus or any preliminary prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading, in each case to the extent, but only to the extent, that any such
loss, liability, claim, damage or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information relating to such Selling Stockholder furnished to the Company by or
on behalf of such Selling Stockholder expressly for use therein; provided,
however, that such indemnity with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter (or the benefit of any person
controlling such Underwriter) if the person asserting any such losses,
liabilities, claims, damages or expenses purchased the Shares which are the
subject thereof from such Underwriter and if such person was not sent or given a
copy
28
of the Prospectus, excluding documents incorporated therein by reference,
at or prior to confirmation of the sale of such Shares to such person in any
case where such sending or giving is required by the Act and the untrue
statement or omission of a material fact contained in such preliminary
prospectus was corrected in the Prospectus; and, provided further, that the
indemnification obligation of the Selling Stockholder under this subsection 8(b)
shall be limited to the actual net proceeds (before deducting expenses) received
by such Selling Stockholder from the sale by such Selling Stockholder of Shares
hereunder. This indemnity will be in addition to any liability that such Selling
Stockholder otherwise may have to the Underwriters, the Company or any other
indemnified person specified in this subsection 8(b), including under this
Agreement.
(c) Each Underwriter, severally and not jointly, agrees to indemnify and
hold harmless the Company, each Selling Stockholder, each of the directors of
the Company, each of the officers of the Company who shall have signed the
Registration Statement, and each other person, if any, who controls the Company
or any Selling Stockholder within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, against any losses, liabilities, claims,
damages and expenses whatsoever (including but not limited to attorneys' fees
and any and all expenses reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus or any
preliminary prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading, in each case to the extent, but only
to the extent, that any such loss, liability, claim, damage or expense arises
out of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the
Representatives with respect to such Underwriter expressly for use in the
Registration Statement or Prospectus; provided, however, that in no case shall
such Underwriter be liable or responsible for any amount in excess of the
aggregate public offering price of the Shares underwritten by it and distributed
to the public. This indemnity will be in addition to any liability that such
Underwriter may otherwise have to the Company, the Selling Stockholders or any
other
29
indemnified person specified in this subsection 8(c), including under this
Agreement. The Company and the Selling Stockholders acknowledge that the
statements set forth in the last paragraph on the cover page of the Prospectus
and in each paragraph under the caption "Underwriting" in the Prospectus (other
than in the last such paragraph) constitute the only information furnished in
writing by or on behalf of any Underwriter expressly for use in the Registration
Statement, each Preliminary Prospectus and the Prospectus.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the assertion of any claim, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent that it has been prejudiced
in any material respect by such failure or from any liability which it may have
otherwise). In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent it
may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
take charge of the defense of such action within a reasonable time after notice
of commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties with respect to such different defenses), in any of which events such
fees and expenses shall be borne by the indemnifying parties. The indemnifying
party under subsection (a), (b) or (c) above shall only be liable for the legal
expenses of one counsel for all indemnified parties in each jurisdiction in
which any claim or action is brought; provided, however, that the indemnifying
party shall be liable for separate counsel for any indemnified party in a
jurisdiction, if counsel to the indemnified parties shall have reasonably
concluded that there may be defenses available to such indemnified party that
are
30
different from or additional to those available to one or more of the other
indemnified parties and that separate counsel for such indemnified party is
prudent under the circumstances. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any settlement of
any claim or action effected without its written consent; provided, however,
that such written consent was not unreasonably withheld.
9. CONTRIBUTION. In order to provide for contribution in circumstances in
which the indemnification provided for in subsections (a) or (b) of Section 8
hereof is for any reason held to be unavailable from the Company or the Selling
Stockholders or is insufficient to hold harmless a party indemnified thereunder,
the Company, the Selling Stockholders and the Underwriters shall contribute to
the aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provisions (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting in the case of losses, claims, damages, liabilities and
expenses suffered by the Company and the Selling Stockholders, any contribution
received by the Company or the Selling Stockholders from persons, other than one
or more of the Underwriters, who may also be liable for contribution, including
persons who control the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, officers of the Company who signed the
Registration Statement and directors of the Company) to which the Company, the
Selling Stockholders and one or more of the Underwriters may be subject, in such
proportions as are appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders, on the one hand, and the Underwriters, on
the other hand, from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 8
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
several Selling Stockholders, on the one hand, and the Underwriters, on the
other hand, in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
Selling Stockholders, on the one hand, and the Underwriters, on the other hand,
shall be deemed to be in the same proportion as (x) the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Selling Stockholders and (y) the underwriting
discounts received by the Underwriters, respectively, in each case as set forth
in the table on the cover page of the Prospectus. The relative fault of the
Company and each Selling Stockholder, on the one hand, and of the Underwriters,
on the other hand, shall be
31
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or such Selling
Stockholder, on the one hand, or the Underwriters, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 9, (i) in no case shall any Underwriter be required to
contribute any amount in excess of the amount by which the aggregate public
offering price of the Shares underwritten by it and distributed to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or such
omission or alleged omission, (ii) in no case shall any Selling Stockholder be
required to contribute any amount in excess of the aggregate Purchase Price of
those of the Shares as are sold by such Selling Stockholder to the Underwriters
pursuant to his Agreement and (iii) 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 9, (i) each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as such
Underwriter, (ii) each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company and (iii) each person, if any, who controls any Selling Stockholder
(including, in the case of the Foundation, each trustee thereof) shall have the
same rights to contribution as such Selling Stockholder, subject in each case to
the provisions of the immediately preceding sentence. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section 9,
notify such other party or parties from whom contribution may be sought, but the
omission to so notify such other party or parties shall not relieve such other
party or parties from any obligation such party or parties may have under this
Section 9 or otherwise. No party shall be liable for contribution with respect
to any action or claim settled without its written consent; provided, however,
that such written consent was not unreasonably withheld.
32
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations and
warranties, covenants and agreements of the Company and the Selling Stockholder
contained in this Agreement, including without limitation the agreements
contained in Sections 5 and 6, the indemnity agreements contained in Section 8
and the contribution agreements contained in Section 9, shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Underwriters or any controlling person of any Underwriter or by or
on behalf of the Company, any of its officers and directors or the Selling
Stockholder or any controlling person thereof, and shall survive delivery of the
Shares to and payment for the Shares by the Underwriters. The representations
contained in Section 2 and the agreements contained in Sections 5, 6, 8, 9 and
12(d) hereof shall survive the termination of this Agreement including pursuant
to Section 12 hereof.
11. DEFAULT BY AN UNDERWRITER.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Option Shares hereunder, and if the Firm
Shares or Option Shares with respect to which such default relates do not (after
giving effect to arrangements, if any, made pursuant to subsection (b) below)
exceed in the aggregate 10% of the total number of Firm Shares or Option Shares,
as the case may be, that all Underwriters have agreed to purchase hereunder,
then the Firm Shares or Option Shares to which the default relates shall be
purchased by the non-defaulting Underwriters in proportion to the respective
proportions that the numbers of Firm Shares set forth opposite their respective
names in Schedule I hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters.
(b) If such default relates to more than 10% of the Firm Shares or Option
Shares, as the case may be, the Representatives may in their discretion arrange
for another party or parties (including any non-defaulting Underwriter or
Underwriters who so agree) to purchase such Firm Shares or Option Shares, as the
case may be, to which such default relates on the terms contained herein. If
within five (5) calendar days after such a default the Representatives do not
arrange for the purchase of the Firm Shares or Option Shares, as the case may
be, to which such default relates as provided in this Section 11, this Agreement
(or, in the case of a default with respect to the Option Shares, the obligations
of the Underwriters to purchase and of the Option Sellers to sell the Option
Shares) shall thereupon terminate, without liability on the part of the Company
and the Selling Stockholders with respect thereto (except in each case as
provided in Sections 6, 8 and 9 hereof) or the several non-defaulting
Underwriters (except as provided in Sections 8 and 9 hereof), but nothing in
this Agreement shall relieve a defaulting
33
Underwriter or Underwriters of its or their liability, if any, to the other
several Underwriters, the Company and the Selling Stockholders for damages
occasioned by its or their default hereunder.
(c) If the Firm Shares or Option Shares to which the default relates are to
be purchased by the non-defaulting Underwriters, or are to be purchased by
another party or parties as aforesaid, the Representatives or the Company shall
have the right to postpone the Closing Date or Additional Closing Date, as the
case may be, for a period not exceeding five (5) business days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus that, in the opinion of Underwriters' Counsel, may
thereby be made necessary or advisable. The term "Underwriter" as used in this
Agreement shall include any party substituted under this Section 11 with like
effect as if it had originally been a party to this Agreement with respect to
such Firm Shares and Option Shares.
12. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective when the Representatives, the
Company and the Selling Stockholders shall have received notification of the
effectiveness of the Registration Statement. Until this Agreement becomes
effective as aforesaid, this Agreement may be terminated by the Company by
notifying the Representatives and the Selling Stockholders, or by the Firm Share
Sellers (acting unanimously) by notice to the Representatives and the Company or
by the Representatives by notifying the Company and the Selling Stockholders
without any liability of any party to any party hereunder. Notwithstanding the
foregoing, the provisions of this Section 12 and of Sections 5, 8, 9 and 10
hereof shall at all times be in full force and effect.
(b) This Agreement and the obligations of the Underwriters hereunder may be
terminated by the Representatives by written notice to the Company and the
Selling Stockholders at any time at or prior to the Closing Date (and, with
respect to the Option Shares, the Additional Closing Date), without liability
(other than with respect to Sections 8 and 9) on the part of any Underwriter to
the Company or the Selling Stockholders if, on or prior to such date, (i) the
Company or any of the Selling Stockholders shall have failed, refused or been
unable to perform in any material respect any agreement on the part of the
Company or such Selling Stockholders to be performed hereunder, (ii) any other
condition to the obligations of the Underwriters set forth in Section 7 hereof
is not fulfilled when and as required in any material respect, (iii) trading in
securities generally on the
34
New York Stock Exchange, the American Stock Exchange or the NASDAQ Stock Market
or in the over-the-counter market shall have been suspended or materially
limited, or minimum prices shall have been established on either such exchange
or in either such market by the Commission, or by such exchange or other
regulatory body or governmental authority having jurisdiction, (iv) a general
banking moratorium shall have been declared by Federal or New York State
authorities, (v) there shall have occurred any outbreak or escalation of armed
hostilities involving the United States on or after the date hereof, or there
shall have been a declaration by the United States of a national emergency or
war, the effect of which shall be, in the Representatives' judgment, to make it
inadvisable or impracticable to proceed with the sale and delivery of the Shares
on the terms and in the manner contemplated in the Prospectus, (vi) in the
Representatives' reasonable opinion any material adverse change shall have
occurred since the respective dates as of which information is given in the
Registration Statement or the Prospectus in the condition (financial or other)
of the Company and its subsidiaries taken as a whole, whether or not arising in
the ordinary course of business other than as set forth in the Prospectus or
contemplated thereby, or (vii) there shall have occurred such a material adverse
change in the financial markets in the United States as, in the Representatives'
judgment, makes it inadvisable or impracticable to proceed with the sale and
delivery of the Shares on the terms and in the manner contemplated in the
Prospectus. The right of the Representatives to terminate this Agreement will
not be waived or otherwise relinquished by their failure to give notice of
termination prior to the time that the event giving rise to the right to
terminate shall have ceased to exist, provided that notice is given prior to the
Closing Date (and, with respect to the Option Shares, the Additional Closing
Date).
(c) Any notice of termination pursuant to this Section 12 shall be by
telephone, telex, telephonic facsimile, or telegraph, confirmed in writing by
letter.
(d) If this Agreement shall be terminated pursuant to any of the provisions
hereof (otherwise than pursuant to notification by the Representatives as
provided in subsection (a) or (b) of this Section 12), or if the sale of the
Shares provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth herein is not satisfied or because of
any refusal, inability or failure on the part of the Company or any Selling
Stockholder to perform any agreement herein or to comply with any provision
hereof, the Company agrees, subject to demand by the Representatives, to
reimburse the Representatives for all reasonable out-of-pocket expenses
(including the reasonable fees and expenses of Underwriters' Counsel), incurred
by the Underwriters in connection herewith.
35
13. NOTICES. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to any one or
more of the Underwriters, shall be mailed, delivered, or telexed or telegraphed
or faxed and confirmed in writing, to Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance Department (Fax No. (212)
▇▇▇-▇▇▇▇); if sent to the Company or any of the Selling Stockholders, shall be
mailed, delivered, or telegraphed or faxed and confirmed in writing, to the
Company (to the attention of the Chief Executive Officer) or such Selling
Stockholder (in care of the Attorney-in-Fact), at ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇).
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument.
15. PARTIES. This Agreement shall inure solely to the benefit of, and shall
be binding upon, each of the Underwriters, the Selling Stockholders and the
Company and the controlling persons, directors, officers, employees and agents
referred to in Sections 8 and 9, and their respective successors and assigns,
and with respect to the Selling Stockholders, their respective heirs, and no
other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. The term "successors and assigns" shall not include
a purchaser, in its capacity as such, of Shares from the Underwriters.
16. CONSTRUCTION. This Agreement shall be construed in accordance with the
laws of the State of New York, but without regard to principles of conflicts of
laws.
36
If the foregoing correctly sets forth the complete agreement between the
Underwriters, on the one hand, and the Company and the Selling Stockholders, on
the other hand, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
SYMS CORP ___________________________
▇▇ ▇▇▇▇,
individually and as
By:______________________ Trustee of the ▇▇ ▇▇▇▇
Name: aka ▇▇ ▇▇▇▇ Merns
Title: Revocable Living Trust
▇▇ ▇▇▇▇ FOUNDATION __________________________
▇▇▇▇▇ ▇▇▇▇ aka
▇▇▇▇▇ ▇▇▇▇ Merns
By:______________________
Name:
Title: __________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Accepted as of the date first above written:
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
SALOMON BROTHERS INC
as Representatives of the several Underwriters
named in Schedule I annexed hereto.
By: BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:______________________
Name:
Title:
37
Schedule I
UNDERWRITERS
Number of
Firm Shares
Name of Underwriter to be Purchased
------------------- ---------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc. .....................................
Salomon Brothers Inc. ........................................
---------
TOTAL: .............................................. 3,500,000
=========
38
Schedule II
SELLING STOCKHOLDERS
Firm Share Sellers:
No. of
Firm Shares
Name to be Sold
---- -----------
▇▇ ▇▇▇▇ Foundation ........................ 2,500,000
▇▇ ▇▇▇▇ (as Trustee of the
▇▇ ▇▇▇▇ aka ▇▇ ▇▇▇▇ Merns
Revocable Living Trust) ................. 1,000,000
---------
Total: ............... 3,500,000
=========
Option Share Sellers:
No. of
Option Shares
Name Subject to Option
---- -----------------
▇▇ ▇▇▇▇ (as Trustee of the
▇▇ ▇▇▇▇ aka ▇▇ ▇▇▇▇ Merns
Revocable Living Trust) ................. 345,000
▇▇▇▇▇ ▇▇▇▇ aka
▇▇▇▇▇ ▇▇▇▇ Merns ........................ 50,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ .......................... 130,000
-------
Total: ............... 525,000
=======
39
Schedule III
SUBSIDIARIES
PERCENT OF
NAME JURISDICTION OWNERSHIP**
---- ------------ -----------
Syms Advertising Inc. ................. Delaware 100%
SYL, Inc. ............................. Delaware 100%
SYI, Inc. ............................. Delaware 100%
Syms Clothing Inc.* ................... New York 100%
Generic Products, Inc.* ............... New York 100%
Rothschild Haberdashery, Inc.* ........ New York 100%
------------------------------
* Inactive
** All of the shares of each subsidiary
are owned directly by Syms Corp.
40
Exhibit A
FORM OF DEPOSIT AGREEMENT AND POWER OF ATTORNEY
November ___, 1997
▇▇. ▇▇ ▇▇▇▇
▇/▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sir:
Syms Corp (the "Company"), of which the undersigned is a stockholder, has
filed with the Securities and Exchange Commission a Registration Statement on
Form S-3 under the Securities Act of 1933, as amended (the "Registration
Statement") with respect to the public offering and sale of shares of its
outstanding Common Stock for the account of certain selling stockholders (the
"Selling Stockholders"), including the undersigned, pursuant to the terms of an
underwriting agreement (the "Underwriting Agreement") among the Company, the
Selling Stockholders and Bear, ▇▇▇▇▇▇▇ & Co. Inc. and Salomon Brothers Inc, as
representatives (the "Representatives") of the several underwriters named in
Schedule I thereto, substantially in the form filed as an exhibit to the
Registration Statement. Capitalized terms used but not separately defined herein
are defined in the Underwriting Agreement and are used herein as so defined.
Copies of the Registration Statement and the form of the Underwriting Agreement
have been furnished to and reviewed by the undersigned. The number of Shares
that may be sold by the undersigned pursuant to the terms of the Underwriting
Agreement is set forth opposite the name of the undersigned in Schedule II
thereto.
As an inducement to the Company, the Underwriters and each of the other
Selling Stockholders to enter into the Underwriting Agreement and to consummate
the transactions contemplated thereby and by the Registration Statement, the
undersigned hereby agrees as follows:
1. Deposit of Shares.
The undersigned hereby delivers to you (the "Attorney-in-Fact"), one or
more certificates (endorsed in blank or accompanied by a stock power endorsed in
blank, with the signature thereon guaranteed by a member firm of the New York
Stock Exchange or a banking institution that is a member of the Federal Reserve
System) evidencing at least the maximum number of
Option Shares that may be sold by the undersigned to the several Underwriters
pursuant to the terms of the Underwriting Agreement.
2. Return of Certificates.
(a) If the Underwriting Agreement has not been executed and delivered,
or the Option has not been exercised, on or before December 31, 1997, then
promptly after such date the Attorney-in-Fact shall return to the
undersigned the certificate or certificates theretofore deposited by the
undersigned with the Attorney-in-Fact pursuant hereto.
(b) If the number of Option Shares purchased by the Underwriters from
the undersigned is less than the total number of shares evidenced by the
certificate or certificates deposited by the undersigned with the
Attorney-in-Fact pursuant hereto, then, promptly following the Additional
Closing Date, the Attorney-in-Fact shall cause the Transfer Agent for the
Common Stock to issue to and in the name of the undersigned, and shall
deliver to the undersigned, a new certificate evidencing the balance of
such shares.
3. Grant of Power of Attorney.
The undersigned hereby irrevocably constitutes and appoints the
Attorney-in-Fact the true and lawful agent and attorney-in-fact of and for the
undersigned, to act for and on behalf of and in the name of the undersigned in
respect of all matters relating to the Underwriting Agreement and the
transactions contemplated thereby. In furtherance and not in limitation of the
foregoing grant, the Attorney-in-Fact shall have full power and authority, in
the name and on behalf of the undersigned, --
(a) To negotiate, determine and agree with the Representatives as to
the Purchase Price to be paid for the Shares by the Underwriters and the
price at which the Shares are to be initially offered to the public by the
Underwriters, and to execute and deliver on behalf of the undersigned the
Underwriting Agreement substantially in the form filed as an exhibit to the
Registration Statement, with such changes thereto as the Attorney-in-Fact,
acting in his sole discretion, may approve, which approval shall be
conclusively evidenced by his execution of the Underwriting Agreement.
(b) To instruct the Transfer Agent for the Common Stock with respect
to all matters pertaining to the certificates for the Option Shares
deposited with the Attorney-in-Fact hereunder; to cause the Company's
Transfer Agent to issue and register a certificate or certificates
representing those of the Option Shares as are purchased
2
from the undersigned by the Underwriters in such names and denominations as
may be specified by the Representatives, and to permit inspection and
packaging of such certificates by the Representatives, in each case as
provided in the Underwriting Agreement.
(c) To take any and all steps deemed necessary or desirable by the
Attorney-in-Fact in connection with the registration of the Shares under
the Act, including, without limitation, arranging for, preparing or causing
to be prepared all amendments to the Registration Statement, the final
Prospectus, the requesting of acceleration of effectiveness of the
Registration Statement, and such undertakings, representations and other
steps as the Attorney-in-Fact, acting in his sole discretion, may deem
necessary or advisable.
(d) To exercise, in his sole discretion, any power conferred upon, and
to take any action authorized to be taken by, the undersigned pursuant to
the Underwriting Agreement.
(e) To deliver to or upon the order of the Representatives,
certificates representing those of the Option Shares as are purchased by
the Underwriters from the undersigned at the Additional Closing Date, as
the same may be fixed in accordance with the terms of the Underwriting
Agreement, against receipt by the Attorney-in-Fact of payment of the
Purchase Price therefor in accordance with the Underwriting Agreement.
(f) To certify to the Transfer Agent for the Common Stock such
instructions and such assurances of the genuineness of any document as may
be reasonably required in connection with the consummation of the sale to
the Underwriters of those of the Option Shares as are purchased by the
Underwriters from the undersigned pursuant to the Underwriting Agreement.
(g) To remit to the undersigned the net proceeds of sale of those of
the Option Shares as are purchased by the Underwriters from the undersigned
(after deduction therefrom of the undersigned's proportionate share of any
expenses to be paid by the Selling Stockholders) or make such other
disposition thereof as the undersigned may specify in written instructions
delivered to the Attorney-in-Fact.
(h) To employ legal counsel for the undersigned, in the undersigned's
capacity as an Option Share Seller, such counsel being hereby authorized to
rely upon the
3
statements and representations of the undersigned contained herein, and in
the Underwriting Agreement.
(i) Otherwise to do all other things and to perform all other acts,
including, without limitation, the execution and delivery of all
certificates, questionnaires, receipts, notices, instructions and any other
documents or papers required or contemplated by the Underwriting Agreement
or deemed necessary or advisable by the Attorney-in-Fact in his sole
discretion in connection with the transactions contemplated by the
Underwriting Agreement and this Deposit Agreement, as fully as could the
undersigned if then personally present and acting.
The Attorney-in-Fact is hereby granted full power to designate by written
instrument any substitute for himself as attorney-in-fact for the undersigned,
such substitute to have all of the power and authority hereby conferred upon the
Attorney-in-Fact by the undersigned.
4. Compensation, Exculpation and Indemnification of the Attorney-in-Fact
The Attorney-in-Fact shall not receive any compensation for services
rendered hereunder. The Attorney-in-Fact shall not be liable for any action
taken or omission made by him in good faith and the undersigned hereby agrees to
indemnify and hold harmless the Attorney-in-Fact from and against any and all
loss, damage or liability that the Attorney-in-Fact may sustain, or to which the
Attorney-in-Fact may become subject, directly or indirectly as a result of any
action taken or omitted in good faith by the Attorney-in-Fact in connection with
the foregoing. In taking any action hereunder, the Attorney-in-Fact is
authorized to rely absolutely upon advice of counsel and any information or
assurance of fact given to him by the Company, and to accept any document as
authentic and any writing as genuine, if certified to be so by the Company.
5. Purposes of Agreement.
This Deposit Agreement is being entered into and the power of attorney
contained herein is being granted and conferred subject to the interests of the
Underwriters, the Company and each of the Selling Stockholders who may become a
party to the Underwriting Agreement and for the purpose of completing the
transactions contemplated by the Underwriting Agreement. In accordance with the
terms of the Underwriting Agreement, the Underwriters, the Company and the
Selling Stockholders have and have declared a substantial interest in the
assurance that, notwithstanding the death or incapacity of the undersigned or
the occurrence of any act of the undersigned, all of the Option Shares as are to
be purchased by the Underwriters
4
from the undersigned pursuant to the Underwriting Agreement shall be available
for delivery against payment therefor, time being of the essence. Accordingly,
this Deposit Agreement and the power of attorney and all authority herein
granted to the Attorney-in-Fact shall be irrevocable and shall not be terminated
(or be capable of termination) by any act of the undersigned, by operation of
law, by the death or incapacity of the undersigned, or by the occurrence of any
other event except as expressly provided herein. Notwithstanding the occurrence
of such death, incapacity or other event prior to the completion of the
transactions contemplated by the Underwriting Agreement and this Deposit
Agreement, the Attorney-in-Fact is authorized and directed to complete all such
transactions and to carry out the provisions of the Underwriting Agreement and
this Deposit Agreement as if such death, incapacity or other event had not
occurred and regardless of any notice thereof.
6. Voting of Shares.
Until full payment by the Underwriters of the aggregate Purchase Price for
the Option Shares purchased from the undersigned by the Underwriters, the
undersigned shall remain the owner of such Shares and shall have the right to
vote such Shares and all other shares of Common Stock (if any) represented by
the certificates deposited by the undersigned with the Attorney-in-Fact pursuant
hereto and to receive all dividends and distributions thereon.
7. Representations of the Undersigned.
All of the representations and warranties of the undersigned as a Selling
Stockholder set forth in Section 2.B of the Underwriting Agreement are
incorporated herein, mutatis mutandis, and shall be deemed to have been made and
given herein by the undersigned with the same force and effect as if fully set
forth herein.
8. Governing Law; Counterparts.
This Deposit Agreement and the power of attorney contained herein shall be
construed and enforced in accordance with the laws of the State of New York.
This Deposit Agreement may be executed in one or more counterparts, all of
which, taken together, shall constitute one and the same instrument.
5
Please confirm your acceptance of and agreement with the foregoing by
countersigning and returning to the undersigned the enclosed counterpart hereof.
Very truly yours,
-----------------------------
ACCEPTED AND AGREED TO:
----------------------------
▇▇ ▇▇▇▇
6
EXHIBIT B
FORM OF OPINION OF SKADDEN, ARPS ET AL.
________________, 1997
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
SALOMON BROTHERS INC
As representatives of the several
Underwriters referred to herein
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Syms Corp --
Public Offering by Selling Stockholders
of shares of Common Stock
---------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Syms Corp, a New Jersey corporation (the
"Company"), and the several selling stockholders (the "Selling Stockholders")
named in Schedule II to the Underwriting Agreement, dated __________, 1997 (the
"Underwriting Agreement"), among the Company, the Selling Stockholders and the
several underwriters (the "Underwriters") named in Schedule I thereto, in
connection with the sale this date by the Selling Stockholders to the
Underwriters of an aggregate of __________ shares of the Company's Common Stock,
$.05 par value (the "Common Stock"). We are furnishing this opinion to you, at
the request of the Company and the Selling Stockholders, pursuant to Section
7(b) of the Underwriting Agreement. Capitalized terms used but not otherwise
defined herein shall have the respective meanings set forth in the Underwriting
Agreement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of [specify documents
examined]. We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such records of the Company and the Selling
Stockholders and such agreements, certificates of public officials, certificates
of officers or other representatives of the Company and others, and such other
documents, certificates and records as we have deemed necessary or appropriate
as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Company and the Selling
Stockholders, we have assumed that such parties had the power, corporate or
other, to enter into and perform all obligations thereunder and have also
assumed the due authorization by all requisite action, corporate or other, and
execution and delivery by such parties of such documents and the validity and
binding effect thereof. As to any facts material to the opinions expressed
herein that we did not independently establish or verify, we have relied upon
oral or written statements and representations of officers and other
representatives of the Company and others.
Members of our firm are admitted to practice in the States of
____________________________, and we do not express any opinion as to the laws
of any other jurisdiction other than the federal laws of the United States of
America to the extent specifically referred to herein.
Based upon and subject to the limitations, qualifications and assumptions
set forth herein, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of New Jersey and
has full corporate power and authority to own, lease, license and operate
its properties and conduct its business as described in the Prospectus. The
opinion set forth in this paragraph 1 as to the valid existence and good
standing of the Company is based solely upon our review of a certificate
from the Secretary of State of New Jersey.
2. [To the effect that] The Company is duly qualified and in good
standing to do business as a foreign corporation in each of Connecticut,
Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Missouri,
New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Texas and
Virginia.
3. The authorized capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization." All of the outstanding
shares of Common Stock, including the Shares, have been duly authorized and
are validly issued, fully paid and nonassessable and were not issued in
violation of or subject to any preemptive rights. Except as disclosed in
the Registration Statement and the Prospectus, to our knowledge there are
no outstanding options, warrants or other securities or rights calling for
the issuance of, and no commitments, obligations, plans or arrangements of
or on the part of the Company to issue any shares of its capital stock or
any securities convertible into, exchangeable for or evidencing the right
to purchase shares of such capital stock.
2
4. The Common Stock conforms in all material respects to the
description thereof contained in the Prospectus under the caption
"Description of Capital Stock."
5. The Company has the corporate power and authority to execute and
deliver, and to perform its obligations under, the Underwriting Agreement.
The execution and delivery of the Underwriting Agreement by the Company and
the performance by the Company of its obligations thereunder, have been
duly authorized by all necessary corporate action on the part of the
Company. The Underwriting Agreement has been duly and validly authorized,
executed and delivered by the Company.
6. The Company's execution and delivery of the Underwriting Agreement
do not, and its performance of its obligations thereunder, when such
performance is required by the terms thereof, will not, (i) constitute a
violation or default (or an event that, with notice or lapse of time or
both, would constitute a default) under, or result in the creation or
imposition of any security interest in or lien upon any property of the
Company pursuant to the terms, conditions or provisions of, any agreement
to which the Company is a party or by which it is bound of which we are
aware and have determined to be material to the business or financial
condition of the Company (which agreements are identified as Schedule ___
annexed hereto) or (ii) conflict with any of the provisions of the
certificate of incorporation or by-laws of the Company or (iii) contravene
any New York, New Jersey or United States federal laws or regulations
(other than federal or state securities laws or federal or state anti-fraud
laws relating to disclosure, as to which we express no opinion in this
paragraph) that, in our experience, are normally applicable to transactions
of the type contemplated by the Underwriting Agreement or (iv) violate or
conflict with any judgment, writ, injunction, decree, order or ruling of
any court or governmental authority binding on the Company that has been
identified to us by the Company.
7. The Foundation has been duly incorporated and is validly existing
and in good standing as a non-profit corporation under the laws of the
State of New Jersey. The Foundation has the corporate power and authority
to own those of the Shares as are owned by it and to execute and deliver,
and to perform its obligations under, the Underwriting Agreement,
including, but not limited to, the sale and delivery to the Underwriters of
those of the Shares as are to be sold by the Foundation pursuant to the
Underwriting Agreement. The execution and delivery by the Foundation of the
Underwriting Agreement and the performance by the Foundation of its
obligations thereunder have been duly authorized by all requisite corporate
action on the part of the Foundation. The Underwriting Agreement has been
duly and validly authorized, executed and delivered by the Foundation.
3
8. The Trust is a validly formed and existing revocable living trust
under the laws of the State of New York. ▇▇ ▇▇▇▇ is the sole incumbent
Trustee of the Trust and, under the terms of the Trust Indenture, in his
capacity as Trustee, has full right, power and authority, in the name and
on behalf of the Trust, to execute and deliver the Underwriting Agreement
and to perform the obligations to be performed by and on behalf of the
Trust pursuant to the terms of the Underwriting Agreement, including, but
not limited to, the sale and delivery to the Underwriters of those of the
Shares as are to be so sold and delivered by the Trust. The Underwriting
Agreement has been duly and validly executed and delivered (i) on behalf of
the Trust by ▇▇ ▇▇▇▇, as Trustee, and (ii) on behalf of each of ▇▇▇▇▇ ▇▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ by ▇▇ ▇▇▇▇, as Attorney-in-Fact pursuant to the
Deposit Agreement.
9. No consent, approval, waiver, license, permit, authorization or
other action by, or filing with, any New Jersey, New York or United States
federal governmental authority is required in connection with the execution
and delivery of the Underwriting Agreement by the Company or any of the
Selling Stockholders, the execution and delivery of the Deposit Agreement
by any of the Selling Stockholders or the performance by the Company or any
of the Selling Stockholders of its, his or her respective obligations under
and the consummation of the transactions contemplated by the Underwriting
Agreement and, in the case of the Selling Stockholders, the Deposit
Agreement except for (i) such as may be required under state securities or
"blue sky" laws (as to which we express no opinion) and (ii) such as have
been made or obtained under the Act, the Exchange Act or the rules of the
New York Stock Exchange.
10. Upon delivery by each Selling Stockholder (either directly or by
his or her Attorney-in-Fact) to the Representatives, on behalf of the
Underwriters, of a certificate evidencing those of the Shares as are to be
so sold to the Underwriters by such Selling Stockholder, registered in the
name of such Selling Stockholder and duly endorsed in blank or accompanied
by a stock power for such Shares duly endorsed in blank, against receipt of
the aggregate Purchase Price therefor, as provided in the Underwriting
Agreement, the Underwriters will acquire such certificate and the Shares
evidenced thereby free and clear of any adverse claim, as defined in
Section 8-102(a)(1) of the Uniform Commercial Code as adopted in the State
of New York (the "Code") (assuming such Underwriters acquire such
certificates without notice of an adverse claim, as such phrase is used in
Section 8-105 of the Code).
11. To the best or our knowledge, no person or entity has the right,
by contract or otherwise, to require registration under the Act of shares
of capital stock or other securities of the Company or any subsidiary
thereof solely because of the filing or effectiveness of the Registration
Statement or the
4
consummation of the transactions contemplated by the Underwriting
Agreement.
12. The Shares are listed for trading on the New York Stock Exchange.
13. The Registration Statement and the Prospectus (except for the
financial statements and the notes thereto, the financial statement
schedules and the other financial and accounting data included therein, as
to which we express no opinion) comply as to form in all material respects
with the requirements of the Act and the Regulations. The Incorporated
Documents (other than the financial statements and the notes thereto, the
financial statement schedules and the other financial and accounting data
included therein, as to which we express no opinion), appear on their face
to have complied as to form in all material respects with the Exchange Act
and the rules and regulations of the Commission thereunder at the time such
Incorporated Documents were filed with the Commission under the Exchange
Act.
14. To the best of our knowledge, there is no litigation, arbitration
or governmental or other action, suit, proceeding or investigation before
any court or before or by any public, regulatory or governmental agency or
body pending or threatened against, or involving the properties or business
of, the Company or any subsidiary, that, if resolved against the Company or
such subsidiary, individually or, to the extent involving related claims or
issues, in the aggregate, is of a character required to be disclosed in the
Registration Statement and the Prospectus and that has not been properly
disclosed therein; and to the best of our knowledge, there is no contract
or document concerning the Company or any subsidiary of a character
required to be described in the Registration Statement and the Prospectus
or to be filed as an exhibit to the Registration Statement, that is not so
described or filed.
15. The statements in the Prospectus under the heading "Shares
Eligible for Future Sale," insofar as such statements purport to summarize
the provisions of laws or regulations, are correct in all material respects
and are a fair summary of the matters referred to therein.
16. The Company is not subject to registration as an "investment
company" under the Investment Company Act of 1940, as amended.
We have been orally advised by the Commission that the Registration
Statement was declared effective under the Securities Act at ________ on
______________________, 1997. We have been orally advised by the Commission that
no stop order suspending the effectiveness of the Registration Statement has
been issued and, to the best of our knowledge, no proceedings for
5
that purpose have been instituted or are pending or threatened by the
Commission.
In addition, we have participated in conferences with officers and other
representatives of the Company, certain of the Selling Stockholders,
representatives of the independent accountants of the Company and
representatives of and counsel for the Underwriters at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although we are not passing upon, and do not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and have made no independent check or
verification thereof, except to the extent set forth in paragraphs 3, 4 and 15
above, on the basis of the foregoing, no facts have come to our attention that
have led us to believe that the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of the date thereof
or as of the date hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, except that we express no view with respect to the
Incorporated Documents or the financial statements, schedules and other
financial and statistical data included therein or excluded therefrom or the
exhibits to the Registration Statement.
This opinion is furnished to you solely for your benefit and the benefit of
the Underwriters in connection with the closing under the Underwriting Agreement
occurring today and is not to be used, circulated, quoted or otherwise referred
to or relied upon for any other purpose without our prior express written
permission.
Very truly yours,
6