EXHIBIT 1.1
2,770,819 Shares(1)
BUCA, INC.
Common Stock
PURCHASE AGREEMENT
_____________________, 1999
U.S. BANCORP XXXXX XXXXXXX INC.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
As Representatives of the several Underwriters
named in Schedule II hereto
c/o U.S. Bancorp Xxxxx Xxxxxxx Inc.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
BUCA, Inc., a Minnesota corporation (the "Company"), and the
shareholders of the Company listed in Schedule I hereto (the "Selling
Shareholders") severally propose to sell to the several Underwriters named in
Schedule II hereto (the "Underwriters") an aggregate of 2,706,375 shares of
Common Stock, $.01 par value per share (the "Common Stock"), of the Company and
warrants (the "Warrants") to purchase an aggregate of 64,444 authorized but
unissued shares of Common Stock. The aggregate of 2,500,000 authorized but
unissued shares of Common Stock to be issued and sold by the Company, 150,000
outstanding shares of Common Stock to be sold by the Selling Shareholders,
56,375 shares of Common Stock issued by the Company upon conversion of the
Company's Series A Convertible Subordinated Debenture (the "Debentures") and to
be sold by the Selling Shareholders and, 64,444 shares of Common Stock to be
issued by the Company upon exercise of the Warrants to be purchased from the
Selling Shareholders are referred to as the "Firm Shares." The Company has also
granted to the several Underwriters an option to purchase up to 399,622
additional shares of Common Stock and a Selling Shareholder has granted to the
Underwriters an option to purchase up to 16,000 additional shares of Common
Stock on the terms and for the purposes set forth in Section 3 hereof (the
"Option Shares"). The Firm Shares and any Option Shares purchased pursuant to
this Purchase Agreement are herein collectively called the "Securities."
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1 Plus an option to purchase up to 415,622 additional shares to cover
over-allotments.
The Company and the Selling Shareholders hereby confirm their agreement
with respect to the sale of the Securities to the several Underwriters, for whom
you are acting as Representatives (the "Representatives").
1. Registration Statement and Prospectus. A registration statement on
Form S-1 (File No. 333-70841) with respect to the Securities, including a
preliminary form of prospectus, has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations ("Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission; one or more amendments to such registration statement have also been
so prepared and have been, or will be, so filed; and, if the Company has elected
to rely upon Rule 462(b) of the Rules and Regulations to increase the size of
the offering registered under the Act, the Company will prepare and file with
the Commission a registration statement with respect to such increase pursuant
to Rule 462(b). Copies of such registration statement(s) and amendments and each
related preliminary prospectus have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus (including a term sheet, if
any, meeting the requirements of Rule 434 of the Rules and Regulations). If the
Company has elected to rely upon Rule 430A of the Rules and Regulations, it will
prepare and file a prospectus (or a term sheet meeting the requirements of Rule
434) pursuant to Rule 424(b) that discloses the information previously omitted
from the prospectus in reliance upon Rule 430A. Such registration statement as
amended at the time it is or was declared effective by the Commission, and, in
the event of any amendment thereto after the effective date and prior to the
First Closing Date (as hereinafter defined), such registration statement as so
amended (but only from and after the effectiveness of such amendment), including
a registration statement (if any) filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the Act and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rules 430A(b) and 434(d) of the Rules and
Regulations, is hereinafter called the "Registration Statement." The prospectus
included in the Registration Statement at the time it is or was declared
effective by the Commission is hereinafter called the "Prospectus," except that
if any prospectus (including any term sheet meeting the requirements of Rule 434
of the Rules and Regulations provided by the Company for use with a prospectus
subject to completion within the meaning of Rule 434 in order to meet the
requirements of Section 10(a) of the Rules and Regulations) filed by the Company
with the Commission pursuant to Rule 424(b) (and Rule 434, if applicable) of the
Rules and Regulations or any other such prospectus provided to the Underwriters
by the Company for use in connection with the offering of the Securities
(whether or not required to be filed by the Company with the Commission pursuant
to Rule 424(b) of the Rules and Regulations) differs from the prospectus on file
at the time the Registration Statement is or was declared effective by the
Commission, the term "Prospectus" shall refer to such differing prospectus
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations) from and after the time such prospectus is filed with the
Commission or transmitted to the Commission for filing pursuant to such Rule
424(b) (and Rule 434, if applicable) or from and after the time it is first
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provided to the Underwriters by the Company for such use. The term "Preliminary
Prospectus" as used herein means any preliminary prospectus included in the
Registration Statement prior to the time it becomes or became effective under
the Act and any prospectus subject to completion as described in Rule 430A or
434 of the Rules and Regulations.
2. Representations and Warranties of the Company and the Selling
Shareholders.
(a) The Company represents and warrants to, and agrees with,
the several Underwriters as follows:
(i) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission and each
Preliminary Prospectus, at the time of filing thereof, did not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; except that the foregoing shall not apply to statements
in or omissions from any Preliminary Prospectus in reliance upon, and
in conformity with, written information furnished to the Company by
you, or by any Underwriter through you, specifically for use in the
preparation thereof.
(ii) As of the time the Registration Statement (or
any post-effective amendment thereto, including a registration
statement (if any) filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the
Act) is or was declared effective by the Commission, upon the filing or
first delivery to the Underwriters of the Prospectus (or any supplement
to the Prospectus (including any term sheet meeting the requirements of
Rule 434 of the Rules and Regulations)) and at the First Closing Date
and Second Closing Date (as hereinafter defined), (A) the Registration
Statement and Prospectus (in each case, as so amended and/or
supplemented) conformed or will conform in all material respects to the
requirements of the Act and the Rules and Regulations, (B) the
Registration Statement (as so amended) did not or will not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (C) the Prospectus (as so supplemented) did
not or will not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which
they are or were made, not misleading; except that the foregoing shall
not apply to statements in or omissions from any such document in
reliance upon, and in conformity with, written information furnished to
the Company by you, or by any Underwriter through you, specifically for
use in the preparation thereof. If the Registration Statement has been
declared effective by the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued, and no
proceeding for that purpose has been initiated or, to the Company's
knowledge, threatened by the Commission.
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(iii) The financial statements of the Company,
together with the notes thereto, set forth in the Registration
Statement and Prospectus comply in all material respects with the
requirements of the Act and the Rules and Regulations and fairly
present the financial condition of the Company as of the dates
indicated and the results of operations and changes in cash flows for
the periods therein specified in conformity with generally accepted
accounting principles consistently applied throughout the periods
involved (except as otherwise stated therein); and the supporting
schedules included in the Registration Statement present fairly the
information required to be stated therein and comply in all material
respects with the requirements of the Act and the Rules and
Regulations. No other financial statements or schedules are required to
be included in the Registration Statement or Prospectus. Deloitte &
Touche LLP, which has expressed its opinion with respect to the
financial statements and schedules filed as a part of the Registration
Statement and included in the Registration Statement and Prospectus,
are independent public accountants as required by the Act and the Rules
and Regulations.
(iv) Each of the Company and its subsidiaries has
been duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each of
the Company and its subsidiaries has full corporate power and authority
to own its properties and conduct its business as currently being
carried on and as described in the Registration Statement and
Prospectus, and is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction in which it owns or
leases real property or in which the conduct of its business makes such
qualification necessary and in which the failure to so qualify would
have a material adverse effect upon its business, condition (financial
or otherwise) or properties, taken as a whole.
(v) Except as contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, neither the Company nor
any of its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any
distribution of any kind with respect to its capital stock; and, except
as contemplated in the Prospectus, there has not been any change in the
capital stock (other than a change in the number of outstanding shares
of Common Stock due to the issuance of shares upon the exercise of
outstanding options or warrants or issuance of shares pursuant to the
Company's Piasano Program or the conversion of outstanding convertible
securities), or any material change in the short-term or long-term
debt, or any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock, of the Company or any of
its subsidiaries, or any material adverse change, or any development
involving a prospective material adverse change, in the condition
(financial or otherwise), business or results of operations of the
Company and its subsidiaries, taken as a whole.
(vi) Except as set forth in the Prospectus, there is
not pending or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company or
any of its subsidiaries is a party before or by any court or
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governmental agency, authority or body, or any arbitrator, which might
result in any material adverse change in the condition (financial or
otherwise), business, or results of operations of the Company and its
subsidiaries, taken as a whole.
(vii) There are no contracts or documents of the
Company or any of its subsidiaries that are required to be filed as
exhibits to the Registration Statement by the Act or by the Rules and
Regulations that have not been so filed.
(viii) This Agreement has been duly authorized,
executed and delivered by the Company, and constitutes a valid, legal
and binding obligation of the Company, enforceable in accordance with
its terms, except as rights to indemnity hereunder may be limited by
federal or state securities laws and except as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity. The execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any
agreement or instrument to which the Company is a party or by which it
is bound or to which any of its property is subject, the Company's
charter or by-laws, or any order, rule, regulation or decree of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties; no consent, approval, authorization
or order of, or filing with, any court or governmental agency or body
is required for the execution, delivery and performance of this
Agreement or for the consummation of the transactions contemplated
hereby, including the issuance or sale of the Securities by the
Company, except such as may be required under the Act or state
securities or blue sky laws; and the Company has full power and
authority to enter into this Agreement and to authorize, issue and sell
the Securities as contemplated by this Agreement.
(ix) All of the issued and outstanding shares of
capital stock of the Company, including the outstanding shares of
Common Stock, are duly authorized and validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and
state securities laws, were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase
securities, and the holders thereof are not subject to personal
liability by reason of being such holders; the Securities which may be
sold hereunder by the Company have been duly authorized and, when
issued, delivered and paid for in accordance with the terms hereof,
will have been validly issued and will be fully paid and nonassessable,
and the holders thereof will not be subject to personal liability by
reason of being such holders; and the capital stock of the Company
(including any adjustments to be effective as of the First Closing as
contemplated in the Prospectus), including the Common Stock, conforms
to the description thereof in the Registration Statement and
Prospectus. Upon the sale of the Securities at the First Closing as
contemplated by this Agreement, all issued and outstanding shares of
preferred stock of the Company will convert automatically into shares
of Common Stock as set forth in the Registration Statement and
Prospectus. Except as otherwise stated in the Registration Statement
and Prospectus, there
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are no preemptive rights or other rights to subscribe for or to
purchase, or any restriction upon the voting or transfer of, any shares
of Common Stock pursuant to the Company's charter, by-laws or any
agreement or other instrument to which the Company is a party or by
which the Company is bound. Neither the filing of the Registration
Statement nor the offering or sale of the Securities as contemplated by
this Agreement gives rise to any rights for or relating to the
registration of any shares of Common Stock or other securities of the
Company, except for such rights which have been waived or fully
satisfied. All of the issued and outstanding shares of capital stock of
each of the Company's subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except
as otherwise described in the Registration Statement and Prospectus and
except for any directors' qualifying shares, the Company owns of record
and beneficially, free and clear of any security interests, claims,
liens, proxies, equities or other encumbrances, all of the issued and
outstanding shares of such stock. Except as described in the
Registration Statement and the Prospectus, there are no options,
warrants, agreements, contracts or other rights in existence to
purchase or acquire from the Company or any subsidiary of the Company
any shares of the capital stock of the Company or any subsidiary of the
Company. The Company has an authorized and outstanding capitalization
(including any adjustments to be effective as of the First Closing as
contemplated in the Prospectus) as set forth in the Registration
Statement and the Prospectus.
(x) The Company and each of its subsidiaries holds,
and is operating in compliance with, all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates
and orders of any governmental or self-regulatory body required for the
conduct of its business and all such franchises, grants,
authorizations, licenses, permits, easements, consents, certifications
and orders are valid and in full force and effect, except for such
failures to hold, to be in compliance, to be valid and in full force
and effect that would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company and its subsidiaries,
taken as a whole; and the Company and each of its subsidiaries is in
compliance with all applicable federal, state, local and foreign laws,
regulations, orders and decrees, except for such failures to be so in
compliance that would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company and its subsidiaries,
taken as a whole.
(xi) The Company and its subsidiaries have good and
marketable title to all property described in the Registration
Statement and Prospectus as being owned by them, in each case free and
clear of all liens, claims, security interests or other encumbrances
except such as are described in the Registration Statement and the
Prospectus or those that are not material in amount and do not
adversely affect the use made and proposed to be made of such property
by the Company and its subsidiaries; the property held under lease by
the Company and its subsidiaries is held by them under valid,
subsisting and enforceable leases with only such exceptions with
respect to any particular lease as do not interfere in any material
respect with the conduct of the business of the Company or its
subsidiaries; the
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Company and each of its subsidiaries owns or possesses all patents,
patent applications, trademarks, service marks, tradenames, trademark
registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets and rights necessary for the conduct of the
business of the Company and its subsidiaries as currently carried on
and as described in the Registration Statement and Prospectus; except
as stated in the Registration Statement and Prospectus, to the
Company's knowledge, no name which the Company or any of its
subsidiaries uses and no other aspect of the business of the Company or
any of its subsidiaries will involve or give rise to any infringement
of, or license or similar fees for, any patents, patent applications,
trademarks, service marks, tradenames, trademark registrations, service
xxxx registrations, copyrights, licenses, inventions, trade secrets or
other similar rights of others material to the business of the Company
and neither the Company nor any of its subsidiaries has received any
notice alleging any such infringement or fee.
(xii) Neither the Company nor any of its subsidiaries
is in violation of its respective charter or by-laws or in breach of or
otherwise in default in the performance of any obligation, agreement or
condition contained in any bond, debenture, note, indenture, loan
agreement or any other contract, lease or other instrument to which it
is subject or by which any of them may be bound, or to which any of the
material property or assets of the Company or any of its subsidiaries
is subject, except for such breaches or defaults that would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), business or results of operations
of the Company and its subsidiaries, taken as a whole.
(xiii) The Company and its subsidiaries have filed
all federal, state, local and foreign income and franchise tax returns
required to be filed and are not in default in the payment of any taxes
which were payable pursuant to said returns or any assessments with
respect thereto, other than any which the Company or any of its
subsidiaries is contesting in good faith.
(xiv) The Company has not distributed and will not
distribute any prospectus or other offering material in connection with
the offering and sale of the Securities other than any Preliminary
Prospectus or the Prospectus or other materials permitted by the Act to
be distributed by the Company.
(xv) The Securities have been conditionally approved
for listing on the Nasdaq National Market System and, on the date the
Registration Statement became or becomes effective, the Company's
Registration Statement on Form 8-A or other applicable form under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
became or will become effective.
(xvi) Other than the subsidiaries of the Company
listed in Exhibit 21 to the Registration Statement, the Company owns no
capital stock or other equity or ownership or proprietary interest in
any corporation, partnership, association, trust or other entity.
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(xvii) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(xviii) Other than as contemplated by this Agreement,
the Company has not incurred any liability for any finder's or broker's
fee or agent's commission in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated
hereby.
(xix) Neither the Company nor any of its affiliates
is presently doing business with the government of Cuba or with any
person or affiliate located in Cuba.
(b) Each Selling Shareholder represents and warrants to, and
agrees with, the several Underwriters as follows:
(i) If such Selling Shareholder is selling Common
Stock issuable upon conversion of the Debentures, immediately prior to
the Effective Time, such Selling Shareholder was the record and
beneficial owner of the Debenture, free and clear of all security
interests, claims, liens, restrictions on transferability, legends,
proxies, equities or other encumbrances and as of the Effective Date,
such Selling Shareholder converted such Debenture into shares of Common
Stock. Such Selling Shareholder is the record and beneficial owner of,
and has, and on the First Closing Date will have, valid and marketable
title to the Common Stock (including any Common Stock issuable upon
conversion of the Debentures) and Warrants, if any, to be sold by such
Selling Shareholder, free and clear of all security interests, claims,
liens, restrictions on transferability, legends, proxies, equities or
other encumbrances; and upon delivery of and payment for such
Securities hereunder, the several Underwriters will acquire valid and
marketable title thereto, free and clear of any security interests,
claims, liens, restrictions on transferability, legends, proxies,
equities or other encumbrances. Such Selling Shareholder is selling the
Common Stock (including any Common Stock issuable upon conversion of
the Debentures) and Warrants to be sold by such Selling Shareholder for
such Selling Shareholder's own account and is not selling such
Securities, directly or indirectly, for the benefit of the Company, and
no part of the proceeds of such sale received by such Selling
Shareholder will inure, either directly or indirectly, to the benefit
of the Company other than as described in the Registration Statement
and Prospectus.
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(ii) Such Selling Shareholder has duly authorized,
executed and delivered a Letter of Transmittal and Custody Agreement
("Custody Agreement"), which Custody Agreement is a valid and binding
obligation of such Selling Shareholder, to Norwest Bank Minnesota N.A.,
as Custodian (the "Custodian"); pursuant to the Custody Agreement the
Selling Shareholder has placed in custody with the Custodian, for
delivery under this Agreement, the certificates representing the Common
Stock, the Debentures (for conversion into shares of Common Stock) and
Warrants, if any, to be sold by such Selling Shareholder; such
certificates represent validly issued, outstanding, fully paid and
nonassessable shares of Common Stock or validly issued and outstanding
Debentures or Warrants; when issued, the certificates representing
shares issuable upon conversion of the Debentures represent validly
issued, outstanding, fully paid and nonassessable shares of Common
Stock; and, in the case of Debentures, such certificates were
accompanied by all documents duly and properly executed that are
necessary to effect the conversion of such Debenture; and in the case
of Common Stock (including shares of Common Stock issuable upon
conversion of the Debentures) and Warrants, such certificates were duly
and properly endorsed in blank for transfer, or were accompanied by all
documents duly and properly executed that are necessary to validate the
transfer of title thereto, to the Underwriters, free of any legend,
restriction on transferability, proxy, lien or claim, whatsoever.
(iii) Such Selling Shareholder has the power and
authority to enter into this Agreement, the Letter of Transmittal and
the Custody Agreement and to sell, transfer and deliver the Securities
to be sold by such Selling Shareholder; and such Selling Shareholder
has duly authorized, executed and delivered to Xxxx X. Xxxxx and Xxxx
X. Motensbacher, as attorneys-in-fact (the "Attorneys-in-Fact"), an
irrevocable power of attorney (a "Power of Attorney") authorizing and
directing the Attorneys-in-Fact, or either of them, to effect the sale
and delivery of the Securities being sold by such Selling Shareholder,
to enter into this Agreement and to take all such other action as may
be necessary hereunder.
(iv) This Agreement, the Custody Agreement and the
Power of Attorney have each been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder and each
constitutes a valid and binding agreement of such Selling Shareholder,
enforceable in accordance with its terms, except as rights to indemnity
hereunder or thereunder may be limited by federal or state securities
laws and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or laws affecting the rights of creditors
generally and subject to general principles of equity. The execution
and delivery of this Agreement, the Custody Agreement and the Power of
Attorney and the performance of the terms hereof and thereof and the
consummation of the transactions herein and therein contemplated will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any agreement or instrument to which
such Selling Shareholder is a party or by which such Selling
Shareholder is bound, or any law, regulation, order or decree
applicable to such Selling Shareholder; no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement, the Custody Agreement and
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the Power of Attorney or for the consummation of the transactions
contemplated hereby and thereby, including the sale of the Securities
being sold by such Selling Shareholder, except such as may be required
under the Act or state securities laws or blue sky laws.
(v) Such Selling Shareholder has not distributed and
will not distribute any prospectus or other offering material in
connection with the offering and sale of the Securities other than any
Preliminary Prospectus or the Prospectus or other materials permitted
by the Act to be distributed by such Selling Shareholder.
(vi) Such Selling Shareholder has reviewed the
Registration Statement and the Prospectus and to the best knowledge of
such Selling Shareholder neither the Registration Statement nor the
Prospectus contains 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 therein not misleading regarding such Selling
Shareholder, the other Selling Shareholders, the Company or otherwise.
(vii) To the knowledge of such Selling Shareholder,
the representations and warranties of the Company contained in
paragraph (a) of this Section 2 are true and correct.
(c) Any certificate signed by any officer of the
Company and delivered to you or to counsel for the Underwriters shall be deemed
a representation and warranty by the Company to each Underwriter as to the
matters covered thereby; any certificate signed by or on behalf of any Selling
Shareholder as such and delivered to you or to counsel for the Underwriters
shall be deemed a representation and warranty by such Selling Shareholder to
each Underwriter as to the matters covered thereby.
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell 2,500,000 Firm Shares, and each
Selling Shareholder agrees, severally and not jointly, to sell the number of
Firm Shares set forth opposite the name of such Selling Shareholder in Schedule
I hereto, to the several Underwriters, and each Underwriter agrees, severally
and not jointly, to purchase from the Company and the Selling Shareholders the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule II hereto. The purchase price for each Firm Share shall be $_________
per share. The obligation of each Underwriter to each of the Company and the
Selling Shareholders shall be to purchase from each of the Company and the
Selling Shareholders that number of Firm Shares (to be adjusted by the
Representatives to avoid fractional shares) which represents the same proportion
of the number of Firm Shares to be sold by each of the Company and the Selling
Shareholders pursuant to this Agreement as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule II hereto represents to the
total number of Firm Shares to be purchased by all Underwriters pursuant to this
Agreement. In making this Agreement, each Underwriter is contracting severally
and not jointly; except as provided in paragraph (c) of this
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Section 3 and in Section 8 hereof, the agreement of each Underwriter is to
purchase only the respective number of Firm Shares specified in Schedule II.
The Firm Shares will be delivered by the Company and the Custodian to
you for the accounts of the several Underwriters against payment of the purchase
price therefor by wire/same day funds payable to the order of the Company and
the Custodian, as appropriate, at the offices of U.S. Bancorp Xxxxx Xxxxxxx
Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or
such other location as may be mutually acceptable, at 9:00 a.m. Central time on
the third (or if the Securities are priced, as contemplated by Rule 15c6-1(c)
under the Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business
day following the date hereof, or at such other time and date as you and the
Company determine pursuant to Rule 15c6-1(a) under the Exchange Act, such time
and date of delivery being herein referred to as the "First Closing Date." If
the Representatives so elect, delivery of the Firm Shares may be made by credit
through full fast transfer to the accounts at The Depository Trust Company
designated by the Representatives. Certificates representing the Firm Shares, in
definitive form and in such denominations and registered in such names as you
may request upon at least two business days' prior notice to the Company and the
Custodian, will be made available for checking and packaging not later than
10:30 a.m., Central time, on the business day next preceding the First Closing
Date at the offices of U.S. Bancorp Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be
mutually acceptable.
(b) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company with respect to 399,622 of the Option Shares and a Selling
Shareholder, with respect to the number of Option Shares set forth opposite the
name of such Selling Shareholder in Schedule I hereto, hereby grants to the
several Underwriters an option to purchase all or any portion of the Option
Shares at the same purchase price as the Firm Shares, for use solely in covering
any over-allotments made by the Underwriters in the sale and distribution of the
Firm Shares. The option granted hereunder may be exercised at any time (but not
more than once) within 30 days after the effective date of this Agreement upon
notice (confirmed in writing) by the Representatives to the Company and to the
Attorneys-in-Fact setting forth the aggregate number of Option Shares as to
which the several Underwriters are exercising the option, the names and
denominations in which the certificates for the Option Shares are to be
registered and the date and time, as determined by you, when the Option Shares
are to be delivered, such time and date being herein referred to as the "Second
Closing" and "Second Closing Date," respectively; provided, however, that the
Second Closing Date shall not be earlier than the First Closing Date nor earlier
than the second business day after the date on which the option shall have been
exercised. If the option is exercised, the obligation of each Underwirter shall
be to purchase Option Shares from the Selling Shareholder and the Company, on a
pro rata basis, (to be adjusted by the Representatives to avoid fractional
shares). The number of Option Shares to be purchased by each Underwriter shall
be the same percentage of the total number of Option Shares to be purchased by
the several Underwriters as the number of Firm Shares to be purchased by such
Underwriter is of the total number of Firm Shares to be purchased by the several
Underwriters, as adjusted by the Representatives in such manner as the
Representatives deem
11
advisable to avoid fractional shares. No Option Shares shall be sold and
delivered unless the Firm Shares previously have been, or simultaneously are,
sold and delivered.
The Option Shares will be delivered by the Company to you for the
accounts of the several Underwriters against payment of the purchase price
therefor by wire/same day funds payable to the order of the Custodian or the
Company, as appropriate, at the offices of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx
Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as
may be mutually acceptable at 9:00 a.m., Central time, on the Second Closing
Date. If the Representatives so elect, delivery of the Option Shares may be made
by credit through full fast transfer to the accounts at The Depository Trust
Company designated by the Representatives. Certificates representing the Option
Shares in definitive form and in such denominations and registered in such names
as you have set forth in your notice of option exercise, will be made available
for checking and packaging not later than 10:30 a.m., Central time, on the
business day next preceding the Second Closing Date at the office of U.S.
Bancorp Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually acceptable.
(c) It is understood that you, individually and not as
Representatives of the several Underwriters may (but shall not be obligated to)
make payment to the Company or the Selling Shareholders, on behalf of any
Underwriter for the Securities to be purchased by such Underwriter. Any such
payment by you shall not relieve any such Underwriter of any of its obligations
hereunder. Nothing herein contained shall constitute any of the Underwriters an
unincorporated association or partner with the Company or any Selling
Shareholder.
4. Covenants.
(a) The Company covenants and agrees with the several
Underwriters as follows:
(i) If the Registration Statement has not already
been declared effective by the Commission, the Company will use its
best efforts to cause the Registration Statement and any post-effective
amendments thereto to become effective as promptly as possible; the
Company will notify you promptly of the time when the Registration
Statement or any post-effective amendment to the Registration Statement
has become effective or any supplement to the Prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and Regulations)
has been filed and of any request by the Commission for any amendment
or supplement to the Registration Statement or Prospectus or additional
information; if the Company has elected to rely on Rule 430A of the
Rules and Regulations, the Company will prepare and file a Prospectus
(or term sheet within the meaning of Rule 434 of the Rules and
Regulations) containing the information omitted therefrom pursuant to
Rule 430A of the Rules and Regulations with the Commission within the
time period required by, and otherwise in accordance with the
provisions of, Rules 424(b), 430A and 434, if applicable, of the Rules
and Regulations; if the Company has elected to rely upon Rule 462(b) of
the Rules and Regulations to increase the size of the offering
registered under the Act, the Company will prepare and file a
registration statement with respect to such
12
increase with the Commission within the time period required by, and
otherwise in accordance with the provisions of, Rule 462(b); the
Company will prepare and file with the Commission, promptly upon your
request, any amendments or supplements to the Registration Statement or
Prospectus (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations) that, in your opinion, may be necessary or
advisable in connection with the distribution of the Securities by the
Underwriters; and the Company will not file any amendment or supplement
to the Registration Statement or Prospectus (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations) to which
you shall reasonably object by notice to the Company after having been
furnished a copy a reasonable time prior to the filing.
(ii) The Company will advise you, promptly after it
shall receive notice or obtain knowledge thereof, of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceeding for any such purpose; and
the Company will promptly use its best efforts to prevent the issuance
of any stop order or to obtain its withdrawal if such a stop order
should be issued.
(iii) Within the time during which a prospectus
(including any term sheet within the meaning of Rule 434 of the Rules
and Regulations) relating to the Securities is required to be delivered
under the Act, the Company will comply as far as it is able with all
requirements imposed upon it by the Act, as now and hereafter amended,
and by the Rules and Regulations, as from time to time in force, so far
as necessary to permit the continuance of sales of or dealings in the
Securities as contemplated by the provisions hereof and the Prospectus.
If during such period any event occurs as a result of which the
Prospectus would include an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in
the light of the circumstances then existing, not misleading, or if
during such period it is necessary to amend the Registration Statement
or supplement the Prospectus to comply with the Act, the Company will
promptly notify you and will amend the Registration Statement or
supplement the Prospectus (at the expense of the Company) so as to
correct such statement or omission or effect such compliance.
(iv) The Company will use its best efforts to qualify
the Securities for sale under the securities laws of such jurisdictions
as you reasonably designate and to continue such qualifications in
effect so long as required for the distribution of the Securities,
except that the Company shall not be required in connection therewith
to qualify as a foreign corporation or to execute a general consent to
service of process in any state.
(v) The Company will furnish to the Underwriters
copies of the Registration Statement (three of which will be signed and
will include all exhibits), each Preliminary Prospectus, the
Prospectus, and all amendments and supplements (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations) to
such documents,
13
in each case as soon as available and in such quantities as you may
from time to time reasonably request.
(vi) During a period of five years commencing with
the date hereof, the Company will furnish to the Representatives, and
to each Underwriter, who may so request in writing, copies of all
periodic and special reports furnished to the shareholders of the
Company and all information, documents and reports filed with the
Commission, the National Association of Securities Dealers, Inc., The
Nasdaq National Market or any securities exchange.
(vii) The Company will make generally available to
its security holders as soon as practicable, but in any event not later
than 15 months after the end of the Company's current fiscal quarter,
an earnings statement (which need not be audited) covering a 12-month
period beginning after the effective date of the Registration Statement
that shall satisfy the provisions of Section 11(a) of the Act and Rule
158 of the Rules and Regulations.
(viii) The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is prevented
from becoming effective under the provisions of Section 9(a) hereof or
is terminated, will pay or cause to be paid (A) all expenses (including
transfer taxes allocated to the respective transferees) incurred in
connection with the delivery to the Underwriters of the Securities, (B)
all expenses and fees (including, without limitation, fees and expenses
of the Company's accountants and counsel but, except as otherwise
provided below, not including fees of the Underwriters' counsel) in
connection with the preparation, printing, filing, delivery, and
shipping of the Registration Statement (including the financial
statements therein and all amendments, schedules, and exhibits
thereto), the Securities, each Preliminary Prospectus, the Prospectus,
and any amendment thereof or supplement thereto, and the printing,
delivery, and shipping of this Agreement and other underwriting
documents, including Blue Sky Memoranda, (C) all filing fees and fees
and disbursements of the Underwriters' counsel incurred in connection
with the qualification of the Securities for offering and sale by the
Underwriters or by dealers under the securities or blue sky laws of the
states and other jurisdictions which you shall designate in accordance
with Section 4(d) hereof, (D) the fees and expenses of any transfer
agent or registrar, (E) the filing fees incident to any required review
by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Securities, (F) listing fees, if any, and (G) all other
costs and expenses incident to the performance of its obligations
hereunder that are not otherwise specifically provided for herein. If
the sale of the Securities provided for herein is not consummated by
reason of action by the Company pursuant to Section 9(a) hereof which
prevents this Agreement from becoming effective, or by reason of any
failure, refusal or inability on the part of the Company or the Selling
Shareholders to perform any agreement on its or their part to be
performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled by the Company or the
Selling Shareholders is not fulfilled (unless such failure to fulfill
any condition is due to the default or omission of any Underwriter),
the Company will reimburse the several Underwriters for
14
all out-of-pocket disbursements (including fees and disbursements of
counsel) incurred by the Underwriters in connection with their
investigation, preparing to market and marketing the Securities or in
contemplation of performing their obligations hereunder. The Company
shall not in any event be liable to any of the Underwriters for loss of
anticipated profits from the transactions covered by this Agreement.
The provisions of this Section shall not affect any agreement that the
Company and the Selling Shareholders may make for the allocation or
sharing of such expenses or costs.
(ix) The Company will apply the net proceeds from the
sale of the Securities to be sold by it hereunder for the purposes set
forth in the Prospectus and will file such information with the
Commission with respect to the sale of the Securities and the
application of the proceeds therefrom as may be required in accordance
with Rule 463 of the Rules and Regulations.
(x) Except as contemplated by the Prospectus, the
Company will not, without your prior written consent, offer for sale,
sell, contract to sell, grant any option for the sale of or otherwise
issue or dispose of any Common Stock or any securities convertible into
or exchangeable for, or any options or rights to purchase or acquire,
Common Stock, except to the Underwriters pursuant to this Agreement,
the 1996 Stock Incentive Plan of BUCA, Inc. and Affiliated Company, the
Stock Option Plan for Non-Employee Directors or the Piasano Partner
Program or issuances pursuant to the exercise of options, warrants or
convertible securities outstanding on the date hereof for a period of
180 days after the commencement of the public offering of the
Securities by the Underwriters.
(xi) The Company either has caused to be delivered to
you or will cause to be delivered to you prior to the effective date of
the Registration Statement a letter from each of the Company's
directors and officers and certain other shareholders of the Company
holding an aggregate of 6,828,039 shares of Common Stock of the Company
stating that such person agrees that he or she will not, without your
prior written consent, offer for sale, sell, contract to sell or
otherwise dispose of any shares of Common Stock or rights to purchase
Common Stock, except to the Underwriters pursuant to this Agreement,
for a period of 180 days after commencement of the public offering of
the Securities by the Underwriters.
(xii) The Company has not taken and will not take,
directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in, or which has constituted,
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities, and has not
effected any sales of Common Stock which are required to be disclosed
in response to Item 701 of Regulation S-K under the Act which have not
been so disclosed in the Registration Statement.
(xiii) The Company will not incur any liability for
any finder's or broker's fee or agent's commission in connection with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
15
(xiv) The Company will inform the Florida Department
of Banking and Finance at any time prior to the consummation of the
distribution of the Securities by the Underwriters if it commences
engaging in business with the government of Cuba or with any person or
affiliate located in Cuba. Such information will be provided within 90
days after the commencement thereof or after a change occurs with
respect to previously reported information.
(b) Each Selling Shareholder covenants and agrees with the
several Underwriters as follows:
(i) Except as otherwise agreed to by the Company and
the Selling Shareholder, such Selling Shareholder will pay all taxes,
if any, on the transfer and sale, respectively, of the Securities being
sold by such Selling Shareholder, the fees of such Selling
Shareholder's counsel and such Selling Shareholder's proportionate
share (based upon the number of Securities being offered by such
Selling Shareholder pursuant to the Registration Statement) of all
costs and expenses (except for legal and accounting expenses and fees
of the registrar and transfer agent) incurred by the Company pursuant
to the provisions of Section 4(a)(viii) of this Agreement; provided,
however, that each Selling Shareholder severally agrees to reimburse
the Company for any reimbursement made by the Company to the
Underwriters pursuant to Section 4(a)(viii) hereof to the extent such
reimbursement resulted from the failure or refusal on the part of such
Selling Shareholder to comply under the terms or fulfill any of the
conditions of this Agreement.
(ii) If this Agreement shall be terminated by the
Underwriters because of any failure, refusal or inability on the part
of such Selling Shareholder to perform any agreement on such Selling
Shareholder's part to be performed, or because any other condition of
the Underwriters' obligations hereunder required to be fulfilled by
such Selling Shareholder is not fulfilled, such Selling Shareholder
agrees to reimburse the several Underwriters for all out-of-pocket
disbursements (including fees and disbursements of counsel for the
Underwriters) incurred by the Underwriters in connection with their
investigation, preparing to market and marketing the Securities or in
contemplation of performing their obligations hereunder. The Selling
Shareholder shall not in any event be liable to any of the Underwriters
for loss of anticipated profits from the transactions covered by this
Agreement.
(iii) The Securities to be sold by such Selling
Shareholder, represented by the certificates on deposit with the
Custodian pursuant to the Custody Agreement of such Selling
Shareholder, are subject to the interest of the several Underwriters
and the other Selling Shareholders; the arrangements made for such
custody are, except as specifically provided in the Custody Agreement,
irrevocable; and the obligations of such Selling Shareholder hereunder
shall not be terminated, except as provided in this Agreement or in the
Custody Agreement, by any act of such Selling Shareholder, by operation
of law, whether
16
by the liquidation, dissolution or merger of such Selling Shareholder,
by the death, disability, or insolvency of such Selling Shareholder, or
by the occurrence of any other event. If any Selling Shareholder should
liquidate, dissolve or be a party to a merger (if such Selling
Shareholder is other than an individual) or die, become disabled or
become insolvent (if such Selling Shareholder is an individual) or if
any other such event should occur before the delivery of the Securities
hereunder, certificates for the Securities deposited with the Custodian
shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such liquidation, dissolution,
merger, death, incapacity, insolvency or other event had not occurred,
whether or not the Custodian shall have received notice thereof.
(iv) Such Selling Shareholder will not, without your
prior written consent, offer for sale, sell, contract to sell, grant
any option for the sale of or otherwise dispose of any Common Stock or
any securities convertible into or exchangeable for, or any options or
rights to purchase or acquire, Common Stock, except to the Underwriters
pursuant to this Agreement, for a period of 180 days after the
commencement of the public offering of the Securities by the
Underwriters.
(v) Such Selling Shareholder has not taken and will
not take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities, and has not effected any sales of
Common Stock which, if effected by the Company, would be required to be
disclosed in response to Item 701 of Regulation S-K.
(vi) Such Selling Shareholder shall immediately
notify you if any event occurs, or of any change in information
relating to such Selling Shareholder or the Company or any new
information relating to the Company or relating to any matter stated in
the Prospectus or any supplement thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations), which
results in the Prospectus (as supplemented) including an untrue
statement of a material fact or omitting to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy, as of the date
hereof and at each of the First Closing Date and the Second Closing Date (as if
made at such Closing Date), of and compliance with all representations,
warranties and agreements of the Company and the Selling Shareholders contained
herein, to the performance by the Company and the Selling Shareholders 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., Central time, on the date of this Agreement, or such later
time and date as you, as
17
Representatives of the several Underwriters, shall approve and all filings
required by Rules 424, 430A and 434 of the Rules and Regulations shall have been
timely made; no stop order suspending the effectiveness of the Registration
Statement or any amendment thereof shall have been issued; no proceedings for
the issuance of such an order shall have been initiated or threatened; and any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to your satisfaction.
(b) No Underwriter shall have advised the Company that the
Registration Statement or the Prospectus, or any amendment thereof or supplement
thereto (including any term sheet within the meaning of Rule 434 of the Rules
and Regulations), contains an untrue statement of fact which, in your opinion,
is material, or omits to state a fact which, in your opinion, is material and is
required to be stated therein or necessary to make the statements therein not
misleading.
(c) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its subsidiaries
shall have incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, or declared or paid any
dividends or made any distribution of any kind with respect to its capital
stock; and except as contemplated in the Prospectus, there shall not have been
any change in the capital stock (other than a change in the number of
outstanding shares of Common Stock due to the issuance of shares upon the
exercise of outstanding options or warrants or issuance of shares pursuant to
the Company's Piasano Program or the conversion of outstanding convertible
securities), or any material change in the short-term or long-term debt of the
Company, or any issuance of options, warrants, convertible securities or other
rights to purchase the capital stock of the Company or any of its subsidiaries,
or any material adverse change or any development involving a prospective
material adverse change (whether or not arising in the ordinary course of
business), in the condition (financial or otherwise), business or results of
operations of the Company and its subsidiaries, taken as a whole, that, in your
judgment, makes it impractical or inadvisable to offer or deliver the Securities
on the terms and in the manner contemplated in the Prospectus.
(d) On each Closing Date, there shall have been furnished to
you, as Representatives of the several Underwriters, the opinion of Faegre and
Xxxxxx LLP, counsel for the Company, dated such Closing Date and addressed to
you, to the effect that:
(i) Each of the Company and its subsidiaries has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each of
the Company and its subsidiaries has full corporate power and authority
to own its properties and conduct its business as currently being
carried on and as described in the Registration Statement and
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which it
owns or leases real property or in which the conduct of its business
makes such qualification necessary and in which the failure to so
qualify would have a material adverse effect upon
18
the business, condition (financial or otherwise) or properties of the
Company and its subsidiaries, taken as a whole.
(ii) The capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus
under the caption "Description of Capital Stock." All of the issued and
outstanding shares of the capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable, and
the holders thereof are not subject to personal liability by reason of
being such holders. The Securities to be issued and sold by the Company
hereunder have been duly authorized and, when issued, delivered and
paid for in accordance with the terms of this Agreement, will have been
validly issued and will be fully paid and nonassessable, and the
holders thereof will not be subject to personal liability by reason of
being such holders. Except as otherwise stated in the Registration
Statement and Prospectus, there are no preemptive rights or other
rights to subscribe for or to purchase, or any restriction upon the
voting or transfer of, any shares of Common Stock pursuant to the
Company's charter, by-laws or any agreement or other instrument known
to such counsel to which the Company is a party or by which the Company
is bound. To the best of such counsel's knowledge, neither the filing
of the Registration Statement nor the offering or sale of the
Securities as contemplated by this Agreement gives rise to any rights
for or relating to the registration of any shares of Common Stock or
other securities of the Company, except for such rights which have been
waived or fully satisfied.
(iii) All of the issued and outstanding shares of
capital stock of each of the Company's subsidiaries have been duly and
validly authorized and issued and are fully paid and nonassessable,
and, to the best of such counsel's knowledge, except as otherwise
described in the Registration Statement and Prospectus and except for
directors' qualifying shares, the Company owns of record and
beneficially, free and clear of any security interests, claims, liens,
proxies, equities or other encumbrances, all of the issued and
outstanding shares of such stock. To the best of such counsel's
knowledge, except as described in the Registration Statement and
Prospectus, there are no options, warrants, agreements, contracts or
other rights in existence to purchase or acquire from the Company or
any subsidiary any shares of the capital stock of the Company or any
subsidiary of the Company.
(iv) The Registration Statement has become effective
under the Act and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose has been instituted or,
to the knowledge of such counsel, threatened by the Commission.
(v) The descriptions in the Registration Statement
and Prospectus of statutes, legal and governmental proceedings,
contracts and other documents are accurate and fairly present the
information required to be shown; and such counsel does not know of any
statutes or legal or governmental proceedings required to be described
in the Prospectus that are not described as required, or of any
contracts or documents of a character required to be
19
described in the Registration Statement or Prospectus or included as
exhibits to the Registration Statement that are not described or
included as required.
(vi) The Company has full corporate power and
authority to enter into this Agreement, and this Agreement has been
duly authorized, executed and delivered by the Company and constitutes
a valid, legal and binding obligation of the Company enforceable in
accordance with its terms (except as rights to indemnity hereunder may
be limited by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the rights of creditors generally and subject
to general principles of equity); the execution, delivery and
performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
applicable statute, rule or regulation, any agreement or instrument
known to such counsel to which the Company is a party or by which it is
bound or to which any of its property is subject, the Company's charter
or by-laws, or any order or decree known to such counsel of any court
or governmental agency or body having jurisdiction over the Company or
any of its respective properties; and no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement or for the consummation of the transactions
contemplated hereby, including the issuance or sale of the Securities
by the Company, except such as may be required under the Act or state
securities laws.
(vii) To the best of such counsel's knowledge,
neither the Company nor any of its subsidiaries is in violation of its
respective charter or by-laws.
(viii) The Registration Statement and the Prospectus,
and any amendment thereof or supplement thereto (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations),
comply as to form in all material respects with the requirements of the
Act and the Rules and Regulations; and on the basis of conferences with
officers of the Company, examination of documents referred to in the
Registration Statement and Prospectus and such other procedures as such
counsel deemed appropriate, nothing has come to the attention of such
counsel that causes such counsel to believe that the Registration
Statement or any amendment thereof, at the time the Registration
Statement became effective and as of such Closing Date (including any
Registration Statement filed under Rule 462(b) of the Rules and
Regulations), contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus (as of its date and as of such Closing Date), as amended or
supplemented, includes any untrue statement of material fact or omits
to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
it being understood that such counsel need express no opinion as to the
financial statements or other financial data included in or omitted
from any of the documents mentioned in this clause.
20
In rendering such opinion such counsel may rely (i) as to matters of
law other than Minnesota and federal law, upon the opinion or opinions of local
counsel provided that the extent of such reliance is specified in such opinion
and that such counsel shall state that such opinion or opinions of local counsel
are satisfactory to them and that they believe they and you are justified in
relying thereon and (ii) as to matters of fact, to the extent such counsel deems
reasonable upon certificates of officers of the Company and its subsidiaries
provided that the extent of such reliance is specified in such opinion.
(e) On the First Closing Date, there shall have been furnished
to you, as Representatives of the several Underwriters, the opinion of Maun &
Simon, counsel for the Selling Shareholders, dated such Closing Date and
addressed to you, to the effect that:
(i) Each of the Selling Shareholders is the sole
record and beneficial owner of the Securities to be sold by such
Selling Shareholder and delivery of the certificates for the Securities
to be sold by each Selling Shareholder pursuant to this Agreement, upon
payment therefor by the Underwriters, will pass marketable title to
such Securities to the Underwriters and the Underwriters will acquire
all the rights of such Selling Shareholder in the Securities (assuming
the Underwriters have no knowledge of an adverse claim), free and clear
of any security interests, claims, liens or other encumbrances.
(ii) Each of the Selling Shareholders has the power
and authority to enter into the Custody Agreement, the Power of
Attorney and this Agreement and to perform and discharge such Selling
Shareholder's obligations thereunder and hereunder; and this Agreement,
the Custody Agreements and the Powers of Attorney have been duly and
validly authorized, executed and delivered by (or by the
Attorneys-in-Fact, or either of them, on behalf of) the Selling
Shareholders and are valid and binding agreements of the Selling
Shareholders, enforceable in accordance with their respective terms
(except as rights to indemnity hereunder or thereunder may be limited
by federal or state securities laws and except as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally and subject to general
principles of equity).
(iii) The execution and delivery of this Agreement,
the Custody Agreement and the Power of Attorney and the performance of
the terms hereof and thereof and the consummation of the transactions
herein and therein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any statute, rule or regulation, or any agreement or
instrument known to such counsel to which such Selling Shareholder is a
party or by which such Selling Shareholder is bound or to which any of
its property is subject, any such Selling Shareholder's charter or
by-laws, or any order or decree known to such counsel of any court or
government agency or body having jurisdiction over such Selling
Shareholder or any of its respective properties; and no consent,
approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Custody Agreement and the Power of
Attorney or for the consummation of the transactions contemplated
hereby and
21
thereby, including the sale of the Securities being sold by such
Selling Shareholder, except such as may be required under the Act or
state securities laws or blue sky laws.
(iv) Such other matters as you may reasonably
request.
In rendering such opinion such counsel may rely (i) as to matters of
law other than Minnesota and federal law, upon the opinion or opinions of local
counsel provided that the extent of such reliance is specified in such opinion
and that such counsel shall state that such opinion or opinions of local counsel
are satisfactory to them and that they believe they and you are justified in
relying thereon and (ii) as to matters of fact, to the extent such counsel deems
reasonable upon certificates of officers of the Selling Shareholders provided
that the extent of such reliance is specified in such opinion.
(f) On each Closing Date, there shall have been furnished to
you, as the Representatives of the several Underwriters, such opinion or
opinions from Xxxxxx & Xxxxxxx LLP, counsel for the Underwriters, dated such
Closing Date and addressed to you, with respect to the formation of the Company,
the validity of the Securities, the Registration Statement, the Prospectus and
other related matters as you reasonably may request, and such counsel shall have
received such papers and information as they request to enable them to pass upon
such matters.
(g) On each Closing Date you, as Representatives of the
several Underwriters, shall have received a letter of Deloitte & Touche LLP,
dated such Closing Date and addressed to you, confirming that they are
independent public accountants within the meaning of the Act and are in
compliance with the applicable requirements relating to the qualifications of
accountants under Rule 2-01 of Regulation S-X of the Commission, and stating, as
of the date of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five days
prior to the date of such letter), the conclusions and findings of said firm
with respect to the financial information and other matters covered by its
letter delivered to you concurrently with the execution of this Agreement, and
the effect of the letter so to be delivered on such Closing Date shall be to
confirm the conclusions and findings set forth in such prior letter.
(h) On each Closing Date, there shall have been furnished to
you, as Representatives of the several Underwriters, a certificate of the
Company, dated such Closing Date and addressed to you, signed by the chief
executive officer and by the chief financial officer of the Company, to the
effect that:
(i) The representations and warranties of the Company
in this Agreement are true and correct, in all material respects, as if
made at and as of such Closing Date, and the Company has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date;
22
(ii) No stop order or other order suspending the
effectiveness of the Registration Statement or any amendment thereof or
the qualification of the Securities for offering or sale has been
issued, and no proceeding for that purpose has been instituted or, to
the best of their knowledge, is contemplated by the Commission or any
state or regulatory body; and
(iii) The signers of said certificate have carefully
examined the Registration Statement and the Prospectus, and any
amendments thereof or supplements thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations), and (A)
such documents contain all statements and information required to be
included therein, the Registration Statement, or any amendment thereof,
does not 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 therein not misleading, and the Prospectus, as
amended or supplemented, does not include any untrue statement of
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, (B) since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an
amended or supplemented prospectus which has not been so set forth, (C)
subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, neither the Company nor
any of its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, not in the ordinary course of business, or declared or
paid any dividends or made any distribution of any kind with respect to
its capital stock, and except as contemplated in the Prospectus, there
has not been any change in the capital stock (other than a change in
the number of outstanding shares of Common Stock due to the issuance of
shares upon the exercise of outstanding options or warrants or issuance
of shares pursuant to the Company's Piasano Program or the conversion
of outstanding convertible securities), or any material change in the
short-term or long-term debt, or any issuance of options, warrants,
convertible securities or other rights to purchase the capital stock,
of the Company, or any of its subsidiaries, or any material adverse
change or any development involving a prospective material adverse
change (whether or not arising in the ordinary course of business), in
the general affairs, condition (financial or otherwise), business or
results of operations of the Company and its subsidiaries, taken as a
whole, and (D) except as stated in the Registration Statement and the
Prospectus, there is not pending, or, to the knowledge of the Company,
threatened or contemplated, any action, suit or proceeding to which the
Company or any of its subsidiaries is a party before or by any court or
governmental agency, authority or body, or any arbitrator, which might
result in any material adverse change in the condition (financial or
otherwise), business or results of operations of the Company and its
subsidiaries, taken as a whole.
(i) On the First Closing Date, there shall have been furnished
to you, as Representatives of the several Underwriters, a certificate or
certificates, dated such Closing Date and addressed to you, signed by each of
the Selling Shareholders or either of such Selling Shareholder's
Attorneys-in-Fact to the effect that the representations and warranties of such
Selling Shareholder
23
contained in this Agreement are true and correct as if made at and as of such
Closing Date, and that such Selling Shareholder has complied with all the
agreements and satisfied all the conditions on such Selling Shareholder's part
to be performed or satisfied at or prior to such Closing Date.
(j) The Company shall have furnished to you and counsel for
the Underwriters such additional documents, certificates and evidence as you or
they may have reasonably requested.
(k) The Nasdaq National Market shall have approved the
Securities for inclusion, subject only to official notice of issuance and
evidence of satisfactory distribution.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and counsel for the Underwriters. The Company will furnish you
with such conformed copies of such opinions, certificates, letters and other
documents as you shall reasonably request.
6. Indemnification and Contribution.
(a)(i) The Company and the Selling Shareholders listed on
Schedule I(a), jointly and severally, agree to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company and/or such Selling
Shareholders, as the case may be), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be a part of the
Registration Statement at the time of effectiveness pursuant to Rules 430A and
434(d) of the Rules and Regulations, if applicable, any Preliminary Prospectus,
the Prospectus, or any amendment or supplement thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations), or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by it in connection with investigating or defending against
such loss, claim, damage, liability or action; provided, however, that neither
the Company nor any Selling Shareholder shall be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Preliminary Prospectus,
the Prospectus, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by you, or by any
Underwriter through you, specifically for use in the preparation thereof; and
further provided, that the foregoing indemnity agreement is subject to the
condition that, insofar as it relates to any untrue statement, alleged untrue
statement, omission or alleged omission made in any Preliminary Prospectus but
eliminated or remedied in the Prospectus, such indemnity agreement shall not
inure to the benefit of the Underwriter (or to the benefit of any person who
controls the Underwriter) if the person asserting any loss, claim, damage or
liability purchased the Securities from the Underwriter, and a
24
copy of the Prospectus was not given to such person with, or prior to, the
written confirmation of the sale of such Securities to such person. However, in
no event shall any Selling Shareholder be liable under the provisions of this
Section 6 for any amount in excess of the aggregate amount of proceeds such
Selling Shareholder received from the sale of the Securities pursuant to this
Agreement.
(ii) In addition to their other obligations under this Section
6(a), the Company and each Selling Shareholder, jointly and severally, agree
that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in this
Section 6(a), they will reimburse each Underwriter on a monthly basis for all
reasonable legal fees or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company's and/or the Selling
Shareholder's obligation to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Underwriter that
received such payment shall promptly return it to the party or parties that made
such payment, together with interest, compounded daily, determined on the basis
of the prime rate (or other commercial lending rate for borrowers of the highest
credit standing) announced from time to time by US Bancorp (the "Prime Rate").
Any such interim reimbursement payments which are not made to an Underwriter
within 30 days of a request for reimbursement shall bear interest at the Prime
Rate from the date of such request. This indemnity agreement shall be in
addition to any liabilities which the Company or the Selling Shareholder may
otherwise have.
(iii) Notwithstanding the foregoing, and without limiting in
any way the ability of the Underwriters to commence an action or proceeding
against any of the Selling Stockholders, no Selling Stockholder listed in
Schedule I(a) shall be required to make payment of any amount pursuant to
Section 6(a)(i) to any Underwriter with respect to any losses, claims, damages,
liabilities or judgments which fall within the scope of Section 6(a)(i) (and are
not based upon information furnished to the Company by such Selling Shareholder,
for inclusion in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto) unless and until (i) the
Underwriters make a written demand for indemnification from the Company and (ii)
the Company or any subsidiary has failed to pay any amount owed to any
Underwriter pursuant to this Section 6 (a) (i) with respect to any such losses,
claims, damages, liabilities and judgments, within twenty business days. In the
event that any Selling Stockholder fails to comply with its obligations with
respect to any such losses, claims, damages, liabilities or judgments, the
Underwriters further agree that (x) they will not commence any legal proceeding
against any such Selling Stockholder to recover such losses, claims, damages,
liabilities or judgments unless, prior to or concurrently therewith they shall
have commenced a legal proceeding against the Company or any of its subsidiaries
to recover the same, (y) the Underwriters will diligently and in good faith
prosecute any such legal proceeding against the Company and its subsidiaries for
as long as the Selling Stockholders are a party thereto, and (z) in the event
that judgments are entered in favor of the Underwriters against both the Company
or its subsidiaries and the Selling Stockholders in any such
25
legal proceeding, (1) during the period of 45 days following the date on which
the judgment against the Company or its subsidiaries becomes final and is not
subject to appeal, the Underwriters will take commercially reasonable steps to
enforce the judgment entered against the Company or its subsidiaries and will
not seek to enforce the judgment entered against any Selling Stockholder and (2)
after the expiration of such period, the Underwriters may seek to enforce the
judgment entered against any such Selling Stockholder, but will continue to take
commercially reasonable steps to enforce the judgment entered against the
Company or its subsidiaries for so long as they are seeking to enforce the
judgment entered against the Selling Stockholders. Notwithstanding the
foregoing, the Selling Stockholders shall be liable in accordance with Section 6
(a) without regard to the provisions set forth in this paragraph immediately
after any Insolvency Event (as hereinafter defined).
(iv) For the purposes of the foregoing paragraph, an
"Insolvency Event" shall have occurred when the Company or any of its
subsidiaries has (i) commenced a voluntary proceeding under any Federal or state
bankruptcy, insolvency, reorganization or similar law, or other proceeding to be
adjudicated a bankrupt or insolvent, (ii) consented to the entry of a decree or
order for relief in any involuntary proceeding or to the commencement of any
similar proceeding against it, (iii) had entered against it any decree or order
for relief in any involuntary proceeding or adjudging the Company or any
subsidiary a bankrupt or insolvent or appointing a custodian, receiver or
similar official of the Company or any subsidiary or any substantial part of its
property, or had any such party appointed or take possession thereof, (iv) made
any assignment for the benefit or creditors, or (v) taken any corporate action
to authorize any of the foregoing actions.
(v) Each Selling Shareholder who is not listed in Schedule
I(a), severally and not jointly, agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject under the Act or otherwise
(including in settlement of any litigation if such settlement is effected with
the written consent of such Selling Stockholder), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, including the information deemed
to be a part of the Registration Statement at the time of effectiveness pursuant
to Rule 430A and 434(d) of the Rules and Regulations, if applicable, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, but only to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company or such Underwriter by such Selling Shareholder, specifically for
use in the preparation thereof, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or
action; provided, however, that the Selling Shareholder shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the
26
Registration Statement, any Preliminary Prospectus, the Prospectus, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by you, or by any Underwriter through you,
specifically for use in the preparation thereof; and further provided, that the
foregoing indemnity agreement is subject to the condition that, insofar as it
relates to any untrue statement, alleged untrue statement, omission or alleged
omission made in any Preliminary Prospectus but eliminated or remedied in the
Prospectus, such indemnity agreement shall not inure to the benefit of the
Underwriter (or to the benefit of any person who controls the Underwriter) if
the person asserting any loss, claim, damage or liability purchased the
Securities from the Underwriter, and a copy of the Prospectus was not given to
such person with, or prior to, the written confirmation of the sale of such
Securities to such person. However, in no event shall any Selling Shareholder be
liable under the provisions of this Section 6(a) (v) for any amount in excess of
the aggregate amount of proceeds such Selling Shareholder received from the sale
of the Securities pursuant to this Agreement.
(b) Each Underwriter will indemnify and hold harmless the
Company and each Selling Shareholder against any losses, claims, damages or
liabilities to which the Company and the Selling Shareholders may become
subject, under the Act or otherwise (including in settlement of any litigation,
if such settlement is effected with the written consent of such Underwriter),
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by you, or by such Underwriter through you, specifically for use in the
preparation thereof, and will reimburse the Company and the Selling Shareholders
for any legal or other expenses reasonably incurred by the Company or any such
Selling Shareholder in connection with investigating or defending against any
such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to any indemnified party to the extent it is not prejudiced as
a proximate result of such failure. In case any such action shall be brought
against any indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party's election so to
assume the
27
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that if the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
shall have the right to employ separate counsel at the expense of the
indemnifying party. It is understood that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm at any time
for all such indemnified parties. Such firm shall be designated in writing by
the Representatives and shall be reasonably satisfactory to the Company in the
case of parties indemnified pursuant to Section 6(a) and shall be designated in
writing by the Company and shall be reasonably satisfactory to the
Representatives in the case of parties indemnified pursuant to Section 6(b). An
indemnifying party shall not be obligated under any settlement agreement
relating to any action under this Section 6 to which it has not agreed in
writing.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Shareholders on the one hand and the Underwriters
on the other from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholders on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Shareholders bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Selling Shareholders or the Underwriters and the parties' relevant
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company, the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in the first sentence of this subsection (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any
28
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending against any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered 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 omission
or alleged omission. 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. The
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company and the Selling
Shareholders under this Section 6 shall be in addition to any liability which
the Company and the Selling Shareholders may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 6 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company (including any person who, with
his consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company or
any Selling Shareholder within the meaning of the Act.
7. Representations and Agreements to Survive Delivery. All
representations, warranties, and agreements of the Company and the Selling
Shareholders contained herein or in certificates delivered pursuant hereto, and
the agreements of the several Underwriters, the Company and the Selling
Shareholders contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling person thereof, or the Company or any of its
officers, directors, or controlling persons, or any Selling Shareholders or any
controlling person thereof, and shall survive delivery of, and payment for, the
Securities to and by the Underwriters hereunder.
8. Substitution of Underwriters.
(a) If any Underwriter shall fail to take up and pay for the
amount of Firm Shares agreed by such Underwriter to be purchased hereunder, upon
tender of such Firm Shares in accordance with the terms hereof, and the amount
of Firm Shares not purchased does not aggregate more than 10% of the total
amount of Firm Shares set forth in Schedule II hereto, the other Underwriter
shall be obligated to take up and pay for the Firm Shares that the withdrawing
or defaulting Underwriter agreed but failed to purchase.
(b) If any Underwriter shall fail to take up and pay for the
amount of Firm Shares agreed by such Underwriter to be purchased hereunder, upon
tender of such Firm Shares in accordance with the terms hereof, and the amount
of Firm Shares not purchased aggregates more
29
than 10% of the total amount of Firm Shares set forth in Schedule II hereto, and
arrangements satisfactory to you for the purchase of such Firm Shares by other
persons are not made within 36 hours thereafter, this Agreement shall terminate.
In the event of any such termination neither the Company nor any Selling
Shareholder shall be under any liability to any Underwriter (except to the
extent provided in Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof)
nor shall any Underwriter (other than an Underwriter who shall have failed,
otherwise than for some reason permitted under this Agreement, to purchase the
amount of Firm Shares agreed by such Underwriter to be purchased hereunder) be
under any liability to the Company or the Selling Shareholders (except to the
extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by the
non-defaulting Underwriter or by any other party or parties, the Representatives
or the Company shall have the right to postpone the First Closing Date for not
more than seven business days in order that the necessary changes in the
Registration Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected. As used herein, the term "Underwriter" includes
any person substituted for an Underwriter under this Section 8.
9. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at 10:00 a.m.,
Central time, on the first full business day following the effective date of the
Registration Statement, or at such earlier time after the effective time of the
Registration Statement as you in your discretion shall first release the
Securities for sale to the public; provided, that if the Registration Statement
is effective at the time this Agreement is executed, this Agreement shall become
effective at such time as you in your discretion shall first release the
Securities for sale to the public. For the purpose of this Section, the
Securities shall be deemed to have been released for sale to the public upon
release by you of the publication of a newspaper advertisement relating thereto
or upon release by you of telexes offering the Securities for sale to securities
dealers, whichever shall first occur. By giving notice as hereinafter specified
before the time this Agreement becomes effective, you, as Representatives of the
several Underwriters, or the Company may prevent this Agreement from becoming
effective without liability of any party to any other party, except that the
provisions of Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof shall at
all times be effective.
(b) You, as Representatives of the several Underwriters, shall
have the right to terminate this Agreement by giving notice as hereinafter
specified at any time at or prior to the First Closing Date, and the option
referred to in Section 3(b), if exercised, may be canceled at any time prior to
the Second Closing Date, if (i) the Company shall have failed, refused or been
unable, at or prior to such Closing Date, to perform any agreement on its part
to be performed hereunder, (ii) any other condition of the Underwriters'
obligations hereunder is not fulfilled, (iii) trading on the New York Stock
Exchange or the American Stock Exchange shall have been wholly suspended, (iv)
minimum or maximum prices for trading shall have been fixed, or maximum ranges
for prices for securities shall have been required, on the New York Stock
Exchange or the American Stock Exchange, by such Exchange or by order of the
Commission or any other governmental authority
30
having jurisdiction, (v) a banking moratorium shall have been declared by
Federal, New York or Minnesota authorities, or (vi) there has occurred any
material adverse change in the financial markets in the United States or an
outbreak of major hostilities (or an escalation thereof) in which the United
States is involved, a declaration of war by Congress, any other substantial
national or international calamity or any other event or occurrence of a similar
character shall have occurred since the execution of this Agreement that, in
your judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof shall at
all times be effective.
(c) If you elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section, the
Company and an Attorney-in-Fact, on behalf of the Selling Shareholders, shall be
notified promptly by you by telephone or telegram, confirmed by letter. If the
Company elects to prevent this Agreement from becoming effective, you and an
Attorney-in-Fact, on behalf of the Selling Shareholders, shall be notified by
the Company by telephone or telegram, confirmed by letter.
10. Default by One or More of the Selling Shareholders or the Company.
If one or more of the Selling Shareholders shall fail at the First Closing Date
to sell and deliver the number of Securities which such Selling Shareholder or
Selling Shareholders are obligated to sell hereunder, and the remaining Selling
Shareholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number of Securities to be sold by all Selling Shareholders as set forth in
Schedule I, then the Underwriters may at your option, by notice from you to the
Company and the non-defaulting Selling Shareholders, either (a) terminate this
Agreement without any liability on the part of any non-defaulting party or (b)
elect to purchase the Securities which the Company and the non-defaulting
Selling Shareholders have agreed to sell hereunder.
In the event of a default by any Selling Shareholder as referred to in
this Section, either you or the Company or, by joint action only, the
non-defaulting Selling Shareholders shall have the right to postpone the First
Closing Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements.
If the Company shall fail at the First Closing Date to sell and deliver
the number of Securities which it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any
non-defaulting party.
No action taken pursuant to this Section shall relieve the
Company or any Selling Shareholders so defaulting from liability, if any, in
respect of such default.
11. Information Furnished by Underwriters. The statements set forth in
the last paragraph of the cover page and under the caption "Underwriting" in any
Preliminary Prospectus and in the
31
Prospectus constitute the written information furnished by or on behalf of the
Underwriters referred to in Section 2 and Section 6 hereof.
12. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to the Representatives c/o U.S. Bancorp
Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000, except that notices given to an Underwriter pursuant to Section
6 hereof shall be sent to such Underwriter at the address stated in the
Underwriters' Questionnaire furnished by such Underwriter in connection with
this offering; if to the Company, shall be mailed, telegraphed or delivered to
it at BUCA, Inc., 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxx, Xxxxxxxxx
00000, Attention: Xxxx X. Xxxxx; if to any of the Selling Shareholders, at the
address of the Attorneys-in-Fact as set forth in the Powers of Attorney, or in
each case to such other address as the person to be notified may have requested
in writing. All notices given by telegram shall be promptly confirmed by letter.
Any party to this Agreement may change such address for notices by sending to
the parties to this Agreement written notice of a new address for such purpose.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns and the controlling persons, officers and
directors referred to in Section 6. Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Securities from any of
the several Underwriters.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
32
Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the
Company, the Selling Shareholders and the several Underwriters in accordance
with its terms.
Very truly yours,
BUCA, Inc.
By
------------------------------
[Title]
Selling Shareholders
By
------------------------------
Attorney-in-Fact
Confirmed as of the date first above mentioned, on behalf of themselves and the
other several Underwriters named in Schedule II hereto
U.S. Bancorp Xxxxx Xxxxxxx Inc.
By
-----------------------------
Managing Director
NationsBanc Xxxxxxxxxx Securities LLC
By
-----------------------------
Managing Director
33
SCHEDULE I
Selling Shareholders
Number of
Shares to Be
Number of Sold upon Number of
Firm Number of Conversion Option
Shares Warrants of Shares to
Name To Be Sold To Be Sold Debenture Be Sold
--------------------------- ---------------- ----------------- ----------------- ---------------
Xxxxxx X. Xxxxxxx 50,000
Xxxxx X. Xxxxxxxx 50,000
Xxx X. Xxxx 50,000
Xxxxxx X. Xxxxxxxxxx 16,000
Sirrom Capital Corp.
Xxxxxx X. Xxxxxxxxxxx 4,500
Xxxxxx Xxxxxxxx 3,646
Xxxxxxx X. Xxxxxxxx 3,500
Xxxxxx X. Xxxxxxx 2,000
Xxxx Xxxxxxxxx 1,811
Xxxx X. Xxxxx 4,000
Xxxxxx X. Xxxxxx 2,500
Xxxxx X. Xxxxx 7,246
Xxxxxx and Xxxxx Xxxxxx 3,623
Wedgewood Capital Limited 7,246
Partnership
Xxxxx X. & Xxxxx Xxxxxxx 7,246
Xxxxxx Xxxxxxxx 1,811
Xxxxxxx Xxxxxxxxx 7,246
---------------- ----------------- ----------------- ---------------
Total
================ ================= ================= ===============
SCHEDULE I(a)
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxx X. Xxxx
Xxxxxx X. Xxxxxxxxxx
SCHEDULE II
Number of Firm
Underwriter Shares (1)
--------------------------------------- ----------------
U.S. Bancorp Xxxxx Xxxxxxx Inc.
NationsBanc Xxxxxxxxxx Securities LLC
Total 2,770,819
=========
-----------------
(1) The Underwriters may purchase up to an additional 415,622 Option
Shares, to the extent the option described in Section 3(b) of the
Agreement is exercised, in the proportions and in the manner described
in the Agreement.
