Exhibit 1.1
TEXAS ROADHOUSE, INC.
9,108,408 Shares
Class A Common Stock
UNDERWRITING AGREEMENT
dated October 4, 0000
XXXX XX XXXXXXX SECURITIES LLC
WACHOVIA CAPITAL MARKETS, LLC
RBC CAPITAL MARKETS CORPORATION
XX XXXXX & CO., LLC
UNDERWRITING AGREEMENT
October 4, 0000
Xxxx xx Xxxxxxx Securities LLC
As Lead Representative of the several Underwriters
Wachovia Capital Markets, LLC
RBC Capital Markets Corporation
XX Xxxxx & Co., LLC
As Representatives of the several Underwriters
c/o BANC OF AMERICA SECURITIES LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
INTRODUCTORY. Texas Roadhouse, Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell to the several underwriters named in
Schedule A hereto (the "UNDERWRITERS") an aggregate of 6,250,000 shares of its
Class A Common Stock, par value $0.001 per share (the "CLASS A COMMON STOCK");
W. Xxxx Xxxxxx, the Chairman of the Company, proposes to sell to the
Underwriters an aggregate of 2,500,000 shares of Class A Common Stock; X.X.
Xxxx, the Chief Executive Officer of the Company, proposes to sell to the
Underwriters an aggregate of 218,758 shares of Class A Common Stock; and Xxxxxx
X. Xxxxx, the Chief Operating Officer of the Company (together with Xx. Xxxxxx
and Xx. Xxxx, the "PRIMARY SELLING STOCKHOLDERS"), proposes to sell to the
Underwriters an aggregate of 139,650 shares of Class A Common Stock. The
6,250,000 shares of Class A Common Stock to be sold by the Company and the
2,858,408 shares of Class A Common Stock to be sold by the Primary Selling
Stockholders are collectively called the "FIRM COMMON SHARES". In addition, the
Company and certain other selling stockholders set forth in Schedule B hereto
(the "SECONDARY SELLING SHAREHOLDERS" and together with the Primary Selling
Stockholders, the "SELLING STOCKHOLDERS") have granted to the Underwriters an
option to purchase up to an additional 1,366,261 shares of Class A Common Stock
up to the amount set forth opposite their names in Schedule B, all as provided
in Section 2. The additional 1,366,261 shares of Class A Common Stock to be sold
by the Company and the Selling Stockholders pursuant to such option are
collectively called the "OPTIONAL COMMON SHARES". The Firm Common Shares and, if
and to the extent such option is exercised, the Optional Common Shares are
collectively called the "COMMON SHARES". Banc of America Securities LLC ("BAS"),
Wachovia Capital Markets, LLC, RBC Capital Markets Corporation, and XX Xxxxx &
Co., LLC have agreed to act as representatives of the several Underwriters (in
such capacity, the "REPRESENTATIVES" and BAS in such capacity, the "LEAD
REPRESENTATIVE") in connection with the offering and sale of the Common Shares.
The Class A Common Stock and the Company's Class B Common Stock, par value
$0.001 per share (the "CLASS B COMMON STOCK") are referred to herein as the
"COMMON STOCK".
The Company and the Underwriters agree that up to five percent of the
Firm Common Shares to be purchased by the Underwriters (the "DIRECTED SHARES")
shall be reserved for sale by the Underwriters to certain eligible directors,
officers and employees of the Company and the TR Entities (as defined below) and
persons having business relationships with the Company and the TR Entities
(collectively, the "PARTICIPANTS"), as part of the distribution of the Common
Shares by the Underwriters (the "DIRECTED SHARE PROGRAM") subject to the terms
of this Agreement, the applicable rules, regulations and interpretations of the
National Association of Securities Dealers, Inc. (the "NASD") and all other
applicable laws, rules and regulations. BAS (in such capacity, the "DESIGNATED
UNDERWRITER") has been selected by the Company to process the sales to the
Participants under the Directed Share Program. To the extent that such Directed
Shares are not orally confirmed for purchase by the Participants by the end of
the first business day after the date of this Agreement, such Directed Shares
may be offered to the public as part of the public offering contemplated hereby.
The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-1 (File No.
333-115259), which contains a form of prospectus to be used in connection with
the public offering and sale of the Common Shares. Such registration statement,
as amended, including the financial statements, exhibits and schedules thereto,
in the form in which it will be declared effective by the Commission under the
Securities Act of 1933 and the rules and regulations promulgated thereunder
(collectively, the "SECURITIES ACT"), including any information deemed to be a
part thereof at the time of effectiveness pursuant to Rule 430A or Rule 434
under the Securities Act, is called the "REGISTRATION STATEMENT". Any
registration statement filed by the Company pursuant to Rule 462(b) under the
Securities Act is called the "RULE 462(B) REGISTRATION STATEMENT", and from and
after the date and time of filing of the Rule 462(b) Registration Statement the
term "Registration Statement" shall include the Rule 462(b) Registration
Statement. Such prospectus, in the form first used by the Underwriters to
confirm sales of the Common Shares, is called the "PROSPECTUS"; PROVIDED,
HOWEVER, if the Company has, with the consent of BAS, elected to rely upon Rule
434 under the Securities Act, the term "Prospectus" shall mean the Company's
prospectus subject to completion (each, a "PRELIMINARY PROSPECTUS") dated
September 20, 2004 (such preliminary prospectus is called the "RULE 434
PRELIMINARY PROSPECTUS"), together with the applicable term sheet (the "TERM
SHEET") prepared and filed by the Company with the Commission under Rules 434
and 424(b) under the Securities Act and all references in this Agreement to the
date of the Prospectus shall mean the date of the Term Sheet. All references in
this Agreement to the Registration Statement, the Rule 462(b) Registration
Statement, a preliminary prospectus, the Prospectus or the Term Sheet, or any
amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("XXXXX").
The Company and the Selling Stockholders hereby confirm their
engagement of XX Xxxxx & Co., LLC as, and XX Xxxxx & Co., LLC hereby confirms
its agreement with the Company and the Selling Stockholders to render services
as, a "qualified independent underwriter", within the meaning of Section (b)(15)
of Rule 2720 of the NASD with respect to
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the offering and sale of the Shares. XX Xxxxx & Co., LLC, solely in its capacity
as the qualified independent underwriter and not otherwise, is referred to
herein as the "QIU". The price at which the Shares will be sold to the public
shall not be higher than the maximum price recommended by the QIU.
As described in more detail in the Prospectus, immediately prior to the
sale of the Common Shares to the Underwriters as contemplated by this Agreement,
the Company and the TR Entities will undertake a corporate reorganization
whereby:
(i) pursuant to the Master Transaction Agreement dated as of May
7, 2004 (the "MASTER TRANSACTION AGREEMENT") among the Company
Texas Roadhouse Management Corp. ("TR MANAGEMENT"), Texas
Roadhouse Holdings LLC ("TR HOLDINGS"), Texas Roadhouse
Development Corporation ("TR DEVELOPMENT"), each of the other
entities identified in the Master Transaction Agreement that
own a direct interest in TR Holdings (the "TR HOLDING
COMPANIES") or a direct interest in an entity that owns and
operate a Texas Roadhouse restaurant (the "TR RESTAURANT
ENTITIES"), and the other persons identified in the Master
Transaction Agreement, TR Management will merge with Texas
Roadhouse Management Interim LLC with TR Management being the
surviving entity and thereby becoming a wholly-owned
subsidiary of the Company and, in consideration therefore, the
holders of non-voting common shares of TR Management will
receive shares of Class A Common Stock;
(ii) pursuant to the Master Transaction Agreement, TR Development
will be merged with Texas Roadhouse Development Interim LLC
with TR Development being the surviving entity and thereby
becoming a wholly-owned subsidiary of the Company and, in
consideration therefore, the shareholders of TR Development
will receive shares of Class A Common Stock;
(iii) pursuant to the Master Transaction Agreement, TR Holdings will
be merged with Texas Roadhouse Holdings Interim LLC with TR
Holdings being the surviving entity and thereby becoming a
subsidiary of the Company and, in consideration therefore, the
equity holders of TR Holdings will receive shares of Class A
Common Stock; and
(iv) pursuant to the Master Transaction Agreement, direct or
indirect subsidiaries of the Company will merge with each of
the TR Holding Companies and the TR Restaurant Entities as
described in the Master Transaction Agreement thereby
resulting in each TR Holding Company and TR Restaurant Entity
becoming a direct or indirect wholly-owned subsidiary of the
Company, and, in consideration therefore, the shareholders of
the TR Holding Companies, and the minority equity holders in
the TR Restaurant Entities, will receive shares of Class A
Common Stock.
Each of the agreements referred to in the preceding clauses (i) through (iv),
and any agreements entered into in connection therewith, are collectively
referred to herein as the "REORGANIZATION AGREEMENTS"). The foregoing
transactions described in clauses (i) through (iv) and as
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contemplated by the Reorganization Agreements are collectively referred to
herein as the "REORGANIZATION." TR Management, TR Development, TR Holdings, the
TR Holding Companies and the TR Restaurant Entities and the other entities
listed on Exhibit 21 to the Registration Statement are referred to herein
collectively as the "TR ENTITIES".
References in this Agreement to "the Company's knowledge" means to the
knowledge of each "named executive officer" of the Company in the Prospectus.
The Company and the Selling Stockholders hereby confirm their
respective agreements with the Underwriters and the QIU as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES.
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents, warrants and covenants to each Underwriter and the QIU as follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Other than Amendment No.
8 to the Registration Statement filed the date hereof, a copy of which has been
provided to you, no further amendment to the Registration Statement will be
filed prior to the effectiveness of the Registration Statement without your
prior written consent. The Company has complied to the Commission's satisfaction
with all requests of the Commission for additional or supplemental information.
No stop order preventing or suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement is in effect and no
proceedings for such purpose have been instituted or are pending or, to the best
knowledge of the Company, are contemplated or threatened by the Commission.
Each preliminary prospectus and the Prospectus when filed complied in
all material respects with the Securities Act and, if filed by electronic
transmission pursuant to XXXXX (except as may be permitted by Regulation S-T
under the Securities Act), was identical to the copy thereof delivered to the
Underwriters for use in connection with the offer and sale of the Common Shares.
Each of the Registration Statement, any Rule 462(b) Registration Statement and
any post-effective amendment thereto, at the time it became effective and at all
subsequent times, complied and will comply in all material respects with the
Securities Act and did not and will not contain any 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. The Prospectus
(including any Prospectus wrapper), as amended or supplemented, as of its date
and at all subsequent times, did not and will not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the two
immediately preceding sentences do not apply to statements in or omissions from
the Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by the
Representatives expressly for use therein. There are no contracts or other
documents required to be described in the Prospectus or to be filed as exhibits
to the Registration Statement which have not been described or filed as
required.
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(b) OFFERING MATERIALS FURNISHED TO UNDERWRITERS. The Company has
delivered to each Representative one complete manually signed copy of the
Registration Statement and of each consent and certificate of experts filed as a
part thereof, and conformed copies of the Registration Statement (without
exhibits) and preliminary prospectuses and the Prospectus, as amended or
supplemented, in such quantities and at such places as the Representatives have
reasonably requested for each of the Underwriters.
(c) DISTRIBUTION OF OFFERING MATERIAL. None of the Company or any TR
Entity has distributed or will distribute, prior to the later of the Second
Closing Date (as defined below) and the completion of the Underwriters'
distribution of the Common Shares, any offering material in connection with the
offering and sale of the Common Shares other than a preliminary prospectus, the
Prospectus or the Registration Statement.
(d) THE UNDERWRITING AGREEMENT. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement of
the Company enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.
(e) AUTHORIZATION OF THE COMMON SHARES. The Common Shares to be
purchased by the Underwriters from the Company have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and delivered by
the Company and paid for by the Underwriters pursuant to this Agreement, will be
validly issued, fully paid and nonassessable. The Common Shares to be purchased
by the Underwriters from the Selling Stockholders were validly issued and fully
paid and are nonassessable.
(f) AUTHORIZATION OF THE REORGANIZATION. The Company and each of the TR
Entities that is a party to any of the Reorganization Agreements (collectively,
the "TR REORGANIZATION PARTIES") and, to the Company's knowledge, the other
parties to the Reorganization Agreements, have all requisite power and authority
to enter into, perform their obligations under and to consummate the
transactions contemplated by each of the Reorganization Agreements to which they
are a party. Each of the Reorganization Agreements (i) has been duly authorized,
executed and delivered by each TR Reorganization Party to which it is a party
and, to the Company's knowledge, by each other party thereto and (ii)
constitutes a legal, valid and binding agreement enforceable in accordance with
its terms, except as such enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors generally or by general equitable
principles (regardless of whether enforceability is considered in a proceeding
at law or in equity).
(g) NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS. Other than the
Selling Stockholders, there are no persons with registration or other similar
rights to have any equity or debt securities registered for sale under the
Registration Statement or included in the offering contemplated by this
Agreement that have not been waived.
(h) NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed in the
Prospectus, subsequent to the respective dates as of which information is given
in the Prospectus: (i) there
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has been no material adverse change, or any development that could reasonably be
expected to result in a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects, whether or not
arising from transactions in the ordinary course of business, of the Company and
the TR Entities, considered as one entity (any such change is called a "MATERIAL
ADVERSE CHANGE"); (ii) the Company and the TR Entities, considered as one
entity, have not incurred any material liability or obligation, indirect, direct
or contingent, not in the ordinary course of business nor entered into any
material transaction or agreement not in the ordinary course of business; and
(iii) there has been no dividend or distribution of any kind declared, paid or
made by the Company or any TR Entity, or repurchase or redemption by the Company
or any TR Entity of any class of capital stock, except for (a) dividends paid to
the Company or any TR Entity and (b) distributions or dividends made or paid to
the equity owners of the TR Entities related to the undistributed net income of
such entities for periods prior to the consummation of the Reorganization and,
in each case, as described in or otherwise contemplated by the Prospectus.
(i) INDEPENDENT ACCOUNTANTS. KPMG LLP, who have expressed their opinion
with respect to the financial statements (which term as used in this Agreement
includes the related notes thereto) and supporting schedules filed with the
Commission as a part of the Registration Statement and included in the
Prospectus, are independent certified public accountants as required by the
Securities Act.
(j) PREPARATION OF THE FINANCIAL STATEMENTS. The financial statements
filed with the Commission as a part of the Registration Statement and included
in the Prospectus present fairly the combined financial position of TR Holdings
and the entities under common control therewith as described in such financial
statements (the "COMBINED ENTITIES") as of and at the dates indicated and the
results of their operations and cash flows for the periods specified. Such
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes thereto. No
other financial statements or supporting schedules are required to be included
in the Registration Statement. The historical financial data set forth in the
Prospectus under the captions "Summary Historical and Pro Forma Combined
Financial and Operating Data", "Capitalization" and "Selected Historical and Pro
Forma Combined Financial and Operating Data" fairly present the information set
forth therein on a basis consistent with that of the audited financial
statements contained in the Registration Statement. The condensed pro forma
combined financial statements of the Combined Entities and the related notes
thereto included in the prospectus under the caption "Unaudited Condensed Pro
Forma Combined Financial Statements" present fairly the information contained
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been properly
presented on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to
therein. The pro forma financial data set forth in the Prospectus under the
captions "Summary Historical Pro Forma Combined Financial Statements",
"Capitalization" and "Selected Historical and Pro Forma Combined Financial and
Operating Data" fairly present the information set forth therein on a basis
consistent with that of the condensed audited combined financial statements
contained in the Registration Statement.
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(k) INCORPORATION AND GOOD STANDING. Each of the Company and the TR
Entities has been duly incorporated or validly formed and is validly existing as
a corporation, limited liability company or limited partnership under the laws
of the jurisdiction of its incorporation or formation and has the power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and, in the case of the Company, to enter into
and perform its obligations under this Agreement. Each of the Company and the TR
Entities is duly qualified as a foreign corporation, limited liability company
or limited partnership to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing would
not, individually or in the aggregate, result in a Material Adverse Change. Upon
consummation of the Reorganization prior to sale of the shares of Common Stock
to the Underwriters pursuant to this Agreement, all of the issued and
outstanding capital stock or equity interests of each subsidiary of the Company
will have been duly authorized, validly issued, fully paid and nonassessable and
will be owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance or claim (except
for any security interest, mortgage, pledge, lien, encumbrance or claim securing
the Company's obligations under the New Credit Agreement). Upon consummation of
the Reorganization prior to sale of the shares of Common Stock to the
Underwriters pursuant to this Agreement, the Company will not own or control,
directly or indirectly, any corporation, association or other entity other than
the TR Entities.
(l) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS. The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization" (other than for subsequent
issuances, if any, upon exercise of outstanding options described in the
Prospectus). The Common Stock (including the Common Shares) conforms in all
material respects to the description thereof contained in the Prospectus. Upon
consummation of the Reorganization prior to sale of the shares of Class A Common
Stock to the Underwriters pursuant to this Agreement, all of the issued and
outstanding shares of Common Stock (including the shares of Class A Common Stock
owned by the Selling Stockholders and the shares of Common Stock to be issued in
connection with the Reorganization) will have been duly authorized and validly
issued, fully paid and nonassessable and will have been issued in compliance
with federal and state securities laws. None of the outstanding shares of Class
A Common Stock were or will be issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe for or purchase
securities of the Company. There are no and, upon consummation of the
Reorganization prior to sale of the shares of Class A Common Stock to the
Underwriters pursuant to this Agreement, there will be no authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or any of its
subsidiaries other than those accurately described in the Prospectus. The
description of the Company's stock equity plan, and the options granted
thereunder, set forth in the Prospectus accurately and fairly presents the
information required to be shown with respect to such plan.
(m) QUOTATION. The Common Shares have been approved for inclusion on
the Nasdaq National Market, subject only to official notice of issuance.
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(n) NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO FURTHER
AUTHORIZATIONS OR APPROVALS REQUIRED. None of the Company or the TR Entities is
in violation of its charter, by-laws or other organizational documents or is in
default (or, with the giving of notice or lapse of time, would be in default)
("DEFAULT") under any indenture, mortgage, loan or credit agreement, note,
contract, franchise, lease or other instrument to which it or any of them is a
party or by which it or any of them may be bound, or to which any of the
property or assets of it or any of them is subject (each, an "EXISTING
INSTRUMENT"), except for such Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change. (1) The execution, delivery and
performance of this Agreement by the Company and consummation of the
transactions contemplated hereby and by the Prospectus, (2) the execution,
delivery and performance of the Reorganization Agreements by the TR
Reorganization Parties and the consummation of the Reorganization, and (3) the
execution, delivery and performance of the New Credit Agreement by the TR Credit
Agreement Parties and incurrence of indebtedness under the New Credit Agreement
as of the Closing Date as described in the Prospectus (i) have been duly
authorized by all necessary corporate action and will not result in any
violation of the provisions of the charter, by-laws or organizational documents
of the Company or any TR Entity, (ii) will not conflict with or constitute a
breach of, or Default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any TR
Entity pursuant to, or require the consent of any other party to, any Existing
Instrument, except for such conflicts, breaches, Defaults, liens, charges or
encumbrances as would not, individually or in the aggregate, result in a
Material Adverse Change and (iii) will not result in any violation of any law,
administrative regulation or administrative or court decree applicable to the
Company or any TR Entity. No consent, approval, authorization or other order of,
or registration or filing with, any court or other governmental or regulatory
authority or agency, is required for (w) the execution, delivery and performance
of this Agreement by the Company and consummation of the transactions
contemplated hereby and by the Prospectus, (x) the execution, delivery and
performance of the Reorganization Agreements by the TR Reorganization Parties
and the consummation of the Reorganization, and (y) the execution, delivery and
performance of the New Credit Agreement by the TR Credit Agreement Parties and
incurrence of indebtedness under the New Credit Agreement as of the Closing Date
as described in the Prospectus, except (A) with respect to clauses (w) and (x)
the effectiveness of the Registration Statement under the Securities Act and
such as have been obtained or made by the Company and are in full force and
effect under the Securities Act, applicable state securities or blue sky laws
and from the NASD and (B) with respect to clause (x), filings of articles of
merger with the Secretaries of State of the Commonwealth of Kentucky.
(o) NO MATERIAL ACTIONS OR PROCEEDINGS. There are no legal or
governmental actions, suits or proceedings pending or, to the Company's
knowledge, threatened (i) against or affecting the Company or any TR Entity,
(ii) which has as the subject thereof any officer or director of, or property
owned or leased by, the Company or any TR Entity or (iii) relating to
environmental or discrimination matters, where in any such case (A) there is a
reasonable possibility that such action, suit or proceeding might be determined
adversely to the Company or any TR Entity and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to result
in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. No material labor dispute with the
employees of the Company or any TR Entity, or with the employees of any
principal supplier of the Company or any TR Entity, exists or, to the Company's
knowledge, is threatened or imminent.
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(p) INTELLECTUAL PROPERTY RIGHTS. The Company and the TR Entities own
or possess sufficient trademarks, trade names, patent rights, copyrights, domain
names, licenses, approvals, trade secrets and other similar rights
(collectively, "INTELLECTUAL PROPERTY RIGHTS") reasonably necessary to conduct
their businesses as now conducted; and the expected expiration of any of such
Intellectual Property Rights would not result in a Material Adverse Change. None
of the Company or any TR Entity has received any notice of infringement or
conflict with asserted Intellectual Property Rights of others, which
infringement or conflict, if the subject of an unfavorable decision, would
result in a Material Adverse Change. None of the Company or any TR Entity is a
party to or bound by any options, licenses or agreements with respect to the
Intellectual Property Rights of any other person or entity that are required to
be set forth in the Prospectus and are not described in all material respects.
None of the technology employed by the Company or any TR Entity has been
obtained or is being used by the Company or any TR Entity in violation of any
contractual obligation binding on any of them or, to the Company's knowledge,
any of their officers, directors or employees or otherwise in violation of the
rights of any persons.
(q) ALL NECESSARY PERMITS, ETC. The Company and the TR Entities possess
such valid and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses, and none of the Company or any TR Entity
has received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could result in a Material Adverse Change.
(r) TITLE TO PROPERTIES. Each TR Entity has good and marketable title
to all the properties and assets reflected as owned in the financial statements
referred to in Section 1(A) (k) above (or elsewhere in the Prospectus), in each
case free and clear of any security interests, mortgages, liens, encumbrances,
equities, claims and other defects, except such as do not materially and
adversely affect the value (except as such value may be impacted by the amount
of the indebtedness relating to liens that secure the Company's existing credit
agreement and other loans and mortgages at various restaurant sites) of such
property and do not materially interfere with the use currently made or proposed
to be made of such property by such TR Entity. The real property, improvements,
equipment and personal property held under lease by each TR Entity are held
under valid and enforceable leases, with such exceptions as are not material and
do not materially interfere with the use made or proposed to be made of such
real property, improvements, equipment or personal property by each TR Entity.
(s) TAX LAW COMPLIANCE. The Company and the TR Entities have filed all
necessary federal, state and foreign income and franchise tax returns or have
properly requested extensions thereof and have paid all taxes required to be
paid by any of them and, if due and payable, any related or similar assessment,
fine or penalty levied against any of them except as may be being contested in
good faith and by appropriate proceedings. Except as disclosed in the Prospectus
with respect to the Company's recording of a cumulative net deferred tax
liability upon becoming a "C" corporation, adequate charges, accruals and
reserves have been made in the applicable financial statements referred to in
Section 1(A)(k) above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the Combined
Entities has not been finally determined.
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(t) COMPANY NOT AN "INVESTMENT COMPANY". The Company has been advised
of the rules and requirements under the Investment Company Act of 1940, as
amended (the "INVESTMENT COMPANY ACT"). The Company is not, and after receipt of
payment for the Common Shares and the consummation of the Reorganization will
not be, an "investment company" within the meaning of Investment Company Act and
will conduct its business in a manner so that it will not become subject to the
Investment Company Act.
(u) INSURANCE. The Company and the TR Entities are insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses including, but not limited
to, policies covering real and personal property owned or leased by the Company
and the TR Entities against theft, damage, destruction, acts of vandalism and,
if located in an earthquake zone, earthquakes. The Company has no reason to
believe that the Company or any TR Entity will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to obtain
comparable coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that would not result in
a Material Adverse Change. None of the Company or any TR Entity has been denied
any insurance coverage which it has sought or for which it has applied.
(v) NO PRICE STABILIZATION OR MANIPULATION. None of the Company or the
TR Entities has taken and will take, directly or indirectly, any action designed
to or that might be reasonably 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 Common Shares. The Company acknowledges that the Underwriters
may engage in passive market making transactions in the Common Shares on the
Nasdaq National Market in accordance with Regulation M under the Exchange Act.
(w) RELATED PARTY TRANSACTIONS. There are no business relationships or
related-party transactions involving the Company, any TR Entity, any Selling
Stockholder or any other person required to be described in the Prospectus which
have not been described as required.
(x) DISCLOSURE CONTROLS AND PROCEDURES. TR Holdings has established and
maintains and the Company will continue to establish and maintain disclosure
controls and procedures (as such term is defined in Rule 13a-14 under the
Exchange Act), which (i) are designed to ensure that material information
relating to it, including its consolidated subsidiaries, is made known to its
principal executive officer and its principal financial officer by others within
those entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared, (ii) have been evaluated for
effectiveness as of a date within 90 days prior to the date hereof and (iii) are
effective in all material respects to perform the functions for which they were
established. Based on the evaluation of the disclosure controls and procedures
described above, the Company is not aware of (a) any significant deficiency or
material weakness in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the ability to record,
process, summarize and report financial data or (b) any fraud, whether or not
material, that involves management or other employees who have a significant
role in TR Holdings and the Company's internal controls over financial
reporting. Since the most recent evaluation of TR Holdings' disclosure controls
and procedures described above, there have been no significant changes in
internal control over financial reporting or in
10
other factors that are reasonably likely to significantly affect internal
control over financial reporting.
(y) COMPANY'S ACCOUNTING SYSTEM. TR Holdings maintains and the Company
will continue to maintain a system of 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.
(z) ERISA COMPLIANCE. The Company, the TR Entities and any "employee
benefit plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, any TR Entity
or their "ERISA Affiliates" (as defined below) are in compliance in all material
respects with ERISA. "ERISA AFFILIATE" means, with respect to the Company, any
TR Entity, any member of any group of organizations described in Sections
414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the
regulations and published interpretations thereunder (the "CODE") of which the
Company or any TR Entity is a member. No "reportable event" (as defined under
ERISA) has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, any TR Entity
or any of their ERISA Affiliates. No "employee benefit plan" established or
maintained by the Company, any TR Entity or any of their ERISA Affiliates, if
such "employee benefit plan" were terminated, would have any "amount of unfunded
benefit liabilities" (as defined under ERISA). None of the Company, any TR
Entity or any of their ERISA Affiliates has incurred or reasonably expects to
incur any liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "employee benefit plan" or (ii) Sections 412, 4971, 4975
or 4980B of the Code. Each "employee benefit plan" established or maintained by
the Company, any TR Entity or any of their ERISA Affiliates that is intended to
be qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or failure to act, which would cause the loss of
such qualification.
(aa) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as otherwise disclosed
in the Prospectus or as would not, individually or in the aggregate, result in a
Material Adverse Change (i) none of the Company or any TR Entity is in violation
of any federal, state, local or foreign law or regulation relating to pollution
or protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including without limitation, laws and regulations relating to
emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum and
petroleum products (collectively, "MATERIALS OF ENVIRONMENTAL CONCERN"), or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environment Concern
(collectively, "ENVIRONMENTAL LAWS"), which violation includes, but is not
limited to, noncompliance with any permits or other governmental authorizations
required for the operation of their respective businesses under applicable
Environmental Laws, or noncompliance with the
11
terms and conditions thereof, nor has the Company or any TR Entity received any
written communication, whether from a governmental authority, citizens group,
employee or otherwise, that alleges that any of them is in violation of any
Environmental Law; (ii) there is no claim, action or cause of action filed with
a court or governmental authority, no investigation with respect to which the
Company or any TR Entity has received written notice, and no written notice by
any person or entity, alleging potential liability for investigatory costs,
cleanup costs, governmental responses costs, natural resources damages, property
damages, personal injuries, attorneys' fees or penalties arising out of, based
on or resulting from the presence, or release into the environment, of any
Material of Environmental Concern at any location owned, leased or operated by
the Company or any TR Entity, now or in the past (collectively, "ENVIRONMENTAL
CLAIMS"), pending or, to the best of the Company's knowledge, threatened against
the Company or any TR Entity or any person or entity whose liability for any
Environmental Claim the Company or any TR Entity has retained or assumed either
contractually or by operation of law; and (iii) to the best of the Company's
knowledge, there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the release,
emission, discharge, presence or disposal of any Material of Environmental
Concern, that reasonably could result in a violation of any Environmental Law or
form the basis of a potential Environmental Claim against the Company or any TR
Entity or, to the Company's knowledge, against any person or entity whose
liability for any Environmental Claim the Company or any TR Entity has retained
or assumed either contractually or by operation of law.
(bb) BROKERS. There is no broker, finder or other party that is
entitled to receive from the Company any brokerage or finder's fee or other fee
or commission as a result of any transactions contemplated by this Agreement.
(cc) NO OUTSTANDING LOANS OR OTHER INDEBTEDNESS. There are no
outstanding loans, advances (except normal advances for business expenses in the
ordinary course of business) or guarantees or indebtedness by the Company or any
TR Entity to or for the benefit of any of the officers or directors of the
Company or any TR Entity or any of the members of any of them, except as
disclosed in the Prospectus.
(dd) COMPLIANCE WITH LAWS. None of the Company or any TR Entity has
been advised, and has no reason to believe, that it and each of its subsidiaries
are not conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business, except
where failure to be so in compliance would not result in a Material Adverse
Change.
(ee) DIRECTED SHARE PROGRAM. (i) The Company has not offered, or caused
the Underwriters to offer, any Common Shares to any person pursuant to the
Directed Share Program with the intent to unlawfully influence (i) a customer or
supplier of the Company or any TR Entity to alter the customer's or supplier's
level or type of business with the Company or any TR Entity or (ii) a trade
journalist or publication to write or publish favorable information about the
Company or any TR Entity or their products and services. The Company
acknowledges that the Directed Share Program shall not be offered to persons
resident outside of the United States.
Any certificate signed by an officer of the Company or any TR Entity
and delivered to the Representatives or to counsel for the Underwriters pursuant
to this Agreement shall be
12
deemed to be a representation and warranty by the Company or such TR Entity, as
the case may be, to each Underwriter as to the matters set forth therein.
The Company acknowledges that the Underwriters and, for purposes of the
opinions to be delivered pursuant to Section 5 hereof, counsel to the Company
and the Selling Stockholders and counsel to the Underwriters, will rely upon the
accuracy and truthfulness of the foregoing representations and hereby consents
to such reliance.
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder severally, and not jointly, represents, warrants and
covenants to each Underwriter and the QIU as follows:
(a) THE UNDERWRITING AGREEMENT. This Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling Stockholder
and is a valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(b) THE CUSTODY AGREEMENT AND THE POWERS OF ATTORNEY. (i) The custody
agreement (the "CUSTODY AGREEMENT") signed by the members of the Committee (as
defined therein), or any of them, on behalf of such Selling Stockholder and
National City Bank of Kentucky, as custodian (the "CUSTODIAN"), relating to the
deposit of the Common Shares to be sold by such Selling Stockholder and (ii)
each power of attorney (a "POWER OF ATTORNEY") appointing certain individuals
named therein as such Selling Stockholder's attorneys-in-fact (each, an
"ATTORNEY-IN-FACT") to the extent set forth therein relating to the transactions
contemplated hereby and by the Prospectus, of such Selling Stockholder has been
duly authorized, executed and delivered by such Selling Stockholder and is a
valid and binding agreement of the Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification thereunder may be
limited by applicable law and except as the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(c) TITLE TO COMMON SHARES TO BE SOLD; ALL AUTHORIZATIONS OBTAINED. The
Common Shares to be sold by such Selling Stockholder pursuant to this Agreement
are certificated securities in registered form and are not held in any
securities account or by or through any securities intermediary within the
meaning of the Uniform Commercial Code as in effect in the Commonwealth of
Kentucky. Upon the consummation of the Reorganization and on the applicable
Closing Date, such Selling Stockholder will have, good and valid title to all of
the Common Shares which may be sold by such Selling Stockholder pursuant to this
Agreement on such date such Selling Stockholder has the legal right and power,
and all authorizations and approvals required by law to enter into this
Agreement and the Custody Agreement (through one or more Attorneys-in-Fact) and
its Power of Attorney, to sell, transfer and deliver all of the Common Shares
which may be sold by such Selling Stockholder pursuant to this Agreement and to
comply with its other obligations hereunder and thereunder. Upon the
Underwriters' acquiring possession of such Common Shares (or an agent's
acquiring possession of such Common Shares
13
on the Underwriters' behalf) and paying the purchase price therefor as herein
contemplated, the Underwriters will acquire their respective interests in such
Common Shares (including, without limitation, all rights that such Selling
Shareholder had or has the power to transfer in such Securities) free of any
adverse claim.
(d) CERTIFICATES SUITABLE FOR TRANSFER. Certificates for all of the
Common Shares to be sold by such Selling Shareholder pursuant to this Agreement,
in suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank, with signatures guaranteed, will
be placed in the custody of the custodian under the Custody Agreement with
irrevocable conditional instructions to such Selling Stockholder's
Attorney-in-Fact under its Power of Attorney to deliver such Common Shares to
the Underwriters pursuant to this Agreement upon consummation of the
Reorganization.
(e) DELIVERY OF THE COMMON SHARES TO BE SOLD. Delivery of the Common
Shares which are sold by such Selling Stockholder pursuant to this Agreement
will pass good and valid title to such Common Shares, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or other claim.
(f) NON-CONTRAVENTION; NO FURTHER AUTHORIZATIONS OR APPROVALS REQUIRED.
The execution and delivery by such Selling Stockholder of, and the performance
by such Selling Stockholder of its obligations under, this Agreement, the
Custody Agreement (through one or more Attorneys-in-Fact) and its Power of
Attorney will not contravene or conflict with, result in a breach of, or
constitute a Default under, or require the consent of any other party to any
agreement or instrument to which such Selling Stockholder is a party or by which
it is bound or under which it is entitled to any right or benefit, any provision
of applicable law or any judgment, order, decree or regulation applicable to
such Selling Stockholder of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Stockholder. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the consummation by such Selling Stockholder of the
transactions contemplated in this Agreement, except such as have been obtained
or made and are in full force and effect under the Securities Act, applicable
state securities or blue sky laws and from the NASD.
(g) NO REGISTRATION OR OTHER SIMILAR RIGHTS. Such Selling Stockholder
does not have any registration or other similar rights to have any other equity
or debt securities registered for sale by the Company under the Registration
Statement or included in the offering contemplated by this Agreement.
(h) NO FURTHER CONSENTS. No consent, approval or waiver is required
under any instrument or agreement to which such Selling Stockholder is a party
or by which it is bound or under which it is entitled to any right or benefit,
in connection with the offering, sale or purchase by the Underwriters of any of
the Common Shares which may be sold by such Selling Stockholder under this
Agreement or the consummation by such Selling Stockholder of any of the other
transactions contemplated hereby.
(i) DISCLOSURE MADE BY THE SELLING STOCKHOLDER IN THE PROSPECTUS. All
information furnished by or on behalf of such Selling Stockholder expressly for
use in the Registration
14
Statement and Prospectus is, and on the applicable Closing Date on which the
Common Shares of such Selling Stockholder are sold pursuant to this Agreement
will be, true, correct, and complete in all material respects, and does not, and
such Closing Date will not, contain any untrue statement of a material fact or
omit to state any material fact necessary to make such information not
misleading. Such Selling Stockholder confirms as accurate the number of shares
of Common Stock set forth opposite such Selling Stockholder's name in the
Prospectus under the caption "Principal and Selling Stockholders" (both prior to
and after giving effect to the sale of the Common Shares).
(j) NO PRICE STABILIZATION OR MANIPULATION. Such Selling Stockholder
has not taken and will not take, directly or indirectly, any action designed to
or that might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Common Stock or any other security of the
Company to facilitate the sale or resale of the Common Shares.
(k) CONFIRMATION OF COMPANY REPRESENTATIONS AND WARRANTIES BY CERTAIN
SELLING STOCKHOLDERS. Each Selling Stockholder (i) has no reason to believe that
the representations and warranties of the Company contained in Section 1(A)
hereof are not true and correct, (ii) is familiar with the Registration
Statement and the Prospectus and has no knowledge of any material fact,
condition or information not disclosed in the Registration Statement or the
Prospectus which has had or may have a Material Adverse Change and (iii) is not
prompted to sell shares of Common Stock by any information concerning the
Company which is not set forth in the Registration Statement and the Prospectus;
provided however that, clauses (i) and (ii) of this paragraph (k) shall not
apply to any Selling Stockholder who is not a "named executive officer" of the
Company in the Prospectus (each, an "OTHER SELLING STOCKHOLDER" and together,
the "OTHER SELLING STOCKHOLDERS").
(l) DISTRIBUTION OF OFFERING MATERIAL. Such Selling Stockholder and its
affiliates have not distributed and will not distribute, prior to the later of
the Second Closing Date (as defined below) and the completion of the
Underwriters' distribution of the Common Shares, any offering material in
connection with the offering and sale of the Common Shares other than a
preliminary prospectus, the Prospectus or the Registration Statement.
Any certificate signed by or on behalf of any Selling Stockholder and
delivered to the Representatives or to counsel for the Underwriters pursuant to
this Agreement shall be deemed to be a representation and warranty by such
Selling Stockholder to each Underwriter as to the matters covered thereby.
Such Selling Stockholder acknowledges that the Underwriters and, for
purposes of the opinion to be delivered pursuant to Section 5 hereof, counsel to
the Company and counsel to such Selling Stockholder, and counsel to the
Underwriters, will rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
(a) THE FIRM COMMON SHARES. Upon the terms herein set forth, (i) the
Company agrees to issue and sell to the several Underwriters an aggregate of
6,250,000 Firm Common Shares and (ii) Xx. Xxxxxx agrees to sell to the several
Underwriters an aggregate of 2,500,000 Firm
15
Common Shares, (iii) Xx. Xxxx agrees to sell to the several Underwriters an
aggregate of 218,758 Firm Common Shares and (iv) Xx. Xxxxx agrees to sell to the
several Underwriters an aggregate of 139,650 Firm Common Shares. On the basis of
the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase from the Company and the Primary Selling
Stockholders the respective number of Firm Common Shares set forth opposite
their names on Schedule A. The purchase price per Firm Common Share to be paid
by the several Underwriters to the Company and the Primary Selling Stockholders
shall be $[___] per share.
(b) THE FIRST CLOSING DATE. Delivery of certificates for the Firm
Common Shares to be purchased by the Underwriters and payment therefor shall be
made at the offices of Xxxxx Xxxxx Xxxx LLC, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx (or such other place as may be agreed to by the Company and the Lead
Representative) at 9:00 a.m., Louisville time, on [___], 2004, or such other
time and date not later than 1:30 p.m., Louisville time, on [___], 2004(1) as
the Lead Representative shall designate by notice to the Company (the time and
date of such closing are called the "FIRST CLOSING DATE"). The Company and the
Primary Selling Stockholders hereby acknowledge that circumstances under which
the Representatives may provide notice to postpone the First Closing Date as
originally scheduled include, but are in no way limited to, any determination by
the Company, the Primary Selling Stockholder or the Representatives to
recirculate to the public copies of an amended or supplemented Prospectus or a
delay as contemplated by the provisions of Section 10.
(c) THE OPTIONAL COMMON SHARES; THE SECOND CLOSING DATE. In addition,
on the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Company
and the Secondary Selling Stockholders hereby grant, severally and not jointly,
an option to the several Underwriters to purchase, severally and not jointly, up
to an aggregate of 1,375,261 Optional Common Shares from the Company and the
Secondary Selling Stockholders at the purchase price per share to be paid by the
Underwriters for the Firm Common Shares. The option granted hereunder is for use
by the Underwriters solely in covering any over-allotments in connection with
the sale and distribution of the Firm Common Shares. The option granted
hereunder may be exercised at any time (but not more than once) upon notice by
the Lead Representative to the Company and the Secondary Selling Stockholders or
any Attorney-in-Fact of any Selling Stockholder designated in its Power of
Attorney, which notice may be given at any time within 30 days from the date of
this Agreement. Such notice shall set forth (i) the aggregate number of Optional
Common Shares as to which the Underwriters are exercising the option, (ii) the
names and denominations in which the certificates for the Optional Common Shares
are to be registered and (iii) the time, date and place at which such
certificates will be delivered (which time and date may be simultaneous with,
but not earlier than, the First Closing Date; and in such case the term "FIRST
CLOSING DATE" shall refer to the time and date of delivery of certificates for
the Firm Common Shares and the Optional Common Shares). Such time and date of
delivery, if subsequent to the First Closing Date, is called the "SECOND CLOSING
DATE" (and each of the First Closing Date and the Second Closing Date is
referred to herein generically as a "CLOSING DATE") and shall be determined by
the Lead
----------
(1) Ten business days following the original contemplated First Closing
Date.
16
Representative and shall not be earlier than three nor later than five
full business days after delivery of such notice of exercise. If any Optional
Common Shares are to be purchased, (a) each Underwriter agrees, severally and
not jointly, to purchase the number of Optional Common Shares (subject to such
adjustments to eliminate fractional shares as the Lead Representative may
determine) that bears the same proportion to the total number of Optional Common
Shares to be purchased as the number of Firm Common Shares set forth on Schedule
A opposite the name of such Underwriter bears to the total number of Firm Common
Shares and (b) each of the Company and each Secondary Selling Stockholder
agrees, severally and not jointly, to sell the number of Optional Common Shares
(subject to such adjustments to eliminate fractional shares as the Lead
Representative may determine) that bears the same proportion to the total number
of Optional Common Shares to be sold as the number of Optional Common Shares set
forth in Schedule B opposite the name of the Company or such Secondary Selling
Stockholder bears to the total number of Optional Common Shares. The Lead
Representative may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to the Company and the Secondary
Selling Stockholders.
(d) PUBLIC OFFERING OF THE COMMON SHARES. The Representatives hereby
advise the Company and the Selling Stockholders that the Underwriters intend to
offer for sale to the public, as described in the Prospectus, their respective
portions of the Common Shares as soon after this Agreement has been executed and
the Registration Statement has been declared effective as the Representatives,
in their sole judgment, have determined is advisable and practicable.
(e) PAYMENT FOR THE COMMON SHARES. Payment for the Common Shares to be
sold by the Company and the Primary Selling Stockholders at the First Closing
Date shall be made at the First Closing Date by wire transfer of immediately
available funds to the order of the Company. Payment for the Common Shares to be
sold by the Company and the Secondary Selling Stockholders at the Second Closing
Date shall be made at the Second Closing Date by wire transfer of immediately
available funds to the order of the Custodian, or to such other accounts as
shall be agreed to between each of the Company and the Selling Stockholders, and
the Underwriters.
It is understood that the Lead Representative has been authorized, for
its own account and the accounts of the several Underwriters, to accept delivery
of and receipt for, and make payment of the purchase price for, the Firm Common
Shares and any Optional Common Shares the Underwriters have agreed to purchase.
BAS, individually and not as the Lead Representative or Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by the Lead Representative by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter, but any
such payment shall not relieve such Underwriter from any of its obligations
under this Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay all stock
transfer taxes, stamp duties and other similar taxes, if any, payable upon the
sale or delivery of the Common Shares to be sold by such Selling Stockholder to
the several Underwriters, or otherwise in connection with the performance of
such Selling Stockholder's obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to such
Selling
17
Stockholder hereunder and to hold such amounts for the account of such Selling
Stockholder with the Custodian under the Custody Agreement.
(f) DELIVERY OF THE COMMON SHARES. The Company and the Primary Selling
Stockholders shall deliver, or cause to be delivered, to the Lead Representative
for the accounts of the several Underwriters certificates for the Firm Common
Shares to be sold by them at the First Closing Date, against the irrevocable
release of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The Company and the Secondary Selling Stockholders
shall also deliver, or cause to be delivered, to the Lead Representative for the
accounts of the several Underwriters, certificates for the Optional Common
Shares the Underwriters have agreed to purchase from them at the Second Closing
Date against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. The certificates for the
Common Shares shall be in definitive form and registered in such names and
denominations as the Lead Representative shall have requested at least two full
business days prior to the First Closing Date (or the Second Closing Date, as
the case may be) and shall be made available for inspection on the business day
preceding the First Closing Date (or the Second Closing Date, as the case may
be) at a location in New York City as the Lead Representative may designate.
Time shall be of the essence, and delivery at the time and place specified in
this Agreement is a further condition to the obligations of the Underwriters.
(g) DELIVERY OF PROSPECTUS TO THE UNDERWRITERS. Not later than 12:00
p.m. on the second business day following the date the Common Shares are first
released by the Underwriters for sale to the public, the Company shall deliver
or cause to be delivered, copies of the Prospectus in such quantities and at
such places as the Representatives shall request.
SECTION 3. ADDITIONAL COVENANTS.
A. COVENANTS OF THE COMPANY. The Company further covenants and agrees
with each Underwriter and the QIU as follows:
(a) REPRESENTATIVES' REVIEW OF PROPOSED AMENDMENTS AND SUPPLEMENTS.
During such period beginning on the date hereof and ending on the later of the
First Closing Date or such date, as in the opinion of counsel for the
Underwriters, the Prospectus is no longer required by law to be delivered in
connection with sales by an Underwriter or dealer (the "PROSPECTUS DELIVERY
PERIOD"), prior to amending or supplementing the Registration Statement
(including any registration statement filed under Rule 462(b) under the
Securities Act) or the Prospectus, the Company shall furnish to the
Representatives for review a copy of each such proposed amendment or supplement,
and the Company shall not file any such proposed amendment or supplement to
which the Representatives reasonably object.
(b) SECURITIES ACT COMPLIANCE. After the date of this Agreement, the
Company shall promptly advise the Representatives in writing (i) of the receipt
of any comments of, or requests for additional or supplemental information from,
the Commission, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (iii) of the time and date that any
post-effective amendment to the Registration Statement becomes effective and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration
18
Statement or any post-effective amendment thereto or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus, or, during
the Prospectus Delivery Period, of any proceedings to remove, suspend or
terminate from listing or quotation the Common Stock from any securities
exchange upon which it is listed for trading or included or designated for
quotation, or of the threatening or initiation of any proceedings for any of
such purposes. If the Commission shall enter any such stop order at any time,
the Company will use its best efforts to obtain the lifting of such order at the
earliest possible moment. Additionally, the Company agrees that it shall comply
with the provisions of Rules 424(b), 430A and 434, as applicable, under the
Securities Act and will use its reasonable efforts to confirm that any filings
made by the Company under such Rule 424(b) were received in a timely manner by
the Commission.
(c) AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS AND OTHER SECURITIES
ACT MATTERS. If, during the Prospectus Delivery Period, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if in the opinion of the Representatives or counsel for the Underwriters it
is otherwise necessary to amend or supplement the Prospectus to comply with law,
the Company agrees to promptly prepare (subject to Section 3(A)(a) hereof), file
with the Commission and furnish at its own expense to the Underwriters and to
dealers, amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with law.
(d) COPIES OF ANY AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS. The
Company agrees to furnish the Representatives, without charge, during the
Prospectus Delivery Period, as many copies of the Prospectus and any amendments
and supplements thereto as the Representatives may request.
(e) BLUE SKY COMPLIANCE. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the
Common Shares for sale under (or obtain exemptions from the application of) the
state securities or blue sky laws of those jurisdictions designated by the
Representatives, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as required for
the distribution of the Common Shares. The Company shall not be required to
qualify as a foreign corporation or to take any action that would subject it to
general service of process in any such jurisdiction where it is not presently
qualified or where it would be subject to taxation as a foreign corporation. The
Company will advise the Representatives promptly of the suspension of the
qualification or registration of (or any such exemption relating to) the Common
Shares for offering, sale or trading in any jurisdiction or any initiation or
threat of any proceeding for any such purpose, and in the event of the issuance
of any order suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof at the
earliest possible moment.
(f) USE OF PROCEEDS. The Company shall apply the net proceeds from the
sale of the Common Shares sold by it in the manner described under the caption
"Use of Proceeds" in the Prospectus.
19
(g) TRANSFER AGENT. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Common Stock.
(h) EARNINGS STATEMENT. As soon as practicable, the Company will make
generally available to its security holders and to the Representatives an
earnings statement (which need not be audited) covering the twelve-month period
ending December 27, 2005 that satisfies the provisions of Section 11(a) of the
Securities Act.
(i) PERIODIC REPORTING OBLIGATIONS. During the Prospectus Delivery
Period the Company shall file, on a timely basis, with the Commission and the
Nasdaq National Market all reports and documents required to be filed under the
Exchange Act. Additionally, the Company shall report the use of proceeds from
the issuance of the Common Shares as may be required under Rule 463 under the
Securities Act.
(j) COMPANY TO PROVIDE INTERIM FINANCIAL STATEMENTS. Prior to any
Closing Date, the Company will furnish the Underwriters, as soon as they have
been prepared by or are available to the Company, a copy of any unaudited
interim financial statements of the Company or any TR Entity for any period
subsequent to the period covered by the most recent financial statements
appearing in the Registration Statement and the Prospectus.
(k) QUOTATION. The Company will use its best efforts to include,
subject to notice of issuance, the Common Shares on the Nasdaq National Market.
(l) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES. During the
period commencing on the date hereof and ending on the 180th day following the
date of the Prospectus, the Company will not, without the prior written consent
of BAS and Wachovia Capital Markets, LLC (which consent may be withheld at their
sole discretion), directly or indirectly, sell, offer, contract or grant any
option to sell, pledge, transfer or establish an open "put equivalent position"
within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose
of or transfer, or announce the offering of, or file any registration statement
under the Securities Act in respect of, any shares of Common Stock, options or
warrants to acquire shares of the Common Stock or securities exchangeable or
exercisable for or convertible into shares of Common Stock (other than as
contemplated by this Agreement with respect to the Common Shares or with respect
to shares of Common Stock issued pursuant to the Reorganization); PROVIDED,
HOWEVER, that the Company may issue shares of its Common Stock or options to
purchase its Common Stock, or Common Stock upon exercise of options, pursuant to
any stock option, stock bonus or other stock plan or arrangement described in
the Prospectus. Notwithstanding the foregoing, if (x) during the last 17 days of
the 180-day restricted period the Company issues an earnings release or material
news or a material event relating to the Company occurs, or (y) prior to the
expiration of the 180-day restricted period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the 180-day period, the restrictions imposed in this clause shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.
(m) FUTURE REPORTS TO THE REPRESENTATIVES. During the period of five
years hereafter the Company will furnish to BAS at 0 Xxxx 00xx Xxxxxx, Xxx Xxxx,
XX 00000 Attention: Legal Department (i) as soon as practicable after the end of
each fiscal year and public disclosure
20
thereof, copies of the Annual Report of the Company containing the consolidated
balance sheet of the Company as of the close of such fiscal year and
consolidated statements of income, stockholders' equity and cash flows for the
year then ended and the opinion thereon of the Company's independent public or
certified public accountants; (ii) as soon as practicable after the filing
thereof, to the extent not available on XXXXX, copies of each proxy statement,
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on
Form 8-K or other report filed by the Company with the Commission, the NASD or
any securities exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its capital stock.
(n) INVESTMENT LIMITATION. The Company shall not invest, or otherwise
use the proceeds received by the Company from its sale of the Common Shares in
such a manner as would require the Company or any of its subsidiaries to
register as an investment company under the Investment Company Act.
(o) NO MANIPULATION OF PRICE. The Company will not take, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization or manipulation
of the price of any securities of the Company.
(p) EXISTING LOCK-UP AGREEMENT. The Company will enforce all existing
agreements between the Company and any of its security holders that prohibit the
sale, transfer, assignment, pledge or hypothecation of any of the Company's
securities in connection with the Company's initial public offering. In
addition, the Company will direct the transfer agent to place stop transfer
restrictions upon any such securities of the Company that are bound by such
existing "lock-up" agreements for the duration of the periods contemplated in
such agreements.
B. COVENANTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder
further covenants and agrees with each Underwriter and the QIU:
(a) LOCK-UP AGREEMENT. On or prior to the date hereof, such Selling
Stockholder shall have furnished to the Representatives an agreement in the form
of Exhibit C hereto.
(b) DELIVERY OF FORM W-9. To deliver to the Representatives prior to
the applicable Closing Date on which the Common Shares of such Selling
Stockholder will be sold to the Underwriters pursuant to this Agreement, a
properly completed and executed United States Treasury Department Form W-9.
The Lead Representative, on behalf of the several Underwriters, may, in
its sole discretion, waive in writing the performance by the Company or any
Selling Stockholder of any one or more of the foregoing covenants or extend the
time for their performance. Notwithstanding the foregoing, the Lead
Representative, for the benefit of the other Representatives, agrees not to
consent to any action proposed to be taken by the Company, any Selling
Stockholder or any other holder of the Company's securities that would otherwise
be prohibited by, or to waive compliance by the Company, any Selling Stockholder
or any such other security holder with the provisions of, Section 3A(l) or 3B(a)
above or any lock-up agreement delivered pursuant to Section 6(k) below without
giving the other Representatives at least 17 days prior notice (or such shorter
notice as the other Representative may deem
21
acceptable to permit compliance with applicable provisions of NASD Conduct
Rule 2711(f) restricting publication and distribution of research and public
appearances by research analysts before and after the expiration, waiver or
termination of a lock-up agreement).
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all costs,
fees and expenses incurred in connection with the performance of its and the
Selling Stockholders' obligations hereunder and in connection with the
transactions contemplated hereby, including without limitation (i) all expenses
incident to the issuance and delivery of the Common Shares (including all
printing and engraving costs), (ii) all fees and expenses of the registrar and
transfer agent of the Common Stock, (iii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Common Shares
to the Underwriters, (iv) all fees and expenses of the Company's counsel,
independent certified public accountants and other advisors and the counsel for
all of the Selling Stockholders, (v) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Registration Statement (including financial statements, exhibits, schedules,
consents and certificates of experts), each preliminary prospectus and the
Prospectus, and all amendments and supplements thereto, and this Agreement, (vi)
all filing fees, attorneys' fees and expenses incurred by the Company or the
Underwriters in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Common Shares for offer and sale under the state securities or blue sky laws,
and, if requested by the Representatives, preparing and printing a "Blue Sky
Survey" or memorandum, and any supplements thereto, advising the Underwriters of
such qualifications, registrations and exemptions, (vii) the filing fees
incident to, and the reasonable fees and expenses of counsel for the
Underwriters in connection with, the NASD's review and approval of the
Underwriters' participation in the offering and distribution of the Common
Shares, (viii) the fees and expenses associated with including the Common Stock
on the Nasdaq National Market, (ix) fees and expenses of the Custodian, (x) all
other fees, costs and expenses referred to in Item 13 of Part II of the
Registration Statement, (xi) all costs and expenses of the QIU in connection
with its performance of the role of qualified independent underwriter and (xii)
all costs and expenses of the Underwriters, including the fees and disbursements
of counsel for the Underwriters, in connection with matters related to the
Directed Shares which are designated by the Company for sale to Participants.
Except as provided in this Section 4, Section 6, Section 8 and Section 9 hereof,
the Underwriters shall pay their own expenses, including the fees and
disbursements of their counsel.
Each Selling Stockholder further agrees with each Underwriter to pay
(directly or by reimbursement) all fees and expenses incident to the performance
of its obligations under this Agreement which are not otherwise specifically
provided for herein, including but not limited to (i) fees and expenses of
counsel and other advisors for the Selling Stockholder and (ii) expenses and
taxes incident to the sale and delivery of the Common Shares to be sold by the
Selling Stockholder to the Underwriters hereunder (which taxes, if any, may be
deducted by the Custodian under the provisions of Section 2 of this Agreement).
This Section 4 shall not affect or modify any separate, valid agreement
relating to the allocation of payment of expenses between the Company, on the
one hand, and the Selling Stockholders, on the other hand.
22
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Firm Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Selling Stockholders set forth in Sections 1(A) and 1(B) hereof as of the
date hereof and as of the First Closing Date as though then made and, with
respect to the Optional Common Shares, as of the Second Closing Date as though
then made, to the timely performance by the Company and the Selling Stockholders
of their respective covenants and other obligations hereunder, and to each of
the following additional conditions:
(a) ACCOUNTANTS' COMFORT LETTER. On the date hereof, the
Representatives shall have received from KPMG LLP, independent certified public
accountants for the Company, a letter dated the date hereof addressed to the
Underwriters, in form and substance satisfactory to the Representatives,
containing statements and information of the type ordinarily included in
accountant's "comfort letters" to underwriters, delivered according to Statement
of Auditing Standards No. 72 (or any successor bulletin), with respect to the
audited and unaudited financial statements and certain financial information
contained in the Registration Statement and the Prospectus (and the
Representatives shall have received an additional four conformed copies of such
accountants' letter for each of the several Underwriters).
(b) COMPLIANCE WITH REGISTRATION REQUIREMENTS; NO STOP ORDER; NO
OBJECTION FROM NASD.
(i) The Registration Statement shall have been declared effective and
the Company shall have received notice thereof not later than 5:00 p.m., New
York City time, on October 4, 2004, or at such other time as the Company and the
Underwriters may agree;
(ii) For the period from and after effectiveness of this Agreement and
prior to the First Closing Date and, with respect to the Optional Common Shares,
the Second Closing Date:
(A) the Company shall have filed the Prospectus with the
Commission (including the information required by Rule 430A under the
Securities Act) in the manner and within the time period required by
Rule 424(b) under the Securities Act; or the Company shall have filed a
post-effective amendment to the Registration Statement containing the
information required by such Rule 430A, and such post-effective
amendment shall have become effective; or, if the Company elected to
rely upon Rule 434 under the Securities Act and obtained the
Representatives' consent thereto, the Company shall have filed a Term
Sheet with the Commission in the manner and within the time period
required by such Rule 424(b);
(B) no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in
effect and no proceedings for such purpose shall have been instituted
or threatened by the Commission; and
(C) the NASD shall have raised no objection to the fairness
and reasonableness of the underwriting terms and arrangements.
23
(c) NO MATERIAL ADVERSE CHANGE OR RATINGS AGENCY CHANGE. For the period
from and after the date of this Agreement and prior to the First Closing Date
and, with respect to the Optional Common Shares, the Second Closing Date:
(i) in the judgment of the Representatives there shall not
have occurred any Material Adverse Change; and
(ii) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any securities
of the Company or any of its subsidiaries by any "nationally recognized
statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act.
(d) OPINION OF COUNSEL FOR THE COMPANY. On each of the First Closing
Date and the Second Closing Date the Representatives shall have received the
favorable opinion of Xxxxx Xxxxx Xxxx LLC, counsel for the Company, dated as of
such Closing Date, the form of which is attached hereto as Exhibit A (and the
Representatives shall have received an additional four conformed copies of each
such counsel's legal opinion for each of the several Underwriters).
(e) OPINION OF COUNSEL FOR THE UNDERWRITERS. On each of the First
Closing Date and the Second Closing Date, the Representatives shall have
received the favorable opinion of Shearman & Sterling LLP, counsel for the
Underwriters, dated as of such Closing Date.
(f) OFFICERS' CERTIFICATE. On each of the First Closing Date and the
Second Closing Date the Representatives shall have received a written
certificate executed by the Chairman of the Board, Chief Executive Officer or
President of the Company and the Chief Financial Officer or Chief Accounting
Officer of the Company, dated as of such Closing Date, to the effect set forth
in subsections (b)(ii) and (c)(ii) of this Section 5, and further to the effect
that:
(i) for the period from and after the date of this Agreement
and prior to such Closing Date, there has not occurred any Material
Adverse Change;
(ii) the representations, warranties and covenants of the
Company set forth in Section 1 of this Agreement are true and correct
with the same force and effect as though expressly made on and as of
such Closing Date; and
(iii) the Company has complied with all the agreements
hereunder and satisfied all the conditions on its part to be performed
or satisfied hereunder at or prior to such Closing Date.
(g) BRING-DOWN COMFORT LETTER. On each of the First Closing Date and
the Second Closing Date, the Representatives shall have received from KPMG LLP,
independent certified public accountants for the Company, a letter dated such
date, in form and substance satisfactory to the Representatives, to the effect
that they reaffirm the statements made in the letter furnished by them pursuant
to subsection (a) of this Section 5, except that the specified date referred to
therein for the carrying out of procedures shall be no more than three business
days prior to the First Closing Date or Second Closing Date, as the case may be
(and the Representatives shall
24
have received an additional four conformed copies of such accountants' letter
for each of the several Underwriters).
(h) OPINION OF COUNSEL FOR THE SELLING STOCKHOLDERS. On each of the
First Closing Date and the Second Closing Date the Representatives shall have
received the favorable opinion of counsel for each Selling Stockholder, dated as
of such Closing Date, the form of which is attached as Exhibit B (and the
Representatives shall have received an additional four conformed copies of such
counsel's legal opinion for each of the several Underwriters).
(i) SELLING STOCKHOLDERS' CERTIFICATE. On each of the First Closing
Date and the Second Closing Date, the Representatives shall receive a written
certificate executed by each Selling Stockholder, dated as of such Closing Date,
to the effect that:
(i) the representations, warranties and covenants of such
Selling Stockholder set forth in Sections 1(B) of this Agreement are
true and correct with the same force and effect as though expressly
made by such Selling Stockholder on and as of such Closing Date; and
(ii) such Selling Stockholder 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.
(j) SELLING STOCKHOLDERS' DOCUMENTS. On the date hereof, the Company
and each Selling Stockholder shall have furnished for review by the
Representatives copies of the Powers of Attorney and the Custody Agreement
executed by the Selling Stockholders and such further information, certificates
and documents as the Representatives may reasonably request.
(k) LOCK-UP AGREEMENT FROM CERTAIN SECURITYHOLDERS OF THE COMPANY. On
or prior to the date hereof, the Company shall have furnished to the
Representatives an agreement in the form of Exhibit C hereto from each director,
officer and each beneficial owner of Common Stock (as defined and determined
according to Rule 13d-3 under the Exchange Act, except that a one hundred eighty
day period shall be used rather than the sixty day period set forth therein)
listed on Schedule C hereto, and such agreement shall be in full force and
effect on each of the First Closing Date and the Second Closing Date.
(l) CERTIFICATES SUITABLE FOR TRANSFER. Certificates for all of the
Common Shares to be sold by the Selling Stockholders pursuant to this Agreement,
in suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank, with signatures guaranteed,
shall have been placed in custody with the Custodian under the Powers of
Attorney and the Custody Agreement with irrevocable conditional instructions to
deliver such Common Shares to the Underwriters pursuant to this Agreement.
(m) REORGANIZATION; ACQUISITION. The Reorganization shall have been
completed.
(n) ADDITIONAL DOCUMENTS. On or before each of the First Closing Date
and the Second Closing Date, the Representatives and counsel for the
Underwriters shall have received such information, documents and opinions as
they may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Common Shares as contemplated herein,
25
or in order to evidence the accuracy of any of the representations and
warranties, or the satisfaction of any of the conditions or agreements, herein
contained.
If any condition specified in this Section 5 is not satisfied when and
as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and the Selling Stockholders at any
time on or prior to the First Closing Date and, with respect to the Optional
Common Shares, at any time prior to the Second Closing Date, which termination
shall be without liability on the part of any party to any other party, except
that Section 4, Section 6, Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement
is terminated by the Representatives pursuant to Section 5, Section 7, Section
10, Section 11 or Section 17, or if the sale to the Underwriters of the Common
Shares on the First Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company or the Selling Stockholders to
perform any agreement herein or to comply with any provision hereof, the Company
and any defaulting Selling Stockholder, jointly and severally, agree to
reimburse the Representatives and the other Underwriters (or such Underwriters
as have terminated this Agreement with respect to themselves), severally, upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by the Representatives and the Underwriters in connection with the proposed
purchase and the offering and sale of the Common Shares, including but not
limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges; PROVIDED, HOWEVER, in the
event this Agreement is terminated pursuant to Section 10 hereof, the Company
shall not be required to reimburse any defaulting Underwriter pursuant to this
Section 6.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall not
become effective until the later of (i) the execution and delivery of this
Agreement by the parties hereto and (ii) notification by the Commission to the
Company and the Representatives of the effectiveness of the Registration
Statement under the Securities Act; provided that Sections 4, 6, 8 and 9 shall
at all times be effective.
Prior to such effectiveness, this Agreement may be terminated by any
party by notice to each of the other parties hereto, and any such termination
shall be without liability on the part of (a) the Company or the Selling
Stockholders to any Underwriter, except that the Company and the Selling
Stockholders shall be obligated to reimburse the expenses of the Representatives
and the Underwriters pursuant to Section 4 and 6 hereof, (b) any Underwriter to
the Company or the Selling Stockholders, or (c) any party hereto to any other
party except that the provisions of Section 8 and Section 9 shall at all times
be effective and shall survive such termination.
SECTION 8. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE UNDERWRITERS BY THE COMPANY AND THE
MANAGEMENT SELLING STOCKHOLDERS. The Company and each of the Selling
Stockholders who is a "named executive officer" of the Company in the Prospectus
(a "MANAGEMENT SELLING STOCKHOLDER), jointly and severally, agree to indemnify
and hold harmless each Underwriter, its officers and employees, and each person,
if any, who controls any Underwriter within the meaning of the Securities Act
26
and the Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which such Underwriter or such controlling person may become
subject, under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430A or
Rule 434 under the Securities Act, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (ii) upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or any prospectus
wrapper material distributed in Canada or any other foreign jurisdiction or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; or (iii) in whole or in part upon any inaccuracy in
the representations and warranties of the Company or the Management Selling
Stockholders contained herein; or (iv) in whole or in part upon any failure of
the Company or the Management Selling Stockholders to perform their respective
obligations hereunder or under law; or (v) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with, or relating
in any manner to, the Common Stock or the offering contemplated hereby, and
which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon any matter covered by clause
(i) or (ii) above, PROVIDED that the Company and the Management Selling
Stockholders shall not be liable under this clause (v) to the extent that a
court of competent jurisdiction shall have determined by a final judgment that
such loss, claim, damage, liability or action resulted directly from any such
acts or failures to act undertaken or omitted to be taken by such Underwriter
through its bad faith or willful misconduct; and to reimburse each Underwriter
and each such controlling person for any and all expenses (including the fees
and disbursements of counsel chosen by BAS) as such expenses are reasonably
incurred by such Underwriter or such controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; PROVIDED, HOWEVER, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, arising out of or based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
the Company by the Representatives expressly for use in the Registration
Statement, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and PROVIDED, FURTHER, that with respect to any preliminary
prospectus, the foregoing indemnity agreement shall not inure to the benefit of
any Underwriter from whom the person asserting any loss, claim, damage,
liability or expense purchased Common Shares, or any person controlling such
Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Common Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The indemnity agreement
set forth
27
in this Section 8(a) shall be in addition to any liabilities that the Company
and the Management Selling Stockholders may otherwise have. Notwithstanding the
provisions of this Section 8(a), the indemnification obligations of each
Management Selling Stockholder pursuant to this Section 8(a) and to Section 8(f)
shall be limited in the aggregate to the total net proceeds received by such
Management Selling Stockholder from the offering of the Common Shares pursuant
to this Agreement.
(b) INDEMNIFICATION BY OTHER SELLING STOCKHOLDERS. Each Other Selling
Stockholder, severally and not jointly, agrees to indemnify and hold harmless
each Underwriter, its officers and employees, and each person, if any, who
controls any Underwriter within the meaning of the Securities Act and the
Exchange Act against any loss, claim, damage, liability or expense, as incurred,
to which such Underwriter or such controlling person may become subject, under
the Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Other Selling Stockholder), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430A or
Rule 434 under the Securities Act, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (ii) upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; or (iii) in whole or in part upon any inaccuracy in the
representations and warranties of such Other Selling Stockholder contained
herein; or (iv) in whole or in part upon any failure of such Other Selling
Stockholder to perform its respective obligations hereunder or under law; or (v)
any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Common Stock
or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon any matter covered by clause (i) or (ii) above, PROVIDED that the
such Other Selling Stockholder shall not be liable under this clause (v) to the
extent that a court of competent jurisdiction shall have determined by a final
judgment that such loss, claim, damage, liability or action resulted directly
from any such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its bad faith or willful misconduct; and to reimburse each
Underwriter and each such controlling person for any and all expenses (including
the fees and disbursements of counsel chosen by BAS) as such expenses are
reasonably incurred by such Underwriter or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; PROVIDED, HOWEVER, that,
notwithstanding anything to the contrary above, the liability of each Other
Selling Stockholders under the foregoing indemnity pursuant to clauses (i), (ii)
and (v) of this paragraph 8(b) shall be limited to losses, claims, damages,
liability or expenses arising out of any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to such Other Selling Stockholder furnished to the Company
by or with the approval of such Selling Stockholder specifically for use in the
Registration Statement (or any amendment thereto), including any information
deemed to be a part thereof pursuant to Rule 430A or Rule 434 under
28
the Securities Act, or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); and PROVIDED, FURTHER, that with respect to
any preliminary prospectus, the foregoing indemnity agreement shall not inure to
the benefit of any Underwriter from whom the person asserting any loss, claim,
damage, liability or expense purchased Common Shares, or any person controlling
such Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Common Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. Each Underwriter hereby
acknowledges that the only information that the Other Selling Stockholders have
furnished to the Company expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) is the information relating to such Selling Stockholder set forth in
the table under the caption "Principal and Selling Stockholders" in the
Prospectus. The indemnity agreement set forth in this Section 8(b) shall be in
addition to any liabilities that the Other Selling Stockholders may otherwise
have. Notwithstanding the provisions of this Section 8(b), the indemnification
obligations of each Other Selling Stockholder pursuant to this Section 8(b)
shall be limited to the total net proceeds received by such Other Selling
Stockholder from the offering of the Common Shares pursuant to this Agreement.
(c) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND OFFICERS AND THE
SELLING STOCKHOLDERS. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, the Selling Stockholders and
each person, if any, who controls the Company or any Selling Stockholder within
the meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer, Selling Stockholder or controlling person may become subject,
under the Securities Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based upon
any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or arises out of or is 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 amendment or
supplement thereto), in reliance upon and in conformity with written information
furnished to the Company by the Representatives expressly for use therein; and
to reimburse the Company, or any such director, officer, Selling Stockholder or
controlling person for any legal and other expense reasonably incurred by the
Company, or any such director, officer, Selling Stockholder or controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action. The Company
and each of the Selling Stockholder hereby acknowledges that the only
information that the Underwriters have furnished to the Company expressly for
use in the Registration Statement, any preliminary prospectus or the Prospectus
(or
29
any amendment or supplement thereto) are the statements set forth (A) in the
table in the first paragraph under the caption "Underwriting" in the Prospectus,
(B) in the second and third sentence of the fourth paragraph under the caption
"Underwriting" in the Prospectus, (C) the sixth (Availability of Prospectus
Online) paragraph under the caption "Underwriting" in the Prospectus, (D) in the
tenth, eleventh, twelfth and thirteenth paragraphs under the caption
"Underwriting--Stabilization" in the prospectus; and the Underwriters confirm
that such statements are correct. The indemnity agreement set forth in this
Section 8(c) shall be in addition to any liabilities that each Underwriter may
otherwise have.
(d) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; PROVIDED, HOWEVER, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise 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 and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party (BAS in the case of Section 8(c) and Section 9), representing
the indemnified parties who are parties to such action) or (ii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice
of commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.
(e) SETTLEMENTS. The indemnifying party under this Section 8 shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the
30
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by Section 8(d) hereof, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party is required to so reimburse the indemnified party pursuant to this Section
8 and shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding.
(f) INDEMNIFICATION OF THE QIU. Without limitation and in addition to
its obligation under the other subsections of this Section 8, the Company and
the Management Selling Stockholders, jointly and severally, agree to indemnify
and hold harmless the QIU, its directors, officers, employees, members,
representatives and agents and each person, if any, who controls the QIU within
the meaning of the Securities Act or the Exchange Act from and against any loss,
claim, damage, liabilities or expense, as incurred, arising out of or based upon
the QIU's acting as a "qualified independent underwriter" (within the meaning of
Rule 2720 to the NASD's Conduct Rules) in connection with the offering
contemplated by this Agreement, and agrees to reimburse each such indemnified
person promptly upon demand for any legal or other expense reasonably incurred
by them in connection with investigating, preparing to defend, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; PROVIDED, HOWEVER, that the Company and the Management
Selling Stockholders shall not be liable in any such case to the extent that it
is judicially determined in a final judgment by a court of competent
jurisdiction that any such loss, claim, damage, liability or expense resulted
directly from the gross negligence or willful misconduct of the QIU.
Notwithstanding the provisions of this Section 8(f), the indemnification
obligations of each Management Selling Stockholder pursuant to this Section 8(f)
and to Section 8(a) shall be limited in the aggregate to the total net proceeds
received by such Management Selling Stockholder from the offering of the Common
Shares pursuant to this Agreement.
(g) INDEMNIFICATION FOR DIRECTED SHARES. In connection with the offer
and sale of the Directed Shares, the Company agrees, promptly upon a request in
writing, to indemnify and hold harmless the Underwriters from and against any
and all losses, liabilities, claims, damages and expenses incurred by them as a
result of the failure of the Participants to pay for and accept delivery of
Directed Shares which, by the end of the first business day following the date
of this Agreement, were subject to a properly confirmed agreement to purchase.
The Company agrees to indemnify and hold harmless the Designated Underwriter,
its officers and employees, and each person, if any, who controls the Designated
Underwriter within the meaning of the Securities Act or the Exchange Act against
any loss, claim, damage, liability or expense, as incurred, to which such
Designated Underwriter or such controlling person may become subject, which is
(i) caused by any untrue statement or alleged untrue statement of a material
fact
31
contained in any material prepared by or with the consent of the Company for
distribution to Participants in connection with the Directed Share Program or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (ii) caused by the failure of any Participant to pay for and accept
delivery of Directed Shares that such Participant agreed to purchase; or (iii)
related to, arising out of, or in connection with the Directed Share Program.
The indemnity agreement set forth in this paragraph shall be in addition to any
liabilities that the Company may otherwise have.
SECTION 9. CONTRIBUTION. If the indemnification provided for in Section
8 is for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders, on the
one hand, and the Underwriters, on the other hand, from the offering of the
Common Shares pursuant to this Agreement 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 Stockholders,
on the one hand, and the Underwriters, on the other hand, in connection with the
statements or omissions or inaccuracies in the representations and warranties
herein which resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Stockholders, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the Common
Shares pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Common Shares
pursuant to this Agreement (before deducting expenses) received by the Company
and the Selling Stockholders, and the total underwriting discount received by
the Underwriters, in each case as set forth on the front cover page of the
Prospectus (or, if Rule 434 under the Securities Act is used, the corresponding
location on the Term Sheet) bear to the aggregate initial public offering price
of the Common Shares as set forth on such cover. The relative fault of the
Company and the Selling Stockholders, on the one hand, and the Underwriters, on
the other hand, shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact or any such inaccurate or alleged
inaccurate representation or warranty relates to information supplied by the
Company or the Selling Stockholders, on the one hand, or the Underwriters, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(d), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(d) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; PROVIDED, HOWEVER,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(d) for purposes of indemnification.
32
The Company, the Selling Stockholder and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, (i) no Underwriter
shall be required to contribute any amount in excess of the underwriting
commissions received by such Underwriter in connection with the Common Shares
underwritten by it and distributed to the public and (ii) no Selling Stockholder
shall be required to contribute any amount in excess of the total net proceeds
from the offering of the Common Shares pursuant to this Agreement that are
received by the Selling Stockholder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company with the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as the Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on
the First Closing Date or the Second Closing Date, as the case may be, any one
or more of the several Underwriters shall fail or refuse to purchase Common
Shares that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on Schedule A
bears to the aggregate number of Firm Common Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Lead Representative with the consent of the non-defaulting
Underwriters, to purchase the Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Common Shares and the
aggregate number of Common Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Common Shares to be purchased on such
date, and arrangements satisfactory to the Lead Representative, the Company and
the Primary Selling Stockholder for the purchase of such Common Shares are not
made within 48 hours after such default, this Agreement shall terminate without
liability of any party to any other party except that the provisions of Section
4, Section 6 Section 8 and Section 9 shall at all times be effective and shall
survive such termination. In any such case either the Lead Representative or the
Company shall have the right to postpone the First Closing Date and either the
Lead Representative or the Other Selling Stockholders shall have the right to
postpone the Second Closing Date, as the case may be, but in no event for
33
longer than seven days in order that the required changes, if any, to the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected.
As used in this Agreement, the term "UNDERWRITER" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing
Date this Agreement may be terminated by the Lead Representative by notice given
to the Company and the Selling Stockholders if at any time (i) trading or
quotation in any of the Company's securities shall have been suspended or
limited by the Commission or by the Nasdaq National Market, or trading in
securities generally on either the Nasdaq Stock Market or the New York Stock
Exchange shall have been suspended or limited, or minimum or maximum prices
shall have been generally established on any of such stock exchanges by the
Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any federal or New York authorities; (iii) there shall have occurred
any outbreak or escalation of national or international hostilities or any
crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States' or international political,
financial or economic conditions, as in the judgment of the Lead Representative
is material and adverse and makes it impracticable to market the Common Shares
in the manner and on the terms described in the Prospectus or to enforce
contracts for the sale of securities; (iv) in the judgment of the Lead
Representative there shall have occurred any Material Adverse Change; or (v) the
Company or any TR Entity shall have sustained a loss by strike, fire, flood,
earthquake, accident or other calamity of such character as in the judgment of
the Lead Representative may interfere materially with the conduct of the
business and operations of the Company and the TR Entities, considered as one
entity, regardless of whether or not such loss shall have been insured. Any
termination pursuant to this Section 11 shall be without liability on the part
of (a) the Company or the Selling Stockholders to any Underwriter, except that
the Company and the Selling Stockholders shall be obligated to reimburse the
expenses of the Representatives and the Underwriters pursuant to Sections 4 and
6 hereof, (b) any Underwriter to the Company or the Selling Stockholders, or (c)
of any party hereto to any other party except that the provisions of Section 8
and Section 9 shall at all times be effective and shall survive such
termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholder and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Stockholder, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 13. NOTICES. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
34
If to the Representatives:
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Legal Department
with a copy to:
Shearman & Sterling LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxx, Esq.
If to the Company:
Texas Roadhouse, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
with a copy to:
Xxxxx Xxxxx Xxxx LLC
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx, Esq.
35
If to the Selling Stockholders (by certified mail):
The Committee for the Selling Stockholders
of Texas Roadhouse, Inc.
c/o Texas Roadhouse, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Any party hereto may change the address for receipt of communications
by giving written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors and personal representatives, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Common Shares as such from any of the
Underwriters merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
Any legal suit, action or proceeding arising out of or based upon this
Agreement or the transactions contemplated hereby ("RELATED PROCEEDINGS") may be
instituted in the federal courts of the United States of America located in the
City and County of New York or the courts of the State of New York in each case
located in the City and County of New York (collectively, the "SPECIFIED
COURTS"), and each party irrevocably submits to the exclusive jurisdiction
(except for proceedings instituted in regard to the enforcement of a judgment of
any such court (a "RELATED JUDGMENT"), as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action or proceeding. Service of
any process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any suit, action or other
proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit, action
or other proceeding in the Specified Courts and irrevocably and unconditionally
waive and agree not to plead or claim in any such court that
36
any such suit, action or other proceeding brought in any such court has been
brought in an inconvenient forum.
SECTION 17. FAILURE OF THE SELLING STOCKHOLDERS TO SELL AND DELIVER
COMMON SHARES. If any of the Primary Selling Stockholders shall fail to sell and
deliver to the Underwriters the Firm Common Shares to be sold and delivered by
such Primary Selling Stockholder at the First Closing Date pursuant to this
Agreement, then the Underwriters may at their option, by written notice from the
Lead Representative to the Company and the Selling Stockholders, either (i)
terminate this Agreement without any liability on the part of any Underwriter
or, except as provided in Sections 4, 6, 8 and 9 hereof, the Company or the
Selling Stockholders, or (ii) purchase the Firm Common Shares which the Company
and the other Primary Selling Stockholders have agreed to sell and deliver in
accordance with the terms hereof. If any Secondary Selling Stockholder shall
fail to sell and deliver to the Underwriters the Optional Common Shares to be
sold and delivered by such Secondary Selling Stockholder at the Second Closing
Date pursuant to this Agreement, then the Underwriters may at their option, by
written notice from the Lead Representative to the Company and the Secondary
Selling Stockholders, either (i) terminate this Agreement with respect to such
Optional Common Shares without any liability on the part of any Underwriter or,
except as provided in Sections 4, 6, 8 and 9 hereof, the Company or the Selling
Stockholders, or (ii) purchase the Optional Common Shares which the Company and
the other Selling Stockholders have agreed to sell and deliver in accordance
with the terms hereof and, if Xx. Xxxxxx is not a defaulting Selling
Stockholder, at the Underwriters' option, purchase from Xx. Xxxxxx the number of
Optional Common Shares which any such defaulting Selling Stockholder has agreed
to sell and deliver in accordance with the terms hereof. If the Underwriters
elect to purchase from Xx. Xxxxxx the number of Optional Common Shares which any
defaulting Selling Stockholder had agreed to sell and deliver in accordance with
the terms hereof, Xx. Xxxxxx shall be obligated to sell and deliver such
additional number of Optional Common Shares. If any Selling Stockholder shall
fail to sell and deliver to the Underwriters the Common Shares to be sold and
delivered by such Selling Stockholder pursuant to this Agreement at the First
Closing Date or the Second Closing Date, then the Underwriters shall have the
right, by written notice from the Lead Representative to the Company and the
Selling Stockholders, to postpone the First Closing Date or the Second Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, to the Registration Statement and the Prospectus or any other
documents or arrangements may be effected.
SECTION 18. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto and no condition herein (express or implied) may be waived unless
waived in writing by each party whom the condition is meant to benefit. The
Table of Contents and the Section headings herein are for the convenience of the
parties only and shall not affect the construction or interpretation of this
Agreement.
37
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Stockholders and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter, the QIU, the officers or employees of any Underwriter, the QIU,
any person controlling any Underwriter, the QIU, the Company, the officers or
employees of the Company, any person controlling the Company, any Selling
Stockholder or any person controlling such Selling Stockholder (ii) acceptance
of the Shares and payment for them hereunder and (iii) termination of this
Agreement.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Selling
Stockholders, the Underwriters, the Underwriters' officers and employees, the
QIU, the QIU officers and employees, any controlling persons referred to herein,
the Company's directors and the Company's officers who sign the Registration
Statement and their respective successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" shall
not include a purchaser of any of the Common Shares from any of the several
Underwriters merely because of such purchase.
[Signatures follow.]
38
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company and the Attorneys-in-Fact on
behalf of the Selling Stockholders the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.
Very truly yours,
TEXAS ROADHOUSE, INC.
By:
-------------------------------------
Name:
Title:
PRIMARY SELLING STOCKHOLDERS
----------------------------------------
W. Xxxx Xxxxxx
----------------------------------------
X. X. Xxxx
----------------------------------------
Xxxxxx Xxxxx
OTHER SELLING STOCKHOLDERS LISTED ON
SCHEDULE B
By:
-------------------------------------
Name:
Title: Attorney-in-fact
39
The foregoing Underwriting Agreement is hereby confirmed and accepted
by the Representatives in New York, New York as of the date first above written.
BANC OF AMERICA SECURITIES LLC
Wachovia Capital Markets, LLC
RBC Capital Markets Corporation
XX Xxxxx & Co., LLC
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By: Banc of America Securities LLC
By:
-----------------------------------
Name:
Title: Managing Director
SCHEDULE A
NUMBER OF
FIRM
COMMON
SHARES TO BE
UNDERWRITERS PURCHASED
------------ ------------
Banc of America Securities LLC................................... [___]
Wachovia Capital Markets, LLC.................................... [___]
RBC Capital Markets Corporation.................................. [___]
XX Xxxxx & Co., LLC.............................................. [___]
Total................................................... 9,108,408
A-1
SCHEDULE B
NUMBER OF FIRM MAXIMUM NUMBER OF
COMMON SHARES TO OPTIONAL COMMON
BE SOLD SHARES TO BE SOLD
------- -----------------
PRIMARY SELLING STOCKHOLDER:
(ALSO A MANAGEMENT SELLING STOCKHOLDER)
W. Xxxx Xxxxxx
000 Xxxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000 ................................. 2,500,000 1,366,261*
OFFICER SELLING STOCKHOLDERS
(EACH ALSO A MANAGEMENT SELLING STOCKHOLDER):
X.X. Xxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000 ..................................... 218,758 --
Xxxxxx X. Xxxxx
00 Xxxxxxxxx
Xxxxxxxx Xxxxxxx, Xxxxx 00000 .............................. 139,650 --
OTHER SELLING STOCKHOLDERS:
PMB Holdings LLC
000 Xxxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000 ................................. -- 35,000
Zitro Partners, Ltd.
00 Xxxxxxxxx
Xxxxxxxx Xxxxxxx, Xxxxx 00000 .............................. -- 60,000
Xxxxxx X. Xxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000 .................................. -- 50,000
Xxxxx Xxxxxxxxxx
#0 Xxxx Xxxxx
Xxxxxxxxx, Xxxxx 00000 ..................................... -- 7,943
LD Holdings, LLC
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000 ................................. -- 35,000
Xxxxxxx Xxxxx Xxxxx
0000 Xxxxx Xxxxx Xxxx
Xxxxx Xxxxx, Xxxx 00000 .................................... -- 6,500
------------ ------------
B-1
NUMBER OF FIRM MAXIMUM NUMBER OF
COMMON SHARES TO OPTIONAL COMMON
BE SOLD SHARES TO BE SOLD
------- -----------------
Xxxxxx X. Xxxxxx
00 Xxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxx 00000 ..................................... -- 4,750
Xxxx Xxxxxx
00 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000 ..................................... -- 8,160
Xxxxxxx X. Xxx, Xx.
0000 Xxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000 ................................. -- 29,688
Xxxxxxx X. Xxxxxxxx, XX
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000 .................................. -- 11,875
Xxxxx X. Xxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000 ................................... -- 11,875
Xxxx Xxxxx
0000 Xxxxx
Xxxxxxxx, Xxxxx 00000 ...................................... -- 5,000
Xxxxxx Family Partners
000 Xxxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000 ................................. -- 60,000
Bosworth X. Xxxx
000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000 ................................. -- 7,000
X. Xxxxxxxx Xxxxxxxxx, III
00000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000 ................................. -- 7,125
Xxxxxxx X. Xxxxxxxxx
0000 Xxxxxxxxx Xxx
Xxxxxxxxxx, Xxxxxxxx 00000 ................................. -- 7,125
Texas Roadhouse, Inc. ...................................... 6,250,000 331,481
------------ ------------
Total ............................................. 9,108,408 1,366,261
============ ============
B-2
NUMBER OF FIRM MAXIMUM NUMBER OF
COMMON SHARES TO OPTIONAL COMMON
BE SOLD SHARES TO BE SOLD
------- -----------------
*In the event any Selling Stockholder (other than Xx. Xxxxxx) shall fail to sell
and deliver to the Underwriters any Optional Common Shares such Selling
Stockholder has agreed to sell on the Second Closing Date, the Underwriters may
elect to purchase such Optional Common Shares from Xx. Xxxxxx pursuant to
Section 17 of the Agreement.
B-3
SCHEDULE C
BENEFICIAL OWNERS REQUIRED TO DELIVER LOCK-UP AGREEMENTS
PURSUANT TO SECTION 5(K)
W. Xxxx Xxxxxx
Xxxx X. Xxxxxx III, MD
Xxxxxx X. Xxxx
Xxxx Xxxxx
Xxxxxxxx Xxxxx
Xxxxxx X. Xxxxx
Xxxxxxx X. Xxx, Xx.
Xxxx Xxxxxx
Xxxx X. Xxxxx
Xxx Xxxxxxxx
Xxxxx Xxxx
Xxxxx Xxxx
Xxxxxx X. Xxxx
Xxxxx/College Station, Ltd.
Xx. Xxxxxx X. XxXxxxxxx
Xxxxx/Corpus Christi, Ltd.
Xxx Xxxxxxx
Xxxxx/Live Oak, Ltd.
Xxxxx Xxxx
Xxxxx/Houston, Ltd.
Xxxxxxxx Xxxx
Xxxxxxx Xxxxx
Xxxxx Xxxxx
Xxxx Xxxxx
Xxxxx Xxxxx
Xxxx Xxxxx
Xxxx Read
Xxxxxxx Xxxxxx
Xxxx Xxxxxx XX
Xxxxxx Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx Xxxx
Xxxxxx Xxxxxxx
Xxxxx/Xxxxx, Ltd.
LD Holdings LLC
PNC Bank fbo Xxxxxxx Xxxxx Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Consolidated Roadhouse, LLC
Xxxxxx X. Xxxx
C-1
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxxx Xxxxx
Xxxxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxx Xxxxxxxx
Xxxxxxx Xxxx Xxxx
Xxxxxxx X. Xxxxxxxx XX
Xxxxx Xxxxxxxxxx
Xxxxx Xxxxxxxxx
Xxxxx X. Xxxxxx
Xxxxx Xxxxxxx
Xxxxx X. Xxxxxx
Xxxx X. Xxxx
Xxxxxx X. Xxxxx
Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxxx Xxxxx
X. Xxxxxxxx Xxxxxxxxx III
C-2
EXHIBIT A
THE FINAL OPINION IN DRAFT FORM SHOULD BE ATTACHED AS
EXHIBIT A AT THE TIME THIS AGREEMENT IS EXECUTED.
Opinion of counsel for the Company to be delivered pursuant to Section
5(d) of the
Underwriting Agreement.
References to the Prospectus in this Exhibit A include any supplements
thereto at the Closing Date.
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Underwriting
Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a Material Adverse Change.
(iv) Each significant subsidiary of the Company (as defined in Rule 405
under the Securities Act) has been duly incorporated or formed and is validly
existing as a corporation or company under the laws of the jurisdiction of its
incorporation or formation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and, to the best knowledge of such counsel, is duly qualified as a
foreign corporation or company to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing would
not, individually or in the aggregate, result in a Material Adverse Change.
(v) All of the issued and outstanding capital stock or equity interests
of each such significant subsidiary of the Company has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance (except for any security interest, mortgage,
pledge, lien or encumbrance securing the Company's obligations under the New
Credit Agreement) or, to the best knowledge of such counsel, any pending or
threatened claim.
(vi) The authorized, issued and outstanding capital stock of the
Company (including the Common Stock) conform to the descriptions thereof set
forth in the Prospectus. All of the outstanding shares of Common Stock
(including the shares of Common Stock owned by Selling Stockholders and the
shares of Common Stock issued in connection with the Reorganization) have been
duly authorized and validly issued, are fully paid and nonassessable and, to the
best of
EXH. A-1
such counsel's knowledge, have been issued in compliance with the registration
and qualification requirements of federal securities laws. The form of
certificate used to evidence the Common Stock is in due and proper form and
complies with all applicable requirements of the charter and by-laws of the
Company and the General Corporation Law of the State of Delaware. The
description of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised thereunder,
set forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights.
(vii) No stockholder of the Company or any other person has any
preemptive right, right of first refusal or other similar right to subscribe for
or purchase securities of the Company arising (i) by operation of the charter or
by-laws of the Company or the General Corporation Law of the State of Delaware
or (ii) to the best knowledge of such counsel, otherwise.
(viii) The
Underwriting Agreement has been duly authorized, executed
and delivered by the Company.
(ix) The Common Shares to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company pursuant to
the
Underwriting Agreement against payment of the consideration set forth
therein, will be validly issued, fully paid and nonassessable.
(x) Each of the Registration Statement and the Rule 462(b) Registration
Statement, if any, has been declared effective by the Commission under the
Securities Act. To the best knowledge of such counsel, no stop order suspending
the effectiveness of either of the Registration Statement or the Rule 462(b)
Registration Statement, if any, has been issued under the Securities Act and no
proceedings for such purpose have been instituted or are pending or are
contemplated or threatened by the Commission. Any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time period required
by such Rule 424(b).
(xi) The Registration Statement, including any Rule 462(b) Registration
Statement, the Prospectus, and each amendment or supplement to the Registration
Statement and the Prospectus, as of their respective effective or issue dates
(other than the financial statements and supporting schedules included therein
or in exhibits to or excluded from the Registration Statement, as to which no
opinion need be rendered) comply as to form in all material respects with the
applicable requirements of the Securities Act.
(xii) The Common Shares have been approved for listing on the Nasdaq
National Market.
(xiii) The statements (i) in the Prospectus under the captions
"Description of Capital Stock", "Summary--Background to the Offering",
"Business--Litigation", "Business--Intellectual Property", "Certain
Relationships and Related Transactions", "Shares Eligible for Future Sale",
"Material U.S. Federal Tax Considerations for Non-U.S. Holders of Our Class A
Common Stock" and "Underwriting" and (ii) in Item 14 and Item 15 of the
Registration Statement, insofar as such statements constitute matters of law,
summaries of legal matters, the
EXH. A-2
Company's charter or by-law provisions, documents or legal proceedings, or legal
conclusions, has been reviewed by such counsel and fairly present and summarize,
in all material respects, the matters referred to therein.
(xiv) To the best knowledge of such counsel, there are no legal or
governmental actions, suits or proceedings pending or threatened which are
required to be disclosed in the Registration Statement, other than those
disclosed therein.
(xv) To the best knowledge of such counsel, there are no Existing
Instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed as exhibits thereto; and the descriptions thereof
and references thereto are correct in all material respects.
(xvi) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the Company's execution, delivery and performance of the
Underwriting Agreement and consummation of the transactions contemplated thereby
and by the Prospectus, except as required under the Securities Act, applicable
state securities or blue sky laws and from the NASD.
(xvii) The execution and delivery of each of the Reorganization
Agreements by the Company and the performance by each TR Reorganization Party of
its obligations thereunder (i) have been duly authorized by all necessary entity
action on the part of the TR Reorganization Parties (ii) will not result in any
violation of the provisions of the charter, by-laws or formation documents of
the Company, TR Holdings or any of their subsidiaries; (iii) will not constitute
a breach of, or Default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company, TR
Holdings or any of their subsidiaries pursuant to, (A) the New Credit Agreement,
or (B) to the best knowledge of such counsel, any other material Existing
Instrument; or (iv) to the best knowledge of such counsel, will not result in
any violation of any law, administrative regulation or administrative or court
decree applicable to the Company, TR Holdings or any of their subsidiaries.
(xviii) The execution and delivery of the Underwriting Agreement by the
Company and the performance by the Company of its obligations thereunder (other
than performance by the Company of its obligations under the indemnification
section of the Underwriting Agreement, as to which no opinion need be rendered)
(i) have been duly authorized by all necessary corporate action on the part of
the Company (ii) will not result in any violation of the provisions of the
charter, by-laws or formation documents of the Company, TR Holdings or any of
their subsidiaries; (iii) will not constitute a breach of, or Default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company, TR Holdings or any of their subsidiaries
pursuant to, (A) the New Credit Agreement, or (B) to the best knowledge of such
counsel, any other material Existing Instrument; or (iv) to the best knowledge
of such counsel, will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company, TR
Holdings or any of their subsidiaries.
(xix) The Company is not, and after receipt of payment for the Common
Shares will not be, an "investment company" within the meaning of Investment
Company Act.
EXH. A-3
(xx) To the best knowledge of such counsel, there are no persons with
registration or other similar rights to have any equity or debt securities
registered for sale under the Registration Statement or included in the offering
contemplated by the Underwriting Agreement, other than the Selling Stockholders.
(xxi) To the best knowledge of such counsel, neither the Company nor
any subsidiary is in violation of its charter, by-laws or formation documents or
any law, administrative regulation or administrative or court decree applicable
to the Company or any subsidiary or is in Default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
material Existing Instrument, except in each such case for such violations or
Defaults as would not, individually or in the aggregate, result in a Material
Adverse Change.
(xxii) The Reorganization as described in the Underwriting Agreement
and the Prospectus has been completed in accordance with the terms of the
Reorganization Agreements and applicable state and federal law.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent certified public accountants for the Company
and with representatives of the Underwriters at which the contents of the
Registration Statement and the Prospectus, and any supplements or amendments
thereto, and related matters were discussed and, although such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (other than as specified above), and any supplements
or amendments thereto, on the basis of the foregoing, nothing has come to their
attention which would lead them to believe that either the Registration
Statement or any amendments thereto, at the time the Registration Statement or
such amendments became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectus,
as of its date or at the First Closing Date or the Second Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief as to the financial
statements or schedules or other financial or statistical data derived
therefrom, included in the Registration Statement or the Prospectus or any
amendments or supplements thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the General Corporation Law of the
Commonwealth of Kentucky or the federal law of the United States, to the extent
they deem proper and specified in such opinion, upon the opinion (which shall be
dated the First Closing Date or the Second Closing Date, as the case may be,
shall be satisfactory in form and substance to the Underwriters, shall expressly
state that the Underwriters may rely on such opinion as if it were addressed to
them and shall be furnished to the Representatives) of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters; PROVIDED, HOWEVER, that such counsel shall further state
that they believe that they and the Underwriters are justified in relying upon
such
EXH. A-4
opinion of other counsel, and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials.
EXH. A-5
EXHIBIT B
THE FINAL OPINION IN DRAFT FORM RELATING TO EACH OR ALL OF THE
SELLING STOCKHOLDER SHOULD BE ATTACHED AS EXHIBIT B AT THE TIME THIS
AGREEMENT IS EXECUTED.
The opinion of such counsel pursuant to Section 5(h) shall be rendered
to the Representatives at the request of the Company and shall so state therein.
References to the Prospectus in this Exhibit B include any supplements thereto
at the Closing Date.
(i) The Underwriting Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder.
(ii) The execution and delivery by the Selling Stockholder of, and the
performance by the Selling Stockholder of its obligations under, the
Underwriting Agreement and the Custody Agreement and its Power of Attorney will
not contravene or conflict with, result in a breach of, or constitute a default
under, the charter, by-laws, partnership agreement, trust agreement or other
organizational documents, as the case may be, of the Selling Stockholder.
(iii) The Selling Stockholder has good and valid title to all of the
Common Shares which may be sold by the Selling Stockholder under the
Underwriting Agreement and has the legal right and power, and all authorizations
and approvals required to enter into the Underwriting Agreement and the Custody
Agreement and its Power of Attorney, to sell, transfer and deliver all of the
Common Shares which may sold by the Selling Stockholder under the Underwriting
Agreement and to comply with its other obligations under the Underwriting
Agreement, the Custody Agreement and its Power of Attorney.
(iv) Each of the Custody Agreement and the Power of Attorney of the
Selling Stockholder has been duly authorized, executed and delivered by the
Selling Stockholder and is a valid and binding agreement of the Selling
Stockholder, enforceable in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles.
(v) Assuming that (i) the certificate or certificates representing the
Common Shares to be sold by the Selling Stockholder pursuant to the Underwriting
Agreement have been effectively indorsed in blank in accordance with Kentucky
UCC Article 8 and (ii) neither the Underwriters, nor the agents acquiring
possession of such Common Shares on their behalf, have notice of any adverse
claim to such Common Shares, then, upon the Underwriters' acquiring possession
of such certificate or certificates for such Common Shares (or the agent's
acquiring possession of such certificate or certificates for such Common Shares
on the Underwriters' behalf) and paying the purchase price therefore pursuant to
the Underwriting Agreement, each Underwriter will be a "protected purchaser" of
such Common Shares to be purchased by it (within the meaning of Section 8-303 of
the Kentucky UCC) and will acquire its interest in such Common Shares
(including, without limitation, all rights that the Selling Stockholder had or
has the power to
EXH. B-1
transfer in such Common Shares) with good and valid title and free and clear of
any security interest, mortgage, pledge, lieu encumbrance or any adverse or
other claim.(2)
(vi) To the best of such counsel's knowledge, no consent, approval,
authorization or other order of, or registration or filing with, any court or
governmental authority or agency, is required for the consummation by the
Selling Stockholder of the transactions contemplated in the Underwriting
Agreement, except as required under the Securities Act, applicable state
securities or blue sky laws, and from the NASD.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the General Corporation Law of the
Commonwealth of Kentucky or the federal law of the United States, to the extent
they deem proper and specified in such opinion, upon the opinion (which shall be
dated the First Closing Date or the Second Closing Date, as the case may be,
shall be satisfactory in form and substance to the Underwriters, shall expressly
state that the Underwriters may rely on such opinion as if it were addressed to
them and shall be furnished to the Representatives) of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters; PROVIDED, HOWEVER, that such counsel shall further state
that they believe that they and the Underwriters are justified in relying upon
such opinion of other counsel, and (B) as to matters of fact, to the extent they
deem proper, on certificates of the Selling Stockholders (or any of them) and
public officials.
----------
(2) May require separate counsel opinion depending on location of
Custodian.
EXH. B-2
EXHIBIT C
LOCK-UP LETTER AGREEMENT
Banc of America Securities LLC
Wachovia Capital Markets, LLC
RBC Capital Markets Corporation
XX Xxxxx & Co., LLC
As Representatives of the several Underwriters
c/o Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX ,00000
RE:
TEXAS ROADHOUSE, INC. (THE "COMPANY")
Ladies and Gentlemen:
The undersigned (the "UNDERSIGNED") understands that the
Company proposes to carry out a public offering (the "OFFERING") of shares of
Class A Common Stock (the "COMMON STOCK") for which you will act as the
representatives of the underwriters of the Offering. Prior to the Offering, the
Company will undertake a corporate reorganization (the "REORGANIZATION")
pursuant to which certain Texas Roadhouse entities (the "EXISTING TEXAS
ROADHOUSE ENTITIES") will be merged into subsidiaries of the Company. The
Undersigned is the owner of record or beneficially of certain equity interests,
or options to acquire such equity interests, in one or more of the Existing
Texas Roadhouse Entities (the "EXISTING TR EQUITY INTERESTS"). Upon completion
of the Reorganization, the Undersigned will receive, and will become the record
or beneficial owner of, shares of Common Stock or options to acquire Common
Stock in exchange for the Existing TR Equity Interests.
The Undersigned recognizes that the Offering will be of
benefit to the Undersigned and will benefit the Company. The Undersigned
acknowledges that you and the other underwriters are relying on the
representations and agreements of the Undersigned contained in this Lock-Up
Letter Agreement in carrying out the Offering and in entering into underwriting
arrangement with the Company with respect to the Offering.
In consideration of the foregoing, the Undersigned hereby
agrees that the Undersigned will not, (and will cause any spouse or immediate
family member of the spouse or the Undersigned living in the Undersigned's
household not to), without the prior written consent of Banc of America
Securities LLC and Wachovia Capital Markets, LLC, as the lead representatives of
the underwriters (which consent may be withheld in their sole discretion),
directly or indirectly, sell, offer, contract or grant any option to sell
(including without limitation any short sale), pledge, transfer, establish an
open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Securities Exchange Act of 1934, as amended, or otherwise dispose of, its
Existing TR Equity Interests (other than in connection with the Reorganization)
or any shares of Common Stock or options to acquire shares of Common Stock or
securities exchangeable or exercisable for or convertible into shares of Common
Stock, currently or
EXH. C-1
hereafter owned either of record or beneficially (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended) by the Undersigned (or such
spouse or family member), or publicly announce an intention to do any of the
foregoing, for a period commencing on the date hereof and continuing through the
close of trading on the date 180 days after the date of the Prospectus. In
addition, if (i) the Company issues an earnings release or material news, or a
material event relating to the Company occurs, during the last 17 days of the
lock-up period, or (ii) prior to the expiration of the lock-up period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the lock-up period, the restrictions imposed by
this Lock-Up Letter Agreement shall continue to apply until the expiration of
the 18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event. The Undersigned understands
that the Company or the underwriters will notify the Undersigned of any such
extension of the lock-up period.
The foregoing paragraph shall not apply to (i) any shares of
Common Stock to be sold in the Offering, (ii) any shares of Common Stock or
other securities acquired in open market transactions after completion of the
Offering, (iii) bona fide gifts, (iv) the exercise of any options to acquire
shares of Common Stock, but not the sale or other transfer of the shares of
Common Stock issued in connection with such exercise, (v) sales or other
dispositions of shares of Common Stock or other securities, in each case, that
are made for estate planning purposes exclusively and are between or among the
Undersigned, members of the Undersigned's immediate family or affiliates (as
defined in Rule 144(a)(i) of the Securities Act of 1933, as amended) of the
Undersigned (including family trusts, family corporations, family limited
liability companies or family partnerships); PROVIDED, HOWEVER, that it shall be
a condition to any transfer made pursuant to clause (iii), (iv) or (v) that the
transferee executes and delivers to Banc of America Securities LLC an agreement
stating that the transferee is receiving and holding the Common Stock or other
securities subject to the provisions of this Lock-Up Letter Agreement, and there
shall be no further transfer of such Common Stock or other securities except in
accordance with this Lock-Up Letter Agreement.
The Undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the Undersigned except in
compliance with the foregoing restrictions.
With respect to the Offering only, the Undersigned waives any
registration rights relating to registration under the Securities Act of any
Common Stock to be owned either of record or beneficially by the Undersigned,
including any rights to receive notice of the Offering.
It is understood that, if the Company notifies you that it
does not intend to proceed with the Offering, or if the underwriting agreement
between the Company and you (the "UNDERWRITING AGREEMENT") does not become
effective or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the shares of Common Stock, or if the completion of the Offering
shall not have occurred prior to December 31, 2004, the Undersigned will be
released from its obligations under this Lock-Up Letter Agreement.
EXH. C-2
This Lock-Up Letter Agreement terminates and supercedes any
prior agreements between the Undersigned and any Existing Texas Roadhouse Entity
that would otherwise restrict the disposition of the shares of Common Stock
after the date of the final prospectus relating to the Offering.
The Undersigned hereby represents and warrants that the
Undersigned has full power and authority to enter into this Lock-Up Letter
Agreement and that, upon request, the Undersigned will execute any additional
documents necessary in connection with the enforcement hereof. This Lock-Up
Letter Agreement is irrevocable and will be binding on the Undersigned and the
respective successors, heirs, personal representatives, and assigns of the
Undersigned.
----------------------------------------
Printed Name of Holder
----------------------------------------
Signature
(and indicate capacity of person signing
if signing as custodian, trustee, or on
behalf of an entity)
EXH. C-3
