EXHIBIT 1.1
Draft of January 31, 2001
3,400,000 Shares
California Pizza Kitchen, Inc.
Common Stock
Underwriting Agreement
dated February __, 2001
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................................ 3
A. Representations and Warranties of the Company......................................................... 3
(a) Compliance with Registration Requirements.................................................... 3
(b) Offering Materials Furnished to Underwriters................................................. 3
(c) Distribution of Offering Material By the Company............................................. 3
(d) The Underwriting Agreement................................................................... 4
(e) Authorization of the Common Shares........................................................... 4
(f) No Applicable Registration or Other Similar Rights........................................... 4
(g) No Material Adverse Change................................................................... 4
(h) Independent Accountants...................................................................... 4
(i) Preparation of the Financial Statements...................................................... 4
(j) Incorporation and Good Standing of the Company and its Subsidiaries.......................... 5
(k) Capitalization and Other Capital Stock Matters............................................... 5
(l) Stock Exchange Listing....................................................................... 5
(m) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required... 6
(n) No Material Actions or Proceedings........................................................... 6
(o) Intellectual Property Rights................................................................. 6
(p) All Necessary Permits, etc................................................................... 7
(q) Title to Properties.......................................................................... 7
(r) Tax Law Compliance........................................................................... 7
(s) Company Not an "Investment Company".......................................................... 7
(t) Insurance.................................................................................... 7
(u) No Price Stabilization or Manipulation....................................................... 8
(v) Related Party Transactions................................................................... 8
(w) No Unlawful Contributions or Other Payments.................................................. 8
(x) Company's Accounting System.................................................................. 8
(y) Compliance with Environmental Laws........................................................... 8
(z) ERISA Compliance............................................................................. 9
B. Representations and Warranties of the Selling Shareholders............................................ 9
(a) The Underwriting Agreement................................................................... 9
(b) The Custody Agreement and Power of Attorney.................................................. 10
(c) Title to Common Shares to be Sold; All Authorizations Obtained............................... 10
(d) Delivery of the Common Shares to be Sold..................................................... 10
(e) Non-Contravention; No Further Authorizations or Approvals Required........................... 10
(f) No Registration or Other Similar Rights...................................................... 10
(g) No Further Consents, etc..................................................................... 11
(h) Disclosure Made by Such Selling Shareholder in the Prospectus................................ 11
(i) No Price Stabilization or Manipulation....................................................... 11
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES......................................................... 11
SECTION 3. ADDITIONAL COVENANTS..................................................................................... 14
A. Covenants of the Company..................................................................... 14
(a) Representatives' Review of Proposed Amendments and Supplements............................... 14
(b) Securities Act Compliance.................................................................... 14
(c) Amendments and Supplements to the Prospectus and Other Securities Act Matters................ 14
(d) Copies of any Amendments and Supplements to the Prospectus................................... 15
(e) Blue Sky Compliance.......................................................................... 15
(f) Use of Proceeds.............................................................................. 15
(g) Transfer Agent............................................................................... 15
(h) Earnings Statement........................................................................... 15
(i) Periodic Reporting Obligations............................................................... 15
(j) Agreement Not To Offer or Sell Additional Securities......................................... 15
(k) Future Reports to the Representatives........................................................ 16
B. Covenants of the Selling Shareholders........................................................ 16
(a) Agreement Not to Offer or Sell Additional Securities......................................... 16
(b) Delivery of Forms W-8 and W-9................................................................ 16
SECTION 4. PAYMENT OF EXPENSES...................................................................................... 16
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS........................................................ 17
(a) Accountants' Comfort Letter.................................................................. 17
(b) Compliance with Registration Requirements; No Stop Order; No Objection from NASD............. 18
(c) No Material Adverse Change or Ratings Agency Change.......................................... 18
(d) Opinion of Counsel for the Company........................................................... 18
(e) Opinion of Counsel for the Underwriters...................................................... 18
(f) Officers' Certificate........................................................................ 18
(g) Bring-down Comfort Letter.................................................................... 19
(h) Opinion of Counsel for the Selling Shareholders.............................................. 19
(i) Selling Shareholders' Certificate............................................................ 19
(j) Selling Shareholders' Documents.............................................................. 20
(k) Lock-Up Agreement from Certain Securityholders of the Company Other Than Selling Shareholders 20
(l) Additional Documents......................................................................... 20
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES.................................................................. 20
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.......................................................................... 20
SECTION 8. INDEMNIFICATION.......................................................................................... 21
(a) Indemnification of the Underwriters.......................................................... 21
(b) Indemnification of the Company, its Directors and Officers and the Selling Shareholders...... 22
(c) Notifications and Other Indemnification Procedures........................................... 23
(d) Settlements.................................................................................. 24
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SECTION 9. CONTRIBUTION............................................................................................ 24
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS...................................................... 25
SECTION 11. TERMINATION OF THIS AGREEMENT........................................................................... 26
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY..................................................... 26
SECTION 13. NOTICES................................................................................................. 26
SECTION 14. SUCCESSORS.............................................................................................. 27
SECTION 15. PARTIAL UNENFORCEABILITY................................................................................ 27
SECTION 16. GOVERNING LAW PROVISIONS................................................................................ 28
SECTION 17. FAILURE OF ONE OR MORE OF THE SELLING STOCKHOLDERS TO SELL AND DELIVER COMMON SHARES.................... 32
SECTION 18. GENERAL PROVISIONS...................................................................................... 28
SCHEDULES
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Schedule A Schedule of Underwriters
Schedule B Schedule of Selling Shareholders
Schedule C-D Schedule of Certain Selling Shareholders
Subject to Powers of Attorney
EXHIBITS
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Exhibit A Form of Opinion of Counsel for the Company
Exhibit B Form of Opinion of Counsel for the Underwriters
Exhibits C1-C4 Forms of Opinion of Counsel to Selling Shareholders
Exhibit D Form of Lock-Up Agreement
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Underwriting Agreement
February __, 0000
XXXX XX XXXXXXX SECURITIES LLC
DEUTSCHE BANC ALEX.XXXXX INC.
XXXXXXXXX XXXXXXXX, INC.
U.S. BANCORP XXXXX XXXXXXX INC.
As Representatives of the several Underwriters
c/o BANC OF AMERICA SECURITIES LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Introductory. California Pizza Kitchen, Inc., a California corporation
(the "Company), proposes to issue and sell to the several underwriters named in
Schedule A (the "Underwriters") an aggregate of 200,000 shares of its Common
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Stock, par value $0.01 per share (the "Common Stock"); and the shareholders of
the Company named in Schedule B (collectively, the "Selling Shareholders")
----------
severally propose to sell to the Underwriters an aggregate of 3,200,000 shares
of Common Stock. The 200,000 shares of Common Stock to be sold by the Company
and the 3,200,000 shares of Common Stock to be sold by the Selling Shareholders
are collectively called the "Firm Common Shares." In addition, certain of the
Selling Shareholders have severally granted to the Underwriters an option to
purchase up to an additional 510,000 shares (the "Optional Common Shares") of
Common Stock, as provided in Section 2, each Selling Shareholder selling up to
the amount set forth opposite such Selling Shareholder's name in Schedule B.
----------
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"), Deutsche Banc Alex.Xxxxx Inc., Xxxxxxxxx
Xxxxxxxx, Inc. and U.S. Bancorp Xxxxx Xxxxxxx Inc. have agreed to act as
representatives of the several Underwriters (in such capacity, the
"Representatives") in connection with the offering and sale of the Common
Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (File No.
333-53088), 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 was 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 January 12, 2001 (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 each of the Selling Shareholders hereby confirm their
respective agreements with the Underwriters as follows:
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Section 1. Representations and Warranties of the Company.
A. Representations and Warranties of the Company. The Company hereby
represents, warrants and covenants to each Underwriter as follows:
(a) Compliance with Registration Requirements. The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has
complied to the Commission's satisfaction with all requests of the
Commission for additional or supplemental information. No stop order
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,
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.
(b) Offering Materials Furnished to Underwriters. The Company has
delivered to the Representatives four complete manually signed copies 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 By the Company. The Company
has 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.
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(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 pursuant to this Agreement, will be validly
issued, fully paid and nonassessable.
(f) No Applicable Registration or Other Similar Rights. 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, other than
the Selling Shareholders with respect to the Common Shares included in
the Registration Statement, except for such rights as have been duly
waived.
(g) 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 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 its subsidiaries, considered as one entity
(any such change is called a "Material Adverse Change"); (ii) the
Company and its subsidiaries, 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, except for dividends paid
to the Company or other subsidiaries, any of its subsidiaries on any
class of capital stock or repurchase or redemption by the Company or any
of its subsidiaries of any class of capital stock.
(h) Independent Accountants. Ernst & Young, LLP, independent
auditors, who have expressed their opinion with respect to the financial
statements (which term as used in this Agreement includes the related
notes thereto) filed with the Commission as a part of the Registration
Statement and included in the Prospectus, are independent public or
certified public accountants as required by the Securities Act and the
Exchange Act.
(i) 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 consolidated
financial position of the Company and its subsidiaries 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 as applied in
the United States 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 financial
data set forth in the Prospectus under the captions "Prospectus
Summary--Summary Consolidated Financial and Operating Data", "Selected
Consolidated Financial and Operating Data" and "Capitalization" fairly
present the information set forth therein on a basis consistent
4
with that of the audited financial statements contained in the
Registration Statement. The pro forma consolidated financial statements
of the Company and its subsidiaries and the related notes thereto
included under the caption "Prospectus Summary--Summary Consolidated
Financial and Operating Data", "Selected Consolidated Financial and
Operating Data" and elsewhere in the Prospectus and in the Registration
Statement 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.
(j) Incorporation and Good Standing of the Company and its
Subsidiaries. Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has
corporate 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 each subsidiary is duly
qualified as a foreign corporation 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 (other than the
State of California) 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. All of the issued and outstanding capital stock
of each subsidiary has been duly authorized and validly issued, is fully
paid and nonassessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or claim. The Company does not own or control,
directly or indirectly, any corporation, association or other entity
other than the subsidiaries listed in Exhibit 21.1 to the Registration
Statement.
(k) 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, pursuant to employee benefit
plans described in the Prospectus or 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. All of the issued and outstanding
shares of Common Stock (including the shares of Common Stock owned by
Selling Shareholders) have been duly authorized and validly issued, are
fully paid and nonassessable and have been issued in compliance with
federal and state securities laws. None of the outstanding shares of
Common Stock were 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 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 option, stock bonus
and other stock plans or arrangements, and the options or other rights
granted 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.
(l) Stock Exchange Listing. The Common Stock (including the Common
Shares) is registered pursuant to Section 12(g) of the Securities
Exchange Act of 1934 (the "Exchange
5
Act") and is listed on the Nasdaq National Market, and the Company has
taken no action designed to terminate, or likely to have the effect of,
terminating, the registration of the Common Stock under the Exchange Act
or delisting the Common Stock from the Nasdaq National Market, nor has
the Company received any notification that the Commission or the
National Association of Securities Dealers, LLC (the "NASD") is
contemplating terminating such registration or listing.
(m) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws 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 the
Company or any of its subsidiaries is a party or by which it or any of
them may be bound (including, without limitation, the Company's credit
facility with Bank of America, N.A., as lender), or to which any of the
property or assets of the Company or any of its subsidiaries is subject
(each, an "Existing Instrument"), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse Change.
The Company's execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby and by 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 or by-laws of the Company or any subsidiary, (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 of its subsidiaries pursuant
to, or require the consent of any other party to, any Existing
Instrument, except for such conflicts, breaches, Defaults, liens,
charges or encumbrances (A) as would not, individually or in the
aggregate, result in a Material Adverse Change or (B) for which valid
consents or waivers have been obtained by the Company and (iii) will not
result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any
subsidiary. 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 the Company's execution,
delivery and performance of this Agreement and consummation of the
transactions contemplated hereby and by the Prospectus, except 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 National Association of Securities Dealers, Inc. (the
"NASD").
(n) No Material Actions or Proceedings. Except as set forth in the
Prospectus, there are no legal or governmental actions, suits or
proceedings pending or, to the best of the Company's knowledge,
threatened (i) against or affecting the Company or any of its
subsidiaries, (ii) which has as the subject thereof any officer or
director of, or property owned or leased by, the Company or any of its
subsidiaries 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 such subsidiary 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 of its subsidiaries
exists or, to the best of the Company's knowledge, is threatened or
imminent.
(o) Intellectual Property Rights. The Company and its subsidiaries
own or possess sufficient trademarks, trade names, patent rights,
copyrights, licenses, approvals, trade secrets and other similar rights
(collectively, "Intellectual Property Rights") reasonably necessary to
6
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. Neither the Company nor any of its subsidiaries
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.
(p) All Necessary Permits, etc. The Company and each subsidiary
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 neither
the Company nor any subsidiary 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,
would result in a Material Adverse Change.
(q) Title to Properties. The Company and each of its subsidiaries
has good and marketable title to all the properties and assets reflected
as owned in the financial statements referred to in Section 1(A)(i)
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 of such property and do not materially interfere with the use
made or proposed to be made of such property by the Company or such
subsidiary. The real property, improvements, equipment and personal
property held under lease by the Company or any subsidiary 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 the Company or such subsidiary.
(r) Tax Law Compliance. The Company and its subsidiaries have
filed all necessary federal, state and foreign income and franchise tax
returns 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. The Company has made adequate charges,
accruals and reserves in the applicable financial statements referred to
in Section 1 (A)(i) above in respect of all federal, state and foreign
income and franchise taxes for all periods as to which the tax liability
of the Company or any of its subsidiaries has not been finally
determined.
(s) 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 will not be, an
"investment company" within the meaning of the Investment Company Act
and will conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(t) Insurance. Each of the Company and its subsidiaries 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 its subsidiaries
against theft, damage, destruction, acts of vandalism and earthquakes.
The Company has no reason to believe that it or any subsidiary 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
7
business as now conducted and at a cost that would not result in a
Material Adverse Change. Neither of the Company nor any subsidiary has
been denied any insurance coverage which it has sought or for which it
has applied.
(u) No Price Stabilization or Manipulation. The Company 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 any security of the Company to
facilitate the sale or resale of the Common Shares.
(v) Related Party Transactions. There are no business relationships
or related-party transactions involving the Company or any subsidiary or
any other person required to be described in the Prospectus which have
not been described as required.
(w) No Unlawful Contributions or Other Payments. Neither the Company
nor any of its subsidiaries nor, to the best of the Company's knowledge,
any employee or agent of the Company or any subsidiary, has made any
contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law or of the
character required to be disclosed in the Prospectus.
(x) Company's Accounting System. The Company maintains 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 as applied in the United States 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.
(y) Compliance with Environmental Laws. Except as would not,
individually or in the aggregate, result in a Material Adverse Change
(i) neither the Company nor any of its subsidiaries 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 the business
of the Company or its subsidiaries under applicable Environmental Laws,
or noncompliance with the terms and conditions thereof, nor has the
Company or any of its subsidiaries received any written communication,
whether from a governmental authority, citizens group, employee or
otherwise, that alleges that the Company or any of its subsidiaries 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 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
8
the environment, of any Material of Environmental Concern at any
location owned, leased or operated by the Company or any of its
subsidiaries, now or in the past (collectively, "Environmental Claims"),
pending or, to the best of the Company's knowledge, threatened against
the Company or any of its subsidiaries or any person or entity whose
liability for any Environmental Claim the Company or any of its
subsidiaries 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 of its subsidiaries or against any
person or entity whose liability for any Environmental Claim the Company
or any of its subsidiaries has retained or assumed either contractually
or by operation of law.
(z) ERISA Compliance. The Company and its subsidiaries 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, its subsidiaries or their "ERISA Affiliates"
(as defined below) are in compliance in all material respects with
ERISA. "ERISA Affiliate" means, with respect to the Company or a
subsidiary, 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 such subsidiary 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, its subsidiaries or any of
their ERISA Affiliates. No "employee benefit plan" established or
maintained by the Company, its subsidiaries 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).
Neither the Company, its subsidiaries nor 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, its subsidiaries 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.
Any certificate signed by an officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
B. Representations and Warranties of the Selling Shareholders. Each
Selling Shareholder, severally and not jointly, represents, warrants and
covenants to each Underwriter as follows:
(a) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling
Shareholder and is a valid and binding agreement of such Selling
Shareholder, 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.
9
(b) The Custody Agreement and Power of Attorney. Each of the (i)
Custody Agreement signed by or on behalf of such Selling Shareholder and
American Stock Transfer & Trust Company, as custodian (the "Custodian"),
relating to the deposit of the Common Shares to be sold by such Selling
Shareholder (the "Custody Agreement") and (ii) Power of Attorney signed
by such Selling Shareholder, if any, appointing certain individuals named
therein as such Selling Shareholder'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 (the "Power of
Attorney"), of such Selling Shareholder has been duly authorized (if such
Selling Shareholder is not an individual), executed and delivered by such
Selling Shareholder and is a valid and binding agreement of such Selling
Shareholder, 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.
Such Selling Shareholder has, and on the First Closing Date and the
Second Closing Date, if applicable, (as defined below) will have, good
and valid title to all of the Common Shares which may be sold by such
Selling Shareholder pursuant to this Agreement on such date and the legal
right and power, and all authorizations and approvals required by law
and, if applicable, under its charter or by-laws, partnership agreement,
trust agreement or other organizational documents to enter into this
Agreement and its Custody Agreement and Power of Attorney, to sell,
transfer and deliver all of the Common Shares which may be sold by such
Selling Shareholder pursuant to this Agreement and to comply with its
other obligations hereunder and thereunder.
(d) Delivery of the Common Shares to be Sold. Upon payment therefor,
delivery of the Common Shares which are sold by such Selling Shareholder
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.
(e) Non-Contravention; No Further Authorizations or Approvals
Required. The execution and delivery by such Selling Shareholder of, and
the performance by such Selling Shareholder of its obligations under,
this Agreement, the Custody Agreement and, if applicable, the 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,
the charter or by-laws, partnership agreement, trust agreement or other
organizational documents of such Selling Shareholder, if applicable, or
any other agreement or instrument to which such Selling Shareholder 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 Shareholder of any court,
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over such Selling Shareholder. 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 Shareholder 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.
(f) No Registration or Other Similar Rights. Such Selling
Shareholder does not have any registration or other similar rights to
have any equity or debt securities registered for
10
sale by the Company under the Registration Statement or included in the
offering contemplated by this Agreement, except for such rights as are
described in the Prospectus under "Shares Eligible for Future Sale".
(g) No Further Consents, etc. Except for the (i) exercise by such
Selling Shareholder of certain registration rights pursuant to the
Registration Rights Agreement for Common Stock, dated as of September 30,
1997 (which registration rights have been duly exercised pursuant
thereto), (ii) consent of such Selling Shareholder to the respective
number of Common Shares to be sold by all of the Selling Shareholders
pursuant to this Agreement and (iii) waiver by certain other holders of
Common Stock of certain registration rights pursuant to such Registration
Rights Agreement, no consent, approval or waiver is required under any
instrument or agreement to which such Selling Shareholder 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 Shareholder under this Agreement or the consummation by such
Selling Shareholder of any of the other transactions contemplated hereby.
(h) Disclosure Made by Such Selling Shareholder in the Prospectus.
All information provided by and about such Selling Shareholder or on its
behalf by its attorney-in-fact or legal counsel for inclusion in the
Registration Statement and Prospectus in the Sections entitled "Principal
and Selling Shareholders," "Certain Relationships and Related
Transactions" and "Management" (the "Selling Shareholder Information")
is, and on the First Closing Date and the Second Closing Date will be,
true, correct, and complete in all material respects, and does not, and
on the First Closing Date and the Second 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
Shareholder confirms as accurate (prior to giving effect to the sale of
the Common Shares) the number of shares of Common Stock set forth
opposite such Selling Shareholder's name in the Prospectus under the
caption "Principal and Selling Shareholders" or with respect to such
Selling Shareholder as described in the footnotes to the table under such
caption.
(i) No Price Stabilization or Manipulation. Such Selling Shareholder
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 to
facilitate the sale or resale of the Common Shares other than as
contemplated by this Agreement.
Any certificate delivered pursuant to (S) 5(i) of this Agreement and
signed by or on behalf of any Selling Shareholder and delivered to the
Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by such Selling Shareholder to each Underwriter as
to the matters covered thereby.
Section 2. Purchase, Sale and Delivery of the Common Shares.
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 200,000
Firm Common Shares and (ii) the Selling Shareholders agree to sell to the
several Underwriters an aggregate of 3,200,000 Firm Common Shares, each Selling
Shareholder selling the number of Firm Common Shares set forth opposite such
Selling Shareholder's name on Schedule B. On the basis of the representations,
----------
warranties and agreements
11
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 Selling Shareholders 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 Selling
Shareholders shall be $[___] per share.
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 BAS, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or such
other place as may be agreed to by the Company and the Representatives) at 6:00
a.m. San Francisco time, on February __, 2001, or such other time and date not
later than 10:30 a.m. San Francisco time, on February 15, 2001 as the
Representatives shall designate by notice to the Company (the time and date of
such closing are called the "First Closing Date"). The Company and the Selling
Shareholders 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 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.
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 Selling
Shareholders, as set forth on Schedule B, hereby grant an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of
510,000 Optional Common Shares from the Selling Shareholders 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 Representatives to the attorneys-in-fact for the
Selling Shareholders (with a copy to the Company) and the Custodian, 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 by the Custodian (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 shall be determined by the Representatives 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 Representatives 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 Selling Shareholder
agrees, severally and not jointly, to sell the number of Optional Common Shares
(subject to such adjustments to eliminate fractional shares as the
Representatives 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 such Selling Shareholder
----------
bears to the total number of Optional Common Shares. The Representatives may
cancel the option at any time prior to its expiration by giving written notice
of such cancellation to the Selling Shareholders (with a copy to the Company).
12
Public Offering of the Common Shares. The Representatives hereby advise
the Company and the Selling Shareholders 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.
Payment for the Common Shares. Payment for the Common Shares to be sold by
the Company 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 Selling Shareholders shall be made at the First Closing
Date (and, if applicable, at the Second Closing Date) by wire transfer of
immediately available funds to the order of (i) Bruckmann, Xxxxxx, Xxxxxxxx &
Co., L.P. ("BRS"), on behalf of BRS and Selling Shareholders numbered 2-14 on
Schedule B; (ii) Xxxxxx Xxxx SBIC L.P.; (iii) Xxxxx X. Xxxx (iv) Xxxxxxx X.
----------
Xxxxxxxxxx and the Xxxxxxxxxx Children's Trust; and (v) the Custodian, on behalf
of all other Selling Shareholders.
It is understood that the Representatives have been authorized, for their
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 Representatives 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 Representatives 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 Shareholder 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 Shareholder to
the several Underwriters, or otherwise in connection with the performance of
such Selling Shareholder's obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to such
Selling Shareholder hereunder and to hold such amounts for the account of such
Selling Shareholder with the Custodian under the Custody Agreement.
Delivery of the Common Shares. The Company and the Selling Shareholders
shall deliver, or cause to be delivered, to the Representatives 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 Selling Shareholders shall also deliver, or cause to be
delivered, to the Representatives for the accounts of the several Underwriters,
certificates for the Optional Common Shares the Underwriters have agreed to
purchase from them at the First Closing Date or the Second Closing Date, as the
case may be, 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 Representatives 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 Representatives 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.
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
13
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 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 objects.
(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 Statement or any post-effective amendment thereto or of any
order preventing or suspending the use of any preliminary prospectus or the
Prospectus, or 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.
14
(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 or Canadian provincial Securities
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.
(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 at least the
twelve-month period ending April 1, 2002 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) Agreement Not To Offer or Sell Additional Securities. During the
period of 90 days following the date of the Prospectus, the Company will
not, without the prior written consent of BAS (which consent may be
withheld at the sole discretion of BAS), 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); 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
15
to any stock option, stock bonus or other stock plan or arrangement
described in the Prospectus, but only if the holders of such shares,
options, or shares issued upon exercise of such options, agree in writing
not to sell, offer, dispose of or otherwise transfer any such shares or
options during such 90 day period without the prior written consent of BAS
(which consent may be withheld at the sole discretion of BAS).
(k) Future Reports to the Representatives. During the period of five
years hereafter the Company will furnish to the Representatives c/o Banc of
America Securities at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000
Attention:Xxxxxxx X. Xxxxx: (i) as soon as practicable after the end of
each fiscal year, copies of the Annual Report of the Company containing the
balance sheet of the Company as of the close of such fiscal year and
statements of income, shareholders' 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, 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.
B. Covenants of the Selling Shareholders. Each Selling Shareholder further
covenants and agrees with each Underwriter:
(a) Agreement Not to Offer or Sell Additional Securities. Such Selling
Shareholder will not, without the prior written consent of BAS (which
consent may be withheld in its 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 Exchange
Act, or otherwise dispose of any shares of Common Stock, options or
warrants to acquire shares of Common Stock, or securities exchangeable or
exercisable for or convertible into shares of Common Stock currently or
hereafter owned either of record or beneficially (as defined in Rule 13d-3
under Securities Exchange Act of 1934, as amended) by the undersigned, or
publicly announce the undersigned's 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 90 days after the date of the final Prospectus,
except for sales permitted by BAS or otherwise permitted under the lockup
executed by such Selling Shareholder.
(b) Delivery of Forms W-8 and W-9. To deliver to the Representatives
prior to the First Closing Date a properly completed and executed United
States Treasury Department Form W-8 (if the Selling Shareholder is a non-
United States person) or Form W-9 (if the Selling Shareholder is a United
States Person).
BAS, on behalf of the several Underwriters, may, in its sole discretion,
waive in writing the performance by the Company or any Selling Shareholder
of any one or more of the foregoing covenants or extend the time for their
performance.
Section 4. Payment of Expenses. The Company agrees to pay all costs, fees
and expenses incurred in connection with the performance of its 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
16
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
public or certified public accountants and other advisors, (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 or the provincial securities laws of Canada, 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 Shares on the Nasdaq National Market, and
(ix) all other fees, costs and expenses referred to in Item 13 of Part II of the
Registration Statement. 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.
The Company further agrees with each Underwriter that it will be responsible
for paying (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 fees and expenses
of the Custodian, and the Company and the Selling Shareholders acknowledge that
the Underwriters shall have no responsibility to pay any expenses or taxes
incident to the sale and delivery of the Common Shares to be sold by such
Selling Shareholders to the Underwriters hereunder (which taxes, if any, may be
deducted by the Custodian under the provisions of Section 2 of this Agreement).
The Selling Shareholders will be responsible for the Underwriters' discounts and
commissions in respect of the Common Shares sold by the Selling Shareholders.
Section 5. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the 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 Shareholders 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 Shareholders
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 Ernst & Young LLP, independent
public or 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 three conformed copies of such accountants'
letter for each of the several Underwriters).
17
(b) Compliance with Registration Requirements; No Stop Order; No
Objection from NASD. 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:
(i) 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);
(ii) 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
(iii) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(c) No Material Adverse 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, in the judgment of the
Representatives, there shall not have occurred any Material Adverse Change:
(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 Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, counsel for
the Company, dated as of such Closing Date, the form of which is attached
as Exhibit A (and the Representatives shall have received an additional
---------
three conformed copies of 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 Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
(a partnership including professional corporations), counsel for the
Underwriters, dated as of such Closing Date, the form of which is attached
as Exhibit B (and the Representatives shall have received an additional
---------
three conformed copies of such counsel's legal opinion for each of the
several Underwriters).
(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 a 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) 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;
18
(ii) the representations, warranties and covenants of the Company
set forth in Section 1(A) 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 Ernst &
Young LLP, independent public or 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 have received an additional three conformed copies of
such accountants' letter for each of the several Underwriters).
(h) Opinion of Counsel for the Selling Shareholders. On each of the
First Closing Date and, if applicable, the Second Closing Date the
Representatives shall have received the favorable opinion of:
(i) Dechert, counsel for Selling Shareholders numbered 1-15 on
Schedule B, dated as of such Closing Date, the form of which is attached
----------
as Exhibit C1 (and the Representatives shall have received an additional
----------
three conformed copies of each such counsel's legal opinion for each of
the several underwriters); and
(ii) XxXxxxxxx, Will & Xxxxx and BancBoston Investments, Inc.,
counsel for Selling Shareholder number 16 on the attached Schedule B,
----------
dated as of such Closing Date, the form of which is attached as Exhibit
-------
C2 (and the Representatives shall have received an additional three
--
conformed copies of each such counsel's legal opinion for each of the
several underwriters); and
(iii) Xxxxxxxx Xxxxxx Xxxxxxxxxx & Xxxxxxxxx, LLP, counsel for the
Selling Shareholders numbered 17-18 on Schedule B, dated as of such
----------
Closing Date, the form of which is attached as Exhibit C3 (and the
----------
Representatives shall have received an additional three conformed copies
of each such counsel's legal opinion for each of the several
underwriters); and
(iv) Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, counsel for all other
Selling Shareholders, dated as of such Closing Date, the form of which
is attached as Exhibit C4 (and the Representatives shall have received
----------
an additional three conformed copies of each such counsel's legal
opinion for each of the several underwriters).
(i) Selling Shareholders' Certificate. On each of the First Closing
Date and the Second Closing Date the Representatives shall receive a
written certificate executed by or on behalf of each Selling Shareholder,
dated as of such Closing Date, to the effect that:
19
(i) the representations, warranties and covenants of such Selling
Shareholder set forth in Section 1(B) of this Agreement are true and
correct with the same force and effect as though expressly made by such
Selling Shareholder on and as of such Closing Date; and
(ii) such Selling Shareholder 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 Shareholders' Documents. On the date hereof, the Company and
the Selling Shareholders shall have furnished for review by the
Representatives copies of the Powers of Attorney and Custody Agreements
executed by each of the Selling Shareholders and such further information,
certificates and documents as the Representatives may reasonably request.
(k) Lock-Up Agreement from Certain Securityholders of the Company Other
Than Selling Shareholders. On the date hereof, the Company shall have
furnished to the Representatives an agreement substantially in the form of
Exhibit D hereto from each director, officer and regional manager of the
---------
Company, Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P. and [__________], and each
such agreement shall be in full force and effect on each of the First
Closing Date and the Second Closing Date.
(l) 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, 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 Shareholders 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
or Section 11, 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 to perform any agreement herein or to comply
with any provision hereof, the Company agrees 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.
Section 7. Effectiveness of this Agreement.
20
This Agreement shall not become effective until the later of (i) the
execution 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.
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 Shareholders to
any Underwriter, except that the Company and the Selling Shareholders 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 Shareholders, 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 8. Indemnification.
(a) Indemnification of the Underwriters. Each of the Company and each of
the Selling Shareholders 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 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 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; and to reimburse each Underwriter and each such controlling
person for any and all expenses (including the fees and disbursements of
counsel chosen by Banc of America Securities) 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 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 relating to any Underwriter furnished to the Company
and/or the Selling Shareholders 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
21
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; provided, further, no Selling
Shareholder shall be required to provide indemnification hereunder until
the person seeking indemnification shall have first made a demand for
payment on the Company with respect to any such loss, claim, damage,
liability or expense and the Company shall have either rejected such demand
or failed to make such requested payment within sixty days after receipt
thereof; and provided, further, that the liability of each Selling
Shareholder under the foregoing indemnity shall be limited to an amount
equal to the aggregate offering price of the Common Shares sold by such
Selling Shareholder, less the underwriting discount, as set forth on the
front cover page of the Prospectus; and provided further, that each Selling
Shareholder (other than the Management Selling Shareholders) under the
foregoing indemnity shall have no obligation to provide indemnity hereunder
where the loss, claim, damage, liability or expense 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,
except to the extent to which such untrue statement or alleged untrue
statement or omission or alleged omission relates to such Selling
Shareholder's Selling Shareholder Information. The indemnity set forth in
this Section 8(a) shall be in addition to any liabilities that the Company
and the Selling Shareholders may otherwise have.
(b) Indemnification of the Company, its Directors and Officers and the
Selling Shareholders. 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
Shareholders and each person, if any, who controls the Company or any
Selling Shareholder 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
Shareholder 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 and/or the Selling Shareholders by the Representatives expressly
for use therein; and to reimburse the Company, or any such director,
officer, Selling Shareholder or controlling person for any legal and other
expense reasonably incurred by the Company, or any such director, officer,
Selling Shareholder or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss,
22
claim, damage, liability, expense or action. The Company and each of the
Selling Shareholders hereby acknowledge that the only information that the
Underwriters have furnished to the Company and the Selling Shareholders
expressly for use in the Registration Statement, any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) are the
statements set forth in the table in the first paragraph, in the fourth
sentence of the first paragraph, in the second and seventh paragraph, in
the first sentence of the ninth paragraph, the tenth paragraph, the
eleventh paragraph and the fourteenth paragraph under the caption "Plan of
Distribution" in the Prospectus; and the Underwriters confirm that such
statements are correct. The indemnity agreement set forth in this Section
8(b) shall be in addition to any liabilities that each Underwriter may
otherwise have.
(c) 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, unless the indemnifying party shall have irrevocably
agreed to be fully responsible for all losses, claims, damages, liabilities
and expenses of the Indemnified Party, or it shall have been determined in
a final, non-appealable judgment by a court of competent jurisdiction that
the Indemnifying Party is fully responsible for all of such losses, claims,
damages, liabilities and expenses, 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(b) and Section 9), representing the
indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel 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.
23
(d) 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
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(c) 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, (ii) the indemnified party shall have provided the indemnifying
party with notice of such proposed settlement at least two (2) business
days prior to its acceptance of such settlement and (iii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with
such request prior to the date of such settlement, except that the
indemnifying party's nonpayment of any portion of such fees and expenses of
counsel that the indemnifying party disputes in good faith as being
excessive shall not be deemed a failure to reimburse within the meaning of
this clause (iii). 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.
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, the Selling Shareholders, and the Underwriters
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, the
Selling Shareholders and the Underwriters 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; provided, however, that the
relative fault of the Management Selling Shareholders shall be deemed to be
consistent with the relative fault of the Company for statements or omissions or
inaccuracies in the representations and warranties hereunder. The relative
benefits received by the Company, the Selling Shareholders and the Underwriters
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
Shareholders, 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 offering price of the Common Shares as set forth on
such cover. The relative fault of the Company, the Selling Shareholders and the
Underwriters 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
24
warranty relates to information supplied by the Company, the Selling
Shareholders or the Underwriters, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission; and, provided further, the relative fault of the Management Selling
Shareholders shall be deemed to be consistent with the relative fault of the
Company hereunder. Notwithstanding the foregoing in this Section 9, in no event
will the liability of any Selling Shareholder under this Section 9 be greater in
amount than the difference between the dollar amount of proceeds received by
such Selling Shareholder upon the sale of Common Shares hereunder and all
amounts previously contributed by such Selling Shareholder under this Section 9.
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(c), 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(c) 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(c) for purposes of indemnification.
The Company, the Selling Shareholders 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, 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. 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 within 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 Representatives 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
25
default occurs exceeds 10% of the aggregate number of Common Shares to be
purchased on such date, and arrangements satisfactory to the Representatives and
the Company for the purchase of such Common Shares are not made within 48 hours
after such default, this Agreement shall terminate without liability of any non-
defaulting 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 Representatives or the
Company shall have the right to postpone the First Closing Date or the Second
Closing Date, as the case may be, 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.
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 Representatives by notice given to the
Company and the Selling Shareholders 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 of federal, New York
or California 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 Representatives 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 Representatives there shall have occurred any
Material Adverse Change; or (v) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the judgment of the Representatives may interfere materially with the conduct
of the business and operations of the Company 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 Shareholders
to any Underwriter, except that the Company 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 Shareholders, 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 Shareholders 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 Shareholders, 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:
26
If to the Representatives:
Banc of America Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: X. Xxxxxx Horsey
with a copy to:
Banc of America Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
If to the Company:
California Pizza Kitchen, Inc.
0000 Xxxx Xxxxxxx Xxxxxxxxx, #0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxxxx X. Xxxx
If to the Selling Shareholders:
American Stock Transfer & Trust Company
0000 00xx Xxx.
Xxxxxxxx, X.X. 00000
Facsimile: 000-000-0000
Attention: Xxxxx Xxxxxx
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.
27
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.
Section 17. Failure of One or More of the Selling Shareholders to Sell and
Deliver Common Shares. The obligations of each Selling Shareholder to deliver
the Common Shares hereunder are several and not joint. If one or more of the
Selling Shareholders shall fail to sell and deliver to the Underwriters the
Common Shares to be sold and delivered by such Selling Shareholders at the First
Closing Date pursuant to this Agreement, then the Underwriters may at their
option, by written notice from the Representative to the Company and the Selling
Shareholders, either (i) terminate this Agreement without any liability on the
part of any Underwriter (except as provided in Sections 8 and 9) or, except as
provided in Sections 4, 6, 8 and 9 hereof, the Company or the Selling
Shareholders, or (ii) purchase the shares which the Company and other Selling
Shareholders have agreed to sell and deliver in accordance with the terms
hereof. If one or more of the Selling Shareholders shall fail to sell and
deliver to the Underwriters the Common Shares to be sold and delivered by such
Selling Shareholders 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 Representative to the Company and the Selling Shareholders, to
postpone the First Closing Date or the Second Closing Date, as the case may be,
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.
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.
28
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company 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,
CALIFORNIA PIZZA KITCHEN, INC.
By:__________________________________________
Name: X.X. Xxxxxxxxxx, Xx.
Title: Executive
Vice President and Chief Financial Officer
THE SELLING SHAREHOLDERS
SET FORTH ON SCHEDULE C
By:__________________________________________
Name:
Title: Attorney-in-fact
THE SELLING SHAREHOLDERS
SET FORTH ON SCHEDULE D
By:__________________________________________
Name:
Title: Attorney-in-fact
__________________________________________
Xxxxx X. Xxxx
__________________________________________
Xxxxxxx X. Xxxxxxxxxx
XXXXXXXXXX CHILDREN'S TRUST
By__________________________________________
Name: Xxxxx X. Xxxx
Title: Trustee
29
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representatives in San Francisco, California as of the date first above
written.
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANC ALEX.XXXXX INC.
XXXXXXXXX XXXXXXXX, INC.
U.S. BANCORP XXXXX XXXXXXX INC.
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By: BANC OF AMERICA SECURITIES LLC
_____________________________________
By: X. Xxxxxx Xxxxxx
Managing Director
30
SCHEDULE A
Underwriters Number of
Firm Common Shares
to be Purchased
Banc of America Securities LLC.................... [___]
Deutsche Banc Alex. Xxxxx Inc..................... [___]
Xxxxxxxxx Xxxxxxxx, Inc........................... [___]
U.S. Bancorp Xxxxx Xxxxxxx Inc.................... [___]
[___] ............................................ [___]
Total......................................... 3,400,000
SCHEDULE B
[To be revised pending final determination of Selling Shareholders]
Selling Shareholder Number of Maximum Number of
Firm Common Optional Common Shares
Shares to be Sold
to be Sold
Selling Shareholder #1
Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
Selling Shareholder #2
Xxxxx X. Xxxxxxxxx
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
Selling Shareholder #3
Xxxxxx X. Xxxxxx
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
Selling Shareholder #4
Xxxxxxx X. Xxxxxxxx
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
Selling Shareholder #5
BCB Family Partners
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
Selling Shareholder Number of Maximum Number of
Firm Common Optional Common Shares
Shares to be Sold
to be Sold
Selling Shareholder #6
Xxxxxx Xxxxxxxxx
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
Selling Shareholder #7
Xxxxxxxxx XxXxxxx
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
Selling Shareholder #0
Xxxxxxx Xxxxx
x/x Xxxxxxxxx, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
Selling Shareholder #9
NAZ Family Partners
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
Selling Shareholder #10
Xxxxx X. Xxxxx
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
2
Selling Shareholder Number of Maximum Number of
Firm Common Optional Common Shares
Shares to be Sold
to be Sold
Selling Shareholder #11
H. Xxxxxx Xxxxxxxx
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
Selling Shareholder #12
Xxxx X. Xxxxxxxx
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
Selling Shareholder #13
X. Xxxx Xxxxxxx
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
Selling Shareholder #14
Xxxxxxxx Xxxxxx
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
Selling Shareholder #15
Xxxxxx Xxxx SBIC LP
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [___]...................................
3
Selling Shareholder Number of Maximum Number of
Firm Common Optional Common Shares
Shares to be Sold
to be Sold
Selling Shareholder #16
BancBoston Investments Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
(XX XX 00000X)
Xxxxxx, XX 00000
Attention: [___]...................................
Selling Shareholder #17
F. Xxxxxxxx Xxxxxxx
[Address]
Attention: [___]...................................
Selling Shareholder #18
Xxxx Xxxxxxxxxx
[Address]...........................................
*Selling Shareholder #19
Xxxxx X. Xxxx
[Address]...........................................
*Selling Shareholder #20
Xxxxxxxxxx Children's Trust
[Address]...........................................
*Selling Shareholder #21
Xxxxxxx X. Xxxxxxxxxx
[Address]...........................................
*Selling Shareholder #22
X.X. Xxxxxxxxxx, Xx.
c/o California Pizza Kitchen, Inc.
0000 Xxxx Xxxxxxx Xxxx., #0000
Xxx Xxxxxxx, XX 00000-0000
Attention: [___]...................................
4
Selling Shareholder Number of Maximum Number of
Firm Common Optional Common Shares
Shares to be Sold
to be Sold
*Selling Shareholder #23
Xxxxxxxxx X. Xxxxx
c/o California Pizza Kitchen, Inc.
0000 Xxxx Xxxxxxx Xxxx., #0000
Xxx Xxxxxxx, XX 00000-0000
Attention: [___]...................................
*Selling Shareholder #24
Xxxxxxx X. Xxxxx
c/o California Pizza Kitchen, Inc.
0000 Xxxx Xxxxxxx Xxxx., #0000
Xxx Xxxxxxx, XX 00000-0000
Attention: [___]...................................
*Selling Shareholder #25
Xxxxx Xxxxxxxxx
c/o California Pizza Kitchen, Inc.
0000 Xxxx Xxxxxxx Xxxx., #0000
Xxx Xxxxxxx, XX 00000-0000
Attention: [___]...................................
*Selling Shareholder #26
Xxxxx Xxxxxxxxxx
c/o California Pizza Kitchen, Inc.
0000 Xxxx Xxxxxxx Xxxx., #0000
Xxx Xxxxxxx, XX 00000-0000
Attention: [___]...................................
*Selling Shareholder #27
Xxxxxxx XxxXxxxxx
c/o California Pizza Kitchen, Inc.
0000 Xxxx Xxxxxxx Xxxx., #0000
Xxx Xxxxxxx, XX 00000-0000
Attention: [___]...................................
5
Selling Shareholder Number of Maximum Number of
Firm Common Optional Common Shares
Shares to be Sold
to be Sold
*Selling Shareholder #28
Xxxxx Xxxxxxxxxx
c/o California Pizza Kitchen, Inc.
0000 Xxxx Xxxxxxx Xxxx., #0000
Xxx Xxxxxxx, XX 00000-0000
Attention: [___]...................................
Total:......................................... 3,200,000 [___]
=================== ========================
* Management Selling Shareholder
6
SCHEDULE C
Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
Xxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxx
BCB Family Partners
Xxxxxx Xxxxxxxxx
Xxxxxxxxx XxXxxxx
Xxxxxxx Place
NAZ Family Partners
Xxxxx X. Xxxxx
H. Xxxxxx Xxxxxxxx
Xxxx X. Xxxxxxxx
X. Xxxx Xxxxxxx
Xxxxxxxx Tibrea
[Xxxxxx Xxxx SBIC LP]
BancBoston Investments Inc.
F. Xxxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxxxxx
SCHEDULE D
X.X. Xxxxxxxxxx, Xx.
Xxxxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxxx
Xxxxxxx XxxXxxxxx
Xxxxx Xxxxxxxxxx
EXHIBIT A
Opinions of Paul, Hastings, Xxxxxxxx & Xxxxxx, LLP, 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 California.
(ii) The Company has corporate power and authority (a) to own, lease and
operate its properties and to conduct its business as described in the
Prospectus, except where the failure to have such power or authority would not,
individually or in the aggregate, result in a Material Adverse Change, and (b)
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 it owns or leases
real property.
(iv) The only significant subsidiary of the Company (as defined in Rule
405 under the Securities Act) is CPK Management Company, a California
corporation (the "Significant Subsidiary"). The Significant Subsidiary has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of California, and has corporate power and authority
to own, lease and operate its properties and to conduct its business as
currently conducted.
(v) All of the issued and outstanding capital stock of the Significant
Subsidiary has been duly authorized and validly issued, is fully paid and non-
assessable and, to our knowledge, is owned by the Company free and clear of any
security interest, mortgage, pledge, lien or encumbrance.
(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 (other than the
Firm Common Shares) have been duly authorized and validly issued, and are fully
paid and nonassessable; provided, however, that certificates for an aggregate of
4,090 shares of Common Stock deemed to be outstanding on and as of the date
hereof have not yet been issued pending the delivery to the Company of stock
certificates for shares of its common stock which were outstanding prior to the
merger of C.P. Kitchen Acquisition Corp. and the Company effected September 30,
1997. The form of certificate used to evidence the Common Stock complies with
all applicable requirements of the Articles and the Bylaws and the General
Corporation Law of the State of California (the "GCL").
(vii) No shareholder 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 by operation of (a) the Articles, (b)
the Bylaws, (c) the GCL or (d) any of the Company's material agreements as
identified by officers of the Company and set forth on Schedule A hereto (the
"Material Agreements").
(viii) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
A-1
(ix) The Firm 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) The Registration Statement has been declared effective by the
Commission under the Securities Act. To our knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under the
Securities Act and to our knowledge 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, 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 is rendered) comply as to form in
all material respects with the applicable requirements of the Securities Act.
(xii) The Common Stock has been approved for inclusion on the Nasdaq
National Market.
(xiii) The statements (i) in the Prospectus under the captions "Risk
Factors--Approximately 41.8% of Our Outstanding Shares of Common Stock May Be
Sold Into the Public Market in the Future, Which Could Depress Our Stock Price,"
and "--Our Articles of Incorporation Permit Our Board of Directors to Issue New
Series of Preferred Stock That May Have the Effect of Delaying or Preventing a
Change in Control of Our Company. This Could Adversely Affect the Value of Your
Shares," the first two paragraphs under the caption "Use of Proceeds,"
"Business--Restaurant Franchise and Licensing Arrangements," "--Agreement with
Kraft Pizza Company" and "--Litigation," the first paragraph under "Management -
-Board of directors; committees," "Management --Indemnification and limitation
of director and officer liability," "--Stock plans" and "--Employment
agreements," "Certain Relationships and Related Transactions," "Description of
Capital Stock," and "Shares Eligible for Future Sale" and (ii) in Item 14 of the
Registration Statement, insofar as such statements constitute matters of law,
summaries of legal matters, the Articles or provisions of the Bylaws, documents
or legal proceedings, or legal conclusions, have been reviewed by us and fairly
present and summarize, in all material respects, the matters referred to
therein.
(xiv) To our knowledge, other than as disclosed in the Registration
Statement, there are no legal or governmental actions, suits or proceedings
pending or threatened which, if decided adversely to the Company, would result
in a Material Adverse Change.
(xv) Except for the registration of the Firm Common Shares under the
Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act, and applicable state
securities or blue sky laws and from the NASD in connection with the purchase
and distribution of the Firm Common Shares by the Underwriters, 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.
(xvi) The execution and delivery of the Underwriting Agreement by the
Company and the performance by the Company of
A-2
its obligations thereunder (other than performance by the Company of its
obligations under the indemnification or contribution sections of the
Underwriting Agreement, as to which no opinion is rendered) (a) will not result
in any violation of the provisions of the Articles or Bylaws; (b) 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 or any of its subsidiaries pursuant to (1) the Credit Agreement dated as
of December 15, 2000 among the Company and Bank of America, N.A., (the "Credit
Agreement"), or (2) the Material Agreements; or (c) to our knowledge, will not
result in any violation of any law or administrative regulation applicable to
the Company or any subsidiary.
(xvii) 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.
(xviii) Except as disclosed in the Prospectus under the caption
"Description of Capital Stock--Registration Rights," to our knowledge, 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 except for persons and
entities who have expressly waived such right or who have been given proper
notice and have failed to exercise such right within the time or times required
under the terms and conditions of such right.
We have participated in conferences with officers and other representatives
of the Company, representatives of Ernst & Young LLP 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 we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus (other than as
specified in paragraph (xiii) above), and any supplements or amendments thereto,
on the basis of the foregoing, nothing has come to our attention which would
lead us 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, in light of the circumstances under which they were made,
not misleading or that the Prospectus, as of its date or at the First Closing
Date, 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 we 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).
The opinions expressed herein are subject to the following qualifications:
a. Each of our opinions in paragraphs (xv) and (xvi), with respect to any
violations, conflicts, defaults, consents, approvals, authorizations or orders,
is intended to express an opinion regarding matters that a lawyer practicing in
the State of California exercising customary professional diligence would
reasonably recognize to be applicable to the Company and the transactions
contemplated by the Agreement. Additionally, each such opinion does not extend
to municipal ordinances or laws of counties or other political subdivisions.
b. We are not expressing any opinion as to any matter relating to the
laws of any jurisdiction other than the federal laws of the United States of
America and the laws of the State of California. In addition, no opinion is
expressed herein with respect to the securities or Blue Sky laws of any state.
A-3
This opinion is furnished to you solely for your benefit in connection with
the purchase of the Firm Common Shares, and may not be relied upon by any other
person or for any other purpose, and may not otherwise be referred to or quoted
from, without our express prior written consent. This opinion is rendered to you
as of the date hereof, and we assume no obligation to update you with respect to
the matters set forth herein.
A-4
EXHIBIT B
Opinions of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel for the
Underwriters, to be delivered pursuant to Section 5(e) of the Underwriting
Agreement.
References to the Prospectus in this Exhibit B include any supplements
---------
thereto at the Closing Date.
(i) The Company is validly existing as a corporation in good standing
under the General Corporation Law of the State of California.
(ii) No shareholder 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 by operation of the charter or bylaws
of the Company or the General Corporation Law of the State of California.
(iii) The Agreement has been duly authorized, executed and delivered by
the Company.
(iv) The Shares to be purchased by the Underwriters from the Company have
been duly authorized for issuance and sale pursuant to the Agreement and, when
issued and delivered by the Company pursuant to the Agreement against payment of
the consideration set forth therein, will be validly issued, fully paid and
nonassessable. The Shares to be sold by the Selling Shareholders have been duly
authorized and are validly issued, fully paid and non-assessable.
(v) The Registration Statement has been declared effective by the
Commission under the Securities Act of 1933, as amended (the "Securities Act").
To the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act and no
proceedings for such purpose have been instituted or are pending or threatened
by the Commission. Any required filing of the Prospectus or 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).
(vi) At the time the Registration Statement was declared effective by the
Commission, the Registration Statement and the Prospectus (other than the
financial statements, notes and schedules thereto and other financial and
statistical data included in or omitted from the Registration Statement or
Prospectus, as to which we express no opinion) appeared on their face to be
responsive as to form in all material respects with the applicable requirements
of the Securities Act and the rules and regulations thereunder.
In the course of the preparation by the Company and its counsel of the
Registration Statement and Prospectus (excluding the documents incorporated by
reference), we participated in conferences with certain of the officers and
representatives of the Company, with representatives of the independent public
accountants for the Company and with representatives of the Underwriters at
which the contents of the Registration Statement and Prospectus and related
matters were discussed. We did not participate in the preparation or drafting
of any document incorporated by reference in the Registration Statement or the
Prospectus. Given the limitations inherent in the independent verification of
factual matters and the character of determinations involved in the registration
process, we are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus. Subject to the foregoing and on the
basis of the information we
B-1
gained in the course of the performance of the services referred to above,
including information obtained from officers and representatives of the Company,
no facts have come to our attention that cause us to believe that the
Registration Statement, at the time it was declared effective by the Commission,
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, on the date thereof, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. In each case,
however, we express no view or belief with respect to financial statements,
notes and schedules thereto and other financial and statistical data included in
or omitted from the Registration Statement or Prospectus.
B-2
[EXHIBITS C1-C4 to come]
[Opinions of each of Xxxxxxx, Xxxx, Hastings, Xxxxxxxx & Xxxxxx LLP,
Xxxxxxxx Xxxxxx Xxxxxxxxxx & Xxxxxxxxx, LLP, XxXxxxxxx, Will & Xxxxx and
BancBoston Investments, Inc., together, counsel to the Selling Shareholders, to
be delivered pursuant to Section 5(h) of the Underwriting Agreement.
References to the Prospectus in this Exhibit C include any supplements
---------
thereto at the Closing Date.
(i) The Underwriting Agreement has been duly authorized, executed
and delivered by or on behalf of, and is a valid and binding agreement of,
such Selling Shareholder, 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 creditors' rights generally or by general equitable principles.
(ii) The execution and delivery by such Selling Shareholder of, and
the performance by such Selling Shareholder of its obligations under, the
Underwriting Agreement and its 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 or by-laws, partnership agreement, trust
agreement or other organizational documents, as the case may be, of such
Selling Shareholder, or, to the best of such counsel's knowledge, violate
or contravene any provision of applicable law or regulation, or violate,
result in a breach of or constitute a default under the terms of any other
agreement or instrument to which such Selling Shareholder is a party or by
which it is bound, or any judgment, order or decree applicable to such
Selling Shareholder of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Shareholder.
(iii) Each of the Custody Agreement and Power of Attorney of such
Selling Shareholder has been duly authorized, executed and delivered by
such Selling Shareholder and is a valid and binding agreement of such
Selling Shareholder, 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 creditors' rights generally or by general equitable principles.
(iv) Assuming that the Underwriters purchase the Common Shares which
are sold by such Selling Shareholder pursuant to the Underwriting Agreement
for value, in good faith and without notice of any adverse claim, the
delivery of such Common Shares pursuant to the Underwriting 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.
(v) 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
such Selling Shareholder of the transactions contemplated in
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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
State of California 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 Shareholders and public officials]
EXHIBIT D
____________ __, 0000
Xxxx xx Xxxxxxx Securities LLC
Deutsche Banc Alex. Xxxxx
Xxxxxxxxx Xxxxxxxx
U.S. Bancorp Xxxxx Xxxxxxx
As Representatives of the Several Underwriters
c/o Banc of America Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Re: California Pizza Kitchen, Inc. (the "Company")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company ("Common Stock") or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry out
a public offering of Common Stock (the "Offering") for which you will act as the
representatives of the underwriters. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company by,
among other things, raising capital and allowing the Company to fulfill its
obligations under the Registration Rights Agreement dated September 30, 1997.
The undersigned acknowledges that you and the other underwriters are relying on
the representations and agreements of the undersigned contained in this letter
in carrying out the Offering and in entering into underwriting arrangements with
the Company and certain selling shareholders with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of Banc of America
Securities (which consent may be withheld in its 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, or otherwise dispose of any shares of
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Common Stock, options or warrants to acquire shares of Common Stock, or
securities exchangeable or exercisable for or convertible into shares of Common
Stock currently or 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 publicly announce the undersigned's intention to do any of the
foregoing, during the "Lock-up Period". The "Lock-up Period" shall be a period
commencing on January 30, 2001 and continuing through the close of trading on
the date 90 days after the date of the final prospectus relating to the Offering
(the "Offering Date"); provided, however, that if the final prospectus has not
been filed with the Securities and Exchange Commission on or before February 28,
2001, this letter agreement will terminate and be of no further force or effect
whatsoever.
The prohibitions contained in this letter agreement shall not apply to: (i) the
sale of any shares of Common Stock to the underwriters pursuant to the
underwriting agreement entered into in connection with the Offering; (ii)
transactions (including purchases and sales) relating to shares of Common Stock
or other securities acquired in open market transactions after the Offering Date
(provided that shares acquired from the underwriters in the Offering shall be
subject to the restrictions contained herein); (iii) gifts and transfers by will
or intestacy; (iv) the exercise of options to purchase shares of Common Stock
granted under the Company's 1998 Stock-Based Incentive Compensation Plan or the
Company's 1990 Employee Equity Participation Plan; provided, however, that the
shares of Common Stock purchased upon the exercise of such options shall be
otherwise subject to this letter agreement; and (v) transfers of Common Stock to
charitable organizations qualified under Section 501(c)(3) of the Internal
Revenue Code, so long as any such organization agrees to be bound hereby in the
same manner as it applies to the undersigned. In addition, transfers to the
undersigned's members, partners, affiliates, immediate family or a trust, the
beneficiaries of which are the undersigned's and/or members of the undersigned's
immediate family, shall not be prohibited by the terms of this letter agreement
so long as the transferee agrees in writing to be bound hereby in the same
manner as it applies to the undersigned. 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.
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
Print Name of Holder:_____________________________________
By:______________________________________
Name:
_________________________________________
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
Dated: ____________ __, 2001
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