EXHIBIT 1.1
2,750,000 Shares
PEET'S COFFEE & TEA, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
Dated April __, 2002
April __, 2002
Xxxxxx Xxxxxx Partners LLC
Pacific Growth Equities, Inc.
XX Xxxxxxxxx & Co.
As Representatives of the several Underwriters
c/o Thomas Xxxxxx Partners LLC
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Introduction. Peet's Coffee & Tea, Inc., a Washington corporation (the
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"Company"), proposes to issue and sell to the several underwriters named in
Schedule A hereto (the "Underwriters"), and a certain shareholder of the Company
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(the "Selling Shareholder") named in Schedule B hereto severally propose to sell
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to the several Underwriters, an aggregate of 2,750,000 shares of the common
stock, no par value per share, of the Company (the "Firm Shares"), of which
2,250,000 shares are to be issued and sold by the Company and 500,000 shares are
to be sold by the Selling Shareholder.
The Company also proposes to issue and sell to the several
Underwriters not more than an additional 412,500 shares of its common stock, no
par value per share (collectively, the "Additional Shares"), if and to the
extent that you shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to the
Underwriters in Section 3 hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "Shares". The shares of common
stock, no par value per share, of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"Common Stock". The Company and the Selling Shareholder are hereinafter
sometimes collectively referred to as the "Sellers". Xxxxxx Xxxxxx Partners LLC,
Pacific Growth Equities, Inc. and XX Xxxxxxxxx & Co. have agreed to act as
representatives of the several Underwriters (in such capacity, the
"Representatives") in connection with the offering and sale of the Shares.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (file no.
333-85082), including a prospectus, relating to the Shares. The registration
statement as amended at the time it becomes effective, including the information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Securities Act of 1933, as amended
(the "Securities Act"), and all documents incorporated or deemed to be
incorporated by reference therein is hereinafter referred to as the
"Registration Statement"; the prospectus in the form first used to confirm sales
of Shares is hereinafter referred to as the "Prospectus". If the Company has
filed a registration statement to register additional shares of Common Stock
pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement. All references
in this Agreement to the Registration Statement, the Rule 462 Registration
Statement, a preliminary prospectus, the Prospectus, 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").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), which is or is deemed to be incorporated by reference in
the Registration Statement or the Prospectus, as the case may be.
1. Representations and Warranties of the Company. The Company represents
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and warrants to and agrees with each of the Underwriters that:
1.1. Effective Registration Statement. The Registration Statement has
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become effective; no stop order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for such purpose are pending before
or threatened by the Commission.
1.2. Contents of Registration Statement. (i) The Registration Statement,
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when it became effective, did not contain and, as amended or supplemented, if
applicable, 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, in light of the circumstances under which they are made, not
misleading, (ii) the Registration Statement and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iii) the Prospectus does not contain and, as amended
or supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in this
paragraph do not apply to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to any Underwriter furnished
to the Company in writing by such Underwriter through you expressly for use
therein.
1.3. Exchange Act Compliance. The documents incorporated or deemed to be
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incorporated by reference in the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material respects
with the requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and the applicable rules and regulations thereunder.
1.4. Due Incorporation. The Company has been duly incorporated, is validly
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existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
1.5. Subsidiaries. Each of Peet's Operating Company, Inc. and Peet's
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Trademark Company (collectively, the "Subsidiaries") has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole. All of the
issued shares of capital stock of each Subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and are
owned directly by the Company, free and clear of all liens, encumbrances,
equities or claims other than security interests in the Company's right, title
and interest in, to and under such capital stock granted by the Company to
General Electric Capital Corporation.
1.6. Underwriting Agreement. This Agreement has been duly
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authorized, executed and delivered by the Company, 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.
1.7. Description of Capital Stock. The authorized capital
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stock of the Company conforms as to legal matters to the description thereof
contained in the Prospectus.
1.8. Authorized Stock. The shares of Common Stock (including
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the Shares to be sold by the Selling Shareholder) outstanding prior to the
issuance of the Shares to be sold by the Company have been duly authorized and
are validly issued, fully paid and non-assessable.
1.9. Validly Issued Shares. The Shares to be sold by the
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Company and the Selling Shareholder have been duly authorized and, when issued
and delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares will not
be subject to any preemptive or similar rights.
1.10. No Conflict. The execution and delivery by the Company
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of, and the performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the articles of
incorporation or by-laws of the Company or any agreement or other instrument
binding upon the Company or any of its subsidiaries that is material to the
Company and its subsidiaries, taken as a whole, or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over the Company
or any subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except such
as may be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
1.11. No Material Adverse Change. There has not occurred any
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material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
1.12. Legal Proceedings; Exhibits. There are no legal or
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governmental proceedings pending or, to the knowledge of the Company, threatened
to which the Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus and are
not so described or any statutes, regulations, contracts or other documents that
are required to be described or incorporated by reference in the Registration
Statement or the Prospectus or to be filed or incorporated by reference as
exhibits to the Registration Statement that are not described or filed or
incorporated as required.
1.13. Compliance with Securities Act. Each preliminary
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prospectus filed as part of the registration statement as originally filed or as
part of any amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder.
1.14. Not an Investment Company. The Company is not and, after
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giving effect to the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
1.15. Compliance with Laws. The Company and its subsidiaries
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(i) are in compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws"), (ii) have received all permits, licenses
or other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) are in compliance with all terms
and conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, individually or in the
aggregate, have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
1.16. No Environmental Costs. There are no costs or liabilities
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associated with Environmental Laws (including, without limitation, any capital
or operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties) which would, individually or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
1.17. No Registration Rights. There is no owner of any
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securities of the Company who has the right to require the Company to file a
registration statement under the Securities Act with respect to any securities
of the Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement other than as described
in the Registration Statement and as have been waived in writing in connection
with the offering contemplated hereby.
1.18. Absence of Material Charges. Subsequent to the respective
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dates as of which information is given in the Registration Statement and the
Prospectus, (1) the Company and its Subsidiaries have not incurred any material
liability or obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (2) the Company has not
purchased any of its outstanding capital stock, nor declared, paid or otherwise
made any dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and (3) there has not been any material change
in the capital stock, short-term debt or long-term debt of the Company and its
Subsidiaries, except in each case as described in the Prospectus.
1.19. Good Title to Properties. The Company and its
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Subsidiaries have good and marketable title to all real property and good and
marketable title to all personal property owned by them which is material to the
business of the Company and its Subsidiaries, taken as a whole, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the value of
such property or do not materially interfere with the use made and proposed to
be made of such property by the Company and its Subsidiaries; and any real
property and buildings held under lease by the Company and its Subsidiaries are
held by them under valid, subsisting and enforceable
leases with such exceptions as are not material or do not materially interfere
with the use made and proposed to be made of such property and buildings by the
Company and its Subsidiaries.
1.20. Intellectual Property Rights. To the Company's knowledge,
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the Company and its Subsidiaries own or possess, or can acquire on reasonable
terms, all material patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names currently employed by them in connection with the
business now operated by them, except where the failure to own, possess or
acquire any of the foregoing would not result in a material adverse effect on
the Company and its Subsidiaries taken as a whole, and neither the Company nor
any of its subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing which,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse affect on the Company and its
subsidiaries, taken as a whole.
1.21. No Labor Disputes. No material labor dispute with the
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employees of the Company or any of its Subsidiaries exists, or, to the knowledge
of the Company, is imminent; and the Company is not aware of any existing,
threatened or imminent labor disturbance by the employees of any of its
principal suppliers, manufacturers or contractors that could have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
1.22. Insurance. The Company and its Subsidiaries are insured
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by the insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses in
which they are engaged; and neither the Company nor any of its Subsidiaries has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
1.23. Governmental Permits. The Company and its subsidiaries
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possess all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective business except where the failure to possess such certificates,
authorizations and permits would not result in a material adverse effect on the
Company and its Subsidiaries, taken as a whole, and neither the Company nor any
of its Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
1.24. Accounting Controls. The Company and each of its
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Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (1) transactions are executed in accordance
with management's general or specific authorizations; (2) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (3) access to assets is permitted only in accordance with
management's general or specific authorization; and (4) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
1.25. Listing of Common Stock. The Common Stock (including the
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Shares) is registered pursuant to Section 12(g) of the Exchange Act and is
listed on the Nasdaq National Market, and the Company has taken no action
designed to, 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, Inc. (the "NASD") is contemplating
terminating such registration or listing.
1.26. Compliance with Food and Beverage Laws. To the Company's
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knowledge, the Company and its subsidiaries are conducting their business in
compliance with the Fair Labor Standards Act, the rules and regulations of the
federal Food and Drug Administration, and all applicable federal, state and
local laws, rules and regulations of the jurisdictions in which it is conducting
business, including, without limitation, all applicable local, state and federal
laws and regulations governing health, sanitation, safety, the purchase and sale
of alcoholic beverages (including, but not limited to, liquor licenses, "tied
house" statutes and "dram shop" statutes), environmental matters, zoning and
land use, except where the failure to be so in compliance would not have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
2. Representations and Warranties of the Selling Shareholder. The
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Selling Shareholder represents and warrants to and agrees with each of the
Underwriters that:
2.1. Due Authorization. This Agreement has been duly authorized,
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executed and delivered by or on behalf of the Selling Shareholder and is a valid
and binding agreement of the 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.
2.2. Selling Shareholder Documents. The Custody Agreement (as
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defined below) and the Power of Attorney (as defined below) have been duly
authorized, executed and delivered by the Selling Shareholder and are valid and
binding agreements of the Selling Shareholder enforceable in accordance with
their respective 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.
2.3. No Conflict. The execution and delivery by the Selling
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Shareholder of, and the performance by the Selling Shareholder of its
obligations under, this Agreement, the Custody Agreement signed by the Selling
Shareholder and ____________, as Custodian, relating to the deposit of the
Shares to be sold by the Selling Shareholder (the "Custody Agreement") and the
Power of Attorney appointing certain individuals as the Selling Shareholder's
attorneys-in-fact to the extent set forth therein, relating to the transactions
contemplated hereby and by the Registration Statement (the "Power of Attorney")
will not contravene any provision of applicable law, or the articles of
incorporation or by-laws of the Selling Shareholder (if the Selling Shareholder
is a corporation), or any agreement or other instrument binding upon the Selling
Shareholder or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Selling Shareholder, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Selling Shareholder of its
obligations under this Agreement or the Custody Agreement or Power of Attorney
of the Selling Shareholder, except such as may be required by the Securities
Act, the NASD or the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
2.4. Good Title to Shares. The Selling Shareholder has, and on
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each Closing Date will have, valid title to the Shares to be sold by the Selling
Shareholder and the legal right and power, and all authorization and approval
required by law, to enter into this Agreement, the Custody Agreement and the
Power of Attorney and to sell, transfer and deliver the Shares to be sold by the
Selling Shareholder.
2.5. Delivery of Common Shares. Delivery of the Shares to be sold
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by the Selling Shareholder pursuant to this Agreement will pass title to such
Shares free and clear of any security interests, claims, liens, equities and
other encumbrances.
2.6. No Registration Rights. The Selling Shareholder does not
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have any registration or other similar rights to have any equity or debt
securities registered for sale by the Company under the Registration Statement
or included in the offering contemplated by this Agreement, other than as
described in the Registration Statement and as have been waived in writing in
connection with the offering contemplated hereby.
2.7. No Price Stabilization or Manipulation. The Selling
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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 any security of the Company to
facilitate the sale or resale of the Shares.
2.8. Disclosure by Selling Shareholder in Registration Statement.
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Such portion of the Registration Statement comprised of the table and the notes
thereto under the caption "Principal and Selling Shareholders" in the form
supplied to the Selling Shareholder in so far as such portion specifically
related to the Selling Shareholder do 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, in light of the circumstances under
which they were made, not misleading.
2.9. Confirmation of Company Representations and Warranties. The
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Selling Shareholder has no reason to believe that the representations and
warranties of the Company contained in Section 1 hereof are not true and
correct, is familiar with the Registration Statement and the Prospectus and has
no knowledge of any material fact, condition or information not disclosed in the
Registration Statement or the Prospectus which has had or may have a material
adverse effect on the Company and its subsidiaries, taken as a whole, and is not
prompted to sell any of the Shares by any information concerning the Company
which is not set forth in the Registration Statement and the Prospectus.
3. Purchase and Sale Agreements.
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3.1. Firm Shares. Each Seller, severally and not jointly, hereby
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agrees to sell to the several Underwriters, and each Underwriter, upon the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from such Seller at $______ a share (the "Purchase Price") the number of Firm
Shares (subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the number of Firm Shares to be
sold by such Seller as the number of Firm Shares set forth in Schedule A hereto
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opposite the name of such Underwriter bears to the total number of Firm Shares.
3.2. Additional Shares. On the basis of the representations and
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warranties contained in this Agreement, and subject to its terms and conditions,
the Company agrees to sell to the Underwriters the Additional Shares, and the
Underwriters shall have a one-time right to purchase, severally and not jointly,
up to 412,500 Additional Shares at the Purchase Price. If you, on behalf of the
Underwriters, elect to exercise such option, you shall so notify the Company in
writing not later than thirty (30) days after the date of this Agreement, which
notice shall specify the number of Additional Shares to be purchased by the
Underwriters and the date on which such shares are to be purchased. Such date
may be the same as the Closing Date (as defined below) but not earlier than the
Closing Date nor later than ten (10) business days after the date of such
notice. Additional Shares may be purchased as provided in Section 4 hereof
solely for the purpose of covering over-allotments made in connection with the
offering of the Firm Shares. If any Additional Shares
are to be purchased, each Underwriter agrees, severally and not jointly, to
purchase the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the total number of Additional Shares to be purchased as the number of Firm
Shares set forth in Schedule A hereto opposite the name of such Underwriter
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bears to the total number of Firm Shares.
3.3. Market Standoff Provision. Each Seller hereby agrees that,
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without the prior written consent of Xxxxxx Xxxxxx Partners, it will not, during
the period ending 90 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock or (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of the Common Stock, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Shares to be sold hereunder, (B) the issuance by the Company of shares of
Common Stock upon the exercise of options or warrants or the conversion of a
security outstanding on the date hereof or under the 2000 Employee Stock
Purchase Plan, (C) the grant by the Company of options to purchase shares of
Common Stock, and the issuance of shares of Common Stock upon the exercise of
such options, pursuant to the Company's 1997 Equity Incentive Plan, 2000 Equity
Incentive Plan and 2000 Non-Employees Directors plan, (D) transactions by any
person other than the Company relating to shares of Common Stock or other
securities acquired in open market transactions after the completion of the
offering of the Shares or (E) the issuance by the Company of Common Stock or
securities convertible into or exchangeable for Common Stock in connection with
mergers or the acquisition of securities, businesses, property or other assets;
provided, however, that any such issuance shall not amount to more than 3% of
the Company's outstanding Common Stock as of the date of this Agreement. In
addition, each Selling Shareholder, agrees that, without the prior written
consent of Xxxxxx Xxxxxx Partners, it will not, during the period ending 90 days
after the date of the Prospectus, make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.
3.4. Terms of Public Offering. The Sellers are advised by you
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that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable.
4. Payment and Delivery.
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4.1. Firm Shares. Payment for the Firm Shares to be sold by
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each Seller shall be made to such Seller in immediately available funds against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on April __, 2002, or at such
other time on the same or such other date, not later than [5 business days after
date above] as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Closing Date".
4.2. Additional Shares. Payment for any Additional Shares shall
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be made to the Company in immediately available funds in New York City against
delivery of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 3(b) or at such other time on the same or on such
other date, in any event not later than [10 days after expiration of
over-allotment option] as shall be designated in writing by you. The time and
date of such payment are hereinafter referred to as the "Option Closing Date".
4.3. Delivery of Certificates. Certificates for the Firm Shares
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and Additional Shares shall be in definitive form and registered in such names
and in such denominations as you shall request in writing
not later than one (1) full business day prior to the Closing Date or the Option
Closing Date, as the case may be. The certificates evidencing the Firm Shares
and Additional Shares shall be delivered to you on the Closing Date or the
Option Closing Date, as the case may be, for the respective accounts of the
several Underwriters, with any transfer taxes payable in connection with the
transfer of the Shares to the Underwriters duly paid, against payment of the
Purchase Price therefor.
5. Covenants of the Company. In further consideration of the
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agreements of the Underwriters herein contained,the Company covenants with each
Underwriter as follows:
5.1. Furnish Copies of Registration Statement and Prospectus. To
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furnish to Xxxxxx Xxxxxx Partners LLC, without charge, a signed copy of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City, without charge, prior
to 10:00 a.m. New York City time on the business day next succeeding the date of
this Agreement and during the period mentioned in Section 5(c) below, as many
copies of the Prospectus and any supplements and amendments thereto (including
any documents incorporated or deemed incorporated by reference therein or to the
Registration Statement as you may reasonably request.
5.2. Notification of Amendments or Supplements. Before amending
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or supplementing the Registration Statement or the Prospectus (including any
amendment or supplement through incorporation by reference of any report filed
under the Exchange Act), to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object, and to file with the Commission
within the applicable period specified in Rule 424(b) under the Securities Act
any prospectus required to be filed pursuant to such rule.
5.3. Filings of Amendments or Supplements. If, during such period
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after the first date of the public offering of the Shares as in the opinion of
counsel for the Underwriters the Prospectus is required by law to be delivered
in connection with sales by an Underwriter or dealer (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 counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to comply
with applicable law, forthwith to prepare, file with the Commission and furnish,
at its own expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have been sold by
you on behalf of the Underwriters and to any other dealers upon request, either
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.
5.4. Blue Sky Laws. To endeavor to qualify the Shares for offer
-------------
and sale under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request.
5.5. Earnings Statement. To make generally available to its
------------------
securityholders as soon as practicable, but in any event not later than eighteen
(18) months after the effective date of the Registration Statement (as defined
in Rule 158(c) under the Securities Act), an earnings statement of the Company
and its subsidiaries (which need not be audited) complying with Section 11(a) of
the Securities Act and the rules and regulations thereunder (including, at the
option of the Company, Rule 158).
5.6. Use of Proceeds. The Company shall apply the net proceeds
---------------
from the sale of the Shares sold by it in the manner described under the caption
"Use of Proceeds" in the Prospectus.
5.7. Transfer Agent. The Company shall engage and maintain, at
--------------
its expense, a registrar and transfer agent for the Common Stock.
5.8. 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.
5.9. Exchange Act Compliance. During the Prospectus Delivery
-----------------------
Period, the Company will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the Exchange Age in the manner
and within the time periods required by the Exchange Act.
6. Conditions to the Underwriters' Obligations. The obligations
-------------------------------------------
of the Sellers to sell the Shares to the several Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the following conditions:
6.1. Effective Registration Statement. The Registration Statement
--------------------------------
shall have become effective not later than [__________] (New York City time) on
the date hereof (the "Effective Date").
6.2. Rule 462 Registration Statement. If the Company elects to
-------------------------------
rely upon Rule 462(b), the Company shall file a Rule 462 Registration Statement
with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462 Registration
Statement or give irrevocable instructions for the payment of such fee pursuant
to Rule 111(b) under the Securities Act.
6.3. Prospectus Filed with Commission. 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.
6.4. No Stop Order. No stop order suspending the effectiveness of
-------------
the Registration Statement, any Rule 462 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.
6.5. No NASD Objection. The NASD shall have raised no objection
------------------
to the fairness and reasonableness of the underwriting terms and arrangements.
6.6. No Debt Downgrading. There shall not have occurred any
-------------------
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act.
6.7. No Material Adverse Change. There shall not have occurred
--------------------------
any change, or any development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement)
that, in your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
6.8. Officer's Certificate. The Underwriters shall have received
---------------------
on the Closing Date a certificate, dated the Closing Date and signed by the
Chief Executive Officer or President of the Company, to the effect set forth in
Sections 6.4 and 6.7 above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct as of
the Closing Date and that the Company has complied with all of the agreements
and satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date. The officers signing and delivering
such certificate may rely upon the best of his or her respective knowledge as to
proceedings threatened.
6.9. Opinion of Company Counsel. The Underwriters shall have
--------------------------
received on the Closing Date an opinion of Xxxxxx Godward LLP, counsel for the
Company, dated the Closing Date, the form of which is attached hereto as
Exhibit A. The opinion shall be rendered to the Underwriters at the request of
---------
the Company and shall so state therein. With respect to the statement after
paragraph (xii) of Exhibit A, such counsel may state that their opinion and
---------
belief are based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and review
and discussion of the contents thereof, but are without independent check or
verification, except as specified.
6.10. Opinion of Selling Shareholder Counsel. The Underwriters
--------------------------------------
shall have received on the Closing Date an opinion of Xxxxxx Godward LLP,
counsel for the Selling Shareholder, dated the Closing Date, the form of which
is attached hereto as Exhibit B. The opinion shall be rendered to the
---------
Underwriters at the request of the Selling Shareholder and shall so state
therein.
6.11. Opinion of Underwriters Counsel. The Underwriters shall
-------------------------------
have received on the Closing Date an opinion of Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, Professional Corporation, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in Exhibit A, paragraphs (vi),
---------
(vii), (ix) and the statement after paragraph (xii). With respect to the
statement after paragraph (xii) of Exhibit A, such counsel may state that their
---------
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification, except as specified.
6.l2. Accountant's Comfort Letter. The Underwriters shall have
---------------------------
received, on each of the date hereof and the Closing Date, a letter dated the
date hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Underwriters, from Deloitte & Touche LLP, independent public
accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus; provided that the letter delivered on
the Closing Date shall use a "cut-off date" not earlier than the date hereof.
6.13. Lock-Up Agreements. The "lock-up" agreements, each
------------------
substantially in the form of Exhibit C hereto, between you and certain officers
and directors of the Company, delivered to you on or before the date hereof,
shall be in full force and effect on the Closing Date.
6.14. Selling Shareholder Certificate. The Underwriters shall
-------------------------------
have received on the Closing Date a certificate, dated the Closing Date and
signed by the Attorney-in-Fact of the Selling Shareholder, to the effect that
the representations and warranties of the Selling Shareholder contained in this
Agreement are true and correct as of the Closing Date and that the Selling
Shareholder has complied with all of the agreements and satisfied all of the
conditions on his part to be performed or satisfied hereunder on or before the
Closing Date.
6.15. Selling Shareholder Documents. On the date hereof, the Company and
-----------------------------
the Selling Shareholder shall have furnished for review by the Representatives
copies of the Powers of Attorney and Custody Agreements executed by the Selling
Shareholder and such further information, certificates and documents as the
Representatives may reasonably request.
6.16. Additional Documents. On the 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 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.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction of each of the above conditions on or
prior to the Option Closing Date and to the delivery to you on the Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares.
7. Expenses. Whether or not the transactions contemplated in this Agreement
--------
are consummated or this Agreement is terminated, the Sellers agree to pay or
cause to be paid all expenses incident to the performance of their obligations
under this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel, the Company's accountants and counsel for the Selling
Shareholders in connection with the registration and delivery of the Shares
under the Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified; (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon; (iii) all filing fees and the reasonable fees
and disbursements of counsel to the Underwriters incurred in connection with the
review and qualification of the offering of the Shares by the NASD; (iv) all
fees and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Common Stock and all costs
and expenses incident to listing the Shares on the Nasdaq National Market; (v)
the cost of printing certificates representing the Shares; (vi) the costs and
charges of any transfer agent, registrar or depositary; (vii) the costs and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show; (viii) all expenses in connection with any offer
and sale of the Shares outside of the United States, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection with offers and sales outside of the United States; and (ix) all
other costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section. It
is understood, however, that except as provided in this Section, Section 8
entitled "Indemnity and Contribution", and the last paragraph of Section 11
below, the Underwriters will pay all of their costs and expenses, including fees
and disbursements of their counsel and any advertising expenses connected with
any offers they may make.
The provisions of this Section shall not supersede or otherwise affect any
agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
8. Indemnity and Contribution.
--------------------------
8.1. Indemnification of the Underwriters. The Company, agrees to indemnify
-----------------------------------
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except (i) insofar as such losses, claims, damages or liabilities
are caused by any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein and
(ii) 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 or liability purchased Shares, or any person
controlling such Underwriter, if copies of the Prospectus were timely delivered
to the Underwriter pursuant to Section 5 and a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the 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.
8.2. Indemnification of Company by the Selling Shareholder. The Selling
-----------------------------------------------------
Shareholder agrees to indemnify and hold harmless the Company, its directors,
its officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, but only with reference to information relating to the Selling
Shareholder furnished in writing by or on behalf of the Selling Shareholder
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto and any report or other
filing with the Commission incorporated by reference therein.
8.3. Indemnification of Underwriters by Selling Shareholder. The Selling
------------------------------------------------------
Shareholder agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with reference
to information relating to the Selling Shareholder furnished in writing by or on
behalf of the Selling Shareholder expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto or any report or other filing with the
Commission incorporated by reference therein .
8.4. Indemnification by the Underwriters. Each Underwriter agrees,
-----------------------------------
severally and not jointly, to indemnify and hold harmless the Company, the
Selling Shareholders, the directors of the Company, the officers of the Company
who sign the Registration Statement and each person, if any, who controls the
Company or any Selling Shareholder within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
8.5. Indemnification Procedures. In case any proceeding (including any
--------------------------
governmental investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
The indemnifying party shall not be liable to the extent the indemnified party
fails to notify the indemnifying party of any proceeding for which indemnity may
be sought and such failure to provide notice results in a forfeiture by the
indemnifying party of substantial rights or defenses or the indemnifying party
is otherwise materially prejudiced by such omission. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for (i) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, (ii) the fees and expenses of more than one separate firm (in addition to
any local counsel) for the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either such Section and (iii) the fees and expenses of more than
one separate firm (in addition to any local counsel) for the Selling Shareholder
and that all such fees and expenses shall be reimbursed as they are incurred. In
the case of any such separate firm for the Underwriters and such control persons
of any Underwriters, such firm shall be designated in writing by Xxxxxx Xxxxxx
Partners. In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate firm for
the Selling Shareholder and such control persons of any Selling Shareholders,
such firm shall be designated in writing by the Selling Shareholder or persons
named as attorneys-in-fact for the Selling Shareholders under the Powers of
Attorney. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its prior 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 from and against any loss or liability 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 the second
and third sentences of this paragraph, 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 60 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
8.6. Limitation of Selling Shareholder Liability. The
-------------------------------------------
liability of the Selling Shareholder under the indemnity and contribution
provisions of this Section 8 shall be limited to an amount equal to the public
offering price of the Shares sold by the Selling Shareholder, less the
underwriting discount, as set forth on the front cover page of the Prospectus.
The Company and the Selling Shareholder may agree, as among themselves and
without limiting the rights of the Underwriters under this Agreement, as to the
respective amounts of such liability for which they each shall be responsible.
8.7. Contribution Agreement. To the extent the indemnification
----------------------
provided for in this Section 8 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party or parties on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause 8(g) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 8(g) above but also the relative fault
of the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Sellers on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by each Seller and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Sellers on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Sellers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective number of Shares they have purchased hereunder, and not joint. No
party shall be liable for contribution with respect to any settlement of any
losses, claims, damages or liabilities if such settlement was effected by the
party seeking contribution without the contributing party's prior written
consent. 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 the second and third
sentences of paragraph 8.5 above, 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 60 days after receipt by such
indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement.
8.8. Contribution Amounts. The Sellers and the
---------------------
Underwriters agree that it would not be just or equitable if contribution
pursuant to this Section 8 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 that does not take account of the equitable considerations
referred to in Section 8.9. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, (A) no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and (B) the Selling
Shareholder shall not be required to contribute any amount in excess of the
offering price of the Shares sold by the Selling Shareholder less the offering
discount as set forth on the front cover page of the prospectus. 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 remedies provided for in
this Section 8 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
8.9. Survival of Provisions. The indemnity and contribution
----------------------
provisions contained in this Section 8 and the representations, warranties and
other statements of the Company and the Selling Shareholders contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement after the consummation of the transactions
contemplated hereby, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, any Selling Shareholder
or any person controlling any Selling Shareholder, or the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Shares.
9. Effectiveness. This Agreement shall become effective
-------------
upon the execution and delivery hereof by the parties hereto.
10. Termination. This Agreement shall be subject to
-----------
termination by notice given by you to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York, Washington or California shall have
been declared by either federal or New York, Washington or California state
authorities or (iv) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis that,
in your reasonable judgment, is material and adverse, or (v) in the reasonable
judgment of the Representatives, there shall have occurred any 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, taken as a whole, and (b) in the case of any of the events
specified in clauses 10(a)(i) through 10(a)(v), such event, individually or
together with any other such event, makes it, in your reasonable judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
11. Defaulting Underwriters. If, on the Closing Date or
------------------------
the Option Closing Date, as the case may be, any one or more of the Underwriters
shall fail or refuse to purchase Shares that it has or they have agreed to
purchase hereunder on such date, and the aggregate number of Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of the Shares to be purchased
on such date, the other Underwriters shall be obligated severally in the
proportions that the number of Firm Shares set forth opposite their respective
names in Schedule A bears to the aggregate number of Firm Shares set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as you may specify, to purchase the Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Shares that any Underwriter
has agreed to purchase pursuant to this Agreement be increased pursuant to this
Section 11 by an amount in excess of one-ninth of such number of Shares without
the written consent of such Underwriter. If, on the Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares and the
aggregate number of Firm Shares with respect to which such default occurs is
more than one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you, the Company and the Selling Shareholders for
the purchase of such Firm Shares are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Shareholders. In any such
case either you or the relevant Sellers shall have the right to postpone the
Closing Date, but in no event for longer than seven (7) days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected. If, on the Option
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased, the non-defaulting Underwriters shall have
the option to (i) terminate their obligation hereunder to purchase Additional
Shares or (ii) purchase not less than the number of Additional Shares that such
non-defaulting Underwriters would have been obligated to purchase in the absence
of such default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of any Seller to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason any Seller shall be unable to perform its obligations under
this Agreement, the Sellers will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Headings; Table of Contents. The headings of the sections
---------------------------
of this Agreement and the table of contents have been inserted for convenience
of reference only and shall not be deemed a part of this Agreement.
14. Notices. All communications hereunder shall be in writing
-------
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives:
Xxxxxx Xxxxxx Partners LLC
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: _____________________
with a copy to:
Xxxxxx Xxxxxx Partners LLC
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
If to the Company or the Selling Shareholder:
Peet's Coffee & Tea, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx
Facsimile: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx
with a copy to:
Xxxxxx Godward LLP
Xxx Xxxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
15. Successors. This Agreement will inure to the benefit of
----------
and be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 11 hereof, and to the benefit of the officers and directors
and controlling persons referred to in Section 8, and in each case their
respective successors, and no other person will have any right or obligation
hereunder. The term "successors" shall not include any purchaser of the Shares
as such from any of the Underwriters merely by reason of such purchase.
16. 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.
17. Governing Law. 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.
18. Consent to Jurisdiction. Any legal suit, action or
-----------------------
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby ("Related Proceedings") may be instituted in
the federal courts of the United States of America located in the City and
County of San Francisco or the courts of the State of California in each case
located in the City and County of San Francisco (collectively, the "Specified
Courts"), and each party irrevocably submits to the exclusive jurisdiction
(except for proceedings instituted in regard to the enforcement of a judgment of
any such court (a "Related Judgment"), as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action or proceeding. Service of
any process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any suit, action or other
proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit, action
or other proceeding in the Specified Courts and irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such suit,
action or other proceeding brought in any such court has been brought in an
inconvenient forum.
19. Failure of the Selling Shareholder to Sell and Deliver Shares. If the
-------------------------------------------------------------
Selling Shareholder shall fail to sell and deliver to the Underwriters the
Shares to be sold and delivered by such Selling Shareholder at the Closing Date
pursuant to this Agreement, then the Underwriters may at their option, by
written notice from the Representatives to the Company and the Selling
Shareholder, either (i) terminate this Agreement without any liability on the
part of any Underwriter or, except as provided in Sections 7 and 8 hereof, the
Company or the Selling Shareholder, or (ii) purchase the shares which the
Company has agreed to sell and deliver in accordance with the terms hereof. If
the Selling Shareholders shall fail to sell and deliver to the Underwriters the
Shares to be sold and delivered by such Selling Shareholder pursuant to this
Agreement at the Closing Date or the Option Closing Date, then the Underwriters
shall have the right, by written notice from the Representatives to the Company
and the Selling Shareholder, to postpone the Closing Date or the Option Closing
Date, as the case may be, but in no event for longer than seven (7) 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.
20. Entire Agreement. 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.
21. Amendments. This Agreement may only be amended or modified in writing,
----------
signed 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.
22. Sophisticated Parties. 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 and contribution provisions of Section 8, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Section 8 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.
[Remainder of page intentionally left blank]
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,
PEET'S COFFEE & TEA, INC.
By:
-----------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
The Selling Shareholders
named in Schedule B hereto,
acting severally
By:
-----------------------------------------------
Attorney-in-Fact
Accepted as of the date hereof
Xxxxxx Xxxxxx Partners LLC
Pacific Growth Equities, Inc.
XX Xxxxxxxxx & Co.
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule A hereto.
By: Xxxxxx Xxxxxx Partners LLC
By:
------------------------------------------
Name:
Title:
SCHEDULE A
Underwriter Number of Firm Shares
To Be Purchased
Xxxxxx Xxxxxx Partners LLC
Pacific Growth Equities, Inc.
XX Xxxxxxxxx & Co.
Total 2,250,000
=========
SCHEDULE B
Number of Firm
Selling Shares
Shareholder To Be Sold
Xxxxxx Xxxxxxx 500,000
Total 500,000
=======
EXHIBIT A
---------
Form of Legal Opinion of Company Counsel
i. The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in the states of Washington,
California and Illinois.
ii. Each Subsidiary of the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in Washington and California, and with
respect to Peet's Operating Company, Inc. in Oregon, Illinois and Massachusetts.
iii. All of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned of record by the Company.
iv. The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Registration Statement.
v. The shares of Common Stock (including the Shares to be sold by the
Selling Shareholder) outstanding prior to the issuance of the Shares to be sold
by the Company have been duly authorized and are validly issued, fully paid and
non-assessable.
vi. The Shares to be sold by the Company have been duly authorized and,
when issued and delivered in accordance with the terms of the Underwriting
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or, to the best of
counsel's knowledge, similar rights.
vii. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
viii. The execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Underwriting Agreement will not
contravene any provision of applicable law (other than (A) applicable state
securities and blue sky laws, and (B) with respect to performance by the Company
of any obligations relating to indemnification or contribution under the
Underwriting Agreement, in each case as to which we express no opinion) or the
articles of incorporation or bylaws of the Company or, to the best of such
counsel's knowledge, any agreement or other instrument binding upon the Company
or any of its Subsidiaries that has been filed by the Company as an exhibit to
any registration statement filed by the Company with the Commission or any
report filed by the Company with the Commission pursuant to the Exchange Act and
incorporated by reference into the Registration Statement or, to the best of
such counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any Subsidiary,
and no consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, except such as (a) have been obtained
under the Securities Act, (b) may be required by
the securities or Blue Sky laws of the various states in connection with the
offer and sale of the Shares or (c) may be required by the NASD, in each case as
to which we express no opinion.
ix. The statements in the description of the Company's common stock
incorporated by reference into the Registration Statement from the Company's
Registration Statement on Form 8-A filed on January 18, 2001, as such statements
constitute summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to such legal
matters, documents and proceedings and fairly summarize the matters referred to
therein.
x. To such counsel's knowledge, there are no (A) legal or governmental
proceedings pending or overtly threatened to which the Company or any of its
Subsidiaries is a party or to which any of the properties of the Company or any
of its Subsidiaries is subject that are required by the rules and regulations
promulgated under the Securities Act to be described in the Registration
Statement or the Prospectus and are not so described, (B) any statutes,
regulations, contracts or other documents that are required by the rules and
regulations promulgated under the Securities Act to be described or incorporated
by reference in the Registration Statement or the Prospectus or to be filed or
incorporated by reference as exhibits to the Registration Statement that are not
described or filed or incorporated as required under the Securities Act.
xi. The Company is not and, after giving effect to the offering and sale of
the Shares and the application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
xii. Each document filed by the Company pursuant to the Exchange Act
(except for financial statements and schedules and other financial and
statistical data included therein as to which such counsel need not express any
opinion) and incorporated or deemed to be incorporated by reference in the
Prospectus complied when so filed as to form in all material respects with the
Exchange Act.
In connection with the preparation of the Registration Statement and the
Prospectus, counsel has participated in conferences with officers and other
representatives of the Company and with its certified public accountants, as
well as with representatives of the Underwriters and their counsel. At such
conferences, the contents of the Registration Statement and the Prospectus and
related matters were discussed. Counsel has not independently verified and
accordingly is not confirming and assumes no responsibility for the accuracy or
completeness of the statements contained in the Registration Statement or the
Prospectus. On the basis of the foregoing, nothing has come to counsel's
attention that has caused counsel to believe (i) that the Registration Statement
(except as to the financial statements and schedules, related notes and other
financial data and statistical data derived therefrom, as to which counsel need
not express any belief) at the Effective Date contained any 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 (ii) that the
Prospectus (except as to the financial statements and schedules, related notes
and other financial data and statistical data derived therefrom, as to which
counsel need not express any belief) as of its date or at the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary, in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
EXHIBIT B
---------
Form of Legal Opinion of Selling Shareholders Counsel
i. The Underwriting Agreement has been executed and delivered by or on
behalf of the Selling Shareholder.
ii. The Custody Agreement and the Power of Attorney of the Selling
Shareholder have been executed and delivered by or on behalf of the Selling
Shareholder and are valid and binding agreements of the Selling Shareholder
except as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting
creditors' rights, and subject to general equity principles and to limitations
on availability of equitable relief, including specific performance.
iii. The Shares conform in all material respects to the description thereof
under the caption "Description of Registrant's Securities to be Registered" in
the Company's Registration Statement on Form 8-A filed with the Securities and
Exchange Commission on January 18, 2001, as amended, and the form of Common
Stock certificate filed as exhibit to the Registration Statement is in due and
proper form under the Washington Corporation Law.
Such counsel may rely with respect to factual matters and to the extent
such counsel deems appropriate, upon the representations of each Selling
Shareholder contained in the Underwriting Agreement and in the Custody Agreement
and Power of Attorney of such Selling Shareholder and in other documents and
instruments; provided that copies of such Custody Agreements and Powers of
Attorney and of any such other documents and instruments shall be delivered to
counsel to the Underwriters and shall be in form and substance satisfactory to
counsel to the Underwriters.
EXHIBIT C
---------
FORM OF LOCK-UP AGREEMENT
March 28, 2002
Xxxxxx Xxxxxx Partners LLC
Pacific Growth Equities, Inc.
XX Xxxxxxxxx & Co.
As Representatives of the several Underwriters
c/o Thomas Xxxxxx Partners LLC
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Re: Lock-Up Agreement (the "Agreement")
-----------------------------------
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock, no par value (the "Common Stock"), of Peet's Coffee & Tea, Inc., a
Washington corporation (the "Company"), or securities convertible into or
exchangeable or exercisable for Common Stock. The undersigned understands that
you, as representatives (the "Representatives"), propose to enter into an
Underwriting Agreement on behalf of the several Underwriters named in Schedule A
----------
to such agreement (collectively, the "Underwriters"), with the Company providing
for a public offering of the Common Stock of the Company pursuant to a
Registration Statement on form S-3 to be filed with the Securities and Exchange
Commission (the "Public Offering"). The undersigned recognizes that the Public
Offering will be of benefit to the undersigned and will benefit the Company by,
among other things, raising additional capital for its operations. 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 Public Offering and in entering into underwriting arrangements
with the Company with respect to the Public Offering.
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Xxxxxx Xxxxxx Partners
(which consent may be withheld in its sole discretion), it will not, during the
period commencing on the date hereof and ending 90 days after the initial filing
date of the registration statement relating to the Public Offering (the
"Registration Statement"), (1) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or (2) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. In
addition, the undersigned agrees that, without the prior written consent of
Xxxxxx Xxxxxx Partners (which consent may be withheld in its sole discretion),
it will not, during the period commencing on the date hereof and ending 90 days
after the initial filing of the Registration Statement, make any demand for or
exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for Common
Stock. With respect to the Public Offering, the undersigned waives any
registration rights relating to registration under the Securities Act of any
Common Stock owned either of record or beneficially by the undersigned,
including any rights to receive notice of the Public Offering.
The foregoing restrictions are expressly agreed to preclude the undersigned
from engaging in any hedging or other transaction that is designed to or
reasonably expected to lead to or result in a sale or disposition of the Common
Stock even if such Common Stock would be disposed of by someone other than the
undersigned. Such prohibited hedging or other transactions would include without
limitation any short sale or any purchase, sale or grant of any right (including
without limitation any put option or put equivalent position or call option or
call equivalent position) with respect to any of the Common Stock or with
respect to any security that includes, relates to, or derives any significant
part of its value from such Common Stock.
Notwithstanding the foregoing, the undersigned may transfer shares of
Common Stock (i) as a bona fide gift or gifts or by will or intestacy, provided
that the transferee or transferees thereof agree to be bound by the restrictions
set forth herein, (ii) to a member or members of his or her immediate family or
to a partnership, or other entity or a trust the partners, owners or
beneficiaries of which are exclusively the undersigned or the immediate family
of the undersigned, provided that the transferee or transferees agree to be
bound by the restrictions set forth herein, and provided further that any such
transfer shall not involve a disposition for value, (iii) to the Underwriters
pursuant to the Underwriting Agreement, or (iv) in transactions relating to
shares of Common Stock acquired by the undersigned in open market transactions
after the completion of the Public Offering. For purposes of this Agreement,
"immediate family" shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin. In addition, notwithstanding the foregoing,
if the undersigned is a corporation, the corporation may transfer the capital
stock of the Company to any wholly-owned subsidiary of such corporation;
provided, however, that in any such case, it shall be a condition to the
-------- -------
transfer that the transferee execute an agreement stating that the transferee is
receiving and holding such capital stock subject to the provisions of this
Agreement and there shall be no further transfer of such capital stock except in
accordance with this Agreement, and provided further that any such transfer
shall not involve a disposition for value.
The undersigned understands that whether or not the Public Offering
actually occurs depends on a number of factors, including stock market
conditions. The Public Offering will only be made pursuant to an Underwriting
Agreement, the terms of which are subject to negotiation among the Company and
the Underwriters. If for any reason the Company decides not to pursue an
offering of its Common Stock or if the Underwriting Agreement (other than
provisions thereof which secure termination) shall terminate or be terminated
prior to payment for and delivery of the shares of Common Stock, this Agreement
shall be terminated immediately.
The undersigned 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.
Very truly yours,
----------------------------
(Name)
----------------------------
(Address)
