Exhibit 4
Stock Purchase Agreement
BUCA, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
The undersigned (the "Investor"), hereby confirms its agreement with you as
follows:
This Stock Purchase Agreement (the "Agreement") is made as of the date set forth
below between BUCA, Inc., a Minnesota corporation (the "Company"), and the
Investor.
The Company has authorized the sale and issuance of up to ___________ shares
(the "Shares") of common stock of the Company, $.01 par value per share (the
"Common Stock"), to certain investors in a private placement (the "Offering").
The Company and the Investor agree that the Investor will purchase from the
Company and the Company will issue and sell to the Investor _______ Shares at a
purchase price of $18.50 per Share, or an aggregate purchase price of
$____________________, pursuant to the Terms and Conditions for Purchase of
Shares attached hereto as Annex I and incorporated herein by this reference as
if fully set forth herein. Unless otherwise requested by the Investor in
Exhibit A, certificates representing the Shares purchased by the Investor will
be registered in the Investor's name and address as set forth below.
The Investor represents that, except as set forth below, (a) it has had no
position, office or other material relationship within the past three years with
the Company or its affiliates, (b) neither it, nor any group of which it is a
member or to which it is related, beneficially owns (including the right to
acquire or vote) any securities of the Company and (c) it has no direct or
indirect affiliation or association with any National Association of Securities
Dealers, Inc. ("NASD") member. Exceptions:
________________________________________________________________________________
(If no exceptions, write "none." If left blank, response will be deemed to be
"none.")
1
Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.
Dated as of: February 26, 2001
____________________________________________
"INVESTOR"
By:_________________________________________
Print Name:_________________________________
Title:______________________________________
Address:____________________________________
____________________________________________
AGREED AND ACCEPTED:
BUCA, Inc.
By:____________________________
Title:_________________________
2
Annex I
Terms and Conditions for Purchase of Shares
1. Agreement to Sell and Purchase the Shares; Subscription Date.
1.1 Purchase and Sale. At the Closing (as defined in Section 2),
the Company will sell to the Investor, and the Investor will purchase from the
Company, upon the terms and conditions hereinafter set forth, the number of
Shares set forth in paragraph 3 of the Stock Purchase Agreement to which these
Terms and Conditions for Purchase of Shares are attached as Annex I and at the
purchase price set forth in such paragraph.
1.2 Other Investors. As part of the Offering, the Company proposes
to enter into this same form of Stock Purchase Agreement with certain other
investors (the "Other Investors"), and the Company expects to complete sales of
Shares to them. (The Investor and the Other Investors are hereinafter sometimes
collectively referred to as the "Investors," and this Agreement and the Stock
Purchase Agreements executed by the Other Investors are hereinafter sometimes
collectively referred to as the "Agreements.") The Company will accept executed
Agreements from Investors for the purchase of Shares commencing upon the date on
which the Company provides the Investors with the proposed purchase price per
Share and concluding upon the date (the "Subscription Date") on which the
Company has notified U.S. Bancorp Xxxxx Xxxxxxx Inc. (in its capacity as
Placement Agent for the Shares, the "Placement Agent") in writing that it is no
longer accepting Agreements for the purchase of Shares in the Offering. The
purchase price per Share shall be the same for the Investor and all Other
Investors. In addition, the Company shall promptly disclose any side letter or
similar agreement or any variation to the form of Stock Purchase Agreement, that
the Company has entered into, both as of and after the date hereof, with any
Other Investor in connection with the offering and sale of Shares, and the
Investor shall be entitled to receive the same rights set forth in any such side
letter or variation to the form of Stock Purchase Agreement (contingent upon the
Investor's agreement to be bound by any obligation(s) such rights are subject
to) upon the written request of the Investor.
1.3 Placement Agent Fee. Investor acknowledges that the Company
intends to pay the Placement Agent a fee in respect of the sale of Shares to the
Investor.
2. Delivery of the Shares at Closing. The completion of the purchase and
sale of the Shares (the "Closing") shall occur at a place and time, no later
than March 1, 2001 (the "Closing Date"), to be specified by the Company and the
Placement Agent, and of which the Investors will be notified in advance by the
Placement Agent. At the Closing, the Company shall deliver to the Investor one
or more stock certificates representing the number of Shares set forth on the
signature page hereto, each such certificate to be registered in the name of the
Investor or, if so indicated on the Stock Certificate Questionnaire attached
hereto as Exhibit A, in the name of a nominee designated by the Investor
provided that, if requested by the Investor, stock certificates representing
such Shares shall be delivered in escrow to such Investor's agent prior to the
Closing, to be held until the completion of the Closing. In addition, on or
prior to the Closing Date, the Company shall cause counsel to the Company to
deliver to the Investors a legal opinion in the form attached hereto as Exhibit
D. The completion of the purchase and sale of Shares to any Other Investor shall
occur on or before March 1, 2001.
The Company's obligation to issue and sell the Shares to the Investor shall
be subject to the following conditions, any one or more of which may be waived
by the Company: (a) receipt by the Company of the purchase price for the Shares
being purchased hereunder as set forth on the signature page hereto; (b)
completion of purchases and sales under the Agreements with the Other Investors;
and
1
(c) the accuracy of the representations and warranties made by the Investors
and the fulfillment of those undertakings of the Investors to be fulfilled prior
to the Closing.
The Investor's obligation to purchase the Shares shall be subject to the
following conditions, any one or more of which may be waived by the Investor:
(a) the Company's agreement to issue and sell, and the Investors' agreements to
purchase, on the Closing Date, not less than one million (1,000,000) shares of
Common Stock; (b) the delivery to the Investor by counsel to the Company of a
legal opinion in the form attached hereto as Exhibit D; (c) the representations
and warranties of the Company contained in Section 3 being true and correct in
all material respects on and as of such Closing with the same effect as though
such representations and warranties had been made on and as of the date of such
Closing; (d) the absence of any order, writ, injunction, judgment or decree that
questions the validity of the Agreements or the right of the Company to enter
into such Agreements or to consummate the transactions contemplated hereby and
thereby; and (e) the delivery to the Investor by the Secretary or Assistant
Secretary of the Company of a certificate stating that the condition specified
in part (c) of this paragraph has been fulfilled.
3. Representations, Warranties and Covenants of the Company. Except as
otherwise described in the Company's Annual Report on Form 10-K for the year
ended December 26, 1999 (and any amendments thereto filed prior to the date
hereof), the Company's Proxy Statement for its 2000 Annual Meeting of
Shareholders, or the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 26, 2000, June 25, 2000, and September 24, 2000, any of the
Company's Current Reports on Form 8-K filed since January 1, 2000, or the
Company's prospectus filed with the Securities and Exchange Commission (the
"SEC") on April 13, 2000 (collectively, the "SEC Reports" or the "Reports"), or
the Company's earnings press release dated February 6, 2001, the Company hereby
represents and warrants to, and covenants with, the Investor as of the date
hereof and the Closing Date, as follows:
3.1 Organization. Each of the Company and its Subsidiaries (as
defined in Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act")) is duly incorporated and validly existing in good standing
under the laws of the jurisdiction of its organization. Each of the Company and
its Subsidiaries has full power and authority to own, operate and occupy its
properties and to conduct its business as presently conducted and is registered
or qualified to do business and in good standing in each jurisdiction in which
it owns or leases property or transacts business and where the failure to be so
qualified would have a material adverse effect upon the Company and its
Subsidiaries taken as a whole, or the business, financial condition, properties,
operations or assets of the Company and its Subsidiaries taken as a whole, or
the Company's ability to perform its obligations under the Agreements ("Material
Adverse Effect"), and no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification, which proceeding is reasonably likely to
result in a Material Adverse Effect.
3.2 Due Authorization. The Company has all requisite power and
authority to execute, deliver and perform its obligations under the Agreements,
and the Agreements have been duly authorized and validly executed and delivered
by the Company and constitute legal, valid and binding agreements of the Company
enforceable against the Company in accordance with their terms, except as rights
to indemnity and contribution may be limited by state or federal securities laws
or the public policy underlying such laws, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
2
3.3 Non-Contravention. The execution and delivery of the
Agreements, the issuance and sale of the Shares to be sold by the Company under
the Agreements, the fulfillment of the terms of the Agreements and the
consummation of the transactions contemplated thereby will not (A) result in
conflict with or constitute a violation of, or default (with the passage of time
or otherwise) under, (i) any bond, debenture, note or other evidence of
indebtedness, or any lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or their respective properties are bound, where such conflict,
violation or default is reasonably expected to result in a Material Adverse
Effect, (ii) the articles of incorporation, by-laws or other organizational
documents of the Company or any of its Subsidiaries, or (iii) any law,
administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority binding upon the Company or any of its
Subsidiaries or their respective properties, where such conflict, violation or
default is reasonably likely to result in a Material Adverse Effect or (B)
result in (x) the creation or imposition of any lien, encumbrance, claim,
security interest or restriction whatsoever upon any of the properties or assets
of the Company or any of its Subsidiaries which is reasonably likely to result
in a Material Adverse Effect or (y) an acceleration of indebtedness pursuant to
any obligation, agreement or condition contained in any bond, debenture, note or
any other evidence of indebtedness or any indenture, mortgage, deed of trust or
any other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them is bound or to which any of the
property or assets of the Company or any of its Subsidiaries is subject which is
reasonably likely to result in a Material Adverse Effect. No consent, approval,
authorization or other order of, or registration, qualification or filing with,
any regulatory body, administrative agency, or other governmental body in the
United States is required for the execution and delivery of the Agreements by
the Company and the valid issuance and sale of the Shares by the Company
pursuant to the Agreements, other than such as have been made or obtained, and
except for any filings required to be made under federal or state securities
laws, which the Company covenants to do in a timely manner.
3.4 Capitalization. The capitalization of the Company as of
September 24, 2000 is as described in the Company's Quarterly Report on Form 10-
Q for the quarter ended September 24, 2000. The Company has not issued any
capital stock since September 24, 2000 other than (i) pursuant to the exercise
of employee stock options under the stock option plans disclosed in the SEC
Reports, (ii) pursuant to the exercise of rights under the Company's Employee
Stock Purchase Plan disclosed in the SEC Reports, and (iii) 14,752 shares of
Common Stock issued upon the exercise of warrants. The Shares to be sold
pursuant to the Agreements have been duly authorized, and when issued and paid
for in accordance with the terms of the Agreements, will be duly and validly
issued, fully paid and nonassessable and free and clear of all pledges, liens
and encumbrances (other than restrictions on transfer under state and/or federal
securities laws as set forth herein or as otherwise required by such laws at the
time a transfer is proposed). The outstanding shares of capital stock of the
Company have been duly and validly issued and are fully paid and nonassessable,
have been issued in compliance with the registration requirements of federal and
state securities laws, and were not issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities. Except for options
issued under the Company's stock option plans and rights under the Company's
Employee Stock Purchase Plan, there are no outstanding rights (including,
without limitation, preemptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any unissued shares of capital
stock or other equity interest in the Company or any of its Subsidiaries, or any
contract, commitment, agreement, understanding or arrangement of any kind, in
either case to which the Company or any of its Subsidiaries is a party and
providing for the issuance or sale of any capital stock of the Company or any of
its Subsidiaries, any such convertible or exchangeable securities or any such
rights, warrants or options. Without limiting the foregoing, no preemptive
right, co-sale right, registration right, right of first refusal or other
similar right exists with respect to the issuance and sale of the Shares, except
as provided in the
3
Agreements. There are no stockholders agreements, voting agreements or other
similar agreements with respect to the Common Stock to which the Company is a
party. The Company owns the entire equity interest in its Subsidiaries, free and
clear of any pledge, lien, security interest, encumbrance, claim or equitable
interest, other than a pledge of all such equity interest to the Company's
lenders pursuant to the Company's line of credit facility.
3.5 Legal Proceedings. There is no legal or governmental proceeding
pending, or to the knowledge of the Company, threatened, to which the Company or
any of its Subsidiaries is a party or of which the business or property of the
Company or any of its Subsidiaries is subject which is reasonably likely to
result in a Material Adverse Effect; nor, to the best knowledge of the Company,
is there any reasonable basis therefor. Neither the Company nor any Subsidiary
is a party to the provisions of any injunction, judgment, decree or order of any
court, regulatory body, administrative agency or other government body which has
had or could reasonably be expected to have a Material Adverse Effect.
3.6 No Violations. Neither the Company nor any of its Subsidiaries
is (a) in violation of its articles of incorporation, bylaws or other
organizational documents, or (b) in violation of any law, administrative
regulation, ordinance or order of any court or governmental agency, arbitration
panel or authority applicable to the Company or any of its Subsidiaries, which
violation, individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect; nor is the Company or any of its Subsidiaries in
default (and there exists no condition which, with the passage of time or
otherwise, would constitute a default) in the performance of any bond,
debenture, note or any other evidence of indebtedness or any indenture,
mortgage, deed of trust or any other material agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries is bound or by which the property of the Company or any of
its Subsidiaries is bound, which default is reasonably likely to have a Material
Adverse Effect.
3.7 Governmental Permits, Etc. Each of the Company and its
Subsidiaries has all necessary franchises, licenses, certificates and other
authorizations from any foreign, federal, state or local government or
governmental agency, department or body that are currently necessary for the
operation of the business of the Company and its Subsidiaries as currently
conducted, except where the failure to currently possess such franchises,
licenses, certificates and other authorizations is not reasonably expected to
have a Material Adverse Effect, and the Company has not received any notice of
proceedings relating to the revocation or modification of any such permit or any
circumstance which would lead it to believe that such proceedings are reasonably
likely which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could reasonably be expected to have a Material
Adverse Effect.
3.8 Intellectual Property.
(a) Except for matters which are not reasonably likely to have
a Material Adverse Effect, (i) each of the Company and its Subsidiaries has
ownership of, or a license or other legal right to use, all patents, copyrights,
trade secrets, trademarks, customer lists, designs, manufacturing or other
processes, computer software, systems, data compilation, research results or
other proprietary rights used in the business of the Company or its Subsidiaries
(collectively, "Intellectual Property") and (ii) all of the Intellectual
Property owned by the Company or its Subsidiaries consisting of patents,
trademarks and copyrights, where necessary or appropriate to protect the
Company's interests, have been duly registered in, filed in or issued by the
United States Patent and Trademark Office, the United States Register of
Copyrights or the corresponding offices of other jurisdictions and have been
maintained and renewed in accordance with all applicable provisions of law and
administrative regulations in the United States and/or such other jurisdictions.
4
(b) Except for matters which have not had and are not
reasonably likely to have a Material Adverse Effect, all licenses or other
agreements under which (i) the Company or any of its Subsidiaries employs rights
in Intellectual Property, or (ii) the Company or any of its Subsidiaries has
granted rights to others in Intellectual Property owned or licensed by the
Company or any of its Subsidiaries, are in full force and effect and there is no
default by the Company or any of its Subsidiaries thereto.
(c) The Company believes that it has taken all steps
reasonably required in accordance with sound business practice and business
judgment to establish and preserve the Company's ownership of all material
Intellectual Property owned by the Company or its Subsidiaries.
(d) Except for matters which have not had and are not
reasonably likely to have a Material Adverse Effect, to the knowledge of the
Company (i) the present business, activities and products of the Company and its
Subsidiaries do not infringe any intellectual property or proprietary rights of
any other person; (ii) neither the Company nor any of its Subsidiaries is making
unauthorized use of any confidential information or trade secrets of any person;
and (iii) the activities of any of the employees on behalf of the Company or any
of its Subsidiaries do not violate any agreements or arrangements related to
confidential information or trade secrets of persons other than the Company or
its Subsidiaries or restricting any such employee's engagement in business
activities of any nature.
(e) No proceedings are pending, or to the knowledge of the
Company, threatened, which challenge the rights of the Company or any of its
Subsidiaries in respect of the Company's or any of its Subsidiaries' right to
the use of the Intellectual Property; nor, to the knowledge of the Company, is
there any reasonable basis therefor, except for matters which have not had and
are not reasonably likely to have a Material Adverse Effect.
(f) The Company is not subject to any judgment, order, writ,
injunction or decree of any court or any federal, state, local, foreign or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or any arbitrator, and has not entered into and is not a
party to any contract which restricts or impairs the use of any such
Intellectual Property in a manner which would have a material adverse effect on
the use of any of the Intellectual Property.
(G) The Company has not entered into any consent,
indemnification, forbearance to xxx or settlement agreement with respect to the
Intellectual Property other than in the ordinary course of business or to
protect the Company's rights to the Intellectual Property. No claims have been
asserted by any person with respect to the validity of the Company's ownership
or right to use the Intellectual Property, except for matters which have not had
and are not reasonably likely to have a Material Adverse Effect and, to the
knowledge of the Company, there is no reasonable basis for any such claim to be
successful.
3.9 Financial Statements. The consolidated financial statements of
the Company and the related notes contained in the SEC Reports present fairly,
in accordance with generally accepted accounting principles, the consolidated
financial position of the Company and its Subsidiaries as of the dates
indicated, and the results of their operations, cash flows and the changes in
stockholders' equity for the periods therein specified, subject, in the case of
unaudited financial statements for interim periods, to normal year-end audit
adjustments. Such consolidated financial statements (including the related
notes) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods therein
specified, except that unaudited financial statements may not contain all
footnotes required by generally accepted accounting principles.
5
3.10 No Material Adverse Change. Since September 24, 2000, there has
not been (i) a change that has had or is reasonably likely to have a Material
Adverse Effect, (ii) any debt, obligation or liability, direct or contingent,
that is material to the Company or any of its Subsidiaries considered as one
enterprise, incurred by the Company or any of its Subsidiaries, except
obligations incurred in the ordinary course of business, (iii) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company or any of its Subsidiaries, or (iv) any loss or damage (whether or not
insured) to the physical property of the Company or any of its Subsidiaries
which has been sustained which has a Material Adverse Effect. Except as
disclosed in the Company's SEC Reports and except for liens and security
interests granted in connection with the Company's credit facility and liens
granted in the ordinary course of business which, as to the latter, have not had
and are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect, since September 24, 2000, the Company has not (i)
mortgaged, pledged or subjected to lien, charge, security interest or other
encumbrance any of its assets, tangible or intangible, (ii) waived any debt owed
to the Company, or (iii) satisfied or discharged any lien, claim or encumbrance
or paid any obligation other than in the ordinary course of business.
3.11 Nasdaq Compliance. The Company's Common Stock is registered
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and is listed on the Nasdaq National Market (the "Nasdaq
Stock Market"), and the Company has taken no action designed to, or which to its
knowledge is reasonably 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 Stock Market. The issuance of the Shares does not require
shareholder approval, including, without limitation, pursuant to the Nasdaq
Marketplace Rules.
3.12 Reporting Status. The Company has timely made all filings
required under the Exchange Act during the 12 months preceding the date of this
Agreement, and all of those documents complied in all material respects with the
SEC's requirements as of their respective filing dates, and the information
contained therein as of the respective dates thereof did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading. The Company is
currently eligible to register the resale of Common Stock in a secondary
offering on a registration statement on Form S-3 under the Securities Act.
3.13 No Manipulation of Stock. The Company has not taken and will
not, in violation of applicable law, take any action outside the ordinary course
of business designed to or that might reasonably be expected to cause or result
in unlawful manipulation of the price of the Common Stock to facilitate the sale
or resale of the Shares.
3.14 Accountants. Deloitte & Touche, LLP, who expressed their
opinion with respect to the consolidated financial statements to be incorporated
by reference from the Company's Annual Report on Form 10-K for the year ended
December 26, 1999 into the Registration Statement (as defined below) and the
prospectus which forms a part thereof (the "Prospectus"), have advised the
Company that they are, and to the best knowledge of the Company they are,
independent accountants as required by the Securities Act and the rules and
regulations promulgated thereunder (the "Rules and Regulations").
3.15 Contracts. Except for matters which are not reasonably likely
to have a Material Adverse Effect, the contracts listed as exhibits to the SEC
Reports, other than those contracts that are substantially or fully performed or
expired by their terms, are in full force and effect on the date hereof,
6
and none of the Company, its Subsidiaries nor, to the Company's knowledge, any
other party to such contracts, is in breach of or default under any of such
contracts.
3.16 Taxes. Except for matters which are not reasonably expected to
have a Material Adverse Effect, the Company has filed all necessary federal,
state and foreign income and franchise tax returns and has paid or accrued all
taxes shown as due thereon, and the Company has no knowledge of a tax deficiency
which has been asserted or threatened against the Company.
3.17 Transfer Taxes. On the Closing Date, all stock transfer or
other taxes (other than income taxes) which are required to be paid in
connection with the sale and transfer of the Shares hereunder will be, or will
have been, fully paid or provided for by the Company and the Company will have
complied with all laws imposing such taxes.
3.18 Investment Company. The Company is not an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for an
investment company, within the meaning of the Investment Company Act of 1940, as
amended.
3.19 Insurance. The Company and its Subsidiaries maintain insurance
of the types and in the amounts that the Company reasonably believes is adequate
for their businesses, including, but not limited to, insurance covering real and
personal property owned or leased by the Company and its Subsidiaries against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against by similarly situated companies, all of which insurance is in
full force and effect.
3.20 Offering Materials. The Company has not in the past nor will it
hereafter take any action to sell, offer for sale or solicit offers to buy any
securities of the Company which would bring the offer or sale of the Shares as
contemplated by this Agreement within the provisions of Section 5 of the
Securities Act. Based in part upon the representations and warranties of the
Investor contained in Section 4 of the Agreement, the offer, sale and issuance
of the Shares as contemplated by this Agreement are exempt from the registration
requirements of the Securities Act, and from the registration or qualification
requirements of the laws of any applicable state or U.S. jurisdiction which has
not or will not be obtained.
3.21 Listing. The Company shall comply with all requirements of the
NASD with respect to the issuance of the Shares and shall use its best efforts
to have the Shares listed on the Nasdaq Stock Market on or before the first date
that the Registration Statement is declared effective by the SEC.
3.22 Related Party Transactions. No transaction has occurred between
or among the Company, any of the Subsidiaries and their affiliates, officers or
directors or any affiliate or affiliates of any such officer or director that
with the passage of time will be required to be disclosed pursuant to Section
13, 14 or 15(d) of the Exchange Act, other than the approval by the Company's
Board of Directors of a loan of up to $150,000 to Xxxxxx X. Xxxxxxxxxx.
3.23 Books and Records. The books, records and accounts of the Company
and the Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the operations of, the
Company and the Subsidiaries. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and
7
(iv) the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.
3.24 Compliance with Environmental Laws. Except as disclosed in the
SEC Reports, (i) the Company is not in violation of any applicable statute, law
or regulation relating to the environment or occupational health and safety
which violation has had or is reasonably likely to have a Material Adverse
Effect, and, (ii) to the Company's knowledge, no material expenditures are or
will be required in order to comply with any such existing statute, law or
regulation. To the Company's knowledge, the Company does not have any material
liability to any governmental authority or other third party arising under or as
a result of any such past or existing statute, law or regulation.
3.25 Properties. The Company has good and marketable title to all
the properties and assets reflected as owned in the financial statements
included in the SEC Reports, subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except (i) those, if any, reflected in the financial
statements included in the SEC reports, or (ii) those which are not material in
amount and do not adversely affect the use of such property by the Company and
its subsidiaries. The Company holds its leased properties under valid and
binding leases, with such exceptions as are not materially significant in
relation to the business of the Company. Except as disclosed in the SEC Reports,
the Company owns or leases all such properties as are necessary to its
operations as now conducted or as proposed to be conducted.
3.26 Compliance. The Company has not been advised, and has no reason
to believe, that it is not conducting its business in compliance with all
applicable laws, rules and regulations of the jurisdictions in which it is
conducting business, except where the failure to be in such compliance would not
have a Material Adverse Effect.
3.27 Labor Matters. No labor dispute with the employees of the
Company exists other than those that have arisen in the ordinary course of
business and have not had and are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect, or, to the knowledge of the
Company, is imminent or reasonably likely.
3.28 Other Governmental Proceedings. To the Company's knowledge,
there are no rulemaking or similar proceedings before The United States Food and
Drug Administration or comparable federal, state, local or foreign government
bodies that involve or affect the Company, and which ruling or proceeding, if
the subject of an action unfavorable to the Company, would reasonably be likely
to have a Material Adverse Effect.
4. Representations, Warranties and Covenants of the Investor.
4.1 Investor Knowledge and Status. The Investor represents and warrants
to, and covenants with, the Company that: (i) the Investor is an "accredited
investor" as defined in Regulation D under the Securities Act and has requested,
received, reviewed and considered all information it deemed relevant in making
an informed decision to purchase the Shares; (ii) the Investor understands that
the Shares are "restricted securities" and have not been registered under the
Securities Act and is acquiring the number of Shares set forth on the signature
page hereto in the ordinary course of its business and for its own account for
investment only, has no present intention of distributing any of such Shares and
has no arrangement or understanding with any other persons regarding the
distribution of such Shares (this representation and warranty not limiting the
Investor's right to sell Shares pursuant to the Registration Statement or
otherwise, or other than with respect to any claim arising out of a breach of
this representation and warranty, the Investor's right to indemnification under
Section 6.3); (iii) the Investor
8
will not, directly or indirectly, offer, sell, pledge, transfer or otherwise
dispose of (or solicit any offers to buy, purchase or otherwise acquire or take
a pledge of) any of the Shares except in compliance with the Securities Act,
applicable state securities laws and the respective rules and regulations
promulgated thereunder; (iv) the Investor has answered all questions on the
signature page hereto and the Investor Questionnaire attached hereto as Exhibit
B for use in preparation of the Registration Statement and the answers thereto
are true and correct as of the date hereof and will be true and correct as of
the Closing Date; (v) the Investor will notify the Company immediately of any
change in any of such information until such time as the Investor has sold all
of its Shares or until the Company is no longer required to keep the
Registration Statement effective; and (vi) the Investor has, in connection with
its decision to purchase the number of Shares set forth on the signature page
hereto, relied only upon the SEC Reports, the Company's earnings press release
dated February 6, 2001, and the representations and warranties of the Company
contained herein. Investor understands that the issuance of the Shares to the
Investor has not been registered under the Securities Act, or registered or
qualified under any state securities law in reliance on specific exemptions
therefrom, which exemptions may depend upon, among other things, the bona fide
nature of the Investor's investment intent as expressed herein. The Placement
Agent is not authorized to make any representation or use any information in
connection with the placement, purchase and sale of the Shares, and no person is
authorized to provide any representation which is inconsistent or in addition to
those herein or in the SEC Reports. The Investor acknowledges that it has not
received or relied on any such representations.
4.2 International Actions. The Investor acknowledges, represents and
agrees that no action has been or will be taken in any jurisdiction outside the
United States by the Company or the Placement Agent that would permit an
offering of the Shares, or possession or distribution of offering materials in
connection with the issue of the Shares, in any jurisdiction outside the United
States. If the Investor is located outside the United States, it has or will
take all actions necessary for the sale of the Shares to comply with all
applicable laws and regulations in each foreign jurisdiction in which it
purchases, offers, sells or delivers Shares or has in its possession or
distributes any offering material, in all cases at its own expense.
4.3 Registration Required. The Investor hereby covenants with the
Company not to make any sale of the Shares without complying with the provisions
of this Agreement, including Section 6.2 hereof, and without effectively causing
the prospectus delivery requirement under the Securities Act to be satisfied
(unless the Investor is selling such Shares in a transaction not subject to the
prospectus delivery requirement), and the Investor acknowledges that the
certificates evidencing the Shares will be imprinted with a legend that
prohibits their transfer except in accordance therewith. The Investor
acknowledges that as set forth in, and subject to the provisions of, Section
6.2, there may occasionally be times when the Company, based on the advice of
its counsel, determines that it must suspend the use of the Prospectus forming a
part of the Registration Statement until such time as an amendment to the
Registration Statement has been filed by the Company and declared effective by
the SEC or until the Company has amended or supplemented such Prospectus.
4.4 Power and Authority. The Investor further represents and warrants
to, and covenants with, the Company that (i) the Investor has full right, power,
authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and (ii) this
Agreement constitutes a valid and binding obligation of the Investor enforceable
against the Investor in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such
9
enforceability is considered in a proceeding in equity or at law) and except as
the indemnification agreements of the Investors herein may be legally
unenforceable.
4.5 No Dispositions. Except with the prior written consent of the
Company, the Investor will not, prior to the effectiveness of the Registration
Statement, or, if earlier, 60 days from the Closing Date, sell, offer to sell,
solicit offers to buy, dispose of, loan, pledge or grant any right with respect
to (collectively, a "Disposition"), the Shares, nor will Investor engage in any
hedging or other transaction which is designed to or could reasonably be
expected to lead to or result in a Disposition of the Shares by the Investor or
any other person or entity. Such prohibited hedging or other transactions would
include, without limitation, effecting any short sale or having in effect any
short position (whether or not such sale or position is against the box and
regardless of when such position was entered into) or any purchase, sale or
grant of any right (including, without limitation, any put or call option) with
respect to the Shares or with respect to any security (other than a broad-based
market basket or index) that includes, relates to or derives any significant
part of its value from Shares. Notwithstanding the above, nothing herein shall
prohibit or restrict the Investor in engaging in any of the transactions
described in this Section 4.5 with respect to shares of Common Stock of the
Company, other than the Shares sold hereunder.
4.6 No Tax or Legal Advice. The Investor understands that nothing in
this Agreement, or any other materials presented to the Investor in connection
with the purchase and sale of the Shares constitutes legal, tax or investment
advice. The Investor has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of Shares.
5. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement or by the
Placement Agent, all covenants, agreements, representations and warranties made
by the Company and the Investor herein shall survive the execution of this
Agreement, the delivery to the Investor of the Shares being purchased and the
payment therefor.
6. Registration of the Shares; Compliance with the Securities Act.
6.1 Registration Procedures and Expenses. The Company shall:
(a) subject to receipt of necessary information from the
Investors, prepare and file with the SEC, as soon as practicable, but in no
event later than ten (10) business days after the Closing Date, a registration
statement on Form S-3 (the "Registration Statement") to enable the resale of the
Shares by the Investors from time to time through the automated quotation system
of the Nasdaq Stock Market or in privately-negotiated transactions;
use its best efforts, subject to receipt of necessary information from the
Investors, to cause the Registration Statement to become effective as soon
as practicable, but in no event later than sixty (60) days after the
Registration Statement is filed by the Company. If the Registration
Statement has not been declared effective by the SEC on or before the date
that is 60 days after the Closing Date, the Company shall, on the 61st day
after the Closing Date and each 30th day thereafter, issue to the Investor
.01 additional shares of Common Stock (which shall be deemed to be Shares),
up to a maximum of .09 additional shares of Common Stock, for every Share
purchased in the Offering until the Registration Statement is declared
effective by the SEC (rounded up to the nearest Share after aggregating all
Shares held by the Investor);
10
(b) use its best efforts to prepare and file with the SEC such
amendments and supplements to the Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep the Registration Statement
current and effective for a period not exceeding, with respect to each
Investor's Shares purchased hereunder, the earliest of (i) the second
anniversary of the Closing Date, (ii) the date on which the Investor may sell
all Shares then held by the Investor without restriction by volume limitations
pursuant to Rule 144(k) of the Securities Act or (iii) such time as all Shares
purchased by such Investor in this Offering have been sold pursuant to a
registration statement;
(c) furnish to the Investor with respect to the Shares
registered under the Registration Statement such number of copies of the
Registration Statement, Prospectuses (including supplemental prospectuses) and
preliminary versions of the Prospectus filed with the Securities and Exchange
Commission ("Preliminary Prospectuses") in conformity with the requirements of
the Securities Act and such other documents as the Investor may reasonably
request, in order to facilitate the public sale or other disposition of all or
any of the Shares by the Investor, provided, however, that unless waived by the
Company in writing, the obligation of the Company to deliver copies of
Prospectuses or Preliminary Prospectuses to the Investor shall be subject to the
receipt by the Company of reasonable assurances from the Investor that the
Investor will comply with the applicable provisions of the Securities Act and of
such other securities or blue sky laws as may be applicable in connection with
any use of such Prospectuses or Preliminary Prospectuses;
(d) file documents required of the Company for normal blue sky
clearance in (i) in all U.S. jurisdictions in which any of the Shares are
originally sold, and (ii) in states specified in writing by the Investor,
provided, however, that, as to clause (ii) the Company shall not be required to
qualify to do business or consent to service of process in any jurisdiction in
which it is not now so qualified or has not so consented;
(e) bear all expenses (other than underwriting discounts and
commissions, if any) in connection with the procedures in paragraph (a) through
(e) of this Section 6.1 and the registration of the Shares pursuant to the
Registration Statement; and
(f) advise the Investors, promptly after it shall receive notice
or obtain knowledge of the issuance of any stop order by the SEC delaying or
suspending the effectiveness of the Registration Statement or of the initiation
of any proceeding for that purpose; and it will promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal at the
earliest possible moment if such stop order should be issued.
With a view to making available to the Investor the benefits of Rule 144
(or its successor rule) and any other rule or regulation of the SEC that may at
any time permit the Investor to sell Shares to the public without registration,
the Company covenants and agrees to: (i) make and keep public information
available, as those terms are understood and defined in Rule 144, until the
earlier of (A) such date as all of the Investor's Shares may be resold pursuant
to Rule 144(k) or any other rule of similar effect or (B) such date as all of
the Investor's Shares shall have been resold; (ii) file with the SEC in a timely
manner all reports and other documents required of the Company under the
Securities Act and under the Exchange Act; and (iii) furnish to the Investor
upon request, as long as the Investor owns any Shares, (A) a written statement
by the Company that it has complied with the reporting requirements of the
Securities Act and the Exchange Act, (B) a copy of the Company's most recent
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other
information as may be reasonably requested in order to avail the Investor of any
rule or regulation of the SEC that permits the selling of any such Shares
without registration.
11
It shall be a condition precedent to the obligations of the Company to take
any action pursuant to this Section 6.1 that the Investor shall furnish to the
Company such information regarding itself, the Shares to be sold by the
Investor, and the intended method of disposition of such securities as shall be
required to effect the registration of the Shares.
The Company understands that the Investor disclaims being an underwriter,
but the Investor being deemed an underwriter by the SEC shall not relieve the
Company of any obligations it has hereunder.
6.2 Transfer of Shares After Registration; Suspension.
(a) The Investor agrees that it will not effect any Disposition
of the Shares or its right to purchase the Shares that would constitute a sale
within the meaning of the Securities Act other than transactions exempt from the
registration requirements of the Securities Act, except as contemplated in the
Registration Statement referred to in Section 6.1 and as described below, and
that it will promptly notify the Company of any changes in the information set
forth in the Registration Statement regarding the Investor or its plan of
distribution.
(b) Except in the event that paragraph (c) below applies, the
Company shall: (i) if deemed necessary by the Company, prepare and file from
time to time with the SEC a post-effective amendment to the Registration
Statement or a supplement to the related Prospectus or a supplement or amendment
to any document incorporated therein by reference or file any other required
document so that such Registration Statement will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
so that, as thereafter delivered to purchasers of the Shares being sold
thereunder, such Prospectus will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; (ii) provide the Investor copies of any documents
filed pursuant to Section 6.2(b)(i); and (iii) upon request, inform each
Investor who so requests that the Company has complied with its obligations in
Section 6.2(b)(i) (or that, if the Company has filed a post-effective amendment
to the Registration Statement which has not yet been declared effective, the
Company will notify the Investor to that effect, will use its best efforts to
secure the effectiveness of such post-effective amendment as promptly as
possible and will promptly notify the Investor pursuant to Section 6.2(b)(i)
hereof when the amendment has become effective).
(c) Subject to paragraph (d) below, in the event: (i) of any
request by the SEC or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement for amendments or
supplements to a Registration Statement or related Prospectus or for additional
information; (ii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose;
(iii) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Shares for sale in any jurisdiction or the initiation of any proceeding for such
purpose; or (iv) of any event or circumstance which necessitates the making of
any changes in the Registration Statement or Prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the Prospectus, it will not contain any untrue statement of a
material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; then the Company shall
12
promptly deliver a certificate in writing to the Investor (the "Suspension
Notice") to the effect of the foregoing and, upon receipt of such Suspension
Notice, the Investor will refrain from selling any Shares pursuant to the
Registration Statement (a "Suspension") until the Investor's receipt of copies
of a supplemented or amended Prospectus prepared and filed by the Company, or
until it is advised in writing by the Company that the current Prospectus may be
used, and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in any such Prospectus. In the
event of any Suspension, the Company will use its best efforts to cause the use
of the Prospectus so suspended to be resumed within 30 days after delivery of a
Suspension Notice, to the Investors. In addition to and without limiting any
other remedies (including, without limitation, at law or at equity) available to
the Investor, the Investor shall be entitled to specific performance in the
event that the Company fails to comply with the provisions of this Section
6.2(c).
(d) Notwithstanding the foregoing paragraphs of this Section
6.2, the Company shall use its best efforts to ensure that the Investor shall
not be prohibited from selling Shares under the Registration Statement as a
result of Suspensions on more than one occasion of not more than 30 days in any
twelve month period. If a Suspension is in effect for more than 30 days
(consecutive or non-consecutive) in any twelve-month period, the Company shall,
on the 31st day of the Suspension and each 30th day thereafter, issue to the
Investor .01 additional shares of Common Stock (which shall be deemed to be
Shares), up to a maximum of .09 additional shares of Common Stock, for every
Share purchased in the Offering until the Suspension is lifted.
(e) Provided that a Suspension is not then in effect the
Investor may sell Shares under the Registration Statement, provided that it
arranges for delivery of a current Prospectus to the transferee of such Shares.
Upon receipt of a request therefor, the Company will provide an adequate number
of current Prospectuses to the Investor and to any other parties requiring such
Prospectuses.
(f) In the event of a sale of Shares by the Investor, unless
such requirement is waived by the Company in writing, the Investor must also
deliver to the Company's transfer agent, with a copy to the Company, a
Certificate of Subsequent Sale substantially in the form attached hereto as
Exhibit C, so that the shares may be properly transferred.
6.3 Indemnification. For the purpose of this Section 6.3:
(a) the term "Selling Stockholder" shall include the Investor
and each person, if any, who controls the Investor within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act;
(b) the term "Registration Statement" shall include any
Preliminary Prospectus, final Prospectus, exhibit, supplement or amendment
included in or relating to, and any document incorporated by reference in, the
Registration Statement (or deemed to be a part thereof) referred to in Section
6.1; and
(c) the term "untrue statement" shall include any untrue
statement or alleged untrue statement of a material fact, or any omission or
alleged omission to state in the Registration Statement a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
13
(d)
(i) The Company agrees to indemnify and hold harmless each
Selling Stockholder from and against any losses, claims, damages or liabilities
to which such Selling Stockholder may become subject (under the Securities Act
or otherwise) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon (i) any
untrue statement of a material fact contained in the Registration Statement,
(ii) any inaccuracy in the representations and warranties of the Company
contained in the Agreement or the failure of the Company to perform its
obligations hereunder or (iii) any failure by the Company to fulfill any
undertaking included in the Registration Statement, and the Company will
promptly reimburse such Selling Stockholder for any reasonable legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim, provided, however, that the Company shall
not be liable in any such case to the extent that such loss, claim, damage or
liability arises out of, or is based upon, an untrue statement made in such
Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Selling Stockholder
specifically for use in preparation of the Registration Statement or the failure
of such Selling Stockholder to comply with its covenants and agreements
contained in Sections 4.1, 4.2, 4.3 or 6.2 hereof or any statement or omission
in any Prospectus that is corrected in any subsequent Prospectus that was
delivered to the Investor at least one business day prior to the pertinent sale
or sales by the Investor.
(ii) The Investor agrees to indemnify and hold harmless the
Company (and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company who signs the
Registration Statement and each director of the Company) from and against any
losses, claims, damages or liabilities to which the Company (or any such
officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, (i) any failure to comply with the covenants and agreements
contained in Section 4.1, 4.2, 4.3 or 6.2 hereof, or (ii) any untrue statement
of a material fact contained in the Registration Statement if such untrue
statement was made in reliance upon and in conformity with written information
furnished by or on behalf of the Investor specifically for use in preparation of
the Registration Statement, and the Investor will promptly reimburse the Company
(or such officer, director or controlling person), as the case may be, for any
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim; provided, however,
that the Investor shall not be liable for any such untrue or alleged untrue
statement or omission or alleged omission of which the Investor has delivered to
the Company in writing a correction at least one business day before the
occurrence of the transaction from which such loss was incurred; provided
further, however, that the aggregate obligation to indemnify and contribute
under this Section 6.3 shall be limited to the net amount of the proceeds
received by the Investor from the sale of the Shares pursuant to the
Registration Statement.
(iii) Promptly after receipt by any indemnified person of a
notice of a claim or the beginning of any action in respect of which indemnity
is to be sought against an indemnifying person pursuant to this Section 6.3,
such indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action, but the omission to so notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party under this Section 6.3 (except to the extent that such
omission materially and adversely affects the indemnifying party's ability to
defend such action) or from any liability otherwise than under this Section 6.3.
Subject to the provisions hereinafter stated, in case any such action shall be
brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from
14
such indemnified party, shall be entitled to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified person. After notice from
the indemnifying person to such indemnified person of its election to assume the
defense thereof (unless it has failed to assume the defense thereof and appoint
counsel reasonably satisfactory to the indemnified party), such indemnifying
person shall not be liable to such indemnified person for any legal expenses
subsequently incurred by such indemnified person in connection with the defense
thereof, provided, however, that if there exists or shall exist a conflict of
interest that would make it inappropriate, in the reasonable opinion of counsel
to the indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or associate
thereof, the indemnified person shall be entitled to retain its own counsel at
the expense of such indemnifying person; provided, however, that no indemnifying
person shall be responsible for the fees and expenses of more than one separate
counsel (together with appropriate local counsel) for all indemnified persons.
In no event shall any indemnifying person be liable in respect of any amounts
paid in settlement of any action unless the indemnifying person shall have
approved the terms of such settlement; provided that such consent shall not be
unreasonably withheld or delayed. No indemnifying person shall, without the
prior written consent of the indemnified person, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified person is
or could reasonably have been a party and indemnification could have been sought
hereunder by such indemnified person, unless such settlement includes an
unconditional release of such indemnified person from all liability on claims
that are the subject matter of such proceeding.
(iv) If the indemnification provided for in this Section 6.3
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (i) or (ii) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Investor on
the other in connection with the statements or omissions or other matters which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, in the case of an
untrue statement, whether the untrue statement relates to information supplied
by the Company on the one hand or the Investor on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement. The Company and the Investor agree that it would
not be just and equitable if contribution pursuant to this subsection (iv) were
determined by pro rata allocation (even if the Investors were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to above in this
subsection (iv). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (iv) shall be deemed to include 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 subsection (iv), the Investor shall not be required to
indemnify and contribute an aggregate amount in excess of the amount by which
the net amount received by the Investor from the sale of the Shares to which
such loss relates exceeds the amount of any damages which the Investor has
otherwise been required to pay by reason of such untrue statement. 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 Investors' obligations in
this subsection to contribute are several in proportion to their sales of Shares
to which such loss relates and not joint.
The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including,
15
without limitation, the provisions of this Section 6.3, and are fully
informed regarding said provisions. They further acknowledge that the
provisions of this Section 6.3 fairly allocate the risks in light of the
ability of the parties to investigate the Company and its business in order
to assure that adequate disclosure is made in the Registration Statement as
required by the Securities Act and the Exchange Act.
6.4 Termination of Conditions and Obligations. The conditions
precedent imposed by Section 4 or this Section 6 upon the transferability of the
Shares shall cease and terminate as to any particular number of the Shares when
such Shares shall have been effectively registered under the Securities Act and
sold or otherwise disposed of in accordance with the intended method of
disposition set forth in the Registration Statement covering such Shares or at
such time as an opinion of counsel satisfactory to the Company shall have been
rendered to the effect that such conditions are not necessary in order to comply
with the Securities Act.
6.5 Information Available. So long as the Registration Statement is
effective covering the resale of Shares owned by the Investor, the Company will
furnish (or to the extent such information is available electronically through
the Company's filings with the SEC, the Company will make available) to the
Investor:
(a) as soon as practicable after it is available, one copy of
(i) its Annual Report to Shareholders (which Annual Report shall contain
financial statements audited in accordance with generally accepted accounting
principles by a national firm of certified public accountants), (ii) if not
included in substance in the Annual Report to Shareholders, its Annual Report on
Form 10-K (the foregoing, in each case, excluding exhibits) and (iii) its
Quarterly Reports on 10-Q;
(b) upon the reasonable request of the Investor, all exhibits
excluded by the parenthetical to subparagraph (a)(ii) of this Section 6.5 as
filed with the SEC and all other information that is made available to
shareholders; and
(c) upon the reasonable request of the Investor, an adequate
number of copies of the Prospectuses to supply to any other party requiring such
Prospectuses; and the Company, upon the reasonable request of the Investor, will
meet with the Investor or a representative thereof at the Company's headquarters
to discuss all information relevant for disclosure in the Registration Statement
covering the Shares and will otherwise reasonably cooperate with the Investor
conducting an investigation for the purpose of reducing or eliminating the
Investor's exposure to liability under the Securities Act, including the
reasonable production of information at the Company's headquarters; provided,
that the Company shall not be required to disclose any confidential information
to or meet at its headquarters with the Investor until and unless the Investor
shall have entered into a confidentiality agreement in form and substance
reasonably satisfactory to the Company with the Company with respect thereto.
6.6 Public Statements. The Company will not issue any public
statement, press release or any other public disclosure listing Investor as one
of the purchasers of the Shares without Investor's prior written consent, except
as may be required by applicable law or rules of any exchange on which the
Company's securities are listed.
7. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed (A) if within domestic United
States by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (B) if delivered
from outside the United States, by International Federal Express (or comparable
service) or facsimile, and
16
shall be deemed given (i) if delivered by first-class registered or certified
mail domestic, four (4) business days after so mailed, (ii) if delivered by
nationally recognized overnight carrier, one (1) business day after so mailed,
(iii) if delivered by International Federal Express (or comparable service), two
(2) business days after so mailed, (iv) if delivered by facsimile, upon electric
confirmation of receipt if confirmation is before 4:00 p.m. local time of the
recipient on a business day and, if not, then the next business day, and shall
be delivered as addressed as follows:
(a) if to the Company, to:
BUCA, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy mailed to:
Faegre & Xxxxxx LLP
2200 Xxxxx Fargo Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) if to the Investor, at its address on the signature page
hereto, or at such other address or addresses as may have been furnished to the
Company in writing.
8. Changes. This Agreement may not be modified or amended except pursuant
to an instrument in writing signed by the Company and the Investor.
9. Headings. The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
10. Severability. In case any provision contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
11. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Minnesota, without giving
effect to the principles of conflicts of law.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
13. Confidential Disclosure Agreement. Notwithstanding any provision of
this Agreement to the contrary, any confidential disclosure agreement previously
executed by the Company and the
17
Investor in connection with the transactions contemplated by this Agreement
shall remain in full force and effect in accordance with its terms following the
execution of this Agreement and the consummation of the transactions
contemplated hereby.
14. Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of the Shares from time to time.
15. Further Assurances. Each party agrees to cooperate fully with the
other parties and to execute such further instruments, documents and agreements
and to give such further written assurance as may be reasonably requested by any
other party to evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of this
Agreement.
16. Expenses. At the Closing, the Company shall pay the reasonable fees
and expenses of Xxxxxxxxx Xxxxxxx, LLP, as counsel to the Investor, incurred in
connection with the negotiation, execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein, in an
amount not to exceed $5,000 (which amount shall be deducted from the amounts
payable by Investor at the Closing pursuant to Section 2 hereof).
18
