EXHIBIT 1.1
7,000,000 Shares
AFC ENTERPRISES, INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
December __, 2001
Credit Suisse First Boston Corporation
Xxxxxxx, Xxxxx & Co.
Bear, Xxxxxxx & Co. Inc.
Deutsche Banc Alex. Xxxxx Inc.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Xxxxxxx Xxxxxx,
Xxx Xxxx, XX 00000-0000
Dear Sirs:
1. Introductory. The stockholders listed in Schedule A hereto ("Selling
Stockholders") propose severally to sell an aggregate of 7,000,000 outstanding
shares ("Firm Securities") of the Common Stock, par value $ 0.01 per share
("Securities"), of AFC Enterprises, Inc., a Minnesota corporation ("Company"),
and the Selling Stockholders also propose to sell to the Underwriters, at the
option of the Underwriters, an aggregate of not more than 1,050,000 additional
outstanding shares ("Optional Securities") of the Company's Securities as set
forth below. The Firm Securities and the Optional Securities are herein
collectively called the "Offered Securities". The Selling Stockholders hereby
agree with the Company and with the several Underwriters named in Schedule B
hereto ("Underwriters") as follows:
2. Representations and Warranties of the Company and the Selling
Stockholders. (a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. 333-73182) relating to the Offered
Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("Commission") and either (A) has been
declared effective under the Securities Act of 1933 ("Act") and is not
proposed to be amended or (B) is proposed to be amended by amendment or
post-effective amendment. If such registration statement (the "initial
registration statement") has been declared effective, either (A) an
additional registration statement (the "additional registration statement")
relating to the Offered Securities may have been filed with the Commission
pursuant to Rule 462(b) ("Rule 462(b)") under the Act and, if so filed, has
become effective upon filing pursuant to such Rule and the Offered
Securities all have been duly registered under the Act pursuant to the
initial registration statement and, if applicable, the additional
registration statement or (B) such an additional registration statement is
proposed to be filed with the Commission pursuant to Rule 462(b) and will
become effective upon filing pursuant to such Rule and upon such filing the
Offered Securities will all have been duly registered under the Act
pursuant to the initial registration statement and such additional
registration statement. If the Company does not propose to amend the
initial registration statement or if an additional registration statement
has been filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has been
filed with the
Commission prior to the execution and delivery of this Agreement, the most
recent amendment (if any) to each such registration statement has been
declared effective by the Commission or has become effective upon filing
pursuant to Rule 462(c) ("Rule 462(c)") under the Act or, in the case of
the additional registration statement, Rule 462(b). For purposes of this
Agreement, "Effective Time" with respect to the initial registration
statement or, if filed prior to the execution and delivery of this
Agreement, the additional registration statement means (A) if the Company
has advised the Representatives that it does not propose to amend such
registration statement, the date and time as of which such registration
statement, or the most recent post-effective amendment thereto (if any)
filed prior to the execution and delivery of this Agreement, was declared
effective by the Commission or has become effective upon filing pursuant to
Rule 462(c), or (B) if the Company has advised the Representatives that it
proposes to file an amendment or post-effective amendment to such
registration statement, the date and time as of which such registration
statement, as amended by such amendment or post-effective amendment, as the
case may be, is declared effective by the Commission. If an additional
registration statement has not been filed prior to the execution and
delivery of this Agreement but the Company has advised the Representatives
that it proposes to file one, "Effective Time" with respect to such
additional registration statement means the date and time as of which such
registration statement is filed and becomes effective pursuant to Rule
462(b). "Effective Date" with respect to the initial registration statement
or the additional registration statement (if any) means the date of the
Effective Time thereof. The initial registration statement, as amended at
its Effective Time, including all information contained in the additional
registration statement (if any) and deemed to be a part of the initial
registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the Form on
which it is filed and including all information (if any) deemed to be a
part of the initial registration statement as of its Effective Time
pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is hereinafter
referred to as the "Initial Registration Statement". The additional
registration statement, as amended at its Effective Time, including the
contents of the initial registration statement incorporated by reference
therein and including all information (if any) deemed to be a part of the
additional registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration
Statement". The Initial Registration Statement and the Additional
Registration Statement are hereinafter referred to collectively as the
"Registration Statements" and individually as a "Registration Statement".
The form of prospectus relating to the Offered Securities, as first filed
with the Commission pursuant to and in accordance with Rule 424(b) ("Rule
424(b)") under the Act or (if no such filing is required) as included in a
Registration Statement, is hereinafter referred to as the "Prospectus". No
document has been or will be prepared or distributed in reliance on Rule
434 under the Act.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the Effective
Date of the Initial Registration Statement, the Initial Registration
Statement conformed in all respects to the requirements of the Act and the
rules and regulations of the Commission ("Rules and Regulations") and did
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, (B) on the Effective Date of the
Additional Registration Statement (if any), each Registration Statement
conformed, or will conform, in all respects to the requirements of the Act
and the Rules and Regulations and did not include, or will not include, any
untrue statement of a material fact and did not omit, or will not omit, to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and (C) on the date of this
Agreement, the Initial Registration Statement and, if the Effective Time of
the Additional Registration Statement is prior to the execution and
delivery of this Agreement, the Additional Registration Statement each
conforms, and at the time of filing of the Prospectus pursuant to Rule
424(b) or (if no such filing is required) at the Effective Date of the
Additional Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all respects to
the requirements of the Act and the Rules and Regulations, and neither of
such documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material fact required
to be stated therein or necessary to make the statements
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therein not misleading. If the Effective Time of the Initial Registration
Statement is subsequent to the execution and delivery of this Agreement: on
the Effective Date of the Initial Registration Statement, the Initial
Registration Statement and the Prospectus will conform in all respects to
the requirements of the Act and the Rules and Regulations, neither of such
documents will include any untrue statement of a material fact or will omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and no Additional Registration
Statement has been or will be filed. The two preceding sentences do not
apply to statements in or omissions from a Registration Statement or the
Prospectus based upon written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein, it
being understood and agreed that the only such information is that
described as such in Section 7(c) hereof.
(iii) Neither the Company nor any of its subsidiaries (as defined in
Rule 405 of the rules and regulations promulgated under the Act;
hereinafter referred to as the "subsidiaries"), has sustained since the
date of the latest audited financial statements included in the Prospectus
any loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree that, individually
or in the aggregate, would have a material adverse effect on the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole ("Material Adverse Effect"),
otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock (except for any grant of stock options consistent with past practice
or any issuance of stock upon the exercise of stock options outstanding as
of the date hereof, in each case pursuant to stock plans that have been
described in the Prospectus, and except for any issuance of stock upon the
exercise of warrants outstanding as of the date hereof that have been
described in the Prospectus) or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole, otherwise than as set forth
or contemplated in the Prospectus, and, except as disclosed in or
contemplated by the Prospectus, there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its
capital stock.
(iv) The Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all
personal property owned by them, 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 and do not
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 would not,
individually or in the aggregate, have a Material Adverse Effect and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries.
(v) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Minnesota, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such qualification,
except for such failures to be so qualified or in good standing that would
not, individually or in the aggregate, have a Material Adverse Effect; and
each subsidiary of the Company has been duly organized and is validly
existing as a corporation or other entity in good standing under the laws
of its jurisdiction of organization.
(vi) The Company has an authorized capitalization as set forth in the
Prospectus, and the Offered Securities and all of the other issued shares
of capital stock of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and conform to the
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description of the Securities contained in the Prospectus; and 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 or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims other than those granted pursuant
to that certain Amended and Restated Credit Agreement, dated as of October
15, 1998, as amended by the First Amended and Restated Credit Agreement,
dated as of October 1, 1999, and by the Second Amended and Restated Credit
Agreement, dated as of February 6, 2001, by and among the Company, Xxxxxxx
Xxxxx Credit Partners L.P., as Lead Arranger and as Syndication Agent,
Canadian Imperial Bank of Commerce, acting through its New York Agency, as
Administrative Agent, the financial institutions listed on the signature
pages thereto, and the Subsidiary Guarantors listed on the signature pages
thereto.
(vii) The offering and sale of the Offered Securities and the
compliance by the Company with all of the provisions of this Agreement and
the consummation of the transactions herein contemplated will not (A)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement 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 is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, except for such
conflicts, breaches, violations or defaults that would not, individually or
in the aggregate, have a Material Adverse Effect, or (B) result in any
violation of the provisions of (x) the Articles of Incorporation or By-laws
of the Company or (y) any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties, except for
violations of any statute, order, rule or regulation that would not,
individually or in the aggregate, result in a Material Adverse Effect; and
no consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required for
the offering and sale of the Offered Securities or the consummation by the
Company of the transactions contemplated by this Agreement, except the
registration under the Act of the Offered Securities and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Offered Securities by the Underwriters.
(viii) Neither the Company nor any of its subsidiaries is in violation
of its Articles of Incorporation or By-laws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or
by which it or any of its properties may be bound, except for such defaults
that would not, individually or in the aggregate, have a Material Adverse
Effect.
(ix) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Securities, and under the caption
"Underwriting", insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate and complete in all
material respects.
(x) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a Material Adverse Effect; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(xi) The Company is not and, after giving effect to the offering and
sale of the Offered Securities, will not be an "investment company", as
such term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act").
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(xii) The Company and its subsidiaries are in compliance with the
applicable requirements of the Federal Trade Commission (the "FTC") rules
governing franchising and all applicable provisions of federal, state,
local and other laws or regulations governing the business of a franchisor,
except for such failures to comply that would not, individually or in the
aggregate, have a Material Adverse Effect.
(xiii) Other than as set forth in the Prospectus, the Company and its
subsidiaries own or possess valid licenses or other rights to use all
patents, trademarks, service marks, trade names, copyrights, know-how,
trade secrets and other intellectual property (collectively, the
"Intellectual Property") necessary to conduct and carry on the business of
the Company and its subsidiaries as described in the Prospectus, except as
would not have a Material Adverse Effect, and the Company and its
subsidiaries have not received any charge, complaint, claim, demand, or
notice alleging any infringement or conflict with (and the Company knows of
no such infringement or conflict with) asserted rights of others with
respect to any Intellectual Property which, if determined adversely to the
Company or its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect.
(xiv) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
(xv) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment.
(xvi) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned
or to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to a Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Act.
(xvii) The Securities are listed on the Nasdaq Stock Market's National
Market.
(xviii) This Agreement has been duly authorized, executed and delivered
by the Company.
(xix) The financial statements included in each Registration Statement
and the Prospectus present fairly the financial position of the Company and
its consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, subject, in the case of
unaudited financial statements, to normal recurring year-end adjustments
(the effect of which will not, individually or in the aggregate, be
material) and the absence of notes to such financial statements. The
financial statements included in each Registration Statement and the
Prospectus have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent basis.
(b) Each Selling Stockholder severally represents and warrants to, and
agrees with, the several Underwriters that:
(i) Such Selling Stockholder has and on each Closing Date hereinafter
mentioned will have valid and unencumbered title to the Offered Securities
to be delivered by such Selling Stockholder on such Closing Date and full
right, power and authority to enter into this Agreement and to sell,
assign, transfer and deliver the Offered Securities to be delivered by such
Selling Stockholder on such Closing Date hereunder; and upon the delivery
of and payment for the Offered Securities on each Closing Date hereunder
the several Underwriters will acquire valid and unencumbered title to the
Offered Securities to be delivered by such Selling Stockholder on such
Closing Date.
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(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the Effective
Date of the Initial Registration Statement, the Initial Registration
Statement conformed in all respects to the requirements of the Act and the
Rules and Regulations and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, (B) on
the Effective Date of the Additional Registration Statement (if any), each
Registration Statement conformed, or will conform, in all respects to the
requirements of the Act and the Rules and Regulations and did not include,
or will not include, any untrue statement of a material fact and did not
omit, or will not omit, to state any material fact required to be stated
therein or necessary to make the statement therein not misleading, and (C)
on the date of this Agreement, the Initial Registration Statement and, if
the Effective Time of the Additional Registration Statement is prior to the
execution and delivery of this Agreement, the Additional Registration
Statement each conforms, and at the time of filing of the Prospectus
pursuant to Rule 424(b) or (if no such filing is required) at the Effective
Date of the Additional Registration Statement in which the Prospectus is
included, each Registration Statement and the Prospectus will conform, in
all respects to the requirements of the Act and the Rules and Regulations,
and neither of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading. If the Effective Time of the Initial Registration
Statement is subsequent to the execution and delivery of this Agreement: on
the Effective Date of the Initial Registration Statement, the Initial
Registration Statement and the Prospectus will conform in all respects to
the requirements of the Act and the Rules and Regulations, neither of such
documents will include any untrue statement of a material fact or will omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. The two preceding sentences do
not apply to statements in or omissions from a Registration Statement or
the Prospectus based upon written information furnished to the Company by
any Underwriter through the Representatives specifically for use therein,
it being understood and agreed that the only such information is that
described as such in Section 7(c); and, solely with regard to each of
Selling Stockholders listed on Schedule C hereto, the two preceding
sentences apply only to the extent that any statements in or omissions from
a Registration Statement or the Prospectus are based on written information
furnished to the Company by such Selling Stockholder specifically for use
therein.
(iii) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between such Selling Stockholder and any
person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like payment.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, each Selling Stockholder agrees,
severally and not jointly, to sell to the Underwriters, and each Underwriter
agrees, severally and not jointly, to purchase from each Selling Stockholder, at
a purchase price of $ per share, that number of Firm Securities
(rounded up or down, as determined by Credit Suisse First Boston Corporation
("CSFBC") in its discretion, in order to avoid fractions) obtained by
multiplying the number of Firm Securities set forth opposite the name of such
Selling Stockholder in Schedule A hereto by a fraction the numerator of which is
the number of Firm Securities set forth opposite the name of such Underwriter in
Schedule B hereto and the denominator of which is the total number of Firm
Securities.
Certificates in negotiable form for the Offered Securities have been placed
in custody, for delivery under this Agreement, under Custody Agreements made
with U.S. Stock Transfer & Trust Corporation, as custodian ("Custodian"). Each
Selling Stockholder agrees that the shares represented by the certificates held
in custody for the Selling Stockholders under such Custody Agreements are
subject to the interests of the Underwriters hereunder, that the arrangements
made by the Selling Stockholders for such custody are to that extent
irrevocable, and that the obligations of the Selling Stockholders hereunder
shall not be terminated by operation of law, whether by the death of any
individual Selling Stockholder or the occurrence of any other event, or in the
case of a trust, by the death of any trustee or trustees or the termination of
such trust. If any individual Selling Stockholder or any such trustee or
trustees should die, or if any other such event should occur, or if any of such
trusts should terminate, before the delivery of the Offered Securities
hereunder,
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certificates for the Offered Securities shall be delivered by the Custodian in
accordance with the terms and conditions of this Agreement as if such death or
other event or termination had not occurred, regardless of whether or not the
Custodian shall have received notice of such death or other event or
termination.
The Custodian will deliver the Firm Securities to the Representatives for
the accounts of the Underwriters, against payment of the purchase price in
Federal (same day) funds by official bank check or checks or wire transfer to an
account at a bank acceptable to CSFBC drawn to the order of
at the office of King & Spalding, Atlanta, Georgia, at 9:00 A.M., New York time,
on , or at such other time not later than seven full
business days thereafter as CSFBC and the Custodian determine, such time being
herein referred to as the "First Closing Date". The certificates for the Firm
Securities so to be delivered will be in definitive form, in such denominations
and registered in such names as CSFBC requests and will be made available for
checking and packaging at the above office of King & Spalding at least 24 hours
prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the Company and the
Selling Stockholders from time to time not more than 30 calendar days subsequent
to the date of the Prospectus, the Underwriters may purchase all or less than
all of the Optional Securities at the purchase price per Security to be paid for
the Firm Securities. The Selling Stockholders agree, severally and not jointly,
to sell to the Underwriters the respective numbers of Optional Securities
obtained by multiplying the number of Optional Securities specified in such
notice by a fraction the numerator of which is the number of shares set forth
opposite the names of such Selling Stockholders in Schedule A hereto under the
caption "Number of Optional Securities to be Sold" and the denominator of which
is the total number of Optional Securities (subject to adjustment by CSFBC to
eliminate fractions). Such Optional Securities shall be purchased from each
Selling Stockholder for the account of each Underwriter in the same proportion
as the number of Firm Securities set forth opposite such Underwriter's name
bears to the total number of Firm Securities (subject to adjustment by CSFBC to
eliminate fractions) and may be purchased by the Underwriters only for the
purpose of covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered. The
right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFBC to the Selling
Stockholders.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Custodian will deliver
the Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against payment of
the purchase price in Federal (same day) funds by official bank check or checks
or wire transfer to an account at a bank acceptable to CSFBC drawn to the order
of , at the above office of King & Spalding. The
certificates for the Optional Securities being purchased on each Optional
Closing Date will be in definitive form, in such denominations and registered in
such names as CSFBC requests upon reasonable notice prior to such Optional
Closing Date and will be made available for checking and packaging at the above
office of King & Spalding at a reasonable time in advance of such Optional
Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company and the Selling Stockholders. (a)
The Company agrees with the several Underwriters and the Selling Stockholders
that:
(i) If the Effective Time of the Initial Registration Statement is prior
to the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CSFBC,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day following
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the execution and delivery of this Agreement or (B) the fifteenth business
day after the Effective Date of the Initial Registration Statement). The
Company will advise CSFBC promptly of any such filing pursuant to Rule
424(b). If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement and an additional
registration statement is necessary to register a portion of the Offered
Securities under the Act but the Effective Time thereof has not occurred as
of such execution and delivery, the Company will file the additional
registration statement or, if filed, will file a post-effective amendment
thereto with the Commission pursuant to and in accordance with Rule 462(b)
on or prior to 10:00 P.M., New York time, on the date of this Agreement or,
if earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later date
as shall have been consented to by CSFBC.
(ii) The Company will advise CSFBC promptly of any proposal to amend or
supplement the initial or any additional registration statement as filed or
the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or the Prospectus and will not
effect such amendment or supplementation without CSFBC's consent; and the
Company will also advise CSFBC promptly of the effectiveness of each
Registration Statement (if its Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or
supplementation of a Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(iii) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Act, the Company will promptly
notify CSFBC of such event and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance. Neither CSFBC's consent to, nor the Underwriters' delivery of,
any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6.
(iv) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional Registration
Statement) which will satisfy the provisions of Section 11(a) of the Act.
For the purpose of the preceding sentence, "Availability Date" means the
45th day after the end of the fourth fiscal quarter following the fiscal
quarter that includes such Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
(v) The Company will furnish to the Representatives copies of each
Registration Statement (five (5) of which will be signed and will include
all exhibits), each related preliminary prospectus, and, so long as a
prospectus relating to the Offered Securities is required to be delivered
under the Act in connection with sales by any Underwriter or dealer, the
Prospectus and all amendments and supplements to such documents, in each
case in such quantities as CSFBC requests. The Prospectus shall be so
furnished on or prior to 3:00 P.M., New York time, on the business day
following the later of the execution and delivery of this Agreement or the
Effective Time of the Initial Registration Statement. All other such
documents shall be so furnished as soon as available. The Company will pay
the expenses of printing and distributing to the Underwriters all such
documents.
8
(vi) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC
designates and will continue such qualifications in effect so long as
required for the distribution.
(vii) During the period of two years hereafter, the Company will furnish
to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the Company
will furnish to the Representatives (i) as soon as available, a copy of
each report and any definitive proxy statement of the Company filed with
the Commission under the Securities Exchange Act of 1934 or mailed to
stockholders, and (ii) from time to time, such other information concerning
the business and financial condition of the Company as CSFBC may reasonably
request.
(viii) For a period of 90 days after the date of the initial public
offering of the Offered Securities, the Company will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly,
or file with the Commission a registration statement under the Act relating
to, any additional shares of its Securities or securities convertible into
or exchangeable or exercisable for any shares of its Securities, or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of CSFBC, except
issuances of Securities pursuant to the exercise of warrants or options, in
each case outstanding on the date hereof, grants of employee stock options
pursuant to the terms of a plan in effect on the date hereof and issuances
of Securities pursuant to the exercise of such options.
(ix) The Company will pay all expenses incident to the performance of
the obligations of the Selling Stockholders and the obligations of the
Company under this Agreement, for any filing fees and other expenses
(including fees and disbursements of counsel) incurred in connection with
qualification of the Offered Securities for sale under the laws of such
jurisdictions as CSFBC designates and the printing of memoranda relating
thereto, for the filing fee incident to the review by the National
Association of Securities Dealers, Inc. of the Offered Securities, for any
travel expenses of the Company's officers and employees and any other
expenses of the Company in connection with attending or hosting meetings
with prospective purchasers of the Offered Securities, for any transfer
taxes on the sale of the Offered Securities to the Underwriters and for
expenses incurred in distributing preliminary prospectuses and the
Prospectus (including any amendments and supplements thereto) to the
Underwriters.
(b) Each Selling Stockholder agrees with the several Underwriters and the
Company that, for a period of 120 days after the date of the initial public
offering of the Offered Securities, not to offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, any additional shares of the
Securities of the Company or securities convertible into or exchangeable or
exercisable for any shares of Securities, enter into a transaction which would
have the same effect, or enter into any swap, hedge or other arrangement that
transfers, in whole or part, any of the economic consequences of ownership of
the Securities, whether any such aforementioned transaction is to be settled by
delivery of the Securities or such other securities, in cash or otherwise, or
publicly disclose the intention to make any such offer, sale, pledge or
disposition, or enter into any such transaction, swap, hedge or other
arrangement, without, in each case, the prior written consent of CSFBC.
Notwithstanding the foregoing, each Selling Stockholder may enter into a
contract qualified under Rule 10b5-1(c) under the Securities Exchange Act of
1934 that is approved in advance by CSFBC, such approval not to be unreasonably
withheld, and provides for such Selling Stockholder's sale of his, her or its
Securities that are not Offered Securities, provided, however, that no sale or
disposition of such Securities pursuant to such contract may occur during the
aforementioned 120-day period.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders herein, to
the accuracy of the statements of Company officers
9
made pursuant to the provisions hereof, to the performance by the Company and
the Selling Stockholders of their obligations hereunder and to the following
additional conditions precedent:
(a) The Representatives shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall
be on or prior to the date of this Agreement or, if the Effective Time of
the Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, shall be prior to the filing of the amendment
or post-effective amendment to the registration statement to be filed
shortly prior to such Effective Time), of Xxxxxx Xxxxxxxx LLP confirming
that they are independent public accountants within the meaning of the Act
and the applicable published Rules and Regulations thereunder and stating
to the effect that:
(i) in their opinion the financial statements examined by them and
included in the Registration Statements comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards
No. 71, Interim Financial Information, on the unaudited financial
statements included in the Registration Statements;
(iii) on the basis of the review referred to in clause (ii) above,
a reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements included in the
Registration Statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act
and the related published Rules and Regulations or any material
modifications should be made to such unaudited financial
statements for them to be in conformity with generally accepted
accounting principles;
(B) the unaudited consolidated net sales, net operating
income, net income and net income per share amounts for the
forty-week periods ended October 7, 2001 and October 1, 2000
included in the Prospectus do not agree with the amounts set
forth in the unaudited consolidated financial statements for
those same periods or were not determined on a basis
substantially consistent with that of the corresponding amounts
in the audited statements of income;
(C) at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not more than
three business days prior to the date of such letter, there was
any change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and its
consolidated subsidiaries or, at the date of the latest available
balance sheet read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared with
amounts shown on the latest balance sheet included in the
Prospectus; or
(D) for the period from the closing date of the latest income
statement included in the Prospectus to the closing date of the
latest available income statement read by such accountants there
were any decreases, as compared with the corresponding period of
the previous year and with the period of corresponding length
ended the date of the latest income statement included in the
Prospectus, in
10
consolidated net sales or net operating income in the total or
per share amounts of consolidated net income;
except in all cases set forth in clauses [__] and [__] above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iii) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statements (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective
amendment to be filed shortly prior to its Effective Time, (ii) if the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement but the Effective Time of the
Additional Registration Statement is subsequent to such execution and
delivery, "Registration Statements" shall mean the Initial Registration
Statement and the additional registration statement as proposed to be filed
or as proposed to be amended by the post-effective amendment to be filed
shortly prior to its Effective Time, and (iii) "Prospectus" shall mean the
prospectus included in the Registration Statements.
(b) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time
shall have occurred not later than 10:00 P.M., New York time, on the date
of this Agreement or such later date as shall have been consented to by
CSFBC. If the Effective Time of the Additional Registration Statement (if
any) is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later that 10:00 P.M., New York
time, on the date of this Agreement or, if earlier, the time the Prospectus
is printed and distributed to any Underwriter, or shall have occurred at
such later date as shall have been consented to by CSFBC. If the Effective
Time of the Initial Registration Statement is prior to the execution and
delivery of this Agreement, the Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section 5(a) of
this Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of a Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of any Selling Stockholder, the Company or the Representatives,
shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company or its
subsidiaries which, in the judgment of a majority in interest of the
Underwriters including the Representatives, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that any
such organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any change in U.S. or international
financial, political or economic conditions or currency exchange rates or
exchange controls as would, in the judgment of a
11
majority in interest of the Underwriters including the Representatives, be
likely to prejudice materially the success of the proposed issue, sale or
distribution of the Offered Securities, whether in the primary market or in
respect of dealings in the secondary market; (iv) any material suspension
or material limitation of trading in securities generally on the New York
Stock Exchange or the Nasdaq Stock Market's National Market, or any setting
of minimum prices for trading on such exchange, or any suspension of
trading of any securities of the Company on any exchange or in the over-
the-counter market; (v) any banking moratorium declared by U.S. Federal or
New York authorities; (vi) any major disruption of settlements of
securities or clearance services in the United States or (vii) any attack
on, outbreak or escalation of hostilities or act of terrorism involving the
United States, any declaration of war by Congress or any other national or
international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters including the Representatives, the effect of
any such attack, outbreak, escalation, act, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with completion of
the public offering or the sale of and payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated such
Closing Date, of Xxxxxxx & XxXxxxxx, counsel for the Company, to the effect
that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Minnesota, with corporate power and authority to own its properties and
conduct its business as such properties and business are described in
the Prospectus.
(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company (including the Offered Securities being delivered on such
Closing Date) have been duly and validly authorized and issued and are
fully paid and non-assessable; and the Offered Securities conform to the
description of the Securities contained in the Prospectus.
(iii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except for
such failures to be so qualified or in good standing that would not,
individually or in the aggregate, have a Material Adverse Effect (such
counsel being entitled to rely in respect of matters of fact in this
clause upon certificates of officers of the Company).
(iv) Each subsidiary of the Company has been duly organized and is
validly existing as a corporation or other entity in good standing under
the laws of its jurisdiction of organization; and all of the issued
shares of capital stock of each such subsidiary have been duly and
validly authorized and issued, are fully paid and non-assessable, and
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims (such counsel being entitled to
rely in respect of matters of fact in this clause upon certificates of
officers of the Company or its subsidiaries).
(v) To such counsel's knowledge and other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject which,
if determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect; and, to
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(vi) This Agreement has been duly authorized, executed and
delivered by the Company.
12
(vii) The offering and sale of the Offered Securities being
delivered on such Closing Date and the compliance by the Company with
all of the provisions of this Agreement and the consummation of the
transactions herein contemplated will not (A) conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, the agreements listed on Schedule 2 to such
opinion (a copy of which has been provided to the Underwriters through
CSFBC), except for such conflicts, breaches, violations or defaults that
would not, individually or in the aggregate, have a Material Adverse
Effect, or (B) result in any violation of (x) the provisions of the
Articles of Incorporation or By-laws of the Company or (y) any statute
or any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties, except for such
violations of any statute, order, rule or regulation that would not,
individually or in the aggregate, result in a Material Adverse Effect.
(viii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the offering and sale of the Offered Securities or the
consummation by the Company of the transactions contemplated by this
Agreement, except the registration under the Act of the Offered
Securities and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Offered
Securities by the Underwriters.
(ix) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Securities and under the caption
"Underwriting", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate and complete in
all material respects.
(x) The Company is not and, after giving effect to the offering
and sale of the Offered Securities, will not be an "investment company",
as such term is defined in the Investment Company Act.
(xi) Each Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior to
such Closing Date (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the
Act and the Rules and Regulations.
Such opinion letter shall also state that such counsel has
participated in conferences with officers and other representatives of
the Company and its subsidiaries, representatives of the independent
public accountants for the Company and its subsidiaries, representatives
of the Underwriters and counsel for the Underwriters, at which
conferences the contents of the Registration Statement and the
Prospectus were discussed and, although such counsel are not passing
upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, except for those referenced in Subsection
(ix) of this Section 6(d), on the basis of the foregoing, nothing has
come to such counsel's attention that would lead them to believe that
the Registration Statement or any further amendment made thereto by the
Company prior to such Closing Date (other than the financial statements
and related schedules and other financial data included therein, as to
which such counsel need make no statement), as of its effective date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (other than the
financial statements and related schedules and other financial data
included therein, as to which such counsel need make no statement), as
of its date or as of such Closing Date, included or includes an untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. Such
counsel do
13
not know of any amendment to the Registration Statement required to be
filed or of any contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or required to be
described in the Registration Statement or the Prospectus which are not
filed or described as required.
In rendering the opinions (A) in paragraphs (i) and (ii) and in
paragraph (ix) (as it relates to the Description of Capital Stock only),
such counsel may rely on an opinion of Xxxxxx & Whitney and (B) in
paragraphs (iii) and (iv), and subparagraph (A) of paragraph (vii), such
counsel may rely on an opinion of Xxxxx Xxxxxxx Xxxxxx Xxxxxxx &
Xxxxxxxxx, P.C. or the general counsel of the Company.
(e) The Representatives shall have received the opinion contemplated in
the Power of Attorney executed and delivered by each Selling Stockholder
and an opinion, dated such Closing Date, of the respective counsel for each
Selling Stockholder, to the effect that:
(i) A Power-of-Attorney and a Custody Agreement has been duly
executed and delivered by such Selling Stockholder, which constitute
the valid and binding agreements of such Selling Stockholder in
accordance with their terms.
(ii) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder; and the sale of
the Offered Securities to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of
the provisions of this Agreement, the Power-of-Attorney and the
Custody Agreement and the consummation of the transactions herein and
therein contemplated will not (A) conflict with or result in a breach
or violation of any terms or provisions of, or constitute a default
under, any statute, indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument known to such counsel to which such
Selling Stockholder is a party or by which such Selling Stockholder is
bound or to which any of the property or assets of such Selling
Stockholder is subject, except for conflicts, breaches, violations or
defaults that would not, individually or in the aggregate, have a
material adverse effect on the ability of such Selling Stockholder to
consummate the transactions contemplated by this Agreement, the Power
of Attorney or the Custody Agreement, or (B) result in any violation
of (x) the provisions of the certificate of incorporation or by-laws
of such Selling Stockholder, if such Selling Stockholder is a
corporation, or the partnership agreement of such Selling Stockholder,
if such Selling Stockholder is a partnership, or (y) any statute,
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over such Selling
Stockholder or the property of such Selling Stockholder, except for
violations of any statute, order, rule or regulation that would not,
individually or in the aggregate, have a material adverse effect on
the ability of such Selling Stockholder to consummate the transactions
contemplated by this Agreement, the Power of Attorney or the Custody
Agreement.
(iii) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement in connection with the
Offered Securities to be sold by such Selling Stockholder hereunder,
except such as have been obtained under the Act and such as may be
required under state securities or Blue Sky laws in connection with
the purchase and distribution of such Offered Securities by the
Underwriters.
(iv) Immediately prior to such Closing Date, such Selling
Stockholder had good and valid title to the Offered Securities to be
sold on such Closing Date by such Selling Stockholder under this
Agreement, free and clear of all liens, encumbrances, equities or
claims, and full right, power and authority to sell, assign, transfer
and deliver the Offered Securities to be sold by such Selling
Stockholder hereunder.
14
(v) Good and valid title to such Offered Securities, free and
clear of all liens, encumbrances, equities or claims, has been
transferred to each of the several Underwriters.
(f) The Representatives shall have received from King & Spalding,
counsel for the Underwriters, such opinion or opinions, dated such Closing
Date, with respect to the incorporation of the Company, the validity of the
Offered Securities delivered on such Closing Date, the Registration
Statements, the Prospectus and other related matters as the Representatives
may require, and the Selling Stockholders and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters. In rendering such opinion, King &
Spalding may rely as to the incorporation of the Company and all other
matters governed by Minnesota law upon the opinion of Xxxxxx & Xxxxxxx
referred to above.
(g) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that: the representations and warranties of the Company in this Agreement
are true and correct; the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to such Closing Date; no stop order suspending the
effectiveness of any Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated by
the Commission; the Additional Registration Statement (if any) satisfying
the requirements of subparagraphs (1) and (3) or Rule 462(b) was filed
pursuant to Rule 462(b), including payment of the applicable filing fee in
accordance with Rule 111(a) or (b) under the Act, prior to the time the
Prospectus was printed and distributed to any underwriter; and, subsequent
to the date of the most recent financial statements in the Prospectus,
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole, except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(h) The Representatives shall have received a letter, dated such
Closing Date, of Xxxxxx Xxxxxxxx LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred to
in such subsection will be a date not more than three days prior to such
Closing Date for the purposes of this subsection.
(i) The Custodian will deliver to CSFBC a letter stating that they
will deliver to each Selling Stockholder a United States Treasury
Department Form 1099 (or other applicable form or statement specified by
the United States Treasury Department regulations in lieu thereof) on or
before January 31 of the year following the date of this Agreement.
The Selling Stockholders and the Company will furnish the
Representatives with such conformed copies of such opinions, certificates,
letters and documents as the Representatives reasonably request. CSFBC may
in its sole discretion waive on behalf of the Underwriters compliance with
any conditions to the obligations of the Underwriters hereunder, whether in
respect of an Optional Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, directors and officers and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make
15
the statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives specifically for
use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in
subsection (c) below.
(b) The Selling Stockholders, jointly and severally, will indemnify and hold
harmless each Underwriter, its partners, directors and officers and each person,
if any, who controls such Underwriter within the meaning of Section 15 of the
Act, against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement, the Prospectus, or
any amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Selling
Stockholders will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by an Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below; provided, further, that
the Selling Stockholders listed on Schedule C hereto shall only be subject to
such liability to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission is based upon information provided by
such Selling Stockholder or contained in a representation or warranty given by
such Selling Stockholder in this Agreement or the Custody Agreement; and
provided, further, that the liability under this subsection of each Selling
Stockholder shall be limited to an amount equal to the aggregate gross proceeds
to such Selling Stockholder from the sale of Securities sold by such Selling
Stockholder hereunder.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act, and each
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company or such Selling Stockholder may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Company and each Selling
Stockholder in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the following information in the Prospectus furnished on behalf of each
Underwriter: the concession and reallowance figures appearing in the
fourth paragraph under the caption "Underwriting" and the information contained
in the 11th and 12th paragraphs under the caption "Underwriting."
16
(d) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a), (b) or (c) above. In case any such action
is brought against any indemnified party and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action 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 (i) includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party.
(e) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a), (b) or
(c) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Selling Stockholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (e). Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under this
Section shall be in addition to any liability which the Company and the Selling
Stockholders may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
17
director of the Company, to each officer of the Company who has signed a
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Selling Stockholders for the purchase of
such Offered Securities by other persons, including any of the Underwriters, but
if no such arrangements are made by such Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Offered Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any
Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBC and the Selling Stockholders for the purchase of such Offered Securities
by other persons are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter,
the Company or the Selling Stockholders, except as provided in Section 9
(provided that if such default occurs with respect to Optional Securities after
the First Closing Date, this Agreement will not terminate as to the Firm
Securities or any Optional Securities purchased prior to such termination). As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Selling Stockholders, of the Company or its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company, the Selling Stockholders, and the Underwriters
pursuant to Section 7 shall remain in effect, and if any Offered Securities have
been purchased hereunder the representations and warranties in Section 2 and all
obligations under Section 5 shall also remain in effect. If the purchase of the
Offered Securities by the Underwriters is not consummated for any reason other
than solely because of the termination of this Agreement pursuant to Section 8
or the occurrence of any event specified in clause (iii), (iv), (v), (vi) or
(vii) of Section 6(c), the Company will reimburse the Underwriters for all out-
of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed, delivered or sent via facsimile and confirmed
to the Representatives, c/o Credit Suisse First Boston Corporation, Eleven
Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention: Transactions Advisory Group
(facsimile no.: 212-325-4296), or, if sent to the Company, will be mailed,
delivered or sent via facsimile and confirmed to it at AFC Enterprises, Inc.,
Xxx Xxxxxxxxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000-0000, Attention:
General Counsel (facsimile no. 770-353-3334), or, if sent to the Selling
Stockholders or any of them, will be mailed, delivered or sent via facsimile and
confirmed to at
(facsimile no. ____________); provided, however, that any notice to an
Underwriter pursuant to Section 7 will be mailed, delivered or telegraphed and
confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective personal representatives and
successors and the officers and directors and controlling persons referred to in
Section 7, and no other person will have any right or obligation hereunder.
18
12. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representatives jointly or by
CSFBC will be binding upon all the Underwriters. Xxxxx X. Xxxxxxx, Xxxx X. Xxxx
and Xxxxxx X. Xxxxxx will act for the Selling Stockholders other than FS Equity
Partners III, L.P., FS Equity Partners International, L.P. and FS Equity
Partners IV, L.P. in connection with such transactions, and any action under or
in respect of this Agreement taken by any two of Xxxxx X. Xxxxxxx, Xxxx X. Xxxx
and Xxxxxx X. Xxxxxx will be binding upon all the Selling Stockholders other
than FS Equity Partners III, L.P., FS Equity Partners International, L.P. and FS
Equity Partners IV, L.P.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
19
If the foregoing is in accordance with the Representatives' understanding of
our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Selling
Stockholders, the Company and the several Underwriters in accordance with its
terms.
Very truly yours,
FS EQUITY PARTNERS IV, L.P.
By: FS Capital Partners, LLC
Its: General Partner
By:________________________________
Name:
Title:
FS EQUITY PARTNERS INTERNATIONAL, L.P.,
By: FS & Co. International, L.P.
Its: General Partner
By: FS International Holdings Limited
Its: General Partner
By:_________________________
Name:
Title:
FS EQUITY PARTNERS III, L.P.,
a Delaware limited partnership
By: FS Capital Partners, L.P.
Its: General Partner
By: FS Holdings, Inc.
Its: General Partner
By:________________________________
Name:
Title:
20
The Selling Stockholders Listed on
Schedule D Hereto
By............................
[_____________ as Attorney-in-Fact]
AFC Enterprises, Inc.
By............................
[Insert title]
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
Credit Suisse First Boston Corporation
Xxxxxxx, Sachs & Co.
Bear, Xxxxxxx & Co. Inc.
Deutsche Banc Alex. Xxxxx Inc.
Acting on behalf of themselves and as the Representatives of the several
Under-writers.
By Credit Suisse First Boston Corporation
By.......................................
[Insert title]
21
SCHEDULE A
Number of
Number of Optional
Firm Securities Securities
Selling Stockholder to be Sold to be Sold
---------------------------------------------- ----------------- -------------
FS Equity Partners III, L.P.
FS Equity Partners International, L.P.
FS Equity Partners IV, X.X.
XXXXXX Private Equity and Mezzanine Fund, L.P. 640,000 96,000
Xxxxx X. Xxxxxxx 300,000 45,000
Xxxx X. Xxxxxxxx 150,000 22,500
Xxxxxx X. Xxxxxxx 150,000 22,500
----------- -----------
Total........................................ 7,000,000 1,050,000
=========== ===========
22
SCHEDULE B
Number of
Firm Securities
Underwriter to be Purchased
----------- ---------------
Credit Suisse First Boston Corporation..........
Xxxxxxx, Sachs & Co.
Bear, Xxxxxxx & Co. Inc.
Deutsche Banc Alex. Xxxxx Inc.
---------------
Total................................
===============
23
SCHEDULE C
FS Equity Partners III, L.P.
FS Equity Partners International, L.P.
FS Equity Partners IV, X.X.
XXXXXX Private Equity and Mezzanine Fund, L.P.
Xxxxxx X. Xxxxxxx
24
SCHEDULE X
XXXXXX Private Equity and Mezzanine Fund, L.P.
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx
25
