EXHIBIT 1.1
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CARIBOU COFFEE COMPANY, INC.
(a Minnesota corporation)
Shares of Common Stock
PURCHASE AGREEMENT
Dated: [_____], 2005
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CARIBOU COFFEE COMPANY, INC.
(a Minnesota corporation)
[_____] Shares of Common Stock
(Par Value $0.01 Per Share)
PURCHASE AGREEMENT
[_____], 2005
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇ ▇▇▇▇▇ & Co., LLC
SunTrust Capital Markets, Inc.
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Caribou Coffee Company, Inc., a Minnesota corporation (the "Company"),
confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters," which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC ("TWP"), ▇▇ ▇▇▇▇▇ &
Co., LLC and SunTrust Capital Markets, Inc. are acting as representatives (in
such capacity, the "Representatives"), with respect to the issue and sale by the
Company and the purchase by the Underwriters, acting severally and not jointly,
of the respective numbers of shares of common stock, par value $0.01 per share,
of the Company ("Common Stock") set forth in said Schedule A, and with respect
to the grant by the Company to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of [_____] additional shares of Common Stock to cover overallotments, if
any. The aforesaid [_____] shares of Common Stock (the "Initial Securities") to
be purchased by the Underwriters and all or any part of the [_____] shares of
Common Stock subject to the option described in Section 2(b) hereof (the "Option
Securities") are hereinafter called, collectively, the "Securities."
The Company understands that the Underwriters propose to make a public
offering of the Securities upon the terms and conditions set forth in the
Prospectus (as defined herein) as soon as the Representatives deem advisable
after this Agreement has been executed and delivered.
The Company and the Underwriters agree that up to [_____] shares of the
Securities to be purchased by the Underwriters (the "Reserved Securities") shall
be reserved for sale by the Underwriters to certain eligible employees and
persons having business relationships with the Company ("Invitees"), as part of
the distribution of the Securities by the Underwriters, subject to the terms of
this Agreement, the
applicable rules, regulations and interpretations of the National Association of
Securities Dealers, Inc. (the "NASD") and all other applicable laws, rules and
regulations. To the extent that the Reserved Securities are not orally confirmed
for purchase by Invitees by the end of the first business day after the date of
this Agreement, such Reserved Securities may be offered to the public as part of
the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-126691), including
the related preliminary prospectus or prospectuses, covering the registration of
the Securities under the Securities Act of 1933, as amended (the "1933 Act").
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations. The information included in such prospectus that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as the "Rule
430A Information." Each prospectus used before such registration statement
became effective, and any prospectus that omitted the Rule 430A Information and
was used after such effectiveness and prior to the execution and delivery of
this Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits and any schedules thereto, at the time it
became effective, and including the Rule 430A Information, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus in
the form first furnished to the Underwriters for use in connection with the
offering of the Securities is herein called the "Prospectus." For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
The Representatives have received agreements substantially in the form
of Exhibit C hereto signed by the persons listed on Schedule D hereto.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement and
any post-effective amendment thereto has become effective under the
1933 Act and no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement or any
post-effective amendment thereto has been issued under the 1933 Act and
no proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at each Date of Delivery therefor), the Registration
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Statement, the Rule 462(b) Registration Statement and any amendments
and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and 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
the Prospectus, any preliminary prospectus and any supplement thereto
or prospectus wrapper prepared in connection therewith, at their
respective times of issuance and at the Closing Time, complied and will
comply in all material respects with any applicable laws or regulations
of foreign jurisdictions in which the Prospectus and such preliminary
prospectus, as amended or supplemented, if applicable, are distributed
in connection with the offer and sale of Reserved Securities. Neither
the Prospectus nor any amendments or supplements thereto (including any
prospectus wrapper), at the time the Prospectus or any such amendment
or supplement was issued and at the Closing Time (and, if any Option
Securities are purchased, at each Date of Delivery therefor), included
or will include an untrue statement of a material fact or omitted or
will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto complied when so filed in all material respects with
the 1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(ii) Independent Auditor. The accountants who audited the
financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations. Except as described in
the Prospectus and as preapproved in accordance with the requirements
set forth in Section 10A of the Exchange Act, such accountants have not
engaged in any "prohibited activities" (as defined in Section 10A of
the Exchange Act) on behalf of the Company.
(iii) Financial Statements. The financial statements included
in the Registration Statement and the Prospectus, together with the
related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated
and the statements of operations, changes in shareholders' equity and
cash flows of the Company and its consolidated subsidiaries for the
periods specified; said financial statements have been prepared in
conformity with United States generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved.
The supporting schedules included in the Registration Statement present
fairly in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included in the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that of
the audited financial statements included in the Registration Statement
and consistent with the books and records of the Company.
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or
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in the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary
course of business, that are material, singly or in the aggregate, with
respect to the Company and its subsidiaries considered as one
enterprise, (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock, (D) there has not been any change in the capital stock of the
Company (other than upon the issuance or exercise of stock options
granted pursuant to the Company's stock plans described in the
Prospectus) or long-term debt of the Company or any of its subsidiaries
and (E) the Company and its subsidiaries have not incurred any
liabilities or obligations, direct or contingent, that are material,
singly or in the aggregate, other than trade payables in the ordinary
course of business consistent with past practice.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Minnesota and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing
in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each of Caribou Ventures,
Caribou on Piedmont, Inc., Caribou MSP Airport, Caribou Coffee
Development Company, Inc. (each, a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the
Registration Statement or as pledged to secure the obligations of the
Company under the Second Amended and Restated Lease and License
Financing dated June 29, 2004 between the Company and Arabica Funding,
Inc. (the "Lease Financing"), all of the issued and outstanding capital
stock of or other ownership interests in each such Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital stock of or
other ownership interests in any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such
Subsidiary. The only subsidiaries of the Company are (A) the
Subsidiaries, which are listed on Exhibit 21 to the Registration
Statement, and (B) certain other subsidiaries that, considered in the
aggregate as a single subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X.
(vii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement or pursuant to
the exercise of options referred to in the Prospectus). The shares of
issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable;
none of the outstanding shares of capital stock of the Company was
issued in violation of the preemptive or other similar rights of any
securityholder of the Company. Except
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as set forth in the Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue or rights to convert
any obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding as of
the date set forth therein. All options and other rights to purchase
shares of capital stock in the Company have been duly and validly
authorized and issued, were issued in compliance with federal and state
securities laws and conform to the description thereof contained in the
Prospectus.
(viii) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(ix) Authorization and Description of Securities. The
Securities to be purchased by the Underwriters from the Company have
been duly authorized for issuance and sale to the Underwriters pursuant
to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set
forth herein, will be validly issued and fully paid and non-assessable;
the description of the Common Stock in the Prospectus conforms, in all
material respects, to the rights set forth in the instruments defining
the same; no holder of the Securities will be subject to personal
liability by reason of being such a holder; and the issuance of the
Securities is not subject to the preemptive or other similar rights of
any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor
any of its subsidiaries is in violation of its charter or by-laws;
neither the Company nor any of its subsidiaries is in violation of any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or
any of their assets, properties or operations, or is (nor will any of
them, with the giving of notice or passage of time, be) in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which it or they may be bound or to which any of the property or
assets of the Company or any subsidiary is subject (collectively,
"Agreements and Instruments"), except for such defaults or violations
that would neither result in a Material Adverse Effect nor affect the
validity of the issuance of the Securities; and the execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus
under the caption "Use of Proceeds") and compliance by the Company with
its obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches, defaults or Repayment Events or liens, charges or
encumbrances that would neither result in a Material Adverse Effect nor
affect the validity of the issuance of the Securities), nor will such
action result in any violation of the provisions of the charter or
by-laws of the Company or any subsidiary or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations (except for such violations that would
neither result in a Material Adverse Effect nor affect the validity of
the issuance of the Securities). As used herein, a "Repayment Event"
means any event or condition that gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase,
5
redemption or repayment of all or a portion of such indebtedness (other
than with respect to the Lease Financing) by the Company or any
subsidiary.
(xi) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors that, in either case, would result in a Material Adverse
Effect.
(xii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any subsidiary that is required to be disclosed in the
Registration Statement (other than as disclosed therein), or that would
result in a Material Adverse Effect, or that would materially and
adversely affect the properties or assets thereof or the consummation
of the transactions contemplated in this Agreement or the performance
by the Company of its obligations hereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective property or
assets is the subject that are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, could not result in a Material Adverse Effect.
(xiii) Absence of Affiliations with NASD Members. To the
Company's knowledge, there are no affiliations or associations between
any member of the NASD and any of the Company's officers or directors,
persons who beneficially own 5% or more of any class of the Company's
securities or any person who, in the six months preceding the filing of
the Registration Statement, purchased any unregistered equity
securities of the Company, except as set forth in the Registration
Statement.
(xiv) Accuracy of Exhibits. There are no Agreements and
Instruments or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits
thereto that have not been so described and filed as required.
(xv) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names, Internet domain names or other
intellectual property (collectively, "Intellectual Property") known to
the Company to be necessary to carry on the business now operated by
them, and neither the Company nor any of its subsidiaries has received
any notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances that would render any
Intellectual Property invalid or inadequate to protect the interest of
the Company or any of its subsidiaries therein, and which infringement
or conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the aggregate, would
result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental or regulatory
authority or agency is necessary or required for the performance by the
Company of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except (A) such as have
been already obtained or as may be required under the 1933 Act or the
1933 Act
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Regulations or state securities laws or by the NASD's rules and
regulations in connection with the purchase and distribution of the
Securities by the Underwriters and (B) such as have been obtained under
the laws and regulations of jurisdictions outside the United States in
which any of the Securities, including the Reserved Securities, are
offered.
(xvii) Absence of Manipulation. Neither the Company nor, to
the Company's knowledge any affiliate of the Company has taken, nor
will the Company or any affiliate take, directly or indirectly, any
action that is designed to or that has constituted or that would be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
(xviii) Possession of Licenses and Permits. The Company and
its subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses") issued
by the appropriate federal, state, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them,
except where the failure so to possess would not, singly or in the
aggregate, result in a Material Adverse Effect; the Company and its
subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, result in a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect
would not, singly or in the aggregate, result in a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses that, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xix) Title to Property. The Company and its subsidiaries own
no real property and have good title to all other properties owned by
them, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (A) are described in the Prospectus (B) secure obligations of the
Company under the Lease Financing or (C) do not, singly or in the
aggregate, interfere with the use made and proposed to be made of such
property by the Company or any of its subsidiaries; and all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company
or any of its subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor
any subsidiary has any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary
to the continued possession of the leased or subleased premises under
any such lease or sublease except as would not, singly or in the
aggregate, result in a Material Adverse Effect.
(xx) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) Environmental Laws. Except as described in the
Registration Statement or except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent,
7
decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products, asbestos-containing materials or mold
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that would
form the basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws.
(xxii) Compliance with Food and Beverage and Labor Laws. The
Company and its subsidiaries are conducting their business in
compliance with the Fair Labor Standards Act, the rules and regulations
of the federal Food and Drug Administration and all applicable federal,
state and local laws, rules and regulations of the jurisdictions in
which it is conducting business, including, without limitation, all
applicable local, state and federal laws and regulations governing
health, sanitation, safety, environmental matters, zoning and land use,
except where the failure to be so in compliance would not result in a
Material Adverse Effect or is described in the Registration Statement.
(xxiii) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement.
(xxiv) Accounting and Internal Controls. The Company maintains
a system of internal accounting controls sufficient to provide
reasonable assurance that (A) transactions are executed in accordance
with management's general or specific authorizations, (B) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with GAAP and to maintain asset accountability, (C)
access to assets is permitted only in accordance with management's
general or specific authorization and (D) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences. The
Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 and 15d-15 under the
Exchange Act) that (A) are designed to ensure that material information
relating to the Company, including its Subsidiaries, is made known to
the Company's principal executive officer and its principal financial
officer by others within those entities and (B) are effective in all
material respects to perform the functions for which they were
established. The Company is not aware of any fraud, whether or not
material, that involves management or other employees who have a
significant role in the Company's internal controls. Since the date of
the most recent evaluation of the Company's internal controls, there
have been no changes in internal controls or in other factors that
could significantly affect internal controls that have materially
affected, or are reasonably likely to materially affect, the Company's
internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.
(xxv) No Offers. The Company has not offered, or caused the
Underwriters to offer, Reserved Shares to any person with the specific
intent to unlawfully influence (A) a customer or
8
supplier of the Company to alter such customer's or supplier's level or
type of business with the Company or (B) a trade journalist or
publication to write or publish favorable information about the Company
or its products.
(xxvi) Benefit Plans. Each Company "employee benefit plan"
within the meaning of the Employee Retirement Income Security Act of
1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"), has been established and
maintained in all material respects in accordance with ERISA. Neither
the Company nor any trade or business that is treated as a single
employer with the Company under Section 414(b), (c), (m) or (o) of the
Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder, maintains, makes
contributions to, or has an obligation to make contributions to (or in
the preceding five years has maintained, made contributions to, or had
an obligation to make contributions to) any "pension plan" as defined
in Section 3(2) of ERISA.
(xxvii) Taxes. The Company has filed all federal, state and
local income and franchise tax returns required to be filed through the
date hereof and has paid all taxes due thereon, and no tax deficiency
has been determined adversely to the Company or any Subsidiary, except
for such failure to file or pay or such deficiency that would not
result in a Material Adverse Effect, that has had (nor does the Company
have any knowledge of any tax deficiency that, if determined adversely
to the Company or any Subsidiary, might have) a Material Adverse
Effect.
(xxviii) Unlawful Payments. Except as would not have a
Material Adverse Effect, neither the Company nor any of its
subsidiaries, nor, to the Company's knowledge, any director, officer,
agent or employee of, or other person associated with or acting on
behalf of, the Company, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity, made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate
funds, violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977, or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(xxix) Patriot Act. Neither the Company nor any of its
subsidiaries, nor, to the Company's knowledge, any director, officer,
agent or employee of, or other person associated with or acting on
behalf of, the Company, has violated the Bank Secrecy Act, as amended,
the Uniting and Strengthening of America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act (USA PATRIOT ACT) of
2001 or the rules and regulations promulgated under any such law or any
successor law.
(xxx) Money Laundering Laws. The operations of the Company and
its subsidiaries are and have been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements of
the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the Money Laundering Control Act of 1986, as amended, any
other money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the "Money Laundering Laws"), except for any such
non-compliance as would not, singly or in the aggregate, have a
Material Adverse Effect, and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator
involving the Company or any of it subsidiaries, with respect to the
Money Laundering Laws is pending or, to the Company's knowledge,
threatened.
(xxxi) Sanctions. Neither the Company nor any of its
subsidiaries, nor, to the Company's knowledge, any director, officer,
agent or employee of, or other person associated
9
with or acting on behalf of, the Company, is currently subject to any
United States sanctions administered by the Office of Foreign Assets
Control of the United States Treasury Department ("OFAC"); and the
Company will not directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such proceeds
to any subsidiary, partner or joint venturer or other person or entity,
for the purpose of financing the activities of any person currently
subject to any United States sanctions administered by OFAC.
(xxxii) ▇▇▇▇▇▇▇▇-▇▇▇▇▇. Upon the effectiveness of the
Registration Statement, the Company will be in compliance, in all
material respects, with all provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002 that are effective and applicable to the Company as an "issuer" as
defined under the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
(xxxiii) Nasdaq Listing. The Securities have been approved for
listing subject to notice of issuance on the Nasdaq National Market
("Nasdaq").
(xxxiv) Audit Committee. The Company's board of directors has
validly appointed an audit committee whose composition satisfies the
requirements of the NASD's Rule 4350(d) and Rule 10A-3 under the
Exchange Act, and the Company's board of directors or audit committee
has adopted a charter that satisfies the requirements of such Rule
4350(d). The audit committee has reviewed the adequacy of its charter
within the past twelve months.
(xxxv) Off-Balance Sheet Transactions. Except as described in
the Prospectus, there are no material off-balance sheet transactions
(as defined in Item 303(a)(4) of Regulation S-K), arrangements,
obligations (including contingent obligations), or any other
relationships with unconsolidated entities or other persons, that may
have a material current or future effect on the Company's financial
condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources or significant
components of revenues or expenses.
(xxxvi) Insurance. The Company carries, or is covered by,
insurance with insurers of recognized reputability in such amounts and
covering such risks as it believes is commercially reasonable in light
of the business presently conducted by the Company, all of which
insurance is in full force and effect, and the Company has no reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers at a cost that would not, singly or in
the aggregate, have a Material Adverse Effect, and there are no claims
by the Company of any material amount under any such policy as to which
any insurer is denying liability or defending under a reservation of
rights claim and the Company has not received notice from any insurer
or agent of such insurer that substantial capital improvements or other
material expenditures will have to be made in order to continue such
insurance.
(xxxvii) Minute Books. The minute books of the Company and
each of its subsidiaries have been made available to the Underwriters
and counsel for the Underwriters, and such books (A) contain a summary
of all meetings and actions of the board of directors (including each
committee thereof) and stockholders of the Company and such subsidiary
since the later of the time of its respective formation and January 1,
2000 through the date of the latest meeting and action and (B)
accurately in all material respects reflect all resolutions adopted at
such meetings or actions referred to in such minutes.
(xxxviii)Finder's Fees. Neither the Company nor any of its
subsidiaries, nor, to the Company's knowledge, any director, officer,
agent, employee or other person associated with or acting on behalf of
the Company or any of its affiliates, is a party to any contract,
agreement or
10
understanding with any person that would give rise to a valid claim
against the Company or the Underwriters for a brokerage commission,
finder's fee or like payment in connection with the offering and sale
of the Securities.
(xxxix) Forward-Looking Statements. No forward-looking
statement (within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in the Prospectus has been
made or reaffirmed without a reasonable basis or has been disclosed
other than in good faith.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule B the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities that such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial Securities, subject, in
each case, to such adjustments among the Underwriters as the Representatives in
their sole discretion shall make to eliminate any sales or purchases of
fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional [_____] shares of Common Stock
at the price per share set forth in Schedule B, less an amount per share equal
to any dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering overallotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company setting forth the
number of Option Securities as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Securities. Any such time and date of delivery (a "Date of Delivery")
shall be determined by ▇▇▇▇▇▇▇ ▇▇▇▇▇, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined. If the option is exercised as to all or
any portion of the Option Securities, each of the Underwriters, acting severally
and not jointly, will purchase that proportion of the total number of Option
Securities then being purchased which the number of Initial Securities set forth
in Schedule A opposite the name of such Underwriter bears to the total number of
Initial Securities, subject in each case to such adjustments as ▇▇▇▇▇▇▇ ▇▇▇▇▇ in
its discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Pillsbury ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ LLP, 1540 Broadway, New York, New York, or at
such other place as shall be agreed upon by the Representatives and the Company,
at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after
4:30 P.M. (Eastern time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section 10 hereof), or
such other time not later than ten business days after such date as shall be
agreed
11
upon by the Representatives and the Company (such time and date of payment and
delivery being herein called the "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, that it has agreed to
purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule
430A, and will notify the Representatives promptly, and confirm the notice in
writing, (i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether or not the form of prospectus transmitted for filing under Rule
424(b) was received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)) or any amendment, supplement
or revision to either the prospectus included in the Registration Statement
12
at the time it became effective or to the Prospectus, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act, such number of copies
of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the Prospectus
will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading,
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representatives may designate until
the distribution of the Securities is complete; provided, however, that the
Company shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject.
(g) Rule 158. The Company will timely file such reports pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), as are necessary
in order to make generally available to its
13
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(i) Listing. The Company will use its reasonable best efforts to effect
and maintain the quotation of the Securities on the Nasdaq National Market.
(j) Restriction on Sale of Securities. During a period of 180 days from
the date of the Prospectus (subject to extension as provided below), the Company
will not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and TWP, (i)
directly or indirectly, offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of any
share of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the 1933
Act with respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Securities to be
sold hereunder, (B) any shares of Common Stock issued by the Company upon the
exercise of an option outstanding on the date hereof and referred to in the
Prospectus or (C) any options to purchase Common Stock, restricted stock, stock
appreciation rights or other incentive awards granted pursuant to existing stock
option or incentive plans of the Company referred to in the Prospectus;
provided, however, that if the Company (i) issues an earnings release or
material news or a material event relating to the Company occurs during the last
17 days of such 180-day period or (ii) prior to the expiration of such 180-day
period, announces that it will release earnings results during the 16-day period
beginning on the last day of such 180-day period, then, if the Company and
▇▇▇▇▇▇▇ ▇▇▇▇▇ and TWP mutually agree, the restrictions imposed by this
subsection (j) shall continue to apply until the expiration of the 18-day period
beginning on the issuance of such earnings release or the occurrence of such
material news or material event.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the rules and regulations
of the Commission thereunder.
(l) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the NASD's
rules from sale, transfer, assignment, pledge or hypothecation for a period of
three months following the date of this Agreement. The Underwriters will notify
the Company as to which persons will need to be so restricted. At the request of
the Underwriters, the Company will direct the transfer agent to place a stop
transfer restriction upon such securities for such period of time. Should the
Company release, or seek to release, from such restrictions any of the Reserved
Securities, the Company agrees to reimburse the Underwriters for any reasonable
expenses (including, without limitation, legal expenses) they incur in
connection with such release.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto,
14
(ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters, (iv) the fees and
disbursements of counsel for the Company, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus and of the Prospectus and any amendments or supplements
thereto, (vii) the fees and expenses of any transfer agent or registrar for the
Securities, (viii) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the marketing of
the Securities, including without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants, and the cost of aircraft and other transportation chartered in
connection with the road show, (ix) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the NASD of the terms of the sale of the Securities, (x) the
fees and expenses incurred in connection with the inclusion of the Securities on
the Nasdaq National Market and (xi) all costs and expenses of the Underwriters,
including the fees and disbursements of counsel for the Underwriters, in
connection with matters related to the Reserved Securities that are designated
by the Company for sale to Invitees. It is understood, however, that except as
provided in this Section 4, the Underwriters will pay all of their own costs and
expenses, including the fees and disbursements of their counsel and any
advertising expenses connected with any offers they may make.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at the Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters. A
prospectus containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A).
(b) Opinion of Counsel for Company. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of each of (i) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Minnesota counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters to
the effect set forth in Exhibit A hereto, and (ii) King & Spalding LLP, counsel
for the Company, in form and substance satisfactory to counsel for the
Underwriters to the effect set forth in Exhibit B hereto,
15
together in each case with signed or reproduced copies of such letter for each
of the other Underwriters. Such counsel may also state that, insofar as such
opinion involves factual matters, such counsel has relied, to the extent they
deem proper, upon certificates of officers of the Company and its subsidiaries
and certificates of public officials.
(c) Opinion of Counsel for Underwriters. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Pillsbury ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters with respect to the matters set forth in clauses
[_____] and the penultimate paragraph of Exhibit B hereto. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal law of
the United States, upon the opinions of counsel satisfactory to the
Representatives, including the opinion referred to in Section 5(b)(i) hereof.
Such counsel may also state that, insofar as such opinion involves factual
matters, such counsel has relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of
public officials.
(d) Officers' Certificate. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of the Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of the Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or, to their
knowledge, contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Ernst & Young LLP a
letter dated such date, in form and substance satisfactory to the
Representatives containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus, together with signed or reproduced
copies of such letter for each of the other Underwriters.
(f) Bring-down Comfort Letter. At the Closing Time, the Representatives
shall have received from Ernst & Young LLP a letter, dated as of the Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to Section 5(e) hereof, except that the specified date
referred to shall be a date not more than three business days prior to the
Closing Time.
(g) Approval of Listing. At the Closing Time, the Securities shall have
been approved for inclusion in the Nasdaq National Market, subject only to
official notice of issuance.
(h) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(i) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates
16
furnished by the Company or any subsidiary of the Company hereunder shall be
true and correct as of each Date of Delivery and, at the relevant Date of
Delivery, the Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(e) hereof remains true and correct as of such Date of
Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
each of (A) King & Spalding LLP, counsel for the Company, and (B)
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Minnesota counsel for the Company, each in form
and substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable
opinion of Pillsbury ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(d) hereof.
(iv) Bring-down Comfort Letter. A letter from Ernst & Young
LLP, in form and substance satisfactory to the Representatives and
dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Representatives pursuant to
Section 5(g) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than five
days prior to such Date of Delivery.
(j) Additional Documents. At the Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained,
including a certificate of Arcapita Bank, B.S.C.(c) as to certain matters
reasonably acceptable to the Representatives; and all proceedings taken by the
Company in connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the Representatives
and counsel for the Underwriters.
(k) Termination of Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery that is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the Company at
any time at or prior to the Closing Time or such Date of Delivery, as the case
may be, and such termination shall be without liability of any party to any
other party, except as provided in Section 4 hereof and except that Sections 1,
6, 7 and 8 hereof shall survive any such termination and remain in full force
and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter, its affiliates, as such term is defined in
Rule 501(b) under the 1933 Act (each, an "Affiliate"), its selling agents and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act as follows:
17
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) hereof) any such settlement is effected
with the written consent of the Company;
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇
▇▇▇▇▇), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under paragraph (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information, or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); provided, however, that the foregoing indemnity with respect to any
untrue statement contained in or omission from a preliminary prospectus shall
not inure to the benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, liability, claim,
damage or expense purchased any of the Securities that are the subject thereof
if a Prospectus was required to be delivered under the 1933 Act and was not sent
or given a copy of the Prospectus (or the Prospectus as amended or supplemented)
at or prior to the written confirmation of the sale of such Securities to such
person and the untrue statement contained in or omission from such preliminary
prospectus was corrected in the Prospectus (or the Prospectus as amended or
supplemented), unless such failure is the result of noncompliance by the Company
with Section 3(d) or Section 3(e) hereof.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company, within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 6(a)
hereof, as incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment thereto), including the Rule 430A Information, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
18
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability that it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) hereof,
counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section 6(b) hereof, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim 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 any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) hereof or settlement of any claim in connection with any
violation referred to in Section 6(f) hereof effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
(f) Indemnification for Reserved Securities. In connection with the
offer and sale of the Reserved Securities, the Company agrees, to indemnify and
hold harmless the Underwriters, their Affiliates and selling agents and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any
and all loss, liability, claim, damage and expense (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending, investigating or settling any such action or claim), as incurred, (i)
arising out of the violation of any applicable laws or regulations of foreign
jurisdictions where Reserved Securities have been offered, (ii) arising out of
any untrue statement or alleged untrue statement of a material fact contained in
any prospectus wrapper or other material prepared by or with the consent of the
Company for distribution to Invitees in connection with the offering of the
Reserved Securities or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) caused by the failure of any Invitee to
pay for and accept delivery of Reserved Securities that have been orally
confirmed for purchase by any Invitee by the end of the first business day after
the date of the Agreement or (iv) related to, or arising out of or in connection
with, the offering of the Reserved Securities.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses,
19
liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such indemnified party, as
incurred, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) 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 on the one hand and of the Underwriters on the other hand in connection
with the statements or omissions, or in connection with any violation of the
nature referred to in Section 6(e) hereof, that resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, bear to the aggregate initial
public offering price of the Securities as set forth on the cover of the
Prospectus.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission or any violation of the nature referred to in Section 6(f)
hereof.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to above in this Section 7.
Notwithstanding the provisions of this Section 7, 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 that such
Underwriter has otherwise been required to pay by reason of any 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number of
Initial Securities set forth opposite their respective names in Schedule A
hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or
20
any of its subsidiaries submitted pursuant hereto shall remain operative and in
full force and effect regardless of (a) any investigation made by or on behalf
of any Underwriter or its Affiliates or selling agents, any person controlling
any Underwriter, its officers or directors, any person controlling the Company
or any person controlling the Company and (b) delivery of and payment for the
Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission, the NASD or the Nasdaq National Market, or if trading generally on
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the NASD or any other governmental
authority, or (iv) a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, or (v) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section 9, such termination shall be without liability of any party to any other
party, except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 hereof shall survive such termination and remain in full
force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time or a Date of Delivery to
purchase the Securities that it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(i) if the number of Defaulted Securities does not exceed 10%
of the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters; or
(ii) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery that occurs after the Closing
Time, the obligation of the Underwriters to purchase and of the Company
to sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting Underwriter.
21
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination
of this Agreement or, in the case of a Date of Delivery that is after the
Closing Time, that does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either (i) the Representatives or (ii) the Company shall
have the right to postpone the Closing Time or the relevant Date of Delivery, as
the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or the Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION 11. Tax Disclosure. Notwithstanding any other provision of this
Agreement, from the commencement of discussions with respect to the transactions
contemplated hereby, the Company (and each employee, representative or other
agent of the Company) may disclose to any and all persons, without limitation of
any kind, the tax treatment and tax structure (as such terms are used in
Sections 6011, 6111 and 6112 of the United States Code and the Treasury
Regulations promulgated thereunder) of the transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided relating to such tax treatment and tax structure.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at 4 World Financial
Center, New York, New York 10080, attention of [_____]; and notices to the
Company shall be directed to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of [_____].
SECTION 13. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase. The Company
acknowledges and agrees that the Underwriters' responsibility to the Company is
solely contractual in nature and that none of the Underwriters or their
affiliates shall be acting in a fiduciary or advisory capacity, or otherwise owe
any fiduciary or advisory duty, to the Company in connection with the offering
of the Securities and the other transactions contemplated by this Agreement.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 15. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT.
EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
22
SECTION 16. 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.
SECTION 17. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
[Signature Page to Follow]
23
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
CARIBOU COFFEE COMPANY, INC.
By
--------------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇ PARTNERS LLC
▇▇ ▇▇▇▇▇ & CO., LLC
SUNTRUST CAPITAL MARKETS, INC.
BY: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By
-----------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named
in Schedule A hereto.
24
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated.................................... [_____]
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC.................................. [_____]
▇▇ ▇▇▇▇▇ & Co., LLC......................................... [_____]
SunTrust Capital Markets, Inc............................... [_____]
Total....................................................... [_____]
Sch A-1
SCHEDULE B
CARIBOU COFFEE COMPANY, INC.
[_____] Shares of Common Stock
(Par Value $0.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $[_____].
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[_____], being an amount equal to the initial
public offering price set forth above less $[_____] per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the overallotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option Securities.
Sch C-1
SCHEDULE C
[List of persons and entities subject to lock-up]
Sch D-1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
A-1
Exhibit B
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
Exhibit C
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS
OR OTHER STOCKHOLDERS PURSUANT TO SECTION 5(K)
[_____], 2005
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇ ▇▇▇▇▇ & Co., LLC
SunTrust Capital Markets, Inc.
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Proposed Public Offering by Caribou Coffee Company, Inc
Dear Sirs:
The undersigned, a stockholder [and an officer or director] of Caribou
Coffee Company, Inc., a Minnesota corporation (the "Company"), understands that
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC ("TWP"), ▇▇ ▇▇▇▇▇ & Co., LLC and
SunTrust Capital Markets, Inc. propose to enter into a Purchase Agreement (the
"Purchase Agreement") with the Company providing for the public offering of
shares (the "Securities") of the Company's common stock, par value $0.01 per
share (the "Common Stock"). In recognition of the benefit that such an offering
will confer upon the undersigned as a stockholder [and an officer or director]
of the Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the Purchase Agreement that, during a period of 180
days from the date of the Purchase Agreement (subject to extension as provided
below), the undersigned will not, without the prior written consent of ▇▇▇▇▇▇▇
▇▇▇▇▇ and TWP, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of the Common Stock or any securities
convertible into or exchangeable or exercisable for shares of the Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file, or cause to be filed, any registration statement under the Securities Act
of 1933, as amended, with respect to any of the foregoing (collectively, the
"Lock-Up Securities") or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Lock-Up Securities, whether any such
swap or transaction is to be settled by delivery of Common Stock or other
securities, in cash or otherwise.
Notwithstanding the foregoing, the undersigned may transfer the Lock-Up
Securities without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and TWP, (i) as a
bona fide gift or gifts, provided that the donee or donees thereof agree to be
bound in writing by the restriction set forth herein, or (ii) to any trust for
the direct or indirect benefit of the undersigned or the immediate family of the
undersigned, provided that the trustee or the trust agrees to be bound in
writing by the restriction set forth herein, and provided further any such
transfer shall not involve a disposition for value. [To be inserted in Caribou
Holding Company Limited's lock up only][or (iii) the operation of any automatic
redemption right or exercise of any purchase rights held by Arcapita Bank B.S.C.
(c) or any of its investment vehicles which is triggered as a result of, or
exercised in order to enforce, anti-money laundering policies or investor
acceptance procedures, so long as the transferee of any securities so redeemed
or repurchased continues to hold such securities in accordance with this lock-up
agreement.] For purposes of this lock-up agreement, "immediate family" shall
mean any relationship by blood, marriage or adoption, not more remote than first
cousin.
Notwithstanding the foregoing, if (i) during the last 17 days of the
180-day lock-up period, the Company issues an earnings release or material news
or a material event relating to the Company occurs or (ii) prior to the
expiration of the 180-day lock-up period, the Company announces that it will
release earnings results or becomes aware that material news or a material event
will occur during the 16-day period beginning on the last day of the 180-day
lock-up period, then the restrictions imposed by this letter shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event, as
applicable, unless ▇▇▇▇▇▇▇ ▇▇▇▇▇ waives, in writing, such extension.
The undersigned hereby acknowledges and agrees that written notice of
any extension of the 180-day lock-up period pursuant to the previous paragraph
will be delivered by ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company (in accordance with Section 12
of the Purchase Agreement) and that any such notice properly delivered will be
deemed to have been given to, and received by, the undersigned. The undersigned
further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the terms of this lock-up agreement during the period
from the date of this lock-up agreement to and including the 34th day following
the expiration of the initial 180-day lock-up period, it will give notice
thereof to the Company and will not consummate such transaction or take any such
action unless it has received written confirmation from the Company that the
180-day lock-up period (as may have been extended pursuant to the previous
paragraph) has expired.
The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the Lock-Up Securities except in compliance with the foregoing
restrictions.
Very truly yours,
Signature:
-------------------------------
Print Name:
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Exhibit A
FORM OF OPINION OF ▇▇▇▇▇▇ & WHITNEY LLP
TO BE DELIVERED PURSUANT TO SECTION 5(a)
1. Each of the Company and Caribou Coffee Development Company, Inc.
("CCDC") and Caribou on Piedmont, Inc. ("CP") is a corporation validly existing
and in good standing under the laws of the State of Minnesota.
2. Caribou Ventures, L.L.C. ("CV") is a limited liability company
validly existing and in good standing under the laws of the State of Minnesota.
3. Caribou MSP Airport ("CMA") is a general partnership existing
under and governed by the Minnesota Uniform Partnership Act of 1994, Minn. Stat.
323A.
4. The Company has corporate power to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under the Purchase Agreement.
5. The Company (in the case of CCDC, under the name "Caribou Coffee
Company") is shown on the records of the relevant entity as the sole registered
owner of 25,000 shares of common stock of CCDC and 1,000 shares of common stock
of CP. Such shares of common stock have been duly authorized and validly issued
and are fully paid and non-assessable.
6. The Company's authorized capital stock consists of 220,000,000
shares, par value $.01 per share, of which 200,000,000 are designated as common
shares ( "Common Stock") and 20,000,000 are designated as preferred shares.
___________ shares of Common Stock have been duly authorized and validly issued
and are fully paid and non-assessable; of these, (i) [397,671] shares were
issued in 2000 on conversion of the Company's Series A Convertible Preferred
Stock (all shares of which were, unless acquired by the Company for cash,
converted into shares of Common Stock upon the effective time of the merger of
Arabica Acquisition, Inc., a Minnesota corporation, with and into the Company on
December 27, 2000 (the "Merger") at a rate of 1.3106667 shares of Common Stock
per share of Series A Convertible Preferred Stock), (ii) [178,985] shares were
issued in 2000 on conversion of the Series B Convertible Preferred Stock (all
shares of which were, unless acquired by the Company for cash, converted into
shares of Common Stock upon the effective time of the Merger at a rate of
1.2533333 shares of Common Stock per share of Series B Convertible Preferred
Stock), (iii) 8,754,184 shares were issued in 2000 pursuant to Section 3.8 of
the Plan of Merger attached as Exhibit A to the Articles of Merger effective
December 27, 2000 and (iv) _________ shares were issued in 2005 in connection
with a four-for-three stock split effected in the form of a dividend of 1/3 of a
shares of Common Stock paid with respect to each outstanding share of Common
Stock on September 2, 2005. None of the foregoing shares were issued in
violation of any statutory preemptive rights or of the Stock Purchase Agreement
for Series A Convertible Preferred Stock dated as of June 28, 1995 between the
Company and the purchasers named therein, the Stock Purchase Agreement
A-1
for Series B Convertible Preferred Stock dated as of January 7, 1997 between the
Company and the purchasers named therein or the Shareholders' Agreement dated as
of December 27, 2000 by, between and among the Company, Caribou Holding Company
Limited and the other shareholders listed therein (the "2000 Shareholders'
Agreement"). In addition, we are aware that the Company has acquired an
aggregate of _________ shares of Common Stock, _________ shares of its Series A
Convertible Preferred Stock and _________ shares of its Series B Convertible
Preferred Stock; such shares reverted upon acquisition to the status of
authorized but unissued shares of the Company.
7. The Securities have been duly authorized for issuance and sale
to the Underwriters pursuant to the Purchase Agreement and, upon issuance,
delivery and payment therefor as described in the Purchase Agreement, will be
validly issued, fully paid and non-assessable and no holder of the Securities is
or will be subject to personal liability solely by reason of being such a
holder. There are no statutory preemptive rights applicable to the issuance and
sale of the Securities nor does the 2000 Shareholders' Agreement create any
preemptive or similar rights applicable to the issuance and sale of the
Securities.
8. The form of certificate to be used to represent the Securities
is in proper form under the Minnesota Business Corporation Act and the Articles
of Incorporation, as amended to date, and Bylaws, as amended to date, of the
Company.
9. The statements under "Description of Capital Stock" in the
Prospectus and under Item 14 in the Registration Statement, insofar as they
constitute matters of Minnesota law or legal conclusions based on Minnesota law
or summaries of the Articles of Incorporation, as amended to date, and Bylaws,
as amended to date, of the Company, have been reviewed by us and fairly and
accurately present in all material respects the information called for with
respect to such matters, conclusions and summaries.
A-2
Exhibit B
FORM OF OPINION OF KING & SPALDING LLP
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction set forth on a
schedule to such opinion.
(ii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(iii) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to our
knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and, to our knowledge, no proceedings for that purpose have been
initiated by the Commission.
(iv) The Registration Statement, including any Rule 462(b)
Registration Statement and the Rule 430A Information, the Prospectus and each
amendment or supplement to the Registration Statement and the Prospectus as of
their respective effective or issue dates (other than the financial statements,
including the notes thereto, supporting schedules and the other financial data
included therein or omitted therefrom, as to which we express no opinion)
complied as to form in all material respects with the applicable requirements of
the 1933 Act and the 1933 Act Regulations.
(v) To our knowledge, there is not pending or threatened any action,
suit, proceeding, inquiry or investigation, to which the Company or any of it
subsidiaries is a party, or to which the property of the Company or any of its
subsidiaries is subject, before or brought by any court or governmental agency
or body, domestic or foreign, that (A) is required to be disclosed in the
Registration Statement that is not adequately disclosed in the Registration
Statement or (B) would reasonably be expected to result in a Material Adverse
Effect or to materiality and adversely affect the properties or assets thereof
or the consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations thereunder other than as disclosed
in the Registration Statement.
(vi) The information in the Prospectus under "Material United States
Federal Tax Consequences for Non-United States Holders," to the extent that it
constitutes matters of law, summaries of legal matters or legal proceedings or
legal conclusions, has been reviewed by us and is correct in all material
respects.
(vii) To the best of our knowledge, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be described in the Registration Statement or to be filed as
exhibits to the Registration Statement other than those described therein or
filed as exhibits thereto.
B-1
(viii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental or
regulatory authority or agency, domestic or foreign (other than under the 1933
Act and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states or by the
NASD's rules and regulations in connection with the purchase and distribution of
the Securities by the Underwriters, as to which we need express no opinion) is
necessary or required in connection with the due authorization, execution and
delivery of the Purchase Agreement or for the offering, issuance, sale or
delivery of the Securities.
(ix) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the Purchase
Agreement and in the Registration Statement (including the issuance and sale of
the Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use Of Proceeds") and compliance
by the Company with its obligations under the Purchase Agreement do not and will
not, whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(x) of the Purchase Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to any agreement or
instrument filed as an exhibit to the Registration Statement (except for such
conflicts, breaches, defaults or Repayment Events or liens, charges or
encumbrances that would not have a Material Adverse Effect), nor will such
action result in any violation of (A) the provisions of the charter or by laws
of the Company or any of its subsidiaries, or (B) any applicable law, statute,
rule or regulation, or any judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiaries or any of their respective
properties, assets or operations.
(x) To our knowledge, there are no persons with registration rights
or other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the 1933
Act, except for such persons set forth on Schedule A attached hereto and such
persons who have effectively waived such rights or who have been given timely
and proper notice of and failed to exercise such rights within the time or times
required under the terms and conditions of such rights.
(xi) The Company is not, and upon the issuance and sale of the
Securities and the application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" within the meaning of the 1940
Act.
Nothing has come to our attention that causes us to believe that the
Registration Statement, as of the effective date of the Registration Statement
or such amendment, contained an untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading or the Prospectus or any
supplement thereto, as of the date of the Prospectus or any such supplement or
as of the Closing Time, contained or contains an untrue statement of a material
fact or omitted or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that in each case we express no belief with respect
to the financial statements, including the notes thereto, and supporting
schedules and the other financial data included therein or omitted therefrom.
B-2
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
B-3