EXHIBIT 1.1
5,300,000 Shares
California Pizza Kitchen, Inc.
Common Stock
Underwriting Agreement
dated ________ __, 2000
Table of Contents
Section 1. Representations and Warranties of the Company and
the Significant Selling Shareholders...................................... 3
(A) Representations and Warranties of the Company........................ 3
Compliance with Registration Requirements................................. 3
Offering Materials Furnished to Underwriters.............................. 3
Distribution of Offering Material by the Company.......................... 3
The Underwriting Agreement................................................ 4
Authorization of the Common Shares........................................ 4
No Applicable Registration or Other Similar Rights........................ 4
No Material Adverse Change................................................ 4
Independent Accountants................................................... 4
Preparation of the Financial Statements................................... 4
Incorporation and Good Standing of the Company and its Subsidiaries....... 5
Capitalization and Other Capital Stock Matters............................ 5
Stock Exchange Listing;................................................... 6
Non-Contravention of Existing Instruments; No Further Authorizations
or Approvals Required..................................................... 6
No Material Actions or Proceedings........................................ 6
Intellectual Property Rights.............................................. 6
All Necessary Permits, etc................................................ 7
Title to Properties....................................................... 7
Tax Law Compliance........................................................ 7
Company Not an Investment Company......................................... 7
Insurance................................................................. 7
No Price Stabilization or Manipulation.................................... 8
Related Party Transactions................................................ 8
No Unlawful Contributions or Other Payments............................... 8
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Company's Accounting System............................................... 8
Compliance with Environmental Laws........................................ 8
ERISA Compliance.......................................................... 9
(B) Representations and Warranties of the Selling Shareholders........... 9
The Underwriting Agreement................................................ 9
The Custody Agreement and Power of Attorney............................... 10
Title to Common Shares to be Sold; All Authorizations Obtained............ 10
Delivery of the Common Shares to be Sold.................................. 10
Non-Contravention; No Further Authorizations or Approvals Required........ 10
No Registration or Other Similar Rights................................... 11
No Further Consents, etc.................................................. 11
Disclosure Made by Such Selling Shareholder in the Prospectus............. 11
No Price Stabilization or Manipulation.................................... 11
Confirmation of Company Representations and Warranties.................... 11
Section 2. Purchase, Sale and Delivery of Common Shares.................. 12
The Firm Common Shares.................................................... 12
The First Closing Date.................................................... 12
The Optional Common Shares; the Second Closing Date....................... 12
Public Offering of the Common Shares...................................... 13
Payment for the Common Shares............................................. 13
Delivery of the Common Shares............................................. 13
Delivery of Prospectus to the Underwriters................................ 14
Section 3. Additional Covenants.......................................... 14
A) Covenants of the Company.............................................. 14
Representatives' Review of Proposed Amendments and Supplements............ 14
Securities Act Compliance................................................. 14
Amendments and Supplements to the Prospectus and Other Securities
Act Matters............................................................... 15
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Copies of any Amendments and Supplements to the Prospectus................ 15
Blue Sky Compliance....................................................... 15
Use of Proceeds........................................................... 15
Transfer Agent............................................................ 15
Earnings Statement........................................................ 15
Periodic Reporting Obligations............................................ 16
Agreement Not To Offer or Sell Additional Securities...................... 16
Future Reports to the Representatives..................................... 16
(B) Covenants of the Selling Shareholders................................ 16
Agreement Not to Offer or Sell Additional Securities...................... 16
Delivery of Forms W-8 and W-9............................................. 17
Section 4. Payment of Expenses........................................... 17
Section 5. Conditions of the Obligations of the Underwriters............. 18
Accountants' Comfort Letter............................................... 18
Compliance with Registration Requirements; No Stop Order, No
Objection from NASD....................................................... 18
No Material Adverse Change or Ratings Agency Change....................... 19
Opinion of Counsel for the Company........................................ 19
Opinion of Counsel for the Underwriters................................... 19
Officers' Certificate..................................................... 19
Bring-down Comfort Letter................................................. 19
Opinion of Counsel for the Selling Shareholders........................... 19
Selling Shareholders' Certificate......................................... 20
Selling Shareholders' Documents........................................... 20
Lock-Up Agreement from Certain Shareholders of the Company Other
Than Selling Shareholders................................................. 20
Additional Documents...................................................... 20
Section 6. Reimbursement of Underwriters' Expenses....................... 20
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Section 7. Effectiveness of this Agreement............................... 21
Section 8. Indemnification............................................... 21
Indemnification of the Underwriters....................................... 21
Indemnification of the Company, its Directors and Officers and
the Selling Shareholders.................................................. 23
Notifications and Other Indemnification Procedures........................ 23
Settlements............................................................... 24
Indemnification of a Qualified Independent Underwriter.................... 25
Section 9. Contribution.................................................. 25
Section 10. Default of One or More of the Several Underwriters........... 26
Section 11. Termination of this Agreement................................ 27
Section 12. Representations and Indemnities to Survive Delivery.......... 28
Section 13. Notices...................................................... 28
Section 14. Successors................................................... 29
Section 15. Partial Unenforceability..................................... 29
Section 16. GOVERNING LAW PROVISIONS..................................... 29
Section 17. Failure of One or More of the Selling Shareholders
to Sell and Deliver Common Shares......................................... 29
Section 18. General Provisions........................................... 29
SCHEDULES
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Schedule A Schedule of Underwriters
Schedule B Schedule of Selling Shareholders
EXHIBITS
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Exhibit C-1 Form of Affiliate Lock-Up Agreement
Exhibit C-2 Form of Non-Affiliate Lock-Up Agreement
Exhibit D Power of Attorney and Custody Agreement
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Underwriting Agreement
________ __, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC
DEUTSCHE BANC SECURITIES INC.
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
As Representatives of the several Underwriters
c/o BANC OF AMERICA SECURITIES LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Introductory. California Pizza Kitchen, Inc., a California
corporation (the "Company), proposes to issue and sell to the several
underwriters named in Schedule A (the "Underwriters") an aggregate of 5,300,000
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shares (the "Firm Common Shares") of its Common Stock, par value $[0.01] per
share (the "Common Stock"). In addition, the shareholders of the Company named
in Schedule B (collectively, the "Selling Shareholders") have severally granted
----------
to the Underwriters an option to purchase up to an additional 795,000 shares
(the "Optional Common Shares") of Common Stock, as provided in Section 2, each
Selling Shareholder selling up to the amount set forth opposite such Selling
Shareholder's name in Schedule B. The Firm Common Shares and, if and to the
----------
extent such option is exercised, the Optional Common Shares, are collectively
called the "Common Shares". Banc of America Securities, Deutsche Banc Alex.
▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ have agreed to act as representatives of the
several Underwriters (in such capacity, the "Representatives") in connection
with the offering and sale of the Common Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (File No.
333-37778), which contains a form of prospectus to be used in connection with
the public offering and sale of the Common Shares. Such registration statement,
as amended, including the financial statements, exhibits and schedules thereto,
in the form in which it was declared effective by the Commission under the
Securities Act of 1933 and the rules and regulations promulgated thereunder
(collectively, the "Securities Act"), including any information deemed to be a
part thereof at the time of effectiveness pursuant to Rule 430A or Rule 434
under the Securities Act, is called the "Registration Statement". Any
registration statement filed by the Company pursuant to Rule 462(b) under the
Securities Act is called the "Rule 462(b) Registration Statement", and from and
after the date and time of filing of the Rule 462(b) Registration Statement the
term "Registration Statement" shall include the Rule 462(b) Registration
Statement. Such prospectus, in the form first used by the Underwriters to
confirm sales of the Common Shares, is called the "Prospectus"; provided,
however, if the Company has, with the consent of Banc of America Securities,
elected to rely upon Rule 434 under the Securities Act, the term "Prospectus"
shall mean the Company's prospectus subject to completion (each, a
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"preliminary prospectus") dated July 10, 2000 (such preliminary prospectus is
called the "Rule 434 preliminary prospectus"), together with the applicable term
sheet (the "Term Sheet") prepared and filed by the Company with the Commission
under Rules 434 and 424(b) under the Securities Act and all references in this
Agreement to the date of the Prospectus shall mean the date of the Term Sheet.
All references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a preliminary prospectus, the Prospectus or the Term
Sheet, or any amendments or supplements to any of the foregoing, shall include
any copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System ("▇▇▇▇▇").
The Company and each of the Selling Shareholders hereby confirms their
respective agreements with the Underwriters as follows:
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Section 1. Representations and Warranties.
A. Representations and Warranties of the Company.
The Company hereby represents, warrants and covenants to each Underwriter
as follows:
(a) Compliance with Registration Requirements. The Registration Statement
and any Rule 462(b) Registration Statement have been declared effective by the
Commission under the Securities Act. The Company has complied to the
Commission's satisfaction with all requests of the Commission for additional or
supplemental information. No stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement is in effect
and no proceedings for such purpose have been instituted or are pending or, to
the best knowledge of the Company, are contemplated or threatened by the
Commission.
Each preliminary prospectus and the Prospectus when filed complied in all
material respects with the Securities Act and, if filed by electronic
transmission pursuant to ▇▇▇▇▇ (except as may be permitted by Regulation S-T
under the Securities Act), was identical to the copy thereof delivered to the
Underwriters for use in connection with the offer and sale of the Common Shares.
Each of the Registration Statement, any Rule 462(b) Registration Statement and
any post-effective amendment thereto, at the time it became effective and at all
subsequent times, complied and will comply in all material respects with the
Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus, as
amended or supplemented, as of its date and at all subsequent times, did not and
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
representations and warranties set forth in the two immediately preceding
sentences do not apply to statements in or omissions from the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment thereto, or the Prospectus, or any amendments or supplements thereto,
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by the Representatives expressly
for use therein. There are no contracts or other documents required to be
described in the Prospectus or to be filed as exhibits to the Registration
Statement which have not been described or filed as required.
(b) Offering Materials Furnished to Underwriters. The Company has
delivered to the Representatives one complete manually signed copy of the
Registration Statement and of each consent and certificate of experts filed as a
part thereof, and conformed copies of the Registration Statement (without
exhibits) and preliminary prospectuses and the Prospectus, as amended or
supplemented, in such quantities and at such places as the Representatives have
reasonably requested for each of the Underwriters.
(c) Distribution of Offering Material By the Company. The Company has not
distributed and will not distribute, prior to the later of the Second Closing
Date (as defined below) and the completion of the Underwriters' distribution of
the Common Shares, any
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offering material in connection with the offering and sale of the Common Shares
other than a preliminary prospectus, the Prospectus or the Registration
Statement.
(d) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles.
(e) Authorization of the Common Shares. The Common Shares to be purchased
by the Underwriters from the Company have been duly authorized for issuance and
sale pursuant to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement, will be validly issued, fully paid and
nonassessable.
(f) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offering contemplated by this Agreement, other than the Selling Shareholders
with respect to the Common Shares included in the Registration Statement, except
for such rights as have been duly waived.
(g) No Material Adverse Change. Except as otherwise disclosed in the
Prospectus, subsequent to the respective dates as of which information is given
in the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as
one entity (any such change is called a "Material Adverse Change"); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock.
(h) Independent Accountants. Ernst & Young LLP, independent auditors, who
have expressed their opinion with respect to the financial statements (which
term as used in this Agreement includes the related notes thereto) filed with
the Commission as a part of the Registration Statement and included in the
Prospectus, are independent public or certified public accountants as required
by the Securities Act.
(i) Preparation of the Financial Statements. The financial statements
filed with the Commission as a part of the Registration Statement and included
in the Prospectus present fairly the consolidated financial position of the
Company and its subsidiaries as of and at the dates indicated and the results of
their operations and cash flows for the periods specified. Such financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved, except
as may be expressly stated in the related notes thereto. No other financial
statements or
4
supporting schedules are required to be included in the Registration Statement.
The financial data set forth in the Prospectus under the captions "Prospectus
Summary--Summary Consolidated Financial and Operating Data," "Selected
Consolidated Financial and Operating Data" and "Capitalization" fairly present
the information set forth therein on a basis consistent with that of the audited
financial statements contained in the Registration Statement. The pro-forma
financial information of the Company and its subsidiaries and the related notes
thereto included under the caption "Prospectus Summary--Summary Consolidated
Financial and Operating Data," "Selected Consolidated Financial and Operating
Data" and elsewhere in the Prospectus and in the Registration Statement presents
fairly such information, has been prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial information and has
been properly presented on the bases described therein, and the assumptions used
in the preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances that such
information has been prepared to reflect.
(j) Incorporation and Good Standing of the Company and its Subsidiaries.
Each of the Company and its subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation and has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and, in the case of the Company, to enter into and perform its
obligations under this Agreement. Each of the Company and each subsidiary is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except for such jurisdictions (other than the State of California) where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a Material Adverse Change. All of the issued and
outstanding capital stock of each subsidiary has been duly authorized and
validly issued, is fully paid and nonassessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim. The Company does not own or
control, directly or indirectly, any corporation, association or other entity
other than the subsidiaries listed in Exhibit 21.1 to the Registration
Statement.
(k) Capitalization and Other Capital Stock Matters. The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization" (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the
Prospectus or upon exercise of outstanding options described in the Prospectus).
The Common Stock (including the Common Shares) conforms in all material respects
to the description thereof contained in the Prospectus. All of the issued and
outstanding shares of Common Stock (including the shares of Common Stock owned
by Selling Shareholders) have been duly authorized and validly issued, are fully
paid and nonassessable and have been issued in compliance with federal and state
securities laws. None of the outstanding shares of Common Stock were issued in
violation of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible
into or exchangeable or exercisable for, any capital stock of the Company or any
of its subsidiaries other than those accurately described in the Prospectus. The
description of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, set forth in
the Prospectus accurately and fairly presents
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the information required to be shown with respect to such plans, arrangements,
options and rights.
(l) Stock Exchange Listing. The Common Shares have been approved for
inclusion on the Nasdaq National Market, subject only to official notice of
issuance.
(m) Non-Contravention of Existing Instruments; No Further Authorizations
or Approvals Required. Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or is in default (or, with the giving of
notice or lapse of time, would be in default) ("Default") under any indenture,
mortgage, loan or credit agreement, note, contract, franchise, lease or other
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound (including, without limitation, the
Company's credit facility with a group of lenders led by Bank of America, N.A.),
or to which any of the property or assets of the Company or any of its
subsidiaries is subject (each, an "Existing Instrument"), except for such
Defaults as would not, individually or in the aggregate, result in a Material
Adverse Change. The Company's execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby and by the
Prospectus (i) have been duly authorized by all necessary corporate action and
will not result in any violation of the provisions of the charter or by-laws of
the Company or any subsidiary, (ii) will not conflict with or constitute a
breach of, or Default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument, except for such conflicts, breaches, Defaults, liens,
charges or encumbrances as would not, individually or in the aggregate, result
in a Material Adverse Change and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the Company or any subsidiary. No consent, approval, authorization or other
order of, or registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company's execution,
delivery and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus, except such as have been obtained or
made by the Company and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and from the National Association
of Securities Dealers, Inc. (the "NASD").
(n) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's knowledge, threatened (i) against or affecting the Company or any of
its subsidiaries, (ii) which has as the subject thereof any officer or director
of, or property owned or leased by, the Company or any of its subsidiaries or
(iii) relating to environmental or discrimination matters, where in any such
case (A) there is a reasonable possibility that such action, suit or proceeding
might be determined adversely to the Company or such subsidiary and (B) any such
action, suit or proceeding, if so determined adversely, would reasonably be
expected to result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated by this Agreement. No material
labor dispute with the employees of the Company or any of its subsidiaries
exists or, to the best of the Company's knowledge, is threatened or imminent.
(o) Intellectual Property Rights. The Company and its subsidiaries own or
possess sufficient trademarks, trade names, patent rights, copyrights, licenses,
approvals, trade secrets and other similar rights (collectively, "Intellectual
Property Rights") reasonably
6
necessary to conduct their businesses as now conducted; and the expected
expiration of any of such Intellectual Property Rights would not result in a
Material Adverse Change. Neither the Company nor any of its subsidiaries has
received any notice of infringement or conflict with asserted Intellectual
Property Rights of others, which infringement or conflict, if the subject of an
unfavorable decision, would result in a Material Adverse Change.
(p) All Necessary Permits, etc. The Company and each subsidiary possess
such valid and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses, and neither the Company nor any subsidiary
has received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Change.
(q) Title to Properties. Except as otherwise disclosed in the Prospectus,
the Company and each of its subsidiaries has good and marketable title to all
the properties and assets reflected as owned in the financial statements
referred to in Section 1 (A) (i) above (or elsewhere in the Prospectus), in each
case free and clear of any security interests, mortgages, liens, encumbrances,
equities, claims and other defects, except such as do not materially and
adversely affect the value of such property and do not materially interfere with
the use made or proposed to be made of such property by the Company or such
subsidiary. The real property, improvements, equipment and personal property
held under lease by the Company or any subsidiary are held under valid and
enforceable leases, with such exceptions as are not material and do not
materially interfere with the use made or proposed to be made of such real
property, improvements, equipment or personal property by the Company or such
subsidiary.
(r) Tax Law Compliance. The Company and its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns and have
paid all taxes required to be paid by any of them and, if due and payable, any
related or similar assessment, fine or penalty levied against any of them. The
Company has made adequate charges, accruals and reserves in the applicable
financial statements referred to in Section 1 (A) (i) above in respect of all
federal, state and foreign income and franchise taxes for all periods as to
which the tax liability of the Company or any of its subsidiaries has not been
finally determined.
(s) Company Not an "Investment Company". The Company has been advised of
the rules and requirements under the Investment Company Act of 1940, as amended
(the "Investment Company Act"). The Company is not, and after receipt of payment
for the Common Shares will not be, an "investment company" within the meaning of
the Investment Company Act and will conduct its business in a manner so that it
will not become subject to the Investment Company Act.
(t) Insurance. Each of the Company and its subsidiaries are insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses including, but not limited
to, policies covering real and personal property owned or leased by the Company
and its subsidiaries against theft, damage, destruction, acts of vandalism and
earthquakes. The Company has no reason to believe that it or any subsidiary will
not be able (i) to renew its existing insurance coverage as and when such
7
policies expire or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted and
at a cost that would not result in a Material Adverse Change. Neither of the
Company nor any subsidiary has been denied any insurance coverage which it has
sought or for which it has applied.
(u) No Price Stabilization or Manipulation. The Company has not taken and
will not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Common Shares.
(v) Related Party Transactions. There are no business relationships or
related-party transactions involving the Company or any subsidiary or any other
person required to be described in the Prospectus which have not been described
as required.
(w) No Unlawful Contributions or Other Payments. Neither the Company nor
any of its subsidiaries nor, to the best of the Company's knowledge, any
employee or agent of the Company or any subsidiary, has made any contribution or
other payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character required to be
disclosed in the Prospectus.
(x) Company's Accounting System. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(y) Compliance with Environmental Laws. Except as would not, individually
or in the aggregate, result in a Material Adverse Change (i) neither the Company
nor any of its subsidiaries is in violation of any federal, state, local or
foreign law or regulation relating to pollution or protection of human health or
the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, "Materials of Environmental Concern"), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environment Concern (collectively,
"Environmental Laws"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations required for
the operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company or any of its subsidiaries received any written
communication, whether from a governmental authority, citizens group, employee
or otherwise, that alleges that the Company or any of its subsidiaries is in
violation of any Environmental Law; (ii) there is no claim, action or cause of
action filed with a court or governmental authority, no investigation with
respect to which the Company has received written notice, and no written notice
by any person or entity alleging potential liability for investigatory costs,
cleanup costs, governmental responses
8
costs, natural resources damages, property damages, personal injuries,
attorneys' fees or penalties arising out of, based on or resulting from the
presence, or release into the environment, of any Material of Environmental
Concern at any location owned, leased or operated by the Company or any of its
subsidiaries, now or in the past (collectively, "Environmental Claims"), pending
or, to the best of the Company's knowledge, threatened against the Company or
any of its subsidiaries or any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained or
assumed either contractually or by operation of law; and (iii) to the best of
the Company's knowledge, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the release, emission, discharge, presence or disposal of any Material of
Environmental Concern, that reasonably could result in a violation of any
Environmental Law or form the basis of a potential Environmental Claim against
the Company or any of its subsidiaries or against any person or entity whose
liability for any Environmental Claim the Company or any of its subsidiaries has
retained or assumed either contractually or by operation of law.
(z) ERISA Compliance. The Company and its subsidiaries and any "employee
benefit plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, its
subsidiaries or their "ERISA Affiliates" (as defined below) are in compliance in
all material respects with ERISA. "ERISA Affiliate" means, with respect to the
Company or a subsidiary, any member of any group of organizations described in
Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended,
and the regulations and published interpretations thereunder (the "Code") of
which the Company or such subsidiary is a member. No "reportable event" (as
defined under ERISA) has occurred or is reasonably expected to occur with
respect to any "employee benefit plan" established or maintained by the Company,
its subsidiaries or any of their ERISA Affiliates. No "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates, if such "employee benefit plan" were terminated, would have any
"amount of unfunded benefit liabilities" (as defined under ERISA). Neither the
Company, its subsidiaries nor any of their ERISA Affiliates has incurred or
reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "employee benefit plan" or
(ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates that is intended to be qualified under Section 401(a) of the Code is
so qualified and nothing has occurred, whether by action or failure to act,
which would cause the loss of such qualification.
Any certificate signed by an officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
B. Representations and Warranties of the Selling Shareholders. Each Selling
Shareholder, severally and not jointly, represents, warrants and covenants to
each Underwriter as follows:
(a) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by or on behalf of such Selling Shareholder and is a
valid and binding agreement of such Selling Shareholder, enforceable in
accordance with its terms,
9
except as rights to indemnification hereunder may be limited by applicable law
and except as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
(b) The Custody Agreement and Power of Attorney. Each of the (i) Custody
Agreement signed by such Selling Shareholder and American Stock Transfer & Trust
Company, as custodian (the "Custodian"), relating to the deposit of the Common
Shares to be sold by such Selling Shareholder (the "Custody Agreement") and (ii)
Power of Attorney appointing certain individuals named therein as such Selling
Shareholder's attorneys-in-fact (each, an "Attorney-in-Fact") to the extent set
forth therein relating to the transactions contemplated hereby and by the
Prospectus (the "Power of Attorney"), of such Selling Shareholder has been duly
authorized, executed and delivered by such Selling Shareholder and is a valid
and binding agreement of such Selling Shareholder, enforceable in accordance
with its terms, except as rights to indemnification thereunder may be limited by
applicable law and except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(c) Title to Common Shares to be Sold; All Authorizations Obtained. Such
Selling Shareholder has, and on the First Closing Date and the Second Closing
Date (as defined below) will have, good and valid title to all of the Common
Shares which may be sold by such Selling Shareholder pursuant to this Agreement
on such date and the legal right and power, and all authorizations and approvals
required by law and under its charter or by-laws, partnership agreement, trust
agreement or other organizational documents to enter into this Agreement and its
Custody Agreement and Power of Attorney, to sell, transfer and deliver all of
the Common Shares which may be sold by such Selling Shareholder pursuant to this
Agreement and to comply with its other obligations hereunder and thereunder.
(d) Delivery of the Common Shares to be Sold. Upon payment therefor,
delivery of the Common Shares which are sold by such Selling Shareholder
pursuant to this Agreement will pass good and valid title to such Common Shares,
free and clear of any security interest, mortgage, pledge, lien, encumbrance or
other claim.
(e) Non-Contravention; No Further Authorizations or Approvals Required.
The execution and delivery by such Selling Shareholder of, and the performance
by such Selling Shareholder of its obligations under, this Agreement, the
Custody Agreement and the Power of Attorney will not contravene or conflict
with, result in a breach of, or constitute a Default under, or require the
consent of any other party to, the charter or by-laws, partnership agreement,
trust agreement or other organizational documents of such Selling Shareholder or
any other agreement or instrument to which such Selling Shareholder is a party
or by which it is bound or under which it is entitled to any right or benefit,
any provision of applicable law or any judgment, order, decree or regulation
applicable to such Selling Shareholder of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction over
such Selling Shareholder. No consent, approval, authorization or other order of,
or registration or filing with, any court or other governmental authority or
agency, is required for the consummation by such Selling Shareholder of the
transactions contemplated in this Agreement, except such as have been obtained
or made and are in full
10
force and effect under the Securities Act, applicable state securities or blue
sky laws and from the NASD.
(f) No Registration or Other Similar Rights. Such Selling Shareholder
does not have any registration or other similar rights to have any equity or
debt securities registered for sale by the Company under the Registration
Statement or included in the offering contemplated by this Agreement, except for
such rights as are described in the Prospectus under "Shares Eligible for Future
Sale".
(g) No Further Consents, etc. Except for the (i) exercise by such Selling
Shareholder of certain registration rights pursuant to the Registration Rights
Agreement for Common Stock, dated as of September 30, 1997 (which registration
rights have been duly exercised pursuant thereto), (ii) consent of such Selling
Shareholder to the respective number of Common Shares to be sold by all of the
Selling Shareholders pursuant to this Agreement and (iii) waiver by certain
other holders of Common Stock of certain registration rights pursuant to such
Registration Rights Agreement, no consent, approval or waiver is required under
any instrument or agreement to which such Selling Shareholder is a party or by
which it is bound or under which it is entitled to any right or benefit, in
connection with the offering, sale or purchase by the Underwriters of any of the
Common Shares which may be sold by such Selling Shareholder under this Agreement
or the consummation by such Selling Shareholder of any of the other transactions
contemplated hereby.
(h) Disclosure Made by Such Selling Shareholder in the Prospectus. All
information provided by or on behalf of such Selling Shareholder for inclusion
in the Registration Statement and Prospectus (the "Selling Shareholder
Information") is, and on the First Closing Date and the Second Closing Date will
be, true, correct, and complete in all material respects, and does not, and on
the First Closing Date and the Second Closing Date will not, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make such information not misleading. Such Selling Shareholder confirms as
accurate the number of shares of Common Stock set forth opposite such Selling
Shareholder's name in the Prospectus under the caption "Principal Shareholders"
or with respect to such Selling Shareholder as described in the footnotes to the
table under such caption.
(i) No Price Stabilization or Manipulation. Such Selling Shareholder has
not taken and will not take, directly or indirectly, any action designed to or
that might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Common Shares other than as contemplated by this Agreement.
(j) Confirmation of Company Representations and Warranties. Such Selling
Shareholder has no reason to believe that the representations and warranties of
the Company contained in Section 1(A) hereof are not true and correct, is
familiar with the Registration Statement and the Prospectus and has no knowledge
of any material fact, condition or information not disclosed in the Registration
Statement or the Prospectus which has had or may have a Material Adverse Change
and is not prompted to sell shares of Common Stock by any information concerning
the Company which is not set forth in the Registration Statement and the
Prospectus.
11
Any certificate signed by or on behalf of any Selling Shareholder and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by such Selling Shareholder to each
Underwriter as to the matters covered thereby.
Section 2. Purchase, Sale and Delivery of the Common Shares.
The Firm Common Shares. The Company agrees to issue and sell to the
several Underwriters the Firm Common Shares upon the terms herein set forth. On
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the Company the
respective number of Firm Common Shares set forth opposite their names on
Schedule A. The purchase price per Firm Common Share to be paid by the several
----------
Underwriters to the Company shall be $[___] per share.
The First Closing Date. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefor shall be made at
the offices of Banc of America Securities, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ (or such other place as may be agreed to by the Company and the
Representatives) at 6:00 a.m. San Francisco time, on __________ __, 2000, or
such other time and date not later than 10:30 a.m. San Francisco time on
________ ___, 2000 [10 business days after the First Closing Date] as the
Representatives shall designate by notice to the Company (the time and date of
such closing are called the "First Closing Date"). The Company and the Selling
Shareholders hereby acknowledge that circumstances under which the
Representatives may provide notice to postpone the First Closing Date as
originally scheduled include, but are in no way limited to, any determination by
the Company or the Representatives to recirculate to the public copies of an
amended or supplemented Prospectus or a delay as contemplated by the provisions
of Section 10.
The Optional Common Shares; the Second Closing Date. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Selling
Shareholders hereby grant an option to the several Underwriters to purchase,
severally and not jointly, up to an aggregate of 795,000 Optional Common Shares
from the Selling Shareholders at the purchase price per share to be paid by the
Underwriters for the Firm Common Shares. The option granted hereunder is for
use by the Underwriters solely in covering any over-allotments in connection
with the sale and distribution of the Firm Common Shares. The option granted
hereunder may be exercised at any time (but not more than once) upon notice by
the Representatives to the attorneys-in-fact for the Selling Shareholders (with
a copy to the Company and the Custodian), which notice may be given at any time
within 30 days from the date of this Agreement. Such notice shall set forth (i)
the aggregate number of Optional Common Shares as to which the Underwriters are
exercising the option, (ii) the names and denominations in which the
certificates for the Optional Common Shares are to be registered and (iii) the
time, date and place at which such certificates will be delivered by the
Custodian (which time and date may be simultaneous with, but not earlier than,
the First Closing Date; and in such case the term "First Closing Date" shall
refer to the time and date of delivery of certificates for the Firm Common
Shares and the Optional Common Shares). Such time and date of delivery, if
subsequent to the First Closing Date, is called the "Second Closing Date" and
shall be determined by the Representatives and shall not be earlier than three
nor later than five full business days after delivery of such notice of
12
exercise. If any Optional Common Shares are to be purchased, (a) each
Underwriter agrees, severally and not jointly, to purchase the number of
Optional Common Shares (subject to such adjustments to eliminate fractional
shares as the Representatives may determine) that bears the same proportion to
the total number of Optional Common Shares to be purchased as the number of Firm
Common Shares set forth on Schedule A opposite the name of such Underwriter
----------
bears to the total number of Firm Common Shares and (b) each Selling Shareholder
agrees, severally and not jointly, to sell the number of Optional Common Shares
(subject to such adjustments to eliminate fractional shares as the
Representatives may determine) that bears the same proportion to the total
number of Optional Common Shares to be sold as the number of Optional Common
Shares set forth in Schedule B opposite the name of such Selling Shareholder
----------
bears to the total number of Optional Common Shares. The Representatives may
cancel the option at any time prior to its expiration by giving written notice
of such cancellation to the Selling Shareholders (with a copy to the Company).
Public Offering of the Common Shares. The Representatives hereby
advise the Company and the Selling Shareholders that the Underwriters intend to
offer for sale to the public, as described in the Prospectus, their respective
portions of the Common Shares as soon after this Agreement has been executed and
the Registration Statement has been declared effective as the Representatives,
in their sole judgment, have determined is advisable and practicable.
Payment for the Common Shares. Payment for the Common Shares to be
sold by the Company shall be made at the First Closing Date (and, if applicable,
at the Second Closing Date) by wire transfer of immediately available funds to
the order of the Company. Payment for the Optional Common Shares to be sold by
the Selling Shareholders shall be made at the Second Closing Date by wire
transfer of immediately available funds to the order of [the Custodian].
It is understood that the Representatives have been authorized, for
their own accounts and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Common Shares and any Optional Common Shares the Underwriters have agreed
to purchase. Banc of America Securities, individually and not as the
Representatives of the Underwriters, may (but shall not be obligated to) make
payment for any Common Shares to be purchased by any Underwriter whose funds
shall not have been received by the Representatives by the First Closing Date or
the Second Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any of
its obligations under this Agreement.
Each Selling Shareholder hereby agrees that (i) it will pay all stock
transfer taxes, stamp duties and other similar taxes, if any, payable upon the
sale or delivery of the Optional Common Shares to be sold by such Selling
Shareholder to the several Underwriters, or otherwise in connection with the
performance of such Selling Shareholder's obligations hereunder and (ii) the
Custodian is authorized to deduct for such payment any such amounts from the
proceeds to such Selling Shareholder hereunder and to hold such amounts for the
account of such Selling Shareholder with the Custodian under the Custody
Agreement.
Delivery of the Common Shares. The Company shall deliver, or cause to
be delivered, to the Representatives for the accounts of the several
Underwriters certificates for the Firm Common Shares to be sold by it at the
First Closing Date, against the irrevocable release of
13
a wire transfer of immediately available funds for the amount of the purchase
price therefor. The Selling Shareholders shall also deliver, or cause to be
delivered, to the Representatives for the accounts of the several Underwriters,
certificates for the Optional Common Shares the Underwriters have agreed to
purchase from the Selling Shareholders at the First Closing Date or the Second
Closing Date, as the case may be, against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase price
therefor. The certificates for the Common Shares shall be in definitive form and
registered in such names and denominations as the Representatives shall have
requested at least two full business days prior to the First Closing Date (or
the Second Closing Date, as the case may be) and shall be made available for
inspection on the business day preceding the First Closing Date (or the Second
Closing Date, as the case may be) at a location in New York City as the
Representatives may designate. Time shall be of the essence, and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.
Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m.
on the second business day following the date the Common Shares are first
released by the Underwriters for sale to the public, the Company shall deliver
or cause to be delivered, copies of the Prospectus in such quantities and at
such places as the Representatives shall request.
Section 3. Additional Covenants.
A. Covenants of the Company. The Company further covenants and
agrees with each Underwriter as follows:
(a) Representative's Review of Proposed Amendments and Supplements.
During such period beginning on the date hereof and ending on the later of the
First Closing Date or such date, as in the opinion of counsel for the
Underwriters, the Prospectus is no longer required by law to be delivered in
connection with sales by an Underwriter or dealer (the "Prospectus Delivery
Period"), prior to amending or supplementing the Registration Statement
(including any registration statement filed under Rule 462(b) under the
Securities Act) or the Prospectus, the Company shall furnish to the
Representatives for review a copy of each such proposed amendment or supplement,
and the Company shall not file any such proposed amendment or supplement to
which the Representatives reasonably object.
(b) Securities Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Representatives in writing (i) of the receipt
of any comments of, or requests for additional or supplemental information from,
the Commission, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (iii) of the time and date that any
post-effective amendment to the Registration Statement becomes effective and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus, or of any proceedings to remove, suspend or
terminate from listing or quotation the Common Stock from any securities
exchange upon which it is listed for trading or included or designated for
quotation, or of the threatening or initiation of any proceedings for any of
such purposes. If the Commission shall enter any such stop order at any time,
the Company will use its best efforts to obtain the lifting of such order at the
earliest possible moment. Additionally, the
14
Company agrees that it shall comply with the provisions of Rules 424(b), 430A
and 434, as applicable, under the Securities Act and will use its reasonable
efforts to confirm that any filings made by the Company under such Rule 424(b)
were received in a timely manner by the Commission.
(c) Amendments and Supplements to the Prospectus and Other Securities Act
Matters. If, during the Prospectus Delivery Period, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if in the opinion of the Representatives or counsel for the Underwriters it
is otherwise necessary to amend or supplement the Prospectus to comply with law,
the Company agrees to promptly prepare (subject to Section 3(A)(a) hereof), file
with the Commission and furnish at its own expense to the Underwriters and to
dealers, amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with law.
(d) Copies of any Amendments and Supplements to the Prospectus. The
Company agrees to furnish the Representatives, without charge, during the
Prospectus Delivery Period, as many copies of the Prospectus and any amendments
and supplements thereto as the Representatives may request.
(e) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the
Common Shares for sale under (or obtain exemptions from the application of) the
state securities or blue sky laws or Canadian provincial Securities laws of
those jurisdictions designated by the Representatives, shall comply with such
laws and shall continue such qualifications, registrations and exemptions in
effect so long as required for the distribution of the Common Shares. The
Company shall not be required to qualify as a foreign corporation or to take any
action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Company will advise the Representatives
promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Common Shares for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best efforts to obtain the
withdrawal thereof at the earliest possible moment.
(f) Use of Proceeds. The Company shall apply the net proceeds from the
sale of the Common Shares sold by it in the manner described under the caption
"Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Common Stock.
(h) Earnings Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Representatives an
earnings statement (which need
15
not be audited) covering the twelve-month period ending __________ __, 2001 that
satisfies the provisions of Section 11(a) of the Securities Act.
(i) Periodic Reporting Obligations. During the Prospectus Delivery Period
the Company shall file, on a timely basis, with the Commission and the Nasdaq
National Market all reports and documents required to be filed under the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder (collectively, the "Exchange Act"). Additionally, the Company shall
report the use of proceeds from the issuance of the Common Shares as may be
required under Rule 463 under the Securities Act.
(k) Agreement Not To Offer or Sell Additional Securities During the
period of 180 days following the date of the Prospectus, the Company will not,
without the prior written consent of Banc of America Securities (which consent
may be withheld at the sole discretion of Banc of America Securities), directly
or indirectly, sell, offer, contract or grant any option to sell, pledge,
transfer or establish an open "put equivalent position" within the meaning of
Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or
announce the offering of, or, except as disclosed in the Prospectus, file any
registration statement under the Securities Act in respect of, any shares of
Common Stock, options or warrants to acquire shares of the Common Stock or
securities exchangeable or exercisable for or convertible into shares of Common
Stock (other than as contemplated by this Agreement with respect to the Common
Shares); provided, however, that the Company may issue shares of its Common
Stock or options to purchase its Common Stock, or Common Stock upon exercise of
options, pursuant to any stock option, stock bonus or other stock plan or
arrangement described in the Prospectus, but only if the holders of such shares,
options, or shares issued upon exercise of such options, agree in writing not to
sell, offer, dispose of or otherwise transfer any such shares or options during
such 180 day period without the prior written consent of Banc of America
Securities (which consent may be withheld at the sole discretion of the Banc of
America Securities).
(l) Future Reports to the Representatives. During the period of five
years hereafter the Company will furnish to the Representatives c/o Banc of
America Securities at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention:
: (i) as soon as practicable after the end of each fiscal year, copies of the
Annual Report of the Company containing the balance sheet of the Company as of
the close of such fiscal year and statements of income, shareholders' equity and
cash flows for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants; (ii) as soon as practicable
after the filing thereof, copies of each proxy statement, Annual Report on Form
10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report
filed by the Company with the Commission, the NASD or any securities exchange;
and (iii) as soon as available, copies of any report or communication of the
Company mailed generally to holders of its capital stock.
B. Covenants of the Selling Shareholders. Each Selling Shareholder
further covenants and agrees with each Underwriter:
(a) Agreement Not to Offer or Sell Additional Securities. Such Selling
Shareholder will not, without the prior written consent of Banc of America
Securities (which consent may be withheld in its sole discretion), directly or
indirectly, sell, offer, contract or grant any option to sell (including without
limitation any short sale), pledge, transfer, establish an open "put
16
equivalent position" within the meaning of Rule 16a-1(h) under the Exchange Act,
or otherwise dispose of any shares of Common Stock, options or warrants to
acquire shares of Common Stock, or securities exchangeable or exercisable for or
convertible into shares of Common Stock currently or hereafter owned either of
record or beneficially (as defined in Rule 13d-3 under Securities Exchange Act
of 1934, as amended) by the undersigned, or publicly announce the undersigned's
intention to do any of the foregoing, for a period commencing on the date hereof
and continuing through the close of trading on the date 180 days after the date
of the Prospectus.
(b) Delivery of Forms W-8 and W-9 . To deliver to the Representatives
prior to the First Closing Date a properly completed and executed United States
Treasury Department Form W-8 (if the Selling Shareholder is a non-United States
person) or Form W-9 (if the Selling Shareholder is a United States Person).
Banc of America Securities, on behalf of the several Underwriters, may, in
its sole discretion, waive in writing the performance by the Company or any
Selling Shareholder of any one or more of the foregoing covenants or extend the
time for their performance.
Section 4. Payment of Expenses. The Company agrees to pay all costs,
fees and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters, (iv) all fees and expenses of
the Company's counsel, independent public or certified public accountants and
other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts), each preliminary prospectus and the Prospectus, and
all amendments and supplements thereto, and this Agreement, (vi) all filing
fees, attorneys' fees and expenses incurred by the Company or the Underwriters
in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Common Shares for offer
and sale under the state securities or blue sky laws or the provincial
securities laws of Canada, and, if requested by the Representatives, preparing
and printing a "Blue Sky Survey" or memorandum, and any supplements thereto,
advising the Underwriters of such qualifications, registrations and exemptions,
(vii) the filing fees incident to, and the reasonable fees and expenses of
counsel for the Underwriters in connection with, the NASD's review and approval
of the Underwriters' participation in the offering and distribution of the
Common Shares, (viii) the fees and expenses associated with including the
Common Stock on the Nasdaq National Market, and (ix) all other fees, costs and
expenses referred to in Item 13 of Part II of the Registration Statement.
Except as provided in this Section 4, Section 6, Section 8 and Section 9 hereof,
the Underwriters shall pay their own expenses, including the fees and
disbursements of their counsel.
The Company further agrees with each Underwriter that it will be
responsible for paying (directly or by reimbursement) all fees and expenses
incident to the performance of the Selling Shareholder's obligations under this
Agreement which are not otherwise specifically provided for herein, including
but not limited to (i) fees and expenses of counsel and other advisors for such
Selling Shareholders, (ii) fees and expenses of the Custodian and (iii) expenses
17
and taxes incident to the sale and delivery of the Common Shares to be sold by
such Selling Shareholders to the Underwriters hereunder (which taxes, if any,
may be deducted by the Custodian under the provisions of Section 2 of this
Agreement). The Selling Shareholders will be responsible for the Underwriters'
discounts and commissions.
Section 5. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Selling Shareholders set forth in Sections 1(A) and 1(B) hereof as of the
date hereof and as of the First Closing Date as though then made and, with
respect to the Optional Common Shares, as of the Second Closing Date as though
then made, to the timely performance by the Company and the Selling Shareholders
of their respective covenants and other obligations hereunder, and to each of
the following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the Representatives
shall have received from Ernst & Young LLP, independent public or certified
public accountants for the Company, a letter dated the date hereof addressed to
the Underwriters, in form and substance satisfactory to the Representatives,
containing statements and information of the type ordinarily included in
accountant's "comfort letters" to underwriters, delivered according to Statement
of Auditing Standards No. 72 (or any successor bulletin), with respect to the
audited and unaudited financial statements and certain financial information
contained in the Registration Statement and the Prospectus (and the
Representatives shall have received an additional two conformed copies of such
accountants' letter for each of the several Underwriters).
(b) Compliance with Registration Requirements; No Stop Order; No Objection
from NASD. For the period from and after effectiveness of this Agreement and
prior to the First Closing Date and, with respect to the Optional Common Shares,
the Second Closing Date:
(i) the Company shall have filed the Prospectus with the Commission
(including the information required by Rule 430A under the Securities Act)
in the manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company shall have filed a post-effective amendment
to the Registration Statement containing the information required by such
Rule 430A, and such post-effective amendment shall have become effective;
or, if the Company elected to rely upon Rule 434 under the Securities Act
and obtained the Representatives' consent thereto, the Company shall have
filed a Term Sheet with the Commission in the manner and within the time
period required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment to the Registration Statement, shall be in effect and no
proceedings for such purpose shall have been instituted or threatened by
the Commission; and
(iii) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
18
(c) No Material Adverse Change or Ratings Agency Change. For the period
from and after the date of this Agreement and prior to the First Closing Date
and, with respect to the Optional Common Shares, the Second Closing Date in the
judgment of the Representatives there shall not have occurred any Material
Adverse Change.
(d) Opinion of Counsel for the Company. On each of the First Closing Date
and the Second Closing Date, the Representatives shall have received the
favorable opinion of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel for the
Company, dated as of such Closing Date, in the form which has been agreed to by
the Representatives (and the Representatives shall have received an additional
two conformed copies of such counsel's legal opinion for each of the several
Underwriters).
(e) Opinion of Counsel for the Underwriters. On each of the First Closing
Date and the Second Closing Date, the Representatives shall have received the
favorable opinion of Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ (a partnership
including professional corporations), counsel for the Underwriters, dated as of
such Closing Date, in the form which has been agreed to by the Representatives
(and the Representatives shall have received an additional two conformed copies
of such counsel's legal opinion for each of the several Underwriters).
(f) Officers' Certificate. On each of the First Closing Date and the
Second Closing Date the Representatives shall have received a written
certificate executed by the Chairman of the Board, Chief Executive Officer or
President of the Company and the Chief Financial Officer or Chief Accounting
Officer of the Company, dated as of such Closing Date, to the effect set forth
in subsection (b)(ii) of this Section 5, and further to the effect that:
(i) for the period from and after the date of this Agreement and
prior to such Closing Date, there has not occurred any Material Adverse
Change;
(ii) the representations, warranties and covenants of the Company
set forth in Section 1(A) of this Agreement are true and correct with the
same force and effect as though expressly made on and as of such Closing
Date; and
(iii) the Company has complied with all the agreements hereunder and
satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date.
(g) Bring-down Comfort Letter. On each of the First Closing Date and the
Second Closing Date the Representatives shall have received from Ernst & Young
LLP, independent public or certified public accountants for the Company, a
letter dated such date, in form and substance satisfactory to the
Representatives, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to subsection (a) of this Section 5, except
that the specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the First Closing Date or
Second Closing Date, as the case may be (and the Representatives shall have
received an additional two conformed copies of such accountants' letter for each
of the several Underwriters).
(h) Opinion of Counsel for the Selling Shareholders. On each of the First
Closing Date and the Second Closing Date the Representatives shall have received
the favorable opinion of counsel for the Selling Shareholders, dated as of such
Closing Date, in the form
19
and from the counsel which has been agreed to by the Representatives (and the
Representatives shall have received an additional two conformed copies of such
counsel's legal opinion for each of the several Underwriters).
(i) Selling Shareholders' Certificate. On each of the First Closing Date
and the Second Closing Date the Representatives shall receive a written
certificate executed by or on behalf of each Selling Shareholder, dated as of
such Closing Date, to the effect that:
(i) the representations, warranties and covenants of such Selling
Shareholder set forth in Section 1(B) of this Agreement are true and
correct with the same force and effect as though expressly made by such
Selling Shareholder on and as of such Closing Date; and
(ii) such Selling Shareholder has complied with all the agreements
and satisfied all the conditions on its part to be performed or satisfied
at or prior to such Closing Date.
(j) Selling Shareholders' Documents. On the date hereof, the Company and
the Selling Shareholders shall have furnished for review by the Representatives
copies of the Powers of Attorney and Custody Agreements executed by each of the
Selling Shareholders and such further information, certificates and documents as
the Representatives may reasonably request.
(k) Lock-Up Agreement from Certain Securityholders of the Company Other
Than Selling Shareholders. On the date hereof, the Company shall have furnished
to the Representatives an agreement in the form of Exhibit C-1 hereto from each
-----------
director, officer, regional manager, and Bruckmann, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Co., L.P.
and in the form of Exhibit C-2 hereto from selected other persons in the
-----------
discretion of the Representatives, and each such agreement shall be in full
force and effect on each of the First Closing Date and the Second Closing Date.
(l) Additional Documents. On or before each of the First Closing Date and
the Second Closing Date, the Representatives and counsel for the Underwriters
shall have received such information, documents and opinions as they may
reasonably require for the purposes of enabling them to pass upon the issuance
and sale of the Common Shares as contemplated herein, or in order to evidence
the accuracy of any of the representations and warranties, or the satisfaction
of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and the Selling Shareholders at any
time on or prior to the First Closing Date and, with respect to the Optional
Common Shares, at any time prior to the Second Closing Date, which termination
shall be without liability on the part of any party to any other party, except
that Section 4, Section 6, Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
Section 6. Reimbursement of Underwriters' Expenses. If this Agreement is
terminated by the Representatives pursuant to Section 5, Section 7, Section 10
or Section 11 or
20
Section 17, or if the sale to the Underwriters of the Common
Shares on the First Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company or the Selling Shareholders to
perform any agreement herein or to comply with any provision hereof, the Company
agrees to reimburse the Representatives and the other Underwriters (or such
Underwriters as have terminated this Agreement with respect to themselves),
severally, upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by the Representatives and the Underwriters in connection
with the proposed purchase and the offering and sale of the Common Shares,
including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, facsimile and telephone charges.
Section 7. Effectiveness of this Agreement.
This Agreement shall not become effective until the later of (i)
the execution of this Agreement by the parties hereto and (ii) notification by
the Commission to the Company and the Representatives of the effectiveness of
the Registration Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated by
any party by notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (a) the Company or the
Selling Shareholders to any Underwriter, except that the Company and the Selling
Shareholders shall be obligated to reimburse the expenses of the Representatives
and the Underwriters pursuant to Sections 4 and 6 hereof, (b) of any Underwriter
to the Company or the Selling Shareholders, or (c) of any party hereto to any
other party except that the provisions of Section 8 and Section 9 shall at all
times be effective and shall survive such termination.
Section 8. Indemnification.
(a) Indemnification of the Underwriters. Each of the Company and
each of the Selling Shareholders agrees to indemnify and hold harmless each
Underwriter, its officers and employees, and each person, if any, who controls
any Underwriter within the meaning of the Securities Act and the Exchange Act
against any loss, claim, damage, liability or expense, as incurred, to which
such Underwriter or such controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such loss, claim, damage, liability or expense (or actions
in respect thereof as contemplated below) arises out of or is based (i) upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430A or Rule 434 under the
Securities Act, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or (ii) upon any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that the Company shall not be liable under this clause (v) to the extent that a
court
21
of competent jurisdiction shall have determined by a final judgment that
such loss, claim, damage, liability or action resulted directly from any such
acts or failures to act undertaken or omitted to be taken by such Underwriter
through its bad faith or willful misconduct; and to reimburse each Underwriter
and each such controlling person for any and all expenses (including the fees
and disbursements of counsel chosen by Banc of America Securities) as such
expenses are reasonably incurred by such Underwriter or such controlling person
in connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided, however,
that the foregoing indemnity agreement shall not apply to any loss, claim,
damage, liability or expense to the extent, but only to the extent, arising out
of or based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information relating to any Underwriter furnished to the Company and the Selling
Shareholders by the Representatives expressly for use in the Registration
Statement, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and provided, further, that with respect to any preliminary
prospectus, the foregoing indemnity agreement shall not inure to the benefit of
any Underwriter from whom the person asserting any loss, claim, damage,
liability or expense purchased Common Shares, or any person controlling such
Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Common Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense; provided, further, no
Selling Shareholder shall be required to provide indemnification hereunder until
the person seeking indemnification shall have first made a demand for payment on
the Company with respect to any such loss, claim, damage, liability or expense
and the Company shall have either rejected such demand or failed to make such
requested payment within sixty days after receipt thereof; provided further,
that Bruckman, Rosser, ▇▇▇▇▇▇▇▇ & Co., L.P. ("BRS") agrees to indemnify and hold
harmless each Underwriter, its officers and employees, and each person, if any,
who controls any Underwriter within the meaning of the Securities Act and the
Exchange Act against any loss, claim, damage, liability or expense, as incurred,
to which such Underwriter or such controlling person may become subject, under
the Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
indemnified person), insofar as such loss, claim, damage, liability or expense
(or actions in respect thereof as contemplated below) arises out of or is based
upon (i) any purchase pursuant to the provisions of Section 17 hereof from BRS
by the Underwriters of shares in addition to those shown on Schedule B next to
BRS's name, (ii) any failure of the Underwriters to have acquired good and
marketable title to all Optional Common Shares delivered to the Underwriters by
the BRS Shareholders (as defined in Section 17) pursuant to this Agreement, free
and clear of any security interest, mortgage, pledge, lien, encumbrance or other
claim, or (iii) any failure of any BRS Shareholder to deliver and sell any of
the Optional Common Shares as required pursuant to this Agreement, or provided,
further, that the liability of each Selling Shareholder, under the foregoing
indemnity agreement shall be limited to an amount equal to the initial public
offering price of the Optional Common Shares sold by such Selling Shareholder,
less the underwriting discount, as set forth on the front cover page of the
Prospectus; and provided further, that each Secondary Selling Shareholder (as
designated on Schedule B) under the foregoing
22
indemnity agreement shall have no obligation to provide indemnity hereunder
where the loss, claim, damage, liability or expense arises out of or is based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any preliminary prospectus or the
Prospectus, or any amendment or supplement thereto, or arises out of or is based
upon the omission or alleged omission to state in any of them a material fact
necessary to make the statements in any of them in the light of the
circumstances in which they were made, not misleading, except to the extent to
which such untrue statement or alleged untrue statement or omission or alleged
omission relates to such Secondary Selling Shareholder's Selling Shareholder
Information. The indemnity agreement set forth in this Section 8(a) shall be in
addition to any liabilities that the Company and the Selling Shareholders may
otherwise have.
(b) Indemnification of the Company, its Directors and Officers and the
Selling Shareholders . Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, the Selling Shareholders and
each person, if any, who controls the Company or any Selling Shareholder
within the meaning of the Securities Act or the Exchange Act, against any
loss, claim, damage, liability or expense, as incurred, to which the Company,
or any such director, officer, Selling Shareholder or controlling person may
become subject, under the Securities Act, the Exchange Act, or other federal
or state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the
written consent of such Underwriter), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
arises out of or is based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any preliminary
prospectus, the Prospectus (or any amendment or supplement thereto), in
reliance upon and in conformity with written information furnished to the
Company and the Selling Shareholders by the Representatives expressly for use
therein; and to reimburse the Company, or any such director, officer, Selling
Shareholder or controlling person for any legal and other expense reasonably
incurred by the Company, or any such director, officer, Selling Shareholder or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. The Company and each of the Selling Shareholders hereby acknowledge
that the only information that the Underwriters have furnished to the Company
and the Selling Shareholders expressly for use in the Registration Statement,
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) are the statements set forth in the table in the first paragraph, in
the second and sixth paragraph, in the first sentence of the eighth paragraph,
the ninth paragraph, the second and third sentences of the tenth paragraph and
the eleventh paragraph under the caption "Plan of Distribution" in the
Prospectus; and the Underwriters confirm that such statements are correct. The
indemnity agreement set forth in this Section 8(b) shall be in addition to any
liabilities that each Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such
23
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party for contribution or otherwise than under the indemnity
agreement contained in this Section 8 or to the extent it is not prejudiced as a
proximate result of such failure. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party and the indemnified party
in conducting the defense of any such action or, unless the indemnifying party
shall have irrevocably agreed to be fully responsible for all losses, claims,
damages, liabilities and expenses of the Indemnified Party, or it shall have
been determined in a final, non-appealable judgment by a court of competent
jurisdiction that the Indemnifying Party is fully responsible for all of such
losses, claims, damages, liabilities and expenses, that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of such indemnifying party's
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel), approved by the indemnifying
party (Banc of America Securities in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by
Section 8(c) hereof, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request, (ii) the indemnified party shall
have provided the indemnifying party with notice of such proposed settlement at
least
24
two (2) business days prior to its acceptance of such settlement and (iii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement, except that the
indemnifying party's nonpayment of any portion of such fees and expenses of
counsel that the indemnifying party disputes in good faith as being excessive
shall not be deemed a failure to reimburse within the meaning of this clause
(iii). No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry of
judgment in any pending or threatened action, suit or proceeding in respect of
which any indemnified party is or could have been a party and indemnity was or
could have been sought hereunder by such indemnified party, unless such
settlement, compromise or consent includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.
(e) Indemnification of a Qualified Independent Underwriter. Without
limitation and in addition to its obligations under the other subsections of
this Section 8, the Company agrees to indemnify and hold harmless and each
person, if any, who controls FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc. within the
meaning of the Securities Act or the Exchange Act from and against any loss,
claim, damage, liabilities or expense, as incurred, arising out of or based
upon FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.'s acting as a "qualified independent
underwriter" (within the meaning of Rule 2720 to the NASD's Conduct Rules) in
connection with the offering contemplated by this Agreement, and agrees to
reimburse each such indemnified person for any legal or other expense
reasonably incurred by them in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
expense results from the gross negligence or willful misconduct of FleetBoston
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc.
Section 9. Contribution.
If the indemnification provided for in Section 8 is for any
reason held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholders, on the one hand,
and the Underwriters, on the other hand, from the offering of the Common Shares
pursuant to this Agreement or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Selling Shareholders, on the one
hand, and the Underwriters, on the other hand, in connection with the statements
or omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Selling Shareholders, on the one hand, and the Underwriters,
on the other hand, in connection with the offering of the Common Shares pursuant
to this Agreement shall be deemed to be in the same respective proportions as
the total net proceeds from the offering of the Common Shares pursuant to this
Agreement (before deducting expenses) received by the Company and the Selling
Shareholders, and the total underwriting discount received by the Underwriters,
in each
25
case as set forth on the front cover page of the Prospectus (or, if Rule 434
under the Securities Act is used, the corresponding location on the Term Sheet)
bear to the aggregate initial public offering price of the Common Shares as set
forth on such cover. The relative fault of the Company and the Selling
Shareholders, 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 or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company or the
Selling Shareholders, on the one hand, or the Underwriters, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. Notwithstanding
the foregoing in this Section 9, in no event will the liability of any Selling
Shareholder under this Section 9 be greater in amount than the difference
between the dollar amount of proceeds received by such Selling Shareholder upon
the sale of Common Shares hereunder and all amounts previously contributed by
such Selling Shareholder under this Section 9.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company, the Selling Shareholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
9 were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the underwriting
commissions received by such Underwriter in connection with the Common Shares
underwritten by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each officer and employee of an
----------
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Company.
Section 10. Default of One or More of the Several Underwriters. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the several Underwriters shall fail or refuse to purchase Common Shares
that it or they have agreed
26
to purchase hereunder on such date, and the aggregate number of Common Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase does not exceed 10% of the aggregate number of the Common Shares to
be purchased on such date, the other Underwriters shall be obligated, severally,
in the proportions that the number of Firm Common Shares set forth opposite
their respective names on Schedule A bears to the aggregate number of Firm
----------
Common Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as may be specified by the
Representatives with the consent of the non-defaulting Underwriters, to purchase
the Common Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date. If, on the First Closing Date or the
Second Closing Date, as the case may be, any one or more of the Underwriters
shall fail or refuse to purchase Common Shares and the aggregate number of
Common Shares with respect to which such default occurs exceeds 10% of the
aggregate number of Common Shares to be purchased on such date, and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Common Shares are not made within 48 hours after such default, this Agreement
shall terminate without liability of any non-defaulting party to any other party
except that the provisions of Section 4, Section 6, Section 8 and Section 9
shall at all times be effective and shall survive such termination. In any such
case either the Representatives or the Company shall have the right to postpone
the First Closing Date or the Second Closing Date, as the case may be, but in no
event for longer than seven days in order that the required changes, if any, to
the Registration Statement and the Prospectus or any other documents or
arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed
to include any person substituted for a defaulting Underwriter under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
Section 11. Termination of this Agreement. Prior to the First
Closing Date this Agreement may be terminated by the Representatives by notice
given to the Company and the Selling Shareholders if at any time (i) trading or
quotation in any of the Company's securities shall have been suspended or
limited by the Commission or by the Nasdaq National Market, or trading in
securities generally on either the Nasdaq Stock Market or the New York Stock
Exchange shall have been suspended or limited, or minimum or maximum prices
shall have been generally established on any of such stock exchanges by the
Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any of federal, New York or California authorities; (iii) there
shall have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development
involving a prospective substantial change in United States' or international
political, financial or economic conditions, as in the judgment of the
Representatives is material and adverse and makes it impracticable to market the
Common Shares in the manner and on the terms described in the Prospectus or to
enforce contracts for the sale of securities; (iv) in the judgment of the
Representatives there shall have occurred any Material Adverse Change; or (v)
the Company shall have sustained a loss by strike, fire, flood, earthquake,
accident or other calamity of such character as in the judgment of the
Representatives may interfere materially with the conduct of the business and
operations of the Company regardless of whether or not such loss shall have been
insured. Any termination pursuant to this Section 11 shall be without liability
on the part of (a) the Company or the Selling Shareholders to any Underwriter,
except that the Company shall be obligated to reimburse the
27
expenses of the Representatives and the Underwriters pursuant to Sections 4 and
6 hereof, (b) any Underwriter to the Company or the Selling Shareholders, or (c)
of any party hereto to any other party except that the provisions of Section 8
and Section 9 shall at all times be effective and shall survive such
termination.
Section 12. Representations and Indemnities to Survive Delivery.
The respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Shareholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Shareholders, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
Section 13. Notices. All communications hereunder shall be in
writing and shall be mailed, hand delivered or telecopied and confirmed to the
parties hereto as follows:
If to the Representatives:
Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: [▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇]
with a copy to:
Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to the Company:
California Pizza Kitchen, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, #▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
If to the Selling Shareholders:
American Stock Transfer & Trust Company
[address]
Facsimile: [___]
Attention: [___]
28
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
Section 14. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, [and personal representatives], and no
other person will have any right or obligation hereunder. The term "successors"
shall not include any purchaser of the Common Shares as such from any of the
Underwriters merely by reason of such purchase.
Section 15. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
Section 16. Governing Law Provisions. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
Section 17. Failure of One or More of the Selling Shareholders to
Sell and Deliver Common Shares. If one or more of the Selling Shareholders shall
fail to sell and deliver to the Underwriters the Common Shares to be sold and
delivered by such Selling Shareholders pursuant to this Agreement at the First
Closing Date or the Second Closing Date, then the Underwriters shall have the
right, by written notice from the Representatives to the Company and the Selling
Shareholders, to postpone the First Closing Date or the Second Closing Date, as
the case may be, but in no event for longer than seven days in order that the
required changes, if any, to the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. If one or more of the
Selling Shareholders (other than BancBoston) (a "BRS" Shareholder") shall fail
to sell and deliver to the Underwriters the Optional Common Shares to be sold
and delivered by such Selling Shareholders at the Second Closing Date pursuant
to this Agreement, then BRS, on the basis of the representations, warranties and
agreements herein contained, hereby grants an option to the several Underwriters
to purchase such number of shares of common stock of the Company owned by BRS
that are necessary to replace all Optional Common Shares not delivered and sold
by the Selling Shareholders as otherwise provided herein.
Section 18. General Provisions. This Agreement constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject
29
matter hereof. This Agreement may be executed in two or more counterparts, each
one of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement may not be
amended or modified unless in writing by all of the parties hereto, and no
condition herein (express or implied) may be waived unless waived in writing by
each party whom the condition is meant to benefit. The Table of Contents and the
Section headings herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a
sophisticated business person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
30
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company and the Custodian the enclosed copies
hereof, whereupon this instrument, along with all counterparts hereof, shall
become a binding agreement in accordance with its terms.
Very truly yours,
CALIFORNIA PIZZA KITCHEN, INC.
By:
--------------------------------------
[Title]
THE SELLING SHAREHOLDERS
SET FORTH ON SCHEDULE B
By:
--------------------------------------
(Attorney-in-fact)
The foregoing Underwriting Agreement is hereby confirmed and accepted
by the Representatives in San Francisco, California as of the date first above
written.
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANC ALEX. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By BANC OF AMERICA SECURITIES LLC
By:
-----------------------------
Managing Director
31
SCHEDULE A
Number of
Firm Common Shares
Underwriters to be Purchased
Banc of America Securities LLC.................. [___]
Deutsche Banc Alex. ▇▇▇▇▇....................... [___]
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.............................. [___]
Total........................................ [___]
SCHEDULE B
Maximum Number of
Selling Shareholder Optional Common
Shares
to be Sold
Selling Shareholder #1
[Bruckman, Rosser, ▇▇▇▇▇▇▇▇ & Co., L.P.]
[address]
Attention: [___]............................... [___]
**Selling Shareholder #2
[▇▇▇▇▇▇ ▇▇▇▇ SBIC LP]
[address]
Attention: [___]............................... [___]
Selling Shareholder #3
[▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇]
[address]
Attention: [___]............................... [___]
Selling Shareholder #4
[▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇]
[address]
Attention: [___] [___]
Selling Shareholder #5
[▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇]
[address]
Attention: [___]............................... [___]
**Selling Shareholder #6
[BCB Family Partners]
[address]
Attention: [___]............................... [___]
**Selling Shareholder #7
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇]
[address]
Attention: [___]............................... [___]
**Selling Shareholder #8
[▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇]
[address]
Attention: [___]............................... [___]
**Selling Shareholder #9
[▇▇▇▇▇▇▇ Place]
[address]
Attention: [___]............................... [___]
**Selling Shareholder #10
[NAZ Family Partners]
[address]
Attention: [___]............................... [___]
**Selling Shareholder #11
[▇▇▇▇▇ ▇. ▇▇▇▇▇]
[address]
Attention: [___]............................... [___]
**Selling Shareholder #12
[H. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇]
[address]
Attention: [___]............................... [___]
**Selling Shareholder #13
[▇▇▇▇ ▇▇▇▇▇▇▇▇]
[address]
Attention: [___]............................... [___]
**Selling Shareholder #14
[Rice ▇▇▇▇▇▇▇]
[address]
Attention: [___]............................... [___]
**Selling Shareholder #15
[▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇]
[address]
Attention: [___]............................... [___]
**Selling Shareholder #16
[BancBoston]
[address]
Attention: [___]............................... [___]
Total:..................................... [___]
** Secondary Selling Shareholder
EXHIBIT C-1
________ __, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ Securities LLC
Deutsche Banc Alex. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
As Representatives of the Several Underwriters
c/o Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: California Pizza Kitchen, Inc. (the "Company")
----------------------------------------------
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company ("Common Stock") or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry out
a public offering of Common Stock (the "Offering") for which you will act as the
representatives of the underwriters. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company by,
among other things, raising capital with which to repay a portion of its
outstanding debt. The undersigned acknowledges that you and the other
underwriters are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering and in
entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of Banc of America
Securities (which consent may be withheld in its sole discretion), directly or
indirectly, sell, offer, contract or grant any option to sell (including without
limitation any short sale), pledge, transfer, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Securities Exchange Act
of 1934, or otherwise dispose of any shares of Common Stock, options or warrants
to acquire shares of Common Stock, or securities exchangeable or exercisable for
or convertible into shares of Common Stock currently or hereafter owned either
of record or beneficially (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) by the undersigned, or publicly announce the
undersigned's intention to do any of the foregoing, during the "Lock-up Period".
The "Lock-up Period" shall be a period commencing on the date of the final
prospectus relating to the Offering (the "Offering Date") and continuing through
the close of trading on the date 90 days after the Offering Date; provided,
however, that if the final prospectus has not been filed with the Securities and
Exchange Commission on or before December 31, 2000, this letter agreement will
terminate and be of no further force or effect whatsoever.
The prohibitions contained in this letter agreement shall not apply to: (i) the
sale of any shares of Common Stock to the underwriters pursuant to the
underwriting agreement entered into in connection with the Offering; (ii)
transactions relating to shares of Common Stock or other securities acquired in
open market transactions after the Offering Date (provided that shares
C-1
acquired from the underwriters in the Offering shall be subject to the
restrictions contained herein); (iii) gifts and transfers by will or intestacy;
and (iv) the exercise of options to purchase shares of Common Stock granted
under the Company's 1998 Stock-Based Incentive Compensation Plan or the
Company's 1990 Employee Equity Participation Plan; provided, however, that the
shares of Common Stock purchased upon the exercise of such options shall be
otherwise subject to this letter agreement. In addition, transfers to the
undersigned's members, partners, affiliates, immediate family or a trust, the
beneficiaries of which are the undersigned's and/or members of the undersigned's
immediate family, shall not be prohibited by the terms of this letter agreement
so long as the transferee agrees in writing to be bound hereby in the same
manner as it applies to the undersigned. With respect to the Offering only, the
undersigned waives any registration rights relating to registration under the
Securities Act of any Common Stock owned either of record or beneficially by the
undersigned, including any rights to receive notice of the Offering.
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
Print Name of Holder:
-----------------------------
By:
----------------------------------------
Signature
-------------------------------------------
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
C-2
EXHIBIT C-2
________ __, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ Securities LLC
Deutsche Banc Alex. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
As Representatives of the Several Underwriters
c/o Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: California Pizza Kitchen, Inc. (the "Company")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company ("Common Stock") or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry out
a public offering of Common Stock (the "Offering") for which you will act as the
representatives of the underwriters. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company by,
among other things, raising capital with which to repay a portion of its
outstanding debt. The undersigned acknowledges that you and the other
underwriters are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering and in
entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of Banc of America
Securities (which consent may be withheld in its sole discretion), directly or
indirectly, sell, offer, contract or grant any option to sell (including without
limitation any short sale), pledge, transfer, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Securities Exchange Act
of 1934, or otherwise dispose of any shares of Common Stock, options or warrants
to acquire shares of Common Stock, or securities exchangeable or exercisable for
or convertible into shares of Common Stock currently or hereafter owned either
of record or beneficially (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) by the undersigned, or publicly announce the
undersigned's intention to do any of the foregoing, during the "Lock-up Period".
The "Lock-up Period" shall be a period commencing on the date of the final
prospectus relating to the Offering (the "Offering Date") and continuing through
the close of trading on the date 180 days after the Offering Date; provided,
however, that if the final prospectus has not been filed with the Securities and
Exchange Commission on or before December 31, 2000, this letter agreement will
terminate and be of no further force or effect whatsoever.
The prohibitions contained in this letter agreement shall not apply to: (i)
transactions relating to shares of Common Stock or other securities acquired in
open market transactions after the Offering Date (provided that shares acquired
from the underwriters in the Offering shall be subject to the restrictions
contained herein); or (ii) gifts and transfers by will or intestacy. In
C-3
addition, transfers to the undersigned's members, partners, affiliates,
immediate family or a trust, the beneficiaries of which are the undersigned's
and/or members of the undersigned's immediate family, shall not be prohibited by
the terms of this letter agreement so long as the transferee agrees in writing
to be bound hereby in the same manner as it applies to the undersigned. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of shares
of Common Stock or securities convertible into or exchangeable or exercisable
for Common Stock held by the undersigned except in compliance with the foregoing
restrictions.
The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
Print Name of Holder:
--------------------------------------
By:
------------------------------------------
Signature
---------------------------------------------
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
Dated: ___, 2000
C-4
EXHIBIT D
POWER OF ATTORNEY
CALIFORNIA PIZZA KITCHEN, INC.
COMMON STOCK
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Co., L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned understands that California Pizza Kitchen, Inc., a
California corporation (the "Company"), has filed a registration statement (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), in connection with the proposed public offering and sale by the Company
and by __________________, [a[n] individual/[INSERT NAME OF STATE]
partnership/corporation] (the "Selling Shareholder"), and certain other selling
shareholders of the Company (the "Other Selling Shareholders"), of shares of the
Company's common stock (the "Stock").
The Selling Shareholder desires to sell certain shares of Stock and such
shares are included among the shares covered by the Registration Statement. The
number of shares of Stock which the Selling Shareholder desires to sell (the
"Shares") is set forth beneath the signature of the Selling Shareholder below.
Concurrently with the execution and delivery of this Power of Attorney, the
Selling Shareholder is delivering to you (the "Committee"), certificates
representing the Shares to be sold by the Selling Shareholder, which the
Committee is authorized to deposit with _______________________ as custodian
(the "Custodian"), pursuant to a custody agreement in the form attached as
Attachment A hereto (the "Custody Agreement").
1. In connection with the foregoing, the Selling Shareholder hereby makes,
constitutes and appoints the Committee, and each person who is a member of the
Committee (a "Member"), and each of their respective substitutes under Section 3
hereof, the true and lawful attorneys-in-fact of the Selling Shareholder and
each of them with full power and authority, in the name and on behalf of the
Selling Shareholder:
(a) To enter into the Custody Agreement and deposit with the Custodian
pursuant thereto the certificates representing the Shares delivered to the
Committee concurrently herewith;
(b) For the purpose of effecting the sale of the Shares, to execute and
deliver an Underwriting Agreement (the "Underwriting Agreement"), by and among
the Company, the Selling Shareholder, the Other Selling Shareholders and Banc of
America Securities, LLC, Deutsche Banc Alex.
D-1
▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as representatives (the "Representatives") of the
several Underwriters (the "Underwriters") named therein.
(c) To endorse, transfer, and deliver certificates representing the Shares
to or on the order of the Representatives or to their nominee or nominees, and
to give such orders and instructions to the Custodian as the Committee may in
its sole discretion determine with respect to (i) the transfer on the books of
the Company of the Shares in order to effect such sale (including the names in
which new certificates for such Shares are to be issued and the denominations
thereof), (ii) the delivery to or for the account of the Representatives of the
certificates representing the Shares against receipt by the Custodian for the
account of the Selling Shareholder of the full purchase price to be paid
therefor, (iii) the remittance to the Selling Shareholder of the proceeds (net
of the underwriting discount) from any sale of the Shares, and (iv) the return
to the Selling Shareholder of certificates representing the number of the Shares
(if any) deposited with the Custodian but not sold by the Representatives
pursuant to the Underwriting Agreement;
(d) To take for the Selling Shareholder all steps deemed necessary or
advisable by the Committee in connection with the registration of the Shares
under the Act, including, without limitation, filing amendments to the
Registration Statement;
(e) If necessary, to endorse (in blank or otherwise) on behalf of the
Selling Shareholder the certificate or certificates representing the Shares, or
a stock power or powers attached to such certificate or certificates; and
(f) To make, execute, acknowledge, verify, deliver and file all such other
applications, consents to service of process, undertakings, reports, contracts,
orders, receipts, notices, requests, instructions, certificates, letters and
other writings as may be required to facilitate the offer and sale of the Shares
and, in general, to do all things and to take all action which the Committee in
its sole discretion may consider necessary or proper in connection with or to
carry out the aforesaid sale of the Shares, as fully as could the Selling
Shareholder if personally present and acting.
2. This Power of Attorney and all authority conferred hereby is granted
and conferred subject to and in consideration of the interests of the Company,
the Representatives, and the Selling Shareholder and, for the purpose of
completing the transactions contemplated by the Underwriting Agreement, this
Power of Attorney and all authority conferred hereby shall be irrevocable and
shall not be terminated by any act of the Selling Shareholder or by operation of
law, whether by [death, disability, incapacity,] revocation[, termination,
liquidation, dissolution] or bankruptcy with respect to the Selling Shareholder
or by the occurrence of any other similar event or events, and if, after the
execution hereof there shall occur a [death, disability, incapacity,]
revocation[, termination, liquidation, dissolution] or bankruptcy with respect
to the Selling Shareholder or if any other similar event or events (including,
without limitation, the termination of any trust or estate for which the Selling
Shareholder is acting as a fiduciary or fiduciaries), shall occur before the
completion of the transactions contemplated by the Underwriting Agreement, the
Committee shall nevertheless be authorized and directed to complete all such
transactions as if such event had not occurred, regardless of whether or not the
Committee shall have received notice of such event. Notwithstanding the
foregoing, if the transactions contemplated by the Custody Agreement, the
Underwriting Agreement, and this Power of Attorney are not completed on or prior
to October 31, 2000, then from and after that date the Selling Shareholder shall
have the power, upon giving written notice to the Committee, to terminate this
Power of Attorney; provided, however, that such termination shall not affect the
-------- -------
validity of any lawful action previously done or performed by
D-2
the Committee pursuant hereto, or the binding nature or enforceability of any
agreement or obligation entered into, prior to the actual receipt of such
notice.
3. Each Member shall have full power to make and substitute any executive
officer of the Company in the place and stead of such Member, and the Selling
Shareholder hereby ratifies and confirms all that each Member or substitute(s)
shall do pursuant to this Power of Attorney. All actions hereunder may be taken
by any one Member or his or her substitute. In the event of the death,
disability or incapacity of any Member, the remaining Member shall appoint a
substitute therefor.
4. The Selling Shareholder hereby represents, warrants and covenants to
the Committee that:
(a) The Selling Shareholder has full power and authority to enter into this
Power of Attorney, the Custody Agreement, and the Underwriting Agreement. All
authorizations and consents necessary for the execution and delivery by or on
behalf of the Selling Shareholder of this Power of Attorney, the Custody
Agreement, and the Underwriting Agreement have been given. Each of this Power
of Attorney, the Custody Agreement, and the Underwriting Agreement has been duly
authorized by or on behalf of the Selling Shareholder, this Power of Attorney
has been duly executed and delivered by the Selling Shareholder and each of this
Power of Attorney and the Custody Agreement constitutes, and the Underwriting
Agreement will constitute when executed by a Member or the Selling Shareholder a
valid and binding agreement of the Selling Shareholder enforceable against the
Selling Shareholder in accordance with the terms hereof and thereof, except (i)
as limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and (ii) that remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding may be brought.
(b) The Selling Shareholder agrees that the Shares represented by the
certificates held in custody for him, her or it under the Custody Agreement are
for the benefit of and coupled with and subject to the interest of the
Custodian, the Committee, the Underwriters, each Other Selling Shareholder and
the Company, that the arrangements made by the Selling Shareholder for such
custody and the appointment of the Custodian and the Committee by the Selling
Shareholder are irrevocable, and that the obligations of the Selling Shareholder
hereunder shall not be terminated by operation of law, whether by [death,
disability, incapacity,] revocation [, termination, liquidation, dissolution] or
bankruptcy with respect to the Selling Shareholder or by the occurrence of any
other similar event or events. If any such event should occur before the
delivery of the Shares under the Underwriting Agreement, certificates for the
Shares shall be delivered by the Custodian in accordance with the terms and
conditions of the Underwriting Agreement and actions taken by the Custodian and
the Committee pursuant to the Custody Agreement and this Power of Attorney shall
be as valid as if such [death, disability, incapacity,] revocation [,
termination, liquidation, dissolution,] bankruptcy or other event had not
occurred, regardless of whether or not the Custodian or the Committee, or either
of them, shall have received notice thereof.
(c) None of the proceeds received by the Selling Shareholder from the sale
of the Shares will be paid to a member of the National Association of Securities
Dealers, Inc. or any affiliate of such member. [Add specific carve outs in
▇▇▇▇▇▇ ▇▇▇▇ and BancBoston letters].
(d) The Committee is entitled to rely upon all the representations,
warranties, and covenants contained in this Power of Attorney in executing and
delivering the Underwriting Agreement and any certificate delivered in
connection therewith as if such representations, warranties, and covenants were
D-3
made on and as of the dates of execution and delivery of the Underwriting
Agreement and any such certificates.
(e) The Selling Shareholder now has, and at the time of delivery thereof
under the Underwriting Agreement will have, good and valid title to all of the
Shares which may be sold by such Selling Shareholder pursuant to the
Underwriting Agreement (and subject to the terms of the Custody Agreement) and
the legal right and power, and all authorizations and approvals required by law
and under its charter or by-laws, partnership agreement, trust agreement or
other organizational documents to sell, transfer and deliver all of the Shares
which may be sold by such Selling Shareholder pursuant to the Underwriting
Agreement free and clear of all voting trust arrangements, liens, encumbrances,
equities, security interests, restrictions and claims whatsoever; and delivery
of such Shares which are sold by the Selling Shareholders pursuant to the
Underwriting Agreement will pass good and valid title thereto, free and clear of
any security interest, mortgage, pledge, lien, encumbrance or other claim.
(f) The performance of this Power of Attorney, the Custody Agreement and
the Underwriting Agreement and the consummation of the transactions contemplated
hereby and thereby will not contravene or conflict with, result in a breach of,
or constitute a default under, or require the consent of any other party to, the
charter, bylaws, partnership agreement, trust agreement or other organizational
documents of such Selling Shareholder or any other agreement to which such
Selling Shareholder is a party or by which it is bound or under which it is
entitled to any right or benefit, any provision of applicable law or any
judgment, order, decree or regulation applicable to such Selling Shareholder of
any court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over such Selling Shareholder.
(g) The Selling Shareholder has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Stock to
facilitate the sale or resale of the Shares.
(h) All Selling Shareholder Information contained in the Registration
Statement and Prospectus (as those terms are defined in the Underwriting
Agreement), is, and on the First Closing Date and the Second Closing Date (as
such terms are defined in the Underwriting Agreement) will be, true, correct and
complete and does not, and on the First Closing Date and the Second Closing Date
will not, contain any untrue statement of a material fact or omit to state a
material fact necessary to make such information not misleading. The Selling
Shareholder confirms as accurate the number of shares of Common Stock set forth
opposite such Selling Shareholder's name in the Prospectus under the caption
"Principal [and Selling] Shareholders" (both prior to and after giving effect to
the sale of the Shares).
(i) On the Second Closing Date, all stock transfer or other taxes (other
than income taxes), if any, that are required to be paid in connection with the
sale and transfer of the Shares to the several Underwriters pursuant to the
Underwriting Agreement will have been fully paid or provided for by the Selling
Shareholder and all laws imposing such taxes will have been fully complied with.
(j) No consent, approval, authorization or order of, or any filing with,
any court or governmental agency or body is required for the consummation by the
Selling Shareholder of the transactions on its part contemplated in this Power
of Attorney, the Custody Agreement or the Underwriting Agreement, except as may
be required under the Act or state or provincial securities or "blue sky" laws.
D-4
(k) Other than as permitted by the Act and the rules and regulations
thereunder, the Selling Shareholder has not distributed and will not distribute
the Prospectus or any other offering material in connection with the offering
and sale of the Shares.
(l) The Selling Shareholder agrees that the Committee is entitled to rely
upon all the representations, warranties and covenants contained in this Section
4 in executing and delivering the Underwriting Agreement and any certificate
delivered in connection therewith as if such representations, warranties and
covenants were made on and as of the dates of execution and delivery of the
Underwriting Agreement and any such certificate unless, with respect to the
representations and warranties contained in clauses (g) and (k) of this Section
4 only, the Selling Shareholder has notified the Committee in writing before the
date of the execution and delivery of the Underwriting Agreement or any such
certificate, as applicable, that such representation or warranty is inaccurate.
5. The representations, warranties and covenants of the Selling
Shareholder in this Power of Attorney are made for the benefit of, and may be
relied upon by the Company, the Committee, the Representatives, the
Underwriters, and the Custodian and their respective counsel, representatives
and agents.
6. The Committee shall be entitled to act and rely upon any statement,
request, notice or instructions respecting this Power of Attorney given to it by
the Selling Shareholder, not only as to the authorization, validity and
effectiveness thereof, but also as to the truth and acceptability of any
information therein contained.
It is understood that the Committee assumes no responsibility or liability
to any person other than to deal with the Shares deposited with it by the
Selling Shareholder and the proceeds from the sale of the Shares in accordance
with the provisions hereof. The Committee in its capacity as such makes no
representations with respect to and shall have no responsibility for the
Registration Statement, the Prospectus or any preliminary prospectus nor, except
as herein expressly provided, for any aspect of the offering of the Shares, and
it shall not be liable for any error of judgment or for any act done or omitted
or for any mistake of fact or law except for its own gross negligence, willful
misconduct, or bad faith. The Selling Shareholder agrees to indemnify the
Committee for and to hold each Member of the Committee harmless against any
loss, claim, damage or liability incurred on its part arising out of or in
connection with his acting as a Member of the Committee under this Power of
Attorney, as well as the cost and expense of investigating and defending against
any such loss, claim, damage or liability, except to the extent such loss,
claim, damage or liability is due to the gross negligence, willful misconduct or
bad faith of the Member seeking indemnification. The Selling Shareholder
further agrees that the Committee may consult with counsel of its own choice
(who may be counsel for the Company) and the Committee shall have full and
complete authorization and protection for any action taken or suffered by the
Committee hereunder in good faith and in accordance with the advice of such
counsel.
7. It is understood that the Committee shall serve entirely without
compensation or other expense to the Selling Shareholder except as otherwise
provided in Paragraph 6 hereof.
8. This Power of Attorney shall be governed by the laws of the State of
New York applicable to contracts made and to be performed entirely in such
State.
9. This Power of Attorney may be signed in two or more counterparts with
the same effect as if the signature thereto and hereto were upon the same
instrument.
D-5
10. In case any provision in this Power of Attorney shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
11. This Power of Attorney shall be binding upon the Committee and the
Selling Shareholder and the heirs, legal representatives, distributees,
beneficiaries, successors and assigns of the Selling Shareholder.
12. Notwithstanding any other provision of this power of Attorney to the
contrary, this Power of Attorney shall terminate forthwith upon (i) The
termination of the Underwriting Agreement in accordance with the provisions
thereof, or (ii) if the sale of the Firm Common Shares to the Underwriters is
not completed by October 31, 2000. Such termination shall not affect the
validity of any lawful action done or performed by the Attorney-in-Fact pursuant
hereto prior to such termination. Upon any such termination of this Power of
Attorney, the Attorney-in-Fact shall provide written instructions to the
Custodian to return the certificate(s) and other documents deposited under the
Custody Agreement to the Attorney-in-Fact. The Selling Shareholder directs the
Attorney-in-Fact, if this Power of Attorney is terminated as provided herein and
after the payment of any expense to be paid or borne by the Selling Shareholder,
to redeliver or cause to be redelivered to the Selling Shareholder the
certificate(s) and other documents deposited under the Custody Agreement.
D-6
Dated: ______________ __, 2000
Very truly yours,
[INSERT NAME OF SELLING
-----------------------
SHAREHOLDER]*
-------------
By:
------------------------------------
[Name:
Title:]
[By:
------------------------------------
Name:
Title:]
SHARES TO BE SOLD:
__________ shares of Common Stock
ACKNOWLEDGED AND ACCEPTED:
THE COMMITTEE:
By:
------------------------------------
[Name]
Attorney-in-Fact
By:
------------------------------------
[Name]
Attorney-in-Fact
------------------
* To be signed in exactly the same manner as the shares are registered. If
the Selling Shareholder is an individual, a spousal consent shall also be
provided.
▇-▇
▇▇▇▇▇▇▇ ▇ - ▇▇▇▇▇▇▇▇▇▇ A
CUSTODY AGREEMENT
This Custody Agreement, dated ________ __, 2000, is by and among
____________________, as custodian (the "Custodian") and the persons listed on
Annex 1 hereto (the "Selling Shareholders").
California Pizza Kitchen, Inc., a California corporation (the "Company"),
has filed a registration statement (the "Registration Statement") with the
Securities and Exchange Commission to register for sale to the public under the
Securities Act of 1933, as amended (the "Act"), __________ shares of the
Company's Common Stock (the "Stock").
The shares covered by the Registration Statement will consist of (a) up to
__________ shares of Stock to be sold by the Company and (b) up to __________
shares of Stock to be sold by the Selling Shareholders pursuant to an over-
allotment option granted to Banc of America Securities LLC, Deutsche Bank Alex.
▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as representatives (the "Representatives") of the
several Underwriters (the "Underwriters") named in the Underwriting Agreement
(as defined in the Power of Attorney described below). The shares of stock
described in clause (b) of the preceding sentence to be sold by the Selling
Shareholders are collectively referred to herein as the "Shares."
Each Selling Shareholder has executed and delivered a Power of Attorney
(the "Power of Attorney") naming ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (the
"Committee"), and each of them, collectively and individually, as [his/her/its]
attorneys-in-fact for certain purposes, including the execution, delivery and
performance of this Custody Agreement in [his/her/its] name, place and stead, in
connection with the proposed sale by each Selling Shareholder of the number of
Shares set forth opposite such Selling Shareholder's name in Annex I.
1. A custody arrangement is hereby established by the Selling Shareholders
with the Custodian with respect to the Shares, and the Custodian is hereby
instructed to act in accordance with this Custody Agreement.
2. Each Selling Shareholder has herewith delivered to the Custodian, and
the Custodian hereby acknowledges receipt of, certificates representing the
Shares, which certificates have been endorsed in blank or are accompanied by
duly executed stock powers. Such certificates are to be held by the Custodian
for the account of the Selling Shareholders and are to be disposed of by the
Custodian in accordance with this Custody Agreement.
3. The Custodian is authorized and directed by the Selling Shareholders:
(a) To hold the certificates representing the Shares delivered by the
Selling Shareholders in its custody; and
(b) On or immediately prior to any settlement date for any Shares sold
pursuant to the Underwriting Agreement contemplated by the Registration
Statement (the "Closing Date"), to cause such Shares being sold on such Closing
Date to be transferred on the books of the Company into such names as the
Custodian shall have been instructed in writing by the Representatives; to cause
to be issued, against surrender of the certificates for the Shares, a new
certificate or certificates for such Shares, free of any restrictive legend,
registered in such name or names; and to deliver such new
D-9
certificates representing such Shares to the Representatives, as instructed by
the Representatives on such Closing Date for the accounts designated by the
Representatives against full payment therefor in accordance with the terms of
the Underwriting Agreement.
4. If (a) the Committee notifies the Custodian that all or any part of the
Shares of any Selling Shareholder will not be sold, or (b) the transactions
contemplated by this Custody Agreement and the Underwriting Agreement have not
been completed on or prior to October 31, 2000 and thereafter each such Selling
Shareholder shall give the Custodian written demand for the return of the unsold
Shares of each such Selling Shareholder, the Custodian shall promptly deliver to
each such Selling Shareholder certificates representing such unsold Shares.
Certificates returned to the Selling Shareholders shall be returned with any
related stock powers, and any new certificates issued to the Selling
Shareholders with respect to such Shares shall bear the same legend reflecting
the unregistered status thereof under the Act appearing in the certificate(s)
delivered to the Custodian by or on behalf of the Selling Shareholders.
5. This Custody Agreement and all authority conferred hereby is granted
and conferred subject to and in consideration of the interests of the Company,
the Representatives, the Underwriters, and the Selling Shareholders, and, for
the purpose of completing the transactions contemplated by the Underwriting
Agreement, this Custody Agreement and all authority conferred hereby shall be
irrevocable and shall not be terminated by any act of any Selling Shareholder or
by operation of law, whether by death, disability, incapacity, revocation,
termination, liquidation, dissolution or bankruptcy with respect to any Selling
Shareholder or by the occurrence of any other similar event or events
(including, without limitation the termination of any trust for which any
Selling Shareholder is acting as a fiduciary), and if, after the execution
hereof, there shall occur death, disability, incapacity, revocation,
termination, liquidation, dissolution or bankruptcy with respect to any Selling
Shareholder or if any other similar event or events shall occur before the
delivery of any of the Shares hereunder to the Representatives, such Shares
shall be delivered to the Representatives in accordance with the terms and
conditions of this Custody Agreement, as if such event had not occurred,
regardless of whether or not the Custodian shall have received notice of such
event.
6. Until remittance to the Selling Shareholders of the proceeds (net of
the underwriting discount) from any sale of the Shares, the Selling Shareholders
shall remain the owner of (and shall retain the right to receive dividends and
distributions on, and to vote) such Shares. Until such payment in full has been
made or until the offering of the Shares contemplated by the Registration
Statement has been terminated, each Selling Shareholder agrees that it will not,
except as contemplated hereby, give, sell, pledge, hypothecate, grant any lien
on, transfer, deal with or contract with respect to the Shares or any interests
therein.
7. The Custodian shall assume no responsibility to any person other than
to deal with the certificates representing the Shares and the proceeds from the
sale of the Shares represented thereby in accordance with the provisions hereof,
and each Selling Shareholder, severally and not jointly, hereby agrees to
indemnify the Custodian for and to hold the Custodian harmless against any and
all losses, claims, damages or liabilities incurred on its part arising out of
or in connection with it acting as the Custodian pursuant hereto, as well as the
costs and expenses of investigating and defending any such losses, claims,
damages or liabilities, except to the extent such losses, claims, damages or
liabilities are due to the negligence, willful misconduct, or bad faith of the
Custodian. Each Selling Shareholder agrees that the Custodian may consult with
counsel of its choice and the Custodian shall have full and complete
authorization and protection for any action taken or suffered by the Custodian
hereunder in good faith and in accordance with the opinion of such counsel.
D-10
8. Each Selling Shareholder, severally and not jointly, hereby represents
and warrants that: (a) [he/she/it] has, and at the time of delivery of the
Shares to the Representatives [he/she/it] will have, full power and authority to
enter into this Custody Agreement and the Power of Attorney, to carry out the
terms and provisions hereof and thereof and to make all of the representations,
warranties, and agreements contained herein and therein; and (b) this Custody
Agreement and the Power of Attorney are the valid and binding agreements of such
Selling Shareholder and are enforceable against such Selling Shareholder in
accordance with their respective terms except (i) as rights to indemnification
thereunder may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles and (ii) that remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding may be brought.
9. The Custodian's acceptance of this Custody Agreement by the execution
hereof shall constitute an acknowledgment by the Custodian of the authorization
herein conferred and shall evidence the Custodian's agreement to carry out and
perform this Custody Agreement in accordance with its terms.
10. This Custody Agreement may be executed in two or more counterparts
with the same effect as if the signatures thereto and hereto were upon the same
instrument. Execution by the Custodian of one counterpart hereof and its
delivery thereof to the Committee shall constitute the valid execution of this
Custody Agreement by the Custodian. The Custodian shall deliver a fully executed
counterpart of the Custody Agreement to each Selling Shareholder promptly after
the execution thereof.
11. This Custody Agreement shall be binding upon the Custodian and the
Selling Shareholders and the legal representatives, distributees, beneficiaries,
successors, and assigns of the Selling Shareholders.
12. This Custody Agreement shall be governed by the laws of the State of
New York applicable to contracts made and to be performed entirely in such
State.
13. Any notice given pursuant to this Custody Agreement shall be deemed
given if in writing and delivered in person, or if given by telephone or
telegraph if subsequently confirmed by letter: (i) if to the Selling
Shareholders, to [his/her/its/their] address[es] set forth on Annex I hereto;
and (ii) if to the Custodian, to it at _____________________.
14. The Custodian shall be entitled to act and rely upon any statement,
request, notice or instruction with respect to this Custody Agreement given to
it on behalf of the Selling Shareholders if the same shall be made or given to
the Custodian by the Committee, not only as to the authorization, validity and
effectiveness thereof, but also as to the truth and acceptability of any
information therein contained.
D-11
In witness whereof, the parties hereto have executed this Custody Agreement
as of the date first above written.
[INSERT NAME OF CUSTODIAN],
as Custodian
By:
------------------------------------
Name:
Title:
THE SELLING SHAREHOLDERS LISTED IN ANNEX 1
HERETO;
By: The Committee
By:
------------------------------------
[Name]
Attorney-in-Fact
By:
------------------------------------
[Name]
Attorney-in-Fact
D-12
Annex I
Names and Addresses
of Selling Shareholders Shares to be Sold
----------------------- -----------------
I-1
State of __________ )
) ss.
County of __________ )
On __________, 2000, before me, ____________________, a Notary Public in
and for said State, personally appeared ____________________, personally known
to me (or proved to me on the basis of satisfactory evidence) to be the
[person/[partner/officer of the partnership/corporation]] whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument the person [, or the entity upon behalf of which the person acted,]
executed the instrument.
Witness my hand and official seal.
Signature
-------------------------------------
(Seal)
I-2