Exhibit 1.1
TEXAS ROADHOUSE, INC.
[___] Shares
Class A Common Stock
UNDERWRITING AGREEMENT
dated [___], ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC
WACHOVIA CAPITAL MARKETS, LLC
RBC CAPITAL MARKETS CORPORATION
▇▇ ▇▇▇▇▇ & CO., LLC
UNDERWRITING AGREEMENT
[Date]
Banc of America Securities LLC
As Lead Representative of the several Underwriters
Wachovia Capital Markets, LLC
RBC Capital Markets Corporation
▇▇ ▇▇▇▇▇ & Co., LLC
As Representatives of the several Underwriters
c/o BANC OF AMERICA SECURITIES LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
INTRODUCTORY. Texas Roadhouse, Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell to the several underwriters named in
Schedule A hereto (the "UNDERWRITERS") an aggregate of [___] shares of its Class
A Common Stock, par value $0.001 per share (the "CLASS A COMMON STOCK"); and W.
▇▇▇▇ ▇▇▇▇▇▇, the founder of the Company (the "PRIMARY SELLING STOCKHOLDER"),
proposes to sell to the Underwriters an aggregate of [___] shares of Class A
Common Stock. The [___] shares of Class A Common Stock to be sold by the Company
and the [___] shares of Class A Common Stock to be sold by the Primary Selling
Stockholder are collectively called the "FIRM COMMON SHARES". In addition,
certain other selling stockholders set forth in Schedule B hereto (the
"SECONDARY SELLING SHAREHOLDERS" and together with the Primary Selling
Stockholder, the "SELLING STOCKHOLDERS") have granted to the Underwriters an
option to purchase up to an additional [___] shares of Class A Common Stock up
to the amount set forth opposite the Selling Stockholder's name in Schedule B,
all as provided in Section 2. The additional [___] shares of Class A Common
Stock to be sold by the Selling Stockholders pursuant to such option are
collectively called the "OPTIONAL COMMON SHARES". 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 LLC ("BAS"),
Wachovia Capital Markets, LLC, RBC Capital Markets Corporation, and ▇▇ ▇▇▇▇▇ &
Co., LLC have agreed to act as representatives of the several Underwriters (in
such capacity, the "REPRESENTATIVES" and BAS in such capacity, the "LEAD
REPRESENTATIVE") in connection with the offering and sale of the Common Shares.
The Class A Common Stock and the Company's Class B Common Stock, par value
$0.001 per share (the "CLASS B COMMON STOCK") are referred to herein as the
"COMMON STOCK".
The Company and the Underwriters agree that up to [___] of the Firm Common
Shares to be purchased by the Underwriters (the "DIRECTED SHARES") shall be
reserved for sale by the Underwriters to certain eligible directors, officers
and employees of the Company and the TR Entities (as defined below) and persons
having business relationships with the Company and the TR Entities
(collectively, the "PARTICIPANTS"), as part of the distribution of the Common
Shares by the Underwriters (the "DIRECTED SHARE PROGRAM") subject to the terms
of this Agreement, the applicable rules, regulations and interpretations of the
National Association of Securities Dealers, Inc. (the "NASD") and all other
applicable laws, rules and regulations. BAS (in such capacity, the "DESIGNATED
UNDERWRITER") has been selected by the Company to process the sales to the
Participants under the Directed Share Program. To the extent that such Directed
Shares are not orally confirmed for purchase by the Participants by the end of
the first business day after the date of this Agreement, such Directed Shares
may be offered to the public as part of the public offering contemplated hereby.
The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-1 (File No.
333-115259), 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 BAS, elected to rely upon Rule
434 under the Securities Act, the term "Prospectus" shall mean the Company's
prospectus subject to completion (each, a "PRELIMINARY PROSPECTUS") dated [___]
(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 the Selling Stockholders hereby confirm their engagement of
▇▇ ▇▇▇▇▇ & Co., LLC as, and ▇▇ ▇▇▇▇▇ & Co., LLC hereby confirms its agreement
with the Company and the Selling Stockholders to render services as, a
"qualified independent underwriter", within the meaning of Section (b)(15) of
Rule 2720 of the NASD with respect to the offering and sale of the Shares. ▇▇
▇▇▇▇▇ & Co., LLC, solely in its capacity as the qualified independent
underwriter and not otherwise, is referred to herein as the "QIU". The price at
which the Shares will be sold to the public shall not be higher than the maximum
price recommended by the QIU.
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As described in more detail in the Prospectus, immediately prior to the
sale of the Common Shares to the Underwriters as contemplated by this Agreement,
the Company and the TR Entities will undertake a corporate reorganization
whereby:
(i) pursuant to the Master Transaction Agreement dated as of May 7,
2004 (the "MASTER TRANSACTION AGREEMENT") among the Company Texas
Roadhouse Management Corp. ("TR MANAGEMENT"), Texas Roadhouse
Holdings LLC ("TR HOLDINGS"), Texas Roadhouse Development
Corporation ("TR DEVELOPMENT"), each of the other entities
identified in the Master Transaction Agreement that own a direct
interest in TR Holdings (the "TR HOLDING COMPANIES") or a direct
interest in an entity that owns and operate a Texas Roadhouse
restaurant (the "TR RESTAURANT ENTITIES"), and the other persons
identified in the Master Transaction Agreement, TR Management will
merge with Texas Roadhouse Management Interim LLC with TR
Management being the surviving entity and thereby becoming a
wholly-owned subsidiary of the Company and, in consideration
therefore, the holders of non-voting common shares of TR Management
will receive shares of Class A Common Stock;
(ii) pursuant to the Master Transaction Agreement, TR Development will
be merged with Texas Roadhouse Development Interim LLC with TR
Development being the surviving entity and thereby becoming a
wholly-owned subsidiary of the Company and, in consideration
therefore, the shareholders of TR Development will receive shares
of Class A Common Stock;
(iii) pursuant to the Master Transaction Agreement, TR Holdings will be
merged with Texas Roadhouse Holdings Interim LLC with TR Holdings
being the surviving entity and thereby becoming a subsidiary of the
Company and, in consideration therefore, the equity holders of TR
Holdings will receive shares of Class A Common Stock; and
(iv) pursuant to the Master Transaction Agreement, direct or indirect
subsidiaries of the Company will merge with each of the TR Holding
Companies and the TR Restaurant Entities as described in the Master
Transaction Agreement thereby resulting in each TR Holding Company
and TR Restaurant Entity becoming a direct or indirect wholly-owned
subsidiary of the Company, and, in consideration therefore, the
shareholders of the TR Holding Companies, and the minority equity
holders in the TR Restaurant Entities, will receive shares of Class
A Common Stock.
Each of the agreements referred to in the preceding clauses (i) through (iv),
and any agreements entered into in connection therewith, are collectively
referred to herein as the "REORGANIZATION AGREEMENTS"). The foregoing
transactions described in clauses (i) through (iv) and as contemplated by the
Reorganization Agreements are collectively referred to herein as the
"REORGANIZATION." TR Management, TR Development, TR Holdings, the TR Holding
Companies and the TR Restaurant Entities and the other entities listed on
Exhibit 21 to the Registration Statement are referred to herein collectively as
the "TR ENTITIES".
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References in this Agreement to "the Company's knowledge" means to the
knowledge of each "named executive officer" of the Company in the Prospectus.
The Company and the Selling Stockholders hereby confirm their respective
agreements with the Underwriters and the QIU as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES.
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents,
warrants and covenants to each Underwriter and the QIU 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
(including any Prospectus wrapper), 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 each Representative 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.
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(c) DISTRIBUTION OF OFFERING MATERIAL. None of the Company or any TR
Entity has distributed or will 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 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
and paid for by the Underwriters pursuant to this Agreement, will be validly
issued, fully paid and nonassessable. The Common Shares to be purchased by the
Underwriters from the Selling Stockholders were validly issued and fully paid
and are nonassessable.
(f) AUTHORIZATION OF THE REORGANIZATION. The Company and each of the TR
Entities that is a party to any of the Reorganization Agreements (collectively,
the "TR REORGANIZATION PARTIES") and, to the Company's knowledge, the other
parties to the Reorganization Agreements, have all requisite power and authority
to enter into, perform their obligations under and to consummate the
transactions contemplated by each of the Reorganization Agreements to which they
are a party. Each of the Reorganization Agreements (i) has been duly authorized,
executed and delivered by each TR Reorganization Party to which it is a party
and, to the Company's knowledge, by each other party thereto and (ii)
constitutes a legal, valid and binding agreement enforceable in accordance with
its terms, except as such enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors generally or by general equitable
principles (regardless of whether enforceability is considered in a proceeding
at law or in equity).
(g) NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS. Other than the
Selling Stockholders, 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 that have not been waived.
(h) 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 the TR Entities, considered as
one entity (any such change is called a "MATERIAL ADVERSE CHANGE"); (ii) the
Company and the TR Entities, 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
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ordinary course of business; and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company or any TR Entity,
or repurchase or redemption by the Company or any TR Entity of any class of
capital stock, except for (a) dividends paid to the Company or any TR Entity and
(b) distributions or dividends made or paid to the equity owners of the TR
Entities related to the undistributed net income of such entities for periods
prior to the consummation of the Reorganization and, in each case, as described
in or otherwise contemplated by the Prospectus.
(i) INDEPENDENT ACCOUNTANTS. KPMG LLP, who have expressed their opinion
with respect to the financial statements (which term as used in this Agreement
includes the related notes thereto) and supporting schedules filed with the
Commission as a part of the Registration Statement and included in the
Prospectus, are independent certified public accountants as required by the
Securities Act.
(j) 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 combined financial position of TR Holdings
and the entities under common control therewith as described in such financial
statements (the "COMBINED ENTITIES") 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 supporting schedules are required to be included
in the Registration Statement. The historical financial data set forth in the
Prospectus under the captions "Summary Historical and Pro Forma Combined
Financial and Operating Data", "Capitalization" and "Selected Historical and Pro
Forma Combined Financial and Operating Data" fairly present the information set
forth therein on a basis consistent with that of the audited financial
statements contained in the Registration Statement. The condensed pro forma
combined financial statements of the Combined Entities and the related notes
thereto included in the prospectus under the caption "Unaudited Condensed Pro
Forma Combined Financial Statements" present fairly the information contained
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have 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 referred to
therein. The pro forma financial data set forth in the Prospectus under the
captions "Summary Historical Pro Forma Combined Financial Statements",
"Capitalization" and "Selected Historical and Pro Forma Combined Financial and
Operating Data" fairly present the information set forth therein on a basis
consistent with that of the condensed audited combined financial statements
contained in the Registration Statement.
(k) INCORPORATION AND GOOD STANDING. Each of the Company and the TR
Entities has been duly incorporated or validly formed and is validly existing as
a corporation, limited liability company or limited partnership under the laws
of the jurisdiction of its incorporation or formation and has the 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 the TR
Entities is duly qualified as a foreign corporation, limited liability company
or limited partnership to transact
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business and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions 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. Upon consummation of the
Reorganization prior to sale of the shares of Common Stock to the Underwriters
pursuant to this Agreement, all of the issued and outstanding capital stock or
equity interests of each subsidiary of the Company will have been duly
authorized, validly issued, fully paid and nonassessable and will be owned by
the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim (except for any security
interest, mortgage, pledge, lien, encumbrance or claim securing the Company's
obligations under the New Credit Agreement). Upon consummation of the
Reorganization prior to sale of the shares of Common Stock to the Underwriters
pursuant to this Agreement, the Company will not own or control, directly or
indirectly, any corporation, association or other entity other than the TR
Entities.
(l) 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,
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. Upon consummation of the
Reorganization prior to sale of the shares of Class A Common Stock to the
Underwriters pursuant to this Agreement, all of the issued and outstanding
shares of Common Stock (including the shares of Class A Common Stock owned by
the Selling Stockholders and the shares of Common Stock to be issued in
connection with the Reorganization) will have been duly authorized and validly
issued, fully paid and nonassessable and will have been issued in compliance
with federal and state securities laws. None of the outstanding shares of Class
A Common Stock were or will be 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 and, upon consummation of the
Reorganization prior to sale of the shares of Class A Common Stock to the
Underwriters pursuant to this Agreement, there will be 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 equity plan, and the options granted
thereunder, set forth in the Prospectus accurately and fairly presents the
information required to be shown with respect to such plan.
(m) QUOTATION. The Common Shares have been approved for inclusion on the
Nasdaq National Market, subject only to official notice of issuance.
(n) NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO FURTHER AUTHORIZATIONS
OR APPROVALS REQUIRED. None of the Company or the TR Entities is in violation of
its charter, by-laws or other organizational documents 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 it or any of them is a party or by
which it or any of them may be bound, or to which any of the property or assets
of it or any of them is subject (each, an "EXISTING INSTRUMENT"), except for
such Defaults as would not, individually or in the
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aggregate, result in a Material Adverse Change. (1) The execution, delivery and
performance of this Agreement by the Company and consummation of the
transactions contemplated hereby and by the Prospectus, (2) the execution,
delivery and performance of the Reorganization Agreements by the TR
Reorganization Parties and the consummation of the Reorganization, and (3) the
execution, delivery and performance of the New Credit Agreement by the TR Credit
Agreement Parties and incurrence of indebtedness under the New Credit Agreement
as of the Closing Date as described in 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, by-laws or organizational documents
of the Company or any TR Entity, (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 TR
Entity 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 TR Entity. 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 (w) the execution, delivery and performance
of this Agreement by the Company and consummation of the transactions
contemplated hereby and by the Prospectus, (x) the execution, delivery and
performance of the Reorganization Agreements by the TR Reorganization Parties
and the consummation of the Reorganization, and (y) the execution, delivery and
performance of the New Credit Agreement by the TR Credit Agreement Parties and
incurrence of indebtedness under the New Credit Agreement as of the Closing Date
as described in the Prospectus, except (A) with respect to clauses (w) and (x)
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 NASD and (B) with respect to clause (x), filings of articles of
merger with the Secretaries of State of the Commonwealth of Kentucky.
(o) NO MATERIAL ACTIONS OR PROCEEDINGS. There are no legal or governmental
actions, suits or proceedings pending or, to the Company's knowledge, threatened
(i) against or affecting the Company or any TR Entity, (ii) which has as the
subject thereof any officer or director of, or property owned or leased by, the
Company or any TR Entity 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 any
TR Entity 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 TR
Entity, or with the employees of any principal supplier of the Company or any TR
Entity, exists or, to the Company's knowledge, is threatened or imminent.
(p) INTELLECTUAL PROPERTY RIGHTS. The Company and the TR Entities own or
possess sufficient trademarks, trade names, patent rights, copyrights, domain
names, licenses, approvals, trade secrets and other similar rights
(collectively, "INTELLECTUAL PROPERTY RIGHTS") reasonably 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. None
of the Company or any TR Entity has received any notice of infringement or
conflict with asserted Intellectual Property Rights of others, which
infringement or conflict, if the subject of an
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unfavorable decision, would result in a Material Adverse Change. None of the
Company or any TR Entity is a party to or bound by any options, licenses or
agreements with respect to the Intellectual Property Rights of any other person
or entity that are required to be set forth in the Prospectus and are not
described in all material respects. None of the technology employed by the
Company or any TR Entity has been obtained or is being used by the Company or
any TR Entity in violation of any contractual obligation binding on any of them
or, to the Company's knowledge, any of their officers, directors or employees or
otherwise in violation of the rights of any persons.
(q) ALL NECESSARY PERMITS, ETC. The Company and the TR Entities 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 none of the Company or any TR Entity
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, could result in a Material Adverse Change.
(r) TITLE TO PROPERTIES. Each TR Entity has good and marketable title to
all the properties and assets reflected as owned in the financial statements
referred to in Section 1(A) (k) 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 (except as such value may be impacted by the amount
of the indebtedness relating to liens that secure the Company's existing credit
agreement and other loans and mortgages at various restaurant sites) of such
property and do not materially interfere with the use currently made or proposed
to be made of such property by such TR Entity. The real property, improvements,
equipment and personal property held under lease by each TR Entity 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 each TR Entity.
(s) TAX LAW COMPLIANCE. The Company and the TR Entities have filed all
necessary federal, state and foreign income and franchise tax returns or have
properly requested extensions thereof 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 except as may be being contested in
good faith and by appropriate proceedings. Except as disclosed in the Prospectus
with respect to the Company's recording of a cumulative net deferred tax
liability upon becoming a "C" corporation, adequate charges, accruals and
reserves have been made in the applicable financial statements referred to in
Section 1(A)(k) above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the Combined
Entities has not been finally determined.
(t) 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 and the consummation of the Reorganization will not be, an
"investment company" within the meaning of Investment Company Act and will
conduct its business in a manner so that it will not become subject to the
Investment Company Act.
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(u) INSURANCE. The Company and the TR Entities 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 the TR
Entities against theft, damage, destruction, acts of vandalism and, if located
in an earthquake zone, earthquakes. The Company has no reason to believe that
the Company or any TR Entity will not be able (i) to renew its existing
insurance coverage as and when such 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. None of the Company or any TR Entity has been denied any
insurance coverage which it has sought or for which it has applied.
(v) NO PRICE STABILIZATION OR MANIPULATION. None of the Company or the TR
Entities has taken and will 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. The Company acknowledges that the Underwriters
may engage in passive market making transactions in the Common Shares on the
Nasdaq National Market in accordance with Regulation M under the Exchange Act.
(w) RELATED PARTY TRANSACTIONS. There are no business relationships or
related-party transactions involving the Company, any TR Entity, any Selling
Stockholder or any other person required to be described in the Prospectus which
have not been described as required.
(x) DISCLOSURE CONTROLS AND PROCEDURES. TR Holdings has established and
maintains and the Company will continue to establish and maintain disclosure
controls and procedures (as such term is defined in Rule 13a-14 under the
Exchange Act), which (i) are designed to ensure that material information
relating to it, including its consolidated subsidiaries, is made known to its
principal executive officer and its principal financial officer by others within
those entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared, (ii) have been evaluated for
effectiveness as of a date within 90 days prior to the date hereof and (iii) are
effective in all material respects to perform the functions for which they were
established. Based on the evaluation of the disclosure controls and procedures
described above, the Company is not aware of (a) any significant deficiency or
material weakness in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the ability to record,
process, summarize and report financial data or (b) any fraud, whether or not
material, that involves management or other employees who have a significant
role in TR Holdings and the Company's internal controls over financial
reporting. Since the most recent evaluation of TR Holdings' disclosure controls
and procedures described above, there have been no significant changes in
internal control over financial reporting or in other factors that are
reasonably likely to significantly affect internal control over financial
reporting.
(y) COMPANY'S ACCOUNTING SYSTEM. TR Holdings maintains and the Company
will continue to maintain 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
10
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.
(z) ERISA COMPLIANCE. The Company, the TR Entities 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, any TR Entity
or their "ERISA Affiliates" (as defined below) are in compliance in all material
respects with ERISA. "ERISA AFFILIATE" means, with respect to the Company, any
TR Entity, 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 any TR Entity 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, any TR Entity
or any of their ERISA Affiliates. No "employee benefit plan" established or
maintained by the Company, any TR Entity 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). None of the Company, any TR
Entity or 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, any TR Entity 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.
(aa) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as otherwise disclosed in
the Prospectus or as would not, individually or in the aggregate, result in a
Material Adverse Change (i) none of the Company or any TR Entity 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 their respective businesses under applicable
Environmental Laws, or noncompliance with the terms and conditions thereof, nor
has the Company or any TR Entity received any written communication, whether
from a governmental authority, citizens group, employee or otherwise, that
alleges that any of them 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 or any TR Entity
has received written notice, and no written notice by any person or entity,
alleging potential liability for investigatory costs, cleanup costs,
governmental responses 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
11
the environment, of any Material of Environmental Concern at any location owned,
leased or operated by the Company or any TR Entity, now or in the past
(collectively, "ENVIRONMENTAL CLAIMS"), pending or, to the best of the Company's
knowledge, threatened against the Company or any TR Entity or any person or
entity whose liability for any Environmental Claim the Company or any TR Entity
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 TR Entity or, to the Company's knowledge, against any
person or entity whose liability for any Environmental Claim the Company or any
TR Entity has retained or assumed either contractually or by operation of law.
(bb) BROKERS. There is no broker, finder or other party that is entitled to
receive from the Company any brokerage or finder's fee or other fee or
commission as a result of any transactions contemplated by this Agreement.
(cc) NO OUTSTANDING LOANS OR OTHER INDEBTEDNESS. There are no outstanding
loans, advances (except normal advances for business expenses in the ordinary
course of business) or guarantees or indebtedness by the Company or any TR
Entity to or for the benefit of any of the officers or directors of the Company
or any TR Entity or any of the members of any of them, except as disclosed in
the Prospectus.
(dd) COMPLIANCE WITH LAWS. None of the Company or any TR Entity has been
advised, and has no reason to believe, that it and each of its subsidiaries are
not conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business, except
where failure to be so in compliance would not result in a Material Adverse
Change.
(ee) DIRECTED SHARE PROGRAM. (i) The Company has not offered, or caused the
Underwriters to offer, any Common Shares to any person pursuant to the Directed
Share Program with the intent to unlawfully influence (i) a customer or supplier
of the Company or any TR Entity to alter the customer's or supplier's level or
type of business with the Company or any TR Entity or (ii) a trade journalist or
publication to write or publish favorable information about the Company or any
TR Entity or their products and services. The Company acknowledges that the
Directed Share Program shall not be offered to persons resident outside of the
United States.
Any certificate signed by an officer of the Company or any TR Entity and
delivered to the Representatives or to counsel for the Underwriters pursuant to
this Agreement shall be deemed to be a representation and warranty by the
Company or such TR Entity, as the case may be, to each Underwriter as to the
matters set forth therein.
The Company acknowledges that the Underwriters and, for purposes of the
opinions to be delivered pursuant to Section 5 hereof, counsel to the Company
and the Selling Stockholders and counsel to the Underwriters, will rely upon the
accuracy and truthfulness of the foregoing representations and hereby consents
to such reliance.
12
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder severally, and not jointly, represents, warrants and
covenants to each Underwriter and the QIU as follows:
(a) THE UNDERWRITING AGREEMENT. This Agreement has been duly authorized,
executed and delivered by or on behalf of such Selling Stockholder and is a
valid and binding agreement of such Selling Stockholder, 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.
(b) THE CUSTODY AGREEMENTS AND THE POWERS OF ATTORNEY. Each of the (i)
Custody Agreement signed by the Committee (as defined therein) or each of them
on behalf of such Selling Stockholder and [___], as custodian (the "CUSTODIAN"),
relating to the deposit of the Common Shares to be sold by such Selling
Stockholder (a "CUSTODY AGREEMENT") and (ii) Power of Attorney appointing
certain individuals named therein as such Selling Stockholder'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 (a "POWER
OF ATTORNEY"), of such Selling Stockholder has been duly authorized, executed
and delivered by such Selling Stockholder and is a valid and binding agreement
of the Selling Stockholder, 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. The
Common Shares to be sold by such Selling Stockholder pursuant to this Agreement
are certificated securities in registered form and are not held in any
securities account or by or through any securities intermediary within the
meaning of the Uniform Commercial Code as in effect in the State of
[__________](1). Upon the consummation of the Reorganization and on the
applicable Closing Date, such Selling Stockholder will have, good and valid
title to all of the Common Shares which may be sold by such Selling Stockholder
pursuant to this Agreement on such date such Selling Stockholder has the legal
right and power, and all authorizations and approvals required by law to enter
into this Agreement and its Custody Agreement (through one or more
Attorneys-in-Fact) and its Power of Attorney, to sell, transfer and deliver all
of the Common Shares which may be sold by such Selling Stockholder pursuant to
this Agreement and to comply with its other obligations hereunder and
thereunder. Upon the Underwriters' acquiring possession of such Common Shares
(or an agent's acquiring possession of such Common Shares on the Underwriters'
behalf) and paying the purchase price therefor as herein contemplated, the
Underwriters will acquire their respective interests in such Common Shares
(including, without limitation, all rights that such Selling Shareholder had or
has the power to transfer in such Securities) free of any adverse claim.
----------
(1) Jurisdiction of location of Custodian.
13
(d) CERTIFICATES SUITABLE FOR TRANSFER. Certificates for all of the Common
Shares to be sold by such Selling Shareholder pursuant to this Agreement, in
suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank, with signatures guaranteed, will
be placed in custody with the custodian under its Power of Attorney and its
Custody Agreement with irrevocable conditional instructions to deliver such
Common Shares to the Underwriters pursuant to this Agreement upon consummation
of the Reorganization.
(e) DELIVERY OF THE COMMON SHARES TO BE SOLD. Delivery of the Common
Shares which are sold by such Selling Stockholder 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.
(f) NON-CONTRAVENTION; NO FURTHER AUTHORIZATIONS OR APPROVALS REQUIRED.
The execution and delivery by such Selling Stockholder of, and the performance
by such Selling Stockholder of its obligations under, this Agreement, its
Custody Agreement (through one or more Attorneys-in-Fact) and its 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 any
agreement or instrument to which such Selling Stockholder 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 Stockholder of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Stockholder. 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 Stockholder of the
transactions contemplated in this Agreement, except such as have been obtained
or made and are in full force and effect under the Securities Act, applicable
state securities or blue sky laws and from the NASD.
(g) NO REGISTRATION OR OTHER SIMILAR RIGHTS. Such Selling Stockholder does
not have any registration or other similar rights to have any other equity or
debt securities registered for sale by the Company under the Registration
Statement or included in the offering contemplated by this Agreement.
(h) NO FURTHER CONSENTS. No consent, approval or waiver is required under
any instrument or agreement to which such Selling Stockholder 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 Stockholder under this Agreement
or the consummation by such Selling Stockholder of any of the other transactions
contemplated hereby.
(i) DISCLOSURE MADE BY THE SELLING STOCKHOLDER IN THE PROSPECTUS. All
information furnished by or on behalf of such Selling Stockholder expressly for
use in the Registration Statement and Prospectus is, and on the applicable
Closing Date on which the Common Shares of such Selling Stockholder are sold
pursuant to this Agreement will be, true, correct, and complete in all material
respects, and does not, and such 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 Stockholder confirms as
accurate the number of shares
14
of Common Stock set forth opposite such Selling Stockholder's name in the
Prospectus under the caption "Principal and Selling Stockholders" (both prior to
and after giving effect to the sale of the Common Shares).
(j) NO PRICE STABILIZATION OR MANIPULATION. Such Selling Stockholder 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 or any other security of the
Company to facilitate the sale or resale of the Common Shares.
(k) CONFIRMATION OF COMPANY REPRESENTATIONS AND WARRANTIES BY CERTAIN
SELLING STOCKHOLDERS. Each Selling Stockholder (i) has no reason to believe that
the representations and warranties of the Company contained in Section 1(A)
hereof are not true and correct, (ii) 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 (iii) 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;
provided however that, clauses (i) and (ii) of this paragraph (k) shall not
apply to any Selling Stockholder who is not a "named executive officer" of the
Company in the Prospectus (each, an "OTHER SELLING STOCKHOLDER" and together,
the "OTHER SELLING STOCKHOLDERS").
(l) DISTRIBUTION OF OFFERING MATERIAL. Such Selling Stockholder and its
affiliates have 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 offering material in
connection with the offering and sale of the Common Shares other than a
preliminary prospectus, the Prospectus or the Registration Statement.
Any certificate signed by or on behalf of any Selling Stockholder and
delivered to the Representatives or to counsel for the Underwriters pursuant to
this Agreement shall be deemed to be a representation and warranty by such
Selling Stockholder to each Underwriter as to the matters covered thereby.
Such Selling Stockholder acknowledges that the Underwriters and, for
purposes of the opinion to be delivered pursuant to Section 5 hereof, counsel to
the Company and counsel to such Selling Stockholder, and counsel to the
Underwriters, will rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
(a) THE FIRM COMMON SHARES. Upon the terms herein set forth, (i) the
Company agrees to issue and sell to the several Underwriters an aggregate of
[___] Firm Common Shares and (ii) the Primary Selling Stockholder agrees to sell
to the several Underwriters an aggregate of [___] Firm Common Shares. 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 and the Primary
Selling Stockholder the respective number of Firm Common Shares set forth
opposite their names on
15
Schedule A. The purchase price per Firm Common Share to be paid by the several
Underwriters to the Company and the Primary Selling Stockholder shall be $[___]
per share.
(b) 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 ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ (or such other place as may be agreed to by the Company and the Lead
Representative) at 9:00 a.m., Louisville time, on [___], 2004, or such other
time and date not later than 1:30 p.m., Louisville time, on [___], 2004(2) as
the Lead Representative shall designate by notice to the Company (the time and
date of such closing are called the "FIRST CLOSING DATE"). The Company and the
Primary Selling Stockholder 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, the Primary Selling Stockholder 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.
(c) 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
Stockholders hereby grant, severally and not jointly, an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of [___]
Optional Common Shares from the Selling Stockholders 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 Lead Representative to the Selling Stockholders or
the Custodian of any Selling Stockholder designated in its Custody Agreement and
its Power of Attorney (with a copy to the Company), 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
(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 each of the First
Closing Date and the Second Closing Date is referred to herein generically as a
"CLOSING DATE") and shall be determined by the Lead Representative and shall not
be earlier than three nor later than five full business days after delivery of
such notice of 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 Lead Representative 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
----------
(2) Ten business days following the original contemplated First Closing Date.
16
Common Shares and (b) each Selling Stockholder agrees, severally and not
jointly, to sell the number of Optional Common Shares (subject to such
adjustments to eliminate fractional shares as the Lead Representative 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 Stockholder bears to the total number of
Optional Common Shares. The Lead Representative may cancel the option at any
time prior to its expiration by giving written notice of such cancellation to
such Selling Stockholders (with a copy to the Company).
(d) PUBLIC OFFERING OF THE COMMON SHARES. The Representatives hereby
advise the Company and the Selling Stockholders 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.
(e) PAYMENT FOR THE COMMON SHARES. Payment for the Common Shares to be
sold by the Company shall be made at the First Closing Date by wire transfer of
immediately available funds to the order of the Company. Payment for the Common
Shares to be sold by the Selling Stockholders 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 Lead Representative has been authorized, for its
own account 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.
BAS, individually and not as the Lead Representative or Representative 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 Lead Representative 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 Stockholder 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 Common Shares to be sold by such Selling Stockholder to
the several Underwriters, or otherwise in connection with the performance of
such Selling Stockholder's obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to such
Selling Stockholder hereunder and to hold such amounts for the account of such
Selling Stockholder with the Custodian under its Custody Agreement.
(f) DELIVERY OF THE COMMON SHARES. The Company and the Primary Selling
Stockholder shall deliver, or cause to be delivered, to the Lead Representative
for the accounts of the several Underwriters certificates for the Firm Common
Shares to be sold by them at the First Closing Date, against the irrevocable
release of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The Selling Stockholders shall also deliver, or cause
to be delivered, to the Lead Representative for the accounts of the several
Underwriters, certificates for the Optional Common Shares the Underwriters have
agreed to purchase from them at the
17
Second Closing Date 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 Lead Representative 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 Lead Representative
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.
(g) 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 and the QIU as follows:
(a) REPRESENTATIVES' 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, during the Prospectus Delivery Period, 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 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.
18
(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 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 not be audited) covering the twelve-month period
ending [___](3) that satisfies the provisions of Section 11(a) of the
Securities Act.
----------
(3) Insert the date of the end of the Company's first quarter ending after one
year following the "effective date of the Registration Statement" (as defined in
Rule 158(c) under the Securities Act).
19
(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
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.
(j) COMPANY TO PROVIDE INTERIM FINANCIAL STATEMENTS. Prior to any Closing
Date, the Company will furnish the Underwriters, as soon as they have been
prepared by or are available to the Company, a copy of any unaudited interim
financial statements of the Company or any TR Entity for any period subsequent
to the period covered by the most recent financial statements appearing in the
Registration Statement and the Prospectus.
(k) QUOTATION. The Company will use its best efforts to include, subject
to notice of issuance, the Common Shares on the Nasdaq National Market.
(l) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES. During the
period commencing on the date hereof and ending on the 180th day following the
date of the Prospectus, the Company will not, without the prior written consent
of BAS and Wachovia Capital Markets, LLC (which consent may be withheld at their
sole discretion), 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 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 or with respect
to shares of Common Stock issued pursuant to the Reorganization); 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. Notwithstanding the foregoing, if (x) during the last 17 days of
the 180-day restricted period the Company issues an earnings release or material
news or a material event relating to the Company occurs, or (y) prior to the
expiration of the 180-day restricted period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the 180-day period, the restrictions imposed in this clause shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.
(m) FUTURE REPORTS TO THE REPRESENTATIVES. During the period of five years
hereafter the Company will furnish to BAS at ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇ Attention:[___] (i) as soon as practicable after the end of each fiscal
year and public disclosure thereof, copies of the Annual Report of the Company
containing the consolidated balance sheet of the Company as of the close of such
fiscal year and consolidated statements of income, stockholders' 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, to the extent not available on ▇▇▇▇▇, 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.
20
(n) INVESTMENT LIMITATION. The Company shall not invest, or otherwise use
the proceeds received by the Company from its sale of the Common Shares in such
a manner as would require the Company or any of its subsidiaries to register as
an investment company under the Investment Company Act.
(o) NO MANIPULATION OF PRICE. The Company will not take, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization or manipulation
of the price of any securities of the Company.
(p) EXISTING LOCK-UP AGREEMENT. The Company will enforce all existing
agreements between the Company and any of its security holders that prohibit the
sale, transfer, assignment, pledge or hypothecation of any of the Company's
securities in connection with the Company's initial public offering. In
addition, the Company will direct the transfer agent to place stop transfer
restrictions upon any such securities of the Company that are bound by such
existing "lock-up" agreements for the duration of the periods contemplated in
such agreements.
B. COVENANTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder
further covenants and agrees with each Underwriter and the QIU:
(a) LOCK-UP AGREEMENT. On or prior to the date hereof, such Selling
Stockholder shall have furnished to the Representatives an agreement in the form
of Exhibit C hereto.
(b) DELIVERY OF FORM W-9. To deliver to the Representatives prior to the
applicable Closing Date on which the Common Shares of such Selling Stockholder
will be sold to the Underwriters pursuant to this Agreement, a properly
completed and executed United States Treasury Department Form W-9.
The Lead Representative, on behalf of the several Underwriters, may, in its
sole discretion, waive in writing the performance by the Company or any Selling
Stockholder of any one or more of the foregoing covenants or extend the time for
their performance. Notwithstanding the foregoing, the Lead Representative, for
the benefit of the other Representatives, agrees not to consent to any action
proposed to be taken by the Company, any Selling Stockholder or any other holder
of the Company's securities that would otherwise be prohibited by, or to waive
compliance by the Company, any Selling Stockholder or any such other security
holder with the provisions of, Section 3A(l) or 3B(a) above or any lock-up
agreement delivered pursuant to Section 6(k) below without giving the other
Representatives at least 17 days prior notice (or such shorter notice as the
other Representative may deem acceptable to permit compliance with applicable
provisions of NASD Conduct Rule 2711(f) restricting publication and distribution
of research and public appearances by research analysts before and after the
expiration, waiver or termination of a lock-up agreement).
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all costs, fees
and expenses incurred in connection with the performance of its and the Selling
Stockholder's 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
21
connection with the issuance and sale of the Common Shares to the Underwriters,
(iv) all fees and expenses of the Company's counsel, independent certified
public accountants and other advisors and the counsel for all of the Selling
Stockholders, (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, 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, (ix)
fees and expenses of the Custodian, (x) all other fees, costs and expenses
referred to in Item 13 of Part II of the Registration Statement, (xi) all costs
and expenses of the QIU in connection with its performance of the role of
qualified independent underwriter and (xii) all costs and expenses of the
Underwriters, including the fees and disbursements of counsel for the
Underwriters, in connection with matters related to the Directed Shares which
are designated by the Company for sale to Participants. 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.
Each Selling Stockholder further agrees with each Underwriter to pay
(directly or by reimbursement) all fees and expenses incident to the performance
of its 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 the Selling Stockholder and (ii) expenses and
taxes incident to the sale and delivery of the Common Shares to be sold by the
Selling Stockholder to the Underwriters hereunder (which taxes, if any, may be
deducted by the Custodian under the provisions of Section 2 of this Agreement).
This Section 4 shall not affect or modify any separate, valid agreement
relating to the allocation of payment of expenses between the Company, on the
one hand, and the Selling Stockholders, on the other hand.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Firm 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 Stockholders 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 Stockholders
of their respective covenants and other obligations hereunder, and to each of
the following additional conditions:
22
(a) ACCOUNTANTS' COMFORT LETTER. On the date hereof, the Representatives
shall have received from KPMG LLP, independent 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 four 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.
(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:
(i) in the judgment of the Representatives there shall not have
occurred any Material Adverse Change; and
(ii) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction of
the possible change, in the rating accorded any securities of the Company
or any of its subsidiaries by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act.
(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 Frost
23
▇▇▇▇▇ ▇▇▇▇ LLC, counsel for the Company, dated as of such Closing Date, the form
of which is attached hereto as Exhibit A (and the Representatives shall have
received an additional four conformed copies of each 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 Shearman & Sterling LLP, counsel for the Underwriters,
dated as of such Closing Date.
(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 subsections (b)(ii) and (c)(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 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 KPMG LLP,
independent 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 four conformed copies
of such accountants' letter for each of the several Underwriters).
(h) OPINION OF COUNSEL FOR THE SELLING STOCKHOLDERS. On each of the First
Closing Date and the Second Closing Date the Representatives shall have received
the favorable opinion of counsel for each Selling Stockholder, dated as of such
Closing Date, the form of which is attached as Exhibit B (and the
Representatives shall have received an additional four conformed copies of such
counsel's legal opinion for each of the several Underwriters).
(i) SELLING STOCKHOLDER'S CERTIFICATE. On each of the First Closing Date
and the Second Closing Date, the Representatives shall receive a written
certificate executed by each Selling Stockholder, dated as of such Closing Date,
to the effect that:
(i) the representations, warranties and covenants of such
Selling Stockholder set forth in Sections 1(B) of this Agreement are true
and correct with the same force and
24
effect as though expressly made by such Selling Stockholder on and as of
such Closing Date; and
(ii) such Selling Stockholder 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 STOCKHOLDER'S DOCUMENTS. On the date hereof, the Company and
the Selling Stockholder shall have furnished for review by the Representatives
copies of the Powers of Attorney and the Custody Agreements executed by the
Selling Stockholders 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 STOCKHOLDERS. On or prior to the date hereof, the Company shall
have furnished to the Representatives an agreement in the form of Exhibit C
hereto from each director, officer and each beneficial owner of Common Stock (as
defined and determined according to Rule 13d-3 under the Exchange Act, except
that a one hundred eighty day period shall be used rather than the sixty day
period set forth therein) listed on Schedule C hereto, and such agreement shall
be in full force and effect on each of the First Closing Date and the Second
Closing Date.
(l) CERTIFICATES SUITABLE FOR TRANSFER. Certificates for all of the Common
Shares to be sold by the Selling Stockholders pursuant to this Agreement, in
suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank, with signatures guaranteed,
shall have been placed in custody with the Custodian under the Powers of
Attorney and the Custody Agreements with irrevocable conditional instructions to
deliver such Common Shares to the Underwriters pursuant to this Agreement.
(m) REORGANIZATION; ACQUISITION. The Reorganization shall have been
completed.
(n) 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 Stockholders 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,
Section 11 or 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 Stockholders to
perform any agreement herein or to comply with any provision hereof,
25
the Company and any defaulting Selling Stockholder, jointly and severally, agree
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; PROVIDED,
HOWEVER, in the event this Agreement is terminated pursuant to Section 10
hereof, the Company shall not be required to reimburse any defaulting
Underwriter pursuant to this Section 6.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall not become
effective until the later of (i) the execution and delivery 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 Stockholders to
any Underwriter, except that the Company and the Selling Stockholders shall be
obligated to reimburse the expenses of the Representatives and the Underwriters
pursuant to Section 4 and 6 hereof, (b) any Underwriter to the Company or the
Selling Stockholders, or (c) 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 BY THE COMPANY AND THE MANAGEMENT
SELLING STOCKHOLDERS. The Company and each of the Selling Stockholders who is a
"named executive officer" of the Company in the Prospectus (a "MANAGEMENT
SELLING STOCKHOLDER), jointly and severally, agree 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 any prospectus wrapper material distributed
in Canada or any other foreign jurisdiction 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; or
(iii) in whole or in part upon any inaccuracy in the representations and
warranties of the Company or the Management Selling Stockholders contained
herein; or (iv) in whole or in
26
part upon any failure of the Company or the Management Selling Stockholders to
perform their respective obligations hereunder or under law; or (v) any act or
failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Common Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon any matter
covered by clause (i) or (ii) above, PROVIDED that the Company and the
Management Selling Stockholders shall not be liable under this clause (v) to the
extent that a court 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 BAS) 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 furnished to the Company 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. The indemnity agreement
set forth in this Section 8(a) shall be in addition to any liabilities that the
Company and the Management Selling Stockholders may otherwise have.
Notwithstanding the provisions of this Section 8(a), the indemnification
obligations of each Management Selling Stockholder pursuant to this Section 8(a)
and to Section 8(f) shall be limited in the aggregate to the total net proceeds
received by such Management Selling Stockholder from the offering of the Common
Shares pursuant to this Agreement.
(b) INDEMNIFICATION BY OTHER SELLING STOCKHOLDERS. Each Other Selling
Stockholder, severally and not jointly, 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
Other Selling Stockholder), 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
27
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; or (iii) in whole or
in part upon any inaccuracy in the representations and warranties of such Other
Selling Stockholder contained herein; or (iv) in whole or in part upon any
failure of such Other Selling Stockholder to perform its respective obligations
hereunder or under law; or (v) any act or failure to act or any alleged act or
failure to act by any Underwriter in connection with, or relating in any manner
to, the Common Stock or the offering contemplated hereby, and which is included
as part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon any matter covered by clause (i) or (ii) above,
PROVIDED that the such Other Selling Stockholder shall not be liable under this
clause (v) to the extent that a court 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 BAS) 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, notwithstanding anything to the contrary above,
the liability of each Other Selling Stockholders under the foregoing indemnity
pursuant to clauses (i), (ii) and (v) of this paragraph 8(b) shall be limited to
losses, claims, damages, liability or expenses arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to such Other Selling
Stockholder furnished to the Company by or with the approval of such Selling
Stockholder specifically for use 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 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. Each
Underwriter hereby acknowledges that the only information that the Other Selling
Stockholders have furnished to the Company expressly for use in the Registration
Statement, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) is the information relating to such Selling Stockholder set
forth in the table under the caption "Principal and Selling Stockholders" in the
Prospectus. The indemnity agreement set forth in this Section 8(b) shall be in
addition to any liabilities that the Other Selling Stockholders may otherwise
have. Notwithstanding the
28
provisions of this Section 8(b), the indemnification obligations of each Other
Selling Stockholder pursuant to this Section 8(b) shall be limited to the total
net proceeds received by such Other Selling Stockholder from the offering of the
Common Shares pursuant to this Agreement.
(c) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND OFFICERS AND THE
SELLING STOCKHOLDERS. 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 Stockholders and
each person, if any, who controls the Company or any Selling Stockholder 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 Stockholder 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 by the Representatives expressly for use therein; and
to reimburse the Company, or any such director, officer, Selling Stockholder or
controlling person for any legal and other expense reasonably incurred by the
Company, or any such director, officer, Selling Stockholder 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 Stockholder hereby acknowledges that the only
information that the Underwriters have furnished to the Company expressly for
use in the Registration Statement, any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) are the statements set forth (A) in the
table in the first paragraph under the caption "Underwriting" in the Prospectus,
(B) in the second and third sentence of the fourth paragraph under the caption
"Underwriting" in the Prospectus, (C) the sixth (Availability of Prospectus
Online) paragraph under the caption "Underwriting" in the Prospectus, (D) in the
tenth, eleventh, twelfth and thirteenth paragraphs under the caption
"Underwriting--Stabilization" in the prospectus; and the Underwriters confirm
that such statements are correct. The indemnity agreement set forth in this
Section 8(c) shall be in addition to any liabilities that each Underwriter may
otherwise have.
(d) 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 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
29
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 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 (BAS in the case of Section 8(c)
and Section 9), representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
reasonably 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.
(e) 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(d) 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 and (ii) such indemnifying party is required to
so reimburse the indemnified party pursuant to this Section 8 and shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, 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.
30
(f) INDEMNIFICATION OF THE QIU. Without limitation and in addition to its
obligation under the other subsections of this Section 8, the Company and the
Management Selling Stockholders, jointly and severally, agree to indemnify and
hold harmless the QIU, its directors, officers, employees, members,
representatives and agents and each person, if any, who controls the QIU 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
the QIU'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 promptly upon demand for any legal or other expense reasonably incurred
by them in connection with investigating, preparing to defend, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; PROVIDED, HOWEVER, that the Company and the Management
Selling Stockholders shall not be liable in any such case to the extent that it
is judicially determined in a final judgment by a court of competent
jurisdiction that any such loss, claim, damage, liability or expense resulted
directly from the gross negligence or willful misconduct of the QIU.
Notwithstanding the provisions of this Section 8(f), the indemnification
obligations of each Management Selling Stockholder pursuant to this Section 8(f)
and to Section 8(a) shall be limited in the aggregate to the total net proceeds
received by such Management Selling Stockholder from the offering of the Common
Shares pursuant to this Agreement.
(g) INDEMNIFICATION FOR DIRECTED SHARES. In connection with the offer and
sale of the Directed Shares, the Company agrees, promptly upon a request in
writing, to indemnify and hold harmless the Underwriters from and against any
and all losses, liabilities, claims, damages and expenses incurred by them as a
result of the failure of the Participants to pay for and accept delivery of
Directed Shares which, by the end of the first business day following the date
of this Agreement, were subject to a properly confirmed agreement to purchase.
The Company agrees to indemnify and hold harmless the Designated Underwriter,
its officers and employees, and each person, if any, who controls the Designated
Underwriter within the meaning of the Securities Act or the Exchange Act against
any loss, claim, damage, liability or expense, as incurred, to which such
Designated Underwriter or such controlling person may become subject, which is
(i) caused by any untrue statement or alleged untrue statement of a material
fact contained in any material prepared by or with the consent of the Company
for distribution to Participants in connection with the Directed Share Program
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (ii) caused by the failure of any Participant to pay for and accept
delivery of Directed Shares that such Participant agreed to purchase; or (iii)
related to, arising out of, or in connection with the Directed Share Program.
The indemnity agreement set forth in this paragraph shall be in addition to any
liabilities that the Company may otherwise have.
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 Stockholders, on the
one hand, and the Underwriters, on the other
31
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 Stockholders, 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 Stockholders, 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
Stockholders, and the total underwriting discount received by the Underwriters,
in each 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
Stockholders, 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 Stockholders, 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.
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(d), 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(d) 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(d) for purposes of indemnification.
The Company, the Selling Stockholder 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, (i) 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 and (ii) no Selling Stockholder shall be
required to contribute any amount in excess of the total net proceeds from the
offering of the Common Shares pursuant to this Agreement that are received by
the Selling Stockholder. 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
32
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 with 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 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 Lead Representative 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 Lead Representative, the Company and
the Primary Selling Stockholder for the purchase of such Common Shares are not
made within 48 hours after such default, this Agreement shall terminate without
liability of any 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 Lead Representative or the
Company shall have the right to postpone the First Closing Date and either the
Lead Representative or the Other Selling Stockholders shall have the right to
postpone 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 Lead Representative by notice given to
the Company and the Selling Stockholders 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 federal or New York
authorities;
33
(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 Lead Representative 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 Lead Representative there shall have occurred any Material
Adverse Change; or (v) the Company or any TR Entity shall have sustained a loss
by strike, fire, flood, earthquake, accident or other calamity of such character
as in the judgment of the Lead Representative may interfere materially with the
conduct of the business and operations of the Company and the TR Entities,
considered as one entity, 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 Stockholders to any Underwriter,
except that the Company and the Selling Stockholders shall be obligated to
reimburse the expenses of the Representatives and the Underwriters pursuant to
Sections 4 and 6 hereof, (b) any Underwriter to the Company or the Selling
Stockholders, 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 Stockholder 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 Stockholder, 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: (212)
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
Banc of America Securities LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Legal Department
34
and
Shearman & Sterling LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
If to the Company:
Texas Roadhouse, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: [___]
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
If to the Selling Stockholders:
[Custodian]
[address]
Facsimile: [___]
Attention: [___]
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
35
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.
Any legal suit, action or proceeding arising out of or based upon this
Agreement or the transactions contemplated hereby ("RELATED PROCEEDINGS") may be
instituted in the federal courts of the United States of America located in the
City and County of New York or the courts of the State of New York in each case
located in the City and County of New York (collectively, the "SPECIFIED
COURTS"), and each party irrevocably submits to the exclusive jurisdiction
(except for proceedings instituted in regard to the enforcement of a judgment of
any such court (a "RELATED JUDGMENT"), as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action or proceeding. Service of
any process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any suit, action or other
proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit, action
or other proceeding in the Specified Courts and irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such suit,
action or other proceeding brought in any such court has been brought in an
inconvenient forum.
SECTION 17. FAILURE OF THE SELLING STOCKHOLDERS TO SELL AND DELIVER COMMON
SHARES. If the Primary Selling Stockholder shall fail to sell and deliver to the
Underwriters the Firm Common Shares to be sold and delivered by the Primary
Selling Stockholder at the First Closing Date pursuant to this Agreement, then
the Underwriters may at their option, by written notice from the Lead
Representative to the Company and the Selling Stockholders, either (i) terminate
this Agreement without any liability on the part of any Underwriter or, except
as provided in Sections 4, 6, 8 and 9 hereof, the Company or the Selling
Stockholders, or (ii) purchase the Firm Common Shares which the Company has
agreed to sell and deliver in accordance with the terms hereof. If any Selling
Stockholder shall fail to sell and deliver to the Underwriters the Optional
Common Shares to be sold and delivered by such Selling Stockholder at the Second
Closing Date pursuant to this Agreement, then the Underwriters may at their
option, by written notice from the Lead Representative to the Company and the
Selling Stockholders, either (i) terminate this Agreement with respect to such
Optional Common Shares without any liability on the part of any Underwriter or,
except as provided in Sections 4, 6, 8 and 9 hereof, the Company or the Selling
Stockholders, or (ii) purchase the Optional Common Shares which the other
Selling Stockholders have agreed to sell and deliver in accordance with the
terms hereof and, if the Primary Selling Stockholder is not a defaulting Selling
Stockholder, at the Underwriters' option, purchase from the Primary Selling
Stockholder the number of Optional Common Shares which any such defaulting
Selling Stockholder has agreed to sell and deliver in accordance with the terms
hereof. If the Underwriters elect to purchase from the Primary Selling
Stockholder the number of Optional Common Shares which any defaulting Selling
Stockholder had agreed to sell and deliver in accordance with the terms hereof,
the Primary Selling Stockholder shall be
36
obligated to sell and deliver such additional number of Optional Common Shares.
If any Selling Stockholder shall fail to sell and deliver to the Underwriters
the Common Shares to be sold and delivered by such Selling Stockholder 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 Lead
Representative to the Company and the Selling Stockholders, to postpone the
First Closing Date or the Second Closing Date, 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.
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 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.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Stockholders and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter, the QIU, the officers or employees of any Underwriter, the QIU,
any person controlling any Underwriter, the QIU, the Company, the officers or
employees of the Company, any person controlling the Company, any Selling
Stockholder or any person controlling such Selling Stockholder (ii) acceptance
of the Shares and payment for them hereunder and (iii) termination of this
Agreement.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Selling
Stockholders, the Underwriters, the Underwriters' officers and employees, the
QIU, the QIU officers and employees, any controlling persons referred to herein,
the Company's directors and the Company's officers who sign the Registration
Statement and their respective successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right
under or by
37
virtue of this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Common Shares from any of the several Underwriters
merely because of such purchase.
[Signatures follow.]
38
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company and the Attorneys-in-Fact on behalf of the
Selling Stockholders 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,
TEXAS ROADHOUSE, INC.
By:
-----------------------------
Name:
Title:
MANAGEMENT SELLING
STOCKHOLDERS
-------------------------------------
W. ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇. ▇. ▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
OTHER SELLING STOCKHOLDERS
LISTED ON SCHEDULE B
By:
-----------------------------
Name:
Title: Attorney-in-fact
39
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representatives in New York, New York as of the date first above written.
BANC OF AMERICA SECURITIES LLC
Wachovia Capital Markets, LLC
RBC Capital Markets Corporation
▇▇ ▇▇▇▇▇ & Co., LLC
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By:Banc of America Securities LLC
By:
--------------------------------------
Name:
Title: Managing Director
SCHEDULE A
NUMBER OF
FIRM
COMMON
SHARES TO BE
UNDERWRITERS PURCHASED
------------------------------------------------------------ ------------
Banc of America Securities LLC.............................. [___]
Wachovia Capital Markets, LLC............................... [___]
RBC Capital Markets Corporation............................. [___]
▇▇ ▇▇▇▇▇ & Co., LLC......................................... [___]
Total.............................................. [___]
A-1
SCHEDULE B
MAXIMUM
NUMBER OF
NUMBER OF OPTIONAL
FIRM COMMON COMMON
SHARES TO BE SHARES TO BE
SOLD SOLD
------------ ------------
PRIMARY SELLING STOCKHOLDER:
W. ▇▇▇▇ ▇▇▇▇▇▇
[Address]................................................. [___] [___]
OTHER SELLING STOCKHOLDERS:
[Name]
[Address].................................................
Total................................................. [___] [___]
A-1
SCHEDULE C
BENEFICIAL OWNERS REQUIRED TO DELIVER LOCK-UP AGREEMENTS
PURSUANT TO SECTION 6(k)
[Names]
A-2
EXHIBIT A
THE FINAL OPINION IN DRAFT FORM SHOULD BE ATTACHED AS EXHIBIT A AT THE
TIME THIS AGREEMENT IS EXECUTED.
Opinion of counsel for the Company to be delivered pursuant to Section 5(d)
of the
Underwriting Agreement.
References to the Prospectus in this Exhibit A include any supplements
thereto at the Closing Date.
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Underwriting
Agreement.
(iii) The Company 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 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.
(iv) Each significant subsidiary of the Company (as defined in Rule 405
under the Securities Act) has been duly incorporated or formed and is validly
existing as a corporation or company under the laws of the jurisdiction of its
incorporation or formation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and, to the best knowledge of such counsel, is duly qualified as a
foreign corporation or company 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 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.
(v) All of the issued and outstanding capital stock or equity interests
of each such significant subsidiary of the Company has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance (except for any security interest, mortgage,
pledge, lien or encumbrance securing the Company's obligations under the New
Credit Agreement) or, to the best knowledge of such counsel, any pending or
threatened claim.
(vi) The authorized, issued and outstanding capital stock of the Company
(including the Common Stock) conform to the descriptions thereof set forth in
the Prospectus. All of the outstanding shares of Common Stock (including the
shares of Common Stock owned by Selling Stockholders and the shares of Common
Stock issued in connection with the Reorganization) have been duly authorized
and validly issued, are fully paid and nonassessable and, to the best of
A-3
such counsel's knowledge, have been issued in compliance with the registration
and qualification requirements of federal securities laws. The form of
certificate used to evidence the Common Stock is in due and proper form and
complies with all applicable requirements of the charter and by-laws of the
Company and the General Corporation Law of the State of Delaware. The
description of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised thereunder,
set forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights.
(vii) No stockholder of the Company or any other person has any
preemptive right, right of first refusal or other similar right to subscribe for
or purchase securities of the Company arising (i) by operation of the charter or
by-laws of the Company or the General Corporation Law of the State of Delaware
or (ii) to the best knowledge of such counsel, otherwise.
(viii) The
Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The Common Shares to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company pursuant to
the
Underwriting Agreement against payment of the consideration set forth
therein, will be validly issued, fully paid and nonassessable.
(x) [Each of] The Registration Statement and the Rule 462(b)
Registration Statement, if any, has been declared effective by the Commission
under the Securities Act. To the best knowledge of such counsel, no stop order
suspending the effectiveness of either of the Registration Statement or the Rule
462(b) Registration Statement, if any, has been issued under the Securities Act
and no proceedings for such purpose have been instituted or are pending or are
contemplated or threatened by the Commission. Any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time period required
by such Rule 424(b).
(xi) The Registration Statement, including any Rule 462(b) Registration
Statement, the Prospectus, and each amendment or supplement to the Registration
Statement and the Prospectus, as of their respective effective or issue dates
(other than the financial statements and supporting schedules included therein
or in exhibits to or excluded from the Registration Statement, as to which no
opinion need be rendered) comply as to form in all material respects with the
applicable requirements of the Securities Act.
(xii) The Common Shares have been approved for listing on the Nasdaq
National Market.
(xiii) The statements (i) in the Prospectus under the captions
"Description of Capital Stock", "Summary--Background to the Offering",
"Business--Litigation", "Business--Intellectual Property", "Certain
Relationships and Related Transactions", "Shares Eligible for Future Sale",
"Material U.S. Federal Tax Considerations for Non-U.S. Holders of Our Class A
Common Stock" and "Underwriting" and (ii) in Item 14 and Item 15 of the
Registration Statement, insofar as such statements constitute matters of law,
summaries of legal matters, the
A-4
Company's charter or by-law provisions, documents or legal proceedings, or legal
conclusions, has been reviewed by such counsel and fairly present and summarize,
in all material respects, the matters referred to therein.
(xiv) To the best knowledge of such counsel, there are no legal or
governmental actions, suits or proceedings pending or threatened which are
required to be disclosed in the Registration Statement, other than those
disclosed therein.
(xv) To the best knowledge of such counsel, there are no Existing
Instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed as exhibits thereto; and the descriptions thereof
and references thereto are correct in all material respects.
(xvi) 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 Company's execution, delivery and performance of the
Underwriting Agreement and consummation of the transactions contemplated thereby
and by the Prospectus, except as required under the Securities Act, applicable
state securities or blue sky laws and from the NASD.
(xvii) The execution and delivery of each of the Reorganization Agreements
by the Company and the performance by each TR Reorganization Party of its
obligations thereunder (i) have been duly authorized by all necessary entity
action on the part of the TR Reorganization Parties (ii) will not result in any
violation of the provisions of the charter, by-laws or formation documents of
the Company, TR Holdings or any of their subsidiaries; (iii) will not 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, TR
Holdings or any of their subsidiaries pursuant to, (A) the New Credit Agreement,
or (B) to the best knowledge of such counsel, any other material Existing
Instrument; or (iv) to the best knowledge of such counsel, will not result in
any violation of any law, administrative regulation or administrative or court
decree applicable to the Company, TR Holdings or any of their subsidiaries.
(xviii) The execution and delivery of the Underwriting Agreement by the
Company and the performance by the Company of its obligations thereunder (other
than performance by the Company of its obligations under the indemnification
section of the Underwriting Agreement, as to which no opinion need be rendered)
(i) have been duly authorized by all necessary corporate action on the part of
the Company (ii) will not result in any violation of the provisions of the
charter, by-laws or formation documents of the Company, TR Holdings or any of
their subsidiaries; (iii) will not 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, TR Holdings or any of their subsidiaries
pursuant to, (A) the New Credit Agreement, or (B) to the best knowledge of such
counsel, any other material Existing Instrument; or (iv) to the best knowledge
of such counsel, will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company, TR
Holdings or any of their subsidiaries.
(xix) The Company is not, and after receipt of payment for the Common
Shares will not be, an "investment company" within the meaning of Investment
Company Act.
A-5
(xx) To the best knowledge of such counsel, 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 the Underwriting Agreement, other than the Selling Stockholders.
(xxi) To the best knowledge of such counsel, neither the Company nor any
subsidiary is in violation of its charter, by-laws or formation documents or any
law, administrative regulation or administrative or court decree applicable to
the Company or any subsidiary or is in Default in the performance or observance
of any obligation, agreement, covenant or condition contained in any material
Existing Instrument, except in each such case for such violations or Defaults as
would not, individually or in the aggregate, result in a Material Adverse
Change.
(xxii) The Reorganization as described in the Underwriting Agreement and
the Prospectus has been completed in accordance with the terms of the
Reorganization Agreements and applicable state and federal law.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent certified public accountants for the Company
and with representatives of the Underwriters at which the contents of the
Registration Statement and the Prospectus, and any supplements or amendments
thereto, and related matters were discussed and, although such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (other than as specified above), and any supplements
or amendments thereto, on the basis of the foregoing, nothing has come to their
attention which would lead them to believe that either the Registration
Statement or any amendments thereto, at the time the Registration Statement or
such amendments became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectus,
as of its date or at the First Closing Date or the Second Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted 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 (it being
understood that such counsel need express no belief as to the financial
statements or schedules or other financial or statistical data derived
therefrom, included in the Registration Statement or the Prospectus or any
amendments or supplements thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the General Corporation Law of the
Commonwealth of Kentucky or the federal law of the United States, to the extent
they deem proper and specified in such opinion, upon the opinion (which shall be
dated the First Closing Date or the Second Closing Date, as the case may be,
shall be satisfactory in form and substance to the Underwriters, shall expressly
state that the Underwriters may rely on such opinion as if it were addressed to
them and shall be furnished to the Representatives) of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters; PROVIDED, HOWEVER, that such counsel shall further state
that they believe that they and the Underwriters are justified in relying upon
such
A-6
opinion of other counsel, and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials.
A-7
EXHIBIT B
THE FINAL OPINION IN DRAFT FORM RELATING TO EACH OR ALL OF THE SELLING
STOCKHOLDER SHOULD BE ATTACHED AS EXHIBIT B AT THE TIME THIS AGREEMENT IS
EXECUTED.
The opinion of such counsel pursuant to Section 5(h) shall be rendered to
the Representatives at the request of the Company and shall so state therein.
References to the Prospectus in this Exhibit B include any supplements thereto
at the Closing Date.
(i) The Underwriting Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder.
(ii) The execution and delivery by the Selling Stockholder of, and the
performance by the Selling Stockholder of its obligations under, the
Underwriting Agreement and its Custody Agreement and its Power of Attorney will
not contravene or conflict with, result in a breach of, or constitute a default
under, the charter, by-laws, partnership agreement, trust agreement or other
organizational documents, as the case may be, of the Selling Stockholder.
(iii) The Selling Stockholder has good and valid title to all of the
Common Shares which may be sold by the Selling Stockholder under the
Underwriting Agreement and has the legal right and power, and all authorizations
and approvals required to enter into the Underwriting Agreement and its Custody
Agreement and its Power of Attorney, to sell, transfer and deliver all of the
Common Shares which may sold by the Selling Stockholder under the Underwriting
Agreement and to comply with its other obligations under the Underwriting
Agreement, its Custody Agreement and its Power of Attorney.
(iv) Each of the Custody Agreement and the Power of Attorney of the
Selling Stockholder has been duly authorized, executed and delivered by the
Selling Stockholder and is a valid and binding agreement of the Selling
Stockholder, enforceable in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles.
(v) Assuming that (i) the certificate or certificates representing the
Common Shares to be sold by the Selling Stockholder pursuant to the Underwriting
Agreement have been effectively indorsed in blank in accordance with [State] UCC
Article 8 and (ii) neither the Underwriters, nor the agents acquiring possession
of such Common Shares on their behalf, have notice of any adverse claim to such
Common Shares, then, upon the Underwriters' acquiring possession of such
certificate or certificates for such Common Shares (or the agent's acquiring
possession of such certificate or certificates for such Common Shares on the
Underwriters' behalf) and paying the purchase price therefore pursuant to the
Underwriting Agreement, each Underwriter will be a "protected purchaser" of such
Common Shares to be purchased by it (within the meaning of Section 8-303 of the
[State] UCC) and will acquire its interest in such Common Shares (including,
without limitation, all rights that the Selling Stockholder had or has the power
to
B-1
transfer in such Common Shares) with good and valid title and free and clear of
any security interest, mortgage, pledge, lieu encumbrance or any adverse or
other claim.(4)
(vi) To the best of such counsel's knowledge, no consent, approval,
authorization or other order of, or registration or filing with, any court or
governmental authority or agency, is required for the consummation by the
Selling Stockholder of the transactions contemplated in the Underwriting
Agreement, except as required under the Securities Act, applicable state
securities or blue sky laws, and from the NASD.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the General Corporation Law of the
Commonwealth of Kentucky or the federal law of the United States, to the extent
they deem proper and specified in such opinion, upon the opinion (which shall be
dated the First Closing Date or the Second Closing Date, as the case may be,
shall be satisfactory in form and substance to the Underwriters, shall expressly
state that the Underwriters may rely on such opinion as if it were addressed to
them and shall be furnished to the Representatives) of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters; PROVIDED, HOWEVER, that such counsel shall further state
that they believe that they and the Underwriters are justified in relying upon
such opinion of other counsel, and (B) as to matters of fact, to the extent they
deem proper, on certificates of the Selling Stockholders (or any of them) and
public officials.
----------
(4) May require separate counsel opinion depending on location of Custodian.
B-2
EXHIBIT C
LOCK-UP LETTER AGREEMENT
Banc of America Securities LLC
Wachovia Capital Markets, LLC
RBC Capital Markets Corporation
▇▇ ▇▇▇▇▇ & Co., LLC
As Representatives of the several Underwriters
c/o Banc of America Securities LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ,▇▇▇▇▇
RE:
TEXAS ROADHOUSE, INC. (THE "COMPANY")
Ladies and Gentlemen:
The undersigned (the "UNDERSIGNED") understands that the Company
proposes to carry out a public offering (the "OFFERING") of shares of Class A
Common Stock (the "COMMON STOCK") for which you will act as the representatives
of the underwriters of the Offering. Prior to the Offering, the Company will
undertake a corporate reorganization (the "REORGANIZATION") pursuant to which
certain Texas Roadhouse entities (the "EXISTING TEXAS ROADHOUSE ENTITIES") will
be merged into subsidiaries of the Company. The Undersigned is the owner of
record or beneficially of certain equity interests, or options to acquire such
equity interests, in one or more of the Existing Texas Roadhouse Entities (the
"EXISTING TR EQUITY INTERESTS"). Upon completion of the Reorganization, the
Undersigned will receive, and will become the record or beneficial owner of,
shares of Common Stock or options to acquire Common Stock in exchange for the
Existing TR Equity Interests.
The Undersigned recognizes that the Offering will be of benefit to the
Undersigned and will benefit the Company. The Undersigned acknowledges that you
and the other underwriters are relying on the representations and agreements of
the Undersigned contained in this Lock-Up Letter Agreement in carrying out the
Offering and in entering into underwriting arrangement with the Company with
respect to the Offering.
In consideration of the foregoing, the Undersigned hereby agrees that
the Undersigned will not, (and will cause any spouse or immediate family member
of the spouse or the Undersigned living in the Undersigned's household not to),
without the prior written consent of Banc of America Securities LLC and Wachovia
Capital Markets, LLC, as the lead representatives of the underwriters (which
consent may be withheld in their 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,
as amended, or otherwise dispose of, its Existing TR Equity Interests (other
than in connection with the Reorganization) or any shares of Common Stock or
options to acquire shares of Common Stock or securities exchangeable or
exercisable for or convertible into shares of Common Stock, currently or
1
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 such
spouse or family member), or publicly announce an 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. In
addition, if (i) the Company issues an earnings release or material news, or a
material event relating to the Company occurs, during the last 17 days of the
lock-up period, or (ii) prior to the expiration of the lock-up period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the lock-up period, the restrictions imposed by
this Lock-Up Letter Agreement shall continue to apply until the expiration of
the 18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event. The Undersigned understands
that the Company or the underwriters will notify the Undersigned of any such
extension of the lock-up period.
The foregoing paragraph shall not apply to (i) any shares of Common
Stock to be sold in the Offering, (ii) any shares of Common Stock or other
securities acquired in open market transactions after completion of the
Offering, (iii) bona fide gifts, (iv) the exercise of any options to acquire
shares of Common Stock, but not the sale or other transfer of the shares of
Common Stock issued in connection with such exercise, (v) sales or other
dispositions of shares of Common Stock or other securities, in each case, that
are made for estate planning purposes exclusively and are between or among the
Undersigned, members of the Undersigned's immediate family or affiliates (as
defined in Rule 144(a)(i) of the Securities Act of 1933, as amended) of the
Undersigned (including family trusts, family corporations, family limited
liability companies or family partnerships); PROVIDED, HOWEVER, that it shall be
a condition to any transfer made pursuant to clause (iii), (iv) or (v) that the
transferee executes and delivers to Banc of America Securities LLC an agreement
stating that the transferee is receiving and holding the Common Stock or other
securities subject to the provisions of this Lock-Up Letter Agreement, and there
shall be no further transfer of such Common Stock or other securities except in
accordance with this Lock-Up Letter Agreement.
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.
With respect to the Offering only, the Undersigned waives any
registration rights relating to registration under the Securities Act of any
Common Stock to be owned either of record or beneficially by the Undersigned,
including any rights to receive notice of the Offering.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, or if the underwriting agreement between
the Company and you (the "UNDERWRITING AGREEMENT") does not become effective or
if the Underwriting Agreement (other than the provisions thereof which survive
termination) shall terminate or be terminated prior to payment for and delivery
of the shares of Common Stock, or if the completion of the Offering shall not
have occurred prior to December 31, 2004, the Undersigned will be released from
its obligations under this Lock-Up Letter Agreement.
2
This Lock-Up Letter Agreement terminates and supercedes any prior
agreements between the Undersigned and any Existing Texas Roadhouse Entity that
would otherwise restrict the disposition of the shares of Common Stock after the
date of the final prospectus relating to the Offering.
The Undersigned hereby represents and warrants that the Undersigned
has full power and authority to enter into this Lock-Up Letter Agreement and
that, upon request, the Undersigned will execute any additional documents
necessary in connection with the enforcement hereof. This Lock-Up Letter
Agreement is irrevocable and will be binding on the Undersigned and the
respective successors, heirs, personal representatives, and assigns of the
Undersigned.
----------------------------------------
Printed Name of Holder
----------------------------------------
Signature
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf of an
entity)
3