1
Exhibit 1.1
2,500,000 SHARES
COOKER RESTAURANT CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
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April ____, 1996
MONTGOMERY SECURITIES
EQUITABLE SECURITIES CORPORATION
c/o Montgomery Securities
600 Montgomery Street
San Francisco, California 94111
Dear Sirs:
SECTION 1. INTRODUCTORY. Cooker Restaurant Corporation, an Ohio
corporation (the "Company"), proposes to issue and sell 2,500,000 shares of its
authorized but unissued Common Stock, having no par value per share (the
"Common Stock"), to the underwriters named in Schedule A annexed hereto
("Underwriters"). Said shares are herein referred to as the "Firm Common
Shares." In addition, the Company proposes to grant to the Underwriters an
option to purchase up to 375,000 additional shares of Common Stock (the
"Optional Common Shares"), as provided in Section 4 hereof. The Firm Common
Shares and, to the extent such option is exercised, the Optional Common Shares,
are hereinafter collectively referred to as the "Common Shares."
You have advised the Company that the Underwriters propose to make a
public offering of the Common Shares on the effective date of the registration
statement hereinafter referred to, or as soon thereafter as in their judgment
is advisable.
The Company hereby confirms its agreement with respect to the purchase
of the Common Shares by the Underwriters as follows:
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to the Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-______) with respect to the Common Shares has been prepared by the
Company in conformity with the requirements of the Securities Act of
1933, as amended (the "Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission
(the "Commission") thereunder, and has been filed with the Commission.
The Company has met all of the
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eligibility requirements for the use of a registration statement on
Form S-3. There have been delivered to the Underwriters two signed
copies of such registration statement and amendments, together with
two copies of each exhibit filed therewith. Conformed copies of such
registration statement and amendments (but without exhibits) and of
the related preliminary prospectus have been delivered to each of the
Underwriters in such reasonable quantities as each of them has
requested. The Company will next file with the Commission one of the
following: (i) prior to effectiveness of such registration statement,
a further amendment thereto, including the form of final prospectus,
or (ii) a final prospectus in accordance with Rules 430A and 424(b) of
the Rules and Regulations. As filed, such amendment and form of final
prospectus, or such final prospectus, shall include all Rule 430A
Information and, except to the extent that the Underwriters shall
agree in writing to a modification, shall be in all substantive
respects in the form furnished to the Underwriters prior to the date
and time that this Agreement was executed and delivered by the parties
hereto, or, to the extent not completed at such date and time, shall
contain only such specific additional information and other changes
(beyond that contained in the latest Preliminary Prospectus) as the
Company shall have previously advised the Underwriters would be
included or made therein.
The term "Registration Statement" as used in this Agreement
shall mean such registration statement at the time such registration
statement becomes effective and, in the event any post-effective
amendment thereto becomes effective prior to the First Closing Date
(as hereinafter defined), shall also mean such registration statement
as so amended; provided, however, that such term shall also include
all Rule 430A Information deemed to be included in such registration
statement at the time such registration statement becomes effective as
provided by Rule 430A of the Rules and Regulations. The term
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in the preceding paragraph and any preliminary prospectus
included in the Registration Statement at the time it becomes
effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean the prospectus relating to the
Common Shares in the form in which it is first filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations or, if
no filing pursuant to Rule 424(b) of the Rules and Regulations is
required, shall mean the form of final prospectus included in the
Registration Statement at the time such registration statement becomes
effective. The term "Rule 430A Information" means information with
respect to the Common Shares and the offering thereof permitted to be
omitted from the Registration Statement when it becomes effective
pursuant to Rule 430A of the Rules and Regulations. Any reference
herein to the Registration Statement, the Prospectus, any amendment or
supplement thereto or any Preliminary Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein,
and any reference herein to the terms "amend," "amendment," or
"supplement," with respect to the Registration Statement or Prospectus
shall be deemed to refer to and include the filing after the execution
hereof of any document with the Commission deemed to be incorporated
by reference therein.
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(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects to the requirements
of the Act and the Rules and Regulations and, as of its date, has not
included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and
at the time the Registration Statement becomes effective, and at all
times subsequent thereto up to and including each Closing Date
hereinafter mentioned, the Registration Statement and the Prospectus,
and any amendments or supplements thereto, will contain all material
statements and information required to be included therein by the Act
and the Rules and Regulations and will in all material respects
conform to the requirements of the Act and the Rules and Regulations,
and neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, will include 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 in
light of circumstances under which they were made; provided, however,
no representation or warranty contained in this subsection 2(b) shall
be applicable to information contained in any Preliminary Prospectus,
the Registration Statement, the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter
specifically for use in the preparation thereof.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Ohio with requisite corporate power and authority to own, lease and
operate its properties, to conduct the business in which it is engaged
as described in the Prospectus, and to enter into this Agreement. The
Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which the
ownership or leasing of its property or the conduct of its business
requires such qualification, except for jurisdictions in which the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the assets or business affairs
of the Company and the Subsidiaries (as hereinafter defined),
considered as one enterprise; and, to the Company's knowledge, no
proceeding has been instituted in any such jurisdiction revoking,
limiting, or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification.
(d) The Company has no subsidiaries, and does not
beneficially own any shares of any other corporation.
(e) The Company has an authorized and outstanding capital
stock as set forth under the headings "Prospectus Summary - The
Offering" and "Capitalization" in the Prospectus; the issued and
outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, were not issued
in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and conform to the description
thereof contained in the Prospectus and the documents incorporated by
reference in the Prospectus.
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As of the respective Closing Dates (as hereinafter defined), the
Company will have no outstanding shares of preferred stock. Except as
disclosed in or contemplated by the Prospectus and the financial
statements of the Company and the related notes thereto included in or
incorporated by reference in the Prospectus, the Company has no
outstanding options to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible
securities or obligations. The description of the Company's
outstanding stock options and other stock plans or arrangements and
the options or other rights granted and exercised thereunder set forth
in the Prospectus, or in the documents incorporated by reference in
the Prospectus, accurately and fairly present in all material respects
the information required to be shown with respect to such options,
plans, arrangements, and rights.
(f) The Common Shares to be sold by the Company have been
duly authorized and, when issued, delivered and paid for in the manner
set forth in this Agreement, will be duly authorized, validly issued,
fully paid and nonassessable, and will conform to the description
thereof contained in the Prospectus and the documents incorporated by
reference in the Prospectus, good and marketable title thereto will
pass to the Underwriters free and clear of any liens, security
interests, adverse claims, equities or other encumbrances of any kind
or character, except as may have been created by any Underwriter. No
preemptive rights or other rights to subscribe for or purchase exist
with respect to the issuance and sale of any of the Common Shares by
the Company pursuant to this Agreement. No stockholder of the Company
has any right that has not been waived in writing to require the
Company to register the sale of any shares owned by such stockholder
under the Act in the public offering contemplated by this Agreement.
(g) The Company has full legal right, corporate power and
authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that (i) the validity
and binding effect and enforcement of this Agreement may be limited by
any applicable bankruptcy, reorganization, moratorium, or similar laws
of general application, (ii) the availability of equitable remedies
may be limited by principles of equity, whether considered in a
proceeding at law or in equity, and (iii) the terms thereof may be
limited by applicable securities laws and the policies embodied
therein. The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions herein
contemplated will not violate any provisions of the Company's Amended
and Restated Articles of Incorporation or Amended and Restated Code of
Regulations and will not result in the breach or violation of, or
constitute, either by itself or upon notice or the passage of time or
both, a default under any material agreement, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other material
instrument to which the Company is a party or by which the Company or
any of its properties may be bound or affected, or any statute or any
authorization, judgment, decree, order, rule or regulation of any
court or any regulatory body, administrative agency or other
governmental body applicable to the Company or any of its properties.
No consent, approval, authorization or other order of any court,
regulatory body, administrative agency or
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other governmental body is required for the execution and delivery of
this Agreement or the consummation of the transactions contemplated by
this Agreement, except for compliance with the Act, the Blue Sky laws
and Canadian securities laws applicable to the public offering of the
Common Shares by the Underwriters and the issuance of a no objection
letter with respect to such offering by the National Association of
Securities Dealers, Inc. (the "NASD").
(h) Price Waterhouse LLP, who have expressed their opinion
with respect to the Company's financial statements filed with the
Commission as a part of the Registration Statement and included or
incorporated by reference in the Prospectus and in the Registration
Statement, are independent accountants as required by the Act and the
Rules and Regulations.
(i) The consolidated financial statements of the Company and
the related notes thereto included in the Registration Statement and
the Prospectus, present fairly the consolidated financial position of
the Company as of the respective dates of such financial statements,
and the results of operations and changes in financial position of the
Company for the respective periods covered thereby. Such financial
statements and related notes have been prepared in accordance with
generally accepted accounting principles applied on a consistent
basis, except that all interim financial data shall be subject to
normal year-end adjustments consistent with past practice. The
Financial Statements and related notes thereto for the Company's
fiscal years ended January 2, 1994, January 1, 1995 and December 31,
1995, which are included in the Prospectus, have been certified by
Price Waterhouse LLP, the Company's independent accountants. No other
financial statements or schedules are required to be included in, or
incorporated by reference in, the Registration Statement. The
selected financial data set forth in the Prospectus under the captions
"Summary Financial Data," "Capitalization" and "Selected Financial
Data" fairly present the information set forth therein on the basis
stated in the Prospectus. The financial information and statistical
data set forth in the Prospectus under the captions "Use of Proceeds,"
"Price Range of Common Stock," "Management's Discussion and Analysis
of Financial Condition and Results of Operations," "Business,"
"Management" and "Principal Stockholders" are materially accurate.
(j) The Company is not in violation or default of any
provision of its Certificate of Incorporation; none of the
Subsidiaries is in violation or default of its Amended and Restated
Articles of Incorporation or its Amended and Restated Code of
Regulations. Except as disclosed in the Prospectus and except as to
defaults that individually or in the aggregate would not have a
material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company, the Company is in
breach of or default with respect to any provision of any judgment,
decree or order, or is in breach of or default with respect to any
provision of any material agreement, mortgage, deed of trust, lease,
loan agreement, security agreement, license, indenture, permit or
other instrument to which
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it is a party or by which it or any of its properties are bound; and,
to the Company's knowledge, there does not exist any state of facts
which constitutes an event of default on the part of the Company or
which, with notice or lapse of time or both, would constitute such an
event of default.
(k) There are no contracts or other documents required to be
described in the Prospectus or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations
which have not been described or filed as required. The contracts so
described in the Prospectus are in full force and effect on the date
hereof; and the Company is not in breach of or default under any
material provision of any such contract which would have a material
adverse effect on the Company.
(l) Except as disclosed in the Prospectus, there are no legal
or governmental actions, suits or proceedings pending or, to the best
knowledge of the Company, threatened to which the Company is or may be
a party or with respect to which material property owned or leased by
the Company is or may be the subject, or related to environmental,
employment of aliens, sexual harassment or discrimination matters,
which actions, suits or proceedings would, individually or in the
aggregate, prevent or adversely affect the transactions contemplated
by this Agreement or result in a material adverse change in the
condition (financial or otherwise), properties, business, or results
of operations of the Company, and no labor disturbance by the
employees of the Company exists or, to the knowledge of the Company,
is imminent which would be expected to result in a material adverse
change in the condition (financial or otherwise), properties, business
or results of operations of the Company. The Company is not a party
to, or subject to the provisions of, any material injunction,
judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body.
(m) The Company has good and marketable title to all the
properties and assets reflected as owned by it in the financial
statements included in the Prospectus (or as reflected or described in
the Prospectus), subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except (i) those, if any, reflected in such
financial statements (or as described in the Prospectus), or (ii)
those which do not materially and adversely affect the use made and
proposed to be made of such property by the Company. The Company
holds its leased properties under valid and binding leases, with such
exceptions as do not have a material adverse effect on the business of
the Company. Except as disclosed in the Prospectus, the Company owns
or leases all such properties as are necessary to its operations as
now conducted.
(n) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
described in or specifically contemplated by the Prospectus (i) the
Company has not incurred any material liabilities or obligations,
direct, indirect or contingent, or entered into any material verbal or
written agreement or other transaction which is not in the ordinary
course of business; (ii) the Company has not sustained any material
loss or interference with its properties from fire, flood, windstorm,
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accident or other calamity, whether or not covered by insurance; (iii)
the Company has not paid or declared any dividends or other
distributions with respect to its capital stock, and the Company is
not in default in the payment of principal or interest on any
outstanding debt obligations, except such default as would not have a
material adverse effect on the Company; (iv) there has not been any
change in the capital stock or indebtedness material to the Company;
and (v) there has not been any material adverse change in the
condition (financial or otherwise), business, properties or results of
operations of the Company.
(o) The Company has validly registered in the principal
register with the U.S. Patent and Trademark Office the trademarks
service marks "Cooker Bar and Grill(R)", "The Southern Cooker - Home
Style Restaurant & Bar(R)" and "Cooker(SM)", and the Company has
sufficient trademarks, trade names, patent rights, mask works,
copyrights, licenses, approvals and governmental authorizations to
conduct its business as now conducted; the Company has no knowledge of
any infringement by the Company of trademarks, trade name rights,
patent rights, mask works, copyrights, licenses, trade secret or other
similar rights of others; the Company has no knowledge of any
infringement by others of its trademarks, trade name rights, patent
rights, mask works, copyrights, licenses, trade secrets or other
similar rights that would be material to the business or financial
condition of the Company; and there is no claim currently pending
against the Company regarding trademark, trade name, patent right,
mask work, copyright, license, trade secret or other infringement
which could have a material adverse effect on the condition (financial
or otherwise), business or results of operations of the Company.
(p) Except as disclosed in the Prospectus, the Company has
not been advised, and has no reason to believe, that either it is not
conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business,
including, without limitation, all applicable local, state and federal
employment, truth-in-advertising, licensing, discrimination,
immigration, alcoholic beverage and environmental laws and
regulations, except where failure to be so in compliance would not
materially adversely affect the condition (financial or otherwise),
business or results of operations of the Company.
(q) The Company has filed all federal, state and foreign
income and franchise tax returns or extensions therefor required to be
filed and has paid all taxes shown as due thereon; and the Company has
no knowledge of any tax deficiency which has been or might be asserted
or threatened against the Company which would materially and adversely
affect the business, operations or properties of the Company.
(r) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; and (iii) the recorded
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accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(s) The Company is not required to make, and following
receipt of the proceeds from the sale of the Common Shares will not be
required to make, any filing or to register under the Investment
Company Act of 1940, as amended.
(t) There is no proceeding pending or to the knowledge of the
Company, threatened which seeks the revocation, suspension,
termination or nonrenewal of any certificate, order, license, permit,
easement, consent, waiver, approval, franchise, grant, authorization
or concession required to conduct the business of the Company as now
conducted and which revocation, suspension, termination or nonrenewal
would have a material adverse effect on the condition (financial or
otherwise), business or results of operations of the Company.
(u) The documents incorporated by reference in the
Registration Statement and Prospectus comply in all material respects
with the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder, and any additional documents deemed to be
incorporated by reference in the Prospectus will, when they are filed
with the Commission, comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder, and both the documents incorporated by
reference in the Prospectus and any additional documents deemed to be
incorporated by reference in the Prospectus do not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which they
are made, not misleading.
(v) The Company has not taken and will not take, directly or
indirectly, any action that might be reasonably expected to cause or
result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Common Shares.
(w) The Company does not conduct business with the Government
of Cuba, or in Cuba, or with any Cuban business entity or enterprise.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The
Underwriters represent and warrant to the Company that the information set
forth (i) on the cover page of the Prospectus with respect to price,
underwriting discounts and commissions and terms of the offering and (ii) in
the stabilization paragraph on the second page of the Prospectus and (iii)
under "Underwriting" in the Prospectus furnished to the Company by the
Underwriters for use in connection with the preparation of the Registration
Statement and the Prospectus is correct in all material respects. The Company
acknowledges that this information is the sole information furnished to the
Company by the Underwriters for inclusion in the Registration Statement, any
Preliminary Prospectus, any Prospectus, or any amendment or supplement thereto.
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SECTION 4. PURCHASE, SALE AND DELIVERY OF COMMON SHARES. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Underwriters 2,500,000 Firm Common Shares, and the
Underwriters agree, severally and not jointly, to purchase from the Company the
number of Firm Common Shares set forth opposite their respective names in
Schedule A hereto. The purchase price per share to be paid by the Underwriters
to the Company shall be $ per share.
Delivery of the certificate(s) for the Firm Common Shares to be
purchased by the Underwriters and payment therefor shall be made by or on
behalf of the Company to the Underwriters or to the account of Montgomery
Securities, at the Depositary Trust Corporation, New York, New York ("DTC"), as
the Representatives may direct, for the respective accounts of the
Underwriters. In the event certificates are delivered to the Underwriters
other than through DTC, such delivery shall be made at the offices of
(or such other place as may be agreed upon by the Company and the
Representatives). Delivery of certificates, whether through DTC or otherwise,
shall be made at such time and date, not later than the third (or, if the Firm
Common Shares are priced, as contemplated by Rule 15c6-1(c) promulgated under
the Securities Exchange Act of 1934, as amended, after 4:30 p.m., Washington
D.C. time, the fourth) full business day following the first date that any of
the Firm Common Shares are released by the Underwriters for sale to the public,
as the Underwriters shall designate (the "First Closing Date"); provided,
however, that if the Prospectus is at any time prior to the First Closing Date
recirculated to the public, the First Closing Date shall occur upon the later
of the third or fourth, as the case may be, full business day following the
first date that any of the Common Shares are released by the Underwriters for
sale to the public or the date that is 48 hours after the date that the
Prospectus has been so recirculated. The certificates for the Firm Common
Shares shall be registered in such names and denominations as the Underwriters
shall have requested at least two full business days prior to the First Closing
Date, and shall be made available for checking and packaging on the business
day preceding the First Closing Date at a location in New York, New York, as
may be designated by the Representatives. 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. Payment by the Underwriters
of the purchase price of the Firm Common Shares shall be made by wire transfer
in same day funds to the Company's account at
Bank, Account Number .
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters to purchase up
to 375,000 Optional Common Shares at the purchase price per share to be paid
for the Firm Common Shares, for use solely in covering any over-allotments made
by the Underwriters in the sale and distribution of the Firm Common Shares.
The options granted hereunder may be exercised at any time (but not more than
once) within 30 days after the first date that any of the Firm Common Shares
are released by the Underwriters for sale to the public upon notice by the
Underwriters to the Company setting forth the aggregate number of Optional
Common Shares as to which the Underwriters are exercising the options, the
names and denominations in which the certificates for such shares are to be
registered and the time and place at
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which such certificates will be delivered. Such time of delivery (which may
not be earlier than the First Closing Date), being herein referred to as the
"Second Closing Date," shall be determined by the Underwriters, but if at any
time other than the First Closing Date shall not be earlier than three nor
later than five full business days after delivery of such notice of exercise.
The number of Optional Common Shares to be purchased by each Underwriter shall
be determined by multiplying the aggregate number of Optional Common Shares to
be sold by the Company pursuant to such notice of exercise by a fraction, the
numerator of which is the number of Firm Common Shares to be purchased by such
Underwriter as set forth opposite its name in Schedule A and the denominator of
which is 2,500,000 (subject to such adjustments to eliminate any fractional
share purchases as the Underwriters in their discretion may make).
Certificates for the Optional Common Shares will be made available for checking
and packaging on the business day preceding the Second Closing Date at a
location in New York, New York, designated by the Representatives. The manner
of payment for and delivery of the Optional Common Shares shall be the same as
for the Firm Common Shares purchased, as specified in this paragraph 4. At any
time before lapse of the options, the Underwriters may cancel such options by
giving written notice of such cancellation to the Company. If the options are
canceled or expire unexercised in whole or in part, the Company will deregister
under the Act the number of Optional Common Shares as to which the option has
not been exercised.
Subject to the terms and conditions hereof, the Underwriters propose
to make a public offering of their respective portions of the Firm Common
Shares, and of the Optional Common Shares, if and to the extent that the
Underwriters exercise their option to purchase Optional Common Shares, as soon
after the effective date of the Registration Statement as in the judgment of
the Underwriters is advisable and at the public offering price set forth on the
cover page of and on the terms set forth in the Prospectus.
SECTION 5. COVENANTS OF THE COMPANY. The Company covenants and
agrees that:
(a) The Company will use its reasonable best efforts to cause
the Registration Statement and any amendment thereof, if not effective
at the time and date that this Agreement is executed and delivered by
the parties hereto, to become effective. If the Registration
Statement has become or becomes effective pursuant to Rule 430A of the
Rules and Regulations, or the filing of the Prospectus is otherwise
required under Rule 424(b) of the Rules and Regulations, the Company
will file the Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) of the Rules and Regulations
within the time period prescribed and will provide evidence
satisfactory to the Underwriters of such timely filing. The Company
will promptly advise the Underwriters in writing (i) of the receipt of
any comments of the Commission, (ii) of any request of the Commission
for amendment of or supplement to the Registration Statement (either
before or after it becomes effective), any Preliminary Prospectus or
the Prospectus or for additional information, (iii) when the
Registration Statement shall have become effective and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of
any proceedings for that purpose. If the Commission shall enter any
such stop order at any time, the Company will use its reasonable best
efforts to obtain the
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lifting of such order at the earliest possible moment. The Company
will not file any amendment or supplement to the Registration
Statement (either before or after it becomes effective), any
Preliminary Prospectus or the Prospectus of which the Underwriters
have not been furnished with a copy a reasonable time prior to such
filing or to which the Underwriters reasonably object in writing or
which is not in compliance with the Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission,
promptly upon the Underwriters' request, any amendments or supplements
to the Registration Statement or the Prospectus which in the
Underwriters' judgment may be necessary or advisable to enable the
several Underwriters to continue the distribution of the Common Shares
and will use its best efforts to cause the same to become effective as
promptly as possible. The Company will fully and completely comply
with the provisions of Rule 430A of the Rules and Regulations with
respect to information omitted from the Registration Statement in
reliance upon such Rule.
(c) If at any time within the nine-month period referred to
in Section 10(a)(3) of the Act during which a prospectus relating to
the Common Shares is required to be delivered under the Act any event
occurs, as a result of which the Prospectus, including any amendments
or supplements, would include an untrue statement of a material fact,
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or if it is
necessary at any time to amend the Prospectus, including any
amendments or supplements, to comply with the Act or the Rules and
Regulations, the Company will promptly advise the Underwriters thereof
and will promptly prepare and file with the Commission, at its own
expense, an amendment or supplement which will correct such statement
or omission or an amendment or supplement which will effect such
compliance and will use its reasonable best efforts to cause the same
to become effective as soon as possible; and, in case any Underwriter
is required to deliver a prospectus after such nine-month period, the
Company, upon request, but at the expense of such Underwriter, will
promptly prepare such amendment or amendments to the Registration
Statement and such Prospectus or Prospectuses as may be necessary to
permit compliance with the requirements of Section 10(a)(3) of the
Act.
(d) As soon as practicable, but not later than 45 days after
the end of the first fiscal quarter ending after one year following
the "effective date of the Registration Statement" (as defined in Rule
158(c) of the Rules and Regulations), the Company will make generally
available to its security holders an earnings statement (which need
not be audited) covering a period of 12 consecutive months beginning
after the effective date of the Registration Statement which will
satisfy the provisions of the last paragraph of Section 11(a) of the
Act.
(e) During such period as a prospectus is required by law to
be delivered in connection with sales by an Underwriter or dealer, the
Company, at its expense, but only for the nine-month period referred
to in Section 10(a)(3) of the Act, will furnish to the Underwriters
copies of the Registration Statement, the Prospectus, the Preliminary
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Prospectus and all amendments and supplements to any such documents
in each case as soon as available and in such quantities as the
Underwriters may reasonably request, for the purposes contemplated by
the Act.
(f) The Company shall cooperate with the Underwriters and
their counsel in order to qualify or register the Common Shares for
sale under (or obtain exemptions from the application of) the Blue Sky
laws of such jurisdictions, and, in the case of jurisdictions in
Canada, under Canadian securities laws, as the Underwriters designate,
and will comply with such laws and continue such qualifications,
registrations and exemptions in effect so long as reasonably required
for the distribution of the Common Shares. The Company shall not be
required to qualify as a foreign corporation or to file a general
consent to 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 Underwriters
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 overt 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, with the Underwriters' cooperation, will use its
reasonable best efforts to obtain the withdrawal thereof.
(g) During the period of three years hereafter, the Company
will furnish to the Underwriters: (i) as soon as practicable after the
end of each fiscal year, copies of the Annual Report to Stockholders
of the Company containing the balance sheet of the Company as of the
close of such fiscal year and statements of income, stockholders'
equity and cash flows for the year then ended and the opinion thereon
of the Company's independent public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement,
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, 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 Common Stock.
(h) During the period of days from the date of the
Prospectus, without the prior written consent of Montgomery Securities
(the giving or withholding of such written consent being in the sole
discretion of Montgomery Securities), the Company will not issue,
offer, sell, grant options to purchase or otherwise dispose of any of
the Company's equity securities or any other securities convertible
into or exchangeable with its Common Stock or other equity security,
except for the grant of options in the ordinary course of business
pursuant to existing stock option plans.
(i) The Company will apply the net proceeds of the sale of
the Common Shares sold by it substantially in accordance with its
statements under the caption "Use of Proceeds" in the Prospectus.
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(j) The Company will use its reasonable best efforts to
qualify or register its Common Stock for sale in non-issuer
transactions under (or obtain exemptions from the application of) the
Blue Sky laws of the State of California (and thereby permit market
making transactions and secondary trading in the Company's Common
Stock in California), will comply with such Blue Sky laws and will use
its reasonable best efforts to maintain such qualifications,
registrations and exemptions in effect for a period of three years
after the date hereof.
The Underwriters may, in their sole discretion, waive in
writing the performance by the Company of any one or more of the
foregoing covenants or extend the time for their performance.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective or
is terminated, the Company agrees to pay all costs, fees and expenses incurred
in connection with the performance of its obligations and the obligations of
the Selling Stockholders hereunder, including without limiting the generality
of the foregoing, (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters, (iv) all fees and expenses
of the Company's counsel, Selling Stockholders' counsel and the Company's
independent accountants, (v) all costs and expenses incurred in connection with
the preparation, printing, filing, shipping and distribution to the
Underwriters and dealers of the Registration Statement, each Preliminary
Prospectus and the Prospectus (including all exhibits and financial statements)
and all amendments and supplements provided for herein, this Agreement, the
Agreement Among Underwriters, the Selected Dealers Agreement, the Underwriters'
Questionnaire, the Underwriters' Power of Attorney and the preliminary Blue Sky
memorandum and final Blue Sky memorandum, (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 Blue Sky laws and applicable Canadian securities laws, (vii) the filing
fees incident to, and the fees and expenses of counsel for the Underwriters in
connection with, securing any required review by the NASD of the terms of sale
of the Common Shares, and (viii) all other fees, costs and expenses referred to
in Item 14 of the Registration Statement. Except as provided in this Section 6,
Section 8 and Section 10 hereof, the Underwriters shall pay all of their own
expenses, including the fees and disbursements of their counsel (excluding
those relating to qualification, registration or exemption under the Blue Sky
laws, Canadian securities laws, the Blue Sky memoranda and relating to review
by the NASD referred to above).
SECTION 7. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase and pay for the Firm Common Shares
on the First Closing Date and the Optional Common Shares on the Second Closing
Date shall be subject to the accuracy of the representations and warranties on
the part of the Company herein set forth as of the date hereof and as of the
First Closing Date or the Second Closing Date, as the case may be, to the
accuracy of the statements of Company officers made pursuant to the provisions
of this Agreement, to the
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performance by the Company of its obligations hereunder, and to the following
additional conditions:
(a) The Registration Statement shall have become effective
not later than 5:00 p.m., Washington D.C. time, on the date of this
Agreement, or at such later time as shall have been consented to by
you; if the filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b) of the Rules and Regulations, the
Prospectus shall have been filed in the manner and within the time
period required by Rule 424(b) of the Rules and Regulations; prior to
such Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or shall be pending or, to the
knowledge of the Company or the Underwriters, shall be contemplated by
the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement, or otherwise,
shall have been complied with to the Underwriters' reasonable
satisfaction.
(b) The Underwriters shall be satisfied that since the
respective dates as of which information is given in the Registration
Statement and Prospectus, (i) there shall not have been any change in
the capital stock (other than pursuant to the exercise of director,
officer or employee stock options disclosed in the Registration
Statement or Prospectus and outstanding as of the date of the
Prospectus) of the Company or any material change in the indebtedness,
(other than in the ordinary course of business) of the Company, (ii)
except as set forth in or contemplated by the Registration Statement
or the Prospectus, no material verbal or written agreement or other
transaction shall have been entered into by the Company which is not
in the ordinary course of business and which reasonably could be
expected to result in a material reduction in the future earnings of
the Company, (iii) no loss or damage (whether or not insured) to the
property of the Company shall have been sustained which materially and
adversely affects the condition (financial or otherwise), business or
results of operations of the Company, (iv) no legal or governmental
action, suit or proceeding affecting the Company which could have a
material adverse effect upon the Company, or which affects or may
affect the transactions contemplated by this Agreement shall have been
instituted or threatened in writing and (v) there shall not have been
any material adverse change in the condition (financial or otherwise),
business, management or results of operations of the Company which
makes it impractical or inadvisable in the judgment of the
Underwriters to proceed with the public offering or purchase of the
Common Shares as contemplated hereby.
(c) There shall have been furnished to the Underwriters on
each Closing Date, in form and substance satisfactory to the
Underwriters, the following documents and certificates:
(i) An opinion of Schwartz, Warren & Ramirez,
counsel for the Company, addressed to the Underwriters and
dated the First Closing Date, or the Second Closing Date, as
the case may be, to the effect that:
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(1) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of its jurisdiction of
incorporation, to the knowledge of such counsel is
duly qualified to do business and is in good standing
as a foreign corporation in all other jurisdictions
where the ownership or leasing of properties or the
conduct of its business requires such qualification,
except for jurisdictions in which the failure to so
qualify would not have a material adverse effect on
the Company, and the Company has requisite corporate
power and authority to own its properties and conduct
its business as described in the Registration
Statement;
(2) The authorized capital stock of the
Company was as set forth under the caption
"Capitalization" in the Prospectus as of the dates
stated therein; all necessary and proper corporate
proceedings have been taken in order to validly
authorize such authorized Common Stock and to validly
issue such issued and outstanding Common Stock; all
outstanding shares of Common Stock (including the
Firm Common Shares and Optional Common Shares, if
any) have been duly authorized and validly issued,
are fully paid and nonassessable, were not issued in
violation of any statutory preemptive rights, and to
the knowledge of such counsel, will not be issued in
violation of any other preemptive rights or other
rights to subscribe for or purchase any securities;
neither the Amended and Restated Articles of
Incorporation nor Amended and Restated Code of
Regulations of the Company contain any restriction
upon the voting or transfer of any of the shares of
capital stock of the Company (including the Firm
Common Shares and the Optional Common Shares), except
such restrictions as may be imposed by federal, state
or Canadian securities laws or as may be expressly
described in the Prospectus;
(3) The certificate(s) evidencing the Common
Shares to be delivered hereunder are in due and
proper form under Ohio law, and when delivered to the
Underwriters or to the order of the Underwriters
against payment of the agreed consideration therefor
in accordance with the provisions of this Agreement,
and the Common Shares represented by such
certificate(s) will be duly authorized and validly
issued, fully paid and nonassessable, will not have
been issued in violation of or subject to any
statutory preemptive rights and, to the knowledge of
such counsel, were not issued in violation of any
other preemptive or other similar rights to subscribe
for or purchase securities, and will conform in all
material respects to the description thereof
contained in the Prospectus;
(4) Except as disclosed or specifically
described in the Prospectus, to such counsel's
knowledge, there are no outstanding options, warrants
or other rights calling for the issuance of, and no
commitments or obligations
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to issue, any shares of capital stock of the Company
or any security convertible into or exchangeable for
capital stock of the Company;
(5) (a) The Registration Statement has
become effective under the Act, and, to such
counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or
preventing the use of the Prospectus has been issued
and no proceedings for that purpose have been
instituted or are pending or overtly threatened by
the Commission; any required filing of the Prospectus
and any supplement thereto pursuant to Rule 424(b) of
the Rules and Regulations has been made in the manner
and within the time period required by such Rule
424(b);
(b) The Registration Statement, the
Prospectus and each amendment or supplement thereto
(except for the financial statements and schedules
and other statistical data and schedules included
therein, as to which such counsel need express no
opinion) comply as to form in all material respects
with the requirements of the Act and the Rules and
Regulations; and
(c) To such counsel's knowledge, there
are no written license agreements, dealer agreements,
leases, contracts, agreements or documents of a
character required to be disclosed in the
Registration Statement, the Prospectus, or to be
filed as exhibits to the Registration Statement which
are not disclosed or filed, as required;
(6) The Company has requisite corporate
power and authority to enter into this Agreement and
to sell and deliver the Common Shares to be sold by
it to the Underwriters; this Agreement has been duly
authorized by all necessary corporate action by the
Company, has been duly executed and delivered by and
on behalf of the Company, and no approval,
authorization, order, consent, registration, filing,
qualification, license or permit of or with any
court, regulatory, administrative or other
governmental body of the United States of America or
the States of Ohio or Florida is required for the
execution and delivery of this Agreement by the
Company or the consummation of the transactions
described in this Agreement, except (i) such as have
been obtained under the Act and (ii) such as may be
required under applicable Blue Sky laws and
applicable Canadian securities laws in connection
with the purchase and distribution of the Common
Shares by the Underwriters and the obtaining of a
letter of no objection from the NASD with respect to
such offering, as to which such counsel need express
no opinion.
(7) The execution and performance of this
Agreement, the sale of the Common Shares and the
consummation of the transactions herein
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described will not violate any of the provisions of
the Amended and Restated Articles of Incorporation or
Amended and Restated Code of Regulations of the
Company, or, to such counsel's knowledge, result in
the breach of or constitute, either by itself or upon
notice or the passage of time or both, a default
under any material written agreement, mortgage, deed
of trust, lease, franchise, license, indenture,
permit or other instrument to which the Company is a
party or by which the Company or any of its property
may be bound or affected, which is material to the
Company, or, to such counsel's knowledge, violate any
statute, judgment, decree, order, rule or regulation
of any court or government body having jurisdiction
over the Company or any of its property, except where
such violation of such statute, judgment, decree,
order, rule or regulation would not materially and
adversely affect the Company (other than clearance by
the NASD of the fairness of the underwriting
arrangements and state securities or Blue Sky laws or
Canadian securities laws and regulations as to which
counsel need not express any opinion);
(8) The Company is not in violation of its
Amended and Restated Articles of Incorporation or
Amended and Restated Code of Regulations;
(9) To such counsel's knowledge, there are
no legal actions, suits or governmental proceedings
pending or threatened before any court or
governmental agency, authority or body which is
required to be described in the Prospectus that is
not described as required;
(10) To such counsel's knowledge, no holders
of securities of the Company have rights that have
not been waived in writing to the registration of
shares of Common Stock or other securities which
would be required to be included in the Registration
Statement filed by the Company or included in the
offering contemplated thereby; and
(11) No transfer taxes are required to be
paid under the laws of the States of Ohio or Florida
in connection with the sale and delivery of the
Common Shares to the Underwriters hereunder.
In rendering such opinion, such counsel may rely, as
to matters of fact, on certificates of the officers of the
Company and of governmental officials, in which case their
opinion shall state that they are so doing and copies of such
certificates are to be delivered to Underwriters and their
counsel.
In addition, such counsel shall state that they have
participated in conferences with officers, employees and other
representatives of the Company, counsel for the Underwriters,
representatives of the independent public accountants for the
Company and representatives of the Underwriters at which the
contents of
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the Registration Statement and Prospectus 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 and Prospectus and has not made any
independent check or verification thereof, on the basis of the
foregoing (relying as to materiality to a large extent upon
the statements of officers, employees and other
representatives of the Company), no facts have come to such
counsel's attention that lead them to believe that either the
Registration Statement at the time such Registration Statement
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 in light
of the circumstances in which they were made, not misleading,
or the Prospectus as of its date contained an untrue statement
of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading,
except that such counsel need express no opinion with respect
to the financial statements, schedules and other statistical
data included in the Registration Statement or Prospectus.
(ii) Such opinion or opinions of Locke Purnell Rain
Harrell (A Professional Corporation), counsel for the
Underwriters, dated the First Closing Date or the Second
Closing Date, as the case may be, with respect to the
incorporation of the Company, the sufficiency of all corporate
proceedings and other legal matters relating to this
Agreement, the validity of the Common Shares, the Registration
Statement and the Prospectus and other related matters as the
Underwriters may reasonably require, and the Company shall
have furnished to such counsel such documents and shall have
exhibited to them such papers and records as they reasonably
may request for the purpose of enabling them to pass upon such
matters. In connection with such opinions, such counsel may
rely on representations or certificates of the officers of the
Company and governmental officials.
(iii) A certificate of the Company executed by the
Chairman of the Board and Chief Executive Officer and the
Chief Financial or Accounting Officer of the Company, dated
the First Closing Date or the Second Closing Date, as the case
may be, to the effect that:
(1) The representations and warranties of
the Company set forth in Section 2 of this Agreement
are true and correct as of the date of this Agreement
and as of the First Closing Date or the Second
Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all
the conditions on its part to be performed or
satisfied on or prior to such Dates, respectively;
(2) The Commission has not issued any order
preventing or suspending the use of the Prospectus or
any Preliminary Prospectus filed as a part of the
Registration Statement or any amendment thereto; no
stop order
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suspending the effectiveness of the Registration
Statement has been issued; and to the best of the
knowledge of the respective signers, no proceedings
for that purpose have been instituted or are pending
or overtly threatened under the Act;
(3) Each of the respective signers of the
certificate has carefully examined the Registration
Statement and the Prospectus; in his opinion and to
the best of his knowledge, the Registration Statement
and the Prospectus and any amendments or supplements
thereto contain all statements required to be stated
therein regarding the Company and its subsidiaries,
and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto
includes any untrue statement of a material fact or
omits to state any material fact required to be
stated therein or necessary to make the statements
therein not misleading;
(4) Since the initial date on which the
Registration Statement was filed, no agreement,
written or oral, transaction or event has occurred
which should have been set forth in an amendment to
the Registration Statement or in a supplement to or
amendment of any Prospectus which has not been
disclosed in such a supplement or amendment;
(5) Since the respective dates as of which
information is given in the Registration Statement
and the Prospectus, and except as disclosed in or
contemplated by the Prospectus, there has not been
any material adverse change or a development
involving a material adverse change in the condition
(financial or otherwise), business, properties,
results of operations, management or prospects of the
Company; no legal or governmental action, suit or
proceeding is pending or threatened against the
Company or its Subsidiaries which is material to the
Company, whether or not arising from transactions in
the ordinary course of business, or which may
adversely affect the transactions contemplated by
this Agreement; the Company has not entered into any
verbal or written agreement or other transaction
which is not in the ordinary course of business or
which reasonably could be expected to result in a
material reduction in the future earnings of the
Company, or incurred any material liability or
obligation, direct, contingent or indirect, made any
change in its capital stock, made any material change
in its short-term debt or long-term debt or
repurchased or otherwise acquired any of the
Company's capital stock; and the Company has not
declared or paid any dividend, or declared or made
any other distribution, with respect to its
outstanding capital stock payable to stockholders of
record, except as disclosed in the Prospectus, on a
date prior to the First Closing Date or Second
Closing Date, as the case may be; and
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(6) Since the respective dates as of which
information is given in the Registration Statement
and the Prospectus and except as disclosed in or
contemplated by the Prospectus, neither the Company
nor any of the Subsidiaries has sustained a material
loss or damage by strike, fire, flood, windstorm,
accident or other calamity (whether or not insured).
(v) On the date before this Agreement is executed
and also on the First Closing Date and the Second Closing
Date, letters addressed to the Underwriters from Price
Waterhouse LLP, independent accountants, the first one to be
dated the day before the date of this Agreement, the second
one to be dated the First Closing Date and the third one (in
the event of a Second Closing) to be dated the Second Closing
Date, in form and substance satisfactory to you.
(vi) On or before the First Closing Date, letters
from each director and officer of the Company and from each
person or entity named under the caption "Principal
Stockholders" in the Prospectus, in form and substance
satisfactory to you, confirming that for a period of _____
days from the date of the Prospectus such person or entity
will not directly or indirectly sell or offer to sell or
otherwise dispose of any shares of Common Stock or any right
to acquire such shares without the prior written consent of
Montgomery Securities, which consent may be withheld at the
sole discretion of Montgomery Securities; provided that such
persons may exercise stock options granted in the ordinary
course of business pursuant to the Company's existing stock
option plans.
All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are
reasonably satisfactory to the Underwriters and to Locke Purnell Rain
Harrell (A Professional Corporation), counsel for the Underwriters.
The Company shall furnish the Underwriters with such manually signed
or conformed copies of such opinions, certificates, letters and
documents as the Underwriters request. Any certificate signed by any
officer of the Company and delivered to the Underwriters shall be
deemed to be a representation and warranty by the Company to the
Underwriters as to the statements made therein.
If any condition to the Underwriters' obligations hereunder to
be satisfied prior to or at the First Closing Date is not so
satisfied, this Agreement at the election of the Underwriters will
terminate upon notification by the Underwriters to the Company without
liability on the part of any Underwriter or the Company, except for
the expenses to be paid or reimbursed by the Company pursuant to
Sections 6 and 8 hereof and except to the extent provided in Section
10 hereof.
SECTION 8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. Notwithstanding
any other provisions hereof, if this Agreement shall be terminated by you
pursuant to the termination provisions of Section 13 by reason of the
inaccuracy of the representations and warranties of the Company set forth in
this Agreement or the inaccuracy of the statements of Company officers made
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pursuant to the provisions of this Agreement or the failure of any other
condition to the obligations of the Underwriters set forth in Section 7 hereof
to be fulfilled, or if the sale to the Underwriters of the Common Shares at the
First Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or to comply
with any provision hereof, the Company agrees to reimburse the Underwriters
upon demand for all out-of-pocket expenses that shall have been reasonably
incurred by the Underwriters in connection with the proposed purchase and the
sale of the Common Shares, including but not limited to fees and disbursements
of Underwriters' counsel, printing expenses, travel expenses, postage, telecopy
charges and telephone charges relating directly to the offering contemplated by
the Prospectus. Any such termination shall be without liability of any party
to any other party, except that the provisions of this Section 8, Section 6 and
Section 10 shall at all times be effective and shall apply.
SECTION 9. EFFECTIVENESS OF REGISTRATION STATEMENT. The Underwriters
and the Company will use their respective best efforts to cause the
Registration Statement to become effective, to prevent the issuance of any stop
order suspending the effectiveness of the Registration Statement and, if such
stop order be issued, to obtain as soon as possible the lifting thereof.
SECTION 10. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Underwriter
or such controlling person may become subject, under the 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 losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise
out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, any amendment
or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state in any of them a material fact required
to be stated therein or necessary to make the statements in any of
them not misleading; and will reimburse each Underwriter and each such
controlling person for any legal and other expenses 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, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment
or supplement thereto in reliance upon and in conformity with the
information furnished to the Company by the Underwriters pursuant to
Section 3 hereof; and provided further, that with respect to any
untrue statement or omission or alleged untrue statement or omission
made in any Preliminary Prospectus, the indemnity agreement contained
in this paragraph shall not inure
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to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages, liabilities or expenses purchased the
Common Shares concerned (or to the benefit of any person controlling
such Underwriter) to the extent that any such loss, claim, damage,
liability or expense of such Underwriter or controlling person results
from the fact that a copy of the Prospectus was not sent or given to
such person at or prior to the written confirmation of sale of such
Common Shares to such person as required by the Act, and if the untrue
statement or omission has been corrected in the Prospectus, unless
such failure to deliver the Prospectus was a result of noncompliance
by the Company with its obligations under Section 6(e) hereof.
(b) In addition to their other obligations under this Section
10 the Company agrees that, as an interim measure during the pendency
of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged
statement or omission, or any inaccuracy in the representations and
warranties of the Company herein or failure to perform the obligations
of the Company hereunder, all as described in Section 10(a), the
Company will reimburse each Underwriter on a quarterly basis for all
reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the Company's
obligations to reimburse each Underwriter for such expenses and the
possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper,
each Underwriter shall promptly return such payment to the Company,
together with interest, compounded daily, determined on the basis of
the prime rate (or other commercial lending rate for borrowers of the
highest credit standing) announced from time to time by Bank of
America NT&SA, San Francisco, California (the "Prime Rate"). Any such
interim reimbursement payments which are not made to an Underwriter
within 30 days of a request for reimbursement shall bear interest at
the Prime Rate from the date of such request. This indemnity
agreement will be in addition to any liability which the Company may
otherwise have.
(c) Each Underwriter will severally indemnify and hold
harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who
controls the Company within the meaning of the Act, against any
losses, claims, damages, liabilities or expenses to which the Company,
or any such director, officer, or controlling person may become
subject under the 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 losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only
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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 the information furnished to the Company pursuant to Section 3
hereof (which information is the sole information furnished to the
Company by the Underwriters for inclusion in the Registration
Statement, any Preliminary Prospectus, any Prospectus, or any
amendment or supplement thereto); and will reimburse the Company, or
any such director, officer or controlling person for any legal and
other expense reasonably incurred by the Company, or any such
director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such
loss, claim, damage, liability, expense or action. In addition to its
other obligations under this Section 10(c), each Underwriter severally
agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or
omission, described in this Section 10(c) which relates to information
furnished to the Company pursuant to Section 3 hereof, it will
reimburse the Company (and, to the extent applicable, each officer,
director or controlling person) on a quarterly basis for all
reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director or controlling person) for such
expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have
been improper, the Company (and, to the extent applicable, each
officer, director or controlling person) shall promptly return such
payment to the Underwriters, together with interest, compounded daily,
determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made within 30 days of a request
for reimbursement, shall bear interest at the Prime Rate from the date
of such request. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, 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
hereunder to the extent it is not materially prejudiced as a proximate
result of such failure. In case any such action is brought against
any indemnified party and such indemnified party notifies an
indemnifying party of the commencement thereof and 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 may wish,
jointly with all other indemnifying parties similarly notified, 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
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and the indemnified party shall have reasonably concluded that there
may be a conflict 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 its election
so to assume the defense of such action and approval by the
indemnified party of counsel, which approval shall not be unreasonably
withheld, the indemnifying party will not be liable to such
indemnified party under this Section for any legal expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defenses 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, approved by the
Underwriters in the case of Section 10(a), 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) If the indemnification provided for in this Section 10 is
required by its terms, but for any reason is held to be unavailable to
or otherwise insufficient to hold harmless any indemnified party under
paragraphs (a), (b), (c) or (d) in respect of any losses, claims,
damages, liabilities or expenses as referred to herein, then each
applicable indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of any losses, claims,
damages, liabilities or expenses referred to herein (i) in such
proportion as is appropriate to reflect the relative benefits received
by the Company and the Underwriters from the offering of the Common
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, then 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 Underwriters in
connection with the statements or omissions or inaccuracies in their
representations and warranties herein which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The respective relative benefits
received by the Company and the Underwriters shall be deemed to be in
the same proportion, in the case of the Company as the total price
paid to the Company for the Common Shares sold by it to the
Underwriters (before deducting expenses), and in the case of
Underwriters as the underwriting commissions received by them, bears
to the total of such amounts paid to the Company and the amounts
received by the Underwriters as underwriting commissions. The
relative fault of the Company and the Underwriters shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact or the inaccurate or the alleged
inaccurate representations and/or warranty relates to the information
supplied by the Company or the
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Underwriters 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
subsection (d) of this Section 10, 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 subsection
(c) of this Section 10 with respect to notice of commencement of any
action shall apply if a claim for contribution is to be made under
this subsection (e); provided, however, that no additional notice
shall be required with respect to any action for which notice has been
given under subsection (d) for the purposes of indemnification. The
Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 10 were determined
solely 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 into account the equitable considerations referred
to in this subsection (e). Notwithstanding the provisions of this
Section 10, no Underwriter shall be required to contribute any amount
in excess of the amount of the total underwriting commissions received
by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within a meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 10 are several in proportion to
their respective underwriting commitments and not joint.
(f) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in this
Section 10, including the amounts of any requested reimbursement
payments and the method of determining such amounts, shall be settled
by arbitration conducted under the provisions of the Constitution and
Rules of the Board of Governors of the New York Stock Exchange, Inc.
or pursuant to the Code of Arbitration Procedure of the NASD. Any
such arbitration must be commenced by service of a written demand for
arbitration or written notice of intention to arbitrate, therein
electing the arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or
notice is authorized to do so. Such an arbitration would be limited
to the operation of the interim reimbursement provisions contained in
this Section 10 and would not resolve the ultimate propriety or
enforceability of the obligation to reimburse expenses which is
created by the provisions of this Section 10.
SECTION 11. DEFAULT OF UNDERWRITERS. It shall be a condition to this
Agreement and the obligation of the Company to sell and deliver the Common
Shares hereunder, and of each Underwriter to purchase the Common Shares in the
manner described herein, that, except as hereinafter in this paragraph
provided, each of the Underwriters shall purchase and pay for all the Common
Shares agreed to be purchased by such Underwriter hereunder upon tender to the
Underwriters of all such shares in accordance with the terms hereof. If ANY
UNDERWRITER defaults in its obligation to purchase Common Shares hereunder on
either the First or Second Closing Date
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and the aggregate number of Common Shares that such defaulting Underwriter
agreed but failed to purchase on such Closing Date does not exceed 10% of the
total number of Common Shares which the Underwriters are obligated severally,
in proportion to their respective commitments hereunder, to purchase on such
Closing Date, the non-defaulting Underwriters shall be obligated to purchase
the Common Shares that such defaulting Underwriter agreed but failed to
purchase on such Closing Date. If any Underwriter so defaults and the
aggregate number of Common Shares with respect to which such default occurs is
more than the above percentage and arrangements satisfactory to the
Underwriters and the Company of such Common Shares for the purchase of such
Common Shares by other persons are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of the
non-defaulting Underwriters or the Company (except for the expenses to be paid
by the Company pursuant to Section 6 hereof and except to the extent provided
in Section 10 hereof).
In the event that Common Shares to which a default relates are to be
purchased by the non-defaulting Underwriters or by another party or parties,
the Underwriters or the sellers of such Common Shares shall have the right to
postpone the First or Second Closing Date, as the case may be, for not more
than three business days in order that the necessary changes in the
Registration Statement, Prospectus and any other documents, as well as any
other arrangements, may be effected. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
SECTION 12. EFFECTIVE DATE. This Agreement shall become effective at
such time as the Registration Statement has become effective and you shall have
released the Firm Common Shares for sale to the public; provided, however, that
the provisions of Sections 6, 8, 10, 13 and 14 hereof shall at all times be
effective. For the purposes of this Section 12, the Firm Common Shares shall
be deemed to have been so released upon the release by the Underwriters for
publication, at any time after the Registration Statement has become effective,
of any newspaper advertisement relating to any of the Common Shares, or upon
the release by the Underwriters of any of the Common Shares for sale to the
public, whichever may occur first.
SECTION 13. TERMINATION. Without limiting the right to terminate
this Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice
to the Underwriters or by the Underwriters by notice to the Company at
any time prior to the time this Agreement shall become effective as to
all its provisions, and any such termination shall be without
liability on the part of the Company to the Underwriters (except for
the expenses to be paid or reimbursed by the Company pursuant to
Sections 6 and 8 hereof and except to the extent provided in Section
10) or of any Underwriter to the Company (except to the extent
provided in Section 10).
(b) This Agreement may also be terminated by the Underwriters
prior to the First Closing Date or prior to the Second Closing Date,
as the case may be, by notice to the
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Company and the Selling Stockholders (i) if additional material
governmental restrictions not in force and effect on the date hereof
shall have been imposed upon trading in securities generally or
minimum or maximum prices shall have been generally established on the
New York Stock Exchange or on the American Stock Exchange or in the
NASDAQ National Market or in the over the counter market by the NASD,
or trading in securities generally shall have been suspended on either
such Exchange or in the NASDAQ National Market or in the over the
counter market by the NASD or the Commission, or a general banking
moratorium shall have been established by federal, New York, Ohio,
Florida or California authorities, (ii) if an outbreak of hostilities
or other national or international calamity or any material change in
political, financial or economic conditions shall have occurred or
shall have accelerated to such an extent that the effect on the
financial markets shall, in the judgment of the Underwriters, affect
adversely the marketability of the Common Shares, (iii) if any adverse
event shall have occurred or shall exist which makes untrue or
incorrect in any material respect any statement or information
contained in the Registration Statement or the Prospectus or any
document incorporated by reference into the Prospectus or which is not
reflected in the Registration Statement or the Prospectus or any
document incorporated by reference into the Prospectus but should be
reflected therein in order to make the statements or information
contained therein not misleading in any material respect, or (iv) if
there shall be any action, suit or proceeding pending or threatened,
or there shall have been any development involving particularly the
business or properties or securities of the Company or the
transactions contemplated by this Agreement, which, in the judgment of
the Underwriters, may materially and adversely affect the business or
earnings of the Company or makes it impracticable to offer or sell the
Common Shares. Any termination pursuant to this subsection (b) shall
be without liability on the part of the Underwriters to the Company or
on the part of the Company to the Underwriters (except for expenses to
be paid or reimbursed by the Company pursuant to Sections 6 or 8
hereof and except to the extent provided in Section 10).
SECTION 14. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company and its officers and of the 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 the Underwriters or the
Company, or any of their partners, officers or directors or any controlling
person, 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 15. NOTICES. All communications hereunder shall be in
writing and, if sent to the Underwriters, shall be mailed, delivered or
telecopied or telegraphed and confirmed to the Underwriters at Montgomery
Securities, 600 Montgomery Street, San Francisco, California 94111, Attention:
General Counsel, and Equitable Securities Corporation, 800 Nashville City
Center, Nashville, Tennessee 37219, Attention:
, with a copy to Locke Purnell Rain Harrell (A Professional
Corporation), 2200 Ross Avenue, Suite 2200, Dallas, Texas 75201, Attention: Dan
Busbee; and if sent to the Company or the Selling Stockholders shall be mailed,
delivered or telecopied or telegraphed and confirmed to the Company at 5500
Village Blvd., West
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Palm Beach, Florida 33407, Attention: G. Arthur Seelbinder, with a copy to
Schwartz, Warren & Ramirez, 41 South High Street, Columbus, Ohio 43215. The
Company or the Underwriters may change the address for receipt of
communications hereunder by giving notice to the other.
SECTION 16. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 11 hereof, and to the benefit of the officers and directors
and controlling persons referred to in Section 10, and in each case their
respective successors, personal representatives and assigns, and no other
person will have any right or obligation hereunder. No such assignment shall
relieve any party of its obligations 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 19. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, subsection, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, subsection, 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 20. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the laws pertaining to
conflicts of laws) of the State of Ohio.
SECTION 21. GENERAL. 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
several counterparts, each one of which shall be an original, and all of which
shall constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company and the Representatives.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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If the foregoing is in accordance with the Underwriters' understanding
of our agreement, kindly sign and return to us the enclosed copies hereof,
whereupon it will become a binding agreement among the Company and the
Underwriters, all in accordance with its terms.
Very truly yours,
COOKER RESTAURANT CORPORATION
By:
------------------------------
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written
by the undersigned Underwriters.
MONTGOMERY SECURITIES
EQUITABLE SECURITIES CORPORATION
By: MONTGOMERY SECURITIES
By:____________________________________________________
Its: Managing Director
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SCHEDULE A
Number of Firm Common
Name of Underwriter Shares to be Purchased
- ---- -- ----------- ------ -- -- ---------
Montgomery Securities -----
Equitable Securities Corporation -----
TOTAL =====
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