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EXHIBIT 10.1
2,500,000 SHARES
COOKER RESTAURANT CORPORATION
COMMON SHARES
UNDERWRITING AGREEMENT
May 7, 1996
MONTGOMERY SECURITIES
EQUITABLE SECURITIES CORPORATION
c/o Montgomery Securities
600 Montgomery Street
San Francisco, California 94111
Dear Sirs:
1. Introductory. Cooker Restaurant Corporation, an Ohio corporation (the
"Company"), proposes to issue and sell 2,500,000 of its authorized but unissued
Common Shares, without par value (the "Common Shares"), to the underwriters
named in Schedule A annexed hereto (the "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 Common
Shares (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:
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. 333-2635) 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 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
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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 and any Registration Statement filed pursuant to Rule 462(b) 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.
(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
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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, 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 more
than 5% of any class of the equity securities issued by 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 Common
Shares 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. As of the respective
Closing Dates (as hereinafter defined), the Company will have no
outstanding preferred shares. 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 other than options granted since March 31, 1996
under any of the Company's stock option plans described, or incorporated by
reference, in the Prospectus. 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,
in the documents incorporated by reference in the Prospectus or in the
Company's 1996 Annual Meeting of Shareholders Proxy Statement, 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
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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 shareholder 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 shareholder 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 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
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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 l, 1995 and December 31, 1995, which
are included in the Prospectus, have been audited and reported on 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 Shares,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business" and "Principal Shareholders" are materially
accurate.
(j) The Company is not in violation or default of any provision 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 not in breach of or
default with respect to any provision of any judgment, decree or order, nor
is it 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 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.
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(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 or documents
incorporated by reference therein), subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except (i) construction or materialman's
liens on properties or assets at Company restaurants under construction on
the date of this Agreement so long as such liens are not placed of record;
(ii) those, if any, reflected in such financial statements (or as described
in the Prospectus or documents incorporated by reference therein), or (iii)
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, 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 service mark "Cooker Bar and
Grill(R)" and currently uses as an unregistered service mark the term
"Cooker--" in combination with other words and designs, and, except as
disclosed in the Prospectus, 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
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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 except for taxes being contested in
good faith with the Internal Revenue Service for which adequate reserves
are in place in accordance with generally accepted accounting principles,
as reflected in the financial statements and notes thereto contained, or
incorporated by reference, in the Prospectus; 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 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 Shares to
facilitate the sale or resale of the Common Shares.
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(w) The Company does not conduct business with the Government of Cuba,
or in Cuba, or with any Cuban business entity or enterprise.
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.
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 $13.145 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 Underwriters
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 Schwartz, Warren & Ramirez a Limited
Liability Company ("Schwartz, Warren & Ramirez") (or such other place as may be
agreed upon by the Company and the Underwriters). 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 Underwriters. 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
federal funds to the Company's account at First Union National Bank of
Tennessee, Account Number 2020000089229, bank routing number 064000059.
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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 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 Underwriters. 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.
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
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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 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
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copies of the Registration Statement, the Prospectus, the Preliminary
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 Shareholders of the
Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, shareholders' equity and cash flows
for the year then ended and the opinion thereon of the Company's
independent public 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 Shares.
(h) During the period of 120 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 Shares or other equity security, except for (i) the grant of
options in the ordinary course of business pursuant to existing stock
option plans, (ii) the issuance of Common Shares upon the exercise of
outstanding options under such plans and (iii) the conversion into Common
Shares of the Company's outstanding 6-3/4% Convertible Subordinated
Debentures due 2002 solely as required under the terms of the Indenture
relating to such debentures.
(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.
(j) The Company will use its reasonable best efforts to qualify or
register its Common Shares for sale in non-issuer transactions under (or
obtain exemptions from the application
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of) the Blue Sky laws of the State of California (and thereby permit market
making transactions and secondary trading in the Company's Common Shares 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.
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 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 Shares,
(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 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 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 and the Blue Sky memoranda and relating to review by the NASD
referred to above).
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
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
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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
(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 Shares and to validly issue such issued and
outstanding
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Common Shares; all outstanding Common Shares (including the Firm
Common Shares and Optional Common Shares, if any) have been duly
authorized and have been (or as to the Firm Common Shares and the
Optional Common Shares, if any, upon issuance payment and
delivery as provided herein, will be) validly issued, are (or as
to the Firm Common Shares and the Optional Common Shares, if any,
upon issuance, payment and delivery as provided herein, will be)
fully paid and nonassessable, are not (or will not be) issued in
violation of any statutory preemptive rights, and to the
knowledge of such counsel, are not (or will not be) issued in
violation of any other preemptive rights or other similar 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), if any, evidencing the Common Shares to be
delivered hereunder are in due and proper form under Ohio law;
when the Firm Common Shares or the Optional Common Shares, as the
case may be, are 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,
good and marketable title to such Common Shares will pass to the
respective Underwriters, to such counsel's knowledge, free and
clear of all voting trust arrangements, liens, encumbrances,
equities, security interests, claims or other defects of title
whatsoever (except such as may have been created by any
Underwriter), and such Common Shares will be duly authorized and
validly issued, fully paid and nonassessable, will conform to the
description thereof contained in the Prospectus, and will not
have been issued in violation of or subject to any statutory
preemptive rights and, to the knowledge of such counsel will not
have been issued in violation of any other preemptive or other
similar rights to subscribe for or purchase securities;
(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 to issue, any shares of capital stock
of the Company or any security convertible into or exchangeable
for capital stock of the Company, other than options granted
since March 31, 1996 to directors, officers and employees of the
Company pursuant to its option plans described, or incorporated
by reference, in the Prospectus or the Company's 1996 Annual
Meeting of Shareholders Proxy Statement;
(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);
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(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
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,
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authority or body which are required to be described in the
Prospectus that are 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 Common Shares 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
State of Ohio 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 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.
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(iii)A certificate of the Company executed by the Chairman of the Board
and Chief Executive Officer or the President 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) To the best knowledge of such officers, 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
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 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 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
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distribution, with respect to its outstanding capital stock
payable to shareholders 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
(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, the Company has
not sustained a material loss or damage by strike, fire, flood,
windstorm, accident or other calamity (whether or not insured).
(iv) 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.
(v) On or before the First Closing Date, letters from each director and
officer of the Company, in form and substance satisfactory to you,
confirming that for a period of 120 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 Common Shares 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
make gifts of the Common Shares so long as prior to such transfer the
recipient of such gift executes and delivers to the Underwriters an
agreement containing substantially the same terms as are contained in
this subsection 7(v).
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
reasonably 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.
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 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
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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 reasonable 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.
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.
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 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
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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 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, setting, 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,
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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 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
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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 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.
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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 commercial arbitration rules of the American Arbitration Association.
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.
Notwithstanding the foregoing, it is a condition precedent to the right of
any party to this Agreement to submit any such dispute or controversy to
arbitration under this Section 10(f), that such party has submitted the
question of the validity of the provisions of this Section 10 as a matter
of law under the federal securities laws to the court in which the
underlying actions for indemnification are being brought, or, if there is
no such court, to the Federal District Court for the Southern District of
New York and such court has made a determination of such question.
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 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.
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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.
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 also may 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 Company (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).
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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.
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,
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 shall be mailed, delivered or telecopied or telegraphed and
confirmed to the Company at 5500 Village Blvd., West Palm Beach, Florida 33407,
Attention: G. Arthur Seelbinder, with a copy to Schwartz, Warren & Ramirez a
Limited Liability Company, 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.
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.
17. 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.
18. 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.
19. 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
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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
Underwriters.
[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: s/G. Arthur Seelbinder
-------------------------------------
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:s/Karl Matthies
-------------------------------
Its: Managing Director
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SCHEDULE A
Number of Firm Common
Name of Underwriter Shares to be Purchased
- ------------------- ----------------------
Montgomery Securities 1,250,000
Equitable Securities Corporation 1,250,000
---------
TOTAL 2,500,000
=========
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