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EXHIBIT 1.1
TOTAL ENTERTAINMENT RESTAURANT CORP.
Common Stock
Underwriting Agreement
dated June __, 1997
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TABLE OF CONTENTS
PAGE
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Section 1. Representations and Warranties of the Company............................................... 3
Compliance with Registration Requirements...................................................... 3
Offering Materials Furnished to Underwriters................................................... 3
Distribution of Offering Material By the Company............................................... 3
The Underwriting Agreement..................................................................... 4
Authorization of the Common Shares............................................................. 4
No Applicable Registration or Other Similar Rights............................................. 4
No Material Adverse Change..................................................................... 4
Independent Accountants........................................................................ 4
Preparation of the Financial Statements........................................................ 5
Organization and Good Standing of the Company and its Subsidiaries............................. 5
Capitalization and Other Capital Stock Matters................................................. 5
The Service Agreement.......................................................................... 6
The Licensing Agreement........................................................................ 7
Nasdaq National Market Listing................................................................. 7
Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required.......................................................................... 7
No Material Actions or Proceedings............................................................. 8
Intellectual Property Rights................................................................... 8
All Necessary Permits; Compliance with Laws, etc............................................... 9
Title to Properties............................................................................ 9
Tax Law Compliance............................................................................. 9
Company Not an "Investment Company."........................................................... 9
Insurance...................................................................................... 10
No Price Stabilization or Manipulation......................................................... 10
Related Party Transactions..................................................................... 10
Section 2. Purchase, Sale and Delivery of the Common Shares............................................ 10
The Firm Common Shares......................................................................... 10
The First Closing Date......................................................................... 10
The Optional Common Shares; the Second Closing Date............................................ 11
Public Offering of the Common Shares........................................................... 11
Payment for the Common Shares.................................................................. 11
Delivery of the Common Shares.................................................................. 11
Delivery of Prospectus to the Underwriters..................................................... 12
Section 3. Additional Covenants of the Company......................................................... 12
Representative's Review of Proposed Amendments and Supplements................................. 12
Securities Act Compliance...................................................................... 12
Amendments and Supplements to the Prospectus and Other Securities Act Matters.................. 13
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TABLE OF CONTENTS
(CONTINUED)
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Copies of any Amendments and Supplements to the Prospectus..................................... 13
Blue Sky Compliance............................................................................ 13
Use of Proceeds................................................................................ 13
Transfer Agent................................................................................. 13
Earnings Statement............................................................................. 13
Periodic Reporting Obligations................................................................. 13
Agreement Not To Offer or Sell Additional Securities........................................... 14
Future Reports to the Representative........................................................... 14
Section 4. Payment of Expenses......................................................................... 14
Section 5. Conditions of the Obligations of the Underwriters........................................... 15
Accountants' Comfort Letter.................................................................... 15
Compliance with Registration Requirements; No Stop Order; No Objection from
NASD ...................................................................................... 16
No Material Adverse Change or Ratings Agency Change............................................ 16
Opinion of Counsel for the Company............................................................. 16
Opinion of Counsel for the Underwriters........................................................ 17
Officers' Certificate.......................................................................... 17
Bring-down Comfort Letter...................................................................... 17
Lock-Up Agreement from Directors, Officers and Stockholders of the Company..................... 18
Additional Documents........................................................................... 18
Section 6. Reimbursement of Underwriters' Expenses..................................................... 18
Section 7. Effectiveness of this Agreement............................................................. 18
Section 8. Indemnification............................................................................. 19
Indemnification of the Underwriters............................................................ 19
Indemnification of the Company, its Directors and Officers..................................... 20
Notifications and Other Indemnification Procedures............................................. 20
Settlements.................................................................................... 21
Section 9. Contribution................................................................................ 22
Section 10. Default of One or More of the Several Underwriters.......................................... 23
Section 11. Termination of this Agreement............................................................... 23
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TABLE OF CONTENTS
(CONTINUED)
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Section 12. Representations and Indemnities to Survive Delivery......................................... 24
Section 13. Notices.................................................................................... 24
Section 14. Successors................................................................................. 25
Section 15. Partial Unenforceability................................................................... 25
Section 16. Governing Law Provisions................................................................... 25
Section 17. General Provisions......................................................................... 25
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UNDERWRITING AGREEMENT
June ___, 1997
XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
As Representative of the several Underwriters
Ladies and Gentlemen:
INTRODUCTORY. Total Entertainment Restaurant Corp., a Delaware
corporation (the "Company"), proposes to issue and sell to the several
underwriters named in Schedule A (the "Underwriters") an aggregate of 2,000,000
shares (the "Firm Common Shares") of its Common Stock, par value $0.01 per share
(the "Common Stock"). In addition, the Company has granted to the Underwriters
an option to purchase up to an additional 300,000 shares (the "Optional Common
Shares") of Common Stock, as provided in Section 2. The Firm Common Shares and,
if and to the extent such option is exercised, the Optional Common Shares are
collectively called the "Common Shares." Xxxxxxxxxx Securities has agreed to act
as representative of the several Underwriters (in such capacity, the
"Representative") in connection with the offering and sale of the Common Shares.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1
(File No. 333-23343), which contains a form of prospectus to be used in
connection with the public offering and sale of the Common Shares. Such
registration statement, as amended, including the financial statements, exhibits
and schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933 and the rules and regulations
promulgated thereunder (collectively, the "Securities Act"), including any
information deemed to be a part thereof at the time of effectiveness pursuant to
Rule 430A or Rule 434 under the Securities Act, is called the "Registration
Statement." Any registration statement filed by the Company pursuant to Rule
462(b) under the Securities Act is called the "Rule 462(b) Registration
Statement," and from and after the date and time of filing of the Rule 462(b)
Registration Statement, the term "Registration Statement" shall include the Rule
462(b) Registration Statement. Such prospectus, in the form first used by the
Underwriters to confirm sales of the Common Shares, is called the "Prospectus;"
provided, however, if the Company has, with the consent of Xxxxxxxxxx
Securities, elected to rely upon Rule 434 under the Securities Act, the term
"Prospectus" shall mean the Company's prospectus subject to completion (each, a
"preliminary prospectus") dated June [ ], 1997 (such preliminary prospectus is
called the "Rule 434 preliminary prospectus"), together with the applicable term
sheet (the "Term Sheet") prepared and filed by the Company with the Commission
under Rules 434 and 424(b) under the Securities Act and all references in this
Agreement to the date of the Prospectus shall mean the date of the Term Sheet.
All references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a preliminary prospectus, the Prospectus or the Term
Sheet, or any amendments or
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supplements to any of the foregoing, shall include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("XXXXX").
On February 20, 1997, the Company entered into an Exchange Agreement
(the "Exchange Agreement") with (i) the holders of all of the outstanding shares
of the capital stock of Xxxxxx'x Sports Grille, Inc., a Delaware corporation
("Xxxxxx'x"), F&H Restaurant Corp., a Delaware corporation ("F&H"), Fox & Hound,
Inc., a Texas corporation ("Fox I"), Fox & Hound II, Inc., a Texas corporation
("Fox II") (collectively, Xxxxxx'x, F&H, Xxx I and Xxx II shall be referred to
herein as the "Entertainment Restaurant Corporations," and the holders of the
capital stock of the Entertainment Restaurant Corporations shall be referred to
herein as the "Entertainment Restaurant Corporation Stockholders"), and (ii) the
holders of 18.75% of the limited partnership interests of each of X. Xxxxxxx
Entertainment, Ltd., a Texas limited Partnership ("Xxxxxxx"), 505 Entertainment,
Ltd., a Texas limited Partnership ("505"), Midway Entertainment, Ltd., a Texas
limited Partnership ("Midway") and F&H Dallas, L.P., a Texas limited Partnership
("Dallas") (collectively, Xxxxxxx, 505, Midway and Dallas shall be referred to
herein as the "Entertainment Restaurant Partnerships," and the holders of such
limited partnership interests in the Entertainment Restaurant Partnerships shall
be referred to herein as the "Entertainment Restaurant Limited Partners").
Pursuant to the transactions contemplated in the Exchange Agreement, the Company
became the direct or indirect (through one or more Entertainment Restaurant
Corporations) owner of all of the outstanding capital stock of each of the
Entertainment Restaurant Corporations and all of the outstanding partnership
interests of each of the Entertainment Restaurant Limited Partnerships in
exchange for the issuance to the Entertainment Restaurant Corporation
Stockholders and the Entertainment Restaurant Limited Partners of all of the
Company's currently outstanding Common Stock.
In connection with the execution of the Exchange Agreement, the Company
entered into an S Corporation Termination, Tax Allocation and Indemnification
Agreement with (i) Baileys and each of the stockholders of Baileys (the
"Xxxxxx'x Tax Agreement"), (ii) Fox I and each of the stockholders of Fox I (the
"Fox I Tax Agreement"), and (iii) Fox II and each of the stockholders of Fox II
(the "Fox II Tax Agreement") (collectively, the Xxxxxx'x Tax Agreement, the Fox
I Tax Agreement and the Fox II Tax Agreement shall be referred to as the "Tax
Agreements"). Pursuant to the Tax Agreements, (i) each of Xxxxxx'x, Xxx I and
Xxx II terminated its status as an S Corporation under Subchapter S of the
Internal Revenue Code of 1986, as amended (the "Code"), and comparable state
laws, and (ii) responsibility for income tax liabilities, if any, incurred
during the period that each of Xxxxxx'x, Fox I and Fox II (collectively, the "S
Corporation Entertainment Restaurant Corporations") were treated as S
Corporations was allocated among the Company and each of the stockholders of the
S Corporation Entertainment Restaurant Corporations. Collectively, the Tax
Agreements and the Exchange Agreement shall be referred to herein as the
"Exchange Documents."
The Company has entered into a Service Agreement (the "Service
Agreement") with Xxxxxxx Enterprises, Inc., a Kansas corporation ("Xxxxxxx
Enterprises"), pursuant to which Xxxxxxx Enterprises will provide certain
accounting and administrative services to each of the Company's entertainment
restaurant locations as well as any future entertainment restaurant locations
developed by the Company in return for certain fees. The Service Agreement will
become effective on the date hereof (the "Effective Date").
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The Company has entered into a licensing agreement (the "Licensing
Agreement") with Xxxxxx X. Xxxxxxxx and Xxxxxx X. Xxxxx (the "Licenses"),
pursuant to which the Company has granted the Licensees the non-exclusive right
to use the "Fox & Hound" name in certain areas of North Carolina. The Licensing
Agreement will become effective on the Effective Date.
The Company hereby confirms its agreement with the
Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents, warrants and covenants to each Underwriter as follows:
(a) Compliance with Registration Requirements. The
Registration Statement and any Rule 462(b) Registration Statement have
been declared effective by the Commission under the Securities Act. The
Company has complied to the Commission's satisfaction with all requests
of the Commission for additional or supplemental information. No stop
order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement is in effect and no proceedings for
such purpose have been instituted or are pending or, to the best
knowledge of the Company, are contemplated or threatened by the
Commission.
Each preliminary prospectus and the Prospectus when filed
complied in all material respects with the Securities Act and was
identical to the copy thereof delivered to the Underwriters for use in
connection with the offer and sale of the Common Shares. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and
at all subsequent times, complied and will comply in all material
respects with the Securities Act and did not and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus, as amended or supplemented, as
of its date and at all subsequent times, did not and will not contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
representations and warranties set forth in the two immediately
preceding sentences do not apply to statements in or omissions from the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments
or supplements thereto, made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in
writing by the Representative expressly for use therein. There are no
statutes, contracts or other documents required to be described in the
Prospectus or to be filed as exhibits to the Registration Statement
which have not been described or filed as required. The description in
the Prospectus of such statutes and contracts fairly presents the
information required to be provided by the Securities Act. The
contracts so described in the Prospectus are in full force and effect
on the date hereof; and neither the Company nor any of the
Subsidiaries, as defined below, nor to the best of the Company's
knowledge, any other party is in breach of or default under any of such
contracts.
(b) Offering Materials Furnished to Underwriters. The Company
has delivered to the Representative one complete manually signed copy
of the Registration Statement and of each consent and certificate of
experts filed as a part thereof, and conformed copies of
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the Registration Statement (without exhibits) and preliminary
prospectuses and the Prospectus, as amended or supplemented, in such
quantities and at such places as the Representative has reasonably
requested for each of the Underwriters.
(c) Distribution of Offering Material By the Company. The
Company has not distributed and will not distribute, prior to the later
of the Second Closing Date (as defined below) and the completion of the
Underwriters' distribution of the Common Shares, any offering material
in connection with the offering and sale of the Common Shares other
than a preliminary prospectus, the Prospectus or the Registration
Statement.
(d) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or
by general equitable principles.
(e) Authorization of the Common Shares. The Common Shares to
be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement, will be
validly issued, fully paid and nonassessable.
(f) No Applicable Registration or Other Similar Rights. There
are no persons with registration or other similar rights to have any
equity or debt securities registered for sale under the Registration
Statement or included in the offering contemplated by this Agreement.
(g) No Material Adverse Change. Except as otherwise disclosed
in the Prospectus, subsequent to the respective dates as of which
information is given in the Prospectus: (i) there has been no material
adverse change, or any development that could reasonably be expected to
result in a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of
business, of the Company and its Subsidiaries, considered as one entity
(any such change is called a "Material Adverse Change"); (ii) the
Company and its Subsidiaries, considered as one entity, have not
incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business nor entered into any
material transaction or agreement not in the ordinary course of
business; and (iii) there has been no dividend or distribution of any
kind declared, paid or made by the Company or any of its Subsidiaries
on any class of capital stock or repurchase or redemption by the
Company or any of its Subsidiaries of any class of capital stock.
(h) Independent Accountants.
(i) Ernst & Young LLP, who have expressed their
opinion with respect to the financial statements (which term as used in
this Agreement includes the related notes thereto) of the Fox and Hound
Restaurant Group, as such term is defined in the Registration Statement
(the "Fox & Hound Financial Statements") and the pro forma financial
statements
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of the Company as of December 31, 1996 (the "Pro Forma Financial
Statements") and supporting schedules filed with the Commission as a
part of the Registration Statement and included in the Prospectus, are
independent public or certified public accountants as required by the
Securities Act.
(ii) Deloitte & Touche LLP, who have expressed their
opinion with respect to the financial statements of Xxxxxx'x Sports
Grille, Inc. (the "Xxxxxx'x Financial Statements") and supporting
schedules filed with the Commission as a part of the Registration
Statement and included in the Prospectus, are independent public or
certified public accountants as required by the Securities Act.
(i) Preparation of the Financial Statements. The financial
statements filed with the Commission as a part of the Registration
Statement and included in the Prospectus present fairly the
consolidated financial position of the Company and its Subsidiaries as
of and at the dates indicated and the results of their operations and
cash flows for the periods specified. The Fox & Hound Financial
Statements filed with the Commission as a part of the Registration
Statement and included in the Prospectus present fairly the
consolidated financial position of the Fox & Hound Restaurant Group as
of and at the dates indicated and the results of their operations and
cash flows for the periods specified. The Xxxxxx'x Financial Statements
filed with the Commission as a part of the Registration Statement and
included in the Prospectus present fairly the consolidated financial
position of Xxxxxx'x Sports Grille, Inc. as of and at the dates
indicated and the results of their operations and cash flows for the
periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. No other financial
statements or supporting schedules are required to be included in the
Registration Statement. The financial data set forth in the Prospectus
under the captions "Prospectus Summary--Summary Selected Financial
Data," "Selected Financial Data" and "Capitalization" fairly present
the information set forth therein on a basis consistent with that of
the audited financial statements contained in the Registration
Statement. The Pro Forma Financial Statements of the Company and its
Subsidiaries and the related notes thereto included under the caption
"Pro Forma Combined Condensed Financial Statements" and elsewhere in
the Prospectus and in the Registration Statement present fairly the
information contained therein, have been prepared in accordance with
the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly presented on the bases
described therein, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(j) Organization and Good Standing of the Company and its
Subsidiaries. Each of the Company and its subsidiary corporations and
subsidiary limited partnerships (the "Subsidiary Limited Partnerships")
listed on Annex I hereto (collectively, the "Subsidiaries") has been
duly incorporated or organized and is validly existing as a corporation
or a limited partnership, as the case may be, in good standing under
the laws of the jurisdiction of its organization and has all requisite
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and, in the case of
the Company, to enter into and perform its obligations under this
Agreement.
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Each of the Company and the Subsidiaries is duly qualified as a foreign
corporation or entity to transact business and is in good standing in
its jurisdiction of organization and each other jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a Material
Adverse Change. All of the issued and outstanding capital stock of each
Subsidiary that is a corporation has been duly authorized and validly
issued, is fully paid and nonassessable and is owned by the Company,
directly or through Subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim. All of the
issued and outstanding ownership interests of each Subsidiary Limited
Partnership has been duly authorized and validly issued, is fully paid
and nonassessable and is owned by the Company, directly or through
Subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or claim. The Company does not own or
control, directly or indirectly, any corporation, association or other
entity other than the Subsidiaries listed in Exhibit 21.1 to the
Registration Statement.
(k) Capitalization and Other Capital Stock Matters. The
authorized, issued and outstanding capital stock of the Company is as
set forth in the Prospectus under the caption "Capitalization." The
Common Stock (including the Common Shares) conforms in all material
respects to the description thereof contained in the Prospectus. All of
the issued and outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and
have been issued in compliance with federal and state securities laws.
None of the outstanding shares of Common Stock were issued in violation
of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company. There
are no authorized or outstanding options, warrants, preemptive rights,
rights of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any
capital stock of the Company or any of its Subsidiaries other than
those accurately described in the Prospectus. The description of the
Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted or currently
intended by the Company to be granted thereunder, set forth in the
Prospectus accurately and fairly presents the information required to
be shown with respect to such plans, arrangements, options and rights.
(l) Exchange Documents. Each of the Company and, to the
Company's knowledge, the Entertainment Restaurant Corporation
Stockholders, the Entertainment Restaurant Limited Partners and the S
Corporation Restaurant Corporations had full legal right, power and
authority to enter into the Exchange Documents and to perform the
transactions contemplated thereby. The Exchange Documents were duly
authorized and executed by the Company and, to the Company's knowledge,
by the Entertainment Restaurant Corporation Stockholders, the
Entertainment Restaurant Limited Partners and the S Corporation
Restaurant Corporations, constitute valid and binding obligations of
the Company, enforceable in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other similar laws relating to
or affecting creditors' rights generally or by general equitable
principles and the transactions contemplated thereby have been
consummated. The execution and performance of the Exchange Documents by
the Company and the Entertainment Restaurant
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Corporation Stockholders, the Entertainment Restaurant Limited Partners
and the S Corporation Restaurant Corporations, and the consummation of
the transactions therein contemplated has not violated and will not
violate any provision of the charter or bylaws, or other organizational
documents, of the Company and has not resulted and will not result in
an a 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 instrument to which the Company is a party
or by which the Company or any of its property may be bound or
affected, 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 property, except for such violations, breaches and defaults that
individually or in the aggregate would not result in a Material Adverse
Change. Each consent, approval or authorization or other order of any
court, regulatory body, administrative agency or other governmental
body required for the delivery of the Exchange Document or the
consummation of the transactions contemplated thereby was obtained,
except for any such consent, approval, authorization or order the
failure to have so obtained has not resulted and will not result in a
Material Adverse Change.
(m) The Service Agreement. Each of the Company and, to the
Company's knowledge, Xxxxxxx Enterprises has full legal right, power
and authority to enter into the Service Agreement and to perform the
transactions contemplated thereby. The Service Agreement has been duly
authorized and executed by the Company and, to the Company's knowledge,
Xxxxxxx Enterprises and, when delivered by the respective parties on
the Effective Date, will constitute a valid and binding obligation of
the Company, enforceable in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other similar laws relating to
or affecting creditors' rights generally or by general equitable
principles. The execution and performance of the Service Agreement by
the Company and Xxxxxxx Enterprises and the consummation of the
transactions therein contemplated will not violate any provision of the
charter or bylaws, or other organizational documents, of the Company
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 instrument to which the
Company is a party or by which the Company or any of its property may
be bound or affected, 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 property, except for such violations, breaches
and defaults that individually or in the aggregate would not result in
a Material Adverse Change. No consent, approval or authorization or
other order of any court, regulatory body, administrative agency or
other governmental body is required for the delivery of the Service
Agreement or the consummation of the transactions contemplated thereby.
(n) The Licensing Agreement. Each of the Company and, to the
Company's knowledge, the Licensees has full legal right, power and
authority to enter into the Licensing Agreement and to perform the
transactions contemplated thereby. The Licensing Agreement has been
duly authorized and executed by the Company and, to the Company's
knowledge, the Licensees and, when delivered by the respective parties
on the Effective
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Date, will constitute a valid and binding obligation of the Company,
enforceable in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles. The execution and
performance of the Licensing Agreement by the Company and the
consummation of the transactions therein contemplated will not violate
any provision of the charter or bylaws, or other organizational
documents, of the Company 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 instrument to which the Company is a party or by which the
Company or any of its property may be bound or affected, 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 property,
except for such violations, breaches and defaults that individually or
in the aggregate would not result in a Material Adverse Change. No
consent, approval or authorization or other order of any court,
regulatory body, administrative agency or other governmental body is
required for the delivery of the Licensing Agreement or the
consummation of the transactions contemplated thereby.
(o) Nasdaq National Market Listing. The Common Shares have
been approved for inclusion on the Nasdaq National Market, subject only
to official notice of issuance.
(p) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any of
its Subsidiaries is in violation of its charter, by-laws or other
organizational documents or is in default (or, with the giving of
notice or lapse of time, would be in default) (a "Default") under any
indenture, mortgage, loan or credit agreement, note, contract,
franchise, lease or other instrument (including, without limitation,
the Exchange Documents) to which the Company or any of its Subsidiaries
is a party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any of its subsidiaries is
subject (each, an "Existing Instrument"), except for such Defaults as
would not, individually or in the aggregate, result in a Material
Adverse Change. The Company's execution, delivery and performance of
this Agreement and consummation of the transactions contemplated hereby
and by the Prospectus (i) have been duly authorized by all necessary
corporate action and will not result in any violation of the provisions
of the charter, by-laws or other organizational documents of the
Company or any Subsidiary, (ii) will not conflict with or constitute a
breach of, or Default or, a Debt Repayment Triggering Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its Subsidiaries pursuant to, or require the consent of any other
part to, any Existing Instrument, except for such conflicts, breaches,
Defaults, liens, charges or encumbrances as would not, individually or
in the aggregate, result in a Material Adverse Change and (iii) will
not result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any
Subsidiary. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company's
execution, delivery and performance of this Agreement and consummation
of the transactions contemplated hereby and by the Prospectus, except
such as have been obtained
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or made by the Company and are in full force and effect under the
Securities Act, applicable state securities or blue sky laws and from
the National Association of Securities Dealers, Inc. (the "NASD"). As
used herein, a "Debt Repayment Triggering Event" means any event or
condition which gives, or with the giving of notice or lapse of time
would give, the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any of its Subsidiaries.
(q) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the best of
the Company's knowledge, threatened (i) against or affecting the
Company or any of its Subsidiaries, (ii) which has as the subject
thereof any officer or director of, or property owned or leased by, the
Company or any of its Subsidiaries or (iii) relating to environmental
or discrimination matters, where in any such case (A) there is a
reasonable possibility that such action, suit or proceeding might be
determined adversely to the Company or such Subsidiary and (B) any such
action, suit or proceeding, if so determined adversely, would
reasonably be expected to result in a Material Adverse Change or
adversely affect the consummation of the transactions contemplated by
this Agreement, the Service Agreement or the Licensing Agreement. No
labor disturbance by the employees of the Company or any of its
Subsidiaries exists or, to the Company's knowledge, is imminent, and
the Company is not aware of any existing or imminent labor disturbance
by the employees of any of its principal suppliers, construction
contractors or other persons that might be expected to result in a
Material Adverse Change. Neither the Company nor any of its
Subsidiaries is a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body.
(r) Intellectual Property Rights. The Company and its
Subsidiaries own or possess sufficient trademarks, service marks, trade
names, patent rights, copyrights, licenses, approvals, trade secrets
and other similar rights (collectively, "Intellectual Property Rights")
reasonably necessary to conduct their businesses as now conducted; and
the expected expiration of any of such Intellectual Property Rights
would not result in a Material Adverse Change. Neither the Company nor
any of its Subsidiaries has received any notice of infringement or
conflict with asserted Intellectual Property Rights of others, which
infringement or conflict, if the subject of an unfavorable decision,
would result in a Material Adverse Change.
(s) All Necessary Permits; Compliance with Laws, etc. The
Company and each Subsidiary possess such valid and current
certificates, authorizations or permits issued by the appropriate
federal, state or local regulatory agencies or bodies necessary to
conduct their respective businesses, and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the
revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could
result in a Material Adverse Change. To the Company's knowledge, the
Company and each of it Subsidiaries is conducting business in
compliance with the Fair Labor Standards Act, the rules and regulations
of the federal Food and Drug Administration, and all applicable
federal, state and local laws, rules and regulations of the
jurisdictions in which it is conducting business, including, without
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limitation, all applicable local, state and federal laws and
regulations governing health, sanitation, safety, the purchase and sale
of alcoholic beverages (including, but not limited to, liquor licenses,
"tied house" statutes and "dram shop" statutes), environmental matters,
zoning and land use, except where the failure to be so in compliance
could result in a Material Adverse Change.
(t) Title to Properties. The Company and each of its
Subsidiaries has good and marketable title to all the properties and
assets reflected as owned in the financial statements referred to in
Section 1(i) above (or elsewhere in the Prospectus), in each case free
and clear of any security interests, mortgages, liens, encumbrances,
equities, claims and other defects, except such as do not materially
and adversely affect the value of such property and do not materially
interfere with the use made or proposed to be made of such property by
the Company or such Subsidiary. The Company and each of its
Subsidiaries holds its leased properties under valid and binding
leases, true and correct copies of which have been delivered to you or
your counsel, with such exceptions as are not materially significant in
relation to the business of the Company and its Subsidiaries taken as a
whole. Except as disclosed in the Prospectus, the Company and each of
its Subsidiaries owns or leases all such properties as are necessary to
its operations as now conducted or as proposed to be conducted.
(u) Tax Law Compliance. The Company and, to the Company's
knowledge, each of its Subsidiaries have filed all necessary federal,
state and foreign income and franchise tax returns and have paid all
taxes shown as due thereon to the extent due to be paid prior to the
date hereof and, to the extent not so due, has made adequate reserves
on its financial statements; and the Company has no knowledge of any
tax deficiency that has been or might be asserted or threatened against
the Company or any Subsidiary that could result in a Material Adverse
Change.
(v) Company Not an "Investment Company." The Company has been
advised of the rules and requirements under the Investment Company Act
of 1940, as amended (the "Investment Company Act"). The Company is not,
and after receipt of payment for the Common Shares will not be, an
"investment company" within the meaning of Investment Company Act and
will conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(w) Insurance. Each of the Company and its Subsidiaries are
insured by recognized, financially sound and reputable institutions
with policies in such amounts and with such deductibles and covering
such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real and
personal property owned or leased by the Company and its Subsidiaries
against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in full
force and effect. The Company has no reason to believe that it or any
Subsidiary will not be able (i) to renew its existing insurance
coverage as and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that would not
result in a Material Adverse Change.
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(x) No Price Stabilization or Manipulation. The Company has
not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Common Shares.
(y) Related Party Transactions. There are no business
relationships or related-party transactions involving the Company or
any subsidiary or any other person required to be described in the
Prospectus pursuant to the Securities Act which have not been described
as required.
Any certificate signed by an officer of the Company and
delivered to the Representative or to counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each Underwriter as
to the matters set forth therein.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
The Firm Common Shares. The Company agrees to issue and sell to the
several Underwriters the Firm Common Shares upon the terms herein set forth. On
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the Company the
respective number of Firm Common Shares set forth opposite their names on
Schedule A. The purchase price per Firm Common Share to be paid by the several
Underwriters to the Company shall be $[ ] per share.
The First Closing Date. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefor shall be made at
the offices of Xxxxxxxxxx Securities, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx (or such other place as may be agreed to by the Company and the
Representative) at 6:00 a.m. San Francisco time, on May [ ], 1997, or such other
time and date not later than 10:30 a.m. San Francisco time, on May [ ], 1997, as
the Representative shall designate by notice to the Company (the time and date
of such closing are called the "First Closing Date"). The Company hereby
acknowledges that circumstances under which the Representative may provide
notice to postpone the First Closing Date as originally scheduled include, but
are in no way limited to, any determination by the Company or the Representative
to recirculate to the public copies of an amended or supplemented Prospectus or
a delay as contemplated by the provisions of Section 10.
The Optional Common Shares; the Second Closing Date. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to an aggregate of 300,000 Optional Common Shares from the
Company at the purchase price per share to be paid by the Underwriters for the
Firm Common Shares. The option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection with the sale and
distribution of the Firm Common Shares. The option granted hereunder may be
exercised at any time (but not more than once) upon notice by the Representative
to the Company, which notice may be given at any time within 30 days from the
date
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of this Agreement. Such notice shall set forth (i) the aggregate number of
Optional Common Shares as to which the Underwriters are exercising the option,
(ii) the names and denominations in which the certificates for the Optional
Common Shares are to be registered and (iii) the time, date and place at which
such certificates will be delivered (which time and date may be simultaneous
with, but not earlier than, the First Closing Date; and in such case the term
"First Closing Date" shall refer to the time and date of delivery of
certificates for the Firm Common Shares and the Optional Common Shares). Such
time and date of delivery, if subsequent to the First Closing Date, is called
the "Second Closing Date" and shall be determined by the Representative and
shall not be earlier than three nor later than five full business days after
delivery of such notice of exercise. If any Optional Common Shares are to be
purchased, each Underwriter agrees, severally and not jointly, to purchase the
number of Optional Common Shares (subject to such adjustments to eliminate
fractional shares as the Representative may determine) that bears the same
proportion to the total number of Optional Common Shares to be purchased as the
number of Firm Common Shares set forth on Schedule A opposite the name of such
Underwriter bears to the total number of Firm Common Shares. The Representative
may cancel the option at any time prior to its expiration by giving written
notice of such cancellation to the Company.
Public Offering of the Common Shares. The Representative hereby advises
the Company that the Underwriters intend to offer for sale to the public, as
described in the Prospectus, their respective portions of the Common Shares as
soon after this Agreement has been executed and the Registration Statement has
been declared effective as the Representative, in its sole judgment, has
determined is advisable and practicable.
Payment for the Common Shares. Payment for the Common Shares shall be
made at the First Closing Date (and, if applicable, at the Second Closing Date)
by wire transfer of immediately available funds to the order of the Company.
It is understood that the Representative has been authorized, for its
own account and the accounts of the several Underwriters, to accept delivery of
and receipt for, and make payment of the purchase price for, the Firm Common
Shares and any Optional Common Shares the Underwriters have agreed to purchase.
Xxxxxxxxxx Securities, individually and not as the Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representative by the First Closing Date or the Second Closing
Date, as the case may be, for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any of its obligations under
this Agreement.
Delivery of the Common Shares. The Company shall deliver, or cause to
be delivered, to the Representative for the accounts of the several Underwriters
certificates for the Firm Common Shares at the First Closing Date, against the
irrevocable release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. The Company shall also deliver, or cause
to be delivered, to the Representative for the accounts of the several
Underwriters, certificates for the Optional Common Shares the Underwriters have
agreed to purchase at the First Closing Date or the Second Closing Date, as the
case may be, against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. The certificates
for the Common Shares shall be in definitive form and registered in such names
and denominations as the Representative shall have requested at least two full
business days prior to the First Closing Date
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(or the Second Closing Date, as the case may be) and shall be made available for
inspection on the business day preceding the First Closing Date (or the Second
Closing Date, as the case may be) at a location in New York City as the
Representative may designate. Time shall be of the essence, and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.
Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m.
on the second business day following the date the Common Shares are released by
the Underwriters for sale to the public, the Company shall delivery or cause to
be delivered copies of the Prospectus in such quantities and at such places as
the Representative shall request.
SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY. The Company further
covenants and agrees with each Underwriter as follows:
(a) Representative's Review of Proposed Amendments and
Supplements. During such period beginning on the date hereof and ending
on the later of the First Closing Date or such date, as in the opinion
of counsel for the Underwriters, the Prospectus is no longer required
by law to be delivered in connection with sales by an Underwriter or
dealer (the "Prospectus Delivery Period"), prior to amending or
supplementing the Registration Statement (including any registration
statement filed under Rule 462(b) under the Securities Act) or the
Prospectus, the Company shall furnish to the Representative for review
a copy of each such proposed amendment or supplement, and the Company
shall not file any such proposed amendment or supplement to which the
Representative reasonably objects.
(b) Securities Act Compliance. After the date of this
Agreement, the Company shall promptly advise the Representative in
writing (i) of the receipt of any comments of, or requests for
additional or supplemental information from, the Commission, (ii) of
the time and date of any filing of any post-effective amendment to the
Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (iii) of the time and date
that any post-effective amendment to the Registration Statement becomes
effective and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus, or
of any proceedings to remove, suspend or terminate from listing or
quotation the Common Stock from any securities exchange upon which the
it is listed for trading or included or designated for quotation, or of
the threatening or initiation of any proceedings for any of such
purposes. If the Commission shall enter any such stop order at any
time, the Company will use its best efforts to obtain the lifting of
such order at the earliest possible moment. Additionally, the Company
agrees that it shall comply with the provisions of Rules 424(b), 430A
and 434, as applicable, under the Securities Act and will use its
reasonable efforts to confirm that any filings made by the Company
under such Rule 424(b) were received in a timely manner by the
Commission.
(c) Amendments and Supplements to the Prospectus and Other
Securities Act Matters. If, during the Prospectus Delivery Period, any
event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make
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the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if in the
opinion of the Representative or counsel for the Underwriters it is
otherwise necessary to amend or supplement the Prospectus to comply
with law, the Company agrees to promptly prepare (subject to Section
3(a) hereof), file with the Commission and furnish at its own expense
to the Underwriters and to dealers, amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) Copies of any Amendments and Supplements to the
Prospectus. The Company agrees to furnish the Representative, without
charge, during the Prospectus Delivery Period, as many copies of the
Prospectus and any amendments and supplements thereto as the
Representative may request.
(e) Blue Sky Compliance. The Company shall cooperate with the
Representative and counsel for the Underwriters to qualify or register
the Common Shares for sale under (or obtain exemptions from the
application of) the state securities or blue sky laws or Canadian
provincial securities laws of those jurisdictions designated by the
Representative, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as
required for the distribution of the Common Shares. The Company shall
not be required to qualify as a foreign corporation or to take any
action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be
subject to taxation as a foreign corporation. The Company will advise
the Representative promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Common Shares
for offering, sale or trading in any jurisdiction or any initiation or
threat of any proceeding for any such purpose, and in the event of the
issuance of any order suspending such qualification, registration or
exemption, the Company shall use its best efforts to obtain the
withdrawal thereof at the earliest possible moment.
(f) Use of Proceeds. The Company shall apply the net proceeds
from the sale of the Common Shares sold by it in the manner described
under the caption "Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall engage and maintain, at
its expense, a registrar and transfer agent for the Common Stock.
(h) Earnings Statement. As soon as practicable, the Company
will make generally available to its security holders and to the
Representative an earnings statement (which need not be audited)
covering the twelve-month period ending June 30, 1998 that satisfies
the provisions of Section 11(a) of the Securities Act.
(i) Periodic Reporting Obligations. During the Prospectus
Delivery Period the Company shall file, on a timely basis, with the
Commission and the Nasdaq National Market all reports and documents
required to be filed under the Exchange Act.
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(j) Agreement Not To Offer or Sell Additional Securities.
During the period of 180 days following the date of the Prospectus, the
Company will not, without the prior written consent of Xxxxxxxxxx
Securities (which consent may be withheld at the sole discretion of
Xxxxxxxxxx Securities), directly or indirectly, sell, offer, contract
or grant any option to sell, pledge, transfer or establish an open "put
equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act, or otherwise dispose of or transfer, or announce the
offering of, or file any registration statement under the Securities
Act in respect of, any shares of Common Stock, options or warrants to
acquire shares of the Common Stock or securities exchangeable or
exercisable for or convertible into shares of Common Stock (other than
as contemplated by this Agreement with respect to the Common Shares);
provided, however, that the Company may issue shares of its Common
Stock or options to purchase its Common Stock, or Common Stock upon
exercise of options, pursuant to any stock option, stock bonus or other
stock plan or arrangement described in the Prospectus, but only if the
holders of such shares, options, or shares issued upon exercise of such
options, agree in writing not to sell, offer, dispose of or otherwise
transfer any such shares or options during such 180 day period without
the prior written consent of Xxxxxxxxxx Securities (which consent may
be withheld at the sole discretion of Xxxxxxxxxx Securities).
(k) Future Reports to the Representative. During the period of
five years hereafter the Company will furnish to the Representative at
000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 Attention:
Xxxxxx X. Xxxxxx (i) as soon as practicable after the end of each
fiscal year, copies of the Annual Report of the Company containing the
balance sheet of the Company as of the close of such fiscal year and
statements of income, stockholders' equity and cash flows for the year
then ended and the opinion thereon of the Company's independent public
or certified public accountants; (ii) as soon as practicable after the
filing thereof, copies of each proxy statement, Annual Report on Form
10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or
other report filed by the Company with the Commission, the NASD or any
securities exchange; and (iii) as soon as available, copies of any
report or communication of the Company mailed generally to holders of
its capital stock.
Xxxxxxxxxx Securities, on behalf of the several Underwriters, may, in
its sole discretion, waive in writing the performance by the Company of any one
or more of the foregoing covenants or extend the time for their performance.
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all costs,
fees and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters, (iv) all fees and expenses of
the Company's counsel, independent public or certified pubic accountants and
other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts), each preliminary
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prospectus and the Prospectus, and all amendments and supplements thereto, and
this Agreement, (vi) all filing fees, attorneys' fees and expenses incurred by
the Company or the Underwriters in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part
of the Common Shares for offer and sale under the state securities or blue sky
laws or the provincial securities laws of Canada, and, if requested by the
Representative, preparing and printing a "Blue Sky Survey" or memorandum, and
any supplements thereto, advising the Underwriters of such qualifications,
registrations and exemptions, (vii) the filing fees incident to, and the
reasonable fees and expenses of counsel for the Underwriters in connection with,
the NASD's review and approval of the Underwriters' participation in the
offering and distribution of the Common Shares, (viii) the fees and expenses
associated with including the Common Shares on the Nasdaq National Market, and
(ix) all other fees, costs and expenses referred to in Item 13 of Part II of the
Registration Statement. Except as provided in this Section 4, Section 6, Section
8 and Section 9 hereof, the Underwriters shall pay their own expenses, including
the fees and disbursements of their counsel.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company set
forth in Section 1 hereof as of the date hereof and as of the First Closing Date
as though then made and, with respect to the Optional Common Shares, as of the
Second Closing Date as though then made, to the timely performance by the
Company of its covenants and other obligations hereunder, and to each of the
following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the
Representative shall have received;
(i) from Ernst & Young LLP, independent public or
certified public accountants for the Company and Fox & Hound
Restaurant Group, a letter dated the date hereof addressed to
the Underwriters, in form and substance satisfactory to the
Representative, containing statements and information of the
type ordinarily included in accountant's "comfort letters" to
underwriters, delivered according to Statement of Auditing
Standards No. 72 (or any successor bulletin), with respect to
the audited and unaudited financial statements and the Pro
Forma Financial Statements prepared by them and certain
financial information contained in the Registration Statement
and the Prospectus (and the Representative shall have received
an additional [___] conformed copies of such accountants'
letter for each of the several Underwriters).
(ii) from Deloitte & Touche LLP, independent public
or certified public accountants for the Xxxxxx'x, a letter
dated the date hereof addressed to the Underwriters, in form
and substance satisfactory to the Representative, containing
statements and information of the type ordinarily included in
accountant's "comfort letters" to underwriters, delivered
according to Statement of Auditing Standards No. 72 (or any
successor bulletin), with respect to the audited and unaudited
financial statements prepared by them and certain financial
information contained in the Registration Statement and the
Prospectus (and the Representative shall have
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received an additional [___] conformed copies of such
accountants' letter for each of the several Underwriters).
(b) Compliance with Registration Requirements; No Stop Order;
No Objection from NASD. For the period from and after effectiveness of
this Agreement and prior to the First Closing Date and, with respect to
the Optional Common Shares, the Second Closing Date:
(i) the Company shall have filed the Prospectus with
the Commission (including the information required by Rule
430A under the Securities Act) in the manner and within the
time period required by Rule 424(b) under the Securities Act;
or the Company shall have filed a post-effective amendment to
the Registration Statement containing the information required
by such Rule 430A, and such post-effective amendment shall
have become effective; or, if the Company elected to rely upon
Rule 434 under the Securities Act and obtained the
Representative's consent thereto, the Company shall have filed
a Term Sheet with the Commission in the manner and within the
time period required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of
the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment to the Registration
Statement, shall be in effect and no proceedings for such
purpose shall have been instituted or threatened by the
Commission; and
(iii) the NASD shall have raised no objection to the
fairness and reasonableness of the underwriting terms and
arrangements.
(c) No Material Adverse Change or Ratings Agency Change. For
the period from and after the date of this Agreement and prior to the
First Closing Date and, with respect to the Optional Common Shares, the
Second Closing Date:
(i) in the judgment of the Representative there shall
not have occurred any Material Adverse Change; and
(ii) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any securities of the Company or any of
its subsidiaries by any "nationally recognized statistical
rating organization" as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act.
(d) Opinion of Counsel for the Company. On each of the First
Closing Date and the Second Closing Date the Representative shall have
received the favorable opinion of Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx
LLP, counsel for the Company, dated as of such
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Closing Date, the form of which is attached as Exhibit A (and the
Representative shall have received an additional [___] conformed copies
of such counsel's legal opinion for each of the several Underwriters).
(e) Opinion of Special Counsel for the Company. On each of the
First Closing Date and the Second Closing Date the Representative shall
have received the favorable opinion of [ ], special counsel for the
Company, dated as of such Closing Date, to the effect that the Company
and its Subsidiaries are in compliance with all applicable laws,
statutes and regulations relating to the purchase, sale or marketing of
alcoholic beverages in the States of Arkansas, Indiana, North Carolina,
South Carolina, Tennessee and Texas.
(f) Opinion of Counsel for the Underwriters. On each of the
First Closing Date and the Second Closing Date the Representative shall
have received the favorable opinion of Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, P.C., counsel for the Underwriters, dated as of such Closing
Date, with respect to the matters set forth in paragraphs (i) (with
respect to the Company only), (v) (with respect to subparagraph (a)
only), (vi) (with respect to due authorization, execution and deliver
of the Underwriting Agreement only), (vii), (viii) (to such counsel's
knowledge, with respect to the first two sentences only), (ix) and (xi)
(with respect to the caption "Underwriting" only) and the next-to-last
paragraph of Exhibit A (and the Representative shall have received an
additional [___] conformed copies of such counsel's legal opinion for
each of the several Underwriters).
(g) Officers' Certificate. On each of the First Closing Date
and the Second Closing Date the Representative shall have received a
written certificate executed by the Chairman of the Board, Chief
Executive Officer or President of the Company and the Chief Financial
Officer or Chief Accounting Officer of the Company, dated as of such
Closing Date, to the effect set forth in subsections (b)(ii) and
(c)(ii) of this Section 5, and further to the effect that:
(i) for the period from and after the date of this
Agreement and prior to such Closing Date, there has not
occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of
the Company set forth in Section 1 of this Agreement are true
and correct with the same force and effect as though expressly
made on and as of such Closing Date; and
(iii) the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date.
(h) Bring-down Comfort Letter. On each of the First Closing
Date and the Second Closing Date the Representative shall have
received;
(i) from Ernst & Young LLP, independent public or
certified public accountants for the Company and Fox & Hound
Restaurant Group, a letter dated such date, in form and
substance satisfactory to the Representative, to the effect
that they reaffirm the statements made in the letter furnished
by them pursuant to
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subsection (a)(i) of this Section 5, except that the specified
date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the First
Closing Date or Second Closing Date, as the case may be (and
the Representative shall have received an additional [___]
conformed copies of such accountants' letter for each of the
several Underwriters).
(ii) from Deloitte & Touche LLP, independent public
or certified public accountants for Xxxxxx'x, a letter dated
such date, in form and substance satisfactory to the
Representative, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to
subsection (a) (ii) of this Section 5, except that the
specified date referred to therein for the carrying out of
procedures shall be no more than three business days prior to
the First Closing Date or Second Closing Date, as the case may
be (and the Representative shall have received an additional
[___] conformed copies of such accountants' letter for each of
the several Underwriters).
(i) Lock-Up Agreement from Directors, Officers and
Stockholders of the Company. On the date hereof, the Company shall have
furnished to the Representative an agreement in the form of Exhibit B
hereto from each director, officer and each beneficial owner of Common
Stock (as determined according to Rule 13d-3 under the Exchange Act),
and such agreement shall be in full force and effect on each of the
First Closing Date and the Second Closing Date.
(j) Additional Documents. On or before each of the First
Closing Date and the Second Closing Date, the Representative and
counsel for the Underwriters shall have received such information,
documents and opinions as they may reasonably require for the purposes
of enabling them to pass upon the issuance and sale of the Common
Shares as contemplated herein, or in order to evidence the accuracy of
any of the representations and warranties, or the satisfaction of any
of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and
as required to be satisfied, this Agreement may be terminated by the
Representative by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Optional Common Shares, at any time prior
to the Second Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 4, Section 6, Section
8 and Section 9 shall at all times be effective and shall survive such
termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement
is terminated by the Representative pursuant to Section 5, Section 7, Section 10
or Section 11, or if the sale to the Underwriters of the Common Shares on the
First Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or to comply
with any provision hereof, the Company agrees to reimburse the Representative
and the other Underwriters (or such Underwriters as have terminated this
Agreement with respect to themselves), severally, upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the
Representative and the Underwriters in connection with the proposed purchase and
the offering
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and sale of the Common Shares, including but not limited to fees and
disbursements of counsel, printing expenses, travel expenses, postage, facsimile
and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall not become effective until the later of
(i) the execution of this Agreement by the parties hereto and (ii) notification
by the Commission to the Company and the Representative of the effectiveness of
the Registration Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated
by any party by notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (a) the Company to any
Underwriter, except that the Company shall be obligated to reimburse the
expenses of the Representative and the Underwriters pursuant to Sections 4 and 6
hereof, (b) of any Underwriter to the Company, or (c) of any party hereto to any
other party except that the provisions of Section 8 and Section 9 shall at all
times be effective and shall survive such termination.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter, its officers and
employees, and each person, if any, who controls any Underwriter within
the meaning of the Securities Act and the Exchange Act against any
loss, claim, damage, liability or expense, as incurred, to which such
Underwriter or such controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory
law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the
written consent of the Company), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based (i) upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any
information deemed to be a part thereof pursuant to Rule 430A or Rule
434 under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading; or (ii) upon any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
or (iii) in whole or in part upon any inaccuracy in the representations
and warranties of the Company contained herein; or (iv) in whole or in
part upon any failure of the Company to perform its obligations
hereunder or under law; or (v) any act or failure to act or any alleged
act or failure to act by any Underwriter in connection with, or
relating in any manner to, the Common Stock or the offering
contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based
upon any matter covered by clause (i) or (ii) above, provided that the
Company shall not be liable under this clause (v) to the extent that a
court of competent jurisdiction shall have determined by a final
judgment that
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such loss, claim, damage, liability or action resulted directly from
any such acts or failures to act undertaken or omitted to be taken by
such Underwriter through its bad faith or willful misconduct; and to
reimburse each Underwriter and each such controlling person for any and
all expenses (including the fees and disbursements of counsel chosen by
Xxxxxxxxxx Securities) as such expenses are reasonably incurred by such
Underwriter or such controlling person in connection with
investigating, defending, settling, compromising or paying any such
loss, claim, damage, liability, expense or action; provided, however,
that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the
extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by
the Representative expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and provided, further, that with respect to any
preliminary prospectus, the foregoing indemnity agreement shall not
inure to the benefit of any Underwriter from whom the person asserting
any loss, claim, damage, liability or expense purchased Common Shares,
or any person controlling such Underwriter, if copies of the Prospectus
were timely delivered to the Underwriter pursuant to Section 2 and a
copy of the Prospectus (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Underwriter to such person, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Common Shares to such person, and if
the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage, liability or expense.
The indemnity agreement set forth in this Section 8(a) shall be in
addition to any liabilities that the Company may otherwise have.
(b) Indemnification of the Company, its Directors and
Officers. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of
its officers who signed the Registration Statement and each person, if
any, who controls the Company within the meaning of the Securities Act
or the Exchange Act, against any loss, claim, damage, liability or
expense, as incurred, to which the Company, or any such director,
officer or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of
any litigation, if such settlement is effected with the written consent
of such Underwriter), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises
out of or is based upon any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto),
or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
the Registration Statement, any preliminary prospectus, the Prospectus
(or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company by the
Representative expressly for use therein; and to reimburse the Company,
or any such director, officer or controlling person for any legal and
other expense reasonably incurred by the Company, or any such director,
officer or controlling person in connection with investigating,
defending, settling, compromising or paying any
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such loss, claim, damage, liability, expense or action. The Company
hereby acknowledges that the only information that the Underwriters
have furnished to the Company expressly for use in the Registration
Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) are the statements set forth (A) as
the first paragraph on the inside front cover page of the Prospectus
concerning stabilization by the Underwriters and (B) in the table in
the first paragraph and as the fifth and eighth paragraphs under the
caption "Underwriting" in the Prospectus; and the Underwriters confirm
that such statements are correct. The indemnity agreement set forth in
this Section 8(b) shall be in addition to any liabilities that each
Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures.
Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against an indemnifying
party under this Section 8, notify the indemnifying party in writing of
the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it
is not prejudiced as a proximate result of such failure. In case any
such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with
all other indemnifying parties similarly notified, by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that a conflict may arise between
the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select
separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party
of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel
(together with local counsel), approved by the indemnifying party
(Xxxxxxxxxx Securities in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall
be at the expense of the indemnifying party.
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(d) Settlements. The indemnifying party under this Section 8
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
Section 8(c) hereof, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise
or consent includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
action, suit or proceeding.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is for any reason held
to be unavailable to or otherwise insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount paid or payable by such indemnified party, as incurred, as a
result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Underwriters, on the
other hand, from the offering of the Common Shares pursuant to this Agreement or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Underwriters, on the other hand, in
connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Underwriters, on the other hand, in connection with the offering of the
Common Shares pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Common
Shares pursuant to this Agreement (before deducting expenses) received by the
Company, and the total underwriting discount received by the Underwriters, in
each case as set forth on the front cover page of the Prospectus (or, if Rule
434 under the Securities Act is used, the corresponding location on the Term
Sheet) bear to the aggregate initial public offering price of the Common Shares
as set forth on such cover. The relative fault of the Company, on the one hand,
and the Underwriters, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact or any
such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company, on the one
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hand, or the Underwriters, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 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 account
of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter shall
be required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company with the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as the Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on
the First Closing Date or the Second Closing Date, as the case may be, any one
or more of the several Underwriters shall fail or refuse to purchase Common
Shares that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on Schedule A
bears to the aggregate number of Firm Common Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representative with the consent of the non-defaulting
Underwriters, to purchase the Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Common Shares and the
aggregate number of Common Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Common Shares to be purchased on such
date, and arrangements satisfactory to the Representative and the Company for
the purchase of such Common Shares are not made
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within 48 hours after such default, this Agreement shall terminate without
liability of any party to any other party except that the provisions of Section
4, Section 6, Section 8 and Section 9 shall at all times be effective and shall
survive such termination. In any such case either the Representative or the
Company shall have the right to postpone the First Closing Date or the Second
Closing Date, as the case may be, but in no event for longer than seven days in
order that the required changes, if any, to the Registration Statement and the
Prospectus or any other documents or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing
Date this Agreement maybe terminated by the Representative by notice given to
the Company if at any time (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the
Nasdaq Stock Market, or trading in securities generally on either the Nasdaq
Stock Market or the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established on
any of such stock exchanges by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by any of federal, New York,
Delaware or California authorities; (iii) there shall have occurred any outbreak
or escalation of national or international hostilities or any crisis or
calamity, or any change in the United States or international financial markets,
or any substantial change or development involving a prospective substantial
change in United States' or international political, financial or economic
conditions, as in the judgment of the Representative is material and adverse and
makes it impracticable to market the Common Shares in the manner and on the
terms described in the Prospectus or to enforce contracts for the sale of
securities; (iv) in the judgment of the Representative there shall have occurred
any Material Adverse Change; or (v) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the judgment of the Representative may interfere materially with the conduct
of the business and operations of the Company regardless of whether or not such
loss shall have been insured. Any termination pursuant to this Section 11 shall
be without liability on the part of (a) the Company to any Underwriter, except
that the Company shall be obligated to reimburse the expenses of the
Representative and the Underwriters pursuant to Sections 4 and 6 hereof, (b) any
Underwriter to the Company, or (c) of any party hereto to any other party except
that the provisions of Section 8 and Section 9 shall at all times be effective
and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Common Shares sold hereunder and any termination of this Agreement.
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SECTION 13. NOTICES. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representative:
Xxxxxxxxxx Securities
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
Xxxxxxxxxx Securities
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
If to the Company:
Total Entertainment Restaurant Corp.
000 Xxxxxxx Xxxxx
Xxxxxxxx 000, Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile: [___]
Attention: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Common Shares as such from any of the Underwriters merely by reason of
such purchase.
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SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
SECTION 17. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in
counterparts, each one of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
may not be amended or modified unless in writing by all of the parties hereto,
and no condition herein (express or implied) may be waived unless waived in
writing by each party whom the condition is meant to benefit. The Table of
Contents and the Section headings herein are for the convenience of the parties
only and shall not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
TOTAL ENTERTAINMENT RESTAURANT CORP.
By:
----------------------------------------
Xxxxx X. Xxxxxxx
Chairman of the Board of Directors
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The foregoing Underwriting Agreement is hereby confirmed and accepted by the
Representative in San Francisco, California as of the date first above written.
XXXXXXXXXX SECURITIES
Acting as Representative of the several Underwriters named in the attached
Schedule A.
By: XXXXXXXXXX SECURITIES
By:
-------------------------------
Xxxxxxx X. Xxxxx
Authorized Signatory
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SCHEDULE A
NUMBER OF FIRM
COMMON SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
Xxxxxxxxxx Securities [_________]
---------
Total 2,000,000
=========
34
EXHIBIT A
Opinion of Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP to be
delivered pursuant to Section 5(d) of the Underwriting Agreement. Capitalized
terms not otherwise defined herein shall have the meaning set forth in the
Underwriting Agreement.
(i) The Company and each of its Subsidiaries has been duly
organized and is validly existing as a corporation (or, in the case of
a Subsidiary Limited Partnership, as a limited partnership) in good
standing under the laws of its jurisdiction of organization, has full
power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus, and is duly qualified to do business as a foreign
corporation or entity and is in good standing 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 result in a
Material Adverse Change.
(ii) The Company has corporate power and authority to enter
into and perform its obligations under the Underwriting Agreement.
(iii) All of the issued and outstanding capital stock of each
Subsidiary that is a corporation has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through Subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or, to the best knowledge
of such counsel, any pending or threatened claim. All of the issued and
outstanding ownership interests of each Subsidiary Limited Partnership
has been duly authorized and validly issued, is fully paid and
nonassessable and is owned by the Company, directly or through
Subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or claim.
(iv) The authorized, issued and outstanding capital stock of
the Company (including the Common Stock) conforms to the description
thereof set forth in the Prospectus. All of the outstanding shares of
Common Stock have been duly authorized and validly issued, are fully
paid and nonassessable and have been issued in compliance with the
registration and qualification requirements of federal and state
securities laws. The form of certificate used to evidence the Common
Stock is in due and proper form and complies with all applicable
requirements of the charter and by-laws of the Company and the General
Corporation Law of the State of Delaware. The description of the
Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised
thereunder, set forth in the Prospectus accurately and fairly presents
the information required to be shown with respect to such plans,
arrangements, options and rights.
(v) No stockholder of the Company or any other person has any
preemptive right, right of first refusal or other similar right to
subscribe for or purchase securities of the Company arising (a) by
operation of the charter or by-laws of the Company or the General
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35
Corporation Law of the State of Delaware or (b) to the best knowledge
of such counsel, otherwise.
(vi) The Underwriting Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the
Company, enforceable in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and except
as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles.
(vii) The Common Shares to be purchased by the Underwriters
from the Company have been duly authorized for issuance and sale
pursuant to the Underwriting Agreement and, when issued and delivered
by the Company pursuant to the Underwriting Agreement against payment
of the consideration set forth therein, will be validly issued, fully
paid and nonassessable.
(viii) The Registration Statement and the Rule 462(b)
Registration Statement, if any, has been declared effective by the
Commission under the Securities Act. To the best knowledge of such
counsel, no stop order suspending the effectiveness of either of the
Registration Statement or the Rule 462(b) Registration Statement, if
any, has been issued under the Securities Act and no proceedings for
such purpose have been instituted or are pending or are contemplated or
threatened by the Commission. Any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) under the Securities Act
has been made in the manner and within the time period required by such
Rule 424(b).
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, the Prospectus, and each amendment or
supplement to the Registration Statement and the Prospectus, as of
their respective effective or issue dates (other than the financial
statements and supporting schedules, or other financial information or
statistical data derived therefrom, included therein or in exhibits to
or excluded from the Registration Statement, as to which no opinion
need be rendered) comply as to form in all material respects with the
applicable requirements of the Securities Act.
(x) The Common Shares have been approved for listing on the
Nasdaq National Market.
(xi) The statements (i) in the Prospectus under the captions
"Description of Capital Stock", "Business--Legal Matters", "Certain
Transactions" and "Shares Eligible for Future Sale" and (ii) in Item 14
and Item 15 of the Registration Statement, insofar as such statements
constitute matters of law, summaries of legal matters, the Company's
charter or by-law provisions, documents or legal proceedings, or legal
conclusions, has been reviewed by such counsel and fairly present and
summarize, in all material respects, the matters referred to therein.
A-2
36
(xii) To the best knowledge of such counsel, there are no
legal or governmental actions, suits or proceedings pending or
threatened which are required to be disclosed in the Registration
Statement.
(xiii) To the best knowledge of such counsel, there are no
Existing Instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed as exhibits thereto;
and the descriptions thereof and references thereto are correct in all
material respects.
(xiv) No consent, approval, authorization or other order of,
or registration or filing with, any court or other governmental
authority or agency, is required for the Company's execution, delivery
and performance of the Underwriting Agreement and consummation of the
transactions contemplated thereby and by the Prospectus, except as
required under the Securities Act, applicable state securities or blue
sky laws and from the NASD.
(xv) The execution and delivery of the Underwriting Agreement
by the Company and the performance by the Company of its obligations
thereunder (other than performance by the Company of its obligations
under the indemnification section of the Underwriting Agreement, as to
which no opinion need be rendered) (a) have been duly authorized by all
necessary corporate action on the part of the Company; (b) will not
result in any violation of the provisions of the charter or by-laws of
the Company or any Subsidiary; (c) will not, to the best knowledge of
such counsel, constitute a breach of, or Default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Subsidiaries, or any
material Existing Instrument; or (d) to the best knowledge of such
counsel, will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company
or any subsidiary.
(xvi) The Company is not, and after receipt of payment for the
Common Shares will not be, an "investment company" within the meaning
of Investment Company Act.
(xvii) To the best knowledge of such counsel, there are no
persons with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration Statement or
included in the offering contemplated by the Underwriting Agreement.
(xviii) Neither the Company nor any Subsidiary is in violation
of its charter or by-laws or other organizational document; to the best
of such counsel's knowledge, neither the Company nor any Subsidiary (a)
is in violation of any law, administrative regulation or administrative
or court decree applicable to the Company or any Subsidiary or (b) is
in Default in the performance or observance of any obligation,
agreement, covenant or condition contained in any material Existing
Instrument, except in each such case for such violations or Defaults as
would not, individually or in the aggregate, result in a Material
Adverse Change.
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In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants for
the Company and with representatives of the Underwriters at which the contents
of the Registration Statement and the Prospectus, and any supplements or
amendments thereto, and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as specified above), and
any supplements or amendments thereto, on the basis of the foregoing, nothing
has come to their attention which would lead them to believe that either the
Registration Statement or any amendments thereto, at the time the Registration
Statement or such amendments became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date or at the First Closing Date or the Second Closing
Date, as the case may be, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no belief as to
the financial statements or schedules or other financial or statistical data
derived therefrom, included in the Registration Statement or the Prospectus or
any amendments or supplements thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the laws of the
State of New York, the General Corporation Law of the State of Delaware or the
federal law of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion (which shall be dated the First Closing Date
or the Second Closing Date, as the case may be, shall be satisfactory in form
and substance to the Underwriters, shall expressly state that the Underwriters
may rely on such opinion as if it were addressed to them and shall be furnished
to the Representative) of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters; provided,
however, that such counsel shall further state that they believe that they and
the Underwriters are justified in relying upon such opinion of other counsel,
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
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EXHIBIT B
March , 1997
Xxxxxxxxxx Securities
As Representative of the Several Underwriters
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
RE: TOTAL ENTERTAINMENT RESTAURANT CORP. (the "Company")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company ("Common Stock") or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry out
a public offering of Common Stock (the "Offering") for which you will act as the
representative of the underwriters. The undersigned recognizes that the Offering
will be of benefit to the undersigned and will benefit the Company by, among
other things, raising additional capital for its operations. The undersigned
acknowledges that you and the other underwriters are relying on the
representations and agreements of the undersigned contained in this letter in
carrying out the Offering and in entering into underwriting arrangements with
the Company with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of Xxxxxxxxxx Securities
(which consent may be withheld in its sole discretion), directly or indirectly,
sell, offer, contract or grant any option to sell (including without limitation
any short sale), pledge, transfer, establish an open "put equivalent position"
within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934,
or otherwise dispose of any shares of Common Stock, options or warrants to
acquire shares of Common Stock, or securities exchangeable or exercisable for or
convertible into shares of Common Stock currently or hereafter owned either of
record or beneficially (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934, as amended) by the undersigned, or publicly announce the
undersigned's intention to do any of the foregoing, for a period commencing on
the date hereof and continuing through the close of trading on the date 180 days
after the date of the Prospectus. The undersigned also agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent and
registrar
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against the transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common Stock
owned either of record or beneficially by the undersigned, including any rights
to receive notice of the Offering.
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
Printed Name of Stockholder: __________________________
By: ___________________________________________________
Signature
Printed Name of Person Signing: __________________________
(If different from name of stockholder)
(Please indicate capacity of person
signing if signing as custodian, trustee,
or on behalf of an entity)
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ANNEX I - SUBSIDIARIES
Xxxxxx'x Sports Grille, Inc.
F&H Restaurant Corp.
Fox & Hound, Inc.
Fox & Hound II, Inc.
X. Xxxxxxx Entertainment, Ltd.
505 Entertainment, Ltd.
Midway Entertainment, Ltd.
F&H Dallas, L.P.
