EXHIBIT 10.18
FOX & HOUND OF LITTLETON, INC.
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement") is made as of the 12th
day of June 2002 by and among TENT FINANCE, INC., a Delaware corporation
("TENT"); XXXX X. XXXX ("Xxxx"); and XXXXX X. XXXXXX ("Xxxxxx") (TENT, Judd,
Zielke, collectively, the "Stockholders" or the "Parties," individually, a
"Stockholder" or a "Party"), who together own record and beneficial ownership of
all issued and outstanding common stock of FOX & HOUND OF LITTLETON, INC., a
Colorado corporation (the "Company").
In consideration of the mutual promises hereinafter set forth, the
Parties agree as follows:
1. Premises of Agreement. The Parties acknowledge that the Company was
organized to engage in the business of owning an establishment licensed to sell
alcoholic beverages subject to the applicable laws, ordinances, and regulations
in Jefferson County, Colorado, where the Company's business will be conducted.
The Parties have acquired stock in the Company in reliance on the qualifications
of the Company and its current stockholders to obtain all licenses and permits
required conduct the business lawfully and to obtain and retain all necessary
licenses. The Parties agree that certain restrictions on the sale or other
transfer of stock and provisions for the governance of the Company set forth in
this Agreement are mutually beneficial and provide for the continued
qualification of the Company to obtain licenses and conduct its business, and
that these mutual promises and other consideration set forth herein constitute
good and sufficient consideration for a binding contract on the terms and
conditions stated herein.
2. Covenants. The Parties agree that the following covenants shall
govern their relationship as stockholders of the Company:
a. Unanimous Vote for Certain Actions. A unanimous vote of the
Stockholders shall be required before any of the following actions may
be taken:
i. Sale of any material part of the assets of the
Company to any purchaser not approved in writing by
Total Entertainment Restaurant Corp. ("TERC").
ii. Any merger or consolidation of the Company with any
entity other than an entity in which at least 50.1%
of the voting stock is owned, directly or indirectly,
by TERC, without the prior written consent of TERC.
iii. Issuance of shares of the Company in excess of those
shares outstanding on the date hereof and held by the
Stockholders.
iv. Dissolution of the Company or the filing of a
voluntary bankruptcy or similar proceeding under
applicable federal or state law without the prior
written consent of TERC.
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v. Payment of any dividend or distribution without the
prior written consent of TERC.
vi. Payment of any salary or other compensation of any
officer, director or shareholder of the Company
without the prior written consent of TERC.
vii. Entering into any agreement with any officer,
director, or shareholder of the Company or any
relative or affiliate of any such persons without the
prior written consent of TERC.
Except in the case of election of directors, Xxxx and Xxxxxx agree to vote their
shares in Company as directed by Tent in its sole discretion.
b. Option to Purchase Stock. Xxxx and Xxxxxx each xxxxx Tent
an irrevocable option to purchase their stock of the Company upon the
occurrence of any of the following events:
i. He dies or becomes legally incapacitated;
ii. His employment with TERC terminates for any reason,
with or without cause;
iii. He commits or suffers to occur any act or condition
that might adversely affect the qualification of the
Company for licenses or permits necessary to the
conduct of its business; or
iv. The giving of not less than ten (10) days prior
notice by Tent, which may be given at any time in
Tent's sole discretion, that it elects to purchase
his shares.
The purchase price for shares purchased under this option shall be the
lesser of (1) the book value of the shares on the exercise date or (2) the
original purchase price.
c. Restrictions on Transfer. Except as expressly provided
herein, no share of stock in the Company (other than shares owned by
Tent) or interest therein shall be sold or transferred (including
transfers by gift, donation, encumbrance, pledge, hypothecation, court
order, judicial process, by operation at law at death, foreclosure,
levee, attachment, or otherwise) by any Stockholder unless the stock
proposed to be transferred is first offered by the Stockholder (or the
personal representative, trustee, or transferee requesting recognition
of the transfer on the Company's records) to the Company for the option
price determined in accordance with Section 2.b above and has obtained
a prior written waiver of the Company's right to purchase, which the
Company may grant or withhold in its sole and absolute discretion. All
certificates for shares of stock in the
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Company shall bear a legend giving notice that transfer of the shares
is restricted by this Agreement and the Bylaws of the Company.
d. Distributions. Xxxxxx and Xxxx hereby agree that all
distributions and dividends from the Company shall be paid solely for
the account of Tent and not for the account of the other stockholders.
e. Adoption and Amendment of Bylaws. The Parties agree to
adopt by unanimous consent of the Stockholders the Amendment to Bylaws
attached hereto, which shall not be further amended without unanimous
written consent of the Stockholders.
f. Cooperation. Each Party covenants and agrees to cooperate
in all matters and in every way as may be necessary, appropriate, or
helpful in the conduct of the intended business of owning a Fox & Hound
restaurant and bar, including making license or permit applications,
providing information, and signing other documents.
3. Pledge of Shares. In order to secure Xxxx'x and Xxxxxx'x obligations
hereunder, including but not limited to, the purchase option set forth in
Section 2.b, Xxxx and Xxxxxx each agree to pledge their right, title, and
interest in and to their stock in the Company by execution of the Pledge and
Security Agreement in the form attached hereto.
4. Default and Remedies. The Parties agree that monetary damages are
not an adequate remedy and that any default in the performance of the
obligations of this Agreement warrants the enforcement of the equitable remedies
of specific performance and/or injunction ordering and mandating performance by
the Parties strictly in accordance with the terms of this Agreement. Exclusive
venue and jurisdiction to enforce this Agreement shall be in the courts sitting
in Sedgwick County, Kansas. The Parties irrevocably submit to the personal
jurisdiction of such courts for such purposes.
5. Enforcement by TERC. Xxxx and Xxxxxx acknowledge that TENT is a
wholly-owned subsidiary of TERC and that TERC has a material interest in the
performance of this agreement by and for the benefit of TERC. Xxxx and Xxxxxx
agree that no right of TENT shall be deemed waived, or be forfeited for default
or lost for any other reason, unless and until at least thirty (30) days prior
written notice has been given to TERC stating the nature of any waiver,
forfeiture, or loss of rights Xxxx or Xxxxxx intends to declare, act, or
otherwise rely upon, and the action deemed necessary to avoid such waiver,
forfeiture, or loss of rights. TERC shall have the right to cause TENT to act or
to act itself, for its own account, to take any action, cure any default, and
otherwise maintain the rights and benefits of this Agreement for TENT and TERC.
This Agreement is made with intention to benefit TERC and shall be enforceable
by TERC.
6. Term and Termination. The term of this Agreement shall be in effect
for a term of ten (10) years ending at midnight on June 11, 2012, and thereafter
shall be renewed automatically for additional terms of ten years each unless one
of the Parties gives written notice at least ninety (90) days in advance of the
expiration date of the term then in effect.
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7. Entire Agreement and Modification. This Agreement is the entire
agreement between the Parties relating to its subject matter, and any other
agreements, representations, or warranties (whether oral or written) between the
Parties relating to the subject matter hereof are hereby revoked, terminated,
and superseded. No modification or amendment to this Agreement shall be made
except as the same shall be in writing executed by authorized representatives of
the Parties. If any provision of this Agreement shall be invalid or
unenforceable by a court of competent jurisdiction, such provision shall be
enforced to the greatest extent allowed by law, or, if the entire provision
shall be invalid or unenforceable, the remaining provisions will remain in
effect.
8. Assignment and Delegation. Except for transfers by Tent to one or
more of its affiliates, Rights under this Agreement may not be assigned nor any
duties delegated by any Party without the other Parties' prior written consent.
For the purposes of this Section, the term assignment shall include the transfer
of majority control of the voting securities of a Party or the right to elect a
majority of the governing body of a Party.
9. Notices. Any notice or communication required or permitted to be
sent or given hereunder shall be deemed given when sent the other Party hereto
at following address by prepaid registered or certified mail, return receipt
requested, or by other equal or more expeditious means, including facsimile,
Federal Express or other reputable courier, addressed as follows:
If to TENT:
0000 X. Xxxxxxx Xxx., Xxxxx 000
Xxxxxxx, XX 00000
If to Xxxx:
0000 Xxxx Xxx Xx.
Xxxxxxxxxx, XX
If to Xxxxxx:
00000 Xxxxxxxx Xx.
Xxxxxxx, XX 00000
If to TERC:
0000 X. Xxxxxxx Xxx., Xxxxx 000
Xxxxxxx, XX 00000
10. Governing Law. This Agreement is made and delivered in the State of
Kansas and shall be governed by the laws of Kansas except for matters
necessarily governed by the corporation laws of the State of Colorado, under
which the Company is incorporated.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the day, month, and year written above.
TENT FINANCE, INC.
By /s/ Xxxx X. Xxxx
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Its President
-----------------------------
/s/ Xxxx X. Xxxx
--------------------------------
XXXX X. XXXX
/s/ Xxxxx X. Xxxxxx
--------------------------------
XXXXX X. XXXXXX
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SPOUSAL CONSENT
I, the undersigned, Xxxxx Xxxxxx (hereinafter referred to as "Spouse"),
wife of Xxxxx X. Xxxxxx, having read the foregoing Agreement and related Pledge
and Security Agreement (collectively, the "Agreement") to which my husband is a
party, being well and fully informed regarding the contents thereof and the
provisions therein which affect any interest I may have in Fox and Hound of
Littleton, Inc., a Colorado corporation, including such interests as may be
acquired by operation of law through my marital status or as a result of my
husband's death under the laws of descent and distribution and the probate code
of the State of Kansas or any other applicable jurisdiction or under any
applicable community property laws, such interests having been explained to me;
knowing the general nature and approximate extent and value of my husband's
property and my own property and having been afforded free access to my
husband's financial books and records; and being entirely willing at all events
that said Agreement may thus be executed by my husband and performed, do hereby
freely and voluntarily consent to the execution of said Agreement by my husband,
and hereby agree to be bound by such Agreement accepting the benefits and
burdens that the Agreement will provide.
Furthermore, my consent shall be binding upon my purchasers, donees,
heirs, personal representatives, successors, assigns, trustees, beneficiaries,
and other transferees of any such interests, whether presently or hereafter
acquired, which I may have in either of said corporations.
IN WITNESS WHEREOF, I have hereunto subscribed my name to this Spousal
Consent as of the 12th day of June, 2002.
/s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx,
Wife of Xxxxx X. Xxxxxx
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SPOUSAL CONSENT
I, the undersigned, Xxxx Xxxx (hereinafter referred to as "Spouse"),
wife of Xxxx X. Xxxx, having read the foregoing Agreement and related Pledge and
Security Agreement (collectively, the "Agreement") to which my husband is a
party, being well and fully informed regarding the contents thereof and the
provisions therein which affect any interest I may have in Fox and Hound of
Littleton, Inc., a Colorado corporation, including such interests as may be
acquired by operation of law through my marital status or as a result of my
husband's death under the laws of descent and distribution and the probate code
of the State of Texas or any other applicable jurisdiction or under any
applicable community property laws, such interests having been explained to me;
knowing the general nature and approximate extent and value of my husband's
property and my own property and having been afforded free access to my
husband's financial books and records; and being entirely willing at all events
that said Agreement may thus be executed by my husband and performed, do hereby
freely and voluntarily consent to the execution of said Agreement by my husband,
and hereby agree to be bound by such Agreement accepting the benefits and
burdens that the Agreement will provide.
Furthermore, my consent shall be binding upon my purchasers, donees,
heirs, personal representatives, successors, assigns, trustees, beneficiaries,
and other transferees of any such interests, whether presently or hereafter
acquired, which I may have in either of said corporations.
IN WITNESS WHEREOF, I have hereunto subscribed my name to this Spousal
Consent as of the 12th day of June, 2002.
/s/ Xxxx Xxxx
-------------------------------------------
Xxxx Xxxx,
Wife of Xxxx X. Xxxx
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UNANIMOUS CONSENT MINUTES
OF
THE SHAREHOLDERS
OF
FOX & HOUND OF LITTLETON, INC.
The undersigned, being all of the shareholders of Fox & Hound of
Littleton, Inc., a Colorado Corporation (the "Corporation"), do hereby waive
written notice of and consent to the adoption of the following Resolutions, to
be given the same force and effect as if duly and unanimously adopted at a
special meeting of the Shareholders of the Corporation, as of the date hereof.
RESOLUTIONS
WHEREAS, all of the shareholders of the Corporation have entered into
that certain Stockholders Agreement dated as of June 12, 2002 (the "Stockholders
Agreement"); and
WHEREAS, the Shareholders desire to amend the Bylaws of the Corporation
to evidence certain restrictions on the transfer of shares of the Corporation.
NOW, THEREFORE, BE IT RESOLVED, that the Bylaws of the Corporation be
amended to add a new Section 5 of ARTICLE VI to read as follows:
5. STOCKHOLDERS AGREEMENT. No shares of the Corporation may be
issued or transferred unless allowed pursuant to the terms of the
Stockholders Agreement dated as of June 12, 2002, and only then upon
the condition that any new shareholder or permitted transferee of
shares of the Corporation shall execute the Stockholder Agreement.
BE FURTHER RESOLVED, that Section 1.E of ARTICLE VI of the Bylaws of
the Corporation be amended to read as follows:
E. Any restrictions imposed by the Corporation upon the
transfer of the shares represented by the certificate, including but
not limited to, the provisions of the Stockholders Agreement dated as
of June 12, 2002.
The undersigned certifies that they are all of the shareholders of the
Corporation entitled to vote on the foregoing matters, and they hereby consent
and agree to the adoption of the foregoing Resolutions.
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IN WITNESS WHEREOF, the undersigned have executed this Unanimous
Consent of the Shareholders, to be filed as part of the record of the
Corporation as of the ____ day of June, 2002.
/s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
TENT Finance, Inc.
By: /s/ Xxxx X. Xxxx
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Its: President
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