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EXHIBIT 1
1,600,000 SHARES
RIDGEVIEW, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
___________, 0000
XXXXXXXXXX/XXXXXXX XXXX CORPORATION
XXXXX & XXXXXXXXXXXX, INC.
as Representatives of the Underwriters
c/o Interstate/Xxxxxxx Lane Corporation
Interstate Tower
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Ladies and Gentlemen:
Ridgeview, Inc., a North Carolina corporation (the "Company"), proposes to
issue and sell 1,520,000 shares of the Common Stock, $.01 par value, of the
Company (the "Common Stock"), and certain shareholders of the Company named in
Schedule I hereto (the "Selling Shareholders") propose severally to sell an
aggregate of 80,000 outstanding shares of Common Stock, to the underwriters
named in Schedule II hereto (the "Underwriters") for whom you are acting as the
representatives (the "Representatives"). Such 1,600,000 shares of Common Stock
are hereinafter referred to as the "Firm Shares." The Company has also agreed
to grant to the Underwriters an option (the "Option") to purchase up to an
additional 240,000 shares of Common Stock (the "Option Shares") on the terms
and for the purposes set forth in Section l(b) hereof. The Firm Shares and the
Option Shares are hereinafter collectively referred to as the "Shares."
The Company and the Selling Shareholders hereby confirm their agreements
with each of the Underwriters as follows.
1. AGREEMENT TO SELL AND PURCHASE.
(a) The Company and each Selling Shareholder hereby agree to sell to each
Underwriter, and upon the basis of the representations, warranties and
agreements of the Company and the Selling Shareholders herein contained and
subject to all the terms and conditions of this Agreement, each Underwriter
agrees, severally and not jointly, to purchase from the Company and each
Selling Shareholder, at a price of $_____ per share, that number of Firm Shares
(rounded up or down as determined by you in your discretion, in order to avoid
fractions of a share) obtained by multiplying the number of Firm Shares to be
sold by the Company or the number of Firm Shares to be sold by each Selling
Shareholder as set forth opposite the name of such Selling Shareholder in
Schedule I hereto, as the case may be, by a fraction the numerator of which is
the number of Firm Shares set forth opposite the name of
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each Underwriter in Schedule II hereto (or such number of Firm Shares increased
as set forth in Section 9 hereof) and the denominator of which is the
total number of Firm Shares. The difference of $_____ per Firm Share between
the initial public offering price and the price at which the Company and each
Selling Shareholder will sell the Firm Shares to the Underwriter is the
"Underwriters' Discount."
(b) Subject to all the terms and conditions of this Agreement, the Company
hereby grants the Option to the Underwriters to purchase, severally and not
jointly, up to 240,000 Option Shares from the Company at the same price per
share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover overallotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date of this Agreement upon
written or telegraphic notice (the "Option Shares Notice") by the
Representatives to the Company no later than 12:00 noon, Charlotte, North
Carolina time, at least two and no more than five business days before the date
specified for closing in the Option Shares Notice (the "Option Closing Date")
setting forth the aggregate number of Option Shares to be purchased and the
time and date for such purchase. On the Option Closing Date, the Company will
issue and sell to the Underwriters the number of Option Shares set forth in the
Option Shares Notice, and each Underwriter will purchase, severally and not
jointly, such percentage of the Option Shares as is equal to the percentage of
Firm Shares that it is purchasing.
(c) Certificates in negotiable form for the Firm Shares to be sold by the
Selling Shareholders hereunder have been placed in custody for delivery under
this Agreement, under a custody agreement (the "Custody Agreement") made with
_________, as custodian (the "Custodian").
2. DELIVERY AND PAYMENT.
(a) Delivery of the Firm Shares shall be made by the Company and the
Custodian to the Underwriters, against payment of the purchase price by
certified or official bank check or checks payable in New York Clearing House
(next-day) funds drawn to the order of the Company in the case of the 1,520,000
Firm Shares to be sold by the Company and to the order of the Custodian in the
case of the 80,000 Firm Shares to be sold by the Selling Shareholders, at the
office of Xxxxx Xxxxx Mulliss & Xxxxx, L.L.P., 000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, at 10:00 a.m., Charlotte, North Carolina time,
on the third business day following the date of this Agreement, or at such time
on such other date, not later than seven business days after the date of this
Agreement, as may be agreed upon by the Company and the Representatives (such
date is hereinafter referred to as the "Closing Date").
(b) To the extent the Option is exercised, delivery of the Option Shares
by the Company to the Underwriters against payment by the Underwriters to the
Company (in the manner specified above) will take place at the offices
specified above for the Closing Date at the time and date (which may be the
Closing Date) specified in the Option Shares Notice.
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(c) Certificates evidencing the Shares to be issued and sold by the Company
shall be in definitive form and shall be registered in such names and in such
denominations as the Representatives shall request at least two business days
prior to the Closing Date or the Option Closing Date, as the case may be, by
written notice to the Company. For the purpose of expediting the checking and
packaging of certificates for such Shares, the Company agrees to make such
certificates available for inspection at least 24 hours prior to the Closing
Date or the Option Closing Date, as the case may be.
(d) The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of that number of the Shares to be issued and sold by the
Company to the Underwriters shall be borne by the Company. The Company will
pay and save each Underwriter and any subsequent holder of such Shares harmless
from any and all liabilities with respect to or resulting from any failure or
delay in paying Federal and state stamp and other transfer taxes, if any, which
may be payable or determined to be payable in connection with the original
issuance or sale to such Underwriter of such Shares.
(e) Upon each sale by an Underwriter of any Shares to selected dealers, the
Underwriter shall require the selected dealer purchasing any such Shares to
agree to re-offer the Shares on the terms and conditions of the offering set
forth in the Registration Statement and Prospectus (each as hereinafter
defined).
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents,
warrants and covenants to each of the Underwriters and the Selling Shareholders
that:
(a) The Company meets the requirements for use of Form S-1 and a
registration statement (Registration No. 333-11111) on Form S-1 relating to
the Shares, including a Preliminary Prospectus (as defined below) and such
amendments to such registration statement as may have been required to the date
of this Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. The term "Preliminary Prospectus" as used herein means a
preliminary prospectus as contemplated by Rule 430 or Rule 430A of the Rules
and Regulations included at any time as part of the Registration Statement (as
defined below). Copies of the Registration Statement and of each related
Preliminary Prospectus have been delivered to the Underwriters. If the
Registration Statement has not become effective, a further amendment to such
Registration Statement, including a form of final prospectus, necessary to
permit the Registration Statement to become effective will be filed promptly by
the Company with the Commission. If the Registration Statement has become
effective, a final prospectus containing information permitted to be omitted at
the time of effectiveness by Rule 430A of the Rules and Regulations will be
filed promptly by the Company with the Commission in accordance with Rule 424
or Rule 434 of the Rules and Regulations. The term "Registration Statement"
means the registration statement as amended at the time the Commission declares
or declared it effective pursuant to Section 8 of the Act (the "Effective
Date"), including financial statements and all exhibits and any information
deemed to be included by Rule 430A. The term "Prospectus" means the
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prospectus as first filed with the Commission pursuant to Rule 424 or Rule 434
of the Rules and Regulations or, if no such filing is required, the form of
final prospectus included in the Registration Statement at the Effective Date.
(b) No stop order or orders suspending the use of any Preliminary
Prospectus have been issued, and no proceedings for that purpose have been
commenced or are pending before or are contemplated by the Commission or any
state securities commission or other regulatory authority. On the Effective
Date, the date the Prospectus is first filed with the Commission pursuant to
Rule 424 or Rule 434 (if required), at all times subsequent to and including
the Closing Date and, if later, the Option Closing Date and when any
post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement and the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment or supplement
thereto), including the financial statements included in the Prospectus, did or
will comply in all material respects with all applicable provisions of the Act
and the Rules and Regulations and will contain all statements required to be
stated therein in accordance with the Act and the Rules and Regulations. On
the Effective Date and when any post-effective amendment to the Registration
Statement becomes effective, no part of the Registration Statement or any such
amendment did or will contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed with the
Commission and at the Closing Date and, if later, the Option Closing Date, the
Prospectus did not or will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
foregoing representations and warranties in this Section 3(b) do not apply to
any statements or omissions made in reliance on and in conformity with
information relating to the Underwriters furnished in writing to the Company by
the Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. The Company acknowledges
that the statements set forth in the last paragraph on the cover page of the
Prospectus and under the heading "Underwriting" in the Prospectus constitute
the only information relating to the Underwriters furnished in writing to the
Company by the Representatives specifically for inclusion in the Registration
Statement.
(c) All outstanding shares of capital stock of the Company (including the
Shares to be sold by the Selling Shareholders hereunder) have been duly
authorized, are validly issued, fully paid and nonassessable and conform to the
description thereof contained in the Prospectus; none of such outstanding
shares were issued in violation of the preemptive rights of any shareholder of
the Company; and the Company has an authorized and outstanding capital stock as
set forth under the caption "Description of Capital Stock" in the Prospectus.
(d) The Shares to be issued and sold by the Company to the Underwriters
hereunder have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued,
fully paid and nonassessable and will conform to the description thereof
contained in the Prospectus; the certificates evidencing the
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Shares will comply with all applicable requirements of North Carolina
law; and none of the Shares will be issued or sold in violation of any
preemptive rights of shareholders of the Company. Except as disclosed in the
Prospectus, there are no (i) outstanding securities or obligations of the
Company or any of its subsidiaries convertible into or exchangeable for any
capital stock of the Company or any of its subsidiaries, (ii) warrants, rights
or options to subscribe for or purchase from the Company or any of its
subsidiaries any such capital stock or any such convertible or exchangeable
securities or obligations or (iii) obligations of the Company or any of its
subsidiaries to issue any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
(e) All of the outstanding shares of capital stock of the Company's
subsidiaries have been duly authorized and validly issued and are fully paid
and nonassessable, and are owned by the Company free and clear of any and all
liens, charges, encumbrances or claims.
(f) The financial statements and schedules included in the Registration
Statement or the Prospectus present fairly the consolidated financial condition
of the Company as of the respective dates thereof and the consolidated results
of operations and cash flows of the Company for the respective periods covered
thereby, all in conformity with generally accepted accounting principles
applied on a consistent basis throughout the entire period involved, except as
otherwise disclosed in the Prospectus. No other financial statements or
schedules of the Company are required by the Act or the Rules and Regulations
to be included in the Registration Statement or the Prospectus. BDO Xxxxxxx,
LLP, independent auditors (the "Accountants"), who have reported on such
financial statements and schedules, are independent accountants with respect to
the Company as required by the Act and the Rules and Regulations.
(g) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to the Closing Date
and, if later, the Option Closing Date, except as set forth in or contemplated
by the Registration Statement and the Prospectus, (i) there has not been and
will not have been any change in the capitalization of the Company, or in the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company, arising for any reason whatsoever, (ii)
the Company has not incurred nor will it incur any material liabilities or
obligations, direct or contingent, nor has it entered into nor will it enter
into any material transactions other than pursuant to this Agreement and the
transactions referred to herein and (iii) except for the dividend declared at
the Board of Directors meeting held September 24, 1996, the Company has not and
will not have paid or declared any dividends or other distributions of any kind
on any class of its capital stock.
(h) The Company is not, and does not intend to conduct its business in a
manner in which it would become, an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," or a company "controlled" by an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended.
(i) There are no actions, suits or proceedings at law or in equity
pending or threatened to which the Company
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or any of its subsidiaries is a party or against or affecting the Company, its
subsidiaries or any of their respective officers in their capacity as such,
before or by any Federal or state court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, wherein
an unfavorable ruling, decision or finding might materially and adversely
affect the Company or its business, properties, business prospects, condition
(financial or otherwise) or results of operations.
(j) The Company and its subsidiaries have (i) all governmental licenses,
permits, consents, orders, approvals and other authorizations necessary to
carry on their business as contemplated in the Prospectus, (ii) complied in all
material respects with all laws, regulations and orders applicable to them or
their business and (iii) performed all their obligations required to be
performed by them thereunder.
(k) Neither the Company nor any of its subsidiaries is in default under
any contract or other instrument to which it is a party or by which any of its
property is bound or affected, except defaults which singly or in the aggregate
do not have a material adverse effect on the condition, financial or otherwise,
results of operations, affairs or business prospects of the Company. To the
best knowledge of the Company, no other party under any contract or other
instrument to which it or its subsidiaries is a party is in default in any
material respect thereunder. Neither the Company nor any of its subsidiaries
is in violation of any provision of its respective articles or certificate of
incorporation or bylaws.
(l) No event of default or event which, but for the giving of notice or
the lapse of time or both, would constitute an event of default exists or will
exist under any material agreement or instrument for borrowed money or any
guarantee of any material agreement or instrument for borrowed money to which
the Company or any of its subsidiaries or any of the respective properties or
assets of the Company or its subsidiaries are subject.
(m) The Company and its subsidiaries own, possess, have the contractual
right to use or can acquire on reasonable terms, adequate trademarks, service
marks and trade names necessary to conduct the business now conducted by them,
and neither the Company nor any of its subsidiaries has received any notice of
infringement or conflict with asserted rights of others with respect to any
trademarks, service marks or trade names which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a material
adverse effect on the condition, financial or otherwise, results of operations,
affairs or business prospects of the Company and its subsidiaries.
(n) Neither the Company nor any of its subsidiaries has violated any
environmental, safety or similar law or regulation applicable to its business
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants, which
violation could have a material adverse effect on the condition (financial or
otherwise), results of operations, affairs or business prospects of the Company
or its subsidiaries; and no labor dispute by the employees of the Company or any
of its subsidiaries exists or, to the knowledge of the Company, is imminent
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which might be expected to have a material adverse effect on the condition,
financial or otherwise, results of operations, affairs or business prospects of
the Company or its subsidiaries.
(o) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part herein
contemplated, except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under state securities or Blue Sky laws
or the Bylaws and rules of the National Association of Securities Dealers, Inc.
(the "NASD") in connection with the purchase and distribution by the
Underwriters of the Shares.
(p) The Company has full corporate power and authority to enter into this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding agreement of the Company and is
enforceable against the Company in accordance with the terms hereof. The
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company or its subsidiaries
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or give any
other party a right to terminate any of its obligations under, or result in the
acceleration of any obligation under, the respective articles or certificate of
incorporation or bylaws of the Company or its subsidiaries, any indenture,
mortgage, deed of trust, voting trust agreement, loan agreement, bond,
debenture, note agreement or other evidence of indebtedness, lease, contract or
other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company, any of its subsidiaries or any of their
properties are bound or affected, or violate or conflict with any judgment,
ruling, decree, order, statute, rule or regulation of any court or other
governmental agency or body applicable to the business or properties of the
Company or any of its subsidiaries.
(q) The Company is duly incorporated and validly existing in good
standing as a corporation under the laws of the State of North Carolina, and
each of the Company's subsidiaries is duly incorporated and validly existing as
a corporation under the laws of the jurisdiction of its incorporation. Each of
the Company and its subsidiaries has full power and authority (corporate and
other) to conduct all the activities conducted by it, to own or lease all the
assets owned or leased by it and to conduct its business as described in the
Registration Statement and the Prospectus. Each of the Company and its
subsidiaries is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which it owns or leases real property or transacts
business requiring such qualification. Except as disclosed in the Registration
Statement, the Company does not own, directly or indirectly, any shares of
stock or any other equity or long-term debt securities of any corporation or
have any equity interest in any firm, partnership, joint venture, association
or other entity. Complete and correct copies of the respective articles or
certificate of incorporation and bylaws of the Company and each of its
subsidiaries and all amendments thereto have been delivered to the
Representatives, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date or, if later, the Option Closing Date.
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(r) The Company, or its subsidiaries, has good and marketable title to
all properties and assets described in the Prospectus as owned by it or them,
free and clear of all liens, charges, encumbrances or restrictions, except such
as are described in the Prospectus or are not material to the business of the
Company or its subsidiaries. The Company, or its subsidiaries, has valid,
subsisting and enforceable leases for the properties described in the
Prospectus as leased by it or them, with such exceptions as are not material
and do not materially interfere with the use made and proposed to be made of
such properties by the Company or its subsidiaries, and neither the Company nor
any of its subsidiaries, as applicable, is in default in any material respects
of any terms or provisions of any leases.
(s) The Company and its subsidiaries have filed all necessary federal,
state and foreign tax returns that are required to be filed by them and have
paid all taxes shown on such returns and on all assessments received by them to
the extent such taxes have become due. All taxes with respect to which the
Company and its subsidiaries are obligated have been paid or adequate accruals
have been set up to cover any such taxes. The Company has no knowledge of any
tax deficiency which has been assessed or threatened against the Company or any
of its subsidiaries.
(t) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that is not described or filed as
required. All such contracts to which any of the Company or its subsidiaries
is a party have been duly authorized, executed and delivered by the Company or
such subsidiary, constitute valid and binding agreements of the Company or such
subsidiary and are enforceable against the Company or such subsidiary, as the
case may be, in accordance with the terms thereof. The Company knows of no
present situation or condition or fact that would prevent compliance with the
terms of such contracts, as amended to date. Except for amendments or
modifications of such contracts in the ordinary course of business, neither the
Company nor any such subsidiary has any intention of exercising any right that
it may have to cancel any of its obligations under any of such contracts, and
has no knowledge that any other party to any of such contracts has any
intention not to render full performance under such contracts.
(u) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Underwriters was or will be, when made,
inaccurate, untrue or incorrect in any material respect.
(v) Neither the Company nor any of its directors, officers or controlling
persons has taken, directly or indirectly, any action designed, or which might
reasonably be expected, to cause or result, under the Act or otherwise, in, or
which has constituted, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares or the
Common Stock.
(w) No holder of securities of the Company has any right that, if
exercised, would require the Company to cause such securities to be included in
the Registration Statement.
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(x) The Shares have been approved for trading, subject to notice that the
Registration Statement has been declared effective, on the Nasdaq National
Market.
(y) Other than as contemplated by this Agreement, there is no broker,
finder or other party that is entitled to receive from the Company any
brokerage or finder's fee or other fee or commission as a result of any of
the transactions contemplated by this Agreement.
4. REPRESENTATIONS OF THE SELLING SHAREHOLDERS. Each Selling Shareholder
severally represents, warrants and covenants to each of the Underwriters that:
(a) Such Selling Shareholder has duly executed and delivered a power of
attorney (the "Power of Attorney"), in the form heretofore delivered to you,
appointing Xxxx X. Xxxxxxx and Xxxxxx X. Xxxx, Xx. as such Selling Shareholder's
attorney-in-fact (the "Attorney-in-Fact"), with authority to execute, deliver
and perform this Agreement on behalf of such Selling Shareholder, and in
connection therewith such Selling Shareholder has duly executed and delivered a
Custody Agreement, in the form heretofore delivered to you, with the Custodian.
Such Selling Shareholder agrees that the Shares represented by the certificates
held in custody for such Selling Shareholder under such Custody Agreement are
subject to the interests of the Underwriters hereunder, that the arrangements
made for such custody and appointment of the Attorney-in-Fact are irrevocable,
and that the obligations of such Selling Shareholder hereunder shall not be
terminated except as provided in this Agreement, the Power of Attorney or the
Custody Agreement, by any act of such Selling Shareholder, by operation of law
or otherwise, whether by the death, incapacity or bankruptcy of such Selling
Shareholder or by the occurrence of any other event. If such Selling
Shareholder should die, become incapacitated or become bankrupt, or if any other
event shall occur, before the delivery of the Shares being sold by such Selling
Shareholder hereunder, the certificate for such Shares deposited with the
Custodian shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such death, incapacity, bankruptcy or other
event had not occurred, regardless of whether the Custodian or the
Attorney-in-Fact shall have received notice thereof.
(b) Such Selling Shareholder has and on the Closing Date will have valid
and unencumbered title to the Shares to be sold by such Selling Shareholder on
that date and full right, power and authority to enter into this Agreement, the
Custody Agreement and the Power of Attorney delivered therewith and to sell,
assign, transfer and deliver the Shares to be sold by such Selling Shareholder
hereunder; and upon the delivery of and payment for the Shares hereunder, the
several Underwriters will acquire valid and unencumbered title to the Shares to
be sold by such Selling Shareholder.
(c) Such Selling Shareholder has legal capacity or full corporate power
and authority, as applicable, to authorize, execute, and deliver each of this
Agreement, the Custody Agreement and the Power of Attorney; each of this
Agreement, the Custody Agreement and the Power of Attorney delivered thereunder
has been duly authorized, executed and delivered by such Selling Shareholder;
the execution, delivery and performance of this Agreement, the Custody
Agreement and the Power of Attorney delivered thereunder and the consummation
of the transactions herein and therein contemplated will not result in a breach
or violation of any of the terms and
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provisions of, or constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or any court having
jurisdiction over such Selling Shareholder or any of its properties, or any
agreement or instrument to which such Selling Shareholder is a party or by
which such Selling Shareholder is bound or to which any of the property or
assets of such Selling Shareholder is subject.
(d) No consent, approval, authorization, order, registration, or
qualification of or with any court or governmental agency or body is required
for the sale and delivery of the Shares to be sold by such Selling Shareholder
hereunder or for such Selling Shareholder's performance of its obligations
under this Agreement and the Custody Agreement or for the execution and
delivery of the Power of Attorney delivered under such Custody Agreement,
except such as have been obtained and made under the Act and the Rules and
Regulations and such as may be required under the securities laws of states and
foreign jurisdictions in connection with the offer and sale of the Shares to be
sold by such Selling Shareholder hereunder.
(e) There are no contracts, agreements or understandings between such
Selling Shareholder and any person which would give rise to a valid claim
against such Selling Shareholder for a brokerage commission, finder's fee or
other like payment in connection with the offering of the Shares other than the
compensation due and payable to the Underwriters as described in the
Prospectus.
(f) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity with
information furnished to the Company by such Selling Shareholder expressly for
use therein, the Preliminary Prospectus did, and the Registration Statement and
the Prospectus and any amendments or supplements thereto will, when they become
effective or are filed with the Commission, as the case may be, not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading.
(g) The sale of Shares by such Selling Shareholder pursuant to this
Agreement is not prompted by or based upon any information concerning the
Company that is not set forth in the Prospectus.
(h) Such Selling Shareholder has not taken and will not take, directly or
indirectly, any action, in contravention of any law, designed to result in or
which has constituted or which might reasonably be expected to cause or result
in, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
5. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with each of the
Underwriters as follows:
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(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives and made available to the Underwriters within a reasonable
period of time prior to the filing thereof and the Underwriters shall not have
objected thereto in good faith.
(b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify you promptly, and will confirm
such advice in writing, (A) when the Registration Statement has become
effective and when any post-effective amendment thereto becomes effective, (B)
of the filing of the Prospectus pursuant to Rule 424 or Rule 434 under the Act,
(C) of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information, (D) of
the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose or the threat thereof, (E) of the happening of any event during the
period mentioned in the second sentence of Section 5(e) hereof that in the
judgment of the Company makes any statement made in the Registration Statement
or the Prospectus untrue or that requires the making of any changes in the
Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not misleading
and (F) of receipt by the Company or any representatives or attorney of the
Company of any other communication from the Commission relating to the Company,
the Registration Statement or any post-effective amendment thereto, any
Preliminary Prospectus or the Prospectus. If at any time the Commission shall
issue any order suspending the effectiveness of the Registration Statement, the
Company will make every reasonable effort to obtain the withdrawal of such
order at the earliest possible moment. If the Company has omitted any
information from the Registration Statement pursuant to Rule 430A of the Rules
and Regulations, the Company will use its best efforts to comply with the
provisions of and make all requisite filings with the Commission pursuant to
said Rule 430A and to notify the Representatives promptly of all such filings.
(c) The Company will furnish to the Representatives, without charge,
copies of the executed signature pages of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto, and such number of conformed copies of the
Registration Statement, with or without exhibits, and any supplement or
amendment thereto, as the Representatives shall reasonably request.
(d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
(e) Prior to the Effective Date, and thereafter from time to time, the
Company will deliver to the Representatives, without charge, as many copies of
the Preliminary Prospectus and the Prospectus or any amendment or supplement
thereto as the Representatives may reasonably request. The Company consents to
the use of the Preliminary Prospectus and the Prospectus, or any amendment or
supplement thereto, by the Underwriters and by all dealers to whom the Shares
may be sold, both in connection with the initial offering or sale of the Shares
and for any
12
period of time thereafter during which the Prospectus is required by law to be
delivered in connection therewith. If during such period of time any event
shall occur which in the judgment of the Company or the Underwriters' counsel
should be set forth in the Preliminary Prospectus or the Prospectus to make any
statement therein, in the light of the circumstances under which it was made,
not misleading, or if it is necessary to supplement or amend the Preliminary
Prospectus or the Prospectus to comply with law, the Company will forthwith
prepare and duly file with the Commission an appropriate supplement or
amendment thereto, and will deliver to the Representatives, without charge,
such number of copies thereof as the Representatives may reasonably request.
(f) Prior to any public offering of the Shares by the Underwriters, the
Company will cooperate with the Underwriters and the Underwriters' counsel in
connection with the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may reasonably request; provided, that in no event shall the
Company be obligated to qualify to do business as a foreign corporation in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to general service of process in any jurisdiction where it is not now
so subject.
(g) During the period of five years commencing on the Effective Date, the
Company will furnish to the Representatives and make available to the
Underwriters, upon request, copies of such financial statements and other
periodic and special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock, and will furnish to
the Representatives and make available to the Underwriters, upon request, a copy
of each annual or other report it shall be required to file with the Commission.
(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last
day of the fifteenth full calendar month following the calendar quarter in
which the Effective Date falls, an earnings statement (which need not be
audited but shall be in reasonable detail) for a period of 12 months ended
commencing after the Effective Date, and satisfying the provisions of Section
11(a) of the Act (including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay, or reimburse
if paid by the Underwriters, all costs and expenses incident to the performance
of the obligations of the Company under this Agreement, including but not
limited to costs and expenses of or relating to (A) the preparation, printing
and filing of the Registration Statement and exhibits thereto, each Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Registration
Statement or the Prospectus, (B) the preparation and delivery of certificates
representing the Shares, (C) the printing of this Agreement and any Agreement
Among Underwriters and Selected Dealer Agreements, (D) furnishing (including
costs of shipping and mailing) such copies of the Registration Statement, the
Prospectus and any Preliminary Prospectus, and all amendments and supplements
thereto, as may be requested for use in connection with the offering and sale
of the Shares by the Underwriters or by dealers to whom Shares may be sold, (E)
the quotation of the Shares on the Nasdaq National Market, (F) any filing fees
required to
13
be paid to the NASD, (G) the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions designated pursuant to Section 5(f) hereof, including the fees,
disbursements and other charges of your counsel in connection therewith, and
the preparation and printing of preliminary, supplemental and final Blue Sky
memoranda, (H) counsel to and accountants for the Company and (I) the transfer
agent for the Shares.
(j) If for any reason the Company shall fail to or shall be unable to
perform its obligations hereunder, the Company will reimburse the Underwriters
for all out-of-pocket expenses (including the fees, disbursements and other
charges of the Underwriters' counsel) reasonably incurred by the Underwriters in
connection herewith.
(k) The Company will not at any time, directly or indirectly, take any
action designed, or which might reasonably be expected, to cause or result in,
or which will constitute, stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of any of the Shares.
(l) The Company will apply the net proceeds from the offering and sale
of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds."
(m) During the period of 180 days commencing at the Closing Date, the
Company will not, without the Representatives' prior written consent, grant
options or warrants to purchase shares of Common Stock at a price less than the
initial public offering price or issue any securities convertible into shares of
Common Stock at a conversion price less than the initial public offering price,
other than as may occur under the terms of the Company's stock plans as
described in the Prospectus.
(n) The Company will not, and will cause each of its executive officers,
directors and each beneficial owner of more than 5% of the outstanding shares
of Common Stock (if any) to enter into agreements with the Underwriters to the
effect that they will not, prior to the Effective Date and for a period of 180
days after the Effective Date, without the Representatives' prior written
consent, sell, contract to sell or otherwise dispose of any shares of Common
Stock or rights to acquire such shares (other than pursuant to employee stock
option plans or in connection with other employee incentive compensation
arrangements).
(o) The Company will not change or terminate the appointment of First
Union National Bank of North Carolina as transfer agent for the Shares for a
period of one year from the Effective Date without first obtaining the
Representatives' written consent, which shall not be unreasonably withheld.
(p) The Company will use all reasonable efforts to comply with, or cause
to be complied with, the conditions precedent to the several obligations of the
Underwriters in Section 7 hereof.
(q) The Company agrees to file with the Commission all required reports
on Form SR in accordance with the provisions of Rule 463 promulgated under the
Act and to provide a copy of such reports to the Representatives and the
Underwriters' counsel.
14
(r) The Company shall register the Common Stock under the Exchange Act
and shall use its best efforts to maintain such registration for so long as
such registration shall be required.
6. AGREEMENTS OF THE SELLING SHAREHOLDERS. Each of the Selling Shareholders
agrees with the Underwriters as follows:
(a) Such Selling Shareholder will cooperate with you and your counsel
in order to qualify the Shares for offering and sale under the securities or
blue sky laws of such jurisdictions as you may reasonably request and will
comply to the best of such Selling Shareholder's ability with such laws so as
to permit the completion of the distribution of the Shares. Such Selling
Shareholder will file such statements and reports as may be required by the
laws of each jurisdiction in which the Shares have been qualified as above.
(b) Such Selling Shareholder will provide to you on or prior to the
Closing Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
each of the Underwriters hereunder are subject to the following conditions:
(a) Notification that the Registration Statement has become effective
shall be received by the Representatives not later than 10:00 a.m., Charlotte,
North Carolina time, on the first full business day after the Effective Date
or at such later date and time as shall be consented to in writing by the
Representatives and all filings required by Rule 424, Rule 434, Rule 430A and
Rule 434 of the Rules and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or
registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the
Commission or such authorities and (iv) after the date hereof no amendment or
supplement to the Registration Statement or the Prospectus shall have been
filed unless a copy thereof was first submitted to the Representatives and made
available to the Underwriters and the Underwriters did not object thereto in
good faith, and the Representatives shall have received certificates, dated the
Closing Date and, with respect to the option shares, the Option Closing Date
and signed by the Chief Executive Officer or the Chairman of the Board of
Directors of the Company and the Chief Financial Officer of the Company (who
may, as to proceedings threatened, rely upon the best of their information and
belief), to the effect of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the
15
general affairs, business, properties, management, condition (financial or
otherwise) or results of operations of the Company, taken as a whole, whether or
not arising from transactions in the ordinary course of business, and there
shall have been no material transaction, contract or agreement entered into by
the Company or any of its subsidiaries other than in the ordinary course of
business, in each case other than as set forth in or contemplated by the
Registration Statement and the Prospectus, and (ii) the Company shall not have
sustained any material loss or interference with its business or properties from
fire, explosion, flood or other casualty, whether or not covered by insurance,
or from any labor dispute or any court or legislative or other governmental
action, order or decree, which is not set forth in the Registration Statement
and the Prospectus, if in the Representatives' judgment any such development is
so material as to make it impracticable or inadvisable to consummate the sale
and delivery of the Shares by the Underwriters at the public offering price.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted or threatened against the Company, its
subsidiaries or any of the Company's officers or directors in their capacities
as such, before or by any Federal, state or local court, commission, regulatory
body, administrative agency or other governmental body, domestic or foreign, in
which litigation or proceeding an unfavorable ruling, decision or finding would
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company or
its subsidiaries.
(e) Each of the representations and warranties of the Company and the
Selling Shareholders contained herein shall be true and correct in all material
respects at the Closing Date and, with respect to the Option Shares, at the
Option Closing Date, as if made at the Closing Date and, with respect to the
Option Shares, at the Option Closing Date, and all covenants and agreements
herein contained to be performed on the part of the Company and the Selling
Shareholders and all conditions herein contained to be fulfilled or complied
with by the Company and the Selling Shareholders at or prior to the Closing
Date and, with respect to the Option Shares, at or prior to the Option Closing
Date, shall have been duly performed, fulfilled or complied with in all
material respects.
(f) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
and satisfactory in form and substance to the Representatives' counsel, from
Xxxxx & Xxx Xxxxx, PLLC, counsel to the Company, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of North Carolina, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus;
(ii) Each of the Company's subsidiaries is validly existing as a
corporation in good standing under the laws of the jurisdiction of
16
its incorporation, with corporate power and authority to own
its properties and conduct its business as described in the Prospectus;
(iii) The Company and each of its subsidiaries is qualified as a
foreign corporation in each jurisdiction in which the ownership of
property or the conduct of business by the Company or such subsidiary
requires such qualification and where the failure to so qualify would
have a material adverse affect on the Company's operations;
(iv) Except as described in the Prospectus, there are no
outstanding (A) securities or obligations of the Company convertible
into or exchangeable for any capital stock of the Company, (B) warrants,
rights or options to subscribe for or purchase from the Company any such
capital stock or any convertible or exchangeable securities or
obligations, or (C) obligations of the Company to issue any such
convertible or exchangeable securities or obligations, or any such
warrants, rights or options;
(v) The Shares delivered on such date have been duly authorized,
executed, authenticated, issued and delivered and conform to the
description thereof contained in the Prospectus and have not been issued
in violation of any preemptive or similar rights of shareholders of the
Company;
(vi) The Company has authorized and outstanding capital stock as
set forth in the Registration Statement; the outstanding shares of Common
Stock of the Company have been duly authorized and validly issued, are
fully paid and nonassessable and conform to the description thereof
contained in the Prospectus; and the shareholders of the Company have no
preemptive or similar rights with respect to the Common Stock; provided,
that the opinion that the outstanding shares are fully paid and
nonassessable shall be based solely on such counsel's review of such stock
transfer books, cancelled share certificates, corporate minutes, charter
documents, financial statements and other records as were made available
to such counsel by the Company (all of such documents and instruments
having been requested by them);
(vii) There are no contracts, agreements or understandings known
to such counsel between the Company and any person granting such person
the right to require the Company to file a registration statement under
the Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities
with the securities registered pursuant to the Registration Statement or
with any securities being registered pursuant to any other registration
statement filed by the Company under the Act;
(viii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required in
connection with the authorization, issuance, transfer, sale or delivery
of the Shares by the Company, in connection with the execution, delivery
and performance of this Agreement by the Company or in connection with
the taking by the Company of any action contemplated hereby, except such
as have been obtained and made under the Act and such as may be required
under state securities laws;
17
(ix) The execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated, including the
issuance and sale of the Shares and compliance with the provisions
thereof, will not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, (A) any statute, rule,
regulation or, to the knowledge of such counsel after due inquiry, any
order of any governmental agency or body or any court having jurisdiction
over the Company, its subsidiaries or any of their properties, or (B) any
material obligation, agreement, covenant or condition contained in any
agreement or instrument known to such counsel to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the properties of the Company or
any of its subsidiaries is subject, or (C) the respective articles or
certificate of incorporation or bylaws of the Company or any of its
subsidiaries; and the Company has full power and authority to authorize,
issue and sell the Shares as contemplated by this Agreement;
(x) To the best of such counsel's knowledge, neither the Company
or any of its subsidiaries is in violation of any judgment, ruling,
decree, order, franchise, license or permit known to such counsel of any
court or other governmental authority applicable to the business or
properties of the Company or any of its subsidiaries, other than
violations or defaults which, individually or in the aggregate, will not
have a material adverse effect on the financial position, shareholders'
equity or results of operation of the Company;
(xi) The Registration Statement was declared effective under the
Act as of the date and time specified in such opinion, the Prospectus
either was filed with the Commission pursuant to the subparagraph of Rule
424(b) or 434 specified in such opinion on the date specified therein or
was included in the Registration Statement (as the case may be), and, to
the best of the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any part thereof has been
issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the Act, and the Registration Statement and
the Prospectus, and each amendment or supplement thereto, as of their
respective effective or issue dates, complied as to form in all material
respects with the requirements of the Act and the Rules and Regulations;
such counsel has no reason to believe that the Registration Statement, or
any amendment thereto, as of its Effective Date, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus, or any supplement thereto, as of
its issue date, included any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the
statements, in light of the circumstances under which they were made, not
misleading; the descriptions in the Registration Statement and Prospectus
of statutes, legal and governmental proceedings and contracts and other
documents fairly summarize the matters purported to be summarized therein,
and such counsel does not know of any contracts required to be summarized
or disclosed or filed or any legal or governmental proceedings pending or
threatened to which the Company is the subject of such character required
to be disclosed in the Registration Statement or Prospectus that are not
disclosed and properly described therein, it being understood that such
counsel need express no opinion as to the financial statements or other
financial and statistical data contained in the Registration Statement or
the Prospectus or as to the section of the Prospectus entitled
"Underwriting";
18
(xii) The Company has the full corporate power and authority to
enter into this Agreement, and this Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and legally
binding obligation of the Company enforceable in accordance with its
terms, except (A) as such enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or similar laws now or
hereafter in effect relating to creditors' rights or debtors' obligations
generally; (B) that the remedies of specific performance and injunctive
and other forms of relief are subject to general equitable principles,
whether enforcement is sought at law or in equity, and that such
enforcement may be subject to the discretion of the court before which any
proceedings therefor may be brought; (C) as rights to indemnity and
contribution may be limited by state or Federal laws relating to
securities or the policies underlying such laws; and (D) as such
enforceability may be limited by possible limitations imposed by law (in
addition to those set forth herein) on provisions relating to remedies
(including without limitation any provision whereby any right is waived).
No opinion need be given as to the enforceability of any provision
requiring or in effect requiring that waivers or amendments of any
provision of the Agreement may be effected only in writing or any choice
of law provisions;
(xiii) The Company is not, and will not be as a result of the
consummation of the transactions contemplated by this Agreement, an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940;
(xiv) The offer and sale of shares of Common Stock to be issued
pursuant to that certain Share Exchange Agreement dated August 27, 1996
among the Company and the shareholders of Interknit, Inc. as named therein
(the "Share Exchange Agreement") are exempt from registration under the
Act and the Rules and Regulations and under the various state securities
or Blue Sky laws; and
(xv) The Company has the full corporate power and authority to
enter into the Share Exchange Agreement, and the Share Exchange Agreement
has been duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company
enforceable in accordance with its terms, except (A) as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance or similar laws now or hereafter in effect relating
to creditors' rights or debtors' obligations generally; (B) that the
remedies of specific performance and injunctive and other forms of relief
are subject to general equitable principles, whether enforcement is sought
at law or in equity, and that such enforcement may be subject to the
discretion of the court before which any proceedings therefor may be
brought; (C) as rights to indemnity and contribution may be limited by
state or Federal laws relating to securities or the policies underlying
such laws; and (D) as such enforceability may be limited by possible
limitations imposed by law (in addition to those set forth herein) on
provisions relating to remedies (including without limitation any
provision whereby any right is waived). No opinion need be given as to the
enforceability of any provision requiring or in effect requiring that
waivers or amendments of any provision of the Share Exchange Agreement may
be effected only in writing or any choice of law provisions.
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent deemed proper, on certificates of executive officers of the Company
and public officials. In rendering the opinions regarding the specific legal
issues covered in Section 7(f)(xiv) of this Agreement, such counsel may render
an explained opinion incorporating the legal analyses supporting and qualifying
the legal conclusions expressed.
(g) The Representatives shall have received an opinion, dated the Closing
Date, satisfactory in form and substance to the Representatives' counsel, from
Xxxxx & Xxx Xxxxx, PLLC, counsel to the Selling Shareholders, to the effect
that:
(i) Each Selling Shareholder has duly authorized, executed and
delivered a Power of Attorney and Custody Agreement constituting valid
and legally binding agreements of such Selling Shareholder and
enforceable in accordance with their terms, except as enforceability may
be limited to bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights of creditors generally
and the availability of equitable remedies;
19
(ii) This Agreement has been duly authorized, executed and
delivered by or on behalf of each Selling Shareholder;
(iii) All authorizations, approvals, orders and consents
necessary for the execution and delivery by each Selling Shareholder of
this Agreement, the Power of Attorney and the Custody Agreement have been
duly and validly given, and each Selling Shareholder has full legal
right, power and authority to enter into this Agreement, the Power of
Attorney and the Custody Agreement and to sell, assign, transfer and
deliver to the several Underwriters the Shares to be sold by such Selling
Shareholder hereunder;
(iv) The performance of this Agreement and the consummation of the
transactions contemplated hereby and by the Power of Attorney and the
Custody Agreement will not result in a breach or violation by such
Selling Shareholder of any of the terms or provisions of, or constitute a
default by such Selling Shareholder under, any indenture, mortgage, will,
trust (constructive or other), loan agreement, lease or other agreement
or instrument known to such counsel after due inquiry to which such
Selling Shareholder or any of its properties is bound, any statute,
order, rule, regulation or decree of any government, governmental
instrumentality or court having jurisdiction over such Selling
Shareholder;
(v) Immediately prior to such Closing Date, each Selling
Shareholder was the sole registered owner of the Shares to be sold by
such Selling Shareholder hereunder; and
(vi) The several Underwriters (assuming that they are bona fide
purchasers within the meaning of the Uniform Commercial Code as in effect
in the governing jurisdiction) will, upon payment therefor in accordance
with the terms hereof, acquire all the rights of each Selling Shareholder
in the Shares purchased by them, free and clear of any liens, security
interests, pledges, claims, encumbrances, shareholders' agreements,
voting trusts or other interests.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent deemed proper, on certificates executed by the Selling
Shareholders. Such opinion may be furnished subject to such stated
assumptions, limitations and qualifications as may be acceptable to counsel for
the Underwriters.
(h) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
from Xxxxx Xxxxx Mulliss & Xxxxx, L.L.P., as the Underwriters' counsel, with
respect to the Registration Statement, the Prospectus and this Agreement, which
opinion shall be satisfactory in all respects to the Representatives, and the
Company shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(i) The Representatives shall have received, concurrently with the
execution and delivery of this Agreement, and at the Closing Date and, with
respect to the Option Shares, at the Option Closing Date, a letter from the
Accountants dated the date of its delivery, addressed to the Representatives
and in form and substance satisfactory to them, to the effect that:
(i) with respect to the Company they are independent public
accountants within the meaning of the Act and the Rules and
Regulations and that
20
they have no interest required to be disclosed in the
Prospectus pursuant to Item 10 of Form S-1;
(ii) in their opinion, the financial statements of the
Company examined by them at all dates and for all periods
referred to in their opinion and included in the Registration
Statement and Prospectus comply in all material respects with the
applicable accounting requirements of the Act and the Rules and
Regulations with respect to registration statements on Form S-1;
(iii) on the basis of certain indicated procedures (but not
an examination in accordance with generally accepted auditing
standards), a reading of the latest available interim unaudited
financial statements of the Company, whether or not appearing in the
Prospectus, inquiries of the officers of the Company or other
persons responsible for its financial and accounting matters
regarding the specific items for which representations are requested
below and a reading of the minute books of the Company, nothing has
come to their attention which would cause them to believe that:
(A) during the period from the last audited balance
sheet included in the Registration Statement to a specified
date not more than five days prior to the date of such letter
there has been any change in the capital stock or other
securities of the Company on a consolidated basis or in the
consolidated long-term debt or other long-term obligations of
the Company or any payment or declaration of any dividend or
other distribution in respect thereof or exchange therefor,
or there have been any material decreases in consolidated net
current assets or consolidated net assets or any increases in
consolidated short-term debt, in each case from that shown on
the last audited balance sheet included in the Registration
Statement or Prospectus, other than as set forth in or
contemplated by the Registration Statement or Prospectus;
(B) from the period from December 31, 1995 to a
specified date not more than five days prior to the date of
such letter there were any decreases in consolidated net
sales or operating income or the total or per share amounts
of consolidated net income, or any decreases in the
consolidated ratios of operating income to net sales or net
income to net sales or the ratio of earnings to fixed
charges, or any increases in the consolidated ratio of
costs and expenses to net sales, in each case as compared
with the comparable periods of the preceding year and the
preceding year to date period; or
(C) the unaudited financial statements and schedules
(including any unaudited condensed pro forma financial
statements), whether or not appearing in the Registration
Statement and Prospectus, do not comply
21
with the accounting requirements of the Act, or
do not present fairly the financial position and results of
the Company for the periods indicated, in conformity with the
generally accepted accounting principles applied on a
consistent basis with the audited financial statements.
(iv) in addition to the examination referred to in their
report included in the Registration Statement and the
Prospectus and the limited procedures and inspection of minutes
books, inquiries and other procedures referred to in subparagraph
(iii) above, they have carried out certain procedures (which shall
be satisfactory to the Representatives), not constituting an
examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are
derived from the general accounting records of the Company and its
subsidiaries, or which are derived directly from such records by
analysis or computation, and are set forth in the Prospectus; have
compared certain of those amounts, percentages and financial
information with the accounting records of the Company and its
subsidiaries (in a manner acceptable to the Representatives); and
have found them to be in agreement except as such discrepancies are
described in such letter and are acceptable to you.
(j) The Representatives shall have received, concurrently with the
execution and delivery of this Agreement and at the Closing Date with respect to
the Firm Shares and, with respect to the Option Shares, the Option Closing Date,
a certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the Chief Financial Officer of the Company, and in form
and substance satisfactory to the Representatives, to the effect that:
(i) The Registration Statement has become effective, and no order
suspending the effectiveness of the Registration Statement has been
issued and to the best knowledge of the respective signers no proceeding
for that purpose has been initiated or is threatened by the Commission;
(ii) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the date of such
certificate, such documents are true and correct in all material respects
and do not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not untrue or
misleading and (B) in the case of the certificate delivered at the
Closing Date and, with respect to the Option Shares, the Option Closing
Date, since the Effective Date no event has occurred as a result of which
it is necessary to amend or supplement the Prospectus in order to make
the statements therein not untrue or misleading in any material respect;
(iii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material
respects; and
22
(iv) Each of the covenants required herein to be performed by the
Company on or prior to the delivery of such certificate has been duly,
timely and fully performed and each condition herein required to be
complied with by the Company on or prior to the date of such certificate
has been duly, timely and fully complied with in all material respects.
(k) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 5(n) hereof.
(l) The Shares shall be qualified for sale in such states as the
Representatives may reasonably request, each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing
Date and the Option Closing Date.
(m) Prior to the Closing Date, the Shares shall have been duly
authorized for trading on the Nasdaq National Market.
(n) At the Closing Date, each Selling Shareholder shall have submitted a
certificate to the Representatives stating that the representations and
warranties of such Selling Shareholder in the Agreement are true and correct as
of such date and that such Selling Shareholder has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date.
(o) The Company and the Selling Shareholders shall have furnished to the
Representatives such certificates, in addition to those specifically mentioned
herein, as the Representatives may have reasonably requested as to the accuracy
and completeness at the Closing Date and, with respect to the Option Shares,
the Option Closing Date of any statement in the Registration Statement or the
Prospectus as to the accuracy at the Closing Date and, with respect to the
Option Shares, the Option Closing Date of the representations and warranties of
the Company or the Selling Shareholders herein, as to the performance by the
Company or the Selling Shareholders of its obligations hereunder, or as to the
fulfillment of the conditions concurrent and precedent to the Underwriters'
obligations hereunder.
(p) All conditions to the exchange of shares of Common Stock
contemplated by the Share Exchange Agreement, and all related transactions
described therein, shall have been satisfied.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Underwriter,
and each person, if any, who controls any Underwriter within the meaning of the
Act, against any and all losses, claims, damages or liabilities, joint or
several, to which such Underwriter or controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based in whole
or in part upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the registration statement as originally filed, the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or in any Blue Sky application or other written
information furnished by the Company filed in any state or other jurisdiction in
order
23
to qualify any or all of the Shares under the securities laws thereof (a "Blue
Sky Application"), or (ii) the omission or alleged omission to state in the
registration statement as originally filed, the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto or
any Blue Sky Application a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances under
which they were made not misleading, and will reimburse each Underwriter and
each such controlling person for any legal or other expenses reasonably incurred
by such Underwriter or such controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Preliminary Prospectus,
the Prospectus or such amendment or such supplement or any Blue Sky Application
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter specifically for use therein (it being understood
that the only information so provided by the Underwriters is the information
included in the last paragraph on the cover page and under the caption
"Underwriting" in any Preliminary Prospectus and the Prospectus); provided,
further, that the foregoing indemnity agreement with respect to any Preliminary
Prospectus shall not insure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
shares, or any person controlling such Underwriter, if 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 Shares to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless the failure
to so deliver was a result of noncompliance by the Company with Section 5(e)
hereof. The Company shall be liable for the full amount of all claims pursuant
to this Section and this Agreement.
(b) The Selling Shareholders will severally but not jointly indemnify and
hold harmless each Underwriter, and each person who controls any Underwriter
within the meaning of Section 15 of the Act, against any and all losses, claims,
damages or liabilities to which such Underwriter or controlling person may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
in whole or in part upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement as originally filed, the
Registration Statement, any Preliminary Prospectus or the Prospectus, or in any
amendment or supplement thereto, or the omission or alleged omission to state in
the registration statement as originally filed, the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that a Selling Shareholder will not be liable in
any such case to the extent that any such loss, claim, damage, liability arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or such amendment or such supplement in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter specifically for use therein (it being understood that the only
information so provided by the Underwriters is the information included in the
last paragraph on the cover page and under the caption "Underwriting" in any
Preliminary Prospectus and the Prospectus). In no event shall any Selling
Shareholder be liable hereunder for an amount in excess of the proceeds received
by such Selling Shareholder from the Underwriters hereunder; provided, further,
that the foregoing indemnity agreement with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if 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 Shares to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless the failure
to so deliver was a result of noncompliance by the Company with Section 5(e)
hereof.
24
(c) The Underwriters severally but not jointly agree, to the extent of
and only to the extent of their respective commitments pursuant to Schedule II,
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 Act, and each Selling
Shareholder, against any and all losses, claims, damages or liabilities to which
the Company or any such director, officer or controlling person or such Selling
Shareholder may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement as originally filed, the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or any Blue Sky Application, or arise out of or
are based upon the omission or the alleged omission to state in the registration
statement as originally filed, the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto or any Blue
Sky Application 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 reliance upon and in conformity with
written information furnished to the Company by any Underwriter specifically for
use therein (it being understood that the only information so provided is the
information included in the last paragraph on the cover page and under the
caption "Underwriting" in any Preliminary Prospectus and in the Prospectus).
(d) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, including governmental
proceedings, such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 8, notify the
indemnifying party 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 otherwise than under this Section 8. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; and after notice
from the indemnifying party to such indemnified party of its election to so
assume the defense thereof, 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 other than reasonable costs of investigation except that the
indemnified party shall have the right to employ separate counsel if, in its
reasonable judgment, it is advisable for the indemnified party and any other
Underwriter to be represented by separate counsel, and in that event the fees
and expenses of separate counsel shall be paid by the indemnifying party.
(e) The Company will not, without prior written consent of the
Representatives, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding (or related cause of
action or portion thereof) in respect of which indemnification may be sought by
the Underwriters hereunder (whether or not any Underwriter is a party to such
claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an
25
unconditional release of all Underwriters from all liability arising out of
such claim, action, suit or proceeding (or related cause of action or portion
thereof).
(f) To provide for just and equitable contribution in circumstances in
which the indemnity agreement provided for in the preceding part of this
Section 8 is for any reason held to be unavailable to the Underwriters or the
Company or any Selling Shareholders or is insufficient to hold harmless an
indemnified party, then the Company and the Selling Shareholders shall
contribute to the damages paid by the Underwriters, and the Underwriters shall
contribute to the damages paid by the Company and the Selling Shareholders;
provided, however, that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. In determining the amount of contribution to which the
respective parties are entitled, there shall be considered the relative
benefits received by each party from the offering of the Shares (taking into
account the portion of the proceeds of the offering realized by each), the
parties' relative knowledge and access to information concerning the matter
with respect to which the claim was asserted, the opportunity to correct and
prevent any statement or omission, and any other equitable considerations
appropriate under the circumstances. The Company, the Selling Shareholders and
the Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose). No Underwriter or
person controlling such Underwriter shall be obligated to make contribution
hereunder which in the aggregate exceeds the Underwriting Discount applicable
to the Shares purchased by such Underwriter under this Agreement, less the
aggregate amount of any damages which such Underwriter and its controlling
persons have otherwise been required to pay in respect of the same or any
similar claim. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint. For purposes of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 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 within the meaning of Section 15 of
the Act, shall have the same rights to contribution as the Company.
(g) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the Act.
9. DEFAULT OF UNDERWRITERS.
If any Underwriter defaults in its obligation to purchase Shares hereunder
and if the total number of Shares that such defaulting Underwriter agreed but
failed to purchase is ten percent or less of the total number of Shares to be
sold hereunder, the non-defaulting Underwriters shall
26
be obligated severally and not jointly to purchase (in the respective
proportions which the number of Shares set forth opposite the name of each
non-defaulting Underwriter in Schedule II hereto bears to the total number of
Shares set forth opposite the names of all the non-defaulting Underwriters or
in such other proportions as you may specify), the Shares that such defaulting
Underwriter or Underwriters agreed but failed to purchase. If any Underwriter
so defaults and the total number of Shares with respect to which such default
or defaults occur is more than ten percent of the total number of Shares to be
sold hereunder, and arrangements satisfactory to the other Underwriters and the
Company and the Selling Shareholders for the purchase of such Shares by other
persons (who may include the non-defaulting Underwriters) are not made within
36 hours after such default, this Agreement, insofar as it relates to the sale
of the Shares, will terminate without liability on the part of the
non-defaulting Underwriters or the Company except for (i) the provisions of
Section 8 hereof, and (ii) the expenses to be paid or reimbursed by the Company
pursuant to Section 5(i) hereof. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. In any such case, you shall have the right to postpone the Closing
Date, or the Option Closing Date, as the case may be, but in no event longer
then seven (7) days, in order that the required changes, if any, in the
Registration Statement and Prospectus or in any other documents or agreements
may be made. Nothing herein shall relieve a defaulting Underwriter from
liability for its default hereunder.
10. SURVIVAL CLAUSE.
The respective representations, warranties, agreements, covenants,
indemnities and other statements of the Company and its officers, the
Underwriters and the Selling Shareholders set forth in this Agreement or made
by or on behalf of them, respectively, pursuant to this Agreement shall remain
in full force and effect, regardless of (i) any investigation made by or on
behalf of the Company, any of its officers or directors, any Underwriter or any
controlling person of an Underwriter, or any Selling Shareholder, (ii) any
termination of this Agreement and (iii) delivery of and payment for the Shares.
11. TERMINATION.
(a) The Underwriters' obligations under this Agreement may be
terminated at any time on or prior to the Closing Date (or, with respect to the
Option Shares, on or prior to the Option Closing Date), by notice to the
Company from the Representatives, without liability on the part of the
Underwriters to the Company, if, prior to delivery and payment for the Shares
(or the Option Shares, as the case may be), in the Representatives' sole
judgment:
(i) there has been since the respective dates as of which
information is given in the Registration Statement or the Prospectus
any materially adverse change in the condition, financial or otherwise,
results of operations, affairs or business prospects of the Company or
its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business;
27
(ii) the Company or any Selling Shareholder shall have failed or
been unable to comply with any of the terms or provisions of this
Agreement on the part of the Company or such Selling Shareholder to be
performed within the respective times herein provided for, unless
compliance therewith or performance thereof shall have been expressly
waived by the Representative in writing;
(iii) trading in any of the equity securities of the Company
shall have been suspended by the Commission, by an exchange that lists
the Shares or by the Nasdaq National Market;
(iv) trading in securities generally on the New York Stock
Exchange or in the over-the-counter market shall have been suspended or
limited or minimum or maximum prices shall have been generally
established on such exchange or market, or additional material
governmental restrictions, not in force on the date of this Agreement,
shall have been imposed upon trading in securities generally by such
exchange or market or by order of the Commission or any court or other
governmental authority;
(v) a general banking moratorium shall have been declared by either
Federal, New York or North Carolina state authorities; or
(vi) any outbreak or material escalation of hostilities or
declaration by the United States of a national emergency or war or
other calamity or crisis shall have occurred the effect of any of which
is such as to make it, in your sole, reasonable judgment, impracticable
or inadvisable to market the Shares on the terms and in the manner
contemplated by the Prospectus.
(b) Any termination of this Agreement pursuant to this Section 11
shall be without liability of any character (including, but not limited to,
loss of anticipated profits or consequential damages) on the part of any party
thereto, except that the Company shall remain obligated to pay the costs and
expenses provided in Section 5(i) hereof and the Company, the Selling
Shareholders and the Underwriters shall remain obligated under Section 8
hereof.
12. MISCELLANEOUS.
(a) Notice given pursuant to any of the provisions of this Agreement
shall be in writing and, unless otherwise specified, shall be mailed, delivered
or telecopied
(i) if to the Company:
Ridgeview, Inc.
0000 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: President
28
with a copy to:
Xxxxx & Xxx Xxxxx, PLLC
NationsBank Corporate Center
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxx, IV
(ii) if to the Underwriters:
Interstate/Xxxxxxx Lane Corporation
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Corporate Finance Department
with a copy to:
Xxxxx Xxxxx Mulliss & Xxxxx, L.L.P.
000 Xxxxx Xxxxxx Xxxxxx
Post Office Box 31247
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: R. Xxxxxxx Xxxxxx
(iii) if to the Selling Shareholders:
Xxxx X. Xxxxxxx
0000 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
(b) This Agreement has been and is made solely for the benefit of the
Underwriters, the Selling Shareholders and the Company and of the controlling
persons, directors and officers referred to in Section 8 hereof, and their
respective successors and assigns, and no other person shall acquire or have any
right under or by virtue of this Agreement. The term "successors and assigns"
as used in this Agreement shall not include a purchaser, as such purchaser, of
Shares from the Underwriters.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of North Carolina.
(d) This Agreement may be signed in two or more counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
(e) In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
29
(f) The Company, the Underwriters and the Selling Shareholders each
hereby irrevocably waive any right they may have to a trial by jury in respect
of any claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the Underwriters.
Very truly yours,
RIDGEVIEW, INC.
By:
------------------------------
Title:
---------------------------
SELLING SHAREHOLDERS
By:
------------------------------
Attorney-in-fact
Confirmed as of the date first above mentioned:
INTERSTATE/XXXXXXX XXXX CORPORATION
XXXXX & XXXXXXXXXXXX, INC.
(for themselves and as Representatives of the Underwriters named in Schedule I
hereto)
By:
---------------------------------
Title:
-------------------------------
30
SCHEDULE I
No. of Shares
Selling Shareholders to be Sold
-------------------- -------------
Xxxxxx X. Xxxxx 31,270
Xxxxx X. Xxxxxxx 13,029
J. Xxxxxx Xxxxxxx, Xx. 11,726
Xxxxxx Xxxxx Xxxxx 10,424
Xxxxx Xxxxxxx 7,036
Xxxx X. Xxxxxxx 3,127
Xxxxxx Xxxxxxx 1,824
Xxxxxx X. Xxxxx, Xx. 1,564
------
TOTAL 80,000
======
31
SCHEDULE II
No. of Shares
Underwriters to be Purchased
------------ ---------------
Interstate/Xxxxxxx Lane Corporation
Xxxxx & Xxxxxxxxxxxx, Inc.
---------
TOTAL 1,600,000
=========
