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EXHIBIT 1.1
Shares of Common Stock
SYNQUEST, INC.
UNDERWRITING AGREEMENT
, 2000
BEAR, XXXXXXX & CO. INC.
X.X. Xxxxxx Securities, Inc.
Wit SoundView Corporation
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o BEAR, XXXXXXX & CO. INC.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
SynQuest, Inc., a corporation organized and existing under the
laws of the State of Georgia (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the several underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of shares (the "Firm
Shares") of its common stock, par value $.01 per share (the "Common Stock"),
and, for the sole purpose of covering over-allotments in connection with the
sale of the Firm Shares, at the option of the Underwriters, up to an additional
shares (the "Additional Shares") of Common Stock. The Firm Shares and any
Additional Shares purchased by the Underwriters are referred to herein as the
"Shares." The Shares are more fully described in the Registration Statement
referred to below.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriters that:
(a) The Company has filed with the Securities
and Exchange Commission (the "Commission") a registration statement on
Form S-1 (No. 333-37518), and may have filed an amendment or amendments
thereto, for the registration of the Shares under the Securities Act of
1933, as amended (the "Act"). Such registration statement, including
the prospectus, financial statements and schedules, exhibits and all
other documents filed as a part thereof, as amended at the time of
effectiveness of the registration statement, including any information
deemed to be a part thereof as of the time of effectiveness pursuant to
paragraph (b) of Rule 430A or Rule 434 of the Rules and Regulations of
the Commission under the Act (the "Regulations"), is herein called the
"Registration Statement." Any registration statement filed pursuant to
Rule 462(b) of the Regulations is herein called the "462(b)
Registration Statement" and after such filing, the term "Registration
Statement" shall include the 462(b) Registration Statement. The
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prospectus, in the form first filed with the Commission pursuant to
Rule 424(b) of the Regulations or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) or Rule 434
filing is required, is herein called the "Prospectus." The term
"preliminary prospectus" as used herein means a preliminary prospectus
as described in Rule 430 of the Regulations.
(b) At the time of the effectiveness of the
Registration Statement or any 462(b) Registration Statement or the
effectiveness of any post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission
pursuant to Rule 424(b) or Rule 434 of the Regulations, when any
supplement to or amendment of the Prospectus is filed with the
Commission and at the Closing Date and the Additional Closing Date, if
any (as hereinafter respectively defined), the Registration Statement
and the Prospectus and any amendments thereof and supplements thereto
complied or will comply in all material respects with the applicable
provisions of the Act and the Regulations and do not or will not
contain an untrue statement of a material fact and do not or will not
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein (i) in the case of
the Registration Statement, not misleading and (ii) in the case of the
Prospectus, in light of the circumstances under which they were made,
not misleading. When the preliminary prospectus relating to the Shares
was first filed with the Commission (whether filed as part of the
registration statement for the registration of the Shares or any
amendment thereto or pursuant to Rule 424(a) of the Regulations) and
when any amendment thereof or supplement thereto was first filed with
the Commission, such preliminary prospectus and any amendments thereof
and supplements thereto complied in all material respects with the
applicable provisions of the Act and the Regulations and did not
contain an untrue statement of a material fact and did not omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. No representation and
warranty is made in this subsection (b), however, with respect to any
information contained in or omitted from the Registration Statement or
the Prospectus or any related preliminary prospectus or any amendment
thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives as herein stated expressly for
use in connection with the preparation thereof. If Rule 434 is used,
the Company will comply with the requirements of Rule 434.
(c) Ernst & Young LLP, who have certified the
consolidated balance sheets and supporting schedules, if any, of the
Company and its subsidiaries as of June 30, 1998 and 1999 included in
the Registration Statement, and the related consolidated statements of
operations, changes in redeemable preferred stock, common stock and
other shareholders' deficit and cash flows for each of the three years
in the period ended June 30, 1999, are independent public accountants
as required by the Act and the Regulations.
(d) Subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as set forth in the Registration Statement and the
Prospectus, there has been no material adverse change in the business,
prospects, properties, operations, condition (financial or other) or
results of operations of
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the Company and its subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business ("Material
Adverse Effect"), and since the date of the latest balance sheet
presented in the Registration Statement and the Prospectus, neither the
Company nor any of its subsidiaries has incurred or undertaken any
liabilities or obligations, direct or contingent, whether or not
arising from transactions in the ordinary course of business, which are
material to the Company and its subsidiaries taken as a whole, except
for liabilities or obligations that are reflected in the Registration
Statement and the Prospectus.
(e) This Agreement and the transactions
contemplated herein have been duly and validly authorized by the
Company, and this Agreement has been duly and validly executed and
delivered by the Company.
(f) Neither the Company nor any of its
subsidiaries is (i) in violation of its respective articles of
incorporation or by-laws (or other organizational documents), (ii) in
violation of any law, ordinance or regulation applicable to it, its
business as now being conducted and as described in the Registration
Statement or the ownership of its assets or (iii) in default in the
performance of any obligation, agreement or condition contained in any
agreement, instrument, franchise, license, permit, judgment, order or
decree to which the Company or any of its subsidiaries is a party or by
which it or any of its subsidiaries or their respective property or
assets is bound that would result, in the case of (ii) or (iii) of this
paragraph (f) of Section 1, in a Material Adverse Effect.
(g) The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby do not and will not (i) conflict with or result in a breach of
any of the terms and provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a
default) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to, any agreement, instrument, franchise,
license or permit to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or their
respective properties or assets may be bound or (ii) violate or
conflict with any provision of applicable law or the articles of
incorporation or by-laws (or other organizational documents) of the
Company or any of its subsidiaries or any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their respective properties or assets
that would result, in the case of (i) or (ii) of this paragraph (g) of
Section 1, in a Material Adverse Effect. No consent, approval,
authorization, order, registration, filing, qualification, license or
permit (collectively, "Governmental Licenses") of or with any court or
any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their respective properties or assets is required for the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, including the issuance, sale and
delivery of the Shares to be issued, sold and delivered by the Company
hereunder, except the registration under the Act of the Shares and such
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and
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permits as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters.
(h) All of the outstanding shares of Common
Stock, including the shares of Common Stock to be issued at or prior to
the Closing Date (as defined below), other than the Shares, are duly
and validly authorized and issued, fully paid and nonassessable and
none of such shares was issued in violation of or is now subject to any
preemptive or similar rights. The Shares, when issued, delivered and
sold in accordance with this Agreement, will be duly and validly issued
and outstanding, fully paid and nonassessable, and will not have been
issued in violation of or be subject to any preemptive or similar
rights. The Company had, at , 2000, an authorized and outstanding
capitalization as set forth under the caption "Capitalization" in the
Registration Statement and the Prospectus. The Common Stock, the Firm
Shares and the Additional Shares conform to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(i) Each of the Company and its subsidiaries has
been duly organized and is validly existing as an organization in good
standing (to the extent good standing is a recognized concept in such
jurisdiction) under the laws of its jurisdiction of organization. The
Company is duly qualified and in good standing as a foreign corporation
in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except for those failures
to be so qualified or in good standing which will not, individually or
in the aggregate, have a Material Adverse Effect. Each of the Company
and its subsidiaries has all requisite power and authority, and all
necessary Governmental Licenses to own, lease and operate its
properties and conduct its business as now being conducted and as
described in the Registration Statement and the Prospectus, and no such
Governmental License contains a materially burdensome restriction not
adequately disclosed in the Registration Statement and the Prospectus.
Each of the Company and its subsidiaries has complied with all Federal,
state, local and foreign laws, ordinances, regulations and orders
applicable to it, its business as now being conducted and as described
in the Registration Statement or the ownership of its assets. All of
the issued shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and
nonassessable and were not issued in violation of any preemptive or
similar rights and are owned directly or indirectly by the Company,
free and clear of any lien, encumbrance, claim, security interest,
restriction on transfer, stockholder's agreement, voting trust or other
defect of title whatsoever.
(j) Except as described in the Registration
Statement and the Prospectus, there is no litigation or governmental
proceeding to which the Company or any of its subsidiaries is a party
or to which any property of the Company or any of its subsidiaries is
subject or which is pending or, to the knowledge of the Company,
contemplated against the Company or any of its subsidiaries which might
result in a Material Adverse Effect or which is required to be
disclosed in the Registration Statement and the Prospectus, and there
are no statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
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(k) The Company has not taken and will not take,
directly or indirectly, any action designed to cause or result in, or
which constitutes or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of the shares of Common
Stock to facilitate the sale or resale of the Shares.
(l) The financial statements, including the
notes thereto, and supporting schedules, if any, included in the
Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company as of the dates
indicated and the results of its operations and changes in cash flows
for the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis; and the supporting schedules, if any, included in the
Registration Statement present fairly the information required to be
stated therein; and the pro forma financial information included in the
Registration Statement and the Prospectus has been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and the assumptions used in the
preparation thereof are, in the Company's opinion, reasonable; and the
other financial and statistical information and data included in the
Registration Statement and the Prospectus is, in all material respects,
accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(m) Except as described in the Registration
Statement and the Prospectus or has have been waived in writing, no
holder of securities of the Company has any rights to the registration
of securities of the Company because of the filing of the Registration
Statement or otherwise in connection with the sale of the Shares
contemplated hereby.
(n) The Company is not, and upon consummation of
the transactions contemplated hereby will not be, subject to
registration as an "investment company" under the Investment Company
Act of 1940.
(o) The Shares have been approved for quotation,
subject to notice of issuance on the Nasdaq National Market System.
(p) No labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent; and the Company is not aware of any existing,
threatened or imminent labor dispute or disturbance by the employees of
any of its principal customers, suppliers, contractors or providers of
outsourced services that might have a Material Adverse Effect.
(q) Except as described in the Registration
Statement and the Prospectus, the Company and its subsidiaries own or
possess valid and enforceable licenses or other rights to use all
inventions, patents, patent applications, trademarks, service marks,
trade names, copyrights, technology, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), proprietary techniques (including
processes and substances) and other intellectual property rights
necessary to conduct the business now conducted or presently
contemplated to be conducted by the Company and its subsidiaries, taken
as a whole, as
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described in the Registration Statement and the Prospectus
("Intellectual Property"), subject to such exceptions as would not have
a Material Adverse Effect. Other than as described in the Registration
Statement and the Prospectus: (i) there are no third parties who have
any rights in the Intellectual Property that could preclude the Company
or its subsidiaries from conducting its business in all material
respects as currently conducted or as presently contemplated to be
conducted as described in the Registration Statement and the
Prospectus; (ii) there are no pending or, to the Company's knowledge,
threatened actions, suits, proceedings, investigations or claims by
others challenging the rights of the Company, its subsidiaries or (if
the Intellectual Property is licensed) the licensor thereof in any
Intellectual Property owned or licensed to the Company or its
subsidiaries; (iii) the Company, its subsidiaries and (if the
Intellectual Property is licensed) to the Company's knowledge the
licensor thereof has not infringed, or received any notice of
infringement of or conflict with, any rights of others with respect to
the Intellectual Property; and (iv) there is no dispute between it or
any licensor with respect to any Intellectual Property, subject, with
respect to any of (i), (ii), (iii) or (iv), to such exceptions,
individually or in the aggregate, as would not have a Material Adverse
Effect.
(r) The Company and its subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a Material Adverse Effect.
(s) There are no costs or liabilities associated
with Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a Material Adverse Effect.
(t) The Company and its subsidiaries do not own
any real property. The Company and its subsidiaries have good and
marketable title to all personal property owned by them which is
material to the business of the Company and its subsidiaries, in each
case free and clear of all liens, encumbrances and defects except such
as are described in the Registration Statement and the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company and its subsidiaries; and any real property and buildings
held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to
be made of such property and buildings by the Company and its
subsidiaries, in each case, except as described in or contemplated by
the Registration Statement and the Prospectus.
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(u) The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in
the businesses in which they are engaged; neither the Company nor any
such subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such subsidiary has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not result in a Material Adverse
Effect.
(v) The Company and each of its subsidiaries
maintain a system of internal accounting controls that, taken as a
whole, is sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(w) Except as described in the Registration
Statement and the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement), the
Company has not sold, issued or distributed any shares of Common Stock
during the six-month period preceding the date hereof, including any
sales pursuant to Rule 144A under, or Regulation D or S of, the Act,
other than shares issued pursuant to employee benefit plans, qualified
stock option plans or other employee compensation plans or pursuant to
outstanding options, rights or warrants.
(x) No relationship, direct or indirect, exists
between or among the Company or any of its subsidiaries on the one
hand, and the directors, officers, shareholders, customers, suppliers
or providers of outsourced services of the Company or any of its
subsidiaries on the other hand, which is required by the Act to be
described in the Registration Statement and the Prospectus which is not
so described.
(y) SynQuest, GMBH does not own any assets, have
any employees, or conduct any business in any jurisdiction.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations,
warranties, covenants and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell
to the Underwriters and the Underwriters, severally and not jointly,
agree to purchase from the Company, at a purchase price per share of
$ , the number of Firm Shares set forth opposite the respective names
of the Underwriters in Schedule I hereto plus any additional number of
Shares which such Underwriter may become obligated to purchase pursuant
to the provisions of Section 9 hereof.
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(b) Payment of the purchase price for, and
delivery of certificates for, the Shares shall be made at the offices
of Proskauer Rose LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at
such other place as shall be agreed upon by the Representatives and the
Company, at 9:00 A.M. on the third or fourth Business Day (as permitted
under Rule 15c6-1 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (unless postponed in accordance with the
provisions of Section 9 hereof), following the date of the
effectiveness of the Registration Statement (or, if the Company has
elected to rely upon Rule 430A of the Regulations, the third or fourth
Business Day (as permitted under Rule 15c6-1 under the Exchange Act)
after the determination of the public offering price of the Shares),
such time and date of payment and delivery being herein called the
"Closing Date". For purposes of this section, "Business Day" shall mean
any day other than a day on which banks are permitted or required to be
closed in New York City. Payment shall be made to the Company by wire
transfer in same day funds against delivery to the Representatives for
the respective accounts of the Underwriters of certificates for the
Shares to be purchased by them. Certificates for the Shares shall be
registered in such name or names and in such authorized denominations
as the Representatives may request in writing at least two full
Business Days prior to the Closing Date. The Company will permit the
Representatives to examine and package such certificates for delivery
at least one full Business Day prior to the Closing Date.
(c) In addition, the Company hereby grants to
the Underwriters options to purchase up to an aggregate of
Additional Shares at the same purchase price per share to be paid by
the Underwriters to the Company for the Firm Shares as set forth in
this Section 2, for the sole purpose of covering over-allotments in the
sale of Firm Shares by the Underwriters. Such options may be exercised
at any time and from time to time, in whole or in part, on or before
the thirtieth day following the date of the Prospectus, by written
notice by the Representatives to the Company. Each such notice shall
set forth the aggregate number of Additional Shares as to which an
option is being exercised and the date and time, as reasonably
determined by the Representatives, when the Additional Shares are to be
delivered (each such date and time being herein sometimes referred to
as the "Additional Closing Date"); provided, however, that no
Additional Closing Date shall be earlier than the Closing Date or
earlier than the second full Business Day after the date on which the
option shall have been exercised nor later than the eighth full
Business Day after the date on which the option shall have been
exercised (unless such time and date are postponed in accordance with
the provisions of Section 9 hereof). Certificates for Additional Shares
shall be registered in such name or names and in such authorized
denominations as the Representatives may request in writing at least
two full Business Days prior to the applicable Additional Closing Date.
The Company will permit the Representatives to examine and package such
certificates for delivery at least one full Business Day prior to the
applicable Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter
on an Additional Closing Date shall be the number which bears the same ratio to
the aggregate number of Additional Shares being purchased on such Additional
Closing Date as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to , subject, however, to such adjustments to
eliminate any fractional shares as the Representatives in their sole discretion
shall make.
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Payment for the Additional Shares shall be made to the Company
by wire transfer in same day funds at the offices of Proskauer Rose LLP, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other location as may be mutually
acceptable, upon delivery of the certificates for the Additional Shares to the
Representatives for the respective accounts of the Underwriters.
3. Offering.
(a) Upon the Representatives' authorization of
the release of the Firm Shares, the Underwriters propose to offer the
Shares for sale to the public upon the terms set forth in the
Prospectus.
(b) The Company and the Underwriters hereby
agree that up to five percent of the Firm Shares to be purchased by the
Underwriters (the "Directed Shares") shall be reserved for sale by the
Underwriters to eligible employees of and certain persons designated by
the Company (the "Directed Shares Purchasers"), as part of the
distribution of the Shares by the Underwriters subject to the terms of
this Agreement, the applicable rules, regulations and interpretations
of the National Association of Securities Dealers, Inc. and all other
applicable laws, rules and regulations; provided, however, that under
no circumstances will Bear, Xxxxxxx & Co. Inc. or any other Underwriter
be liable to the Company or to any of the Directed Shares Purchasers
for any action taken or omitted in good faith in connection with
transactions effected with regard to the Directed Shares Purchasers. To
the extent that such Directed Shares are not orally confirmed for
purchase by such persons by the end of the first Business Day after the
date of this Agreement, such Directed Shares will be offered to the
public as part of the underwritten offering contemplated hereby.
4. Covenants of the Company. The Company covenants and agrees
with the Underwriters that:
(a) If the Registration Statement has not yet
been declared effective, the Company will use its best efforts to cause
the Registration Statement and any amendments thereto to become
effective as promptly as possible, and if Rule 430A is used or the
filing of the Prospectus is otherwise required under Rule 424(b) or
Rule 434, the Company will file the Prospectus (properly completed if
Rule 430A has been used) pursuant to Rule 424(b) or Rule 434 within the
prescribed time period and will provide evidence satisfactory to you of
such timely filing. If the Company elects to rely on Rule 434, the
Company will prepare and file a term sheet that complies with the
requirements of Rule 434.
The Company will notify you immediately (and, if requested by
you will confirm such notice in writing) (i) when the Registration
Statement and any amendments thereto become effective, (ii) of any
request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for any additional
information, (iii) of the mailing or the delivery to the Commission for
filing of any amendment of or supplement to the Registration Statement
or the Prospectus, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the
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threatening, of any proceedings therefor, (v) of the receipt of any
comments from the Commission, and (vi) of the receipt by the Company of
any notification with respect to the suspension of the qualification
of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for that purpose. If the Commission shall
propose or enter a stop order at any time, the Company will use its
best effort to prevent the issuance of any such stop order and, if
issued, to obtain the lifting of such order as soon as possible. The
Company will not file any amendment to the Registration Statement, make
any filing under Rule 462(b) of the Regulations or file any amendment
of or supplement to the Prospectus (including the prospectus required
to be filed pursuant to Rule 424(b) or Rule 434) that differs from the
prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration
Statement to which the Representatives shall reasonably object in
writing after being timely furnished in advance a copy thereof.
(b) If at any time when a prospectus relating to
the Shares is required to be delivered under the Act any event shall
have occurred as a result of which the Prospectus as then amended or
supplemented would, in the judgment of the Representatives or the
Company, include an untrue statement of a material fact or omit to
state any material fact required to be stated therein, in light of the
circumstances under which they were made, not misleading, or if it
shall be necessary, in the judgment of the Representatives or the
Company, at any time to amend or supplement the Prospectus or the
Registration Statement to comply with the Act or the Regulations, the
Company will notify you promptly and prepare and file with the
Commission an appropriate amendment or supplement (in form and
substance satisfactory to the Representatives) which will correct the
statement or omission and will use its best efforts to have any
amendment to the Registration Statement declared effective as soon as
possible.
(c) The Company will promptly deliver to you one
signed copy of the Registration Statement, including exhibits and all
amendments thereto, and the Company will promptly deliver to each of
the Underwriters such number of copies of any preliminary prospectus,
the Prospectus, the Registration Statement and all amendments of and
supplements to such documents, if any, as the Representatives may
reasonably request.
(d) The Company will endeavor in good faith, in
cooperation with you, at or prior to the time of effectiveness of the
Registration Statement, to qualify the Shares for offering and sale
under the securities laws relating to the offering or sale of the
Shares in such jurisdictions as the Representatives may designate and
to maintain such qualification in effect for so long as required for
the distribution thereof, except that in no event shall the Company be
obligated in connection therewith to qualify as a foreign corporation
or to execute a general consent to service of process.
(e) The Company will make generally available
(within the meaning of Section 11(a) of the Act) to its security
holders and to you as soon as practicable, but not later than 45 days
after the end of its fiscal quarter in which the first anniversary date
of the effective date of the Registration Statement occurs, an earnings
statement (in form complying with the provisions of Rule 158 of the
Regulations) covering a period of at
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least twelve consecutive months beginning after the effective date of
the Registration Statement.
(f) During the period of 180 days from the date
of the Prospectus, the Company will not directly or indirectly, without
the prior written consent of Bear, Xxxxxxx & Co. Inc., issue, sell,
offer or agree to sell, grant any option for the sale of, pledge, make
any short sale, establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as
amended), or otherwise dispose of, any Common Stock (or any securities
convertible into, exercisable for or exchangeable for Common Stock) of
the Company or of any of its subsidiaries or (ii) enter into any swap,
derivative transaction or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise, provided that the foregoing
shall not apply to (A) the Shares to be sold hereunder, (B) the
issuance by the Company of shares of Common Stock upon the exercise
of any option or warrant outstanding or the conversion of any class or
series of securities outstanding on the date hereof and disclosed in
the Prospectus, (C) the payment of dividends on any security
outstanding on the date hereof as described in the Prospectus, (D) the
grant of stock options under the Company's stock option plan and (E)
the issuance of restrictive stock as a result of a merger or
acquisition; and the Company will obtain the undertaking of each of its
executive officers and directors and such of its shareholders as have
been heretofore designated by Bear, Xxxxxxx & Co. Inc. and listed on
Schedule II attached hereto, not to engage in any of the aforementioned
transactions on their own behalf.
(g) During a period of three years from the
effective date of the Registration Statement, the Company will furnish
to you copies of (i) all reports to its shareholders and (ii) all
reports, financial statements and proxy or information statements filed
by the Company with the Commission or any national securities exchange.
(h) The Company will apply the proceeds from the
sale of the Shares as set forth under "Use of Proceeds" in the
Prospectus.
(i) The Company will use its best efforts to
cause the Shares to qualify for inclusion in the Nasdaq National Market
System.
(j) The Company will use its best efforts to
ensure that the Directed Shares are restricted as required by the
National Association of Securities Dealers Inc. or the National
Association of Securities Dealers Inc. rules from sale, transfer,
assignment, pledge or hypothecation for a period of three (3) months
following the date of this Agreement. The Underwriters will notify the
Company in writing as to which persons will need to be so restricted.
At the request of the Underwriters, the Company will direct the
transfer agent to place a stop transfer restriction upon such
securities for such a period of time. Should the Company release, or
seek to release, from such restrictions any of the Directed Shares, the
Company agrees to reimburse the Underwriters for any reasonable
expenses (including, without limitation, legal expenses) they incur in
connection with such release.
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(k) The Company will file or cause to be filed
the Certificate of Designation, Preferences and Rights of Series H
Preferred Stock as attached hereto as Exhibit A with the Secretary of
State of the State of Georgia no later than the first Business Day
after execution this Agreement and issue ____ shares of Series H
Preferred Stock as a stock dividend prior to the Closing Date as
contemplated by the Prospectus.
5. Payment of Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
the Company hereby agrees to pay all costs and expenses incident to the
performance of the obligations of the Company hereunder, including those in
connection with (i) preparing, printing, duplicating, filing and distributing
the Registration Statement, as originally filed, and all amendments thereof
(including all exhibits thereto), any preliminary prospectus, the Prospectus and
any amendments or supplements thereto (including, without limitation, fees and
expenses of the Company's accountants and counsel), the underwriting documents
(including this Agreement and the Agreement Among Underwriters) and all other
documents related to the public offering of the Shares (including those supplied
to the Underwriters in quantities as hereinabove stated), (ii) the issuance,
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the qualification of the Shares under
state or foreign securities or Blue Sky laws, including the costs of printing
and mailing a preliminary and final "Blue Sky Survey", (iv) the reasonable fees
of counsel for the Underwriters in connection with the qualification of the
Shares under state or foreign securities or Blue Sky laws and in connection with
the review and qualification of the offering of the Shares by the National
Association of Securities Dealers Inc., and such counsel's reasonable
disbursements in relation thereto, (v) quotation of the Shares on the Nasdaq
National Market System, (vi) filing fees of the Commission and the National
Association of Securities Dealers, Inc., (vii) the cost of printing certificates
representing the Shares and (viii) the cost and charges of any transfer agent or
registrar.
6. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Firm Shares and the Additional
Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company herein contained, as of the date
hereof and as of the Closing Date (for purposes of this Section 6, "Closing
Date" shall refer to the Closing Date for the Firm Shares and any Additional
Closing Date, if different, for the Additional Shares), to the absence from any
certificates, opinions, written statements or letters furnished to you or to
Proskauer Rose LLP ("Underwriters' Counsel"), pursuant to this Section 6 of any
misstatement or omission, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Registration Statement, including any
462(b) Registration Statement, shall have become effective not later
than 5:30 P.M., New York time, on the date of this Agreement, or at
such later time and date as shall have been consented to in writing by
the Representatives; if the Company shall have elected to rely upon
Rule 430A or Rule 434 of the Regulations, the Prospectus shall have
been filed with the Commission in a timely fashion in accordance with
Section 4(a) hereof; and, at or prior to the Closing Date, no stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereof shall have been issued and no
proceedings therefor shall have been initiated or threatened by the
Commission.
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(b) At the Closing Date, you shall have received
the opinion of King & Spalding, counsel for the Company, dated the
Closing Date addressed to the Underwriters and in form and substance
satisfactory to Underwriters' Counsel, 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
Georgia. The Company is duly qualified and in good
standing as a foreign corporation in each
jurisdiction in which the character or location of
its properties (owned, leased or licensed) or the
nature or conduct of its business makes such
qualification necessary, except for those failures to
be so qualified or in good standing which will not,
individually or in the aggregate, have a Material
Adverse Effect. The Company has all corporate
authority and all necessary Governmental Licenses to
own, lease and operate its respective properties and
conduct its business as now being conducted and as
described in the Registration Statement and the
Prospectus.
(ii) The Company has the authorized and
issued outstanding capital stock as set forth under
the caption "Description of Capital Stock" in the
Registration Statement and the Prospectus and has
authorized and issued ___ shares of Series H
Preferred Stock as a stock dividend prior to the
Closing Date as contemplated by the Prospectus. All
of the outstanding shares of Common Stock are duly
and validly authorized and issued, are fully paid and
nonassessable and were not issued in violation of or
subject to any preemptive or similar rights. The
Shares to be delivered on the Closing Date have been
duly and validly authorized and, when delivered by
the Company in accordance with this Agreement, will
be duly and validly issued, fully paid and
nonassessable and will not have been issued in
violation of or subject to any preemptive or similar
rights. The Common Stock, the Firm Shares and the
Additional Shares conform to the descriptions thereof
contained in the Registration Statement and the
Prospectus.
(iii) The Common Stock is duly authorized
for quotation on the Nasdaq National Market System.
(iv) This Agreement has been duly and
validly authorized, executed and delivered by the
Company.
(v) To the knowledge of such counsel,
there is no litigation or governmental or other
action, suit, proceeding or investigation before any
court or before or by any public, regulatory or
governmental agency or body pending or threatened
against, or involving the properties or business of,
the Company or any of its subsidiaries, which is of a
character required to be disclosed in the
Registration Statement and the Prospectus which has
not been properly disclosed therein and there are no
statutes, regulations, contracts or other documents
that are required to be described in the Registration
Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not
described or filed as required.
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(vi) The execution, delivery and
performance of this Agreement and the consummation of
the transactions contemplated hereby by the Company
do not and will not (A) conflict with or result in a
breach of any of the terms and provisions of, or
constitute a default (or an event which with notice
or lapse of time, or both, would constitute a
default) under, or result in the creation or
imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its
subsidiaries pursuant to, any agreement, instrument,
franchise, license or permit known to such counsel to
which the Company is a party or by which the Company
or any of its properties or assets may be bound or
(B) violate or conflict with any provision of
applicable law or the articles of incorporation or
by-laws of the Company, or, to the best knowledge of
such counsel, any judgment, decree, order, statute,
rule or regulation of any court or any public,
governmental or regulatory agency or body having
jurisdiction over the Company or any of its
properties or assets that would result in a Material
Adverse Effect. No Governmental License is required
for the execution, delivery and performance of this
Agreement or the consummation of the transactions
contemplated hereby, except for (1) such as may be
required under state securities or Blue Sky laws in
connection with the purchase and distribution of the
Shares by the Underwriters (as to which such counsel
need express no opinion) and (2) such as have been
made or obtained under the Act.
(vii) The statements (A) in the
Registration Statement and the Prospectus under the
captions "Business--Strategic Relationships,"
"--Legal Proceedings," "Management," "Related Party
Transactions," "Description of Capital Stock,"
"Shares Eligible for Future Sale" and "Underwriting"
and (B) in the Registration Statement in Items 14 and
15, in each case insofar as such statements
constitute summaries of the legal matters, documents
or proceedings referred to therein, fairly present
the information called for with respect to such legal
matters, documents and proceedings and fairly
summarize the matters referred to therein.
(viii) The Company is not, and upon
consummation of the transactions contemplated hereby
will not be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as
amended, and the rules and regulations of the
Commission thereunder.
(ix) The Registration Statement and the
Prospectus and any amendments thereof or supplements
thereto (other than the financial statements and
schedules and other financial data included therein,
as to which no opinion need be rendered) comply as to
form in all material respects with the requirements
of the Act and the Regulations.
(x) Such counsel has been advised by
the Commission that the Registration Statement has
become effective under the Act, and, to the knowledge
of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any
post-effective amendment thereof has been issued and
no proceedings therefor have been initiated or
threatened by the Commission and all filings required
by Rule 424(b) of the Regulations have been made.
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(xi) To such counsel's knowledge, no
holder of any security of the Company has any right,
not effectively satisfied or waived, to require
inclusion of shares of Common Stock or any other
security of the Company in the Registration
Statement.
In addition, such opinion shall also contain
a statement that such counsel has participated in
conferences with officers and representatives of the
Company, representatives of the independent public
accountants for the Company and the Underwriters at
which the contents of the Registration Statement and
the Prospectus and related matters were discussed
and, although such counsel has not independently
verified, is not passing upon and does not assume
responsibility for the accuracy, completeness or
fairness of the statements contained in the
Registration Statement and the Prospectus, based upon
such counsel's participation as described above, no
facts have come to the attention of such counsel
which would lead such counsel to believe that either
the Registration Statement at the time it became
effective (including the information deemed to be
part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) or Rule 434,
if applicable), or any post-effective amendment
thereof made prior to the Closing Date as of the date
of such post-effective amendment, contained an 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 as of its date (or
any amendment thereof or supplement thereto made
prior to the Closing Date as of the date of such
amendment or supplement) and as of the Closing Date
contained or contains an untrue statement of a
material fact or omitted or omits 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 (it being understood that such counsel
need express no belief or opinion with respect to the
financial statements and schedules and other
financial data included therein).
In rendering such opinion, such counsel may
rely (A) as to matters involving the application of
laws other than the laws of the United States, the
Georgia Business Corporation Code, the laws of the
State of New York and jurisdictions in which they are
admitted, to the extent such counsel deems proper and
to the extent specified in such opinion, if at all,
upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' Counsel) of
other counsel reasonably acceptable to Underwriters'
Counsel, familiar with the applicable laws; and (B)
as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of
the Company and certificates or other written
statements of officers of departments of various
jurisdictions having custody of documents respecting
the corporate existence or good standing of the
Company and its subsidiaries, provided that copies of
any such statements or certificates shall be
delivered to Underwriters' Counsel. The opinion of
such counsel for the Company shall state that the
opinion of any such other counsel is in form
satisfactory to such counsel and, in their opinion,
you and they are justified in relying thereon.
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The opinion of King & Spalding described in this Section 6(b)
shall be rendered to the Underwriters at the request of the Company and
shall so state therein.
(c) At the Closing Date, you shall have received an opinion of
counsel for each subsidiary of the Company (excluding SynQuest, GMBH), dated the
Closing Date addressed to the Underwriters and in form and substance
satisfactory to Underwriters' Counsel, to the effect that:
(i) Such subsidiary has been duly organized and is
validly existing as an organization in good standing (to the extent
good standing is a recognized concept in such jurisdiction) under the
laws of its jurisdiction of organization. Such subsidiary is duly
qualified and in good standing as a foreign organization in each
jurisdiction in which the character or location of its properties
(owned, leased or licensed) or the nature or conduct of its business
makes such qualification necessary, except for those failures to be so
qualified or in good standing which will not, individually or in the
aggregate, have a Material Adverse Effect.
(ii) Such subsidiary has all requisite power and
authority, and all necessary Governmental Licenses to own, lease and
operate its properties and conduct its business as now being conducted
and as described in the Registration Statement and the Prospectus.
(iii) All of the issued and outstanding capital stock of
such subsidiary has been duly and validly authorized and issued and is
fully paid and nonassessable and was not issued in violation of any
preemptive or similar rights and is owned directly or indirectly by the
Company, free and clear of any lien, encumbrance, claim, security
interest, restriction on transfer, stockholders' agreement, voting
trust or other defect of title whatsoever.
(iv) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herby
by the Company do not and will not (A) conflict with or result in a
breach of any of the terms and provisions of, or constitute a default
(or an event which with notice or lapse of time, or both, would
constitute a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of such
subsidiary pursuant to any agreement, instrument, franchise, license or
permit known to such counsel to which such subsidiary is a party or by
which such subsidiary or any of its properties or assets may be bound
or (B) violate or conflict with any provision of applicable law or the
articles of incorporation or by-laws (or other organizational
documents) of such subsidiary, or, to the best knowledge of such
counsel, any judgment, decree, order, statute, rule or regulation of
any court or any public, governmental or regulatory agency or body
having jurisdiction over such subsidiary or any of its properties or
assets.
(d) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be satisfactory in
form and substance
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to you and to Underwriters' Counsel, and the Underwriters shall have received
from said Underwriters' Counsel a favorable opinion, dated as of the Closing
Date, with respect to the issuance and sale of the Shares, the Registration
Statement and the Prospectus and such other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
Underwriters' Counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(e) At the Closing Date, you shall have received a certificate of
the Chief Executive Officer and the Executive Vice President, Finance and
Administration of the Company, dated the Closing Date, to the effect that (i)
the conditions set forth in subsection (a) of this Section 6 have been
satisfied, (ii) as of the date hereof and as of the Closing Date, the
representations and warranties of the Company set forth in Section 1 hereof are
accurate, (iii) as of the Closing Date, the obligations of the Company to be
performed hereunder on or prior thereto have been duly performed and (iv)
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, the Company and its subsidiaries,
taken as a whole, have not sustained any material loss or interference with
their respective businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, and there has not been any
material adverse change, or any development involving a material adverse change,
in the business, prospects, properties, operations, condition (financial or
other) or results of operations of the Company and its subsidiaries taken as a
whole, except in each case as described in or contemplated by the Prospectus.
(f) At the time this Agreement is executed and at the Closing
Date, you shall have received a letter, from Ernst & Young LLP, independent
public accountants for the Company who have audited the Company's financial
statements for the fiscal years ended June 30, 1998 and 1999, dated,
respectively, as of the date of this Agreement and as of the Closing Date
addressed to the Underwriters and in form and substance satisfactory to the
Representatives, to the effect that: (i) they are or were independent certified
public accountants with respect to the Company within the meaning of the Act and
the Regulations and stating that the answer to Item 10 of the Registration
Statement is correct insofar as it relates to them; (ii) in their opinion, the
financial statements and schedules, if any, of the Company included in the
Registration Statement and the Prospectus and covered by their opinion therein
comply as to form in all material respects with the applicable accounting
requirements of the Act and the applicable published rules and regulations of
the Commission thereunder; (iii) on the basis of procedures consisting of a
reading of the latest available unaudited interim consolidated financial
statements of the Company, and its subsidiaries, a reading of the minutes of
meetings and consents of the stockholders and boards of directors of the Company
and its subsidiaries and the committees of such boards subsequent to June 30,
1999, inquiries of officers and other employees of the Company and its
subsidiaries who have responsibility for financial and accounting matters of the
Company and its subsidiaries with respect to transactions and events subsequent
to June 30, 1999 and other specified procedures and inquiries to a date not more
than five days (three days in the case of the letter delivered on the Closing
Date) prior to the date of such letter, nothing has come to their attention that
would cause them to believe that: (A) the consolidated financial statements and
schedules, if any, of the
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Company presented in the Registration Statement and the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the applicable published rules and regulations of
the Commission thereunder or that such unaudited consolidated financial
statements are not fairly presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited consolidated financial statements of the Company included in the
Registration Statement and the Prospectus; (B) with respect to the period
subsequent to June 30, 1999, there were, as of the date of the most recent
available monthly consolidated financial statements of the Company and its
subsidiaries, if any, and as of a specified date not more than five days (three
days in the case of the letter delivered on the Closing Date) prior to the date
of such letter, any changes in the capital stock or long-term indebtedness of
the Company or any decrease in the net current assets or stockholders' equity of
the Company, in each case as compared with the amounts shown in the most recent
balance sheet presented in the Registration Statement and the Prospectus, except
for changes or decreases which the Registration Statement and the Prospectus
disclose have occurred or may occur or which are set forth in such letter or (C)
that during the period from June 30, 1999 to the date of the most recent
available monthly consolidated financial statements of the Company and its
subsidiaries, if any, and to a specified date not more than five days (three
days in the case of the letter delivered on the Closing Date) prior to the date
of such letter, there was (1) any decrease, as compared with the corresponding
period in the prior fiscal year, in total revenues, or any increase, as compared
with the corresponding period in the prior fiscal year, in operating loss or the
total or per share net loss or (2) any decrease, as compared with the
corresponding period in the prior fiscal quarter, in revenues, except in any
such case for decreases or increases which the Registration Statement and the
Prospectus disclose have occurred or may occur or which are set forth in such
letter; (iv) nothing has come to their attention that would cause them to
believe that the pro forma financial information included in the Registration
Statement do not comply in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro forma adjustments
have not been properly applied to the historical amounts in the compilation of
such financial information; and (v) stating that they have compared specific
dollar amounts, numbers of shares, percentages of revenues and earnings, and
other financial information pertaining to the Company and its subsidiaries set
forth in the Registration Statement and the Prospectus, which have been
specified by you prior to the date of this Agreement, to the extent that such
amounts, numbers, percentages, and information may be derived from the general
accounting and financial records of the Company and its subsidiaries or from
schedules furnished by the Company, and excluding any questions requiring an
interpretation by legal counsel, with the results obtained from the application
of specified readings, inquiries, and other appropriate procedures specified by
you set forth in such letter, and found them to be in agreement.
(g) Prior to the Closing Date, the Company shall have furnished to
you such further information, certificates and documents as you may reasonably
request.
(h) You have shall received from each person who is a director,
executive officer or shareholder listed on Schedule II attached hereto, an
agreement to the effect that such person will not, directly or indirectly,
without the prior written consent of Bear,
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Xxxxxxx & Co. Inc., offer, sell, offer or agree to sell, grant any
option to purchase, pledge, make any short sale, establish an open "put
equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act), or otherwise dispose of, any Common Stock (or any
securities convertible into, exercisable for or exchangeable for Common
Stock) of the Company or of any of its subsidiaries or (ii) enter into
any swap, derivative transaction or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise, for a period of
180 days after the date of the Prospectus.
(i) At the Closing Date, the Shares shall have been
approved for quotation on the Nasdaq National Market System.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to the Representatives
and to their counsel, all obligations of the Underwriters hereunder may be
cancelled by the Representatives at, or at any time prior to, the Closing Date
and the obligations of the Underwriters to purchase the Additional Shares may be
cancelled by the Representatives at, or at any time prior to, the Additional
Closing Date. Notice of such cancellation shall be given to the Company in
writing, or by telephone, telex or telegraph, confirmed in writing.
7. 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 Section 15 of the Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
against any and all losses, liabilities, claims, damages and expenses
whatsoever as incurred (including but not limited to attorneys' fees
and, subject to paragraph (d) of this Section 7, any and all expenses
whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation),
joint or several, to which they or any of them may become subject under
the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, or any related preliminary
prospectus or the Prospectus, or in any supplement thereto or amendment
thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided,
however, that the Company will not be liable in any such case to the
extent but only to the extent that any such loss, liability, claim,
damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter
through the
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Representatives expressly for use therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise
have, including under this Agreement.
(b) Each Underwriter severally, and not jointly, agrees
to indemnify and hold harmless the Company, each of the directors of
the Company, each of the officers of the Company who shall have signed
the Registration Statement, and each other person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against any losses, liabilities, claims,
damages and expenses whatsoever as incurred (including but not limited
to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced
or threatened, or any claim whatsoever, and, subject to paragraph (d)
of this Section 7, any and all amounts paid in settlement of any claim
or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as
such losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any amendment thereof
or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is
based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representatives expressly for use
therein; provided, however, that in no case shall any Underwriter be
liable or responsible for any amount in excess of the underwriting
discount applicable to the Shares purchased by such Underwriter
hereunder. This indemnity will be in addition to any liability which
any Underwriter may otherwise have including under this Agreement. The
Company acknowledges that the statements set forth in the last sentence
of the last paragraph on the cover page of the Prospectus and in the
third, tenth and twelfth paragraphs under the caption "Underwriting" in
the Prospectus constitute the only information furnished in writing by
or on behalf of any Underwriter expressly for use in the Registration
Statement relating to the Shares as originally filed or in any
amendment thereof, any related preliminary prospectus or the Prospectus
or in any amendment thereof or supplement thereto, as the case may be.
(c) In connection with the offer and sale of the Directed
Shares, the Company agrees, promptly upon a request in writing, to
indemnify and hold harmless the Underwriters from and against any and
all losses, liabilities, claims, damages and expenses incurred by them
as a result of the failure of the Directed Shares Purchasers to pay for
and accept delivery of the Directed Shares which, by the end of the day
following the date of this Agreement, were subject to a properly
confirmed agreement to purchase such Directed Shares.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such
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subsection, notify each party against whom indemnification is to be
sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability
which it may have under this Section 7). In case any such action is
brought against any indemnified party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent it may elect by
written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume
the defense thereof with counsel satisfactory to such indemnified
party. Notwithstanding the foregoing, the indemnified party or parties
shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense
of such indemnified party or parties unless (i) the employment of such
counsel shall have been authorized in writing by one of the
indemnifying parties in connection with the defense of such action,
(ii) the indemnifying parties shall not have retained counsel to have
charge of the defense of such action within a reasonable time after
notice of commencement of the action, or (iii) such indemnified party
or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying
parties. In no event shall the indemnifying party or parties be liable
for fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for all indemnified
parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same
general allegations or circumstances. Anything in this subsection to
the contrary notwithstanding, an indemnifying party shall not be liable
for any settlement of any claim or action effected without its written
consent; provided, however, that such consent was not unreasonably
withheld.
8. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company and
the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company any
contribution received by the Company from persons, other than the Underwriters,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, officers of the Company who signed the Registration Statement and
directors of the Company) as incurred to which the Company and one or more of
the Underwriters may be subject, in such proportions as is appropriate to
reflect the relative benefits received by the Company and the Underwriters from
the offering of the Shares or, if such allocation is not permitted by applicable
law or indemnification is not available as a result of the indemnifying party
not having received notice as provided in Section 7 hereof, in such proportion
as is appropriate to reflect not only the relative benefits referred to above
but also the relative fault of the Company and the Underwriters in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any
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other relevant equitable considerations. The relative benefits received by the
Company and the Underwriters shall be deemed to be in the same proportion as (x)
the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and (y) the
underwriting discounts and commissions received by the Underwriters,
respectively, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and of the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this Section
8, (i) in no case shall any Underwriter be liable or responsible for any amount
in excess of the underwriting discount applicable to the Shares purchased by
such Underwriter hereunder, and (ii) 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. Notwithstanding the provisions of this Section 8 and the
preceding sentence, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. For purposes of this Section 8, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each case
to clauses (i) and (ii) of this Section 8. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 8 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; provided, however, that such consent was not unreasonably
withheld.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in
its or their obligation to purchase Firm Shares or Additional Shares
hereunder, and if the Firm Shares or Additional Shares with respect to
which such default relates do not (after giving effect to arrangements,
if any, made by you pursuant to subsection (b) below) exceed in the
aggregate 10% of the number of Firm Shares or Additional Shares, as the
case may be, the Firm Shares and Additional Shares to which the default
relates shall be purchased by
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the non-defaulting Underwriters in proportion to the respective
proportions which the numbers of Firm Shares set forth opposite their
respective names in Schedule I hereto bear to the aggregate number of
Firm Shares set forth opposite the names of the non-defaulting
Underwriters.
(b) In the event that such default relates to more than
10% of the Firm Shares or Additional Shares, as the case may be, the
Representatives may in their discretion arrange for any Representative
or for another party or parties (including any non-defaulting
Underwriter or Underwriters who so agree) to purchase such Firm Shares
or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within five calendar
days after such a default you do not arrange for the purchase of the
Firm Shares or Additional Shares, as the case may be, to which such
default relates as provided in this Section 9, this Agreement or, in
the case of a default with respect to the Additional Shares, the
obligations of the Underwriters to purchase and of the Company to sell
the Additional Shares shall thereupon terminate, without liability on
the part of the Company with respect thereto (except in each case as
provided in Section 5, 7(a) and 8 hereof) or the Underwriters, but
nothing in this Agreement shall relieve a defaulting Underwriter or
Underwriters of its or their liability, if any, to the other
Underwriters and the Company for damages occasioned by its or their
default hereunder.
(c) In the event that the Firm Shares or Additional
Shares to which the default relates are to be purchased by the
non-defaulting Underwriters, or are to be purchased by another party or
parties as aforesaid, the Representatives or the Company shall have the
right to postpone the Closing Date or the applicable Additional Closing
Date, as the case may be, for a period, not exceeding five Business
Days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment or supplement to the Registration Statement or the Prospectus
which, in the opinion of Underwriters' Counsel, may thereby be made
necessary or advisable. The term "Underwriter" as used in this
Agreement shall include any party substituted under this Section 9 with
like effect as if it had originally been a party to this Agreement with
respect to such Firm Shares and Additional Shares.
10. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the Underwriters and
the Company contained in this Agreement, including the agreements contained in
Section 5, the indemnity agreements contained in Section 7 and the contribution
agreements contained in Section 8, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or any controlling person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling person thereof, and shall survive
delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8 and 11(d) hereof shall survive the termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.
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11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the later
of when (i) the Representatives and the Company shall have received
notification of the effectiveness of the Registration Statement or (ii)
the execution of this Agreement. If either the initial public offering
price or the purchase price per Share has not been agreed upon prior to
5:00 P.M., New York time, on the fifth full Business Day after the
Registration Statement shall have become effective, this Agreement
shall thereupon terminate without liability to the Company or the
Underwriters except as herein expressly provided. Until this Agreement
becomes effective as aforesaid, it may be terminated by the Company by
notifying you or by the Representatives notifying the Company.
Notwithstanding the foregoing, the provisions of this Section 11 and of
Section 1, 5, 7 and 8 hereof shall at all times be in full force and
effect.
(b) You shall have the right to terminate this Agreement
at any time prior to the Closing Date or the obligations of the
Underwriters to purchase Additional Shares at any time prior to the
applicable Additional Closing Date, as the case may be, if (A) any
domestic or international event or act or occurrence has materially
disrupted, or in the opinion of the Representatives will in the
immediate future materially disrupt, the market for the Company's
securities or securities in general; or (B) if trading on the New York
or American Stock Exchanges or the Nasdaq National Market shall have
been suspended, or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been
required, on the New York or American Stock Exchanges or the Nasdaq
National Market by the New York or American Stock Exchanges, the
National Association of Securities Dealers, Inc. or by order of the
Commission or any other governmental authority having jurisdiction; or
(C) if a banking moratorium has been declared by a state or federal
authority or if any new restriction materially adversely affecting the
distribution of the Firm Shares or the Additional Shares, as the case
may be, shall have become effective; or (D) (i) if the United States
becomes engaged in hostilities or there is an escalation of hostilities
involving the United States or there is a declaration of a national
emergency or war by the United States or (ii) if there shall have been
such change in political, financial or economic conditions, if the
effect of any such event in (i) or (ii) as in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with
the offering, sale and delivery of the Firm Shares or the Additional
Shares, as the case may be, on the terms contemplated by the
Prospectus.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone, telex, or telegraph, confirmed in writing by
letter.
(d) If this Agreement shall be terminated pursuant to any
of the provisions hereof (otherwise than pursuant to (i) notification
by the Representatives as provided in Section 11(a) hereof or (ii)
Section 9(b) or 11(b) hereof), or if the sale of the Shares provided
for herein is not consummated because any condition to the obligations
of the Underwriters set forth herein is not satisfied or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof, the Company will,
subject to demand by the Representatives, reimburse
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the Underwriters for all out-of-pocket expenses (including the fees and
expenses of their counsel), incurred by the Underwriters in connection
herewith.
12. Notices. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and confirmed
in writing, to such Underwriter c/o Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx,
Xxx Xxxx, X.X. 00000, Attention: Xxxxx Xxxxxxx; if sent to the Company, shall be
mailed, delivered, or telegraphed and confirmed in writing to the Company, 0000
Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000, Attention: Chief Executive
Officer.
13. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Underwriters and the Company and the controlling
persons, directors, officers, employees and agents referred to in Section 7 and
8, and their respective successors and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Shares from any of the Underwriters.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, but without
regard to principles of conflicts of law
15. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
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16. If the foregoing correctly sets forth the understanding
between you and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us.
Very truly yours,
SYNQUEST, INC.
By:
--------------------------------------
Name:
Title:
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
X.X. Xxxxxx Securities, Inc.
Wit SoundView Corporation
as representatives of the several
Underwriters named in Schedule I hereto
BY: BEAR, XXXXXXX & CO. INC.
By:
---------------------------------
Name:
Title:
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SCHEDULE I
Number of Firm
Name of Underwriter Shares to be Purchased
------------------- ----------------------
Bear, Xxxxxxx & Co. Inc
X.X. Xxxxxx Securities Inc.
Wit SoundView Corporation
Total.................. __________
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SCHEDULE II
[All 1% shareholders - need lockups from all who fall into this category]
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