Exhibit 1.1
_________ Shares of Common Stock
PRIMIS, Inc.
UNDERWRITING AGREEMENT
February [ ], 2000
BEAR, XXXXXXX & CO. INC.
U.S. BANCORP XXXXX XXXXXXX INC.
X.X. XXXXXXXX & CO.
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
PRIMIS, Inc., a corporation organized and existing under the
laws 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, and may have
filed an amendment or amendments thereto, on Form S-1 (No. 333-95111), 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 Rule 462(b) Registration Statement. The 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. Neither the Commission nor the Blue
Sky or securities authority of any jurisdiction has issued a stop order
suspending the effectiveness of the Registration Statement, preventing or
suspending the use of any preliminary prospectus, the Prospectus, the
Registration Statement or any amendment or supplement thereto, refusing to
permit the effectiveness of the Registration Statement or suspending the
registration or qualification of the Shares, nor, to the Company's knowledge,
has any of such authorities instituted or threatened to institute any
proceedings with respect to a stop order.
(b) At the respective 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
2
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 (including
any prospectus wrapper) 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, and the Prospectus, any preliminary
prospectus and any supplement thereto or prospectus wrapper prepared in
connection therewith, at their respective times of issuance and at the Closing
Date, complied and will comply in all material respects with any applicable laws
or regulations of foreign jurisdictions in which the Prospectus and such
preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the offer and sale of the Directed Shares (as
hereinafter defined). When any related preliminary prospectus 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 you as herein stated expressly for use in connection with
the preparation
3
thereof. If Rule 434 is used, the Company will comply with the requirements of
Rule 434.
(c) PricewaterhouseCoopers LLC, who have certified
the financial statements and supporting schedules included in the Registration
Statement, 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 or any development involving a prospective material
adverse change in the business, prospects, properties, operations, condition
(financial or other) or results of operations of the Company, including but not
limited to relationships with customers and suppliers of the Company, whether or
not arising from transactions in the ordinary course of business, and since the
date of the latest balance sheet presented in the Registration Statement and the
Prospectus, the Company has not incurred or undertaken any liabilities or
obligations, direct or contingent, which are material to the Company, except for
liabilities or obligations which 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) 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) or Repayment Event (as hereinafter
defined) under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to, any
agreement, instrument, franchise, license or permit to which the Company is a
party or by which the Company or its properties or assets may be bound or (ii)
violate or conflict
4
with (A) any provision of the certificate of incorporation or by-laws of the
Company or (B) 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. No consent,
approval, authorization, order, registration, filing, qualification, license or
permit of or with any court or any public, governmental or regulatory agency or
body having jurisdiction over the Company or any of its 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 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. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness
by the Company.
(g) All of the outstanding shares of capital stock of
the Company 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 have been duly
authorized for issuance and sale to the Underwriters pursuant to this Agreement
and, 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, and no holder of Shares will be subject to personal liability by reason
of being such a holder. The Company had, at December 31, 1999, an authorized and
outstanding capitalization as set forth in the Registration Statement and the
Prospectus. The authorized capital stock of the Company, including the Firm
Shares and the Additional Shares, conforms to the description thereof contained
in the Registration
5
Statement and the Prospectus. Except as disclosed in the Registration Statement
and the Prospectus, there are no outstanding options, warrants or other rights
calling for the issuance of, and no commitments, obligations, plans or
arrangements to issue, any shares of capital stock of the Company or any
security convertible into or exchangeable for capital stock of the Company. The
outstanding stock options relating to the Common Stock have been duly authorized
and validly issued and conform to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(h) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation. 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 in the aggregate have a
material adverse effect on the Company. The Company has all requisite power and
authority, and all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits (collectively, "Governmental
Licenses") of and from all public, regulatory or governmental agencies and
bodies, 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, each such Governmental License is valid and in full force and
effect, and no such Governmental License contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and the
Prospectus, and the Company has not received any notice of proceedings relating
to the revocation of any such Governmental Licenses. The Company does not own
any capital stock or any other interests in any other corporation or entity.
(i) The Company is not (i) in violation of its
charter or by-laws, as the case may be, or in breach of any of the terms or
provisions of or in default (or would be in default with notice or lapse of time
or both) in the performance or observance of any material obligation, agreement,
covenant or condition contained in any bond, debenture, note or other evidence
6
of indebtedness or in any material contract, indenture, mortgage, deed of trust,
loan or credit agreement, lease, joint venture or other agreement or instrument
to which the Company is a party or by which any of its properties may be bound,
which breach, violation, default or defaults would have individually or in the
aggregate a material adverse effect on the Company or (ii) in violation of any
law, order, rule, regulation, writ, injunction, judgment or decree of any court
or governmental agency or body, the violation of which would have individually
or in the aggregate a material adverse effect on the Company.
(j) Except as described in the Prospectus, there is
no litigation or governmental proceeding to which the Company is a party or to
which any property of the Company is subject or which is pending or, to the
knowledge of the Company, contemplated against the Company which might result in
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 or which is required to be
disclosed in the Registration Statement and the Prospectus.
(k) Neither the Company nor any of its directors,
officers or affiliates has taken or will 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 included in the
Registration Statement and the Prospectus, including the notes thereto and
supporting schedules, present fairly the consolidated financial position of the
Company as of the dates indicated and the results of its operations 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 ("GAAP") applied on a consistent basis; and the
supporting schedules included in the Registration Statement present fairly the
information required to be stated therein; and the selected financial data and
the summary financial information included in the Registration Statement
7
and the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the financial statements included in
the Registration Statement and the Prospectus.
(m) The Company has filed all federal, state, local
and foreign tax returns that have been required to be filed and has paid all
taxes shown thereon and all assessments received by it to the extent that such
taxes have become due and are not being contested in good faith. Except as
disclosed in the Registration Statement and the Prospectus, there is no tax
deficiency that has been or might reasonably be expected to be asserted or
threatened against the Company.
(n) The Company has good and marketable title to all
personal property owned by it, in each case free and clear of all liens,
encumbrances and defects except such as are described or referred to in the
Prospectus or such as do not materially affect the value of such property and do
not interfere with the use made or proposed to be made of such property by the
Company. Any real property and buildings held under lease by the Company are
held under valid, existing and enforceable leases with such exceptions as are
not material and do not interfere with the use made or proposed to be made of
such property and buildings by the Company.
(o) Except as described in the Registration Statement
and the Prospectus, the Company owns or possesses valid and enforceable licenses
or other rights to use all inventions, patents, patent applications, trademarks,
service marks, trade names, copyrights, technology, software, databases,
Internet domain names, 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 as described
in the Registration Statement and the Prospectus (collectively, "Intellectual
Property"), free and clear of all liens, claims and encumbrances. The Company
has taken all reasonable steps to protect, maintain and safeguard the
Intellectual Property for which improper or unauthorized disclosure would impair
its value or validity and has executed
8
appropriate nondisclosure and confidentiality agreements and made appropriate
filings and registrations in connection with the foregoing; 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 from conducting its business 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 action, suits, proceedings, investigations or claims by
others challenging the rights of the Company or (if the Intellectual Property is
licensed) the licensor thereof if any Intellectual Property owned or licensed to
the Company; (iii) neither the Company nor (if the Intellectual Property is
licensed), to the Company's knowledge, the licensor thereof has 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, to the knowledge
of the Company, no dispute between it and any licensor with respect to any
Intellectual Property. True and correct copies of all material licenses and
other material agreements between the Company and any third party relating to
the Intellectual Property, and all amendments thereof and supplements thereto,
have been provided to the Underwriters.
(p) No relationship, direct or indirect, exists
between or among the Company or any of its affiliates, on the one hand, and the
directors, officers, shareholders, customers or suppliers of the Company, on the
other hand, that is required by the Act to be described in the Registration
Statement and the Prospectus that is not so described.
(q) The Shares have been approved for quotation on
the Nasdaq National Market, subject only to official notice of issuance.
(r) Except as described in the Prospectus or as 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.
9
(s) The Company is not, and upon consummation of the
transactions contemplated hereby will not be, subject to registration as an
"investment company" or an entity "controlled" by an "investment company" under
the Investment Company Act of 1940, as amended.
(t) There are no existing or, to the knowledge of the
Company, threatened labor disputes with any employees of the Company that are
likely in the aggregate to have a material adverse effect on the Company.
(u) The Company is conducting its business in
compliance with all applicable federal, state and local laws, rules and
regulations of the jurisdictions in which it is conducting its business,
including but not limited to real estate appraisal, home inspection and
mortgage-related regulations, except where failure to comply would not have a
material adverse effect on the prospects or financial condition of the Company.
(v) The Company (i) is 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)
has received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and (iii) is in compliance
with all terms and conditions of any such permit, license or approval, except
where such noncompliance or failure to comply with the terms and conditions of,
or failure to receive, such permits, licenses or approvals will not in the
aggregate have a material adverse effect on the Company.
(w) Each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Securities Act of 1974, as
amended ("ERISA"), that is maintained, administered or contributed to by the
Company for employees or former employees of the Company has been maintained in
compliance with its respective terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to ERISA and
the Internal Revenue Code of
10
1986, as amended (the "Code"). No prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to
any such plan, excluding transactions effected pursuant to a statutory or
administrative exemption. For each such plan that is subject to the funding
rules of Section 412 of the Code or Section 302 of ERISA, no "accumulated
funding deficiency," as defined in Section 412 of the Code, has been incurred,
whether or not waived, and the fair market value of the assets of each such plan
(excluding for these purposes accrued but unpaid contributions) exceeded the
present value of all benefits accrued under such plan determined using
reasonable actuarial assumptions.
(x) The Company maintains 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.
(y) The Company maintains insurance of the types and
in the amounts generally deemed adequate for its business, including, without
limitation, insurance coverage for real and personal property owned or leased by
it against theft, damage, destruction, acts of vandalism and all other material
risks customarily insured against, all of which insurance is in full force and
effect. The Company has no reason to believe that it will not be able to renew
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.
(z) The Company has reviewed its operations and those
of any third parties with which the Company has a material relationship to
evaluate the extent to which the business or operations of the Company
11
will be affected by the Year 2000 Problem. As a result of such review, the
Company has no reason to believe, and does not believe, that the Year 2000
Problem will have a material adverse effect on the general affairs, management,
current or future financial position, business, prospects, shareholders' equity
or results of operations of the Company or result in any material loss or
interference with the Company's business or operations. The "Year 2000 Problem"
as used herein means any significant risk that computer hardware or software
used in the receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of mechanical or
electrical systems of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to January 1, 2000.
(bb) The statistical and market-related data included
in the Registration Statement and the Prospectus are derived from sources which
the Company reasonably and in good faith believes to be accurate, reasonable and
reliable, and such data agree with the sources from which they were derived.
(cc) There are no contracts or documents which are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits thereto which have not been so described and filed as
required.
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.
(b) Payment of the purchase price for, and delivery
of certificates for, the Shares shall be
12
made at the offices of Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P., 1600 Atlanta Financial
Center, 0000 Xxxxxxxxx Xxxx, XX, Xxxxxxx, Xxxxxxx 00000, or at such other place
as shall be agreed upon by you and the Company, at 9:00 A.M. (Atlanta time) on
the third or fourth Business Day, as permitted under Rule 15c6-1 under the
Securities Exchange Act of 1934, as amended (the "1934 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 0000 Xxx) after the determination of the
initial public offering price of the Shares), or such other time not later than
ten Business Days after such date as shall be agreed upon by you and the Company
(such time and date of payment and delivery being herein called the "Closing
Date"). As used herein, the term "Business Day" means any day other than a day
on which banks are permitted or required to be closed in Boston, Massachusetts.
Payment shall be made to the Company by wire transfer in same day funds, against
delivery to you at the offices of Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P., 1600 Atlanta
Financial Center, 0000 Xxxxxxxxx Xxxx, XX, Xxxxxxx, Xxxxxxx 00000, or such other
location as may be mutually acceptable, 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 you may request in writing at least two full
Business Days prior to the Closing Date. The Company will permit you 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 the option to purchase up to ________ 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. This option may
be exercised at any time, or from time to time, in whole or in part, on or
before the 30th day following the date of the Prospectus, by written notice by
you to the Company. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised
13
and the date and time, as reasonably determined by you, when the Additional
Shares are to be delivered (such date and time being herein sometimes referred
to as the "Additional Closing Date"); PROVIDED, HOWEVER, that the Additional
Closing Date shall not 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 the
Additional Shares shall be registered in such name or names and in such
authorized denominations as you may request in writing at least two full
Business Days prior to the Additional Closing Date. The Company will permit you
to examine and package such certificates for delivery at least one full Business
Day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same ratio to the aggregate number of
Additional Shares being purchased 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 you in your sole
discretion shall make.
Payment of the purchase price for the Additional Shares shall
be made to the Company by wire transfer in same day funds at the offices of
Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P., 1600 Atlanta Financial Center, 0000 Xxxxxxxxx
Xxxx, XX, Xxxxxxx, Xxxxxxx 00000, or such other location as may be mutually
acceptable, upon delivery of the certificates for the Additional Shares to you
for the respective accounts of the Underwriters.
3. OFFERING.
(a) Upon your 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 [ ] percent (___%) of the
14
Firm Shares to be purchased by the Underwriters (the "Directed Shares") shall be
reserved for sale by the Underwriters to certain 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 day after the date of this
Agreement, such Directed Shares will be offered to the public as part of the
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
15
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 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 make every reasonable 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 of the Regulations) 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 you shall reasonably object in
writing after being timely furnished in advance a copy thereof.
(b) The Company will comply with the Act and the
Regulations so as to permit the completion of the distribution of the Shares as
contemplated in this Agreement and the Prospectus. 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 Underwriters or the Company, include
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it shall be necessary at any time to amend or supplement the Prospectus or
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 reasonably satisfactory to you)
which will correct such statement or omission and will use its best efforts to
have any amendment to the Registration Statement declared effective as soon as
possible.
16
(c) The Company will promptly deliver to you four
signed copies of the Registration Statement, including exhibits and all
amendments thereto, and signed copies of all consents, 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 you may reasonably
request, and the Company hereby consents to the use of such copies for purposes
permitted by the Act.
(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 you 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 earning statement (in form complying with the
provisions of Rule 158 of the Regulations) covering a period of at 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, or otherwise dispose of or
encumber, or otherwise create or maintain a "put equivalent position" (within
the meaning of Rule 16a-1(h) under the 0000 Xxx) in, any shares of the Company's
Common Stock (or any securities convertible into, exercisable for or
exchangeable for Common Stock), and the Company has obtained or will obtain the
undertaking of each of its officers, directors, option
17
holders and each shareholder that beneficially owns one or more percent of the
outstanding capital stock of the Company, as listed on Schedule II attached
hereto, not to engage in any of the aforementioned transactions on their own
behalf, other than (i) the Company's sale of Shares hereunder, (ii) the
Company's issuance of shares of Common Stock and options to purchase Common
Stock under any stock option or purchase plan described in the Prospectus, and
(iii) the Company's issuance of shares of Common Stock upon the exercise of any
currently outstanding warrant or the automatic conversion of any class of
securities outstanding on the date hereof and disclosed in the Prospectus. The
Company agrees not to waive any undertaking obtained pursuant to this paragraph.
(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. The Company, during the period when the
Prospectus is required to be delivered under the Act, will file all documents
required to be filed with the Commission pursuant to the 1934 Act within the
time periods required by the 1934 Act and the rules and regulations of the
Commission thereunder.
(h) The Company will apply the proceeds from the sale
of the Shares as set forth under "Use of Proceeds" in the Prospectus and report
such use of proceeds as may be required pursuant to Rule 463 of the Regulations.
(i) The Company will use its best efforts to cause
the Shares to be quoted on the Nasdaq National Market and to maintain such
quotation so long as any of the Shares are outstanding.
(j) The Company hereby agrees that it will 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 months following the date of this Agreement. The Underwriters
18
will notify the Company 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.
(k) The Company will use its best efforts to do and
perform all things required or necessary to be done and performed under this
Agreement by the Company prior to or after the Closing Date or any Additional
Closing Date, as the case may be, and to satisfy all conditions precedent to the
delivery of the Shares.
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 the Selling
Agreement) 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" and the reasonable fees of counsel for the Underwriters and such
counsel's reasonable disbursements in relation thereto, (iv) quotation of the
Shares on the Nasdaq National Market, (v) filing fees of the Commission and the
National Association of Securities Dealers, Inc., (vi) the cost of
19
printing certificates representing the Shares, (vii) the cost and charges of any
transfer agent or registrar and (viii) all costs and expenses of the
Underwriters, including the fees and disbursements of counsel for the
Underwriters, in connection with matters related to the Directed Shares which
are designated by the Company for sale to certain employees of and certain
persons designated by the Company.
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
Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P. ("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 Rule
462(b) Registration Statement, shall have become effective and all necessary
approvals of The Nasdaq Stock Market, Inc. shall have been received not later
than 5:30 P.M., Atlanta time, on the date of this Agreement, or at such later
time and date as shall have been consented to in writing by you; 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.
(b) At the Closing Date, you shall have received the
opinion of Powell, Goldstein, Xxxxxx & Xxxxxx LLP, counsel for the Company,
dated the Closing Date, addressed to the Underwriters and in form and
20
substance satisfactory to Underwriters' Counsel, to the effect that:
(i) The Company has been duly organized 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, licensed or
operated) 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 in the aggregate have a material
adverse effect on the Company. The Company has all requisite corporate
authority to own, lease, license and operate its properties and conduct
its business as now being conducted and as described in the
Registration Statement and the Prospectus.
(ii) The Company has an authorized capitalization as
set forth in the Registration Statement and the Prospectus; and all of
the outstanding shares of capital stock of the Company 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 against
payment therefor 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 in
all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(iii) The Shares to be sold under this Agreement to
the Underwriters have been approved for quotation on the Nasdaq
National Market subject to official notice of issuance.
(iv) This Agreement has been duly and validly
authorized, executed and delivered by the Company.
21
(v) 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 to
the best of such counsel's knowledge, threatened against, or involving
the properties or businesses of, the Company that is of a character
required to be disclosed in the Registration Statement and the
Prospectus and has not been properly disclosed therein. In rendering
the opinion set forth in this paragraph, such counsel shall not be
required to search the dockets of any courts or governmental
authorities.
(vi) The Company is listed in the records of the
United States Patent and Trademark Office ("PTO") as the owner of
record of each of the trademark registrations and applications listed
in EXHIBIT A attached hereto (herein called the "Trademarks"). To such
counsel's knowledge, there are no asserted or unasserted claims of any
persons relating to the scope or ownership of any of the Trademarks,
there are no liens which have been filed against any of the Trademarks,
there are no material defects of form in the preparation or filing of
the Trademark applications, the Trademark Applications are being
diligently prosecuted, and none of such Trademarks has been finally
rejected or abandoned. Further, nothing has come to our attention that
leads us to believe that the Trademark applications will not eventuate
in registered Trademarks, or that any Trademark registrations issued,
or to be issued in respect of any such Trademark applications, will not
be valid or will not afford the Company reasonable trademark protection
relative to the subject matter thereof.
(vii) The Company owns or possesses valid and
enforceable licenses or other rights to use all Intellectual Property.
(viii) Other than as described in the Registration
Statement and the Prospectus: (A) there are no third parties who have
any rights in the Intellectual Property that could preclude the
22
Company from conducting business as currently conducted or as
presently contemplated to be conducted as described in the
Registration Statement and the Prospectus; (B) there are no pending or
threatened actions, suits, proceedings, investigations or claims by
others challenging the rights of the Company or, if the Intellectual
Property is licensed to the Company, in respect of any third-party
licensor; (C) neither the Company nor, to the extent any Intellectual
Property is licensed to the Company, any third-party licensor has
infringed, or received any notice of infringement of or conflict with,
any rights of others with respect to the Intellectual Property; and
(D) there is no dispute between the Company and any third-party
licensor with respect to any Intellectual Property.
(ix) 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) or Repayment Event under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company 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 its properties or
assets may be bound or (B) violate or conflict with any provision of
the certificate of incorporation or by-laws of the Company, 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 properties or assets. No
consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over the
Company or any of its 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
23
and delivery of the Shares, 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 or the 1934 Act.
(x) The Company is not, and upon consummation of the
transactions contemplated hereby will not be, subject to registration
as an "investment company" or an entity "controlled" by an "investment
company" under the Investment Company Act of 1940, as amended.
(xi) 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 or
incorporated by reference 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.
(xii) Such counsel has been informed by the
Commission that the Registration Statement is 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 or supplement thereto 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.
(xiii) Except as disclosed in or specifically
contemplated by Registration Statement and the Prospectus, to such
counsel's knowledge, there are no outstanding options, warrants or
other rights calling for the issuance of, and no commitments,
obligations, plans or arrangements to issue, any shares of capital
stock of the Company or any security convertible or exchangeable for
capital stock of the Company. The outstanding stock options relating to
the Common Stock have been duly authorized and validly issued and
conform to the
24
descriptions thereof contained in the Registration Statement and the
Prospectus.
(xiv) The statements in the Registration Statement
and the Prospectus under the captions "Description of Capital Stock"
and "Business --Legal Proceedings" and in Item 15 of Part II of the
Registration Statement, insofar as such statements constitute a summary
of the terms of the Shares, legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such terms, legal matters, documents or proceedings.
(xv) The form of certificate used to evidence the
Common Stock complies in all material respects with all applicable
statutory requirements, with any applicable requirements of the
certificate of incorporation and by-laws of the Company and with the
requirements of The Nasdaq Stock Market, Inc.
(xvi) To the knowledge of such counsel, there are no
statutes or regulations that are required to be described in the
Prospectus that are not described as required.
(xvii) All descriptions in the Registration Statement
of contracts and other documents to which the Company is a party are
accurate in all material respects; to the knowledge of such counsel,
there are no franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be described
or referred to in the Registration Statement or to be filed as exhibits
thereto other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct in all material respects.
(xviii) Each acquisition agreement relating to the
acquisitions described in the Prospectus under the caption
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" has been duly authorized,
25
executed and delivered by the Company and each of its subsidiaries and
each other party thereto and constitutes the valid and binding
agreement of the Company and such subsidiary enforceable against the
Company and such subsidiary in accordance with its terms, subject, as
to enforcement, to applicable bankruptcy, insolvency, reorganization
and moratorium laws and other laws relating to or affecting the
enforcement of creditors' rights generally and to general equitable
principles.
(xix) 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 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 amendment thereof made prior to the Closing Date as
of the date of such 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 or
incorporated by reference therein).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws
26
other than the laws of the United States 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; (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
regarding the corporate existence or good standing of the Company, 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.
(c) All proceedings taken in connection with the sale
of the Firm Shares and the Additional Shares as herein contemplated shall be
reasonably satisfactory in form and substance 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 you 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.
(d) At the Closing Date, you shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer 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
27
has not sustained any material loss or interference with its 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 otherwise) or results of
operations of the Company, except in each case as described in or contemplated
by the Prospectus.
(e) At the time this Agreement is executed and at the
Closing Date, you shall have received a letter from PricewaterhouseCoopers LLC,
independent public accountants for the Company, 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 you, stating that: (i) they are
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 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 financial
statements of the Company, a reading of the minutes of meetings and consents of
the shareholders and board of directors of the Company and the committees of
such board subsequent to December 31, 1999, inquiries of officers and other
employees of the Company who have responsibility for financial and accounting
matters of the Company with respect to transactions and events subsequent to
December 31, 1999, a review of interim financial information in accordance with
the standards established by the American Institute of Certified Public
Accountants in Statement of Auditing Standards No. 71, Interim Financial
Information, with respect to the year ended December 31, 1999 and other
specified procedures and inquiries to a date not more than five days prior to
the date of such letter, nothing has come to their attention
28
that would cause them to believe that: (A) the unaudited financial statements
and schedules of the 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, if applicable, the 1934 Act and the
applicable published rules and regulations of the Commission thereunder or that
such unaudited financial statements are not fairly presented in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Registration Statement and the Prospectus; (B) with respect to the period
subsequent to December 31, 1999, there were, as of the date of the most recent
available monthly financial statements of the Company, if any, and as of a
specified date not more than five days 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 shareholders' 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 January 1, 2000 to the date of the most recent available monthly
financial statements of the Company, if any, and to a specified date not more
than five days prior to the date of such letter, there was any decrease, as
compared with the corresponding period in the prior fiscal year, in total
revenues, or total or per share net income (loss), except for decreases which
the Registration Statement and the Prospectus disclose have occurred or may
occur or which are set forth in such letter; and (iv) they have compared
specific dollar amounts, numbers of shares, percentages of revenues and
earnings(loss) and other financial information pertaining to the Company 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 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,
29
inquiries, and other appropriate procedures specified by you set forth in such
letter, and found them to be in agreement.
(f) Prior to the Closing Date, the Company shall have
furnished to you such further information, certificates and documents as you may
reasonably request.
(g) At the Closing Date, the Shares shall have been
approved for quotation on the Nasdaq National Market.
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 you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
canceled by you at, or at any time prior to, the Closing Date, and the
obligations of the Underwriters to purchase the Additional Shares may be
canceled by you 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,
facsimile, 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 1934 Act, against any
and all losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to reasonable attorneys' fees and any and all
reasonable 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 1934
Act or otherwise, insofar as such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact contained
30
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; or (ii) (A) the
violation of any applicable laws or regulations of foreign jurisdictions where
Directed Shares have been offered and (B) any untrue statement or alleged untrue
statement of a material fact included in the supplement or prospectus wrapper
material distributed in connection with the reservation and sale of the Directed
Shares to eligible employees and certain persons designated by the Company or
the omission or alleged omission therefrom of a material fact necessary to make
the statements therein, when considered in conjunction with the Prospectus or
preliminary prospectus, 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
you 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 1934 Act,
against any losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to reasonable attorneys' fees and any and
all reasonable 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 1934 Act or otherwise, insofar as such losses, liabilities,
claims, damages or expenses
31
(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
you 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 paragraph of the cover
page, in the [table in the first paragraph and the third 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 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 it as a result of
(i) 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 or (ii) the refusal of any Directed Shares Purchasers that are
also employees of the Company to properly confirm their respective agreements to
purchase the Directed Shares that they had agreed to purchase by
32
the end of the first day after the date of this Agreement.
(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 subsection, notify each party
against whom indemnification is to be sought in writing of the commencement of
such action (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 employed 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.
The indemnifying party shall indemnify and hold harmless the indemnified party
from and against any and all losses, claims, damages, liabilities and judgments
by reason of any settlement of any action (A) effected with its written consent
or (B) effected without its written consent if the settlement is entered into
more than 20 Business Days after the indemnifying party shall have
33
received a request from the indemnified party for reimbursement for the fees and
expenses of counsel (in any case where such fees and expenses are at the expense
of the indemnifying party) and, prior to the date of such settlement, the
indemnifying party shall have failed to comply with such reimbursement request.
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 1934
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 are 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, in such proportions as are 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 other
relevant equitable considerations. The relative benefits received by the Company
and the Underwriters, respectively, shall be deemed to be in the same proportion
as (a) the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and (b) 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
34
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 or any violation of the nature
referred to in Section 7(a)(ii). 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 1934 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 1934 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
35
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
or Additional Shares to which the default relates shall be purchased by the
non-defaulting Underwriters in the same 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 total number of Firm Shares or Additional Shares, as the case
may be, you may in your discretion arrange for yourself 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 5
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 (except in
each case as provided in Section 5, Section 7(a) and Section 8 hereof) or the
Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter or
36
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 such default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Company shall have the right to postpone the Closing Date or
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, as the
case may be.
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 hereof, the indemnity agreements contained in Section 7 hereof and the
contribution agreements contained in Section 8 hereof, 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 Section 11
hereof.
11. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective upon the
later of (i) such time as you and the
37
Company shall have received notification of the effectiveness of the
Registration Statement and (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 you
notifying the Company. Notwithstanding the foregoing, the provisions of this
Section 11 and of Sections 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 the Additional Shares at any time prior to the
Additional Closing Date, as the case may be, if (i) any domestic or
international event or act or occurrence has materially disrupted, or in your
opinion will in the immediate future materially disrupt, the market for the
Company's securities or securities in general; (ii) if trading on the New York
Stock Exchange or quotations over 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 Stock Exchange or for the Nasdaq National Market by the New York Stock
Exchange or The Nasdaq Stock Market, Inc. or by order of the Commission or any
other governmental authority having jurisdiction; or (iii) 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
(iv) (A) 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 (B) if there shall have
been such change in political, financial or economic conditions, if the effect
of any such event in (A) or (B) as in your judgment makes it impracticable or
inadvisable to proceed with the offering, sale and delivery of the Firm Shares
38
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, facsimile, telex or telegraph, confirmed in
writing.
(d) If this Agreement shall be terminated pursuant to
any of the provisions hereof (otherwise than pursuant to (i) notification by you
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 in
any material respect, the Company will, subject to demand by you, reimburse the
Underwriters for all reasonable out-of-pocket expenses (including the reasonable
fees and expenses of their counsel), incurred by the Underwriters in connection
herewith.
12. NOTICE. 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, sent by facsimile, telex or telegraph
and confirmed in writing by letter, to such Underwriter c/o Bear, Xxxxxxx & Co.
Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: _____________,
_________________, fax no. (212) 272-____; if sent to the Company, shall be
mailed, delivered, or sent by facsimile, telex or telegraph and confirmed in a
letter to the Company, 00000 Xxxxx Xxxx Xxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx
00000, Attention: C. Xxxxx Xxxxxxx, President and Chief Executive Officer, fax
no. (770) ___-____, with a copy to Powell, Goldstein, Xxxxxx & Xxxxxx LLP,
Sixteenth Floor, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention:
Xxxxxxx Xxxxxxxxxx, Esquire, fax no. (404) ___-____.
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
Sections 7 and 8, and their respective successors and assigns, and no other
person shall have or be construed
39
to have any legal or equitable right, remedy or claim under or in respect of or
by virtue of this Agreement or any provision contained herein. 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
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
40
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,
PRIMIS, INC.
By:
-------------------------
Name:
Title:
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
U.S. BANCORP XXXXX XXXXXXX INC.
X.X. XXXXXXXX & CO.
By: BEAR, XXXXXXX & CO. INC.
By:
-------------------------
Name:
Title:
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
41
SCHEDULE I
Number of Firm
Name of Underwriter Shares to be Purchased
------------------- ----------------------
Bear, Xxxxxxx & Co. Inc...............................
U.S. Bancorp Xxxxx Xxxxxxx Inc........................
X.X. Xxxxxxxx & Co....................................
Total...................... ____________
42
SCHEDULE II
[To come]
43
EXHIBIT A
[To come]
44
