EXHIBIT 1
SATELLINK COMMUNICATIONS, INC.
______________ SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
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____________, 1998
X.X. XXXXXXXX & CO.
XXXXXX XXXXXX & COMPANY, INC.
As Representatives of the several Underwriters
c/o X.X. Xxxxxxxx & Co.
X.X. Xxxxxxxx Financial Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Satellink Communications, Inc., a Georgia corporation (the "Company"),
proposes to sell to the several underwriters named in Schedule I hereto (the
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"Underwriters") for whom you are acting as the representatives (the
"Representatives") ______________ shares (the "Company Shares") of the Company's
common stock, par value $0.01 per share (the "Common Stock"), and the
shareholders of the Company named on Schedule II hereto (the "Selling
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Shareholders") propose to sell to the Underwriters ___________ shares of the
Common Stock (the "Selling Shareholder Shares"). The Company Shares and the
Selling Shareholder Shares are hereinafter referred to collectively as the "Firm
Shares." The Company has also agreed to grant to you an option (the "Option")
to purchase up to ____________ additional shares of Common Stock (the "Option
Shares") on the terms and for the purposes set forth in Section 1(b) hereof.
The Firm Shares and the Option Shares are hereinafter collectively referred to
as the "Shares."
The Company and the Selling Shareholders confirm as follows their
agreements with you.
1. AGREEMENT TO SELL AND PURCHASE; PUBLIC OFFERING.
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(a) On the basis of the representations, warranties, agreements and
covenants herein contained, and subject to all the terms and conditions of this
Underwriting Agreement (the "Agreement"), the Company agrees to sell to the
Underwriters an aggregate of ______________ Firm Shares, and each of the Selling
Shareholders agrees, severally and not jointly, to sell to the Underwriters the
aggregate number of Firm Shares set forth opposite such Selling Shareholder's
name in Schedule II hereto, and each of the Underwriters, severally and not
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jointly, agrees to purchase at the purchase price of $______ per share the
number of Firm Shares set forth opposite such Underwriter's name in Schedule I
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hereto.
(b) Subject to all the terms and conditions of this Agreement, the Company
also grants the Underwriters the Option to purchase, severally and not jointly,
up to ____________ Option Shares from the Company, each at the same price per
share as the Underwriters shall pay for the Firm Shares. The Underwriters shall
not be under any obligation to purchase any Option Shares prior to the exercise
of such option. The Option may be exercised only to cover over-allotments in the
sale of the Firm Shares and may be exercised in whole or in part at any time or
from time to time on or before the 30th day after the date of the Prospectus (as
defined below) upon written or telephonic notice (the "Option Shares Notice") by
you to the Company no later than 12:00 noon, Atlanta, Georgia time, at least two
and no more than 15 full business days before the date and time specified for
closing in the Option Shares Notice (the "Option Closing Date") setting forth
the aggregate number of Option Shares to be purchased. On the Option Closing
Date, the Company will issue and sell to the Underwriters the number of Option
Shares set forth in the Option Shares Notice, and unless otherwise adjusted by
the Representatives, each of the Underwriters will purchase such percentage of
the Option Shares as is equal to the percentage of Firm Shares that such
Underwriter is purchasing.
(c) After the Registration Statement becomes effective, upon the
authorization by you of the release of the Shares, the several Underwriters
propose to offer the Firm Shares and the Option Shares purchased by the
Underwriters for sale initially at the price per share set forth in the
Prospectus (the initial offering price) and upon the terms set forth therein.
2. DELIVERY AND PAYMENT.
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Delivery of the Firm Shares shall be made to you by or on behalf of the
Company and the Selling Shareholders against payment of the purchase price by
federal funds wire transfer payable in same day funds to the order of the
Company at the offices of X.X. Xxxxxxxx & Co., X.X. Xxxxxxxx Financial Center,
000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, or at such other place as may
be agreed upon by the Representatives and the Company, at 10:00 a.m., Nashville
time, on the third or, if the Firm Shares are priced, as contemplated by Rule
15c6-1(c) promulgated pursuant to the Securities Exchange Act of 1934, as
amended, (the "Exchange Act"), after 4:30 p.m., Washington, D.C. time, the
fourth full business day following the date of this Agreement (the "Closing
Date"), or at such other time on such date, or at such other place, as may be
agreed upon by the Company and the Representatives.
To the extent, if any, that the Option is exercised, delivery of the Option
Shares against payment therefor (in the manner specified above) will take place
at the offices specified above on the Option Closing Date (which, subject to the
requirements set forth above for the Option Shares Notice, may be the Closing
Date).
Certificates evidencing the Shares shall be in definitive form and shall be
registered in such names and in such denominations as you shall request not less
than 48 hours prior to the Closing Date or the Option Closing Date, as the case
may be, by written notice to the Company.
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For the purpose of expediting the checking and packaging of certificates for the
Shares, the Company agrees to make such certificates available for inspection at
least 24 hours prior to the Closing Date or the Option Closing Date, as the case
may be, at a location to be designated by you, which may be in New York, New
York, or elsewhere. If the Representatives so elect, delivery of the Shares may
be made by credit through full fast transfer to the accounts designated by the
Representatives at The Depository Trust Company.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Company Shares and Option Shares by the Company to
the Underwriters shall be borne by the Company. The Company will pay and save
each of the Underwriters and any subsequent holder of the Shares harmless from
any and all liabilities with respect to or resulting from any failure or delay
in paying federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to such Underwriter of the Company Shares and Option Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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The Company represents, warrants and covenants to each of the Underwriters
that:
(a) The Company has prepared and has filed with the Securities and
Exchange Commission (the "Commission") a registration statement (Registration
No. 333-49839) on Form S-1 relating to the Shares, including a preliminary
prospectus and such amendments to such registration statement as may have been
required to the date of this Agreement, under the provisions of the Securities
Act of 1933, as amended (the "Act"), and the rules and regulations (collectively
referred to as the "Rules and Regulations") of the Commission thereunder. The
registration statement and all amendments thereto have been duly authorized and
executed by the Company in accordance with the Rules and Regulations. The term
"preliminary prospectus" as used herein means a preliminary prospectus as
contemplated by Rule 430 or Rule 430A of the Rules and Regulations included at
any time as part of the registration statement. Copies of such registration
statement and amendments and of each related preliminary prospectus have been
delivered to you. If such registration statement has not become effective, a
further amendment to such registration statement, including a form of final
prospectus, necessary to permit such registration statement to become effective,
will be filed promptly by the Company with the Commission. If such registration
statement has become effective, a final prospectus containing information
permitted to be omitted at the time of effectiveness by Rule 430A of the Rules
and Regulations will be filed promptly by the Company with the Commission in
accordance with Rule 424(b) of the Rules and Regulations, if required. The term
"Registration Statement" as used herein means the registration statement as
amended at the time it becomes or became effective (the "Effective Date"),
including financial statements and all exhibits and any information deemed to be
included by Rule 430A. The term "Prospectus" means the prospectus as first filed
with the Commission pursuant to Rule 424(b) of the Rules and Regulations or, if
no such filing is required, the form of final prospectus included in the
Registration Statement at the Effective Date.
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(b) On the Effective Date, the date the Prospectus is first filed with the
Commission pursuant to Rule 424(b) (if required), at all times subsequent
thereto through and including the Closing Date and, if later, the Option Closing
Date and when any post-effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed with the
Commission, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
or supplement thereto), including the financial statements included in the
Prospectus, did and will comply with all applicable provisions of the Act and
the Rules and Regulations and did and will contain all statements required to be
stated therein in accordance with the Act and the Rules and Regulations. On the
Effective Date and when any post-effective amendment to the Registration
Statement becomes effective, no part of the Registration Statement or any such
amendment or supplement did or will contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading. On the date any
amendment or supplement to the Prospectus is filed with the Commission and at
the Closing Date and, if later, the Option Closing Date, the Prospectus did not
or will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omissions made in reliance on and in conformity with information
relating to the Underwriters furnished in writing to the Company by the
Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. The Company acknowledges that
the only information relating to the Representatives furnished in writing to the
Company by the Underwriters specifically for inclusion in the Registration
Statement, any preliminary prospectus and the Prospectus is the information in
the last paragraph on the cover page, the paragraphs relating to stabilization
on the inside front cover and the statements set forth under the heading
"Underwriting" in any preliminary prospectus or the Prospectus.
(c) The Company and each of its subsidiaries, as defined in the Rules and
Regulations (individually, a "Subsidiary" and collectively, the "Subsidiaries"),
are, and at the Closing Date and, if later, the Option Closing Date will be, a
corporation or limited liability company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization. The Company is the sole legal and beneficial owner of all
securities of the Subsidiaries free and clear of all liens, charges and
encumbrances. The Company and each of the Subsidiaries has, and at the Closing
Date and, if later, the Option Closing Date will have, full power and authority
to conduct all the activities conducted by it, to own or lease all the assets
owned or leased by it and to conduct its business as described in the
Registration Statement and the Prospectus. The Company and each Subsidiary is,
and at the Closing Date and, if later, the Option Closing Date will be, duly
licensed or qualified to do business and in good standing as a foreign
corporation in all jurisdictions in which the nature of the activities conducted
by it or the character of the assets owned or leased by it makes such licensing
or qualification necessary, except where the failure to so qualify would not
have a material adverse effect upon the business, properties, business
prospects, condition (financial or
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otherwise) or results of operations of the Company and the Subsidiaries, and no
proceeding has been instituted in any jurisdiction revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, the Company's or any
Subsidiary's power, authority, licensing or qualification. Except for the stock
of the Subsidiaries or as disclosed in the Registration Statement, the Company
does not own, and at the Closing Date and, if later, the Option Closing Date
will not own, directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity interest in any
firm, partnership, joint venture, association or other entity. Complete and
correct copies of the Restated Articles of Incorporation (the "Restated
Articles") and the Bylaws (the "Bylaws") of the Company and the certificate of
incorporation and bylaws, or the organizational documents and operating
agreements, as the case may be, of each Subsidiary and all amendments thereto
have been delivered to you, and no changes therein will be made subsequent to
the date hereof and prior to the Closing Date or, if later, the Option Closing
Date.
(d) The outstanding shares of the Company's Common Stock have been, and
the Shares to be issued and sold by the Company upon such issuance and delivery
and payment therefor in the manner herein described will be, duly authorized,
validly issued, fully paid and nonassessable and will not be subject to any
preemptive or similar right. The description of the Common Stock in the
Registration Statement and the Prospectus is, and at the Closing Date and, if
later, the Option Closing Date will be, complete and accurate in all respects.
All offers and sales of securities of the Company have been at all relevant
times duly registered under or exempt from the registration requirements of the
Act and were duly registered under or exempt from the registration requirements
of all applicable state securities or Blue Sky laws. Except as set forth in the
Prospectus and except for options issued under the Company's stock option plans,
the Company does not have outstanding, and at the Closing Date and, if later,
the Option Closing Date will not have outstanding, any options to purchase, or
any rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell any shares of
Common Stock or any such warrants, convertible securities or obligations. The
description of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised thereunder,
set forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights.
(e) The financial statements together with the related notes and schedules
included in the Registration Statement or the Prospectus are accurate in all
material respects and present fairly the financial condition of the Company and
all entities that have been acquired by the Company as of the respective dates
thereof and the results of operations and cash flows of the Company and all
entities that have been acquired by the Company for the respective periods
covered thereby, all in conformity with generally accepted accounting principles
applied on a consistent basis throughout the entire period involved, except as
otherwise disclosed in the Prospectus. The financial and statistical data set
forth in the Prospectus under the captions "Prospectus Summary," "Summary
Consolidated Financial and Operating Data," "Use of Proceeds," "Capitalization,"
"Selected Consolidated Financial and Operating Data," "Management's Discussion
and Analysis of Financial Condition and Results of Operations," "Business,"
"Management" and "Principal and
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Selling Shareholders" have been compiled on a basis consistent with that of the
audited financial statements contained in the Registration Statement and
Prospectus and fairly present the information set forth therein. No other
financial statements or schedules of the Company are required by the Act, the
Exchange Act or the Rules and Regulations to be included in the Registration
Statement or the Prospectus. Xxxxxx Xxxxxxxx LLP (the "Accountants"), who have
reported on certain of such financial statements and schedules, are independent
auditors with respect to the Company as required by the Act and the Rules and
Regulations.
(f) The Company maintains a system of internal accounting controls
sufficient to assure 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 accountability for
assets; (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 existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. The Company's system of
internal accounting controls is sufficient to meet the broad objectives of
internal accounting control insofar as those objectives pertain to the
prevention or detection of errors or irregularities in amounts that would be
material in relation to the Company's financial statements; and, except as
disclosed in the Prospectus, neither the Company nor any employee or agent of
the Company has made any payment of funds of the Company or received or retained
any funds in violation of any law, rule or regulation, the receipt or payment of
which could have a material adverse effect on the Company.
(g) There are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of the members of the families of any of them,
except as disclosed in the Registration Statement and the Prospectus.
(h) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus and prior to the Closing Date and,
if later, the Option Closing Date, except as set forth in the Registration
Statement and the Prospectus, (i) there has not been and will not have been any
material adverse change in the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company,
arising for any reason whatsoever, (ii) the Company has not incurred nor will it
incur any material liabilities or obligations, direct or contingent, except in
the ordinary course of business, (iii) the Company has not entered into any
material transaction not in the ordinary course of business, (iv) the Company
has not and will not have paid or declared any dividends or other distributions
of any kind on any class of its capital stock, (v) there has not been and will
not have been any change in the capitalization of the Company other than
pursuant to the exercise of employee stock options or the issuance of shares
under the Company's stock option plans and (vi) there has not been any loss or
damage (whether or not insured) to the property of the Company which has been
sustained or will have been sustained which has a material adverse effect on the
business, business prospects, condition (financial or otherwise) or results of
operations of the Company.
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(i) The Company has timely filed all necessary federal, state and foreign
income and franchise tax returns and has paid all taxes shown thereon, and there
is no tax deficiency that has been or, to the best of the Company's knowledge,
might be asserted against the Company that might have a material adverse effect
on the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company, and all tax liabilities are
adequately provided for on the books of the Company.
(j) The Company is not an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
(k) Except as set forth in the Registration Statement and the Prospectus,
there are no actions, suits or proceedings pending or threatened against or
affecting the Company or any Subsidiary or any of their respective officers in
their capacity as such, before or by any federal or state court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding would materially and
adversely affect the Company or its business, properties, business prospects,
condition (financial or otherwise) or results of operations or prevent or
materially hinder the consummation of this Agreement.
(l) The Company has not at any time during the past five years: (i) made
any unlawful contributions to any candidate for any political office, or failed
fully to disclose any contribution in violation of law; or (ii) made any payment
to any state, federal or foreign government official, or other person charged
with similar public or quasi-public duty (other than payment required or
permitted by applicable law).
(m) The Company and each Subsidiary has, and at the Closing Date and, if
later, the Option Closing Date will have: (i) all governmental licenses,
certificates, permits, consents, orders, approvals and other authorizations,
including licenses granted by the Federal Communications Commission (the "FCC")
for and related to the provision of wireless and wireline telecommunications
services (the "FCC Licenses"), necessary to carry on the Company's business as
contemplated in the Prospectus; (ii) complied in all material respects with all
laws, regulations and orders applicable to it or its business or properties; and
(iii) performed all obligations required to be performed by it and is not, and
at the Closing Date and, if later, the Option Closing Date will not be, in
default, under any contract or other instrument material to it to which it is a
party or by which its property is bound or affected where such default would
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
the Subsidiaries or prevent or materially hinder the consummation of this
Agreement. To the best knowledge of the Company and each Subsidiary, as of the
date of this Agreement, the Closing Date and, if later, the Option Closing Date,
no other party under any contract or other instrument to which it is a party is
in default thereunder, nor at the Closing Date and, if later, the Option Closing
Date will any of them be, in
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violation of any provision of its certificate of incorporation or bylaws. All
FCC Licenses of the Company and its Subsidiaries are in full force and effect
and have been duly issued in the name of, or validly assigned to, the Company or
one of its Subsidiaries, and no default or breach exists thereunder. No event
has occurred with respect to the FCC Licenses that permits, or after giving
notice, lapse of time or both would permit, revocation or termination of any
such FCC License or would result in any material impairment of the rights of the
holder thereof. All of such FCC Licenses are in effect for the usual FCC License
terms and are unimpaired by any condition of other restriction imposed by the
FCC or other governmental authority (other than restrictions and conditions
generally applicable to licenses of the same or similar type or class).
All applications necessary for renewal or extension of the FCC Licenses
have been timely filed in accordance with the requirements of the FCC or other
governmental authority issuing such FCC Licenses. The Company has not been
informed that any of the FCC Licenses will not be renewed in the ordinary
course, and no allegations, complaints, charges, investigations, renewal or
revocation hearings, or other proceedings, have been threatened or initiated in
any forum, nor has any governmental authority (including, but not limited to,
the FCC) proposed, announced, used, or adopted any amendment, modification, or
change to any law or regulation, with respect to or impacting upon such FCC
Licenses.
(n) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part herein contemplated,
except such as have been obtained under the Act or the Rules and Regulations and
such as may be required under state securities or Blue Sky laws or the bylaws
and rules of the National Association of Securities Dealers, Inc. (the "NASD")
in connection with the purchase and distribution by the Underwriters of the
Shares.
(o) The filing of the Registration Statement and the execution and
delivery of this Agreement have been duly authorized by the Board of Directors
of the Company, and the Company has full corporate power and authority to enter
into this Agreement and to perform its obligations hereunder. This Agreement has
been duly executed and delivered by the Company and constitutes a valid and
binding agreement of the Company enforceable against the Company in accordance
with the terms hereof. The performance of this Agreement and the consummation of
the transactions contemplated hereby will not result in the creation or
imposition of any material lien, charge or encumbrance upon any of the assets of
the Company or any Subsidiary pursuant to the terms or provisions of, or result
in a breach or violation of any of the terms or provisions of, or constitute a
default under, or give any other party a right to terminate any of its
obligations under, or result in the acceleration of any obligation under, the
certificate of incorporation or bylaws of the Company or the Subsidiaries, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which the Company or any Subsidiary
is a party or by which the Company or any Subsidiary or any of its or their
properties are bound or affected, or violate or conflict with any judgment,
ruling, decree, order, statute, rule or regulation of any court or other
governmental agency or body applicable to the business or
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properties of the Company or any Subsidiary; the occurrence of which would
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
the Subsidiaries or prevent or materially hinder the consummation of this
Agreement.
(p) The Company and each Subsidiary has good and valid title to all
properties and assets described in the Registration Statement and Prospectus as
owned by it, free and clear of all liens, charges, encumbrances or restrictions,
except such as are described in the Prospectus or are not material to the
business of the Company. The Company and each Subsidiary has valid, subsisting
and enforceable leases for the properties described in the Prospectus as leased
by it, and with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such properties by the
Company and such Subsidiaries, and the Company has no notice or knowledge of any
material claim of any sort which has been, or may be, asserted by anyone adverse
to the Company's or a Subsidiary's rights as lessee or sublessee under any lease
or sublease described above, or affecting or questioning the Company's or a
Subsidiary's rights to the continued possession of the leased or subleased
premises under any such lease or sublease in conflict with the terms thereof.
The Company and each Subsidiary owns or leases all such properties as are
necessary to its operations as now conducted.
(q) Each of the Company and the Subsidiaries owns or possesses adequate
rights to use all patents, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names and copyrights which are necessary to
conduct its businesses as described in the Registration Statement and
Prospectus; the Company has not received any notice of, and has no knowledge of,
any infringement of or conflict with asserted rights of the Company by others
with respect to any patent, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names or copyrights, and the Company has not
received any notice of, and has no knowledge of, any infringement of or conflict
with asserted rights of others with respect to any patent, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names or
copyrights owned or used by the Company, which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, could have a material
adverse effect on the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and the
Subsidiaries.
(r) To the best of the Company's knowledge, no labor disturbance by the
employees of the Company or any of the Subsidiaries exists or is imminent; and
the Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers that could be expected to result in
a material adverse change in the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
the Subsidiaries.
(s) The Company and the Subsidiaries maintain insurance with insurers of
recognized financial responsibility of the types and in the amounts generally
deemed adequate for their respective business and consistent with insurance
coverage maintained by similar companies in
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similar businesses, including, but not limited to, insurance covering real and
personal property owned or leased by the Company or the Subsidiaries against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect; 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
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
the Subsidiaries.
(t) Except as described in the Registration Statement and the Prospectus,
there is no factual basis for any action, suit or other proceeding involving the
Company, the Subsidiaries or any of their material assets for any failure of the
Company, the Subsidiaries or any predecessor thereof, to comply with any
requirements of federal, state, local or foreign regulation relating to air,
water, solid waste management, hazardous or toxic substances, or the protection
of health or the environment. Except as described in the Registration Statement
and the Prospectus, none of the property owned or leased by the Company or the
Subsidiaries is contaminated with any waste or hazardous substances, and neither
the Company nor the Subsidiaries may be deemed an "owner or operator" of a
"facility" or "vessel" which owns, possesses, transports, generates or disposes
of a "hazardous substance" as those terms are defined in Section 9601 of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. (S)9601, et seq.
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(u) All documents or contracts required to be filed as exhibits to the
Registration Statement to which the Company or any Subsidiary is a party have
been filed as exhibits to the Registration Statement and have been duly
authorized, executed and delivered by the Company or such Subsidiary and
constitute valid and binding agreements of the Company or such Subsidiary and
are enforceable against the Company or such Subsidiary in accordance with the
terms thereof, except where the lack of authorization, execution, delivery or
enforceability of any such contract would not materially and adversely affect
the business, properties, business prospects, condition (financial or otherwise)
or results of operations of the Company and the Subsidiaries or prevent or
materially hinder the consummation of this Agreement.
(v) No statement, representation, warranty or covenant made by the Company
in this Agreement or made in any certificate or document required by this
Agreement to be delivered to any of the Underwriters was or will be, when made,
inaccurate, untrue or incorrect.
(w) The Company has not taken and will not take, directly or indirectly,
any action designed to or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or the Common Stock, and the Company
is not aware of any such action taken or to be taken by affiliates of the
Company.
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(x) No holder of securities of the Company has rights which have not been
waived to require the registration of any securities of the Company because of
the filing of the Registration Statement. Other than the registration rights
granted pursuant to: (i) that certain Series A Preferred Stock Purchase
Agreement and Amendment to Stockholders Agreement, dated July 25, 1989, by and
between the Company, the several purchasers and the several security holders of
the Company.(the "Series A Rights"); (ii) those certain Series C Convertible
Preferred Stock Purchase Agreements, dated November 17, 1995, and among the
Company and the several purchasers of Series C Convertible Preferred Stock (the
"Series C Rights"); (iii) Options to purchase Common Stock of the Company
granted to certain principals of The Breckenridge Group, Inc. (the "Breckenridge
Rights"); and (iv) Preferred Stock and Warrant Purchase Agreements, dated April
3, 1998, by and among the Company and the several purchasers of Series D
Redeemable Preferred Stock (the "Series D Rights," and collectively with the
Series A Rights, Series C Rights and Breckenridge Rights, the "Registration
Rights Agreements"), there are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Act.
(y) The Company has taken such action as necessary to have the Company
Shares and the Option Shares authorized for trading, and all of the Company
Shares and the Option Shares have been approved for listing, on the National
Association of Securities Dealers Automated Quotation National Market System
(the "Nasdaq National Market") upon notice of issuance, and the Selling
Shareholder Shares are listed on the Nasdaq National Market.
(z) Other than as contemplated by this Agreement, there is no broker,
finder or other party that is entitled to receive from the Company any brokerage
or finder's fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement.
(aa) Other than as set forth in any preliminary prospectus and the
Prospectus, the Company's internal systems and software and the network
connections it maintains are adequately programmed to address the Year 2000
issue.
(bb) Each of the Company and its Subsidiaries: (i) is in compliance with
the provisions of the Federal Communications Act of 1934, as amended (the
"Communications Act"), as implemented, interpreted, and applied by the FCC; (ii)
is in compliance with FCC requirements and restrictions relating to FCC License
ownership and will continue to be in such compliance immediately following the
Closing Date, and if applicable, the Option Closing Date; (iii) has duly and
timely filed all reports and other filings which are required to be filed by it
under the Communications Act or any other applicable law, rule or regulation of
any governmental authority; and (iv) is in compliance with all such laws, rules
and regulations, the noncompliance with which would affect the continuation of
any FCC License held by the Company or any of its
11
Subsidiaries. All information provided by or on behalf of the Company or any
Subsidiary in any filing with the FCC was, at the time of filing, true, complete
and correct in all material respects when made, and the FCC has been notified of
any substantial or significant changes in such information as may be required in
accordance with applicable laws, rules and regulations.
(cc) The representations and warranties made by the Company in that certain
Third Amended and Restated Loan and Security Agreement, dated June 27, 1997, by
and among the Company, Satellink Paging, LLC, certain named Lenders and
Creditanstalt-Bankverein, as amended by that First Amendment, dated March 11,
1998, to the Third Amended and Restated Loan and Security Agreement by and among
the Company, Satellink Paging, LLC, certain named Lenders and Creditanstalt-
Bankverein, as amended, modified or supplemented from time to time (the "Loan
Agreement"), were true, correct and complete when and as made and will continue
to be true, correct and complete in all material respects as of the date of this
Agreement, the Closing Date and, if later, the Option Closing Date as if set
forth in their entirety herein. The Company is in compliance with all covenants
of the Company and is not in default or breach of any of the terms and
provisions set forth in the Loan Agreement, and after giving effect to the
Offering, the Company will continue to be in compliance with the covenants,
terms and provisions of the Loan Agreement.
(dd) None of the Selling Shareholders listed under the caption "Principal
and Selling Shareholders" in the Prospectus is a member of the NASD that is
participating in the distribution of the Shares or a "person associated with a
member," as that term is defined in the NASD's Review of Corporate Financing
Interpretation.
(ee) Any certificate signed by any officer of the Company and delivered to
you or to counsel for the Underwriters shall be deemed a representation and
warranty to each Underwriter as to the matters covered thereby.
(ff) The Company has not distributed and will not distribute prior to the
later of (i) the Closing Date or the Option Closing Date, as the case may be, or
(ii) completion of the distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any preliminary
prospectuses, the Prospectus, the Registration Statement and other materials, if
any, permitted by the Act.
12
4. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS.
----------------------------------------------------------
Each of the Selling Shareholders, severally and not jointly, represents,
warrants and covenants to each Underwriter that:
(a) Such Selling Shareholder at the Closing Date will have good and
valid title to the Shares set forth in Schedule II to be sold by such Selling
-----------
Shareholder, free and clear of any liens, encumbrances, equities and claims
(other than as imposed by the Act or this Agreement), and full right, power and
authority to effect the sale and delivery of such Shares; and upon the delivery
of and payment for the Shares to be sold by such Selling Shareholder pursuant to
this Agreement, good and valid title thereto, free and clear of any liens,
encumbrances, equities and claims, will be transferred to the Underwriters.
(b) Such Selling Shareholder has duly executed and delivered the
Custody Agreement and Power of Attorney (the "Custody Agreement") in the form
previously delivered to the Underwriters, appointing and ,
and each of them, as such Selling Shareholder's attorney-in-fact (the "Attorney-
in-Fact") and , as custodian (the "Custodian"). The Attorney-in-Fact is
authorized to execute, deliver and perform this Agreement on behalf of such
Selling Shareholder, to deliver the Shares to be sold by such Selling
Shareholder hereunder, to accept payment therefor and otherwise to act on behalf
of such Selling Shareholder in connection with this Agreement. Certificates, in
suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank, representing the Shares to be
sold by such Selling Shareholder hereunder have been deposited with the
Custodian pursuant to the Custody Agreement for the purpose of delivery pursuant
to this Agreement. Such Selling Shareholder agrees that the shares of Common
Stock represented by the certificates on deposit with the Custodian are subject
to the interests of the Company, the Underwriters and the other Selling
Shareholders hereunder, that the arrangements made for such custody and the
appointment of the Attorney-in-Fact are to that extent irrevocable, and that the
obligations of such Selling Shareholder hereunder shall not be terminated except
as provided in this Agreement and the Custody Agreement. If such Selling
Shareholder should die, become disabled or be declared incompetent, dissolve or
become insolvent, or if any other event should occur before the delivery of the
Shares of such Selling Shareholder hereunder, the certificates for such Shares
deposited with the Custodian shall be delivered by the Custodian in accordance
with the terms and conditions of this Agreement as if such death, disability,
incompetency, dissolution, insolvency or other event had not occurred,
regardless of whether or not the Custodian or the Attorney-in-Fact shall have
received notice thereof.
(c) Such Selling Shareholder, acting through its duly authorized
Attorney-in-Fact, has duly executed and delivered this Agreement; this Agreement
constitutes a legal, valid and binding obligation of such Selling Shareholder;
all authorizations and consents necessary for the execution and delivery of this
Agreement and the Custody Agreement on behalf of such Selling Shareholder and
for the sale and delivery of the Shares to be sold by such Selling Shareholder
hereunder have been given, except as may be required by the Act or state
securities laws or the NASD; and such
13
Selling Shareholder has the legal capacity and full right, power and authority
to execute this Agreement and the Custody Agreement.
(d) The performance of this Agreement and the Custody Agreement and the
consummation of the transactions contemplated hereby and thereby by each of the
Selling Shareholders will not result in a material breach or violation of, or
material conflict with, any of the terms or provisions of, or constitute a
material default by such Selling Shareholder under, any indenture, mortgage,
deed of trust (constructive or other), loan agreement, lease, franchise, license
or other agreement or instrument to which such Selling Shareholder or any of its
properties is bound, any statute, or any judgment, decree, order, rule or
regulation or any court or governmental agency or body applicable to such
Selling Shareholder or any of its properties.
(e) Such Selling Shareholder has not distributed and will not distribute
any prospectus or other offering material in connection with the offer and sale
of the Shares other than any preliminary prospectus prepared and filed by the
Company with the Commission or the Prospectus or other material permitted by the
Act.
(f) The representations and warranties of the Company contained in Section
3 of this Agreement are true and correct in all material respects; such Selling
Shareholder has reviewed and is familiar with the Registration Statement as
originally filed with the Commission and the preliminary prospectus contained
therein. The preliminary prospectus does not include an untrue statement of a
material fact, or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; other than as disclosed to the Underwriters, such Selling
Shareholder is not prompted to sell the Shares to be sold by such Selling
Shareholder by any material, non-public information concerning the Company that
is not fully and fairly disclosed in the preliminary prospectus or the
Prospectus.
(g) To the extent that any statements or omissions made in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity with
written information furnished to the Company by such Selling Shareholder
expressly for use therein, such Registration Statement, preliminary prospectus
and Prospectus and any amendments or supplements thereto did not and will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(h) No approval, consent, order, authorization, designation, declaration
or filing by or with any regulatory body, administrative or other governmental
body is necessary in connection with the execution and delivery of this
Agreement by such Selling Shareholder, and the consummation by it of the
transactions herein contemplated (other than as required by the Act, state
securities laws and the NASD).
(i) Any certificates signed by or on behalf of such Selling Shareholder as
such and delivered to the Representatives or to counsel for the Representatives
shall be deemed a
14
representation and warranty by such Selling Shareholder to each Underwriter as
to the matters covered thereby.
(j) In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated such Selling
Shareholder agrees to deliver to you prior to or at the Closing Date a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
(k) Such Selling Shareholder has not taken and will not take, directly or
indirectly, any action intended to constitute or which has constituted, or which
might reasonably be expected to cause or result in, stabilization or
manipulation of the price of the Common Stock.
5. COVENANTS OF THE COMPANY.
------------------------
The Company covenants and agrees with each of the Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or thereafter
during such period as the Prospectus is required by law to be delivered in
connection with sales of the Shares by an underwriter or dealer, file any
amendment or supplement to the Registration Statement or the Prospectus, unless
a copy thereof shall first have been submitted to you within a reasonable period
of time prior to the filing thereof and you shall not have objected thereto in
good faith.
(b) The Company will use its reasonable best efforts to cause the
Registration Statement and any amendment thereto, if not effective at the time
and date that this Agreement is executed by the parties hereto, to become
effective as promptly as possible and will notify you promptly and confirm such
advice in writing: (i) when the Registration Statement has become effective and
when any post-effective amendment thereto becomes effective; (ii) of any request
by the Commission for amendments or supplements to the Registration Statement or
the Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or the threat
thereof; (iv) of the happening of any event during the period mentioned in the
second sentence of Section 5(e) that in the judgment of the Company makes any
statement made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading; and (v) of receipt by the
Company or any representatives or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any preliminary prospectus or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. If the Company has
omitted any information from the Registration Statement pursuant to Rule 430A of
the Rules and
15
Regulations, the Company will use its best efforts to comply with the provisions
of and make all requisite filings with the Commission pursuant to said Rule 430A
and to notify the Representatives promptly of all such filings. If the Company
files a term sheet pursuant to Rule 434 of the Rules and Regulations, the
Company will provide evidence satisfactory to you that the Prospectus and term
sheet meeting the requirements of Rule 434(b) or (c), as applicable, of the
Rules and Regulations, have been filed, within the time period prescribed, with
the Commission pursuant to subparagraph (7) of Rule 424(b) of the Rules and
Regulations; if for any reason the filing of the final form of Prospectus is
required under Rule 424(b)(3) of the Rules and Regulations, the Company will
provide evidence satisfactory to you that the Prospectus contains such
information and has been filed with the Commission within the time period
prescribed.
(c) The Company will furnish to you at or before the Closing Date, without
charge, four signed copies of the Registration Statement and of any post-
effective amendment thereto, including financial statements and schedules, and
all exhibits thereto, and will furnish you with such number of copies of the
Registration Statement, without exhibits, and all amendments thereto as you may
reasonably request.
(d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement. The Company will, from time to time,
after the effective date of the Registration Statement file with the Commission
such reports as are required by the Act, the Exchange Act, the rules and
regulations thereunder (the "Exchange Act Rules and Regulations") and the Rules
and Regulations, and shall also file with state securities commissions in states
where the Shares have been sold by you (as you shall have advised us in writing)
such reports as are required to be filed by the securities acts and the
regulations of those states.
(e) On the Effective Date, and thereafter from time to time until
expiration of the period mentioned in the second sentence of this Section 5(e),
the Company will deliver to each of you, without charge, as many copies of the
Prospectus or any amendment or supplement thereto as you may reasonably request.
The Company consents to the use of the Prospectus or any amendment or supplement
thereto by you and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for any period of time
thereafter during which the Prospectus is required by law to be delivered in
connection therewith. If during such period of time any event shall occur which
in the judgment of the Company or your counsel should be set forth in the
Prospectus in order to make any statement therein, in light of the circumstances
under which it was made, not misleading, or if it is necessary to supplement or
amend the Prospectus to comply with law, the Company will forthwith prepare and
duly file with the Commission an appropriate supplement or amendment thereto,
and will deliver to each of you, without charge, such number of copies thereof
as you may reasonably request.
(f) Prior to any public offering of the Shares by you, the Company will
cooperate with you and your counsel in connection with the exemption of the
Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions as you may request; provided, that in no event shall the Company
--------
be obligated to qualify to do business in any jurisdiction where it is not
16
now so qualified or to take any action which would subject it to general service
of process in any jurisdiction where it is not now so subject. The Company will,
from time to time, file such statements, reports and other documents as are or
may be required to continue such exemptions in effect for so long a period as
the Underwriters may reasonably request.
(g) During a period of five years after the date hereof, the Company will
furnish to its shareholders as soon as practicable after the end of each
respective period annual reports (including financial statements audited by
independent certified public accountants) and unaudited quarterly reports of
operations for each of the first three quarters of the fiscal year, and will
furnish to you and the other several Underwriters hereunder, upon request (i)
concurrently with furnishing such reports to its shareholders, statements of
operations of the Company for each of the first three quarters in the form
furnished to the Company's shareholders, (ii) concurrently with furnishing to
its shareholders, a balance sheet of the Company as of the end of such fiscal
year, together with statements of operations, shareholders' equity and cash
flows of the Company for such fiscal year, accompanied by a copy of the
certificate or report thereon of independent certified public accountants, (iii)
as soon as they are available, copies of all reports (financial or other) mailed
to shareholders, (iv) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, any securities
exchange or the NASD, (v) every material press release and every material news
item or article in respect of the Company or its affairs which was generally
released to shareholders or prepared by the Company and (vi) any additional
information of a public nature concerning the Company, or the Subsidiaries, or
its business which you may reasonably request.
(h) The Company will make generally available to holders of its securities
as soon as may be practicable but in no event later than the last day of the
15th full calendar month following the calendar quarter in which the Effective
Date falls, an earnings statement (which need not be audited but shall be in
reasonable detail) for a period of 12 months ended commencing after the
Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay, or reimburse
if paid by the Underwriters, all costs and expenses incident to the performance
of the obligations of the Company under this Agreement, including but not
limited to costs and expenses of or relating to: (i) the preparation, printing,
and filing of the Registration Statement and exhibits to it, each preliminary
prospectus; the Prospectus and any amendment or supplement to the Registration
Statement or the Prospectus; (ii) the preparation and delivery of certificates
representing the Shares; (iii) the printing of this Agreement and other
underwriting documents, including Underwriter's Questionnaires, Underwriter's
Powers of Attorney, Blue Sky Memorandum, Master Agreement Among Underwriters and
Master Selected Dealer Agreements; (iv) furnishing (including costs of shipping
and mailing) such copies of the Registration Statement, the Prospectus and any
preliminary prospectus, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom
17
Shares may be sold; (v) the quotation of the Shares on the Nasdaq National
Market; (vi) any filings required to be made by you with the NASD (but not the
fees and disbursements of your counsel in connection therewith); (vii) the
exemption of the Shares for offer and sale under the securities or Blue Sky laws
of such jurisdictions designated pursuant to Section 5(f), including the fees,
disbursements and other charges of your counsel in connection therewith, and the
preparation and printing of preliminary, supplemental and final Blue Sky
memoranda (subject to a maximum fee of $2,000 assuming no unusual
circumstances); and (viii) the transfer agent for the Shares.
(j) If this Agreement shall be terminated by the Company or if for any
reason the Company shall be unable to perform its obligations hereunder, the
Company will reimburse you for all out-of-pocket expenses (including the fees,
disbursements and other charges of your counsel) reasonably incurred by you in
connection herewith. If this Agreement shall be terminated by the Underwriters
based upon a matter within the control of the Company or any fault of the
Company, the Company shall reimburse you for any out-of-pocket expenses
(including the fees, disbursements and other charges of your counsel).
(k) The Company will not at any time, directly or indirectly, take any
action designed, or which might reasonably be expected, to cause or result in,
or which will constitute, stabilization of the price of the shares of Common
Stock to facilitate the sale or resale of any of the Shares. The Company will
not make bids for or purchases of or induce bids for or purchases of, directly
or indirectly, any shares of Common Stock or securities convertible into Common
Stock of the Company until the distribution of all shares of Common Stock being
sold in the public offering has been completed.
(l) The Company will apply the net proceeds from the offering and sale of
the Shares to be sold by the Company in the manner set forth in the Prospectus
under "Use of Proceeds," which description complies in all respects with the
requirements of Item 504 of Regulation S-K.
(m) During the period of 180 days commencing at the Closing Date, the
Company will not, without your prior written consent, grant options to purchase
shares of Common Stock, except in accordance with the provisions of the
Company's stock option plans as previously approved by the Company's
shareholders and except at prices equal to or greater than "fair market value,"
as defined in the Company's stock option plans as in effect on the date hereof.
(n) Except pursuant to this Agreement or with the prior written consent of
X.X. Xxxxxxxx & Co., the Company will not, and the Company has provided
agreements executed by each of the Company's officers and directors, each
Selling Shareholder and certain other shareholders of the Company providing that
none of them will, for a period of 180 days from the date of the Prospectus, (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (including, without
18
limitation, shares of Common Stock or securities convertible into or exercisable
or exchangeable for Common Stock which may be deemed to be beneficially owned by
the undersigned in accordance with the Rules and Regulations and the Exchange
Act Rules and Regulations) or (ii) enter into any swap or other arrangement that
transfers all or a portion of the economic consequences associated with the
ownership of any Common Stock (regardless of whether any of the transactions
described in clause (i) or (ii) is to be settled by the delivery of Common
Stock, or such other securities, in cash or otherwise); provided, however, that
-------- -------
the exercise of stock options or other purchases of Common Stock under stock
option plans or other incentive compensation arrangements for employees or
directors as previously approved by the Company's Board of Directors and as in
effect on the date hereof shall not be prohibited.
(o) The Company will maintain and keep accurate books and records
reflecting its assets and maintain internal accounting controls which provide
reasonable assurance that: (i) transactions are executed in accordance with
management's authorization; (ii) transactions are recorded as necessary to
permit the preparation of the Company's financial statements and to maintain
accountability for the assets of the Company; (iii) access to the assets of the
Company is permitted only in accordance with management's authorization; and
(iv) the recorded accounts of the assets of the Company are compared with
existing assets at reasonable intervals.
(p) If at any time during the 90-day period after the Registration
Statement is declared effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which, in your opinion, the
market price for the Shares has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising it as to the effect set forth above, prepare, consult
with you concerning the necessity and the substance of and disseminate a press
release or other public statement reasonably satisfactory to you responding to
or commenting on such rumor, publication or event.
(q) The Company will supply you with copies of all correspondence to and
from, and all documents issued to and by, the Commission in connection with the
registration of the Shares under the Act.
(r) Prior to the Closing Date (and, if applicable, the Option Closing
Date), the Company will furnish to you, as soon as they have been prepared,
copies of any unaudited interim financial statements of the Company for any
periods subsequent to the periods covered by the financial statements appearing
in the Registration Statement and the Prospectus.
(s) Prior to the Closing Date (and, if applicable, the Option Closing
Date), the Company will not issue any press releases or other communications
directly or indirectly and will hold no press conferences with respect to the
Company, the business, properties, assets, liabilities, financial condition or
results of operations of the Company, or the offering of the Shares, without
your prior consent which shall not be unreasonably withheld.
19
(t) The Company will use its best efforts to maintain the quotation of the
Shares on the Nasdaq National Market.
(u) The Company will maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar (which may be the same
entity as the transfer agent) for its Common Stock.
(v) During a period of 120 days from the effective date of the
Registration Statement, the Company will not file a registration statement
registering shares under any stock option plan or other employee benefit plan.
(w) On or prior to the Closing Date, the Company will take all steps
necessary to complete the conversion of the Series A Convertible Preferred Stock
and Series C Convertible Preferred Stock into Common Stock, and such conversion
shall have been consummated.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
-------------------------------------------------
The respective obligations of the Underwriters to purchase and pay for the
Shares shall be subject to the following conditions:
(a) Notification that the Registration Statement has become effective
shall be received by you not later than 5:30 p.m., Atlanta, Georgia time, on the
date of this Agreement or at such later date and time as shall be consented to
in writing by you and all filings required by Rule 424, Rule 430A, Rule 434 and
Rule 462(b) of the Rules and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or, to the knowledge of the Company, threatened by the Commission, (ii)
no order suspending the effectiveness of the Registration Statement or the
exemption of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect, and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and to the satisfaction of the Representatives, (iv) after
the date hereof no amendment or supplement to the Registration Statement or the
Prospectus shall have been filed unless a copy thereof was first submitted to
you and you did not object thereto in good faith, (v) the NASD, upon review of
the terms of the public offering of the Shares, shall not have objected to such
offering, such terms or the Underwriters' participation in the same, and (vi)
and you shall have received certificates, dated the Closing Date and the Option
Closing Date and signed by the Chief Executive Officer and the Chief Financial
Officer of the Company (who may, as to proceedings threatened, rely upon the
best of their information and belief), to the effect of clauses (i), (ii) and
(iii).
20
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change, or any development involving a prospective material
adverse change, in the general affairs, business, business prospects,
properties, management, key personnel, condition (financial or otherwise) or
results of operations of the Company, whether or not arising from transactions
in the ordinary course of business, in each case other than as set forth in the
Registration Statement and the Prospectus (or, in the case of a prospective
change, other than as contemplated by the Registration Statement and the
Prospectus) and (ii) the Company shall not have sustained any material loss or
interference with its business or properties from fire, explosion, flood,
hurricane or other casualty or calamity, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other governmental action,
order or decree, which is not set forth in the Registration Statement and the
Prospectus, if in your reasonable judgment any such development makes it
inadvisable to consummate the sale and delivery of the Shares by you at the
public offering price. Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
officers or directors in their capacities as such, before or by any federal,
state or local court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, in which litigation or proceeding
an unfavorable ruling, decision or finding would materially and adversely affect
the business, properties, business prospects, condition (financial or otherwise)
or results of operations of the Company.
(d) All corporate proceedings and other legal matters in connection with
this Agreement, the Registration Statement and the Prospectus, and the
registration, authorization, issue, sale and delivery of the Shares, shall have
been reasonably satisfactory to counsel to the Underwriters, and such counsel
shall have been furnished with such papers and information as they may
reasonably have requested to enable them to pass upon the matters referred to in
this Section 6(d).
(e) Each of the representations and warranties of the Company contained
herein shall be true, accurate and correct in all material respects at the
Closing Date and, with respect to the Option Shares, at the Option Closing Date,
as if made at the Closing Date and, with respect to the Option Shares, at the
Option Closing Date, and all covenants and agreements herein contained to be
performed on the part of the Company and all conditions herein contained to be
fulfilled or complied with by the Company at or prior to the Closing Date and,
with respect to the Option Shares, at or prior to the Option Closing Date, shall
have been duly performed, fulfilled or complied with.
(f) The Underwriters shall have received an opinion, dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to your counsel, from Xxxxxx & Bird LLP,
counsel to the Company, to the effect that:
(i) The Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Georgia. The
Company has the corporate
21
power and corporate authority to own its properties and conduct its
business as described in the Prospectus. The Company is qualified to do
business as a foreign corporation in good standing in all other
jurisdictions, except where the failure to so qualify would not have a
material adverse effect upon the Company.
(ii) Each of the Company's Subsidiaries is a corporation or limited
liability company duly organized and validly existing and in good standing
under the laws of the state of its incorporation or organization, with full
corporate power and authority to own its properties and conduct its
business as now conducted. The outstanding stock of each of the
Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable. Other than as disclosed in any preliminary prospectus and
the Prospectus, all of the outstanding stock and membership interests of
each of the Subsidiaries is owned by the Company, free and clear of all
possessory (and, to the knowledge of such counsel, other) liens,
encumbrances, pledges, equities or claims of any kind. Other than as
disclosed in any preliminary prospectus and the Prospectus, to the
knowledge of such counsel, no options or warrants or other rights to
purchase from the Company or any Subsidiary, agreements or other
obligations to issue or other rights to convert any obligations into any
shares of capital stock or of ownership interests in any of the Company's
Subsidiaries are outstanding.
(iii) The Company and each of its Subsidiaries is duly qualified or
authorized to do business as a foreign corporation in good standing in all
jurisdictions where the nature of its business or character of property
owned or leased by it require it to be so qualified or authorized to do
business, except where the failure to be so qualified or authorized to do
business would not have a material adverse effect.
(iv) The Shares delivered on such Closing Date have been duly
authorized, validly issued and are fully paid and nonassessable and conform
to the description thereof contained under the caption "Description of
Capital Stock" in the Prospectus.
(v) The outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and
conform to the description thereof contained under the caption
"Capitalization" in the Prospectus, and there are no preemptive rights or
other rights to subscribe for or to purchase, or any restriction upon the
transfer of, the Shares or any other shares of Common Stock pursuant to,
the Restated Articles, Bylaws or, to the knowledge of such counsel, any
agreement (other than this Agreement) or instrument to which the Company or
any Selling Shareholder is a party or by which it may be bound. All offers
and sales of the Company's securities during the past three years were at
all relevant times duly registered or exempt from the registration
requirements of the Act and were duly registered or the subject of an
exemption from the registration requirements of applicable state securities
or Blue Sky laws.
(vi) Other than the Registration Rights Agreements, there are no
contracts,
22
agreements or understandings known to such counsel between the Company and
any person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under the Act. All
registration rights under the Registration Rights Agreements have been
waived with respect to the filing of the Registration Statement and the
consummation of the transactions contemplated by this Agreement.
(vii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court or, to the knowledge of
such counsel, any third party, is required for the performance of this
Agreement by the Company, the issuance or sale of the Shares or the
consummation of the transactions contemplated hereby, except such as have
been obtained and made under the Act, the Exchange Act and such as may be
required under state securities or Blue Sky laws.
(viii) The filing of the Registration Statement has been duly
authorized by the Board of Directors of the Company. The execution,
delivery and performance of this Agreement and the consummation of the
transactions herein contemplated, including the issuance and sale of the
Shares and compliance with the provisions thereof, will not result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, (A) any statute, rule or regulation or, to the knowledge of
such counsel, order of any governmental agency or body or any court having
jurisdiction over the Company or any of its properties, (B) any material
obligation, agreement, covenant or condition contained in any agreement or
instrument to the knowledge of such counsel to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the properties of the Company or
any of its Subsidiaries is subject, or (C) the Restated Articles or the
Bylaws of the Company or the organizational documents of any of the
Subsidiaries, and the Company has full power and authority to authorize,
issue and sell the Company Shares and the Option Shares as contemplated by
this Agreement.
(ix) The Registration Statement and all post-effective amendments
thereto was declared effective under the Act as of the date and time
specified in such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b) specified in such
opinion on the date specified therein or was included in the Registration
Statement (as the case may be), and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the Act;
the Registration Statement and the Prospectus, and each amendment or
supplement thereto, as of their respective effective or issue dates,
complied as to form in all material respects with the requirements of the
Act and the Rules
23
and Regulations (except that such counsel need express no opinion as to
financial statements, schedules and other financial or statistical
information included therein); the descriptions in the Registration
Statement and Prospectus of the Restated Articles and Bylaws of the Company
and of statutes, legal and governmental proceedings and contracts and other
documents are accurate in all material respects and fairly present the
information required to be shown; and such counsel does not know of any
statutes or regulations or any pending or threatened legal or governmental
proceedings, required to be described in the Prospectus which are not
described as required nor of any contracts or documents of a character
required to be described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such counsel need
express no opinion as to the financial statements, schedules or other
financial or statistical data contained in the Registration Statement or
the Prospectus or as to the section of the Prospectus entitled
"Underwriting." The Shares have been approved for listing on the Nasdaq
Stock Market's National Market upon notice of issuance.
(x) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding obligation of
the Company enforceable in accordance with its terms.
(xi) The statements made in the Registration Statement under the
captions "Dividend Policy" and "Capitalization," to the extent that they
constitute summaries of documents referred to therein or matters of law or
legal conclusions, have been reviewed by such counsel and are accurate
summaries and fairly present the information disclosed therein.
(xii) The Company is not, and will not be as a result of the
consummation of the transactions contemplated by this Agreement, an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
In addition, such counsel shall state that such counsel has participated in
conferences with officials and other representatives of the Company, the
Representatives, counsel for the Underwriters and the Accountants, at which such
conferences the contents of the Registration Statement and Prospectus and
related matters were discussed, and although they have not verified the accuracy
or completeness of the statements contained in the Registration Statement or the
Prospectus, nothing has come to the attention of such counsel which leads them
to believe that, at the time the Registration Statement became effective and at
all times subsequent thereto up to and on the Closing Date and on the Option
Closing Date, the Registration Statement and any amendment or supplement thereto
(other than the financial statements including supporting schedules and other
financial and statistical information derived therefrom, as to which such
counsel need express no comment) contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not
24
misleading, or at the Closing Date or the Option Closing Date, as the case may
be, the Registration Statement, the Prospectus and any amendment or supplement
thereto (except as aforesaid) contained any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions of law not
involving the laws of the United States or the State of Georgia upon opinions of
local counsel, and as to questions of fact upon representations or certificates
of officers of the Company or the Selling Shareholders or officers of Selling
Shareholders (when the Selling Shareholder is not a natural person), and of
government officials, in which case their opinion is to state that they are so
relying and that they have no knowledge of any material misstatement or
inaccuracy in any such opinion.
(g) The Underwriters shall have received an opinion, dated the Closing
Date satisfactory in form and substance to your counsel, from Xxxxxx & Bird LLP,
counsel to the Selling Shareholders, to the effect that:
(i) This Agreement and the Custody Agreement have been duly executed
and delivered by or on behalf of each of the Selling Shareholders and
constitute valid and binding agreements of such Selling Shareholders in
accordance with their terms.
(ii) To the knowledge of such counsel, the sale of the Shares to be
sold by each Selling Shareholder hereunder and the compliance by such
Selling Shareholder with all of the provisions of this Agreement and the
Custody Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a material breach
or violation of any terms or provisions of, or constitute a default under
any material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which such Selling
Shareholder is a party or by which such Selling Shareholder is bound or to
which any of the property or assets of such Selling Shareholder is subject,
or any statute, order, rule or regulation of any court or governmental
agency or body known to such counsel to be applicable to such Selling
Shareholder or the property of such Selling Shareholder.
(iii) To the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental agency or body is
required for the consummation of the transactions contemplated by this
Agreement in connection with the Shares to be sold by each Selling
Shareholder hereunder, except such as have been obtained under the Act and
such as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of such Shares by the
Underwriters, as to which such counsel need express no opinion.
25
(iv) Assuming that the Underwriters will take delivery of the Shares
for value in good faith and without notice of any adverse claim and that
the Underwriters are not parties themselves to any fraud or illegality
affecting the Shares, and by delivery of a certificate or certificates
therefor, the Selling Shareholders will transfer to the Underwriters good
and valid title to such shares, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any kind.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent proper, on certificates of the Selling Shareholders and the
representations and warranties contained in the Custody Agreement executed by
such Selling Shareholder. Such counsel also may rely as to matters of fact, to
the extent proper, on certificates of responsible officers of the Company and
public officials.
(h) You shall have received on the Closing Date and, with respect to the
Option Shares, the Option Closing Date, an opinion, dated the Closing Date and
the Option Closing Date, respectively, of , special FCC counsel
for the Company, in the form attached hereto as Exhibit A.
(i) You shall have received an opinion, dated the Closing Date and, if
applicable, the Option Closing Date, from Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx,
L.L.P., as your counsel, with respect to the Registration Statement, the
Prospectus and this Agreement, which opinion shall be satisfactory in all
respects to you, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(j) You shall have received at or prior to the Closing Date from Xxxxxx
Xxxxxxx Xxxxx & Scarborough, L.L.P. a memorandum or memoranda, in form and
substance satisfactory to you, with respect to the exemption for offering and
sale by the Underwriters of the Shares under state securities or Blue Sky laws
of such jurisdictions as the Underwriters may have designated to the Company.
(k) The Representatives shall have received from the Accountants a letter
dated the date hereof, and at the Closing Date a second letter dated the Closing
Date (and, if applicable, the Option Closing Date), in form and substance
satisfactory to the Representatives stating that they are independent public
accountants with respect to the Company within the meaning of the Act and the
applicable Rules and Regulations, and the answer to Item 509 of Regulation S-K
set forth in the Registration Statement is correct insofar as it relates to
them, and stating that:
(i) In their opinion, the financial statements and schedules
examined by them and included in the Registration Statement or Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations and are presented in
accordance with generally accepted accounting principles; and they have
made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the interim financial
statements,
26
selected financial and operating data, and/or condensed financial
statements derived from audited financial statements of the Company.
(ii) The financial information included in the Preliminary
Prospectus and the Prospectus under the captions "Prospectus Summary,"
"Summary Consolidated Financial and Operating Data" and "Selected
Consolidated Financial and Operating Data" for each of the fiscal years
ended July 31, 1993, 1994, 1995, 1996 and 1997, and the six months ended
January 31, 1998 agrees with the corresponding amounts in the audited
financial statements included in the Prospectus or previously reported on
by them.
(iii) On the basis of a reading of the latest available interim
consolidated financial statements (unaudited) of the Company and its
Subsidiaries, a reading of the minute books of the Company and its
Subsidiaries, inquiries of officials of the Company responsible for
financial and accounting matters and other specified procedures, all of
which have been agreed to by the Representatives, nothing came to their
attention that caused them to believe that:
a. the unaudited financial statements included in the
Registration Statement do not comply as to form in all material
respects with the accounting requirements of the federal securities
laws and the related published rules and regulations thereunder or are
not in conformity with generally accepted accounting principles
applied on a basis consistent with the basis for the audited financial
statements contained in the Registration Statement;
b. any other unaudited financial statement data included in the
Prospectus do not agree with the corresponding items in the unaudited
financial statements from which data was derived and any such
unaudited data were not determined on a basis consistent with the
basis for the corresponding amounts in the audited financial
statements included in the Prospectus;
c. at a specified date not more than five days prior to the
date of delivery of such respective letter, there was any change in
the capital stock, decline in shareholders' equity or increase in
long-term debt of the Company, or any decreases in working capital,
net current assets or net assets or other items specified by the
Underwriters, in each case as compared with amounts shown in the
latest balance sheets included in the Prospectus, except in each case
for changes, decreases or increases which the Prospectus discloses
have occurred or may occur or which are described in such letters; and
d. for the period from the closing date of the latest
statements of operations included in the Prospectus to a specified
date not more than five days prior to the date of delivery of such
respective letter, there were any decreases in net revenues or net
income of the Company, or other items appearing on the face
27
of the statement of operations specified by the Representatives, or
any increases in any items appearing on the face of the statement of
operations specified by the Representatives, in each case as compared
with the corresponding period of the preceding year, except in each
case for decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter.
(iv) They have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information specified by you which are derived from the general
accounting records of the Company, which appear in the Prospectus and have
compared such amounts, percentages and financial information with the
accounting records of the Company and have found them to be in agreement.
In the event that the letters to be delivered referred to above set forth
any such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that the Underwriters shall have reasonably
determined, after discussions with officers of the Company responsible for
financial and accounting matters and with the Accountants, that such changes,
decreases or increases as are set forth in such letters do not reflect a
material adverse change in the shareholders' equity or long-term debt of the
Company as compared with the amounts shown in the latest balance sheet of the
Company included in the Prospectus, or a material adverse change in total net
revenues or net income of the Company, in each case as compared with the
corresponding period of the prior year.
(l) At the Closing Date and, as to the Option Shares, the Option Closing
Date, there shall be furnished to you a certificate, dated the date of its
delivery, signed by each of the Chief Executive Officer and Chief Financial
Officer of the Company, in form and substance satisfactory to you, to the effect
that:
(i) Each of the representations and warranties of the Company
contained in Section 3 of this Agreement were, when originally made, and
are, at the time such certificate is delivered, true and correct in all
material respects;
(ii) Each of the covenants required herein to be performed by the
Company on or prior to the delivery of such certificate has been duly,
timely and fully performed, and each condition herein required to be
complied with by the Company on or prior to the date of such certificate
has been duly, timely and fully complied with by the Company.
(m) On or prior to the Closing Date, you shall have received the executed
agreements referred to in Section 5(n).
(n) The Shares shall be exempt for offer and sale in such states as you
may reasonably request, each such exemption shall be in effect and not subject
to any stop order or other proceeding on the Closing Date or the Option Closing
Date.
28
(o) The Shares shall have been duly authorized for quotation and shall
have been approved for listing on the Nasdaq National Market upon official
notice of issuance.
(p) No Underwriter shall have advised the Company that the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or any
supplement thereto, contains an untrue statement of fact which, in your
reasonable judgment, is material, or omits to state a fact which, in your
reasonable judgment, is material and is required to be stated therein or
necessary to make the statements therein not misleading and the Company shall
not have cured such untrue statement of fact or stated a statement of fact
required to be stated therein.
(q) The Company shall have furnished to you such certificates, in addition
to those specifically mentioned herein, as you may have reasonably requested as
to the accuracy and completeness at the Closing Date and the Option Closing Date
of any statement in the Registration Statement or the Prospectus, as to the
accuracy at the Closing Date and the Option Closing Date of the representations
and warranties of the Company herein, as to the performance by the Company of
its obligations hereunder, or as to the fulfillment of the conditions concurrent
and precedent to your obligations hereunder.
(r) The Selling Shareholders or the Attorney-in-Fact shall deliver to the
Underwriters a certificate dated the Closing Date, if any, and executed by each
Selling Shareholder or the Attorney-in-Fact to the effect that the
representations and warranties of the Selling Shareholders shall be true and
correct in all material respects as of the Closing Date.
All such opinions, certificates, letters and documents will be in
compliance with the provisions of this Agreement only if they are reasonably
satisfactory to you and counsel for the Underwriters. The Company will furnish
you with such conformed copies of such opinions, certificates, letters and
documents as you may request.
If any of the conditions specified in this Section 6 shall not have been
satisfied at or prior to the Closing Date (and, if applicable, the Option
Closing Date) or waived by you in writing, this Agreement may be terminated by
you pursuant to Section 8 hereof.
7. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
(a) The Company will indemnify and hold harmless each Underwriter
(including, without limitation, in its capacity as an Underwriter or as a
"qualified independent underwriter" within the meaning of Rule 2700 of the
NASD), the directors, officers, employees and agents of each Underwriter and
each person, if any, who controls each Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, liabilities, expenses and damages (including any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become subject under the
Act, the Exchange Act or other federal or state statutory law or regulation, at
29
common law or otherwise, insofar as such losses, claims, liabilities, expenses
or damages arise out of or are based in whole or in part upon (i) any inaccuracy
in the representations and warranties of the Company contained herein, (ii) any
failure of the Company to perform its obligations hereunder or under law or
(iii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus or in any documents filed under the Exchange Act, or the omission or
alleged omission to state in such document a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
--------
however, that the foregoing indemnity agreement with respect to any preliminary
-------
prospectus or the Prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or liabilities
purchased Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage or liability; and further
-------
provided, that the Company will not be liable to the extent that such loss,
--------
claim, liability, expense or damage arises from the sale of the Shares in the
public offering to any person by an Underwriter and is based on an untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to an Underwriter furnished in
writing to the Company by an Underwriter expressly for inclusion in the
Registration Statement, any preliminary prospectus or the Prospectus. The
Company acknowledges that the information in the last paragraph on the cover
page, the paragraphs relating to stabilization on the inside front cover and the
statements set forth under the heading "Underwriting" in any preliminary
prospectus and the Prospectus constitute the only information relating to any
Underwriter furnished in writing to the Company by you expressly for inclusion
in the Registration Statement, any preliminary prospectus or the Prospectus.
This indemnity agreement will be in addition to any liability that the Company
might otherwise have.
(b) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter (including, without limitation, in
its capacity as an Underwriter or as a "qualified independent underwriter"
within the meaning of Rule 2700 of the NASD), and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, or any blue sky application or filing, and the
Company, its directors, its officers who sign the Registration Statement and
each person, if any who controls the Company within the meaning of either such
Section, provided, however, that the indemnification obligation of each Selling
Shareholder shall be limited to the net proceeds received by such Selling
Shareholder with respect to the Shares sold, from and against any and all
losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendment or supplement thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material
30
fact required to be stated therein or necessary to make the statements therein
not misleading, but only with reference to information relating to such Selling
Shareholder furnished in writing by or on behalf of such Selling Shareholder
expressly for use in the Registration Statement or the Prospectus or in any
preliminary prospectus; provided, however, that the foregoing indemnity
-------- -------
agreement shall be effective only if Selling Shareholder Shares are sold
pursuant to this Agreement; further provided, that the foregoing indemnity
----------------
agreement with respect to any preliminary prospectus or the Prospectus shall not
inure to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage or liability; and further provided, that the Selling
------- --------
Shareholders will not be liable to the extent that such loss, claim, liability,
expense or damage arises from the sale of the Shares in the public offering to
any person by an Underwriter and is based on an untrue statement or omission or
alleged untrue statement or omission made in reliance on and in conformity with
information relating to an Underwriter furnished in writing to the Company by an
Underwriter expressly for inclusion in the Registration Statement, any
preliminary prospectus or the Prospectus. The Selling Shareholders acknowledge
that the information in the last paragraph on the cover page, the paragraphs
relating to stabilization on the inside front cover and the statements set forth
under the heading "Underwriting" in any preliminary prospectus and the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Company by you expressly for inclusion in the Registration
Statement, any preliminary prospectus or the Prospectus. This indemnity
agreement will be in addition to any liability that each Selling Shareholder
might otherwise have.
(c) Each Underwriter will indemnify and hold harmless the Company, each
Selling Shareholder, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each
director of the Company and each officer of the Company who signs the
Registration Statement to the same extent as the foregoing indemnity from the
Company to the Underwriters, but only insofar as losses, claims, liabilities,
expenses or damages arise out of or are based on any untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to you furnished in writing to the Company
by you expressly for use in the Registration Statement, any preliminary
prospectus or the Prospectus; provided, however, that such indemnity shall not
-------- -------
be applicable to any Selling Shareholder if no Selling Shareholder Shares are
sold pursuant to this Agreement. The Company acknowledges that the information
set forth in the last paragraph on the cover page, the paragraphs relating to
stabilization on the inside front cover and the statements set forth under the
heading "Underwriting" in any preliminary prospectus and the Prospectus
constitute the only information relating to the Underwriters furnished in
writing to the Company by the Underwriters expressly for inclusion in the
Registration Statement, any preliminary prospectus or the Prospectus. This
indemnity will be in addition to any liability that the Underwriters might
31
otherwise have.
(d) Any party that proposes to assert the right to be indemnified under
this Section 7 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 7, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 7 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (ii) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (iii) a
conflict of interests exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (iv) the indemnifying party has
not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld).
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 7 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company, the Underwriters or the
Selling Shareholders, then the Company, the Underwriters and the Selling
32
Shareholders will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters and the Selling
Shareholders, such as persons who control the Company within the meaning of the
Act, officers of the Company who signed the Registration Statement and directors
of the Company, who may be liable for contribution) to which the Company, the
Underwriters and the Selling Shareholders may be subject in such proportion as
shall be appropriate to reflect the relative benefits received by the Company,
the Underwriters and the Selling Shareholders. The relative benefits received by
the Company on the one hand and the Underwriters on the other hand shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering (before deducting expenses) received by the Company bears to the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus. The
relative benefits received by the Selling Shareholders shall be deemed to be in
proportion to the net proceeds to be received by them in the offering, as set
forth in the table on the cover page of the Prospectus. If, but only if, the
allocation provided by the foregoing sentences is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentences but also the relative fault of the Company, the Underwriters
and the Selling Shareholders with respect to the statements or omissions which
resulted in such loss, claim, liability, expense or damage, or action in respect
thereof, as well as any other relevant equitable considerations with respect to
such offering. Such relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Underwriters or the Selling Shareholders, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, the Underwriters and the
Selling Shareholders agree that it would not be just and equitable if
contributions pursuant to this Section 7(d) were to be determined by pro rata or
per capita allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to above in this
Section 7(d) shall be deemed to include, for purpose of this Section 7(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), an Underwriter shall not be
required to contribute any amount in excess of the underwriting discounts
received by it (less the aggregate amount of any damages which such Underwriter
and its controlling persons have otherwise been required to pay in respect of
the same or any similar claim), and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 7(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 7(d), any person who
controls a party to this Agreement within the meaning of the
33
Act will have the same rights to contribution as that party, and each officer
and director of the Company who signed the Registration Statement will have the
same rights to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action against such party in respect of which a
claim for contribution maybe made under this Section 7(d), will notify any such
party or parties from whom contribution may be sought, but the omission to
notify will not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 7(d). No
party will be liable for contribution with respect to any action or claim
settled without its written consent (which consent will not be unreasonably
withheld).
(f) The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company and the Selling Shareholders
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by the Underwriters or on their behalf,
(ii) acceptance of any of the Shares and payment therefor or (iii) any
termination of this Agreement.
(g) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 7, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 7 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act and the Exchange
Act.
8. TERMINATION.
-----------
The Underwriters' obligations under this Agreement may be terminated at any
time on or prior to the Closing Date (or, with respect to the Option Shares, on
or prior to the Option Closing Date), by notice to the Company from the
Representatives, without liability on the part of any of the Underwriters to the
Company (provided, however, that this Section 8 and Sections 5(h), 5(i) and 7
shall be and always remain effective), if, prior to delivery and payment for the
Firm Shares (or the Option Shares, as the case may be), in your reasonable
judgment, (i) the Company shall have failed, refused or been unable to perform
any agreement on its part to be performed, or because of such condition the
Underwriters' obligations hereunder required to be fulfilled are not fulfilled,
including, but not limited to, any change in the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company from that set forth in the Registration Statement or Prospectus which,
in your reasonable judgment, is material and adverse; (ii) any condition
specified in Section 6 of this Agreement shall not have been satisfied; (iii)
trading in any of the equity securities of the Company shall have been suspended
by the Commission, by an exchange that lists the Shares or by the Nasdaq
National Market; (iv) trading in securities generally on the New York Stock
Exchange or the Nasdaq National Market shall have been suspended or limited or
minimum or maximum prices shall have been generally established on such
exchange, or additional material governmental restrictions, not in force on the
34
date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange or by order of the Commission or any court of other
governmental authority; (v) a general banking moratorium shall have been
declared by either federal or state authorities; or (vi) any material adverse
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or declaration by the United States of a
national emergency or war or other calamity, crisis, act of God or hostile act
against the United States shall have occurred the effect of any of which is such
as to make it, in your reasonable judgment, impracticable or inadvisable to
market the Shares on the terms and in the manner contemplated by the Prospectus.
9. SUBSTITUTION OF UNDERWRITERS.
----------------------------
If any Underwriter shall fail or refuse to purchase any of the Firm Shares
which it has agreed to purchase hereunder, and the aggregate number of Firm
Shares which such defaulting Underwriter agreed but failed or refused to
purchase is not more than one-tenth of the aggregate number of Firm Shares, the
other Underwriters shall be obligated, severally, to purchase the Firm Shares
that such defaulting Underwriter agreed but failed or refused to purchase, in
the proportions which the number of Firm Shares which they have respectively
agreed to purchase pursuant to Section 1 bears to the aggregate number of Firm
Shares which all such non-defaulting Underwriters have so agreed to purchase, or
in such other proportions as you may specify; provided, that in no event shall
--------
the maximum number of Firm Shares which an Underwriter has been obligated to
purchase pursuant to Section 1 be increased pursuant to this Section 9 by more
than one-ninth of such number of Firm Shares without the prior written consent
of such Underwriter. If an Underwriter shall fail or refuse to purchase any
Firm Shares and the aggregate number of Firm Shares which such defaulting
Underwriter agreed but failed or refused to purchase exceeds one-tenth of the
aggregate number of the Firm Shares and arrangements satisfactory to the non-
defaulting Underwriters or the Company for the purchase of such Firm Shares are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the Company
for the purchase or sale of any Shares under this Agreement. In any such case
the Underwriters or the Company shall have the right to postpone the Closing
Date or Option Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. Any
action taken pursuant to this Section 9 shall not relieve any defaulting
Underwriter from liability in respect to any default of such Underwriter under
this Agreement.
10. DEFAULT BY A SELLING SHAREHOLDER.
--------------------------------
If any of the Selling Shareholders shall fail to sell and deliver the number
of Selling Shareholder Shares that such Selling Shareholder is obligated to
sell, the Underwriters may, at their option, by notice to the Company, either
(a) require the Company to sell and deliver such number of shares of Common
Stock as to which the Selling Shareholders have defaulted, (b) elect to purchase
the Firm Shares that the Company and the non-defaulting Selling Shareholders
have
35
agreed to sell pursuant to this Agreement or (c) terminate this Agreement
if the Company shall have refused to sell and deliver to the Underwriters the
shares of Common Stock referred to in clause (a) of this Section 10.
In the event of a default under this Section 10 that does not result in the
termination of this Agreement, either the Underwriters or the Company shall have
the right to postpone the Closing Date for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. No action taken pursuant to this
Section 10 shall relieve the Company or the Selling Shareholder so defaulting
from liability, if any, in respect of such default.
11. MISCELLANEOUS.
-------------
All communications hereunder shall be in writing and, if sent to any of the
Underwriters, shall be mailed, first class postage prepaid, sent via reliable
overnight delivery service, sent by facsimile (and by one of the two preceding
methods), delivered by hand or telegraphed and confirmed in writing to the
Representatives in care of X.X. Xxxxxxxx & Co., X.X. Xxxxxxxx Financial Center,
000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx, Attention: Xxx Xxxx Xxxxxx, or if
sent to the Company shall be sent by one of the foregoing methods to the Company
at 0000 Xxxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, Attention:
Xxxxxx X. Xxxxxxxx.
This Agreement has been and is made solely for the several Underwriters' and
the Company's and the Selling Shareholders' benefits and of the controlling
persons, directors and officers referred to in Section 7, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" as used in this Agreement shall not include a
purchaser, as such purchaser, of Shares from an Underwriter.
This Agreement shall be governed by and construed in accordance with the laws
of the State of Georgia.
This Agreement may be signed in two or more counterparts with the same effect
as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
THE COMPANY, EACH SELLING SHAREHOLDER AND YOU EACH HEREBY IRREVOCABLY WAIVE
ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
36
You hereby represent and warrant to the Company and each Selling Shareholder
that you have authority to act hereunder on behalf of the several Underwriters,
and any action hereunder taken by you will be binding upon all the Underwriters.
Please confirm that the foregoing correctly sets forth the agreement among the
Company, the Selling Shareholders and you.
Very truly yours,
SATELLINK COMMUNICATIONS, INC.
By: _______________________________
Name:
Title:
SELLING SHAREHOLDERS:
By: _______________________________
[ ], as Attorney-in-Fact
for each of the Selling
Shareholders identified on
Schedule II
-----------
Confirmed and accepted as of the
date first above written.
X.X. XXXXXXXX & CO.
XXXXXX XXXXXX & COMPANY, INC.
By: X.X. Xxxxxxxx & Co.
By: _______________________________
Name:
Title:
37
SCHEDULE I
----------
UNDERWRITERS
Number of
Name of Underwriter Firm Shares
------------------- -----------
X.X. Xxxxxxxx & Co..................................................
Xxxxxx Xxxxxx & Company, Inc........................................
-----------
Total..........................................................
-----------
38
SCHEDULE II
-----------
SELLING SHAREHOLDERS
Number of
Firm
Name of Selling Shareholder Shares
--------------------------- -------------
[ ].......................................................
[ ].......................................................
[ ].......................................................
[ ].......................................................
-------------
Total........................................................
-------------
39
