1
EXHIBIT 1.1
4,400,000 SHARES1
THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
______________, 1998
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXXXXX & XXXXX LLC
THE XXXXXXXX-XXXXXXXX COMPANY, LLC
As Representatives of the several Underwriters
c/o BancAmerica Xxxxxxxxx Xxxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies/Gentlemen:
The Profit Recovery Group International, Inc., a Georgia corporation
(the "Company"), and certain shareholders of the Company named in Schedule B
hereto (hereafter called the "Selling Shareholders") address you as the
Representatives of each of the persons, firms and corporations listed in
Schedule A hereto (herein collectively called the "Underwriters") and hereby
confirm their respective agreements with the several Underwriters as follows:
1. Description of Shares. The Company proposes to issue and sell
2,000,000 shares of its authorized and unissued Common Stock, no par value per
share, to the several Underwriters. The Selling Shareholders, acting severally
and not jointly, propose to sell an aggregate of 2,400,000 shares of the
Company's authorized and outstanding Common Stock, no par value per share, to
the several Underwriters. The 2,000,000 shares of Common Stock, no par value per
share, of the Company to be sold by the Company are hereinafter called the
"Company Shares" and the 2,400,000 shares of Common Stock, no par value per
share, to be sold by the Selling Shareholders are hereinafter called the
"Selling Shareholder Shares." The Company Shares and the Selling Shareholder
Shares are hereinafter collectively referred to as the "Firm Shares." Certain
Selling Shareholders also propose to grant, severally and not jointly, to the
Underwriters an option to purchase up to 660,000 additional shares of the
Company's Common Stock, no par value per share, (the "Option Shares"), as
provided in Section 7 hereof. As used in this Agreement, the term "Shares" shall
include the Firm Shares and the Option Shares. All shares of Common Stock, no
par value per share, of the Company to be outstanding after giving effect to the
sales contemplated hereby, including the Shares, are hereinafter referred to as
"Common Stock."
--------
1 Plus an option to purchase up to 660,000 additional shares from certain
shareholders of the Company to cover over-allotments.
2
2. Representations, Warranties and Agreements of the Company and the
Shareholders.
I. Each of the Company, Xxxx X. Xxxx and Xxxx X. Xxxx (Xxxx X. Xxxx and
Xxxx X. Xxxx are collectively referred to as the "Shareholders"), jointly and
severally, represent and warrant to and agrees with each Underwriter that:
(a) A registration statement on Form S-3 (File No. 333-46225)
with respect to the Shares, including a prospectus subject to completion, has
been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the applicable rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") under the Act and has been filed with the
Commission; such amendments to such registration statement, such amended
prospectuses subject to completion and such abbreviated registration statements
pursuant to Rule 462(b) of the Rules and Regulations as may have been required
prior to the date hereof have been similarly prepared and filed with the
Commission; and the Company will file such additional amendments to such
registration statement, such amended prospectuses subject to completion and such
abbreviated registration statements as may hereafter be required. Copies of such
registration statement and amendments, of each related prospectus subject to
completion (the "Preliminary Prospectuses") and of any abbreviated registration
statement pursuant to Rule 462(b) of the Rules and Regulations have been
delivered to you. The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Act.
If the registration statement relating to the Shares has been
declared effective under the Act by the Commission, the Company will prepare and
promptly file with the Commission the information omitted from the registration
statement pursuant to Rule 430A(a) or, if BancAmerica Xxxxxxxxx Xxxxxxxx, on
behalf of the several Underwriters, shall agree to the utilization of Rule 434
of the Rules and Regulations, the information required to be included in any
term sheet filed pursuant to Rule 434(b) or (c), as applicable, of the Rules and
Regulations pursuant to subparagraph (1), (4) or (7) of Rule 424(b) of the Rules
and Regulations or as part of a post-effective amendment to the registration
statement (including a final form of prospectus). If the registration statement
relating to the Shares has not been declared effective under the Act by the
Commission, the Company will prepare and promptly file an amendment to the
registration statement, including a final form of prospectus, or, if BancAmerica
Xxxxxxxxx Xxxxxxxx, on behalf of the several Underwriters, shall agree to the
utilization of Rule 434 of the Rules and Regulations, the information required
to be included in any term sheet filed pursuant to Rule 434(b) or (c), as
applicable, of the Rules and Regulations. The term "Registration Statement" as
used in this Agreement shall mean such registration statement, including
financial statements, schedules and exhibits, in the form in which it became or
becomes, as the case may be, effective (including, if the Company omitted
information from the registration statement pursuant to Rule 430A(a) or files a
term sheet pursuant to Rule 434 of the Rules and Regulations, the information
deemed to be a part of the registration statement at the time it became
effective pursuant to Rule 430A(b) or Rule 434(d) of the Rules and Regulations)
and, in the event of any amendment thereto or the filing of any abbreviated
registration statement pursuant to Rule 462(b) of the Rules and Regulations
relating thereto after the effective date of such registration statement, shall
also mean (from and after the effectiveness of such amendment or the filing of
such abbreviated registration statement) such registration statement as so
amended, together with any such abbreviated registration statement. The term
"Prospectus" as used in this Agreement shall mean the prospectus relating to the
Shares as included in such Registration Statement at the time it becomes
effective (including, if the Company omitted information from the Registration
Statement pursuant to Rule 430A(a) of the Rules and Regulations, the information
deemed to be a part of the Registration Statement at the time it became
effective pursuant to Rule 430A(b) of the Rules and Regulations); provided,
however, that if in reliance on Rule 434 of the Rules and Regulations and with
the consent of BancAmerica Xxxxxxxxx Xxxxxxxx, on behalf of the several
Underwriters, the Company shall have provided to the Underwriters a term sheet
pursuant to Rule 434(b) or (c), as applicable, prior to the time that a
confirmation is sent or given for purposes of Section 2(10)(a) of the Act, the
term "Prospectus" shall mean the "prospectus subject to completion" (as defined
in Rule 434(g) of the Rules and Regulations) last provided to the Underwriters
by the Company and circulated by the Underwriters to all prospective
-2-
3
purchasers of the Shares (including the information deemed to be a part of the
Registration Statement at the time it became effective pursuant to Rule 434(d)
of the Rules and Regulations). Notwithstanding the foregoing, if any revised
prospectus shall be provided to the Underwriters by the Company for use in
connection with the offering of the Shares that differs from the prospectus
referred to in the immediately preceding sentence (whether or not such revised
prospectus is required to be filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the Underwriters for
such use. If in reliance on Rule 434 of the Rules and Regulations and with the
consent of BancAmerica Xxxxxxxxx Xxxxxxxx, on behalf of the several
Underwriters, the Company shall have provided to the Underwriters a term sheet
pursuant to Rule 434(b) or (c), as applicable, prior to the time that a
confirmation is sent or given for purposes of Section 2(10)(a) of the Act, the
Prospectus and the term sheet, together, will not be materially different from
the prospectus in the Registration Statement. Any reference to the Registration
Statement or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of the Registration Statement or the Prospectus,
as the case may be, and any reference to any amendment or supplement to the
Registration Statement or the Prospectus shall be deemed to refer to and include
any documents filed after such date under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), which, upon filing, are incorporated by
reference therein, as required by paragraph (b) of Item 12 of Form S-3. As used
in this Agreement, the term "Incorporated Documents" means the documents which
at the time are incorporated by reference in the Registration Statement, the
Prospectus or any amendment or supplement thereto.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus or instituted proceedings for that
purpose, and each such Preliminary Prospectus has conformed in all material
respects to the requirements of the Act and the Rules and Regulations and, as of
its date, has not included 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; and at the time
the Registration Statement became or becomes, as the case may be, effective and
at all times subsequent thereto up to and on the Closing Date (hereinafter
defined) and on any later date on which Option Shares are to be purchased, (i)
the Registration Statement and the Prospectus, and any amendments or supplements
thereto, contained and will contain all material information required to be
included therein by the Act and the Rules and Regulations and will in all
material respects conform to the requirements of the Act and the Rules and
Regulations, (ii) the Registration Statement, and any amendments or supplements
thereto, did not and will not include any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and (iii) the Prospectus, and any
amendments or supplements thereto, did not and will not include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that none of the representations and warranties contained in this subparagraph
(b) shall apply to information contained in or omitted from the Registration
Statement or the Prospectus, or any amendment or supplement thereto, in reliance
upon, and in conformity with, written information relating to any Underwriter
furnished to the Company by such Underwriter specifically for use in the
preparation thereof.
The Incorporated Documents heretofore filed, when they were filed
(or, if any amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects with the requirements
of the Exchange Act and the rules and regulations of the Commission thereunder;
any further Incorporated Documents so filed will, when they are filed, conform
in all material respects with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder; no such document when it was filed
(or, if an amendment with respect to any such document was filed, when such
amendment was filed), 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, in light of the circumstances under which they were
made, not misleading; and no such further amendment will contain any untrue
statement of a material fact or omit to state a material fact required to
-3-
4
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(c) Each of the Company and its Subsidiaries (as defined below) has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation with full corporate
power and authority to own, lease and operate its properties and conduct its
business as described in the Prospectus; at the Closing Date, the Company will
directly or indirectly own all of the outstanding capital stock of its
Subsidiaries free and clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest, except as disclosed in the Prospectus; each of the
Company and its Subsidiaries is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the ownership
or leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or be in good
standing would not have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and its Subsidiaries considered as one enterprise; no proceeding has been
instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or qualification,
except any such proceeding which would not have a material adverse effect on the
condition (financial or otherwise), earnings, operations, business or business
prospects of the Company and its Subsidiaries considered as one enterprise;
neither the Company nor any of its Subsidiaries is in violation of its
respective charter or bylaws or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
material bond, debenture, note or other evidence of indebtedness which has not
otherwise been waived, or in any material lease, contract, indenture, mortgage,
deed of trust, loan agreement, joint venture or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which it or any of
its Subsidiaries or their respective properties may be bound which has not
otherwise been waived; and neither the Company nor any of its Subsidiaries is in
material violation of any law, order, rule, regulation, writ, injunction,
judgment or decree of any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of its
Subsidiaries or over their respective properties of which it or they have
knowledge. At the Closing Date, the Company will not own or control, directly or
indirectly, any corporation, association or other entity or have any equity
interest in any other entity other than those entities identified on Schedule C
hereto. For purposes of this Agreement, the term "Subsidiary" shall mean the
"U.S. Subsidiaries" and the "Foreign Subsidiaries," collectively; the term "U.S.
Subsidiaries" shall mean any corporation, partnership or other entity in which
the Company or any Subsidiary has a controlling interest and which is organized
under the laws of any State or political subdivision of the U.S. and which
conducts its principal business activities in the U.S.; and, the term "Foreign
Subsidiaries" shall mean any corporation, partnership or other entity in which
the Company or any Subsidiary has a controlling interest and which is organized
under the laws of any country other than the U.S. or under the laws of any State
or political subdivision of the U.S., but which conducts its principal business
activities outside of the U.S.
(d) The Company has full legal right, power and authority to enter
into this Agreement and perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company and is
a valid and binding agreement on the part of the Company, enforceable in
accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles; the performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a material breach or
violation of any of the terms and provisions of, or constitute a default under,
(i) any material bond, debenture, note or other evidence of indebtedness, or
under any lease, contract, indenture, mortgage, deed of trust, loan agreement,
joint venture or other agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which it or any of its Subsidiaries or their
respective properties may be bound, (ii) the charter or bylaws of the Company or
any of its Subsidiaries, or (iii) any law, order, rule, regulation, writ,
injunction, judgment or decree of any court, government or governmental agency
or body, domestic or foreign, having jurisdiction over the
-4-
5
Company or any of its Subsidiaries or over their respective properties. No
consent, approval, authorization or order of or qualification with any court,
government or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any of its Subsidiaries or over their
respective properties is required for the execution and delivery of this
Agreement and the consummation by the Company or any of its Subsidiaries of the
transactions herein contemplated, except such as may be required under the Act,
the Exchange Act, or under state or other securities or Blue Sky laws, all of
which requirements have been satisfied in all material respects, and except for
any such foreign consents, approvals or authorizations the failure of which to
obtain would not have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and its Subsidiaries considered as one enterprise.
(e) There is not any pending or, to the best of the Company's
knowledge, threatened action, suit, claim or proceeding against the Company, any
of its Subsidiaries or any of their respective officers or any of their
respective properties, assets or rights before any court, government or
governmental agency or body, domestic or foreign, having jurisdiction over the
Company or any of its Subsidiaries or over their respective officers or
properties or otherwise which (i) might result in any material adverse change in
the condition (financial or otherwise), earnings, operations, business or
business prospects of the Company and its Subsidiaries considered as one
enterprise or might materially and adversely affect their properties, assets or
rights, (ii) might prevent consummation of the transactions contemplated hereby
or (iii) is required to be disclosed in the Registration Statement or the
Prospectus and is not so disclosed; and there are no agreements, contracts,
leases or documents of the Company or any of its Subsidiaries of a character
required to be described or referred to in the Registration Statement or the
Prospectus or any Incorporated Document or to be filed as an exhibit to the
Registration Statement or any Incorporated Document by the Act or the Rules and
Regulations or by the Exchange Act or the rules and regulations of the
Commission thereunder which have not been accurately described in all material
respects in the Registration Statement or the Prospectus or any Incorporated
Document or filed as exhibits to the Registration Statement or any Incorporated
Document.
(f) At the Closing Date, all outstanding shares of capital stock of
the Company (including the Selling Shareholder Shares) will have been duly
authorized and validly issued and fully paid and nonassessable, will have been
issued in compliance with all federal and state securities laws, will not have
been issued in violation of or subject to any preemptive rights or other rights
to subscribe for or purchase securities, and the authorized and outstanding
capital stock of the Company is as set forth in the Prospectus under the caption
"Capitalization" and conforms in all material respects to the statements
relating thereto contained in the Registration Statement and the Prospectus and
any Incorporated Document (and such statements correctly state the substance of
the instruments defining the capitalization of the Company); the Firm Shares and
the Option Shares have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered by the
Company against payment therefor in accordance with the terms of this Agreement,
will be duly and validly issued and fully paid and nonassessable, and will be
sold free and clear of any pledge, lien, security interest, encumbrance, claim
or equitable interest; and no preemptive right, co-sale right, registration
right, right of first refusal or other similar right of shareholders exists with
respect to any of the Firm Shares or Option Shares or the issuance and sale
thereof other than those that have been expressly waived prior to the date
hereof and those that will automatically expire upon and will not apply to the
consummation of the transactions contemplated on the Closing Date. No further
approval or authorization of any shareholder, the Board of Directors of the
Company or others is required for the issuance and sale or transfer of the
Shares except as may be required under the Act, the Exchange Act or under state
or other securities or Blue Sky laws. At the Closing Date, all issued and
outstanding shares of capital stock of each Subsidiary of the Company will have
been duly authorized and validly issued and fully paid and nonassessable, and
will not have been issued in violation of or subject to any preemptive right, or
other rights to subscribe for or purchase shares and will be directly or
indirectly owned by the Company free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest, except as disclosed in the
Prospectus. Except as disclosed in or contemplated by the Prospectus and the
financial statements of the Company, and the related notes thereto, included in
the Prospectus, neither the Company nor any Subsidiary has outstanding
-5-
6
any options to purchase, or any preemptive rights or other rights to subscribe
for or to purchase, any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its capital stock or any
such options, rights, 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.
(g) KPMG Peat Marwick LLP, which has audited the consolidated
financial statements of the Company, together with the related notes, as of
December 31, 1996 and 1997 and for each of the years in the three (3) years
ended December 31, 1997 filed with the Commission as a part of the Registration
Statement, which are included in the Prospectus, are independent accountants
within the meaning of the Act and the Rules and Regulations; the audited
consolidated financial statements of the Company, together with the related
schedules and notes, and the unaudited consolidated financial information,
forming part of the Registration Statement and the Prospectus, fairly present in
all material respects the financial position and the results of operations of
the Company and its Subsidiaries and combined companies at the respective dates
and for the respective periods to which they apply; and all audited consolidated
financial statements of the Company, together with the related schedules and
notes, and the unaudited consolidated financial information, filed with the
Commission as part of the Registration Statement, have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved except as may be otherwise stated therein. The
selected and summary financial and statistical data included in the Registration
Statement present fairly in all material respects the information shown therein
and have been compiled on a basis consistent with the audited consolidated
financial statements presented therein. Except for the financial statements of
Financiere Xxxx, S.A. and its subsidiaries for the years ended December 31, 1995
and 1996, the six months ended June 30, 1997 and the nine months ended September
30, 1997, which are included in the Registration Statement, no other financial
statements or schedules are required to be included in the Registration
Statement.
(h) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and except as disclosed
or contemplated in the Prospectus, there has not been (i) any material adverse
change in the condition (financial or otherwise), earnings, operations, business
or business prospects of the Company and its Subsidiaries considered as one
enterprise, (ii) any transaction that is material to the Company and its
Subsidiaries considered as one enterprise, except transactions entered into in
the ordinary course of business, (iii) any obligation, direct or contingent,
that is material to the Company and its Subsidiaries considered as one
enterprise, incurred by the Company or its Subsidiaries, except obligations
incurred in the ordinary course of business, (iv) any change in the capital
stock or outstanding indebtedness of the Company or any of its Subsidiaries that
is material to the Company and its Subsidiaries considered as one enterprise,
(v) any dividend or distribution of any kind declared, paid or made on the
capital stock of the Company or any of its Subsidiaries or (vi) any loss or
damage (whether or not insured) to the property of the Company or any of its
Subsidiaries that has been sustained or will have been sustained which has a
material adverse effect on the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its Subsidiaries
considered as one enterprise.
(i) Except as set forth in the Registration Statement and the
Prospectus and any Incorporated Document, (i) each of the Company and its
Subsidiaries has good and marketable title to all properties and assets
described in the Registration Statement and the Prospectus and any Incorporated
Document as owned by it, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest, other than such as would not have a
material adverse effect on the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its Subsidiaries
considered as one enterprise, (ii) the agreements to which the Company or any of
its Subsidiaries is a party described in the Registration Statement and the
Prospectus and any Incorporated Document are valid agreements, enforceable by
the Company and its Subsidiaries (as applicable), except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or
-6-
7
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles and, to the best of the Company's knowledge, the
other contracting party or parties thereto are not in material breach or
material default under any of such agreements, and (iii) each of the Company and
its Subsidiaries has valid and enforceable leases for all properties described
in the Registration Statement and the Prospectus and any Incorporated Document
as leased by it, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles. Except as set forth in the Registration Statement and the Prospectus
and any Incorporated Document, the Company owns or leases all such properties as
are necessary to its operations as now conducted or as proposed to be conducted.
(j) The Company and its Subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns (other than
franchise tax returns which the failure to file would not have a material
adverse effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its Subsidiaries considered as
one enterprise) and have paid all taxes and penalties shown thereon as due, and
there is no tax deficiency that has been or, to the best of the Company's or the
Shareholders' knowledge, might be asserted against the Company or any of its
Subsidiaries that might have a material adverse effect on the condition
(financial or otherwise), earnings, operations, business or business prospects
of the Company and its Subsidiaries considered as one enterprise; and all tax
liabilities are adequately provided for on the books of the Company and its
Subsidiaries.
(k) The Company and its Subsidiaries maintain insurance with
insurers of recognized financial responsibility of the types and in the amounts
generally deemed adequate for their respective businesses and consistent with
insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company or its 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 condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its Subsidiaries considered as
one enterprise.
(l) To the best of Company's or the Shareholders' knowledge,
no labor disturbance by the employees of the Company or any of its 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 might
be expected to result in a material adverse change in the condition (financial
or otherwise), earnings, operations, business or business prospects of the
Company and its Subsidiaries considered as one enterprise. No collective
bargaining agreement exists with any of the Company's employees and, to the best
of the Company's and the Shareholders' knowledge, no such agreement is imminent.
(m) Each of the Company and its 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 now conducted and as proposed to be
conducted as described in the Registration Statement and the Prospectus in the
U.S. and, to the Company's knowledge, outside the U.S.; the expiration of any
patents, patent rights, trade secrets, trademarks, service marks, trade names or
copyrights would not have a material adverse effect on the condition (financial
or otherwise), earnings, operations, business or business prospects of the
Company and its Subsidiaries considered as one enterprise; 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-
-7-
8
how, trademarks, service marks, trade names or copyrights which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
might have a material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and its
Subsidiaries considered as one enterprise.
(n) Except as described in the Registration Statement and the
Prospectus, each of the Company and its Subsidiaries have operated and currently
operate its business in conformity with all applicable laws, rules and
regulations of each jurisdiction in which it is conducting business, except
where the failure to be so in compliance would not have a material adverse
effect on the condition (financial or otherwise), earnings, operations, business
or business prospects of the Company and its Subsidiaries considered as one
enterprise. The Company and its Subsidiaries have all licenses, certificates,
authorizations, approvals, permits, franchises, orders and consents from all
state, federal and other governmental or regulatory authorities (including
foreign jurisdictions) which are necessary to the conduct of their businesses,
except where the failure to be so in compliance would not have a material
adverse effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its Subsidiaries considered as
one enterprise. All of such licenses, certificates, authorizations, approvals,
permits, franchises, orders and consents are valid and in full force and effect.
Except as described in the Registration Statement and the Prospectus, the
Company and its Subsidiaries have fulfilled and performed, and will fulfill and
perform, all of their obligations with respect to, and are operating in
compliance with, all such licenses, certificates, authorizations, approvals,
permits, franchises, orders and consents and no event has occurred which allows,
or after notice or lapse of time would allow, revocation or termination thereof
or result in any impairment of the rights of the holder thereof, except to the
extent that any such revocation, termination or impairment would not have a
material adverse effect on the condition (financial or otherwise), results of
operations, business or business prospects of the Company and its Subsidiaries
considered as one enterprise. Except as set forth in the Registration Statement
and the Prospectus, no such licenses, certificates, authorizations, approvals,
permits, franchises, orders or consents contain any restrictions that have or
may have a material adverse effect on the condition (financial or otherwise),
results of operations, business or business prospects of the Company and its
Subsidiaries considered as one enterprise. The Company and its Subsidiaries are
not aware of any existing or imminent matter the occurrence of which would have
a material adverse effect on the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its Subsidiaries
considered as one enterprise other than as disclosed in the Registration
Statement and the Prospectus.
(o) The Common Stock is registered pursuant to Section 12(g)
of the Exchange Act and is listed on The Nasdaq Stock Market, Inc. National
Market (the "Nasdaq National Market"), and the Company has taken no action
designed to, or likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act or delisting the Common Stock from the
Nasdaq National Market, nor has the Company received any notification that the
Commission or the National Association of Securities Dealers, Inc. ("NASD") is
contemplating terminating such registration or listing. The Company has filed in
a timely manner all reports and other information required to be filed with the
Commission pursuant to the Exchange Act during the twelve calendar months and
any portion of a month immediately preceding the filing of the Registration
Statement.
(p) The Company has been advised concerning the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations
thereunder, and has in the past conducted, and intends in the future to conduct,
its affairs in such a manner as to ensure that it will not become an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the 1940 Act and such rules and regulations.
(q) The Company has not distributed and will not distribute
prior to the later of (i) the Closing Date, or any date on which Option Shares
are to be purchased, as the case may be, and (ii) completion of the distribution
of the Shares, any offering material in connection with the offering and
-8-
9
sale of the Shares other than any Preliminary Prospectuses, the Prospectus, the
Registration Statement and other materials, if any, permitted by the Act.
(r) Neither the Company nor any of its Subsidiaries has at any
time during the last five (5) years (i) made any unlawful contribution to any
candidate for foreign office or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof.
(s) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
(t) Each director of the Company, each Selling Shareholder and
any other person or entity shown on Schedule D hereto has agreed in writing that
such person will not, for a period of 90 days from the date that the
Registration Statement is declared effective by the Commission (the "Lock-up
Period"), offer to sell, contract to sell, or otherwise sell, dispose of, loan,
pledge or grant any rights with respect to (collectively, a "Disposition") any
shares of Common Stock, any options or warrants to purchase any shares of Common
Stock or any securities convertible into or exchangeable for shares of Common
Stock (collectively, "Securities") now owned or hereafter acquired directly by
such person or with respect to which such person has or hereafter acquires the
power of disposition, otherwise than (i) as a bona fide gift or gifts, provided
the donee or donees thereof agree in writing to be bound by this restriction,
(ii) as a distribution to limited partners, shareholders or beneficiaries of
such person, provided that the distributees thereof agree in writing to be bound
by the terms of this restriction, or (iii) if such person is an individual, to a
member or members of his or her immediate family or to a trust the beneficiaries
of which are exclusively such person and/or a member or members of his or her
immediate family, provided that each transferee thereof agrees in writing to be
bound by the terms of this restriction, or (iv) with the prior written consent
of BancAmerica Xxxxxxxxx Xxxxxxxx. The foregoing restriction has been expressly
agreed to preclude the holder of the Securities from engaging in any hedging or
other transaction which is designed to or reasonably expected to lead to or
result in a Disposition of Securities during the Lock-up Period, even if such
Securities would be disposed of by someone other than such holder. Such
prohibited hedging or other transactions would include, without limitation, any
short sale (whether or not against the box) or any purchase, sale or grant of
any right (including, without limitation, any put or call option) with respect
to any Securities or with respect to any security (other than a broad-based
market basket or index) that includes, relates to or derives any significant
part of its value from Securities. Furthermore, each such person has also agreed
and consented to the entry of stop transfer instructions with the Company's
transfer agent against the transfer of the Securities held by such person except
in compliance with the foregoing restrictions. The Company has provided to
counsel for the Underwriters a complete and accurate list of all securityholders
of the Company and the number and type of securities held by each
securityholder. The Company has provided to counsel for the Underwriters true,
accurate and complete copies of all of the agreements pursuant to which its
directors and shareholders have agreed to such or similar restrictions (the
"Lock-up Agreements") presently in effect or effected hereby. The Company hereby
represents and warrants that it will not release any of its directors or other
shareholders from any Lock-up Agreements currently existing or hereafter
effected without the prior written consent of BancAmerica Xxxxxxxxx Xxxxxxxx.
(u) Except as set forth in the Registration Statement and the
Prospectus, (i) the Company is in compliance with all rules, laws and
regulations relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment ("Environmental Laws")
which are applicable to its business which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a material
adverse effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its Subsidiaries considered as
one enterprise, (ii) the Company has received no notice from any governmental
authority or third party of an asserted claim under Environmental Laws, which
claim is required to be disclosed in the Registration
-9-
10
Statement and the Prospectus, (iii) the Company will not, to its knowledge, be
required to make future material capital expenditures to comply with
Environmental Laws and (iv) to the Company's knowledge, no property which is
owned, leased or occupied by the Company has been designated as a Superfund site
pursuant to the Comprehensive Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. ss. 9601, et seq.), or otherwise designated as a
contaminated site under applicable state or local law.
(v) The Company and each of its Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurances 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.
(w) 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 required to be disclosed and disclosed in the Registration Statement
and the Prospectus or incorporated by reference in any Incorporated Document.
(x) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government of Cuba
or with any person or affiliate located in Cuba.
(y) No Subsidiary of the Company is prohibited, directly or
indirectly, from paying any dividends, from making any other distributions on
such Subsidiary's capital stock, from repaying to the Company any loans or
advances to such Subsidiary or from transferring any of such Subsidiary's
property or assets to the Company or any other Subsidiary of the Company, except
as disclosed in the Registration Statement and the Prospectus and except for
such limitations that may be contained in the corporate code of the jurisdiction
under which such Subsidiary is incorporated.
(z) To the best of the Company's and the Shareholders'
knowledge, no officer, director or five percent (5%) securityholder of the
Company has an "association" or "affiliation" with any member of the NASD within
the meaning of Rule 2710 of the NASD's Conduct Rules. The Company does not have
an "association" or "affiliation" with any member of the NASD, within the
meaning of Rule 2710 of the NASD's Conduct Rules.
II. Each Selling Shareholder, severally and not jointly,
represents and warrants to and agrees with respect solely to himself or itself
with each Underwriter and the Company that:
(a) Such Selling Shareholder now has and on the Closing Date,
and on any later date on which Option Shares are purchased, will have valid
marketable title to the Shares to be sold by such Selling Shareholder, free and
clear of any pledge, lien, security interest, encumbrance, claim or equitable
interest other than pursuant to this Agreement; and upon delivery of such Shares
hereunder and payment of the purchase price as herein contemplated, each of the
Underwriters will obtain valid marketable title to the Shares purchased by it
from such Selling Shareholder, free and clear of any pledge, lien, security
interest pertaining to such Selling Shareholder or such Selling Shareholder's
property, encumbrance, claim or equitable interest, including any liability for
estate or inheritance taxes, or any liability to or claims of any creditor,
devisee, legatee or beneficiary of such Selling Shareholder.
-10-
11
(b) Such Selling Shareholder has duly authorized (if
applicable), executed and delivered, in the form heretofore furnished to the
Representatives, an irrevocable Power of Attorney (the "Power of Attorney")
appointing Xxxx X. Xxxx and Xxxx X. Xxxx as attorneys-in-fact (collectively, the
"Attorneys" and individually, an "Attorney") and a Custody Agreement (the
"Custody Agreement") with First Union National Bank of North Carolina, as
custodian (the "Custodian"); each of the Power of Attorney and the Custody
Agreement constitutes a valid and binding agreement on the part of such Selling
Shareholder, enforceable in accordance with its terms, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles; and each of such Selling
Shareholder's Attorneys, acting alone, is authorized to execute and deliver this
Agreement and the certificate referred to in Section 6(i) hereof on behalf of
such Selling Shareholder, to determine the purchase price to be paid by the
several Underwriters to such Selling Shareholder as provided in Section 3
hereof, to authorize the delivery of the Selling Shareholder Shares and the
Option Shares to be sold by such Selling Shareholder under this Agreement and to
duly endorse (in blank or otherwise) the certificate or certificates
representing such Shares or a stock power or powers with respect thereto, to
accept payment therefor, and otherwise to act on behalf of such Selling
Shareholder in connection with this Agreement.
(c) All consents, approvals, authorizations and orders
required for the execution and delivery by such Selling Shareholder of the Power
of Attorney and the Custody Agreement, the execution and delivery by or on
behalf of such Selling Shareholder of this Agreement and the sale and delivery
of the Selling Shareholder Shares and the Option Shares to be sold by such
Selling Shareholder under this Agreement (other than, at the time of the
execution hereof (if the Registration Statement has not yet been declared
effective by the Commission), the issuance of the order of the Commission
declaring the Registration Statement effective and such consents, approvals,
authorizations or orders as may be necessary under state or other securities or
Blue Sky laws) have been obtained and are in full force and effect; such Selling
Shareholder, if other than a natural person, has been duly organized and is
validly existing in good standing under the laws of the jurisdiction of its
organization as the type of entity that it purports to be; and such Selling
Shareholder has full legal right, power and authority to enter into and perform
its obligations under this Agreement and such Power of Attorney and Custody
Agreement, and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Shareholder under this Agreement.
(d) Such Selling Shareholder will not, during the Lock-up
Period, effect the Disposition of any Securities now owned or hereafter acquired
directly by such Selling Shareholder or with respect to which such Selling
Shareholder has or hereafter acquires the power of disposition, otherwise than
(i) as a bona fide gift or gifts, provided the donee or donees thereof agree in
writing to be bound by this restriction, (ii) as a distribution to limited
partners, shareholders or beneficiaries of such Selling Shareholder, provided
that the distributees thereof agree in writing to be bound by the terms of this
restriction, or (iii) if such person is an individual, to a member or members of
his or her immediate family or to a trust the beneficiaries of which are
exclusively such person and/or a member or members of his or her immediate
family, provided that each transferee thereof agrees in writing to be bound by
the terms of this restriction, or (iv) with the prior written consent of
BancAmerica Xxxxxxxxx Xxxxxxxx. The foregoing restriction is expressly agreed to
preclude the holder of the Securities from engaging in any hedging or other
transaction which is designed to or reasonably expected to lead to or result in
a Disposition of Securities during the Lock-up Period, even if such Securities
would be disposed of by someone other than the Selling Shareholder. Such
prohibited hedging or other transactions would include, without limitation, any
short sale (whether or not against the box) or any purchase, sale or grant of
any right (including, without limitation, any put or call option) with respect
to any Securities or with respect to any security (other than a broad-based
market basket or index) that includes, relates to or derives any significant
part of its value from Securities. Such Selling Shareholder also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent against the transfer of the securities held by such Selling Shareholder
except in compliance with the foregoing restrictions.
(e) Certificates in negotiable form representing all Shares to
be sold by such Selling Shareholder under this Agreement, together with a stock
power or powers duly endorsed in blank
-11-
12
by such Selling Shareholder, have been placed in custody with the Custodian for
the purpose of effecting delivery hereunder.
(f) This Agreement has been duly authorized by each such
Selling Shareholder that is not a natural person and has been duly executed and
delivered by or on behalf of such Selling Shareholder and is a valid and binding
agreement of such Selling Shareholder, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by applicable law
and except as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles; and the
performance of this Agreement and the consummation of the transactions herein
contemplated will not result in a material breach or violation of any of the
terms and provisions of or constitute a default under any material bond,
debenture, note or other evidence of indebtedness, or under any material lease,
contract, indenture, mortgage, deed of trust, loan agreement, joint venture or
other agreement or instrument to which such Selling Shareholder is a party or by
which such Selling Shareholder, or any Selling Shareholder Shares or any Option
Shares to be sold by such Selling Shareholder hereunder, may be bound or, to the
best of such Selling Shareholder's knowledge, result in any violation of any
law, order, rule, regulation, writ, injunction, judgment or decree of any court,
government or governmental agency or body, domestic or foreign, having
jurisdiction over such Selling Shareholder or over the properties of such
Selling Shareholder, or, if such Selling Shareholder is other than a natural
person, result in any violation of any provisions of the charter, bylaws or
other organizational documents of such Selling Shareholder.
(g) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Shares.
(h) Such Selling Shareholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares other than in his capacity as an executive
officer or director of the Company.
(i) All information furnished by or on behalf of such Selling
Shareholder relating to such Selling Shareholder and the Selling Shareholder
Shares that is contained in the representations and warranties of such Selling
Shareholder in such Selling Shareholder's Power of Attorney or set forth in the
Registration Statement or the Prospectus is, and at the time the Registration
Statement became or becomes, as the case may be, effective and at all times
subsequent thereto up to and on the Closing Date, and on any later date on which
Option Shares are to be purchased, was or will be, true, correct and complete in
all material respects, and does not, and at the time the Registration Statement
became or becomes, as the case may be, effective and at all times subsequent
thereto up to and on the Closing Date (hereinafter defined) ,and on any later
date on which Option Shares are to be purchased, will not, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make such information, in light of the
circumstances under which they were made, not misleading.
(j) Such Selling Shareholder will review the Prospectus and
will comply with all agreements and satisfy all conditions on its part to be
complied with or satisfied pursuant to this Agreement on or prior to the Closing
Date, or any later date on which Option Shares are to be purchased, as the case
may be, and will advise one of its Attorneys and BancAmerica Xxxxxxxxx Xxxxxxxx
prior to the Closing Date or such later date on which Option Shares are to be
purchased, as the case may be, if any statement to be made on behalf of such
Selling Shareholder in the certificate contemplated by Section 6(i) would be
inaccurate if made as of the Closing Date or such later date on which Option
Shares are to be purchased, as the case may be.
(k) Such Selling Shareholder does not have, or has waived
prior to the date hereof, any preemptive right, co-sale right or right of first
refusal or other similar right to purchase any of the Shares that are to be sold
by the Company or any of the other Selling Shareholders to the Underwriters
-12-
13
pursuant to this Agreement; such Selling Shareholder does not have, or has
waived prior to the date hereof, any registration right or other similar right
to participate in the offering made by the Prospectus, other than such rights of
participation as have been satisfied by the participation of such Selling
Shareholder in the transactions to which this Agreement relates in accordance
with the terms of this Agreement; and such Selling Shareholder does not own any
warrants, options or similar rights to acquire, and does not have any right or
arrangement to acquire, any capital stock, rights, warrants, options or other
securities from the Company, other than those described in the Registration
Statement and the Prospectus.
(l) Such Selling Shareholder is not aware that any of the
representations and warranties of the Company set forth in Section 2.I. above is
untrue or inaccurate in any material respect.
3. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and the Selling Shareholders
agree, severally and not jointly, to sell to the Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
the Selling Shareholders, respectively, at a purchase price of $_____ per share,
the respective number of Company Shares as hereinafter set forth and Selling
Shareholder Shares set forth opposite the names of the Company and the Selling
Shareholders in Schedule B hereto. The obligation of each Underwriter to the
Company and to each Selling Shareholder shall be to purchase from the Company or
such Selling Shareholder that number of Company Shares or Selling Shareholder
Shares, as the case may be, which (as nearly as practicable, as determined by
you) is in the same proportion to the number of Company Shares or Selling
Shareholder Shares, as the case may be, set forth opposite the name of the
Company or such Selling Shareholder in Schedule B hereto as the number of Firm
Shares which is set forth opposite the name of such Underwriter in Schedule A
hereto (subject to adjustment as provided in Section 10) is to the total number
of Firm Shares to be purchased by all the Underwriters under this Agreement.
The certificates in negotiable form for the Selling Shareholder
Shares have been placed in custody (for delivery under this Agreement) under the
Custody Agreement. Each Selling Shareholder agrees that the certificates for the
Selling Shareholder Shares of such Selling Shareholder so held in custody are
subject to the interests of the Underwriters hereunder, that the arrangements
made by such Selling Shareholder for such custody, including the Power of
Attorney is to that extent irrevocable and that the obligations of such Selling
Shareholder hereunder shall not be terminated by the act of such Selling
Shareholder or by operation of law, whether by the death or incapacity of such
Selling Shareholder or the occurrence of any other event, except as specifically
provided herein or in the Custody Agreement. If any Selling Shareholder should
die or be incapacitated, or if any other such event should occur, before the
delivery of the certificates for the Selling Shareholder Shares hereunder, the
Selling Shareholder Shares to be sold by such Selling Shareholder shall, except
as specifically provided herein or in the Custody Agreement, be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as if
such death, incapacity or other event had not occurred, regardless of whether
the Custodian shall have received notice of such death or other event.
Delivery of definitive certificates for the Firm Shares to be
purchased by the Underwriters pursuant to this Section 3 shall be made against
payment of the purchase price therefor by the several Underwriters by wire
transfer of same-day funds, payable to the order of the Company with regard to
the Shares being purchased from the Company, and to the order of the Custodian
for the respective accounts of the Selling Shareholders with regard to the
Shares being purchased from such Selling Shareholders at the offices of Long
Xxxxxxxx & Xxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx
00000 (or at such other place as may be agreed upon among the Representatives
and the Company), at 7:00 A.M., San Francisco time (a) on the third (3rd) full
business day following the first day that Shares are traded, (b) if this
Agreement is executed and delivered after 1:30 P.M., San Francisco time, the
fourth (4th) full business day following the day that this Agreement is executed
and delivered or (c) at such other time and date not later than seven (7) full
business days following the first day that Shares are traded as the
Representatives and the Company may determine (or at such time and date to which
payment and delivery shall have been postponed pursuant to Section 10 hereof),
such time
-13-
14
and date of payment and delivery being herein called the "Closing Date;"
provided, however, that if the Company has not made available to the
Representatives copies of the Prospectus within the time provided in Section
4(d) hereof, the Representatives may, in their sole discretion, postpone the
Closing Date until no later than two (2) full business days following delivery
of copies of the Prospectus to the Representatives. The certificates for the
Firm Shares to be so delivered will be made available to you at such office or
such other location including, without limitation, in New York City, as you may
reasonably request for checking at least one (1) full business day prior to the
Closing Date and will be in such names and denominations as you may request,
such request to be made at least two (2) full business days prior to the Closing
Date. If the Representatives so elect, delivery of the Firm Shares may be made
by credit through full fast transfer to the accounts at The Depository Trust
Company designated by the Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated to)
make payment of the purchase price on behalf of any Underwriter or Underwriters
whose check or checks shall not have been received by you prior to the Closing
Date for the Firm Shares to be purchased by such Underwriter or Underwriters.
Any such payment by you shall not relieve any such Underwriter or Underwriters
of any of its or their obligations hereunder.
After the Registration Statement becomes effective, the
several Underwriters intend to make an initial public offering (as such term is
described in Section 11 hereof) of the Firm Shares at an initial public offering
price of $_____ per share. After the initial public offering, the several
Underwriters may, in their discretion, vary the public offering price.
The information set forth in the last paragraph on the front
cover page (insofar as such information relates to the Underwriters), on the
inside front cover concerning stabilization and over-allotment by the
Underwriters, and under the first, third, seventh, eighth and ninth paragraphs
under the caption "Underwriting" in any Preliminary Prospectus and in the
Prospectus constitutes the only information furnished by the Underwriters to the
Company for inclusion in any Preliminary Prospectus, the Prospectus or the
Registration Statement, and you, on behalf of the respective Underwriters,
represent and warrant to the Company and the Selling Shareholders that the
statements made therein do not include any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
4. Further Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto, to
become effective as promptly as possible; the Company will use its best efforts
to cause any abbreviated registration statement pursuant to Rule 462(b) of the
Rules and Regulations as may be required subsequent to the date the Registration
Statement is declared effective to become effective as promptly as possible; the
Company will notify you, promptly after it shall receive notice thereof, of the
time when the Registration Statement, any subsequent amendment to the
Registration Statement or any abbreviated registration statement has become
effective or any supplement to the Prospectus has been filed; if the Company
omitted information from the Registration Statement at the time it was
originally declared effective in reliance upon Rule 430A(a) of the Rules and
Regulations, the Company will provide evidence satisfactory to you that the
Prospectus contains such information and has been filed, within the time period
prescribed, with the Commission pursuant to subparagraph (1) or (4) of Rule
424(b) of the Rules and Regulations or as part of a post-effective amendment to
such Registration Statement as originally declared effective which is declared
effective by the Commission; 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
-14-
15
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, it will provide
evidence satisfactory to you that the Prospectus contains such information and
has been filed with the Commission within the time period prescribed; it will
notify you promptly of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information; promptly upon your request, it will prepare and file with the
Commission any amendments or supplements to the Registration Statement or
Prospectus which, in the reasonable opinion of counsel for the several
Underwriters ("Underwriters' Counsel"), may be necessary or advisable in
connection with the distribution of the Shares by the Underwriters; it will
promptly prepare and file with the Commission, and promptly notify you of the
filing of, any amendments or supplements to the Registration Statement or
Prospectus which may be necessary to correct any statements or omissions, if, at
any time when a prospectus relating to the Shares is required to be delivered
under the Act, any event shall have occurred as a result of which the Prospectus
or any other prospectus relating to the Shares as then in effect would include
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; in case any Underwriter is required
to deliver a prospectus nine (9) months or more after the effective date of the
Registration Statement in connection with the sale of the Shares, it will
prepare promptly upon request, but at the expense of such Underwriter, such
amendment or amendments to the Registration Statement and such prospectus or
prospectuses as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Act; and it will file no amendment or supplement to the
Registration Statement or Prospectus or the Incorporated Documents, or, prior to
the end of the period of time in which a prospectus relating to the Shares is
required to be delivered under the Act, file any document which upon filing
becomes an Incorporated Document, which shall not previously have been submitted
to you a reasonable time prior to the proposed filing thereof or to which you
shall reasonably object in writing, subject, however, to compliance with the Act
and the Rules and Regulations, the Exchange Act and the rules and regulations of
the Commission thereunder and the provisions of this Agreement.
(b) The Company will advise you, promptly after it shall
receive notice or obtain knowledge, of the issuance of any stop order by the
Commission suspending the effectiveness of the Registration Statement or of the
initiation or threat of any proceeding for that purpose; and it will promptly
use its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop order should be issued.
(c) The Company will use its best efforts to qualify the
Shares for offering and sale under the securities laws of such jurisdictions as
you may designate and to continue such qualifications in effect for so long as
may be required for purposes of the distribution of the Shares, except that the
Company shall not be required in connection therewith or as a condition thereof
to qualify as a foreign corporation or to execute a general consent to service
of process in any jurisdiction in which it is not otherwise required to be so
qualified or to so execute a general consent to service of process. In each
jurisdiction in which the Shares shall have been qualified as above provided,
the Company will make and file such statements and reports in each year as are
or may be required by the laws of such jurisdiction.
(d) The Company will furnish to you, as soon as available,
and, in the case of the Prospectus and any term sheet or abbreviated term sheet
under Rule 434, in no event later than the first (1st) full business day
following the first day that Shares are traded, copies of the Registration
Statement (three of which will be signed and which will include all exhibits),
each Preliminary Prospectus and the Prospectus and any amendments or supplements
to such documents, including any prospectus prepared to permit compliance with
Section 10(a)(3) of the Act, and the Incorporated Documents (three of which will
include all exhibits,) all in such quantities as you may from time to time
reasonably request. Notwithstanding the foregoing, if BancAmerica Xxxxxxxxx
Xxxxxxxx, on behalf of the several Underwriters, shall agree to the utilization
of Rule 434 of the Rules and Regulations, the Company shall
-15-
16
provide to you copies of a Preliminary Prospectus updated in all respects
through the date specified by you in such quantities as you may from time to
time reasonably request.
(e) The Company will make generally available to its
securityholders as soon as practicable, but in any event not later than the
ninetieth (90th) day following the end of the fiscal quarter first occurring
after the first anniversary of the effective date of the Registration Statement,
an earnings statement (which will be in reasonable detail but need not be
audited) complying with the provisions of Section 11(a) of the Act and covering
a twelve (12) month period beginning after the effective date of the
Registration Statement.
(f) During a period of five (5) years after the date hereof or
such earlier date that the Company is acquired or is a party to a merger where
the Company is not the surviving entity and where all of the shareholders of the
Company cease to be shareholders, 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 will furnish to you and the other several Underwriters
hereunder, upon request (i) 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, of shareholders' equity, and of cash flows of the
Company for such fiscal year, accompanied by a copy of the certificate or report
thereon of independent certified public accountants, (ii) as soon as they are
available, copies of all reports (financial or other) mailed to shareholders,
(iii) 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, (iv) every material press release and every material news item or
article in respect of the Company or its affairs which was released to
shareholders or prepared by the Company or any of its Subsidiaries, and (v) any
additional information of a public nature concerning the Company or its
Subsidiaries, or its business which you may reasonably request. During such five
(5) year period, if the Company shall have active Subsidiaries, the foregoing
financial statements shall be on a consolidated basis to the extent that the
accounts of the Company and its Subsidiaries are consolidated, and shall be
accompanied by similar financial statements for any significant Subsidiary which
is not so consolidated.
(g) The Company will apply the net proceeds from the sale of
the Shares being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(h) 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.
(i) If the transactions contemplated hereby are not
consummated by reason of any failure, refusal or inability on the part of the
Company or any Selling Shareholder to perform any agreement on their respective
parts to be performed hereunder or to fulfill any condition of the Underwriters'
obligations hereunder, or if the Company shall terminate this Agreement pursuant
to Section 11 (a) hereof, or if the Underwriters shall terminate this Agreement
pursuant to Section 11 (b)(i), the Company will reimburse the several
Underwriters for all out-of-pocket expenses (including fees and disbursements of
Underwriters' Counsel and Underwriters' Canadian counsel) incurred by the
Underwriters in investigating or preparing to market or marketing the Shares.
(j) If at any time during the ninety (90) day period after the
Registration Statement becomes 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 of the Common Stock 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 the Company to the effect set forth
above, forthwith prepare, consult with you concerning 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.
-16-
17
(k) During the Lock-up Period, the Company will not, without
the prior written consent of BancAmerica Xxxxxxxxx Xxxxxxxx, effect the
Disposition of, directly or indirectly, any Securities other than the sale of
the Firm Shares and the Option Shares hereunder, the sales of shares of Common
Stock pursuant to the exercise of options granted or to be granted under the
Company's stock option plan (the "Option Plan"), the issuance of options under
the Option Plan, and the issuance of unregistered stock in connection with an
acquisition provided that such unregistered stock shall not be freely tradeable
within the Lock-up Period.
(l) For so long as there are more than one hundred (100)
shareholders of record of the Common Stock, the Company shall use its best
efforts to maintain the listing of the Common Stock on the Nasdaq National
Market for a period of at least five (5) years after the effective date of the
Registration Statement.
(m) The Company and the Selling Shareholders shall use their
best efforts to do and perform all things required or necessary to be done and
performed under this Agreement by the Company or the Selling Shareholders prior
to the Closing Date or any later date on which Option Shares are to be
purchased, as the case may be, and to satisfy all conditions precedent to the
delivery of the Shares.
(n) The Company agrees to enforce (at its expense), for the
benefit of the Underwriters and at the request of BancAmerica Xxxxxxxxx
Xxxxxxxx, the Lock-Up Agreements and not to waive any condition of any such
agreement without the prior written consent of BancAmerica Xxxxxxxxx Xxxxxxxx.
5. Expenses.
(a) The Company and the Selling Shareholders agree with each
Underwriter that:
(i) The Company will pay and bear all costs and expenses
in connection with the preparation, printing and filing of the Registration
Statement (including financial statements, schedules and exhibits), Preliminary
Prospectuses, the Prospectus and the Incorporated Documents, and any amendments
or supplements thereto; the printing of this Agreement, the Agreement Among
Underwriters, the Selected Dealer Agreement, the Preliminary Blue Sky Survey and
any Supplemental Blue Sky Survey, the Underwriters' Questionnaire and Power of
Attorney, and any instruments related to any of the foregoing; the issuance and
delivery of the Shares hereunder to the several Underwriters, including transfer
taxes, if any, the cost of all certificates representing the Shares and transfer
agents' and registrars' fees; the fees and disbursements of counsel for the
Company; all fees and other charges of the Company's independent certified
public accountants; the cost of furnishing to the several Underwriters copies of
the Registration Statement (including appropriate exhibits), Preliminary
Prospectus, the Prospectus, the Incorporated Documents and any amendments or
supplements to any of the foregoing; NASD filing fees and the cost of qualifying
the Shares under the laws of such jurisdictions as you may designate (including
filing fees and fees and disbursements of Underwriters' Counsel and Canadian
counsel in connection with such NASD filings, Blue Sky qualifications and
compliance with Canadian securities laws); and all other expenses directly
incurred by the Company in connection with the performance of their obligations
hereunder. Any additional expenses incurred as a result of the sale of the
Shares by the Selling Shareholders will be borne collectively by the Company and
the Selling Shareholders as may be agreed between such parties. The provisions
of this Section 5(a)(i) are intended to relieve the Underwriters from the
payment of the expenses and costs which the Selling Shareholders and the Company
hereby agree to pay, but shall not affect any agreement which the Selling
Shareholders and the Company may make, or may have made, for the sharing of any
of such expenses and costs. Such agreements shall not impair the obligations of
the Company and the Selling Shareholders hereunder to the several Underwriters.
(ii) In addition to its other obligations under Section
8(a) hereof, the Company agrees that, as an interim measure during the pendency
of any claim, action, investigation,
-17-
18
inquiry or other proceeding described in Section 8(a) hereof, it will reimburse
the Underwriters on a monthly basis for all reasonable legal or other expenses
actually incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
Company's obligation to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Underwriters shall
promptly return such payment to the Company together with interest, compounded
daily, determined on the basis of the prime rate listed from time to time in The
Wall Street Journal which represents the base rate on corporate loans posted by
a substantial majority of the nation's thirty (30) largest banks (the "Prime
Rate"). Any such interim reimbursement payments which are not made to the
Underwriters within thirty (30) days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request.
(iii) In addition to their other obligations under
Section 8(b) hereof, each Selling Shareholder agrees that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding described in Section 8(b) hereof relating to such Selling
Shareholder, it will reimburse the Underwriters on a monthly basis for all
reasonable legal or other expenses actually incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of such Selling Shareholder's obligation to
reimburse the Underwriters for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is so
held to have been improper, the Underwriters shall promptly return such payment
to the Selling Shareholders, together with interest, compounded daily,
determined on the basis of the Prime Rate. Any such interim reimbursement
payments which are not made to the Underwriters within thirty (30) days of a
request for reimbursement shall bear interest at the Prime Rate from the date of
such request.
(b) In addition to their other obligations under Section 8(c)
hereof, the Underwriters severally and not jointly agree that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding described in Section 8(c) hereof, they will reimburse the
Company and each Selling Shareholder on a monthly basis for all reasonable legal
or other expenses actually incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the Company and each
such Selling Shareholder for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is so
held to have been improper, the Company and each such Selling Shareholder shall
promptly return such payment to the Underwriters together with interest,
compounded daily, determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made to the Company and each such Selling
Shareholder within thirty (30) days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request.
(c) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in Sections
5(a)(ii), 5(a)(iii) and 5(b) hereof, including the amounts of any requested
reimbursement payments, the method of determining such amounts and the basis on
which such amounts shall be apportioned among the reimbursing parties, shall be
settled by arbitration conducted under the provisions of the Constitution and
Rules of the Board of Governors of the New York Stock Exchange, Inc. or pursuant
to the Code of Arbitration Procedure of the NASD. Any such arbitration must be
commenced by service of a written demand for arbitration or a written notice of
intention to arbitrate, therein electing the arbitration tribunal. In the event
the party demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to said demand or
notice is authorized to do so. Any such arbitration will be limited to the
operation of the interim reimbursement provisions contained in Sections
5(a)(ii), 5(a)(iii) and 5(b) hereof and will not resolve the ultimate propriety
or enforceability of the obligation to indemnify for
-18-
19
expenses which is created by the provisions of Sections 8(a), 8(b) and 8(c)
hereof or the obligation to contribute to expenses which is created by the
provisions of Section 8(c) hereof.
6. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Shares as provided herein shall
be subject to the accuracy, as of the date hereof and the Closing Date and any
later date on which Option Shares are to be purchased, as the case may be, of
the representations and warranties of the Company and the Selling Shareholders
herein, to the performance by the Company and the Selling Shareholders of their
respective obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 2:00 P.M., San Francisco time, on the date following the date of this
Agreement, or such later date as shall be consented to in writing by you; and no
stop order suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the knowledge of
the Company, any Selling Shareholder or any Underwriter, threatened by the
Commission, and any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or any Incorporated
Document or otherwise) shall have been complied with to the satisfaction of
Underwriters' Counsel.
(b) All corporate proceedings and other legal matters in connection
with this Agreement, the form of Registration Statement and the Prospectus, and
the registration, authorization, issue, sale and delivery of the Shares, shall
have been reasonably satisfactory to Underwriters' Counsel, 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.
(c) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, or any later date on which Option Shares are to be
purchased, as the case may be, there shall not have been any change in the
condition (financial or otherwise), earnings, operations, business or business
prospects of the Company and its Subsidiaries considered as one enterprise from
that set forth in the Registration Statement or Prospectus, which, in your sole
judgment, is material and adverse and that makes it, in your sole judgment,
impracticable or inadvisable to proceed with the public offering of the Shares
as contemplated by the Prospectus.
(d) You shall have received on the Closing Date and on any later
date on which Option Shares are to be purchased, as the case may be, the
following opinion of Xxxx Xxxxxxxx & Xxxxxx LLP, special counsel for the Company
and the Selling Shareholders, dated the Closing Date or such later date on which
Option Shares are to be purchased, as the case may be, addressed to the
Underwriters and with reproduced copies or signed counterparts thereof for each
of the Underwriters, to the effect that:
(i) The Company and each U.S. Subsidiary and each Foreign
Subsidiary incorporated under the laws of any state of the U.S.
(collectively the "U.S. Incorporated Subsidiaries"), is a
corporation validly existing and in good standing under the laws of
the jurisdiction of its incorporation;
(ii) The Company and each U.S. Incorporated Subsidiary has the
corporate power and authority to own, lease and operate its
properties and the Company and each U.S. Subsidiary has the
corporate power and authority to conduct its business as described
in the Prospectus;
(iii) The Company and each U.S. Subsidiary is duly qualified to
do business as a foreign corporation in each State or jurisdiction
in the U.S. and is in good standing in each jurisdiction in the
U.S., if any, in which the ownership or leasing of its properties or
the conduct of its business requires such qualification, except
where the failure to be so qualified or be in good standing would
not have a material adverse effect
-19-
20
on the condition (financial or otherwise), earnings,
operations or business of the Company and its Subsidiaries
considered as one enterprise. To such counsel's knowledge, the
Company does not own or control, directly or indirectly, any
corporation, association or other entity other than those
entities disclosed on Schedule C hereto;
(iv) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus under
the caption "Capitalization" as of the dates stated therein,
the issued and outstanding shares of capital stock of the
Company (including the Selling Shareholder Shares) have been
duly and validly issued and are fully paid and nonassessable,
and, to such counsel's knowledge, will not have been issued in
violation of or subject to any preemptive right, co-sale
right, registration right, right of first refusal or other
similar right;
(v) All issued and outstanding shares of capital
stock of each U.S. Incorporated Subsidiary have been duly
authorized and validly issued and are fully paid and
nonassessable, and, to such counsel's knowledge, have not been
issued in violation of or subject to any preemptive right,
co-sale right, registration right, right of first refusal or
other similar right and are owned by the Company free and
clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest;
(vi) The Firm Shares to be issued by the Company
pursuant to the terms of this Agreement have been duly
authorized and, upon issuance and delivery against payment
therefor in accordance with the terms hereof, will be duly and
validly issued and fully paid and nonassessable, and will not
have been issued in violation of or subject to any preemptive
right, co-sale right, registration right, right of first
refusal or other similar right. The Option Shares have been
duly authorized, validly issued and are non-assessable.
(vii) The Company has the corporate power and
authority to enter into this Agreement and to issue, sell and
deliver to the Underwriters the Shares to be issued and sold
by it hereunder;
(viii) This Agreement has been duly authorized by all
necessary corporate action on the part of the Company and has
been duly executed and delivered by the Company and, assuming
due authorization, execution and delivery by you, is a valid
and binding agreement of the Company, enforceable in
accordance with its terms, except insofar as indemnification
provisions may be limited by applicable law and except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally, public policy or by
general equitable principles;
(ix) The Registration Statement has become
effective under the Act and, to such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are pending or threatened under the
Act;
(x) The Registration Statement and the Prospectus,
and each amendment or supplement thereto (other than the
financial statements (including supporting schedules) and
financial data derived therefrom as to which such counsel need
express no opinion), as of the effective date of the
Registration Statement, complied as to form in all material
respects with the requirements of the Act and the applicable
Rules and Regulations; and each of the Incorporated Documents
(other than the financial statements (including supporting
schedules) and the financial data derived therefrom as
-20-
21
to which such counsel need express no opinion) complied when
filed (or, if any amendment with respect to any such document
was filed, when such amendment was filed) pursuant to the
Exchange Act as to form in all material respects with the
requirements of the Act and the Rules and Regulations or the
Exchange Act and the applicable rules and regulations of the
Commission thereunder, as the case may be;
(xi) The statements under the caption "Description
of Capital Stock" in the Prospectus, insofar as such
statements constitute a summary of documents referred to
therein or matters of law, when read in conjunction with other
information contained in the Registration Statement, fairly
summarize in all material respects the information called for
with respect to such documents and matters; provided, however,
that such counsel may rely on representations of officers of
the Company with respect to the factual matters contained in
such statements. The form of certificate evidencing the Common
Stock and filed as an exhibit to the Registration Statement
complies with Georgia law in all material respects;
(xii) To such counsel's knowledge, there are no
agreements, contracts, leases or documents to which the
Company is a party of a character required to be described or
referred to in the Registration Statement or Prospectus or any
Incorporated Document or to be filed as an exhibit to the
Registration Statement or any Incorporated Document which are
not described or referred to therein or filed as required;
(xiii) The performance of this Agreement and the
consummation of the transactions herein contemplated (other
than performance of the Company's and Selling Shareholders'
indemnification obligations hereunder, concerning which no
opinion need be expressed) will not (a) result in any
violation of the Company's charter or bylaws or (b) to such
counsel's knowledge, result in a material breach or violation
of any of the terms and provisions of, or constitute a
material default under, any material bond, debenture, note or
other evidence of indebtedness, or any lease, contract,
indenture, mortgage, deed of trust, loan agreement, joint
venture or other agreement or instrument known to such counsel
to which the Company is a party or by which its properties are
bound, or any applicable U.S. statute, rule or regulation
known to such counsel (other than the financial statements
(including supporting schedules) and financial data derived
therefrom as to which such counsel need express no opinion)
or, to such counsel's knowledge, any order, writ or decree of
any court, government or governmental agency or body in the
U.S. having jurisdiction over the Company or any of its
Subsidiaries , or over any of their respective properties or
operations;
(xiv) No consent, approval, authorization or order
of or qualification with any court, government or governmental
agency or body in the U.S. having jurisdiction over the
Company or any of its Subsidiaries, or over any of their
properties or operations is necessary in connection with the
consummation by the Company of the transactions herein
contemplated, except such as have been obtained under the Act,
the Exchange Act or such as may be required under State or
other securities or Blue Sky laws in connection with the
purchase and the distribution of the Shares by the
Underwriters;
(xv) To such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened
against the Company or any of its Subsidiaries of a character
required to be disclosed in the Registration Statement or the
Prospectus or any Incorporated Document by the Act or the
Rules and Regulations or by the Exchange Act or the applicable
rules and regulations of the Commission thereunder, other than
those described therein;
-21-
22
(xvi) To such counsel's knowledge, neither the
Company nor any of its U.S. Incorporated Subsidiaries is
presently in material violation of its respective charter or
bylaws, and, to such counsel's knowledge, neither the Company
nor any of its Subsidiaries is presently in material breach of
any applicable U.S. statute, rule or regulation known to such
counsel or, to such counsel's knowledge, any order, writ or
decree of any court or governmental agency or body in the U.S.
having jurisdiction over the Company or any of its
Subsidiaries, or over any of their respective properties or
operations;
(xvii) To such counsel's knowledge, except as set
forth in the Registration Statement and Prospectus, no holders
of Common Stock or other securities of the Company have
registration rights with respect to securities of the Company
and, except as set forth in the Registration Statement and
Prospectus, all holders of securities of the Company having
rights known to such counsel to registration of such shares of
Common Stock or other securities, because of the filing of the
Registration Statement by the Company have, with respect to
the offering contemplated thereby, waived such rights or such
rights have expired by reason of lapse of time following
notification of the Company's intent to file the Registration
Statement or have included securities in the Registration
Statement pursuant to the exercise of and in full satisfaction
of such rights;
(xviii) Each Selling Shareholder which is not a
natural person has full right, power and authority to enter
into and to perform its obligations under the Power of
Attorney and Custody Agreement to be executed and delivered by
it in connection with the transactions contemplated herein;
the Power of Attorney and Custody Agreement of each Selling
Shareholder that is not a natural person has been duly
authorized by such Selling Shareholder; the Power of Attorney
and Custody Agreement of each Selling Shareholder has been
duly executed and delivered by or on behalf of such Selling
Shareholder; and the Power of Attorney and Custody Agreement
of each Selling Shareholder constitutes the valid and binding
agreement of such Selling Shareholder, enforceable in
accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable
principles;
(xix) Each of the Selling Shareholders has full
right, power and authority to enter into and to perform its
obligations under this Agreement and to sell, transfer, assign
and deliver the Shares to be sold by such Selling Shareholder
hereunder (it being acknowledged that no such opinion shall be
required as to the capacity of any individual Selling
Shareholder);
(xx) This Agreement has been duly authorized by
each Selling Shareholder that is not a natural person and has
been duly executed and delivered by or on behalf of each
Selling Shareholder;
(xxi) Upon the delivery of and payment for the
Shares as contemplated in this Agreement, each of the
Underwriters will receive valid marketable title to the Shares
purchased by it from such Selling Shareholder, free and clear
of any pledge, lien, security interest, encumbrance, claim or
equitable interest. In rendering such opinion, such counsel
may assume that the Underwriters purchased such shares in good
faith and are without notice of any defect in the title of the
Shares being purchased from the Selling Shareholders and may
assume (if counsel has no actual knowledge to the contrary)
the validity and completeness of the representations and
warranties of the Selling Shareholders contained in their
respective Custody Agreements and Powers of Attorney;
-22-
23
(xxii) Neither the Company nor any of its U.S.
Incorporated Subsidiaries is, nor will the Company or any of
its U.S. Incorporated Subsidiaries become upon the sale of the
Shares and the application of the proceeds therefrom as
described in the Prospectus under the caption "Use of
Proceeds," an "investment company" or a person controlled by
an "investment company" within the meaning of the 1940 Act;
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Representatives, Underwriters' Counsel and the independent
certified public accountants of the Company, at which such conferences the
contents of the Registration Statement and Prospectus and related matters were
discussed, and although they have not independently investigated or verified and
do not assume responsibility for the accuracy, completeness or fairness 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, (i)
the Registration Statement, when such document became effective (but after
giving effect to any modification incorporated therein pursuant to Rule 430A
under the Act) and as of the Closing Date or the Option Closing Date as the case
may be (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 misleading in light of the
circumstances under which they were made, (ii) the Prospectus, or any supplement
thereto, at the date it bears and as of the Closing Date or the Option Closing
Date, as the case may be, (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 misleading
in light of the circumstances under which they were made or (iii) any
Incorporated Document when such document was filed (or, if any amendment with
respect to such document was filed, when such amendment was filed) (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 misleading in light of the circumstances under which they
were made. Such counsel shall also state that the conditions for the use of Form
S-3 set forth in the General Instructions thereto have been satisfied.
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, the Selling
Shareholders or officers of the 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,
representation or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to you, as Representatives of the
Underwriters, and to Underwriters' Counsel. Counsel may deliver its opinion in
accordance with the January 1, 1992 edition of the Interpretive Standards
applicable to Legal Opinion to Third Parties in Corporate Transactions adopted
by the Legal Opinion Committee of the Corporate and Banking Law Section of the
State Bar of Georgia. Notwithstanding anything to the contrary herein contained,
such counsel need express no opinion as requested in clauses (xviii), (xix),
(xx) and (xxi) to the extent such opinions relate to Epargne Capitalization
Intermediare and Epargne Developpement.
(e) You shall have received on the Closing Date and on any
later date on which Option Shares are to be purchased, as the case may be,
opinions in form and substance reasonably satisfactory to the Underwriters and
to Underwriters' counsel from special counsel for the Company and for the
certain Foreign Subsidiaries located or operating in Canada, France, Mexico and
the United Kingdom, dated the Closing Date or such later date on which Option
Shares are to be purchased, as the case may be, addressed to the Underwriters
and with reproduced copies or signed counterparts thereof for each of the
Underwriters.
-23-
24
(f) You shall have received on the Closing Date and on any
later date on which Option Shares are to be purchased, as the case may be, an
opinion of Xxxxxx & Bird, in form and substance satisfactory to you, with
respect to the sufficiency of all such corporate proceedings and other legal
matters relating to this Agreement and the transactions contemplated hereby as
you may reasonably require, and the Company shall have furnished to such counsel
such documents as they may have requested for the purpose of enabling them to
pass upon such matters.
(g) You shall have received on the Closing Date and on any
later date on which Option Shares are to be purchased, as the case may be, a
letter from KPMG Peat Marwick LLP addressed to the Board of Directors of the
Company and to the Underwriters, dated the Closing Date or such later date on
which Option Shares are to be purchased, as the case may be, confirming that
they are independent certified public accountants with respect to the Company
within the meaning of the Act and the applicable published Rules and Regulations
and based upon the procedures described in such letter delivered to you
concurrently with the execution of this Agreement (herein called the "Original
Letter"), but carried out to a date not more than five (5) business days prior
to the Closing Date or such later date on which Option Shares are to be
purchased, as the case may be, (i) confirming, to the extent true, that the
statements and conclusions set forth in the Original Letter are accurate as of
the Closing Date or such later date on which Option Shares are to be purchased,
as the case may be, and (ii) setting forth any revisions and additions to the
statements and conclusions set forth in the Original Letter which are necessary
to reflect any changes in the facts described in the Original Letter since the
date of such letter, or to reflect the availability of more recent financial
statements, data or information. The letter shall not disclose any change in the
condition (financial or otherwise), earnings, operations, business or business
prospects of the Company and its Subsidiaries considered as one enterprise from
that set forth in the Registration Statement or Prospectus, which, in your sole
judgment, is material and adverse and that makes it, in your sole judgment,
impracticable or inadvisable to proceed with the public offering of the Shares
as contemplated by the Prospectus. The Original Letter from KPMG Peat Marwick
LLP shall be addressed to or for the use of the Board of Directors of the
Company and the Underwriters in form and substance satisfactory to the
Underwriters and shall (i) represent, to the extent true, that they are
independent certified public accountants with respect to the Company within the
meaning of the Act and the applicable published Rules and Regulations, (ii) set
forth their opinion with respect to their audit of the consolidated balance
sheets of the Company as of December 31, 1996 and 1997 and related consolidated
statements of earnings, shareholders' equity, and cash flows for the years ended
December 31, 1995, 1996 and 1997, and (iii) address other matters agreed upon by
KPMG Peat Marwick LLP and you. In addition, you shall have received from KPMG
Peat Marwick LLP a letter addressed to the Company and made available to you for
the use of the Underwriters stating that their review of the Company's system of
controls, to the extent they deemed necessary in establishing the scope of their
audit of the Company's consolidated financial statements as of December 31,
1997, did not disclose any weaknesses in internal controls that they considered
to be material weaknesses.
(h) You shall have received on the Closing Date and on any
later date on which Option Shares are to be purchased, as the case may be, a
certificate of the Company, dated the Closing Date or such later date on which
Option Shares are to be purchased, as the case may be, signed by the Chief
Executive Officer and Chief Financial Officer of the Company, to the effect
that, and you shall be satisfied that:
(i) The representations and warranties of the Company in
this Agreement are true and correct in all material respects,
as if made on and as of the Closing Date or any later date on
which Option Shares are to be purchased, as the case may be,
and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date or any later date on
which Option Shares are to be purchased, as the case may be;
-24-
25
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or threatened
under the Act;
(iii) When the Registration Statement became effective and
at all times subsequent thereto up to the delivery of such
certificate, the Registration Statement and the Prospectus,
and any amendments or supplements thereto, and the
Incorporated Documents, when such Incorporated Documents
became effective or were filed with the Commission or, if
amended, as of the date of such amendment thereto, contained
all material information required to be included therein by
the Act and the Rules and Regulations or the Exchange Act and
the applicable rules and regulations of the Commission
thereunder, as the case may be, and in all material respects
conformed to the requirements of the Act and the Rules and
Regulations or the Exchange Act and the applicable rules and
regulations of the Commission thereunder, as the case may be,
the Registration Statement, and any amendment or supplement
thereto, did not and does not include any untrue statement of
a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading, the Prospectus, and any amendment or
supplement thereto, did not and does not include any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and,
since the effective date of the Registration Statement, there
has occurred no event required to be set forth in an amended
or supplemented Prospectus which has not been so set forth;
and
(iv) Each Preliminary Prospectus, when filed with the
Commission and at all time subsequent thereto up to the
delivery of such certificate, conformed in all material
respects to the requirements of the Act and the Rules and
Regulations as of its date, has not included any untrue
statement of 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;
provided, however, if any such material misstatement or
material omission were made, it was corrected in a subsequent
Preliminary Prospectus which was publicly distributed to
prospective purchasers;
(v) Subsequent to the respective dates as of which
information is given in the Registration Statement and
Prospectus, and except as disclosed or contemplated in the
Prospectus, there has not been (a) any material adverse change
in the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and
its Subsidiaries considered as one enterprise, (b) any
transaction that is material to the Company and its
Subsidiaries considered as one enterprise, except transactions
entered into in the ordinary course of business, (c) any
obligation, direct or contingent, that is material to the
Company and its Subsidiaries considered as one enterprise,
incurred by the Company or its Subsidiaries, except
obligations incurred in the ordinary course of business, (d)
any change in the capital stock or outstanding indebtedness of
the Company or any of its Subsidiaries that is material to the
Company and its Subsidiaries considered as one enterprise, (e)
any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company or any of its
Subsidiaries, or (f) any loss or damage (whether or not
insured) to the property of the Company or any of its
Subsidiaries which has been sustained or will have been
sustained which has a material adverse effect on the condition
(financial or otherwise), earnings, operations, business or
business prospects of the Company and its Subsidiaries
considered as one enterprise.
(vi) The Common Stock is registered pursuant to Section
12(g) of the Exchange Act and is listed on Nasdaq National
Market, and the Company has taken no
-25-
26
action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the
Exchange Act or delisting the Common Stock from the Nasdaq
National Market, nor has the Company received any notification
that the Commission or the NASD is contemplating terminating
such registration or listing. The Company has filed in a
timely manner all reports and other information required to be
filed with the Commission pursuant to the Exchange Act during
the 12 calendar months and any portion of a month immediately
preceding the filing of the Registration Statement (or during
such shorter period of time that the Company has been subject
to the reporting requirements of the Exchange Act).
(i) You shall be satisfied that, and you shall have
received a certificate, dated the Closing Date, or any later date on which
Option Shares are to be purchased, as the case may be, from the Attorneys for
each Selling Shareholder to the effect that, as of the Closing Date, or any
later date on which Option Shares are to be purchased, as the case may be, they
have not been informed that:
(i) The representations and warranties made by such
Selling Shareholder herein are not true or correct in any
material respect on the Closing Date or on any later date on
which Option Shares are to be purchased, as the case may be;
or
(ii) Such Selling Shareholder has not complied with
any obligation or satisfied any condition which is required to
be performed or satisfied on the part of such Selling
Shareholder at or prior to the Closing Date or any later date
on which Option Shares are to be purchased, as the case may
be.
(j) The Company shall have obtained and delivered to you
an agreement from each director of the Company and each other person listed on
Schedule D hereto that such person will not, during the Lock-up Period, effect
the Disposition of any Securities now owned or hereafter acquired directly by
such person or with respect to which such person has or hereafter acquires the
power of disposition, otherwise than (i) as a bona fide gift or gifts, provided
the donee or donees thereof agree in writing to be bound by this restriction,
(ii) as a distribution to limited partners, shareholders or beneficiaries of
such person, provided that the distributees thereof agree in writing to be bound
by the terms of this restriction, or (iii) if such person is an individual, to a
member or members of his or her immediate family or to a trust the beneficiaries
of which are exclusively such person and/or a member or members of his or her
immediate family, provided that each transferee thereof agrees in writing to be
bound by the terms of this restriction, or (iv) with the prior written consent
of BancAmerica Xxxxxxxxx Xxxxxxxx.
The foregoing restriction shall have been expressly agreed to
preclude the holder of the Securities from engaging in any hedging or other
transaction which is designed to or reasonably expected to lead to or result in
a Disposition of Securities during the Lock-up Period, even if such Securities
would be disposed of by someone other than the such holder. Such prohibited
hedging or other transactions would include, without limitation, any short sale
(whether or not against the box) or any purchase, sale or grant of any right
(including, without limitation, any put or call option) with respect to any
Securities or with respect to any security (other than a broad-based market
basket or index) that includes, relates to or derives any significant part of
its value from Securities. Furthermore, such person will have also agreed and
consented to the entry of stop transfer instructions with the Company's transfer
agent against the transfer of the Securities held by such person except in
compliance with this restriction.
(k) The Company and the Selling Shareholders shall have
furnished to you such further certificates and documents as you shall reasonably
request (including certificates of officers of the Company, the Selling
Shareholders or officers of the Selling Shareholders (when the Selling
Shareholder is not a natural person) as to the accuracy of the representations
and warranties of the Company and the Selling Shareholders herein, as to the
performance by the Company and the Selling Shareholders of their
-26-
27
respective obligations hereunder and as to the other conditions concurrent and
precedent to the obligations of the Underwriters hereunder.
All such opinions, certificates, letters and documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory to Underwriters' Counsel. The Company and the Selling Shareholders
will furnish you with such number of conformed copies of such opinions,
certificates, letters and documents as you shall reasonably request.
7. Option Shares.
(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, certain Selling Shareholders hereby grant to the several Underwriters,
severally and not jointly, for the purpose of covering over-allotments in
connection with the distribution and sale of the Firm Shares only, a
nontransferable option to purchase up to an aggregate of 660,000 Option Shares
as set forth on Schedule B hereto at the purchase price per share for the Firm
Shares set forth in Section 3 hereof. Such option may be exercised by the
Representatives on behalf of the several Underwriters on one (1) or more
occasions in whole or in part during the period of thirty (30) days after the
date on which the Firm Shares are initially offered to the public, by giving
written notice to the Company. The number of Option Shares to be purchased by
each Underwriter upon the exercise of such option shall be the same proportion
of the total number of Option Shares to be purchased by the several Underwriters
pursuant to the exercise of such option as the number of Firm Shares purchased
by such Underwriter (set forth in Schedule A hereto) bears to the total number
of Firm Shares purchased by the several Underwriters (set forth in Schedule A
hereto), adjusted by the Representatives in such manner as to avoid fractional
shares.
Delivery of definitive certificates for the Option Shares to
be purchased by the several Underwriters pursuant to the exercise of the option
granted by this Section 7 shall be made against payment of the purchase price
therefor by the several Underwriters by wire transfer of same-day funds, payable
to the order of the Selling Shareholders. Such delivery and payment shall take
place at the offices of Long Xxxxxxxx & Xxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxx 00000 or at such other place as may be agreed upon among
the Representatives and the Selling Shareholders (i) on the Closing Date, if
written notice of the exercise of such option is received by the Selling
Shareholders at least two (2) full business days prior to the Closing Date, or
(ii) on a date which shall not be later than the third (3rd) full business day
following the date the Selling Shareholders receives written notice of the
exercise of such option, if such notice is received by the Selling Shareholders
less than two (2) full business days prior to the Closing Date.
The certificates for the Option Shares to be so delivered will
be made available to you at such office or such other location including,
without limitation, in New York City, as you may reasonably request for checking
at least one (1) full business day prior to the date of payment and delivery and
will be in such names and denominations as you may request, such request to be
made at least two (2) full business days prior to such date of payment and
delivery. If the Representatives so elect, delivery of the Option Shares may be
made by credit through full fast transfer to the accounts at The Depository
Trust Company designated by the Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated to)
make payment of the purchase price on behalf of any Underwriter or Underwriters
whose check or checks shall not have been received by you prior to the date of
payment and delivery for the Option Shares to be purchased by such Underwriter
or Underwriters. Any such payment by you shall not relieve any such Underwriter
or Underwriters of any of its or their obligations hereunder.
(b) Upon exercise of any option provided for in Section 7(a)
hereof, the obligations of the several Underwriters to purchase such Option
Shares will be subject (as of the date hereof and as of
-27-
28
the date of payment and delivery for such Option Shares) to the accuracy of and
compliance with the representations, warranties and agreements of the Company
and the Selling Shareholders herein, to the accuracy of the statements of the
Company, the Selling Shareholders and officers of the Company made pursuant to
the provisions hereof, to the performance by the Company and the Selling
Shareholders of their respective obligations hereunder, to the conditions set
forth in Section 6 hereof, and to the condition that all proceedings taken at or
prior to the payment date in connection with the sale and transfer of such
Option Shares shall be reasonably satisfactory in form and substance to you and
to Underwriters' Counsel, and you shall have been furnished with all such
documents, certificates and opinions as you may request in order to evidence the
accuracy and completeness of any of the representations, warranties or
statements, the performance of any of the covenants or agreements of the Company
and the Selling Shareholders or the satisfaction of any of the conditions herein
contained.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject (including, without
limitation, in its capacity as an Underwriter or as a "qualified independent
underwriter" within the meaning of Schedule E of the Bylaws of the NASD), under
the Act, the Exchange Act or otherwise, specifically including, but not limited
to, losses, claims, damages or liabilities in so far as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any breach of any representation, warranty, agreement or covenant of
the Company herein contained, (ii) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or any
amendment or supplement thereto, including any Incorporated Document or, if
amended, any Incorporated Document as so amended, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
or the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, such Preliminary Prospectus, or the
Prospectus, or any such amendment or supplement thereto, in reliance upon, and
in conformity with, written information relating to any Underwriter furnished to
the Company by such Underwriter, directly or through you, specifically for use
in the preparation thereof and, provided further, that the indemnity agreement
provided in this Section 8(a) with respect to any Preliminary Prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
losses, claims, damages, liabilities or actions based upon any untrue statement
or alleged untrue statement of material fact or omission or alleged omission to
state therein a material fact purchased Shares, if a copy of the Prospectus in
which such untrue statement or alleged untrue statement or omission or alleged
omission was corrected had not been sent or given to such person within the time
required by the Act and the Rules and Regulations, unless such failure is the
result of noncompliance by the Company with Section 4(d) hereof.
The indemnity agreement in this Section 8(a) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls any Underwriter within the meaning of the Act or
the Exchange Act. This indemnity agreement shall be in addition to any
liabilities which the Company may otherwise have.
(b) Each Selling Shareholder, severally and not jointly,
agrees to indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject (including, without limitation, in its capacity as an Underwriter
or as a "qualified independent underwriter" within the meaning of Schedule E or
the Bylaws of the NASD) under the Act, the Exchange Act or otherwise,
specifically including, but not limited to, losses, claims, damages or
liabilities in so far as such losses, claims, damages or liabilities (or actions
in
-28-
29
respect thereof) arise out of or are based upon (i) any breach of any
representation, warranty, agreement or covenant of such Selling Shareholder
herein contained, (ii) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment or
supplement thereto, including any Incorporated Document or, if amended, any
Incorporated Document as so amended, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (iii) any untrue statement or alleged
untrue statement of any material fact contained in any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or the omission or
alleged omission to state therein a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, in the case of subparagraphs (ii) and (iii) of this
Section 8(b) to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company or such
Underwriter by such Selling Shareholder, directly or through such Selling
Shareholder's representatives, specifically for use in the preparation thereof,
and agrees to reimburse each Underwriter for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however that the indemnity
agreement provided in this Section 8(b) with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any losses, claims, damages, liabilities or actions based upon
any untrue statement or alleged untrue statement of a material fact or omission
or alleged omission to state therein a material fact purchased Shares, if a copy
of the Prospectus in which such untrue statement or alleged untrue statement or
omission or alleged omission was corrected had not been sent or given to such
person within the time required by the Act and the Rules and Regulations, unless
such failure is the result of noncompliance by the Company with Section 4(d)
hereof.
The indemnity agreement in this Section 8(b) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls any Underwriter within the meaning of the Act or
the Exchange Act. This indemnity agreement shall be in addition to any
liabilities which such Selling Shareholder may otherwise have.
(c) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company and each Selling Shareholder against any
losses, claims, damages or liabilities, joint or several, to which the Company
or such Selling Shareholder may become subject under the Act or otherwise,
specifically including, but not limited to, losses, claims, damages or
liabilities in so far as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (i) any breach of any
representation, warranty, agreement or covenant of such Underwriter herein
contained, (ii) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or any amendment or supplement
thereto, including any Incorporated Document or, if amended, any Incorporated
Document as so amended, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (iii) any untrue statement or alleged untrue
statement of any material fact contained in any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in the case of subparagraphs (ii) and (iii) of this Section 8(c) to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter, directly or through you, specifically for use in the preparation
thereof, and agrees to reimburse the Company and each such Selling Shareholder
for any legal or other expenses reasonably incurred by the Company and each such
Selling Shareholder in connection with investigating or defending any such loss,
claim, damage, liability or action.
The indemnity agreement in this Section 8(c) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
officer of the Company who signed the Registration Statement and each director
of the Company, each Selling Shareholder and each person, if any, who controls
the Company or any Selling Shareholder within the meaning of the Act or the
Exchange Act.
-29-
30
This indemnity agreement shall be in addition to any liabilities which each
Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 8, notify the indemnifying party in writing of the
commencement thereof but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such action is brought against
any indemnified party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it shall elect by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have received an opinion of
counsel that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of the indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with the reasonable
fees of appropriate local counsel) approved by the indemnifying party
representing all the indemnified parties under Section 8(a), 8(b) or 8(c) hereof
who are parties to such action), (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party. In no event
shall any indemnifying party be liable in respect of any amounts paid in
settlement of any action unless the indemnifying party shall have approved the
terms of such settlement; provided that such consent shall not be unreasonably
withheld. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnification could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on all claims that are the subject matter of such
proceeding.
(e) In order to provide for just and equitable contribution in
any action in which a claim for indemnification is made pursuant to this Section
8 but it is judicially determined (by the entry of a final judgment or decree by
a court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 8 provides for
indemnification in such case, all the parties hereto shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that except as set forth
in Section 8(f) hereof, the Underwriters severally and not jointly are
responsible pro rata for the portion represented by the percentage that the
underwriting discount bears to the initial public offering price, and the
Company and the Selling Shareholders are responsible for the remaining portion,
provided, however that (i) no Underwriter shall be required to contribute any
amount in excess of the amount by which the underwriting discount applicable to
the Shares purchased by such Underwriter exceeds the amount of damages which
such Underwriter has otherwise required to pay and (ii) no person guilty of a
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation. The contribution agreement in this Section 8(e)
shall extend upon the same terms and conditions to, and shall inure to the
benefit of, each person, if any, who
-30-
31
controls any Underwriter, the Company or any Selling Shareholder within the
meaning of the Act or the Exchange Act and each officer of the Company who
signed the Registration Statement and each director of the Company.
(f) The liability of each Selling Shareholder under the
representations, warranties and agreements contained herein and under the
indemnity agreements contained in the provisions of this Section 8 shall be
limited to an amount equal to the sum of (i) the initial public offering price
of the Selling Shareholder Shares and Option Shares sold by such Selling
Shareholder to the Underwriters minus the amount of the underwriting discount
paid thereon to the Underwriters by such Selling Shareholder, and (ii) all
amounts received by such Selling Shareholders, in addition to amounts received
for Selling Shareholder Shares and Option Shares as provided in (i) above,
described under the captions "Risk Factors - Offering Benefits to Affiliates"
and "Use of Proceeds" contained in the Prospectus. The Company and such Selling
Shareholders may agree, as among themselves and without limiting the rights of
the Underwriters under this Agreement, as to the respective amounts of such
liability for which they each shall be responsible. For purposes of this
paragraph, the term "Selling Shareholders" includes the "Shareholders."
(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 8, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 8 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.
9. Representations, Warranties, Covenants and Agreements to
Survive Delivery. All representations, warranties, covenants and agreements of
the Company, the Selling Shareholders and the Underwriters herein or in
certificates delivered pursuant hereto, and the indemnity and contribution
agreements contained in Section 8 hereof shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter within the meaning of the
Act or the Exchange Act, or by or on behalf of the Company or any Selling
Shareholder, or any of their officers, directors or controlling persons within
the meaning of the Act or the Exchange Act, and shall survive the delivery of
the Shares to the several Underwriters hereunder or termination of this
Agreement.
10. Substitution of Underwriters. If any Underwriter or
Underwriters shall fail to take up and pay for the number of Firm Shares agreed
by such Underwriter or Underwriters to be purchased hereunder upon tender of
such Firm Shares in accordance with the terms hereof, and if the aggregate
number of Firm Shares which such defaulting Underwriter or Underwriters so
agreed but failed to purchase does not exceed 10% of the Firm Shares, the
remaining Underwriters shall be obligated, severally in proportion to their
respective commitments hereunder, to take up and pay for the Firm Shares of such
defaulting Underwriter or Underwriters.
If any Underwriter or Underwriters so defaults and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed to take up and pay for exceeds 10% of the Firm
Shares, the remaining Underwriters shall have the right, but shall not be
obligated, to take up and pay for (in such proportions as may be agreed upon
among them) the Firm Shares which the defaulting Underwriter or Underwriters so
agreed but failed to purchase. If such remaining Underwriters do not, at the
Closing Date, take up and pay for the Firm Shares which the defaulting
Underwriter or Underwriters so agreed but failed to purchase, the Closing Date
shall be postponed for twenty-four (24) hours to allow the several Underwriters
the privilege of substituting within twenty-four (24) hours (including
non-business hours) another underwriter or underwriters (which may include any
nondefaulting Underwriter) satisfactory to the Company. If no such underwriter
or underwriters shall have been substituted as aforesaid by such postponed
Closing Date, the Closing Date may, at the option of
-31-
32
the Company, be postponed for a further twenty-four (24) hours, if necessary, to
allow the Company the privilege of finding another underwriter or underwriters,
satisfactory to you, to purchase the Firm Shares which the defaulting
Underwriter or Underwriters so agreed but failed to purchase. If it shall be
arranged for the remaining Underwriters or substituted underwriter or
underwriters to take up the Firm Shares of the defaulting Underwriter or
Underwriters as provided in this Section 10, (i) the Company shall have the
right to postpone the time of delivery for a period of not more than seven (7)
full business days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement, supplements to the Prospectus or other
such documents which may thereby be made necessary, and (ii) the respective
number of Firm Shares to be purchased by the remaining Underwriters and
substituted underwriter or underwriters shall be taken as the basis of their
underwriting obligation. If the remaining Underwriters shall not take up and pay
for all such Firm Shares so agreed to be purchased by the defaulting Underwriter
or Underwriters or substitute another underwriter or underwriters as aforesaid
and the Company shall not find or shall not elect to seek another underwriter or
underwriters for such Firm Shares as aforesaid, then this Agreement shall
terminate.
In the event of any termination of this Agreement pursuant to
the preceding paragraph of this Section 10, neither the Company nor any Selling
Shareholder shall be liable to any Underwriter (except as provided in Sections 5
and 8 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed, otherwise than for some reason permitted under this Agreement, to
purchase the number of Firm Shares agreed by such Underwriter to be purchased
hereunder, which Underwriter shall remain liable to the Company, the Selling
Shareholders and the other Underwriters for damages, if any, resulting from such
default) be liable to the Company or any Selling Shareholder (except to, the
extent provided in Sections 5 and 8 hereof).
The term "Underwriter" in this Agreement shall include any
person substituted for an Underwriter under this Section 10.
11. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at the earlier of
(i) 6:30 A.M., San Francisco time, on the first (lst) full business day
following the effective date of the Registration Statement, or (ii) the time of
the initial public offering of any of the Shares by the Underwriters after the
Registration Statement becomes effective. The time of the initial public
offering shall mean the time of the release by you, for publication, of the
first newspaper advertisement relating to the Shares, or the time at which the
Shares are first generally offered by the Underwriters to the public by letter,
telephone, telegram or telecopy, whichever shall first occur. By giving notice
as set forth in Section 12 before the time this Agreement becomes effective,
you, as Representatives of the several Underwriters, or the Company, may prevent
this Agreement from becoming effective without liability of any party to any
other party, except as provided in Sections 4(i), 5 and 8 hereof.
(b) You, as Representatives of the several Underwriters, shall
have the right to terminate this Agreement by giving notice as hereinafter
specified at any time on or prior to the Closing Date or on or prior to any
later date on which Option Shares are to be purchased, as the case may be, (i)
if the Company or any Selling Shareholder shall have failed, refused or been
unable to perform any agreement on its part to be performed, or because any
other condition of the Underwriters' obligations hereunder required to be
fulfilled is not fulfilled, including, without limitation, any change in the
condition (financial or otherwise), earnings, operations, business or business
prospects of the Company and its Subsidiaries considered as one enterprise from
that set forth in the Registration Statement or the Prospectus, which, in your
sole judgment, is material and adverse, or (ii) if additional material
governmental restrictions, not in force and effect on the date hereof, shall
have been imposed upon trading in securities generally or minimum or maximum
prices shall have been generally established on the New York Stock Exchange or
on the American Stock Exchange or in the over
-32-
33
the counter market by the NASD, or trading in securities generally shall have
been suspended on either such exchange or in the over the counter market by the
NASD, or if a banking moratorium shall have been declared by federal, New York
or California authorities, or (iii) if the Company shall have sustained a loss
by strike, fire, flood, earthquake, accident or other calamity of such character
as to interfere materially with the conduct of the business and operations of
the Company regardless of whether or not such loss shall have been insured, or
(iv) if there shall have been a material adverse change in the general political
or economic conditions or financial markets as in your reasonable judgment makes
it inadvisable or impracticable to proceed with the offering, sale and delivery
of the Shares, or (v) if there shall have been an outbreak or escalation of
hostilities or of any other insurrection or armed conflict or the declaration by
the United States of a national emergency which, in the reasonable opinion of
the Representatives, makes it impracticable or inadvisable to proceed with the
public offering of the Shares as contemplated by the Prospectus. In the event of
termination pursuant to subparagraph (i) above, the Company shall remain
obligated to pay costs and expenses pursuant to Sections 4(j), 5 and 8 hereof.
Any termination pursuant to any of subparagraphs (ii) through (v) above shall be
without liability of any party to any other party except as provided in Sections
5 and 8 hereof.
If you elect to prevent this Agreement from becoming effective
or to terminate this Agreement as provided in this Section 11, you shall
promptly notify the Company by telephone, telecopy or telegram, in each case
confirmed by letter. If the Company shall elect to prevent this Agreement from
becoming effective, the Company shall promptly notify you by telephone, telecopy
or telegram, in each case, confirmed by letter.
12. Notices. All notices or communications hereunder, except as
herein otherwise specifically provided, shall be in writing and if sent to you
shall be mailed, delivered, telegraphed (and confirmed by letter) or telecopied
(and confirmed by letter) to you c/o BancAmerica Xxxxxxxxx Xxxxxxxx, 000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, telecopier
number (000) 000-0000, Attention: General Counsel; if sent to the Company, such
notice shall be mailed, delivered, telegraphed (and confirmed by letter) or
telecopied (and confirmed by letter) to The Profit Recovery Group International,
Inc., 0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000 Xxxxx, Xxxxxxx, Xxxxxxx 00000-0000,
telecopier number (000) 000-0000, Attention: Xxxx X. Xxxx, Chief Executive
Officer; if sent to one or more of the Selling Shareholders, such notice shall
be sent mailed, delivered, telegraphed (and confirmed by letter) or telecopied
(and confirmed by letter) to Xxxx X. Xxxx and Xxxx X. Xxxx, as Attorney-in-Fact
for the Selling Shareholders, at The Profit Recovery Group International, Inc.,
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000 Xxxxx, Xxxxxxx, Xxxxxxx 00000-0000,
telecopier number (000) 000-0000, with a copy to Xxxxxxx X. Xxxxxxxxxxx, at Long
Xxxxxxxx & Xxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx
00000, telecopier number (000) 000-0000.
13. Parties. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters and the Company and the Selling
Shareholders and their respective executors, administrators, successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any person or entity, other than the parties hereto and
their respective executors, administrators, successors and assigns, and the
controlling persons within the meaning of the Act or the Exchange Act, officers
and directors referred to in Section 8 hereof, any legal or equitable right,
remedy or claim in respect of this Agreement or any provisions herein contained,
this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the parties hereto and their
respective executors, administrators, successors and assigns and said
controlling persons and said officers and directors, and for the benefit of no
other person or entity. No purchaser of any of the Shares from any Underwriter
shall be construed a successor or assign by reason merely of such purchase.
In all dealings with the Company and the Selling Shareholders
under this Agreement, you shall act on behalf of each of the several
Underwriters, and the Company and the Selling Shareholders shall be entitled to
act and rely upon any statement, request, notice or agreement made or given by
you jointly or by BancAmerica Xxxxxxxxx Xxxxxxxx on behalf of you.
-33-
34
14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California.
15. Counterparts. This Agreement may be signed in several counterparts,
each of which will constitute an original.
If the foregoing correctly sets forth the understanding among the
Company, the Selling Shareholders and the several Underwriters, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the Company, the Selling Shareholders
and the several Underwriters.
Very truly yours,
THE PROFIT RECOVERY GROUP
INTERNATIONAL, INC.
By:
-----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
SELLING SHAREHOLDERS
By:
---------------------------------------------
Attorney-in-Fact for the Selling Shareholders
named in Schedule B hereto
Accepted as of the date first above written:
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXXXXX & XXXXX LLC
THE XXXXXXXX-XXXXXXXX COMPANY, LLC
On their behalf and on behalf of each of the several Underwriters named in
Schedule A hereto.
By: BANCAMERICA XXXXXXXXX XXXXXXXX
By:
-----------------------------------
Authorized Signatory
-34-
35
SCHEDULE A
Number of
Firm Shares
To Be
Underwriters Purchased
------------ ---------
BancAmerica Xxxxxxxxx Xxxxxxxx
Xxxxxxxxx & Xxxxx LLC
The Xxxxxxxx-Xxxxxxxx Company, LLC
Total 4,400,000
=========
-35-
36
SCHEDULE B
Number of
Company
Shares To
Company Be Sold
------- -------
The Profit Recovery Group International, Inc.
Total
Number of Selling
Shareholder Shares
Name of Selling Shareholder To Be Sold
--------------------------- ----------
Firm Shares Option Shares
Total 2,400,000 660,000
========= =======
-36-
37
SCHEDULE C
Subsidiaries
The Profit Recovery Group International I, Inc.
The Profit Recovery Group Asia, Inc.
The Profit Recovery Group Australia, Inc.
The Profit Recovery Group Belgium, Inc.
The Profit Recovery Group Canada, Inc.
The Profit Recovery Group France, Inc.
The Profit Recovery Group Germany, Inc.
The Profit Recovery Group Mexico, Inc.
The Profit Recovery Group Netherlands, Inc.
The Profit Recovery Group New Zealand, Inc.
The Profit Recovery Group Singapore PTE LTD.
The Profit Recovery Group South Africa, Inc.
The Profit Recovery Group U.K., Inc.
PRG International Holding Company, Inc.
PRG France, S.A.
Financiere Xxxx, S.A.
Xxxx Intervention, S.A.
B&F Associates, S.A.R.L.
Club Affairs Xxxx, S.A.R.L.
Meridian VAT Reclaim France, S.A.R.L.
Step, S.A.
-37-
38
SCHEDULE D
Lock-up List
Xxxx X. Xxxx
Cook Family Limited Partnership
Cook Family Foundation, Inc.
Xxxx X. Xxxx Grantor Retained Annuity Trust
M. Xxxx Xxxx Grantor Retained Annuity Trust
Xxxx X. Xxxx
Xxxx Family Limited Partnership
Xxxx X. Xxxx Xxxxxxx Retained Annuity Trust
Xxxxxxx Xxxx Family Trust
Xxxxxxxx Xxxx Family Trust
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx Grantor Retained Annuity Trust
Xxxx Xxxxxxxxx
Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx Grantor Retained Annuity Trust
Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx for Xxxx X. Xxxxx
Xxxxx X. Xxxxxxxx for Berkshire Fund III, L.P.
Xxxxx X. Xxxxxxxx for Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxxx for Xxxx Xxxxx-Xxxxxx
Xxxxx X. Xxxxxxxx for Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxxx for Xxxxxxxxxxx Xxxxxxxx
Xxxxx X. Xxxxxxxx for Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxxx for Xxxx Xxxxxxxxx
Xxxxx X. Xxxxxxxx for Xxx X. Xxxxxx
Xxxxx X. Xxxxxxxx for Xxxxxxx X. Xxxxx Daughters' Trust FBO Xxxxx
Xxxxx X. Xxxxxxxx for Xxxxxx X. Small
Xxxxx X. Xxxxxxxx for Xxxxxxx X. Xxxxx Daughters' Trust FBO Xxxx
Xxxx W.I. Xxxxxxxxx
X. Xxxxx Xxxxxx
Xxxx Xxxxxxx Xxxx Trust
Xxxxx X. Xxxx
M. Xxxx Xxxx
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxx
Xxxxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
Xxx Xxxx
Xxxxxx Xxxxxxx
Epargne Capitalisation Intermediare
Epargne Developpement
-38-
