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EXHIBIT 1.1
1,250,000 Shares
HOMECOM COMMUNICATIONS, INC.
Common Stock ($.0001 Par Value)
UNDERWRITING AGREEMENT
______, 0000
XXXXXXXXX XXXXXXXX & CO. INC.
As Representative of the several Underwriters
named in Schedule A hereto
x/x Xxxxxxxxx Xxxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. HomeCom Communications, Inc., a Delaware corporation
(the "Company"), proposes to sell, pursuant to the terms of this Agreement, to
the several underwriters named in Schedule A hereto (the "Underwriters," or
each, an "Underwriter"), an aggregate of 1,250,000 shares of Common Stock,
$.0001 par value (the "Common Stock"), of the Company. The aggregate of
1,250,000 shares so proposed to be sold is hereinafter referred to as the "Firm
Stock". The Company also proposes to sell to the Underwriters, upon the terms
and conditions set forth in Section 3 hereof, up to an additional 187,500 shares
of Common Stock (the "Option Stock"). The Firm Stock and the Option Stock are
hereinafter collectively referred to as the "Stock". Ladenburg Xxxxxxxx & Co.
Inc. is hereinafter referred to as the "Representative").
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-12219)
in the form in which it became or becomes effective and also in such
form as it may be when any post-effective amendment thereto shall
become effective with respect to the Stock, including any pre-
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effective prospectuses included as part of the registration statement
as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "Securities Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, copies of which have heretofore been
delivered to you, has been prepared by the Company in conformity with
the requirements of the Securities Act and has been filed with the
Commission under the Securities Act; one or more amendments to such
registration statement, including in each case an amended pre-effective
prospectus, copies of which amendments have heretofore been delivered
to you, have been or will be so prepared and filed. Such registration
statement is referred to hereinafter as the "Registration Statement".
If it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the Registration Statement will be filed
and must be declared effective before the offering of the Stock may
commence, the term "Registration Statement" as used in this Agreement
means the Registration Statement as amended by said post-effective
amendment. The term "Registration Statement" as used in this Agreement
shall also include any registration statement relating to the Stock
that is filed and declared effective pursuant to Rule 462(b) under the
Securities Act. The term "Prospectus" as used in this Agreement means
the prospectus in the form included in the Registration Statement, or,
(A) if the prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Securities Act and such
information is included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act, the term "Prospectus"
as used in this Agreement means the prospectus in the form included in
the Registration Statement as supplemented by the addition of the Rule
430A information contained in the prospectus filed with the Commission
pursuant to Rule 424(b) and (B) if prospectuses that meet the
requirements of Section 10(a) of the Securities Act are delivered
pursuant to Rule 434 under the Securities Act, then (i) the term
"Prospectus" as used in this Agreement means the "prospectus subject to
completion" (as such term is defined in Rule 434(g) under the
Securities Act) as supplemented by (a) the addition of Rule 430A
information or other information contained in the form of prospectus
delivered pursuant to Rule 434(b)(2)
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under the Securities Act or (b) the information contained in the term
sheets described in Rule 434(b)(3) under the Securities Act, and (ii)
the date of such prospectuses shall be deemed to be the date of the
term sheets. The term "Pre-effective Prospectus" as used in this
Agreement means the prospectus subject to completion in the form
included in the Registration Statement at the time of the initial
filing of the Registration Statement with the Commission, and as such
prospectus shall have been amended from time to time prior to the date
of the Prospectus.
(ii) The Commission has not issued or threatened to issue any
order preventing or suspending the use of any Pre-effective Prospectus,
and, at its date of issue, each Pre-effective Prospectus conformed in
all material respects with the requirements of the Securities Act and
at its date of issue did 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 light of the circumstances
under which they were made, not misleading; and, at the time the
Registration Statement becomes effective and at all times subsequent
thereto up to and including the Closing Date[s], the Registration
Statement and the Prospectus and any amendments or supplements thereto
contained and will contain all material statements and information
required to be included therein by the Securities Act and conformed and
will conform in all material respects to the requirements of the
Securities Act and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, included or will
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the foregoing
representations, warranties and agreements shall not apply to
information contained in or omitted from any Pre-effective Prospectus
or the Registration Statement or the Prospectus or any such amendment
or supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any
Underwriter, directly or through you, specifically for use in the
preparation thereof; there is no franchise, lease, contract, agreement
or document required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed therein as required; and all
descriptions of any such
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franchises, leases, contracts, agreements or documents contained in the
Registration Statement are accurate and complete descriptions of such
documents in all material respects.
(iii) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus, and
except as set forth or contemplated in the Prospectus, the Company has
not incurred any liabilities or obligations, direct or contingent, nor
entered into any transactions not in the ordinary course of business,
and there has not been any material adverse change in the condition
(financial or otherwise), properties, business, management, prospects,
net worth or results of operations of the Company or any change in the
capital stock, short-term or long-term debt of the Company.
(iv) The financial statements, together with the related notes
and schedules, set forth in the Prospectus and elsewhere in the
Registration Statement fairly present, on the basis stated in the
Registration Statement, the financial position and the results of
operations and changes in financial position of the Company at the
respective dates or for the respective periods therein specified. Such
statements and related notes and schedules have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis except as may be set forth in the Prospectus. The
selected financial and pro forma financial data set forth in the
Prospectus under the caption "SELECTED HISTORICAL AND PRO FORMA
FINANCIAL DATA" fairly present, on the basis stated in the Registration
Statement, the information set forth therein.
(v) Coopers & Xxxxxxx L.L.P., who have expressed their
opinions on the audited financial statements and related schedules
included in the Registration Statement and the Prospectus, are
independent public accountants as required by the Securities Act and
the Rules and Regulations.
(vi) The Company has been duly organized and is validly
existing and in good standing as a corporation under the laws of its
jurisdiction of organization, with power and authority (corporate and
other) to own or lease its properties and to conduct its business as
described in the Prospectus; the Company is in possession of and
operating in compliance with all franchises, grants, authorizations,
licenses,
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permits, easements, consents, certificates and orders required for the
conduct of its business, all of which are valid and in full force and
effect; and the Company is duly qualified to do business and in good
standing as a foreign corporation in all other jurisdictions where its
ownership or leasing of properties or the conduct of its business
requires such qualification, except where the failure to be so
qualified and in good standing would not have a material adverse effect
on the Company. The Company has all requisite power and authority, and
all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits of and from all
public regulatory or governmental agencies and bodies to own, lease and
operate its properties and conduct its business as now being conducted
and as described in the Registration Statement and the Prospectus, and
no such consent, approval, authorization, order, registration,
qualification, license or permit contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and
the Prospectus. The Company does not own or control, directly or
indirectly, any corporation, association or other entity.
(vii) The Company's authorized and outstanding capital stock
is on the date hereof, and will be on the Closing Date[s], as set forth
under the heading "Capitalization" in the Prospectus; the outstanding
shares of Common Stock conform to the description thereof in the
Prospectus and have been duly authorized and validly issued and are
fully paid and nonassessable and have been issued in compliance with
all federal and state securities laws and were not issued in violation
of or subject to any preemptive rights or similar rights to subscribe
for or purchase securities and conform to the description thereof
contained in the Prospectus. Except as disclosed in and or contemplated
by the Prospectus and the financial statements of the Company and
related notes thereto included in the Prospectus, the Company does not
have outstanding any options or warrants 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 and other stock plans or arrangements, and the options or
other rights granted or exercised thereunder, as set forth in the
Prospectus, accurately and fairly presents the
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information required to be shown with respect to such plans,
arrangements, options and rights.
(viii) The shares of Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued, fully paid and
nonassessable and free of any preemptive or similar rights and will
conform to the description thereof in the Prospectus. The shares of
Common Stock issuable upon exercise of the Warrants (as hereinafter
defined) have been duly and validly authorized and, when issued and
delivered against payment therefor in accordance with the terms
thereof, will be duly and validly issued, fully paid and nonassessable
and free of any preemptive or similar rights.
(ix) Except as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company is a party or
of which any property of the Company is subject, which, if determined
adversely to the Company, might individually or in the aggregate (i)
prevent or adversely affect the transactions contemplated by this
Agreement, (ii) suspend the effectiveness of the Registration
Statement, (iii) prevent or suspend the use of the Pre-effective
Prospectus in any jurisdiction or (iv) result in a material adverse
change in the condition (financial or otherwise), properties, business,
management, prospects, net worth or results of operations of the
Company; and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated against the Company by
governmental authorities or others. The Company is not a party or
subject to the provisions of any material injunction, judgment, decree
or order of any court, regulatory body or other governmental agency or
body. The description of the Company's litigation under the heading
"Business -- Legal Proceedings" in the Prospectus is true and correct
and complies with the Rules and Regulations.
(x) The execution, delivery and performance of this Agreement
and the consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms or provisions of or
constitute a default under any indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to which the Company is a
party or by which it or any of its properties is or may be bound, the
Certificate of Incorporation, By-laws or
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other organizational documents of the Company or any law, order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties or will result
in the creation of a lien.
(xi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement, except such
as may be required by the National Association of Securities Dealers,
Inc. (the "NASD") or under the Securities Act or the securities or
"Blue Sky" laws of any jurisdiction in connection with the purchase and
distribution of the Stock by the Underwriters.
(xii) The Company has the full corporate power and authority
to enter into this Agreement and to perform its obligations hereunder
(including to issue, sell and deliver the Stock), and this Agreement
has been duly and validly authorized, executed and delivered by the
Company and is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to
the extent that rights to indemnity and contribution hereunder may be
limited by federal or state securities laws or the public policy
underlying such laws. The Company has the full corporate power and
authority to execute and deliver the Warrants on the terms and
conditions set forth in this Agreement and in the Warrants, and such
execution and delivery of the Warrants has been duly and validly
authorized, and when executed and delivered pursuant to this Agreement,
the Warrants will be enforceable against the Company in accordance with
their terms.
(xiii) The Company is in all material respects in compliance
with, and conducts its business in conformity with, all applicable
federal, state, local and foreign laws, rules and regulations of each
court or governmental agency or body having jurisdiction over the
Company; to the knowledge of the Company, otherwise than as set forth
in the Registration Statement and the Prospectus, no prospective change
in any of such federal or state laws, rules or regulations has been
adopted which, when made effective, would have a material adverse
effect on the operations of the Company.
(xiv) The Company has filed all necessary federal, state,
local and foreign income, payroll,
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franchise and other tax returns and has paid all taxes shown as due
thereon or with respect to any of its properties, and there is no tax
deficiency that has been, or to the knowledge of the Company is likely
to be, asserted against the Company or any of its properties or assets
that would adversely affect the financial position, business or
operations of the Company.
(xv) No person or entity has the right to require registration
of shares of Common Stock or other securities of the Company because of
the filing or effectiveness of the Registration Statement or otherwise,
except for persons and entities who have expressly waived such right or
who have been given proper notice and have failed to exercise such
right within the time or times required under the terms and conditions
of such right and except as contemplated by the Warrants.
(xvi) Neither the Company nor any of its officers, directors
or affiliates has taken or will take, directly or indirectly, any
action designed or intended to stabilize or manipulate the price of any
security of the Company, or which caused or resulted in, or which might
in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the
Company.
(xvii) The Company has provided you with all financial
statements since ______________, 1996 to the date hereof that are
available to the officers of the Company.
(xviii) The Company owns or possesses all patents, trademarks,
trademark registrations, service marks, service xxxx registrations,
tradenames, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by it or necessary for the
conduct of its business, and the Company is not aware of any claim to
the contrary or any challenge by any other person to the rights of the
Company with respect to the foregoing. The Company's business as now
conducted and as proposed to be conducted does not and will not
infringe or conflict with any patents, trademarks, service marks, trade
names, copyrights, trade secrets, licenses or other intellectual
property or franchise right of any person. No claim has been made
against the Company alleging the infringement by the Company of any
patent, trademark, service xxxx, tradename, copyright, trade secret,
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license in or other intellectual property right or franchise right of
any person.
(xix) The Company has performed all material obligations
required to be performed by it under any indenture, mortgage, deed of
trust, note agreement or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, and neither
the Company nor any other party to such indenture, mortgage, deed of
trust, note agreement or other agreement or instrument is in default
under or in breach of any such obligations.
(xx) The Company is not involved in any labor dispute nor is
any such dispute threatened. The Company is not aware that (A) any
executive, key employee or significant group of employees of the
Company plans to terminate employment with the Company or (B) any such
executive or key employee is subject to any noncompete, nondisclosure,
confidentiality, employment, consulting or similar agreement that would
be violated by the present or proposed business activities of the
Company. The Company does not have and does not expect to have any
liability for any prohibited transaction or funding deficiency or any
complete or partial withdrawal liability with respect to any pension,
profit sharing or other plan which is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), to which
the Company makes or ever has made a contribution and in which any
employee of the Company is or has ever been a participant. With respect
to such plans, the Company is in compliance in all material respects
with all applicable provisions of ERISA.
(xxi) The Company has obtained the written agreement described
in Section 8(j) of this Agreement from each of its officers, directors
and holders of Common Stock listed on Schedule B hereto.
(xxii) The Company has, and the Company as of the Closing
Date[s] will have, good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned
or proposed to be owned by it which is material to the business of the
Company, in each case free and clear of all liens, encumbrances and
defects, except such as are described in the Prospectus or such as
would not have a material adverse effect on the Company; and any real
property and buildings held under lease by the Company or proposed to
be held after giving effect to the
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transactions described in the Prospectus are, or will be as of the
Closing Date[s], held by it under valid, subsisting and enforceable
leases with such exceptions as would not have a material adverse effect
on the Company, in each case except as described in or contemplated by
the Prospectus.
(xxiii) The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are customary in the business in which it is engaged or
proposes to engage after giving effect to the transactions described in
the Prospectus; and the Company does not have 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, or the earnings, business or operations of the Company,
except as described in or contemplated by the Prospectus.
(xxiv) Other than as contemplated by this Agreement, there is
no broker, finder or other party that is entitled to receive from the
Company any brokerage or finder's fee or other fee or commission as a
result of any of the transactions contemplated by this Agreement.
(xxv) The Company has complied with all provisions of Section
517.075 Florida Statutes (Chapter 92-198; Laws of Florida).
(xxvi) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (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.
(xxvii) To the Company's knowledge, neither the Company nor
any employee or agent of the Company
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has made any payment of funds of the Company or received or retained
any funds in violation of any law, rule or regulation.
(xxviii) The Company is not an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
(xxix) Each certificate signed by any officer of the Company
and delivered to the Underwriters or counsel for the Underwriters shall
be deemed to be a representation and warranty by the Company as to the
matters covered thereby.
3. Purchase by, and Sale and Delivery to, Underwriters--Closing
Date[s]. The Company agrees to sell to the Underwriters the Firm Stock, and on
the basis of the representations, warranties, covenants and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase the Firm Stock, the
number of shares of Stock to be purchased by each Underwriter being set opposite
its name in Schedule A, subject to adjustment in accordance with Section 12
hereof.
The purchase price per share to be paid by the Underwriters to the
Company will be $_________ per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representative may direct by notice in writing to the Company given at or prior
to 12:00 Noon, New York Time, on the second full business day preceding the
First Closing Date (as defined below), or if no such direction is received, in
the names of the respective Underwriters or in such other names as Lendenburg
Xxxxxxxx & Co. Inc. may designate (solely for the purpose of administrative
convenience) and in such denominations as Ladenburg Xxxxxxxx & Co. Inc. may
determine), against payment of the aggregate Purchase Price herefor by certified
or official bank check or checks in Clearing House funds (next day funds),
payable to the order of the Company, all at the offices of Xxxxxxx Xxxx &
Xxxxxxxxx, One Citicorp Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The time and date of the delivery and closing shall be at 10:00 A.M., New York
Time, on ________, 1997, in accordance with Rule 15c6-1 of the Securities
Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"). The time and date of such payment and
delivery are herein referred to as the "First Closing Date". The First Closing
Date and the
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location of delivery of, and the form of payment for, the Firm Stock may be
varied by agreement between the Company and the Underwriters. The First Closing
Date may be postponed pursuant to the provisions of Section 12.
The Company shall make the certificates for the Stock available to the
Representative for examination on behalf of the Underwriters not later than
10:00 A.M., New York Time, on the business day preceding the First Closing Date
at the offices of Ladenburg Xxxxxxxx & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
It is understood that Ladenburg Xxxxxxxx & Co. Inc., individually and
not as Representative of the several Underwriters, may (but shall not be
obligated to) make payment to Company on behalf of any Underwriter or
Underwriters, for the Stock to be purchased by such Underwriter or Underwriters.
Any such payment by Ladenburg Xxxxxxxx & Co. Inc., shall not relieve such
Underwriter or Underwriters from any of its or their other obligations
hereunder.
The several Underwriters agree to make an initial public offering of
the Firm Stock at the initial public offering price set forth on the cover page
of the Prospectus as soon after the effectiveness of the Registration Statement
as in their judgment is advisable. The Representative shall promptly advise the
Company of the making of the initial public offering.
Solely for the purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Stock as contemplated by the
Prospectus, the Company hereby grants to the Underwriters an option to purchase,
severally and not jointly, up to an aggregate of 187,500 shares of Option Stock.
The price per share to be paid for the Option Stock shall be the Purchase Price.
The option granted hereby may be exercised as to all or any part of the Option
Stock at any time, and from time to time, not more than thirty (30) days
subsequent to the effective date of this Agreement. No Option Stock shall be
sold and delivered unless the Firm Stock previously has been, or simultaneously
is, sold and delivered. The right to purchase the Option Stock or any portion
thereof may be surrendered and terminated at any time upon notice by the
Representative to the Company.
The option granted hereby may be exercised by the Underwriters by
giving written notice from Ladenburg Xxxxxxxx & Co. Inc. to the Company setting
forth the number of shares of the Option Stock to be purchased by them, the
names and denominations in which such shares are to be registered and the date
and time for delivery of and payment for the Option Stock. Each date and time
for delivery of and payment for the Option Stock (which may be the First Closing
Date, but not earlier) is herein called the
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"Option Closing Date" and shall in no event be earlier than two (2) business
days nor later than ten (10) business days after written notice is given. (The
Option Closing Date and the First Closing Date are herein called the "Closing
Dates".) All purchases of Option Stock from the Company shall be made on a pro
rata basis. Option Stock shall be purchased for the account of each Underwriter
in the same proportion as the number of shares of Firm Stock (subject to
adjustment by the Underwriters to eliminate odd lots). Upon exercise of the
option by the Underwriters, the Company agrees to sell to the Underwriters the
number of shares of Option Stock set forth in the written notice of exercise and
the Underwriters agree, severally and not jointly, to purchase the number of
such shares determined as aforesaid.
The Company will deliver the Option Stock to the Underwriters (in the
form of definitive certificates, issued in such names and in such denominations
as the Representative may direct by notice in writing to the Company given at
or prior to 12:00 Noon, New York Time, on the second full business day preceding
the Option Closing Date, or, if no such direction is received, in the names of
the respective Underwriters or in such other names as Ladenburg, Xxxxxxxx & Co.
Inc. may designate (solely for the purpose of administrative convenience) and in
such denominations as Ladenburg Xxxxxxxx & Co. Inc. may determine, against
payment of the aggregate Purchase Price therefor by certified or official bank
check or checks in Clearing House funds (next day funds), payable to the order
of the Company all at the offices of Xxxxxxx Xxxx & Xxxxxxxxx, One Citicorp
Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Company shall make
the certificate[s] for the Option Stock available to the Underwriters for
examination not later than 10:00 A.M., New York Time, on the business day
preceding the Option Closing Date at the offices of Ladenburg Xxxxxxxx & Co.
Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Option Closing Date and
the location of delivery of, and the form of payment for, the Option Stock may
be varied by agreement between the Company and by Underwriters. The Option
Closing Date may be postponed pursuant to the provisions of Section 12.
In order to induce you to enter into this Agreement, the Company, in
consideration of the receipt of $____ for each Warrant and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, shall execute and deliver to you, in your individual capacity and
not as Representative, or your assignees, in compliance with the rules of the
NASD, warrants exercisable during the five-year period commencing on the date
of this Agreement (the "Warrants") to purchase an aggregate of 125,000 shares
of Common Stock at an exercise price per share equal to 120% of the initial
public offering price per share set forth on the cover page of the Prospectus.
The Warrants shall be in the form of Exhibit 4.3 to
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the Registration Statement. Execution and delivery of Warrants, registered in
your name or the names in which you shall notify the Company in writing, shall
be made to you, at your offices at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
at the First Closing Date. The cost of original issue tax stamps, if any, in
connection with the execution and delivery of the Warrants shall be borne by the
Company.
4. Covenants and Agreements of the Company. The Company covenants and
agrees with the several Underwriters that:
(a) The Company will (i) if the Company and the
Representative have determined not to proceed pursuant to Rule 430A,
use its best efforts to cause the Registration Statement to become
effective, (ii) if the Company and the Representative have determined
to proceed pursuant to Rule 430A, use its best efforts to comply with
the provisions of and make all requisite filings with the Commission
pursuant to Rule 430A and Rule 424 of the Rules and Regulations and
(iii) if the Company and the Representative have determined to deliver
Prospectuses pursuant to Rule 434 of the Rules and Regulations, to use
its best efforts to comply with all the applicable provisions thereof.
The Company will advise the Representative promptly as to the time at
which the Registration Statement becomes effective, will advise the
Representative promptly of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of
the institution of any proceedings for that purpose, and will use its
best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible the lifting thereof, if issued. The Company
will advise the Representative promptly of the receipt of any comments
of the Commission or any request by the Commission for any amendment of
or supplement to the Registration Statement or the Prospectus or for
additional information and will not at any time file any amendment to
the Registration Statement or supplement to the Prospectus which shall
not previously have been submitted to the Representative a reasonable
time prior to the proposed filing thereof or to which the
Representative shall reasonably object in writing or which is not in
compliance with the Securities Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission,
promptly upon the request of the Representative, any amendments or
supplements to the Registration Statement or the Prospectus which in
the opinion of the Representative may be necessary to
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enable the several Underwriters to continue the distribution of the
Stock and will use its best efforts to cause the same to become
effective as promptly as possible.
(c) If at any time after the effective date of the
Registration Statement when a prospectus relating to the Stock is
required to be delivered under the Securities Act any event relating to
or affecting the Company occurs as a result of which the Prospectus or
any other prospectus as then in effect would include an untrue
statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it is necessary at
any time to amend the Prospectus to comply with the Securities Act, the
Company will promptly notify the Representative thereof and will
prepare an amended or supplemented prospectus which will correct such
statement or omission; and in case any Underwriter is required under
the Securities Act or the Exchange Act to deliver a prospectus relating
to the Stock nine (9) months or more after the effective date of the
Registration Statement, the Company upon the request of the
Representative and at the expense of the Underwriter will prepare
promptly such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Securities
Act.
(d) The Company will deliver to the Representative, at or
before the First Closing Date, signed copies of the Registration
Statement, as originally filed with the Commission, and all amendments
thereto, including all financial statements and exhibits thereto, and
will deliver to the Representative such number of copies of the
Registration Statement, including such financial statements but without
exhibits, and all amendments thereto, as the Representative may
reasonably request. The Company will deliver or mail to or upon the
order of the Representative, from time to time until the effective
date of the Registration Statement, as many copies of the Pre-effective
Prospectus as the Representative may reasonably request. The Company
will deliver or mail to or upon the order of the Representative on the
date of the initial public offering, and thereafter from time to time
during the period when delivery of a prospectus relating to the Stock
is required under the Securities Act, as many copies of the Prospectus,
in final form or as
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thereafter amended or supplemented, as the Representatives may
reasonably request; provided, however, that the expense of the
preparation and delivery of any prospectus required for use nine (9)
months or more after the effective date of the Registration Statement
shall be borne by the Underwriters required to deliver such prospectus.
(e) The Company will make generally available to its
stockholders as soon as practicable an earnings statement which will be
in reasonable detail (but which need not be audited) and which will
comply with Section 11(a) of the Securities Act, covering a period of
at least twelve (12) months beginning after the "effective date" (as
defined in Rule 158 under the Securities Act) of the Registration
Statement but in no event commencing later than 90 days after such
date.
(f) The Company will cooperate with the Representative to
enable the Stock to be registered or qualified for offering and sale by
the Underwriters and by dealers under the securities laws of such
jurisdictions as the Representative may designate and at the request
of the Representative will make such applications and furnish such
consents to service of process or other documents as may be required of
it as the issuer of the Stock for that purpose; provided, however, that
the Company shall not be required to qualify to do business or to file
a general consent (other than that arising out of the offering or sale
of the Stock) to service of process in any such jurisdiction where it
is not now so subject. The Company will, from time to time, prepare and
file such statements and reports as are or may be required of it as the
issuer of the Stock to continue such qualifications in effect for so
long a period as the Representative may reasonably request for the
distribution of the Stock. The Company will advise the Representative
promptly after the Company becomes aware of the suspension of the
qualifications or registration of (or any such exception relating to)
the Common Stock of the Company for offering, sale or trading in any
jurisdiction or of any initiation or threat of any proceeding for any
such purpose, and in the event of the issuance of any orders suspending
such qualifications, registration or exception, the Company will, with
the cooperation of the Representative, use its best efforts to obtain
the withdrawal thereof.
(g) The Company will furnish to its stockholders annual
reports containing financial
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statements certified by independent public accountants and with
quarterly summary financial information in reasonable detail which may
be unaudited. During the period of five (5) years from the date hereof,
the Company will deliver to the Representative, as soon as they are
available, copies of each annual report of the Company containing the
balance sheet of the Company as of the close of such fiscal year and
statements of income, stockholders' equity and cash flows for the year
then ended and the opinion thereon of the Company's independent public
accountants and each other report or communication furnished by the
Company to its stockholders and will deliver to the Representative,
(i) as soon as they are available, copies of any other reports or
communication (financial or other) which the Company shall publish or
otherwise make available to any of its stockholders as such, (ii) as
soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission, the NASD or any
national securities exchange and (iii) from time to time such other
information concerning the Company as you may reasonably request.
(h) The Company will use its best efforts to list the Stock,
subject to official notice of issuance, on the Nasdaq SmallCap Market.
(i) The Company will maintain a transfer agent and registrar
for the Common Stock.
(j) Prior to filing its quarterly statements on Form 10-Q, the
Company will have its independent auditors perform a limited quarterly
review of its quarterly numbers.
(k) The Company will not offer, sell, assign, transfer,
encumber, contract to sell, grant an option to purchase or otherwise
dispose of any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock during the 180 days
following the date on which the price of the Common Stock to be
purchased by the Underwriters is established, other than the Company's
sale of Common Stock hereunder, the issuance of the Warrants and the
Company's issuance of Common Stock upon the exercise of the Warrants
and upon the exercise stock options which are presently outstanding and
described in the Prospectus.
(l) The Company will apply the net proceeds from the sale of
the Stock as set forth in the
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description under the heading "Use of Proceeds" in the Prospectus,
which description complies in all respects with the requirements of
Item 504 of Regulation S-K.
(m) The Company will supply you with copies of all
correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Stock under the
Securities Act.
(n) Prior to the Closing Date[s] the Company will furnish to
you, as soon as they have been prepared, copies of any unaudited
interim financial statements of the Company for any periods subsequent
to the periods covered by the financial statements appearing in the
Registration Statement and the Prospectus.
(o) Prior to the Closing Date[s] the Company will issue no
press release or other communications directly or indirectly and hold
no press conference with respect to the Company, the financial
condition, results of operation, business, prospects, assets or
liabilities of the Company or the offering of the Stock, without your
prior written consent. For a period of twelve (12) months following the
Option Closing Date, the Company will use its best efforts to provide
to you copies of each press release or other public communications with
respect to the financial condition, results of operations, business,
prospects, assets or liabilities of the Company at least twenty-four
(24) hours prior to the public issuance thereof or such longer advance
period as may reasonably be practicable.
(p) The Company hereby grants to Ladenburg Xxxxxxxx & Co. Inc.
a right of first refusal, expiring on the second anniversary of the
date of this Agreement, on any future financings with respect to the
Company.
5. Payment of Expenses. (a) The Company will pay (directly or by
reimbursement) all costs, fees and expenses incurred in connection with expenses
incident to the performance of its obligations under this Agreement and in
connection with the transactions contemplated hereby, including but not limited
to (i) all expenses and taxes incident to the issuance and delivery of the Stock
to the Representative; (ii) all expenses incident to the registration of the
Stock under the Securities Act; (iii) the costs of preparing stock certificates
(including printing and engraving costs); (iv) all fees and expenses of the
registrar and transfer agent of the Common Stock; (v) all necessary issue,
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transfer and other stamp taxes in connection with the issuance and sale of the
Stock to the Underwriters; (vi) fees and expenses of the Company's counsel and
the Company's independent accountants; (vii) all costs and expenses incurred in
connection with the preparation, printing filing, shipping and distribution of
the Registration Statement, each Pre-effective Prospectus and the Prospectus
(including all exhibits and financial statements) and all amendments and
supplements provided for herein, the Agreement Among Underwriters between the
Representatives and the Underwriters, the Master Selected Dealers' Agreement,
the Blue Sky memoranda and this Agreement; (viii) all filing fees, attorneys'
fees and expenses incurred by the Company or the Underwriters in connection with
exemptions from the qualifying or registering (or obtaining qualification or
registration of) all or any part of the Stock for offer and sale under the Blue
Sky or other securities laws of such jurisdictions as the Representative may
designate; (ix) all fees and expenses paid or incurred in connection with
filings made with the NASD; and (x) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section 5. Except as provided in this Section 5 and Section
11 hereof, the Underwriters will pay all of their own expenses, including the
fees and disbursements of their counsel.
(b) In addition to its other obligations under Section 6(a) hereof, the
Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
(i) any statement or omission or any alleged statement or omission or (ii) any
breach or inaccuracy in its representations and warranties, it will reimburse
each Underwriter on a quarterly basis for all reasonable legal or other expenses
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 each Underwriter 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, each Underwriter shall promptly return
it to the Company together with interest, compounded daily, determined on the
basis of the prime rate (or other commercial lending rate for borrowers of the
highest credit standing) announced from time to time by ________, New York, New
York (the "Prime Rate"). Any such interim reimbursement payments which are not
made to any Underwriter in a timely manner as provided below shall bear interest
at the Prime Rate from the due date for such reimbursement. This expense
reimbursement agreement will be in addition to any other liability which the
Company may otherwise have. The request for reimbursement will be sent to the
Company.
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(c) In addition to its other obligations under Section 6(b) hereof,
each Underwriter agrees that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in Section 6(b) hereof which relates to written information furnished
to the Company by the Representative specifically for inclusion in the
Registration Statement and the Prospectus, it will reimburse the Company (and,
to the extent applicable, each officer, director or controlling person) on a
quarterly basis for all reasonable legal or other expenses 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, to the extent
applicable, each officer, director or controlling person) 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, to the
extent applicable, each officer, director or controlling person) shall promptly
return it to the Underwriter 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 within thirty (30) days of a request
for reimbursement shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
(d) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in paragraph (b) or (c) of this
Section 5, including the amounts of any requested reimbursement payments and the
method of determining such amounts, 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 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. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in paragraph (b) or (c) of this
Section 5 and would not resolve the ultimate propriety or enforceability of the
obligation to reimburse expenses which is created by the provisions of Section
6.
(e) In addition to its other obligations under Section 6 hereof, on the
First Closing Date and each Option Closing Date,
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the Company will pay to you, individually and not as Representative of the
several Underwriters, a non-accountable expense allowance in an aggregate amount
equal to two percent (2%) of the initial public offering price of the Firm Stock
and the Option Stock being sold by the Company on such Closing Date and Option
Closing Date.
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of the Securities Act and the
respective officers, directors, partners, employees, representatives and agents
of each Underwriter (collectively, the "Underwriter Indemnified Parties" and,
each, an "Underwriter Indemnified Party"), against any losses, claims, damages,
liabilities or expenses (including the reasonable cost of investigating and
defending against any claims therefor and counsel fees incurred in connection
therewith), joint or several, which may be based upon the Securities Act, or any
other statute or at common law, on the ground or alleged ground that any
Pre-effective Prospectus, the Registration Statement or the Prospectus (or any
Pre-effective Prospectus, the Registration Statement or the Prospectus as from
time to time amended or supplemented) includes or allegedly includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, unless such
statement or omission was made in reliance upon, and in conformity with, written
information furnished to the Company by any Underwriter, directly or through the
Representative, specifically for use in the preparation thereof; provided, that
with respect to any untrue statement or omission or alleged untrue statement or
omission made in any Pre-effective Prospectus, the indemnity agreement contained
in this subsection (a) shall not inure to the benefit of any Underwriter
Indemnified Party from whom the person asserting any such losses, claims,
damages or liabilities purchased the shares of Stock concerned to the extent
that any such loss, claim, damage or liability of such Underwriter Indemnified
Party results from the fact that a copy of the Prospectus was not sent or given
to such person at or prior to the written confirmation of the sale of such
shares of Stock to such person as required by the Securities Act and if the
untrue statement or omission concerned has been corrected in the Prospectus. The
Company will be entitled to participate at its own expense in the defense or, if
it so elects, to assume the defense of any suit brought to enforce any such
liability, but if the Company elects to assume the defense, such defense shall
be conducted by counsel chosen by it. In the event the Company elects to assume
the defense of any such suit and retain such counsel, any Underwriter
Indemnified Parties, defendant or defendants in the suit, may retain additional
counsel but shall bear the fees and expenses of such counsel unless (i)
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the Company shall have specifically authorized the retaining of such counsel or
(ii) the parties to such suit include any such Underwriter Indemnified Parties
and the Company and such Underwriter Indemnified Parties have been advised by
counsel to the Underwriters that one or more legal defenses may be available to
it or them which may not be available to the Company, in which case the Company
shall not be entitled to assume the defense of such suit notwithstanding its
obligation to bear the fees and expenses of such counsel. The Company shall not
be liable for any settlement of any such suit effected without its written
consent, but if settled with the written consent of the Company, the Company
agrees to indemnity and hold harmless any Underwriter and any such controlling
person from and against any loss or liability by reason of such settlement. 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 indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
for claims that are the subject matter of such proceeding. The foregoing
indemnity agreement with respect to any preliminary Prospectus or any Prospectus
that is subsequently supplemented or amended shall not inure to the benefit of
any Underwriter from whom the person asserting the loss, claim, damage or
liability purchased Stock if a copy of the Prospectus (as amended or
supplemented, if the Company shall have furnished the Underwriters with such
amendments or supplements thereto on a timely basis) was not sent or given by or
on behalf of any of the Underwriters to the person asserting the claim or
action, if required by law to have been so sent or given by the Underwriter
seeking indemnification, at or prior to the written confirmation of the sale of
such shares of Stock and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage or liability. This
indemnity agreement is not exclusive and will be in addition to any liability
which the Company might otherwise have and shall not limit any rights or
remedies which may otherwise be available at law or in equity to each
Underwriter Indemnified Party.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively, the "Company
Indemnified Parties"), against any losses, claims, damages, liabilities or
expenses (including, unless the Underwriter or Underwriters elect to assume the
defense, the reasonable cost of investigating and defending against any claims
therefor and counsel fees incurred in connection therewith), joint or several,
which arise out of or are based in whole or in part upon the Securities Act, the
Exchange Act or any other federal, state,
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local or foreign statute or regulation, or at common law, on the ground or
alleged ground that any Pre-effective Prospectus, the Registration Statement or
the Prospectus (or any Pre-effective Prospectus, the Registration Statement or
the Prospectus, as from time to time amended and supplemented) includes an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances in which they were made, not misleading, but only
insofar as any such statement or omission was made in reliance upon, and in
conformity with, written information furnished to the Company by such
Underwriter, directly or through the Representatives, specifically for use in
the preparation thereof; provided, however, that in no case is the Underwriter
to be liable with respect to any claims made against any Company Indemnified
Party against whom the action is brought unless such Company Indemnified Party
shall have notified such Underwriter in writing within a reasonable time after
the summons or other first legal process giving information of the nature of the
claim shall have been served upon the Company Indemnified Party, but failure to
notify such Underwriter of such claim shall not relieve it from any liability
which it may have to any Company Indemnified Party otherwise than on account of
its indemnity agreement contained in this paragraph. Such Underwriter shall be
entitled to participate at its own expense in the defense, or, if it so elects,
to assume the defense of any suit brought to enforce any such liability, but, if
such Underwriter elects to assume the defense, such defense shall be conducted
by counsel chosen by it. In the event that any Underwriter elects to assume the
defense of any such suit and retain such counsel, the Company Indemnified
Parties and any other Underwriter or Underwriters or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional counsel retained by them, respectively. The Underwriter
against whom indemnity may be sought shall not be liable to indemnify any person
for any settlement of any such claim effected without such Underwriter's
consent. This indemnity agreement is not exclusive and will be in addition to
any liability which such Underwriter might otherwise have and shall not limit
any rights or remedies which may otherwise be available at law or in equity to
any Company Indemnified Party.
(c) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on
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the other from the offering of the Stock. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law, then
each indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to above shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating, defending, settling or compromising any
such claim. Notwithstanding the provisions of this subsection (c), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the shares of the Stock underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 6(c) are several in
proportion to their respective underwriting commitments and not joint.
7. Survival of Indemnities, Representations, Warranties, etc. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of
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the Company and the Underwriters, as set forth in this Agreement or made by them
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter, the
Company or any of its officers or directors or any controlling person, and shall
survive delivery of and payment for the Stock and any termination of this
Agreement.
8. Conditions of Underwriters' Obligations. The respective obligations
of the several Underwriters hereunder shall be subject to the accuracy, at and
(except as otherwise stated herein) as of the date hereof and at and as of the
Closing Date[s], of the representations and warranties made herein by the
Company, to compliance at and as of the Closing Date[s] by the Company with its
covenants and agreements herein contained and other provisions hereof to be
satisfied at or prior to the Closing Date[s], and to the following additional
conditions:
(a) The Registration Statement shall have become effective 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 or the Representative, shall be
threatened by the Commission, and any request for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Representative.
Any filings of the Prospectus, or any supplement thereto, required
pursuant to Rule 424(b) or Rule 434 of the Rules and Regulations shall
have been made in the manner and within the time period required by
Rule 424(b) and Rule 434 of the Rules and Regulations, as the case may
be.
(b) The Representative shall have been satisfied that there
shall not have occurred any change prior to the Closing Date[s], in the
condition (financial or otherwise), properties, business, management,
prospects, net worth or results of operations of the Company, or any
change in the capital stock, short-term or long-term debt of the
Company, such that (i) the Registration Statement or the Prospectus, or
any amendment or supplement thereto, contains an untrue statement of
fact which, in the opinion of the Underwriter, is material, or omits to
state a fact which, in the opinion of the Representative, is required
to be stated therein or is necessary to make the statements therein not
misleading, or (ii) it is unpracticable in the reasonable judgment of
the Representative to proceed
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with the public offering or purchase the Stock as contemplated hereby.
(c) The Representatives shall be satisfied that no legal or
governmental action, suit or proceeding affecting the Company which is
material and adverse to the Company or which affects or may affect the
Company's ability to perform its obligations under this Agreement shall
have been instituted or threatened and there shall have occurred no
material adverse development in any existing such action, suit or
proceeding.
(d) At the time of execution of this Agreement, the
Representative shall have received from Coopers & Xxxxxxx L.L.P.,
independent certified public accountants, a letter, dated the date
hereof, in form and substance satisfactory to the Underwriter.
(e) The Representative shall have received from Coopers &
Xxxxxxx L.L.P., independent certified public accountants, letters,
dated the Closing Date[s], to the effect that such accountants
reaffirm, as of the Closing Date[s], and as though made on the Closing
Date[s], the statements made in the letter furnished by such
accountants pursuant to paragraph (d) of this Section 8.
(f) The Representative shall have received from Xxxxxx,
Xxxxxxx & Xxxxxx, L.L.P., counsel for the Company, an opinion, dated
the Closing Date[s], to the effect set forth in Exhibit I hereto. In
rendering such opinion, Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P. may rely as to
all matters governed other than by the laws of the State of Georgia,
the Delaware General Corporation Law or federal laws on the opinion of
local counsel of good standing in such jurisdictions, provided that
such local counsel is satisfactory to the counsel to the
Representative and that in each case Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P.
shall state that they believe that they and the Underwriters are
justified in relying on such other counsel.
(g) The Representative shall have received from Xxxxxxx Xxxx
& Xxxxxxxxx, counsel for the Underwriters, their opinion or opinions
dated the Closing Date[s] with respect to the incorporation of the
Company, the validity of the Stock, the Registration Statement and the
Prospectus and such other related matters as it may reasonably request,
and the Company shall have furnished to such counsel such
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documents as they may request for the purpose of enabling them to pass
upon such matters. In rendering such opinion, Xxxxxxx Xxxx & Xxxxxxxxx
may rely as to all matters governed other than by the laws of the State
of New York, the Delaware General Corporation Law or federal laws on
the opinion of counsel referred to in paragraph (f) of this Section 8.
(h) The Representative shall have received a certificate,
dated the Closing Date[s], of the chief executive officer or the
President and the chief financial or accounting officer of the Company
to the effect that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the best of the
knowledge of the signers, no proceedings for that purpose have
been instituted or are pending or contemplated under the
Securities Act;
(ii) Neither any Pre-effective Prospectus, as of its date,
nor the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, as of the time when the
Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate,
included any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(iii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as set forth or contemplated in the
Prospectus, the Company has not incurred any material liabilities
or obligations, direct or contingent, nor entered into any
material transactions not in the ordinary course of business;
(iv) The representations and warranties of the Company in
this Agreement are true and correct at and as of the Closing
Date[s], and the Company has complied with all the agreements and
performed or satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date[s]; and
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(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except
as disclosed in or contemplated by the Prospectus, (i) there has
not been any material adverse change or a development involving a
material adverse change in the condition (financial or otherwise),
properties, business, management, prospects, net worth or results
of operations of the Company, or any change in the capital stock,
short-term or long-term debt of the Company; (ii) the business and
operations conducted by the Company have not sustained a loss by
strike, fire, flood, accident or other calamity (whether or not
insured) of such a character as to interfere materially with the
conduct of the business and operations of the Company; (iii) no
legal or governmental action, suit or proceeding is pending or
threatened against the Company which is material to the Company,
whether or not arising from transactions in the ordinary course of
business, or which may materially and adversely affect the
transactions contemplated by this Agreement; (iv) since such dates
and except as so disclosed, the Company has not incurred any
material liability or obligation, direct, contingent or indirect,
made any change in its capital stock, made any material change in
its short-term or funded debt or repurchased or otherwise acquired
any of the Company's capital stock; and (v) the Company has not
declared or paid any dividend, or made any other distribution,
upon its outstanding capital stock payable to stockholders of
record on a date prior to the Closing Date.
(i) The Company shall have furnished to the Representative
such additional certificates as the Representative may have reasonably
requested as to the accuracy, at and as of the Closing Date[s], of the
representations and warranties made herein by it and as to compliance
at and as of the Closing Date[s] by it with its covenants and
agreements herein contained and other provisions hereof to be satisfied
at or prior to the Closing Date[s], and as to satisfaction of the other
conditions to the obligations of the Underwriters hereunder.
(j) The Representative shall have received the written
agreements of the officers and directors of the Company and the holders
of securities of the Company listed in Schedule B that each will not
offer,
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sell, assign, transfer, encumber, contract to sell, grant an option to
purchase or otherwise dispose of, other than by operation of law,
gifts, pledges or dispositions by estate representatives, any shares of
Common Stock (including, without limitation, Common Stock which may be
deemed to be beneficially owned by such officer, director or holder in
accordance with the Rules and Regulations) or securities convertible
into or exercisable or exchangeable for Common Stock during the 180
days following the date of the final Prospectus.
(k) The Nasdaq SmallCap Market shall have approved the Stock
for inclusion, subject only to official notice of issuance.
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in form
and substance to the Representative. The Company will furnish to the
Representative conformed copies of such opinions, certificates, letters and
other documents as the Representative shall reasonably request. If any of the
conditions hereinabove provided for in this Section shall not have been
satisfied when and as required by this Agreement, this Agreement may be
terminated by the Representative by notifying the Company of such termination
in writing or by telegram at or prior to the Closing Date[s], but the
Representative shall be entitled to waive any of such conditions.
9. Effective Date. This Agreement shall become effective immediately as
to Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16, 17 and 18 and 19, and, as to all
other provisions, at 11:00 a.m. New York City time, on the first full business
day following the effectiveness of the Registration Statement or at such earlier
time after the Registration Statement becomes effective as the Representative
may determine on and by notice to the Company or by release of any of the Stock
for sale to the public. For the purposes of this Section 9, the Stock shall be
deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Stock or upon the release by you of
telegrams offering the Stock for sale to securities dealers.
10. Termination. This Agreement (except for the provisions of Section
5) may be terminated by the Company at any time before it becomes effective in
accordance with Section 9 by notice to the Representative and may be terminated
by the Representative at any time before it becomes effective in accordance
with Section 9 by notice to the Company. In the event of any termination of this
Agreement under this or any other provision of this Agreement, there shall be no
liability of any
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party to this Agreement to any other party, other than as provided in Sections
5, 6 and 11 and other than as provided in Section 12 as to the liability of
defaulting Underwriters.
This Agreement may be terminated after it becomes effective by the
Representative by notice to the Company (i) if at or prior to the First Closing
Date trading in securities on any of the New York Stock Exchange, American Stock
Exchange or Nasdaq National Market shall have been suspended or minimum or
maximum prices shall have been established on any such exchange or market, or a
banking moratorium shall have been declared by New York or United States
authorities; (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market; (iii) if at or
prior to the First Closing Date there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign power or of
any other insurrection or armed conflict involving the United States or (B) any
change in financial markets or any calamity or crisis which, in the judgment of
the Representative, makes it impractical or inadvisable to offer or sell the
Firm Stock on the terms contemplated by the Prospectus; (iv) if there shall have
been any development or prospective development involving particularly the
business or properties or securities of the Company or the transactions
contemplated by this Agreement, which, in the judgment of the Representative,
makes it impracticable or inadvisable to offer or deliver the Firm Stock on the
terms contemplated by the Prospectus; (v) if there shall be any litigation or
proceeding, pending or threatened, which, in the judgment of the
Representative, makes it impracticable or inadvisable to offer or deliver the
Firm Stock on the terms contemplated by the Prospectus; or (vi) if there shall
have occurred any of the events specified in the immediately preceding clauses
(i) - (v) together with any other such event that makes it, in the judgment of
the Representative, impractical or inadvisable to offer or deliver the Firm
Stock on the terms contemplated by the Prospectus.
11. Reimbursement of Underwriters. Notwithstanding any other provisions
hereof, if this Agreement shall not become effective by reason of any election
of the Company pursuant to the first paragraph of Section 10 or shall be
terminated by the Representative under Section 8 or Section 10, the Company
will bear and pay the expenses specified in Section 5 hereof and, in addition to
its obligations pursuant to Section 6 hereof, the Company will reimburse the
reasonable out-of-pocket expenses of the Underwriters (including reasonable fees
and disbursements of counsel for the Underwriters) incurred in connection with
this Agreement and the proposed purchase of the Stock, and promptly upon demand
the Company will pay such amounts to you as Representative.
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12. Substitution of Underwriters. If on the First Closing Date or the
option Closing Date, as the case may be, any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder
(otherwise than by reason of default on the part of the Company), you, as
Representative of the Underwriters, shall use your reasonable efforts to
procure within 48 hours thereafter one or more of the other Underwriters, or any
others, to purchase from the Company such amounts as may be agreed upon and upon
the terms set forth herein, the shares of Stock which the defaulting Underwriter
or Underwriters failed to purchase. If during such 48 hours you, as such
Representative, shall not have procured such other Underwriters, or any others,
to purchase the shares of Stock agreed to be purchased by the defaulting
Underwriter or Underwriters, then (a) if the aggregate number of shares which
such defaulting Underwriter or Underwriters agreed but failed to purchase does
not exceed ten percent (10%) of the total number of shares underwritten, the
other Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the shares of Stock which such
defaulting Underwriter or Underwriters agreed but failed to purchase, or (b) if
the aggregate number of shares of Stock with respect to which such default or
defaults occur is more than ten percent (10%) of the total number of shares
underwritten, the Company or you, as the Representative of the Underwriters,
will have the right, by written notice given within the next 48-hour period to
the parties to this Agreement, to terminate this Agreement without liability on
the part of the non-defaulting Underwriters or the Company.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 12, (i) the Company
shall have the right to postpone the Closing Date[s] for a period of not more
than five (5) full business days in order that the Company may 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 or supplements to
the Prospectus which may thereby be made necessary, and (ii) the respective
numbers of shares to be purchased by the remaining Underwriters or substituted
Underwriters shall be taken as the basis of their underwriting obligation for
all purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Underwriter of its liability to the Company or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 12 shall be without liability on the part of
any non-defaulting Underwriter or the Company, except for expenses to be paid or
reimbursed pursuant to Section 5 and except for the provisions of Section 6.
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13. Notices. All communications hereunder shall be in writing and, if
sent to the Underwriters shall be mailed, delivered or telegraphed and confirmed
to you, as their Representative x/x Xxxxxxxxx Xxxxxxxx & Co. Inc. at 000
Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Ms. Xxxxxxxxx
Xxxxx, or if sent to the Company, shall be mailed, delivered or telegraphed and
confirmed c/o HomeCom Communications, Inc., Fourteen Xxxxxxxx Xxxxxx, Xxxxx 000,
0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, Attention: President.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Company and their respective
successors and legal representatives. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable right, remedy
or claim under or 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 such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the person or persons, if any, who control any
Underwriter or Underwriters within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, and the indemnities of the several
Underwriters shall also be for the benefit of each director of the Company, each
of its officers who has signed the Registration Statement and the person or
persons, if any, who control the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act.
15. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of [New York] without giving effect to
the choice of law principles thereof.
16. Authority of the Representative. In connection with this
Agreement, you will act for and on behalf of the several Underwriters, and any
action taken under this Agreement by Ladenburg Xxxxxxxx & Co. Inc., as
Representative, will be binding on all the Underwriters.
17. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
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18. General. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Representative.
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19. Counterparts. This Agreement may be signed in two (2) or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between us.
Very truly yours,
HOMECOM COMMUNICATIONS, INC.
By:
--------------------------------
Title:
Accepted and delivered in
New York, New York as of
the date first above written.
LADENBURG XXXXXXXX & CO. INC.
Acting on its own behalf and as
Representative of the several
Underwriters referred to in the
foregoing Agreement.
By: Ladenburg Xxxxxxxx & Co. Inc.
By:
---------------------------------
Title:
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SCHEDULE A
Number of shares
of Firm Stock to
Name be Purchased
---- ----------------
Ladenburg Xxxxxxxx & Co. Inc.
---------
1,250,000
=========
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SCHEDULE B
37
EXHIBIT I
Matters to be covered in
opinion of Counsel to the Company(1)
1. The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification, and has all power and authority necessary to own or hold
its properties and conduct the business in which it is engaged.
2. The Company has an authorized capitalization as set forth
in the Prospectus under the caption "Capitalization", and all of the
issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
all of the shares of Stock to be issued and sold by the Company to the
Underwriters pursuant to the Underwriting Agreement have been duly and
validly authorized and, when issued and delivered against payment
therefor as provided for in the Underwriting Agreement, will be duly
and validly issued, fully paid and non-assessable and free of any
preemptive or similar rights; and all of the shares of Common Stock to
be issued upon exercise of the Warrants have been duly and validly
authorized and, when issued and delivered against payment therefor as
provided in the Warrants, will be duly and validly issued, fully paid
and nonassessable and free of all preemptive or similar rights.
3. Except as disclosed in and or specifically contemplated by
the Prospectus and the financial statements of the Company and related
notes thereto included in the Prospectus, to the best of such counsel's
knowledge, the Company does not have outstanding any options or
warrants to purchase, or any preemptive rights
--------------------
(1) Capitalized terms used herein but not defined shall have the meanings
given such terms in the Underwriting Agreement.
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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, except for options granted
subsequent to the date of information provided in the Prospectus
pursuant to the Company's stock option plans as disclosed in the
Prospectus. There are no restrictions upon the voting or transfer of,
any of the Stock pursuant to the Certificate of Incorporation or
By-Laws or, to the best of such counsel's knowledge, any agreement or
other instrument of the Company.
4. To the best of such counsel's knowledge, except as set
forth in the Prospectus, there are no material legal or governmental
proceedings pending to which the Company is a party or of which any
property or assets of the Company is the subject which, if determined
adversely to the Company, could have a material adverse effect on the
Company or prevent or adversely affect the transactions contemplated by
the Underwriting Agreement; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or other third parties. To the best of such
counsel's knowledge, the Company is not a party or subject to the
provisions of any material injunction, judgment, decree or order of any
court, regulatory body or other governmental agency or body.
5. The Company has the full corporate power and authority to
enter into the Underwriting Agreement and to perform its obligations
thereunder (including to issue, sell and deliver the Stock), and the
Underwriting Agreement has been duly and validly authorized, executed
and delivered by the Company. The Company has the full corporate power
and authority to execute and deliver the Warrants on the terms and
conditions set forth in the Underwriting Agreement and in the Warrants,
and such execution and delivery of the Warrants has been duly and
validly authorized, and when executed and delivered pursuant to the
Underwriting Agreement, the Warrants will be enforceable against the
Company in accordance with their terms.
6. The execution, delivery and performance of the Underwriting
Agreement and the consummation of the transactions therein contemplated
will not result in a breach or violation of any of the terms or
provisions of or constitute a default under the Certificate of
Incorporation, By-laws or other organizational documents of the
Company, or any indenture, mortgage, deed of trust,
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note agreement or other agreement or instrument known to such counsel
to which the Company is a party or by which it or any of its properties
is or may be bound, or any law, order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or
any of its properties or result in the creation of a lien.
7. No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by the
Company of the transactions contemplated by the Underwriting Agreement
(except such as may be required by the National Association of
Securities Dealers, Inc. or as required by the securities or "Blue Sky"
laws of any jurisdiction as to which such counsel need express no
opinion) in connection with the purchase and distribution of the Stock
by the Underwriters, except such as have been obtained or made,
specifying the same.
8. The Registration Statement was declared effective under the
Securities Act as of _________________, 1997, the Prospectus was filed
with the Commission pursuant to Rule 424(b) of the Rules and
Regulations on __________________, 1997 and, to the best of such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose is pending or threatened by the Commission.
9. The Registration Statement and the Prospectus and any
amendments or supplements thereto (except for the financial statements
and notes thereto and related schedules as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations.
10. To the best of such counsel's knowledge, there is no
franchise, lease, contract, agreement or other document required to be
described in the Registration Statement or Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or
filed therein as required. All descriptions of any such franchises,
leases, contracts, agreements or documents contained in the
Registration Statement are accurate and complete descriptions of such
documents in all material respects.
11. To the best of such counsel's knowledge, no holders of
securities of the Company have the right to require registration of
shares of Common Stock or other securities of the Company because of
the filing or
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effectiveness of the Registration Statement or otherwise, except for
persons and entities who have expressly waived such right or who have
been given proper notice and have failed to exercise such right within
the time or times required under the terms and conditions of such right
and except as contemplated by the Warrants.
12. The statements in the Prospectus, to the extent they
constitute a summary of documents referred to therein or they reflect
matters of law or legal conclusions relating to such law, accurately
summarize and fairly present the information called for with respect to
such documents and matter and the legal and regulatory matters
described therein.
13. The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
In addition to the matters set forth above, such opinion shall also include a
statement to the effect that nothing has come to the attention of such counsel
which leads them to believe that (i) the Registration Statement or any amendment
thereto, as of the time it became effective under the Securities Act (but after
giving effect to any modifications incorporated therein pursuant to Rule 430A
under the Securities Act) and as of the First Closing Date or the Option Closing
Date, as the case may be, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or (ii) that the
Prospectus, or any supplement thereto, on the date it was filed pursuant to the
Rules and Regulations and as of the First Closing Date or the Option Closing
Date, as the case may be, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading (except that such counsel need express no view as
to financial statements and notes thereto, schedules and statistical information
therein). With respect to such statement, such counsel may state that their
belief is based upon the procedures set forth therein, but is without
independent check and verification.
In rendering such opinion, such counsel may rely as to matters of law other than
the law of the State of Georgia, the Delaware General Corporation Law and the
federal law of the United States, on opinions of local counsel, and as to
matters of fact, on certificates of officers of the Company and of government
officials, in which case their opinion is to state that they are
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so doing and that the Underwriters are justified in relying on such opinions or
certificates.
5
