EXHIBIT 99.1
4,000,000 Shares
The InterCept Group, Inc.
Common Stock
UNDERWRITING AGREEMENT
----------------------
August 7, 2001
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXXXX XXXXXXXX, INC.
FIRST UNION SECURITIES, INC.
SUNTRUST CAPITAL MARKETS, INC.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Xxxxxx Xxxxxxx Xxxxxx,
Xxx Xxxx, N.Y. 10010-3629
Dear Sirs:
1. Introductory. The InterCept Group, Inc., a Georgia corporation
("Company"), proposes to issue and sell 3,100,000 shares of its common stock, no
par value ("Securities"), and the shareholders listed in Schedule A hereto
("Selling Shareholders") propose severally to sell an aggregate of 900,000
outstanding shares of the Securities (such 4,000,000 shares of Securities being
hereinafter referred to as the "Firm Securities"). The Company also proposes to
sell to the Underwriters, at the option of the Underwriters, not more than
600,000 additional shares of its Securities, as set forth below (such 600,000
additional shares being hereinafter referred to as the "Optional Securities").
The Firm Securities and the Optional Securities are herein collectively called
the "Offered Securities". The Company and the Selling Shareholders hereby agree
with the several Underwriters named in Schedule B hereto ("Underwriters") as
follows:
2. Representations and Warranties of the Company and the Selling
Shareholders.
(a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. 333-64834) relating to the
Offered Securities, including a form of prospectus, has been filed with
the Securities and Exchange Commission ("Commission") and either (A)
has been declared effective under the Securities Act of 1933 ("Act")
and is not proposed to be amended or (B) may be proposed to be amended
by amendment or post-effective amendment. If such registration
statement (the "initial registration statement") has been declared
effective, either (A) an additional registration statement (the
"additional registration statement") relating to the Offered Securities
may have been filed with the Commission pursuant to Rule 462(b) ("Rule
462(b)") under the Act and, if so filed, has become effective upon
filing pursuant to such Rule and the Offered Securities all have been
duly registered under the Act pursuant to the initial registration
statement and, if applicable, the additional registration statement or
(B) such an additional registration statement may be proposed to be
filed with the Commission pursuant to Rule 462(b) and will become
effective upon filing pursuant to
such Rule and upon such filing the Offered Securities will all have
been duly registered under the Act pursuant to the initial registration
statement and such additional registration statement. If the Company
does not propose to amend the initial registration statement or if an
additional registration statement has been filed and the Company does
not propose to amend it, and if any post-effective amendment to either
such registration statement has been filed with the Commission prior to
the execution and delivery of this Agreement, the most recent amendment
(if any) to each such registration statement has been declared
effective by the Commission or has become effective upon filing
pursuant to Rule 462(c) ("Rule 462(c)") under the Act or, in the case
of the additional registration statement, Rule 462(b). For purposes of
this Agreement, "Effective Time" with respect to the initial
registration statement or, if filed prior to the execution and delivery
of this Agreement, the additional registration statement means (A) if
the Company has advised the Representatives that it does not propose to
amend such registration statement, the date and time as of which such
registration statement, or the most recent post-effective amendment
thereto (if any) filed prior to the execution and delivery of this
Agreement, was declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c), or (B) if the Company
has advised the Representatives that it proposes to file an amendment
or post-effective amendment to such registration statement, the date
and time as of which such registration statement, as amended by such
amendment or post-effective amendment, as the case may be, is declared
effective by the Commission. If an additional registration statement
has not been filed prior to the execution and delivery of this
Agreement but the Company has advised the Representatives that it
proposes to file one, "Effective Time" with respect to such additional
registration statement means the date and time as of which such
registration statement is filed and becomes effective pursuant to Rule
462(b). "Effective Date" with respect to the initial registration
statement or the additional registration statement (if any) means the
date of the Effective Time thereof. The initial registration statement,
as amended at its Effective Time, including all material incorporated
by reference therein, including all information contained in the
additional registration statement (if any) and deemed to be a part of
the initial registration statement as of the Effective Time of the
additional registration statement pursuant to the General Instructions
of the Form on which it is filed and including all information (if any)
deemed to be a part of the initial registration statement as of its
Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act,
is hereinafter referred to as the "Initial Registration Statement". The
additional registration statement, as amended at its Effective Time,
including the contents of the initial registration statement
incorporated by reference therein and including all information (if
any) deemed to be a part of the additional registration statement as of
its Effective Time pursuant to Rule 430A(b), is hereinafter referred to
as the "Additional Registration Statement". The Initial Registration
Statement and the Additional Registration are hereinafter referred to
collectively as the "Registration Statements" and each individually as
a "Registration Statement". The form of prospectus relating to the
Offered Securities, as first filed with the Commission pursuant to and
in accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no
such filing is required) as included in a Registration Statement,
including all material incorporated by reference in such prospectus, is
hereinafter referred to as the "Prospectus". No document has been or
will be prepared or distributed in reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
("Rules and Regulations") and did not 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 not misleading, (B)
on the Effective Date of the Additional Registration Statement (if
any), each Registration Statement conformed or will conform, in all
material respects to the requirements of the Act and the Rules and
Regulations and did not include, or will not include, any untrue
statement of a material fact and did not omit, or will not omit, to
state
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any material fact required to be stated therein or necessary to make
the statements therein not misleading, and (C) on the date of this
Agreement, the Initial Registration Statement and, if the Effective
Time of the Additional Registration Statement is prior to the execution
and delivery of this Agreement, the Additional Registration Statement
each conforms, and at the time of filing of the Prospectus pursuant to
Rule 424(b) or (if no such filing is required) at the Effective Date of
the Additional Registration Statement in which the Prospectus is
included, each Registration Statement and the Prospectus will conform,
in all material respects to the requirements of the Act and the Rules
and Regulations, and neither of such documents includes, or will
include, any untrue statement of a material fact or omits, or will
omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. If the
Effective Time of the Initial Registration Statement is subsequent to
the execution and delivery of this Agreement: on the Effective Date of
the Initial Registration Statement, the Initial Registration Statement
and the Prospectus will conform in all material respects to the
requirements of the Act and the Rules and Regulations, neither of such
documents will include any untrue statement of a material fact or will
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and no
Additional Registration Statement has been or will be filed. The two
preceding sentences do not apply to statements in or omissions from a
Registration Statement or the Prospectus based upon written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the
only such information is that described as such in Section 7(c) hereof.
(iii) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Georgia,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus; and the
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions where failure to so qualify
would individually or in the aggregate have a material adverse effect
on the condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries taken as a whole
("Material Adverse Effect").
(iv) Each subsidiary of the Company has been duly incorporated and
is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus; and each subsidiary of the Company is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions where failure to so qualify would individually or in the
aggregate have a Material Adverse Effect; all of the issued and
outstanding capital stock of each subsidiary of the Company has been
duly authorized and validly issued and is fully paid and nonassessable;
and the capital stock of each subsidiary owned by the Company, directly
or through subsidiaries, and the capital stock of Netzee, Inc. owned by
the Company is owned free from liens, encumbrances and defects (other
than the pledge by the Company of the shares of Netzee, Inc. owned by
the Company to First Union National Bank as security under the
Company's credit facility with such bank). As used in this agreement,
the term "subsidiary of the Company" does not include Netzee, Inc.
(v) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized and are, or upon
issuance in accordance with the terms hereof will be, validly issued,
fully paid and nonassessable and conform to the description thereof
contained in the Prospectus; the shareholders of the Company have no
preemptive rights with respect to the Securities; and no person has any
co-sale rights, rights of first refusal or other similar rights with
regard to any Securities (expressly excluding registration rights,
which are addressed in Section 2(a)(vii) below).
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(vi) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that
would give rise to a valid claim against the Company or any Underwriter
for a brokerage commission, finder's fee or other like payment in
connection with this offering.
(vii) Except as disclosed in the Prospectus or expressly waived in
writing by the holder of such right, there are no contracts, agreements
or understandings between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company
owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to a
Registration Statement or in any securities being registered pursuant
to any other registration statement filed by the Company under the Act,
and all rights of any persons to include securities of the Company in
the Registration Statement have been fully satisfied by the inclusion
of Offered Securities in the Registration Statement or expressly waived
in writing.
(viii) The Securities have been approved for listing subject to
notice of issuance on The Nasdaq Stock Market's National Market.
(ix) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required to be
obtained or made by the Company for the consummation of the
transactions contemplated by this Agreement in connection with the sale
of the Offered Securities, except such as have been obtained and made
under the Act and such as may be required under state and foreign
securities laws.
(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 and provisions of,
or constitute a default under, (i) any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, in any such case that would have a
Material Adverse Effect, (ii) any agreement or instrument to which the
Company or any such subsidiary is a party or by which the Company or
any such subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, in any such case that would
have a Material Adverse Effect, or (iii) the articles of incorporation,
charter or by-laws of the Company or any such subsidiary.
(xi) This Agreement has been duly authorized, executed and
delivered by the Company.
(xii) The Company and its subsidiaries have good and marketable
title to all real properties and all other properties and assets owned
by them, in each case free from liens, encumbrances and defects that
would materially affect the value thereof or materially interfere with
the use made or to be made thereof by them (provided, however, that the
Company and its subsidiaries have granted to First Union National Bank
a security interest in all of their assets other than real estate owned
and the stock of all subsidiaries owned by the Company to secure the
Company's credit facility with such bank); and the Company and its
subsidiaries hold any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere
with the use made or to be made thereof by them.
(xiii) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by
them and have not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or
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permit that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(xiv) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent,
that might have a Material Adverse Effect.
(xv) The Company and its subsidiaries own, possess or can acquire
on reasonable terms, adequate trademarks, trade names and other rights
to inventions, know-how, patents, copyrights, confidential information
and other intellectual property (collectively, "intellectual property
rights") necessary to conduct the business now operated by them, or
presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect
to any intellectual property rights that, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect.
(xvi) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of
its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise
material in the context of the sale of the Offered Securities; and no
such actions, suits or proceedings are threatened or, to the Company's
knowledge, contemplated.
(xvii) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of
the Company and its consolidated subsidiaries as of the dates shown and
their results of operations and cash flows for the periods shown, and,
except as otherwise disclosed in the Prospectus, such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent
basis; the schedule included in each Registration Statement presents
fairly the information required to be stated therein; and the
assumptions used in preparing the pro forma financial statements
included in each Registration Statement and the Prospectus provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the
related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts. All financial statements included in
material incorporated by reference into the Registration Statements and
the Prospectus shall be deemed included in the Registration Statements
and the Prospectus for purposes of this subsection.
(xviii) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included in the Prospectus
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as a whole, and there has been
no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(xix) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940.
(b) Each Selling Shareholder severally represents and warrants to,
and agrees with, the several Underwriters that:
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(i) Such Selling Shareholder has and on each Closing Date
hereinafter mentioned will have valid and unencumbered title to the
Offered Securities to be delivered by such Selling Shareholder on such
Closing Date (other than the pledge by XXXxxxx.xxx Inc. to the Company
of the Securities of the Company to be sold by XXXxxxx.xxx Inc. in this
offering, which pledge shall be released by the Company upon the First
Closing Date (as defined below) to permit the sale of those Offered
Securities as contemplated in this Agreement, with a portion of the net
proceeds of such sale being applied to repay in full the loan from the
Company to XXXxxxx.xxx Inc.) and full right, power and authority to
enter into this Agreement and to sell, assign, transfer and deliver the
Offered Securities to be delivered by such Selling Shareholder on such
Closing Date hereunder; and upon the delivery of and payment for the
Offered Securities on each Closing Date hereunder the several
Underwriters will acquire valid and unencumbered title to the Offered
Securities to be delivered by such Selling Shareholder on such Closing
Date.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all material respects to the
requirements of the Act and the Rules and Regulations and did not
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 not misleading, (B) on the Effective Date of the
Additional Registration Statement (if any), each Registration Statement
conformed, or will conform, in all material respects to the
requirements of the Act and the Rules and Regulations and did not
include, or will not include, any untrue statement of a material fact
and did not omit, or will not omit, to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, and (C) on the date of this Agreement, the Initial
Registration Statement and, if the Effective Time of the Additional
Registration Statement is prior to the execution and delivery of this
Agreement, the Additional Registration Statement each conforms, and at
the time of filing of the Prospectus pursuant to Rule 424(b) or (if no
such filing is required) at the Effective Date of the Additional
Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all material
respects to the requirements of the Act and the Rules and Regulations,
and neither of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of
this Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and the Prospectus will
conform in all material respects to the requirements of the Act and the
Rules and Regulations, neither of such documents will include any
untrue statement of a material fact or will omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading. The two preceding sentences do not apply to
statements in or omissions from a Registration Statement or the
Prospectus based upon written information furnished to the Company by
any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information
is that described as such in Section 7(c); and, solely with regard to
Selling Shareholders Vir A. Nanda and XXXxxxx.xxx Inc., the two
preceding sentences apply only to the extent that any statements in or
omissions from a Registration Statement or the Prospectus are based on
written information furnished to the Company by the Selling Shareholder
specifically for use therein.
(iii) There are no contracts, agreements or understandings between
such Selling Shareholder and any person that would give rise to a valid
claim against such Selling Shareholder or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection
with this offering.
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(c) XXXxxxx.xxx, Inc. represents and warrants to the several
Underwriters that its primary offices are located in Ontario, Canada, that
it does not conduct business in any provinces of Canada other than Ontario
and Manitoba, and that it is not registered or required to be registered to
do business in any of the provinces of Canada other than Ontario and
Manitoba.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and each Selling Shareholder
agree, severally and not jointly, to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
each Selling Shareholder, at a purchase price of $29.31 per share, that number
of Firm Securities (rounded up or down, as determined by Credit Suisse First
Boston Corporation ("CSFBC") in its discretion, in order to avoid fractions)
obtained by multiplying 3,100,000 Firm Securities in the case of the Company and
the number of Firm Securities set forth opposite the name of such Selling
Shareholder in Schedule A hereto, in the case of a Selling Shareholder, in each
case by a fraction the numerator of which is the number of Firm Securities set
forth opposite the name of such Underwriter in Schedule B hereto and the
denominator of which is the total number of Firm Securities.
Certificates in negotiable form for the Offered Securities to be sold
hereunder by each Selling Shareholder other than XXXxxxx.xxx Inc. have been
placed in custody, for delivery under this Agreement, under Custody Agreements
made with SunTrust Bank, Atlanta, Georgia, as custodian ("Custodian"). Each
such Selling Shareholder agrees that the shares represented by the certificates
held in custody for such Selling Shareholders under such Custody Agreements are
subject to the interests of the Underwriters hereunder, that the arrangements
made by such Selling Shareholders for such custody are to that extent
irrevocable, and that the obligations of such Selling Shareholders hereunder
shall not be terminated by operation of law, whether by the death of any
individual Selling Shareholder or the occurrence of any other event, or in the
case of a trust, by the death of any trustee or trustees or the termination of
such trust. If any individual Selling Shareholder or any such trustee or
trustees should die, or if any other such event should occur, or if any of such
trusts should terminate, before the delivery of the Offered Securities
hereunder, certificates for such Offered Securities shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as if
such death or other event or termination had not occurred, regardless of whether
or not the Custodian shall have received notice of such death or other event or
termination.
The Company, the Custodian and XXXxxxx.xxx Inc. will deliver the Firm
Securities to the Representatives for the accounts of the Underwriters, at the
office of Xxxxxx & Bird LLP, Atlanta, Georgia, against payment of the purchase
price in Federal (same day) funds by official bank check or checks or wire
transfer to an account at a bank acceptable to CSFBC drawn to the order of the
Company in the case of 3,100,000 shares of Firm Securities, the Custodian in the
case of 290,000 shares of Firm Securities and XXXxxxx.xxx Inc. in the case of
610,000 shares of Firm Securities, at the office of Xxxxxx & Bird LLP in
Atlanta, Georgia, at 9:00 A.M., New York time, on August 13, 2001, or at such
other time not later than seven full business days thereafter as CSFBC and the
Company determine, such time being herein referred to as the "First Closing
Date". For purposes of Rule 15c6-1 under the Securities Exchange Act of 1934
("Exchange Act"), the First Closing Date (if later than the otherwise applicable
settlement date) shall be the settlement date for payment of funds and delivery
of securities for all the Offered Securities sold pursuant to the offering. The
certificates for the Firm Securities so to be delivered will be in definitive
form, in such denominations and registered in such names as CSFBC requests and
will be made available for checking and packaging at the above office of Xxxxxx
& Bird LLP at least 24 hours prior to the First Closing Date. In addition to
the foregoing, the Company and each Selling Shareholder agree with First Union
Securities, Inc. that on the First Closing Date, the Company and such Selling
Shareholder will pay to First Union Securities, Inc., pro rata based on the
number of Firm Shares to be sold by it or him pursuant to this Agreement, the
$250,000 fee for financial advisory services related to the offering
contemplated by this Agreement, as set forth in the letter agreement dated July
20, 2001 between the Company and First Union Securities, Inc. The Company and
the Selling Shareholders agree and hereby direct that the applicable amount to
be paid to First Union Securities, Inc. as provided in the preceding sentence
shall be withheld from the net proceeds otherwise payable to the Company and the
Selling Shareholders and that the aggregate amount of $250,000 thus withheld
shall be paid over to First Union Securities, Inc. by official bank check or
wire transfer on the First Closing Date.
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In addition, upon written notice from CSFBC given to the Company from time
to time not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per Security to be paid for the Firm Securities. The Company
agrees to sell to the Underwriters the number of Optional Securities specified
in such notice and the Underwriters agree, severally and not jointly, to
purchase such Optional Securities. Such Optional Securities shall be purchased
from the Company for the account of each Underwriter in the same proportion as
the number of Firm Securities set forth opposite such Underwriter's name bears
to the total number of Firm Securities (subject to adjustment by CSFBC to
eliminate fractions) and may be purchased by the Underwriters only for the
purpose of covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered. The
right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFBC to the Company and
the Selling Shareholders.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against payment of
the purchase price therefor in Federal (same day) funds by official bank check
or checks or wire transfer to an account at a bank acceptable to CSFBC drawn to
the order of the Company, at the above office of Xxxxxx & Bird LLP. The
certificates for the Optional Securities being purchased on each Optional
Closing Date will be in definitive form, in such denominations and registered in
such names as CSFBC requests upon reasonable notice prior to such Optional
Closing Date and will be made available for checking and packaging at the above
office of Xxxxxx & Bird LLP at a reasonable time in advance of such Optional
Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company and the Selling Shareholders. The
Company agrees with the several Underwriters and the Selling Shareholders that:
(a) If the Effective Time of the Initial Registration Statement is prior
to the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CSFBC,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day following the execution and delivery of this Agreement
or (B) the fifteenth business day after the Effective Date of the Initial
Registration Statement. The Company will advise CSFBC promptly of any such
filing pursuant to Rule 424(b). If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement and an additional registration statement is necessary to register
a portion of the Offered Securities under the Act but the Effective Time
thereof has not occurred as of such execution and delivery, the Company
will file the additional registration statement or, if filed, will file a
post-effective amendment thereto with the Commission pursuant to and in
accordance with Rule 462(b) on or prior to 10:00 P.M., New York time, on
the date of this Agreement or, if earlier, on or prior to the time the
Prospectus is printed and distributed to any Underwriter, or will make such
filing at such later date as shall have been consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to amend or
supplement the initial or any additional registration statement as filed or
the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or the Prospectus and will not
effect such amendment or supplementation without CSFBC's consent; and the
Company will also advise CSFBC promptly of the effectiveness of each
Registration Statement (if its Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or
supplementation of a Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best
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efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered Securities
is required to be delivered under the Act in connection with sales by any
Underwriter or dealer, any event occurs as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the 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 Act, the Company will promptly notify CSFBC
of such event and will promptly prepare and file with the Commission, at
its own expense, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance.
Neither CSFBC's consent to, nor the Underwriters' delivery of, any such
amendment or supplement shall constitute a waiver of any of the conditions
set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date (as
defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional Registration
Statement) which will satisfy the provisions of Section 11(a) of the Act.
For the purpose of the preceding sentence, "Availability Date" means the
45th day after the end of the fourth fiscal quarter following the fiscal
quarter that includes such Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (five of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a
prospectus relating to the Offered Securities is required to be delivered
under the Act in connection with sales by any Underwriter or dealer, the
Prospectus and all amendments and supplements to such documents, in each
case in such quantities as CSFBC requests. The Prospectus shall be so
furnished on or prior to 3:00 P.M., New York time, on the business day
following the later of the execution and delivery of this Agreement or the
Effective Time of the Initial Registration Statement. All other such
documents shall be so furnished as soon as available. The Company will pay
the expenses of printing and distributing to the Underwriters all such
documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC
designates and will continue such qualifications in effect so long as
required for the distribution, provided, however, that in connection
therewith, the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction in which the Company is not currently so subject.
(g) During the period of three years hereafter, the Company will furnish
to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a
copy of its annual report to shareholders for such year; and the Company
will furnish to the Representatives (i) as soon as available, a copy of
each report and any definitive proxy statement of the Company filed with
the Commission under the Exchange Act or mailed to shareholders, provided,
however, that the Company shall be deemed to have satisfied its obligations
hereunder if it files the document via XXXXX and such document is available
for public inspection via XXXXX, and (ii) from time to time, such other
information concerning the Company as CSFBC may reasonably request.
(h) For a period of 90 days after the date of the initial public offering
of the Offered Securities as set forth in the final Prospectus, the Company
will not offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, or file with the Commission a registration
statement under the Act relating to, any additional shares of its
Securities or securities convertible into or
9
exchangeable or exercisable for any shares of its Securities, or publicly
disclose the intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of CSFBC, except issuances of
Securities pursuant to the exercise of any employee stock options
outstanding on the date hereof or issuances of Securities pursuant to the
Company's employee stock purchase plan.
(i) The Company agrees with the several Underwriters that the Company
will pay all expenses incident to the performance of the obligations of the
Company and the Selling Shareholders, as the case may be, under this
Agreement, for any filing fees and other expenses (including fees and
disbursements of counsel) in connection with qualification of the Offered
Securities for sale under the laws of such jurisdictions (both within the
U.S. and elsewhere) as CSFBC designates and the printing of memoranda
relating thereto (not to exceed $12,500 in the aggregate without the
Company's prior written consent), for the filing fee incident to the review
by the National Association of Securities Dealers, Inc. ("NASD") of the
Offered Securities, for any travel expenses of the Company's officers and
employees and any other expenses of the Company in connection with
attending or hosting meetings with prospective purchasers of the Offered
Securities, for any transfer taxes on the sale by the Selling Shareholders
of the Offered Securities to the Underwriters and for expenses incurred in
distributing preliminary prospectuses and the Prospectus (including any
amendments and supplements thereto) to the Underwriters.
(j) The Company will cause the Custodian to deliver to CSFBC, attention:
Transactions Advisory Group on the Closing Date a letter stating that it
will deliver to each Selling Shareholder for whom it is acting as Custodian
a United States Treasury Department Form 1099 (or other applicable form or
statement specified by the United States Treasury Department regulations in
lieu thereof) on or before January 31 of the year following the date of
this Agreement. The Company will deliver a Form 1099 (or other applicable
form or statement) to XXXxxxx.xxx Inc. on or before January 31, of the year
following the date of this Agreement.
(k) Each Selling Shareholder agrees, for a period of 90 days after the
date of the initial public offering of the Offered Securities as set forth
in the final Prospectus, not to offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any additional shares of the
Securities of the Company or securities convertible into or exchangeable or
exercisable for any shares of Securities, enter into a transaction which
would have the same effect, or enter into any swap, hedge or other
arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of the Securities, whether any such
aforementioned transaction is to be settled by delivery of the Securities
or such other securities, in cash or otherwise, or publicly disclose the
intention to make any such offer, sale, pledge or disposition, or enter
into any such transaction, swap, hedge or other arrangement, without, in
each case, the prior written consent of CSFBC, provided, however, that
nothing contained herein shall prohibit Selling Shareholder Xxxx X. Xxxxxxx
from pledging any shares of Securities or securities convertible into or
exchangeable or exercisable for any shares of Securities in connection with
any swap, hedge or other similar arrangement existing and known to CSFBC as
of the date of this Agreement.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on the Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Shareholders herein, to
the accuracy of the statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Shareholders of their obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall
be on or prior to the date of this Agreement or, if the Effective Time of
the Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, shall be prior to the filing of the amendment
or post-effective amendment to the registration statement to be filed
shortly prior to such Effective Time), of Xxxxxx Xxxxxxxx LLP
10
confirming that they are independent public accountants within the meaning
of the Act and the applicable published Rules and Regulations thereunder
and stating to the effect that:
(i) in their opinion the financial statements and schedule
examined by them and included in the Registration Statements comply as
to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards
No. 71, Interim Financial Information, on the unaudited financial
statements included in the Registration Statements;
(iii) on the basis of the review referred to in clause (ii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements included in the
Registration Statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act
and the Exchange Act and the related published Rules and
Regulations or any material modifications should be made to such
unaudited financial statements for them to be in conformity with
generally accepted accounting principles; or
(B) at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not more than
three business days prior to the date of this Agreement, there
was any change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and its
consolidated subsidiaries as compared with amounts shown on the
latest balance sheet included in the Registration Statements;
except in all cases set forth in clause (B) above for changes,
increases or decreases which the Registration Statements disclose have
occurred or may occur or which are described in such letter;
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statements (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter; and
(v) they have read the unaudited pro forma condensed consolidated
financial information included in the Registration Statements and have
inquired of certain officials of the Company who have responsibility
for financial and accounting matters about the basis for their
determination of the pro forma adjustments and whether the unaudited
pro forma condensed consolidated financial statements comply as to
form in all material respects with applicable accounting requirements
of Rule 11-02 of Regulation S-X; they have proved the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma condensed consolidated
financial statements; and nothing came to their attention as a result
of these procedures that caused them to believe
11
that the unaudited pro forma condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X and
that the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective
amendment to be filed shortly prior to its Effective Time, (ii) if the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement but the Effective Time of the
Additional Registration Statement is subsequent to such execution and
delivery, "Registration Statements" shall mean the Initial Registration
Statement and the additional registration statement as proposed to be filed
or as proposed to be amended by the post-effective amendment to be filed
shortly prior to its Effective Time, and (iii) "Prospectus" shall mean the
prospectus included in the Registration Statements. All financial
statements included in material incorporated by reference into the
Registration Statements and the Prospectus shall be deemed included in the
Registration Statements and the Prospectus for purposes of this subsection.
(b) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time
shall have occurred not later than 10:00 P.M., New York time, on the date
of this Agreement or such later date as shall have been consented to by
CSFBC. If the Effective Time of the Additional Registration Statement (if
any) is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York
time, on the date of this Agreement or, if earlier, the time the Prospectus
is printed and distributed to any Underwriter, or shall have occurred at
such later date as shall have been consented to by CSFBC. If the Effective
Time of the Initial Registration Statement is prior to the execution and
delivery of this Agreement, the Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section 5(a) of
this Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of a Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of any Selling Shareholder, the Company or the Representatives,
shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as one enterprise which, in the judgment of a majority
in interest of the Underwriters including the Representatives, is material
and adverse and makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Offered Securities; (ii) any downgrading in the rating of any debt
securities of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act), or
any public announcement that any such organization has under surveillance
or review its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any material
suspension or material limitation of trading in securities generally on the
New York Stock Exchange or The Nasdaq Stock Market's National Market, or
any setting of minimum prices for trading on any such exchange, or any
suspension of trading of any securities of the Company on any exchange or
in the over-the-counter market; (iv) any banking moratorium declared by
U.S. Federal or New York authorities; or (v) any outbreak or escalation of
major hostilities in which the United States is involved, any declaration
of war by Congress or any other substantial national or international
calamity or emergency if, in the judgment of a majority in interest of the
Underwriters including the Representatives, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities.
12
(d) The Representatives shall have received an opinion, dated such
Closing Date, of Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P., counsel for
the Company, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Georgia,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in
all jurisdictions where failure to so qualify would have a Material
Adverse Effect;
(ii) The Offered Securities delivered on such Closing Date and
all other outstanding shares of the Common Stock of the Company have
been duly authorized and are, or upon issuance in accordance with the
terms hereof will be, validly issued, fully paid and nonassessable and
conform to the description thereof contained in the Prospectus; the
shareholders of the Company have no preemptive rights with respect to
the Securities arising under the Company's articles of incorporation
or the Georgia Business Corporation Code or, to the best knowledge of
such counsel, any other similar rights with respect to the Securities;
and to the best knowledge of such counsel, no person has any co-sale
rights, rights of first refusal or other similar rights with regard to
any Securities (expressly excluding registration rights, which are
covered in the following subsection);
(iii) Except as disclosed in the Prospectus or expressly waived
in writing by the holder of such right, there are no contracts,
agreements or understandings known to such counsel between the Company
and any person granting such person the right to require the Company
to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Act; and all rights of any persons to include
securities of the Company in the Registration Statement have been
fully satisfied by the inclusion of Offered Securities in the
Registration Statement or expressly waived in writing;
(iv) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court of the United
States of America or the State of Georgia is required to be obtained
or made by the Company for the consummation of the transactions
contemplated by this Agreement in connection with the sale of the
Offered Securities, except such as have been obtained and made under
the Act and such as may be required by the NASD and under state
securities laws;
(v) 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 and provisions of,
or constitute a default under, (a) any statute, rule, regulation or
order of any governmental agency or body or court of the United States
of America or the State of Georgia having jurisdiction over the
Company or any subsidiary of the Company or any of their properties
and which, to the best knowledge of such counsel, is applicable to the
Company or any subsidiary of the Company or any of their properties
(provided, however, that such counsel need express no opinion as to
compliance with the securities or blue sky laws of the various states
or any applicable foreign jurisdiction), (b) any agreement or
instrument to which the Company or any such subsidiary is a party or
by which the Company or any such subsidiary is bound or to which any
of the properties of the Company or any such subsidiary is subject
that is filed as an exhibit to or incorporated by reference in the
Registration Statement, or (c) the articles or certificate of
incorporation or by-laws of the Company or any such subsidiary,
except, in the case of (a) and (b), for such as would not have a
Material Adverse Effect;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company; and
13
(vii) The conditions for the use of Form S-3 by the Company in
connection with the registration of the Offered Securities under the
Act have, to the best knowledge of such counsel, been satisfied; the
Registration Statement and the Prospectus (other than (a) the
financial statements, the notes thereto and the related schedules and
other financial data contained in or omitted from the Registration
Statement or the Prospectus, and (b) the information furnished on
behalf of each Underwriter as provided in Section 7(c) hereof, as to
which in each case such counsel need express no opinion), as of their
respective effective, issue or filing dates, complied as to form in
all material respects with the requirements of the Act, the Exchange
Act and the Rules and Regulations; such counsel do not know of any
statutes or legal or governmental proceedings required to be described
in the Registration Statement or the Prospectus that are not described
as required or of any contracts or documents of a character required
to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not
described and filed as required; and the descriptions in the
Registration Statement and the Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown.
In addition, such counsel shall confirm that (1) the Registration
Statement was declared effective under the Act as of the date and time
specified in such opinion; (2) the Prospectus was filed with the
Commission pursuant to subparagraph (4) of Rule 424(b) on the date
specified in such opinion; and (3) to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act.
In addition, such counsel shall state as follows: Counsel have
reviewed certain corporate records and other documents of the Company
and its subsidiaries, have participated in conferences with officers
and other representatives of the Company, the Company's independent
public accountants, and the Representatives and their counsel at which
the contents of the Registration Statement and the Prospectus were
discussed and revised. Because of the inherent limitations in the
independent verification of factual matters and because of the
inherent limitations involved in the preparation of registration
statements under the Act, counsel are not passing upon and do not
assume any responsibility for, and make no representation that counsel
have independently verified, the accuracy, completeness or fairness of
the information and statements contained in the Registration Statement
and the Prospectus. However, on the basis of the foregoing, no facts
have come to counsel's attention that lead counsel to believe that any
part of the Registration Statement or any amendment thereto, as of its
effective date or as of such Closing Date, contained 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 not misleading, or that the Prospectus, as of its issue date
or as of such Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that
counsel may expressly exclude any belief regarding (a) the financial
statements, the notes thereto and the related schedules and other
financial data contained in or omitted from the Registration Statement
or the Prospectus, and (b) the information furnished on behalf of each
Underwriter as provided in Section 7(c) hereof, as to which in each
case such counsel need express no opinion.
[
(e) The Representatives shall have received an opinion, dated the First
Closing Date, of Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP, United States counsel
with respect to the transactions contemplated by this Agreement for
XXXxxxx.xxx Inc., an Ontario corporation and a Selling
14
Shareholder in the offering, to the effect that:
(i) Upon delivery of the Offered Securities of XXXxxxx.xxx Inc.,
properly endorsed, to the Representatives for the accounts of the
several Underwriters in the State of New York, registration of such
Offered Securities upon the transfer records of the Company in the
names of the several Underwriters upon registration of transfer
thereof, and payment therefor in accordance with the terms hereof, and
assuming that such Underwriters are without notice of any adverse
claim within the meaning of the applicable Uniform Commercial Code,
the Underwriters are protected purchasers within the meaning of such
Uniform Commercial Code and the several Underwriters will acquire on
the First Closing Date all of the rights of XXXxxxx.xxx Inc. in such
Offered Securities free of any adverse claims;
(ii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court of the United
States of America or the State of Georgia is required to be obtained
or made by XXXxxxx.xxx Inc. for the consummation of the transactions
contemplated by this Agreement in connection with the sale of the
Offered Securities sold by XXXxxxx.xxx Inc., except such as may be
required under the U.S. federal securities laws, by the NASD and under
state securities laws; provided, however, that Xxxxxxxxxx Xxxxxx &
Xxxxxxx LLP shall render no opinion regarding any consents, approvals,
authorizations or orders that may be necessary for the specific
conduct of XXXxxxx.xxx Inc.'s business or industry in any applicable
jurisdiction;
(iii) 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 statute, rule, regulation or
order of any governmental agency or body or court of the United States
of America or the State of Georgia having jurisdiction over
XXXxxxx.xxx Inc. or any of its properties and known to such counsel to
be applicable to XXXxxxx.xxx Inc. or any of its properties, and, in
the case of any such order, solely as identified in a certificate by
XXXxxxx.xxx, Inc. that is certified by an officer of XXXxxxx.xxx, Inc.
as being true and complete (an "XXXxxxx.xxx Certificate");
(f) The Representatives shall have received an opinion, dated the First
Closing Date, of Gowling Xxxxxxx Xxxxxxxxx LLP, Canadian counsel to
XXXxxxx.xxx Inc., to the effect that:
(i) XXXxxxx.xxx Inc. is duly incorporated and subsisting under
the laws of the province of Ontario, Canada;
(ii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court of Canada or the
provinces of Ontario or Manitoba is required to be obtained or made by
XXXxxxx.xxx Inc. for the consummation of the transactions contemplated
by this Agreement in connection with the sale of the Offered
Securities sold by XXXxxxx.xxx Inc.;
(iii) The execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated do not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, (x) any statute, rule, regulation or order
of any governmental agency or body or court of Canada or the provinces
of Ontario or Manitoba and known to such counsel to be applicable to
XXXxxxx.xxx Inc. or any of its properties, and, in the case of any
such order, solely as identified in an XXXxxxx.xxx Certificate, (y)
any material agreement or instrument solely as identified in an
XXXxxxx.xxx Certificate , or (z) its charter or by-laws;
(iv) This Agreement has been duly authorized, executed and
delivered by or on behalf of XXXxxxx.xxx Inc.
15
Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP and Gowling Xxxxxxx Xxxxxxxxx LLP each
shall be entitled to rely on certificates of XXXxxxx.xxx Inc. signed by
officers of XXXxxxx.xxx Inc. as to factual matters. Additionally, each of
the Representatives shall provide a certificate signed by an officer to
Gowling Xxxxxxx Xxxxxxxxx LLP as to its registration status under the
Ontario Securities Act, and Gowling Xxxxxxx Xxxxxxxxx LLP shall be entitled
to rely on such certificates where appropriate. Further, Xxxxxxxxxx Xxxxxx
& Xxxxxxx LLP shall also be entitled to rely upon the opinions of Gowling
Xxxxxxx Xxxxxxxxx LLP as to matters of Canadian or Ontario law that, in the
opinion of Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP, may form the basis for any
opinion set forth in its opinion letter, and Gowling Xxxxxxx Xxxxxxxxx LLP
shall be entitled to rely on the opinions of Manitoba counsel as to all
matters of Manitoba law.
(g) The Representatives shall have received from Xxxxxx & Bird LLP,
counsel for the Underwriters, such opinion or opinions, dated such Closing
Date, with respect to the incorporation of the Company, the validity of the
Offered Securities delivered on such Closing Date, the Registration
Statements, the Prospectus and other related matters as the Representatives
may require, and the Selling Shareholders and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(h) The Representatives shall have received a certificate of the
Company, dated such Closing Date, signed by the Chief Executive Officer and
the Chief Financial Officer of the Company in which such officers, to the
best of their knowledge after reasonable investigation, shall state that:
the representations and warranties of the Company in this Agreement are
true and correct; the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to such Closing Date; no stop order suspending the
effectiveness of any Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to the knowledge of
the Company, are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule 462(b),
including payment of the applicable filing fee in accordance with Rule
111(a) or (b) under the Act, prior to the time the Prospectus was printed
and distributed to any Underwriter; and, subsequent to the respective dates
of the most recent financial statements in the Prospectus, there has been
no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(i) The Representatives shall have received a letter, dated such
Closing Date, of Xxxxxx Xxxxxxxx LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred to
in such subsection will be a date not more than three days prior to such
Closing Date for the purposes of this subsection.
(j) On or prior to the date of this Agreement, the Representatives
shall have received lockup letters from each of the executive officers and
directors of the Company who are not Selling Shareholders.
The Selling Shareholders and the Company will furnish the Representatives
with such conformed copies of such opinions, certificates, letters and
documents as the Representatives reasonably request. CSFBC may in its sole
discretion waive on behalf of the Underwriters compliance with any
conditions to the obligations of the Underwriters hereunder, whether in
respect of an Optional Closing Date or otherwise.
7. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Underwriter, its
partners, directors and officers and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter
may become subject, under the Act or otherwise, insofar as such losses,
claims,
16
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists
of the information described as such in subsection (c) below.
(b) The Selling Shareholders, severally and not jointly, will
indemnify and hold harmless each Underwriter, its partners, directors and
officers and each person who controls such Underwriter within the meaning
of Section 15 of the Act, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
the Selling Shareholders will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by an
Underwriter through the Representatives specifically for use therein, it
being understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in subsection (c)
below; provided, further, that Selling Shareholders Vir A. Nanda and
XXXxxxx.xxx Inc. shall only be subject to such liability to the extent that
the untrue statement or alleged untrue statement or omission or alleged
omission is based upon information provided by such Selling Shareholder in
writing specifically for use therein or contained in a representation or
warranty given by such Selling Shareholder in this Agreement or the Custody
Agreement of such Selling Shareholder; and provided, further, that the
liability under this subsection of each Selling Shareholder shall be
limited to an amount equal to the aggregate net proceeds to such Selling
Shareholder from the sale of Securities sold by such Selling Shareholder
hereunder.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any,
who controls the Company within the meaning of Section 15 of the Act, and
each Selling Shareholder against any losses, claims, damages or liabilities
to which the Company or such Selling Shareholder may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, the Prospectus, or any amendment
or supplement thereto, or any related preliminary prospectus, or arise out
of or are based upon the omission or the alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company
and each Selling Shareholder in connection with investigating
17
or defending any such loss, claim, damage, liability or action as such
expenses are incurred, it being understood and agreed that the only such
information furnished by any Underwriter consists of (i) the following
information in the Prospectus furnished on behalf of each Underwriter: the
concession and reallowance figures appearing in the fourth paragraph under
the caption "Underwriting" and the information contained in the 11th and
12th paragraphs under the caption "Underwriting"; (ii) the following
information in the Prospectus furnished on behalf of First Union
Securities, Inc.: the information contained in the sixth paragraph under
the caption "Underwriting"; and (iii) the following information in the
Prospectus furnished on behalf of SunTrust Capital Markets, Inc.: the
information contained in the 13th paragraph under the caption
"Underwriting."
(d) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against an indemnifying party
under subsection (a), (b) or (c) above, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under subsection (a), (b) or (c) above. In
case any such action is brought against any indemnified party and it
notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party),
and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action 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 (i) includes an unconditional
release of such indemnified party from all liability on any claims that are
the subject matter of such action and (ii) does not include a statement as
to, or an admission of, fault, culpability or a failure to act by or on
behalf of an indemnified party.
(e) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a),
(b) or (c) above, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a), (b) or (c)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholders on the one
hand and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Selling Shareholders on the one hand and the
Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities as well as
any other relevant equitable considerations. The relative benefits received
by the Company and the Selling Shareholders 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 and the Selling Shareholders bear to the total
underwriting discounts and commissions received by the Underwriters. 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, the Selling Shareholders or the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of
this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (e). Notwithstanding the provisions of this subsection (e), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by
18
it and distributed to the public were offered to the public exceeds the
amount of any damages which such 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 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations in this subsection (e) to contribute are
several in proportion to their respective underwriting obligations and not
joint.
(f) The obligations of the Company and the Selling Shareholders under
this Section shall be in addition to any liability which the Company and
the Selling Shareholders may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters
under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of
the Company who has signed a Registration Statement and to each person, if
any, who controls the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company and the Selling Shareholders for
the purchase of such Offered Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBC, the Company and the Selling Shareholders for the purchase of such Offered
Securities by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any non-
defaulting Underwriter, the Company or the Selling Shareholders, except as
provided in Section 9 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Selling Shareholders, of the Company and of the several Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any Underwriter, any Selling Shareholder, the Company or any of
their respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Offered Securities. If
this Agreement is terminated pursuant to Section 8 or if for any reason the
purchase of the Offered Securities by the Underwriters is not consummated, the
Company and the Selling Shareholders shall remain responsible for the expenses
to be paid or reimbursed by them pursuant to Section 5 and the respective
obligations of the Company, the Selling Shareholders, and the Underwriters
pursuant to Section 7 shall remain in effect, and if any Offered Securities have
been purchased hereunder the representations and warranties in Section 2 and all
obligations under Section 5 shall also remain in effect. If the purchase of the
Offered Securities by the Underwriters is not consummated for any reason (other
than solely because of the termination of this Agreement pursuant to Section 8
or the occurrence of any event specified in clause (iii), (iv) or (v) of Section
6(c)), the Company will reimburse the Underwriters for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by
them in connection with the offering of the Offered Securities.
19
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives c/o Credit Suisse First Boston Corporation, Xxxxxx Xxxxxxx
Xxxxxx, Xxx Xxxx, N.Y. 10010-3629, Attention: Transactions Advisory Group, or,
if sent to the Company, will be mailed, delivered or telegraphed and confirmed
to it at The InterCept Group, Inc., 0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxx 00000, Attention: Xxxx X. Xxxxxxx, or, if sent to the Selling
Shareholders or any of them other than XXXxxxx.xxx Inc., will be mailed,
delivered or telegraphed and confirmed to SunTrust Bank, as Custodian, 00
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxx Xxxxxxx, or if sent
to XXXxxxx.xxx Inc., will be mailed, delivered or telegraphed and confirmed to
it at XXXxxxx.xxx Inc., 0 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx X0X 0X0,
Attention: Dev Misir; provided, however, that any notice to an Underwriter
pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to
such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective personal representatives
and successors and the officers and directors and controlling persons referred
to in Section 7, and no other person will have any right or obligation
hereunder.
12. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representatives jointly or by
CSFBC will be binding upon all the Underwriters. Xxxx X. Xxxxxxx and Xxxxx X.
Xxxxxxxxx will act for the Selling Shareholders other than XXXxxxx.xxx Inc. in
connection with such transactions, and any action under or in respect of this
Agreement taken by Xxxx X. Xxxxxxx or Xxxxx X. Xxxxxxxxx will be binding upon
all the Selling Shareholders other than XXXxxxx.xxx Inc.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
20
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Selling
Shareholders, the Company and the several Underwriters in accordance with its
terms.
Very truly yours,
The InterCept Group, Inc.
By /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxxx
Senior Vice President and
Chief Financial Officer
The Selling Shareholders Listed
on Schedule A Hereto
By /s/ Xxxxx X. Xxxxxxxxx
--------------------------------------
Xxxxx X. Xxxxxxxxx as Attorney-in-Fact
XXXxxxx.xxx Inc.
By: /s/ Xxx Xxxxx
------------------------------------
Xxx Xxxxx
Executive Vice President
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
Credit Suisse First Boston Corporation
Xxxxxxxxx Xxxxxxxx, Inc.
First Union Securities, Inc.
SunTrust Capital Markets, Inc.
Acting on behalf of themselves and as
the Representatives of the several
Underwriters.
By Credit Suisse First Boston Corporation
By /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx
Managing Director
21
SCHEDULE A
Number of
Selling Shareholder Firm Securities to be Sold
-------------------------------- ------------------------------
Xxxx X. Xxxxxxx 100,000
Xxxxx X. Xxxxxxx 100,000
Xxxxxxx X. Xxxxxxxx 40,000
Xxxxx X. Xxxxxxxxx 35,000
Vir A. Nanda 15,000
XXXxxxx.xxx Inc. 610,000
-------
Total 900,000
=======
22
SCHEDULE B
Number of Firm Securities
Underwriter to be Purchased
----------- -------------------------
Credit Suisse First Boston Corporation............................... 1,777,500
Xxxxxxxxx Xxxxxxxx, Inc.............................................. 1,066,500
First Union Securities, Inc.......................................... 355,500
SunTrust Capital Markets, Inc........................................ 355,500
Xxxxx, Xxxxxxxx & Xxxx, Inc.......................................... 40,000
Xxxxxx X. Xxxxx & Co. Incorporated................................... 25,000
Barrington Research Associates, Inc.................................. 40,000
Xxxxxxx Xxxxx & Company, L.L.C....................................... 25,000
Xxxx Xxxxxxxx Incorporated........................................... 35,000
Xxx-Xxxx, Xxxxxx Inc................................................. 25,000
X. X. Xxxxxxxxx + Co., LLC........................................... 40,000
Xxxx Xxxxxxxxx Xxxxxxxx & Co......................................... 40,000
Invemed Associates LLC............................................... 35,000
Xxxxxx Xxxxxxxxxx Xxxxx LLC.......................................... 25,000
Xxxxxxxxx & Company, Inc............................................. 25,000
Xxxxxx Xxxxxx & Company, Inc......................................... 40,000
Xxxxxxx Xxxxxx Xxxxxx................................................ 25,000
Xxxxxx, Xxxxxxxx & Company, Incorporated............................. 25,000
---------
Total 4,000,000
=========
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