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EXHIBIT 1.1
GOODY'S FAMILY CLOTHING, INC.
COMMON STOCK
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UNDERWRITING AGREEMENT
, 1997
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THE XXXXXXXX-XXXXXXXX COMPANY, INC.
X.X. XXXXXXXX & CO.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o The Xxxxxxxx-Xxxxxxxx Company, Inc.
0000 Xxxxxxxxx Xxxx, XX
Xxxxxxx, Xxxxxxx 00000
Dear Sirs:
Certain shareholders of Goody's Family Clothing, Inc., a Tennessee
corporation (the "Company"), named in Schedule II hereto (the "Selling
Shareholders") propose, subject to the terms and conditions stated herein, to
sell to the Underwriters (the "Underwriters") named in Schedule I hereto an
aggregate of 2,027,000 shares of common stock of the Company, no par value
("Common Stock"), in the respective amounts set forth opposite their names in
Schedule II hereto (the "Firm Shares"), and, at the election of the
Underwriters, subject to the terms and conditions stated herein, one of the
Selling Shareholders proposes to sell to the Underwriters up to 300,000
additional shares of Common Stock (the "Optional Shares") (the Firm Shares and
the Optional Shares that the Underwriters elect to purchase pursuant to Section
2 hereof are collectively called the "Shares"). In your capacity as
representatives of the several Underwriters, you are referred to herein as the
"Representatives."
1. REPRESENTATIONS AND WARRANTIES
(a) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to, and agrees with, each of the Underwriters
that:
(i) A registration statement on Form S-3 (File
No. 333-32409) with respect to the Shares, including a
prospectus subject to completion, has been filed by the
Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended
(the "Act"), and one or more amendments to such registration
statement may have been so filed. After the execution of this
Agreement, the Company will file with the Commission either
(A) if such registration statement, as it may have been
amended, has become effective under the Act and information
has been omitted therefrom in accordance with Rule 430A under
the Act, a prospectus in the form most recently included in
an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration
statement) with such changes or insertions as are required by
Rule 430A or permitted by Rule 424(b) under the Act and as
have been provided to and approved by the Representatives, or
(B) if such registration statement, as it may have been
amended, has not become effective under the Act, an amendment
to such registration statement, including a form of
prospectus, a copy of which amendment has been provided to
and approved by the Representatives prior to the execution of
this Agreement. As used in this Agreement, the term
"Registration Statement" means such registration statement,
as hereafter amended,
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including a registration statement filed pursuant to Rule
462(b) and also including (i) all financial statement
schedules and exhibits thereto, (ii) all documents
incorporated by reference therein filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and
(iii) any information omitted therefrom pursuant to Rule 430A
under the Act and included in the Prospectus (as hereinafter
defined); the term "Preliminary Prospectus" means each
prospectus subject to completion included in such
registration statement or any amendment (or post-effective
amendment) thereto (including the prospectus subject to
completion, if any, included in the Registration Statement at
the time it was or is declared effective), including all
documents incorporated by reference therein filed under the
Exchange Act; and the term "Prospectus" means the prospectus
first filed with the Commission pursuant to Rule 424(b) under
the Act or, if no prospectus is required to be so filed, such
term means the prospectus included in the Registration
Statement in either case, including all documents
incorporated by reference therein filed under the Exchange
Act. Any reference in this Agreement to an "amendment or
supplement" to any Preliminary Prospectus or the Prospectus
or an "amendment" to any registration statement (including
the Registration Statement) shall be deemed to include any
document incorporated by reference therein and filed with the
Commission under the Exchange Act after the date of such
Preliminary Prospectus, Prospectus or Registration Statement,
as the case may be. For purposes of the preceding sentence,
any reference to the "effective date" of an amendment to a
registration statement shall, if such amendment is effected
by means of the filing with the Commission under the Exchange
Act of a document incorporated by reference in such
registration statement, be deemed to refer to the date on
which such document was so filed with the Commission. As used
herein, any reference to any statement or information as
being "made", "included", "contained", "disclosed", or "set
forth" in any Preliminary Prospectus, a Prospectus or any
amendment or supplement thereto, or the Registration
Statement or any amendment thereto (or other similar
references) shall refer both to information and statements
actually appearing in such document as well as information
and statements incorporated by reference therein. For
purposes of the following representations and warranties, to
the extent reference is made to the Prospectus and at the
relevant time the Prospectus is not yet in existence, such
reference shall be deemed to be to the most recent
Preliminary Prospectus.
(ii) No order preventing or suspending the use of
any Preliminary Prospectus has been issued and no proceeding
for that purpose has been instituted or overtly threatened by
the Commission or the securities authority of any state or
other jurisdiction. If the Registration Statement has become
effective under the Act, no stop order suspending the
effectiveness of the Registration Statement or any part
thereof has been issued and no proceeding for that purpose
has been instituted or overtly threatened or, to the
knowledge of the Company, contemplated by the Commission or
the securities authority of any state or other jurisdiction.
(iii) When any Preliminary Prospectus and any
amendment or supplement thereto was filed with the Commission
it (A) contained all statements required to be stated therein
in accordance with, and complied in all material respects
with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (B) did not
include any untrue statement of a material fact or omit 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, except for any
statements which have been revised and included in the
Prospectus. When the Registration Statement or any amendment
thereto was or is declared effective, and at each Time of
Delivery (as hereinafter defined), it (A) contained or will
contain all statements required to be stated therein in
accordance with, and complied or will comply in all material
respects with the requirements of, the Act and the rules and
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regulations of the Commission thereunder and (B) did not or
will not include any untrue statement of a material fact or
omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any
amendment or supplement thereto is filed with the Commission
pursuant to Rule 424(b) (or, if the Prospectus or such
amendment or supplement is not required to be so filed, when
the Registration Statement or the amendment thereto
containing such amendment or supplement to the Prospectus was
or is declared effective) and at each Time of Delivery, the
Prospectus, as amended or supplemented at any such time, (A)
contained or will contain all statements required to be
stated therein in accordance with, and complied or will
comply in all material respects with the requirements of, the
Act and the rules and regulations of the Commission
thereunder and (B) did not or will not include any untrue
statement of a material fact or omit 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. The foregoing provisions of this paragraph
(iii) do not apply to statements or omissions made in any
Preliminary Prospectus and any amendment or supplement
thereto, the Registration Statement or any amendment thereto
or the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information
furnished to the Company by any Underwriter through
the Representatives specifically for use therein.
(iv) The descriptions in the Registration Statement
and the Prospectus of statutes, legal and governmental
proceedings or contracts and other documents are accurate in
all material respects and fairly present in all material
respects the information required to be shown; and there are
no statutes or legal or governmental proceedings required to
be described in the Registration Statement or the Prospectus
that are not described as required and there are no contracts
or documents of a character that are 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 or filed as required.
(v) Each of the Company and its subsidiaries has
been duly incorporated or organized, is validly existing as a
corporation or limited partnership in good standing under the
laws of its jurisdiction of incorporation or organization and
has all requisite power and authority (corporate and other)
to own or lease its properties and conduct its business as
described in the Prospectus. The Company has full power and
authority (corporate and other) to enter into this Agreement
and to perform its obligations hereunder. Each of the Company
and its subsidiaries is duly qualified to transact business
as a foreign corporation or limited partnership and is in
good standing under the laws of each other jurisdiction in
which it owns or leases properties, or conducts any business,
so as to require such qualification, except where the failure
to so qualify would not have a material adverse effect on the
financial position, results of operations, or business of the
Company and its subsidiaries taken as a whole ("Material
Adverse Effect").
(vi) The Company's authorized, issued and
outstanding common stock is as disclosed in the Prospectus.
All of the issued shares of common stock of the Company have
been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description of the Common
Stock contained in the Prospectus. None of the issued shares
of common stock of the Company, or issued shares of common
stock or limited partnership interests of any of its
subsidiaries, has been issued or is owned or held in
violation of any preemptive rights of shareholders, and no
person or entity (including any holder of outstanding shares
of common stock or limited partnership interests of the
Company or its
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subsidiaries) has any statutory preemptive or, to the
Company's knowledge, other rights to subscribe for any of the
Shares.
(vii) The issued shares of common stock or limited
partnership interests of each of the Company's subsidiaries
have been duly authorized and validly issued, are fully paid
and nonassessable and, except for directors qualifying shares,
except for liens or encumbrances contained in the Company's
currently existing $120,000,000 revolving line of credit (the
"Credit Facility"), and except as otherwise disclosed in the
Prospectus, are directly or indirectly owned beneficially by
the Company free and clear of all liens, security interests,
pledges, charges, encumbrances, defects, shareholders'
agreements, voting trusts, equities or claims of any nature
whatsoever. Other than the subsidiaries listed on Exhibit 21
to the Company's Annual Report on Form 10-K for the year
ended February 1, 1997 (which are herein referred to as the
"subsidiaries") and except for short-term working capital
cash investments, the Company does not own, directly or
indirectly, any capital stock or other equity securities of
any other corporation or any partnership interest in any
partnership, joint venture or other association other than as
disclosed in the Prospectus.
(viii) Except as disclosed in the Prospectus and
except for forfeitures, grants and exercises of stock options
pursuant to existing stock option plans of the Company in the
ordinary course of business after the date of the Preliminary
Prospectus, there are no outstanding (A) securities or
obligations of the Company or any of its subsidiaries
convertible into or exchangeable for any capital stock of the
Company or any such subsidiary, (B) warrants, rights or
options to subscribe for or purchase from the Company or any
such subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or (C)
obligations of the Company or any such subsidiary to issue
any shares of capital stock, any such convertible or
exchangeable securities or obligations, or any such warrants,
rights or options.
(ix) Since the date of the most recent audited
financial statements included in the Prospectus, neither the
Company nor any of its subsidiaries has sustained any
material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as disclosed in or
contemplated by the Prospectus.
(x) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, (A) neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations,
direct or contingent, or entered into any transactions, not
in the ordinary course of business, that are material to the
Company and its subsidiaries taken as a whole, (B) the
Company has not purchased any of its outstanding capital
stock or declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock, (C) there has
not been any change in the capital stock (except as a result
of shares issued upon exercise of stock options pursuant to
existing stock option plans of the Company), or, otherwise
than in the ordinary course of business consistent with past
practice, long-term debt or short-term debt of the Company or
any of its subsidiaries, and (D) there has not been any
material adverse change, or any development involving a
prospective material adverse change, in or affecting the
financial position, results of operations or business of the
Company and its subsidiaries taken as a whole, in each case
other than as disclosed in or contemplated by the Prospectus.
(xi) Except as disclosed in the Prospectus, there
are no contracts, agreements or understandings between the
Company and any person granting such person the right to
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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 any such right has been
effectively waived) or any securities being registered
pursuant to any other registration statement filed by the
Company under the Act.
(xii) All offers and sales of the Company's capital
stock by the Company prior to the date hereof were at all
relevant times duly registered under the Act or exempt from
the registration requirements of the Act by reason of
Sections 3(b), 4(2) or 4(6) thereof and were duly registered
or the subject of an available exemption from the
registration requirements of the applicable state securities
or blue sky laws.
(xiii) Neither the Company nor any of its
subsidiaries is, or with the giving of notice or passage of
time or both would be, in violation of its Articles of
Incorporation or Bylaws or in default under any indenture,
mortgage, deed of trust, loan agreement, or other
material agreement or instrument to which the Company or any
of its subsidiaries is a party or to which any of their
respective properties or assets are subject, except where
such default (other than in respect of its Articles of
Incorporation and Bylaws) would not have a material adverse
effect on the financial position, results of operations, or
business of the Company and its subsidiaries, taken as a
whole ("Material Adverse Effect").
(xiv) The sale of the Shares and the performance of
this Agreement and the consummation of the transactions
herein contemplated will not conflict with, or (with or
without the giving of notice or the passage of time or both)
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, loan agreement, lease, or other
material agreement or instrument to which the Company or any
of its subsidiaries is a party or to which any of their
respective properties or assets is subject, nor will such
action conflict with or violate any provision of the Articles
of Incorporation or Bylaws of the Company or any of its
subsidiaries or any statute, rule or regulation or any order,
judgment or decree of any court or governmental agency or
body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties or assets,
except where such breach, violation, or default (other than
in respect of its Articles of Incorporation or Bylaws) would
not have a Material Adverse Effect.
(xv) The Company and its subsidiaries have good and
marketable title in fee simple to all real property, if any,
and good title to all personal property owned by them and
material to the Company and its subsidiaries as a whole, in
each case free and clear of all liens, security interests,
pledges, charges, encumbrances, mortgages and defects, except
such as are contained in the Credit Facility or otherwise
disclosed in the Prospectus or such as do not materially and
adversely affect the value of such property and do not
interfere with the use made or proposed to be made of such
property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company or any
of its subsidiaries and material to the Company and its
subsidiaries as a whole are held under valid, subsisting and
enforceable leases, with such exceptions as are disclosed
in the Prospectus or are not material and do not interfere
with the use made or proposed to be made of such property and
buildings by the Company or such subsidiaries.
(xvi) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or
filing with, any court or governmental agency or body is
required for the sale of the Shares or the consummation of
the transactions contemplated by this Agreement, except the
registration of the Shares under the Act (which, if the
Registration Statement is not effective as of the time of
execution hereof, shall be obtained as provided
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in this Agreement) and such as may be required under state
securities or blue sky laws or the bylaws and rules and
regulations of the National Association of Securities
Dealers, Inc. ("NASD") in connection with the offer, sale and
distribution of the Shares by the Underwriters.
(xvii) Other than as disclosed in the Prospectus,
there is no litigation, arbitration, claim, proceeding
(formal or informal) or investigation pending or, to the
Company's knowledge, threatened, in which the Company or any
of its subsidiaries is a party or of which any of their
respective properties or assets are the subject which, if
determined adversely to the Company or any such subsidiary,
would individually or in the aggregate have a Material
Adverse Effect. Neither the Company nor any of its
subsidiaries is in violation of, or in default with respect
to, any statute, rule, regulation, order, judgment or decree,
except as described in the Prospectus or such as do not and
will not individually or in the aggregate have a Material
Adverse Effect, and neither the Company nor any of its
subsidiaries is required to take any action in order to avoid
any such violation or default.
(xviii) Deloitte & Touche LLP, who have rendered a
report with respect to certain financial statements of the
Company and its consolidated subsidiaries, is and was during
the periods covered by its report included in the
Registration Statement and the Prospectus, independent public
accountants as required by the Act and the Exchange Act and
the respective rules and regulations of the Commission
thereunder.
(xix) The consolidated financial statements and
schedules (including the related notes) of the Company and
its consolidated subsidiaries included in the Registration
Statement, the Prospectus or any Preliminary Prospectus were
prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods
involved (except as may be otherwise indicated in the notes
thereto) and fairly present (subject, in the case of
unaudited statements, to normal recurring audit adjustments)
the financial position and results of operations of the
Company and its subsidiaries, on a consolidated basis, at the
dates and for the periods presented. The other financial and
statistical information and data included in the Registration
Statement, the Prospectus or any Preliminary Prospectus, set
forth under the captions "Prospectus Summary," "Selected
Consolidated Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations,"
and "Business" in the Prospectus are, in all material
respects, accurately presented and prepared on a basis
consistent with such financial statements and the books and
records of the Company.
(xx) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the
valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, subject, as
to enforcement, to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws relating to
or affecting the enforcement of creditors' rights generally
and to general equitable principles, and except as the
enforceability of rights to indemnity and contribution under
this Agreement may be limited under applicable securities
laws or the public policy underlying such laws.
(xxi) Except in connection with the administration
of the Company's Employee Payroll Investment Plan in the
ordinary course of business, neither the Company nor, to the
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Company's knowledge, any of its officers, directors or
affiliates has (A) taken, directly or indirectly, any action
designed to cause or result in, or that has constituted or
might reasonably be expected to constitute, the stabilization
or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares or (B) since
the filing of the Registration Statement (1) sold, bid for,
purchased or paid anyone any compensation for soliciting
purchases of, the Shares or (2) paid or agreed to pay to any
person any compensation for soliciting another to purchase
any other securities of the Company.
(xxii) The Company has obtained for the benefit of
the Company and the Underwriters from each of its directors
and executive and certain other officers a written agreement
which generally provides that for a period of 120 days from
the date of the Prospectus such director or officer will not,
without the prior written consent of The Xxxxxxxx-Xxxxxxxx
Company, Inc., offer, pledge, sell, contract to sell, grant
any option for the sale of, or otherwise dispose (or announce
any offer, pledge, sale, grant of an option to purchase or
other disposition) of, directly or indirectly, any shares of
Common Stock or securities convertible into, or exercisable
or exchangeable for, shares of Common Stock except under
certain prescribed circumstances.
(xxiii) Neither the Company, any of its
subsidiaries, nor, to the Company's knowledge, any director,
officer, agent, employee or other person associated with and
acting on behalf of the Company or any such subsidiary has,
directly or indirectly: used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful
expenses relating to political activity; made any unlawful
payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or
campaigns from corporate funds; violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or made
any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(xxiv) To the Company's knowledge, the operations of
the Company and its subsidiaries with respect to any real
property currently leased or owned or by any means controlled
by the Company or any subsidiary (the "Real Property") are in
compliance with all federal, state, and local laws,
ordinances, rules, and regulations relating to occupational
health and safety and the environment (collectively, "Laws"),
except where such noncompliance would not have a Material
Adverse Effect; and the Company and its subsidiaries have all
material licenses, permits and authorizations necessary to
operate its business under all Laws and are in compliance in
all material respects with all terms and conditions of such
licenses, permits and authorizations; neither the Company nor
any subsidiary has authorized, conducted or has knowledge of
the generation, transportation, storage, use, treatment,
disposal or release of any hazardous substance, hazardous
waste, hazardous material, hazardous constituent, toxic
substance, pollutant, contaminant, petroleum product, natural
gas, liquefied gas or synthetic gas defined or regulated
under any environmental law on, in or under any Real Property
in violation of any Laws except which individually or in the
aggregate would not have a Material Adverse Effect, and there
is no pending or threatened claim, litigation or any
administrative agency proceeding, nor has the Company or any
subsidiary received any written or oral notice from any
governmental entity or third party, that: (A) alleges a
violation of any Laws by the Company or any subsidiary; (B)
alleges the Company or any subsidiary is a liable party under
the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. ss. 9601 et seq. or any state
superfund law; (C) alleges possible contamination of the
environment by the Company or any subsidiary; or (D) alleges
possible contamination of the Real Property, except those, in
any such case, which would not have a Material Adverse
Effect.
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(xxv) Other than as disclosed in the Prospectus,
the Company and its subsidiaries own or have the right
to use all patents, patent applications, trademarks,
trademark applications, trade names, service marks,
copyrights, franchises, trade secrets, proprietary or other
confidential information and intangible properties and assets
(collectively, "Intangibles") necessary to their respective
businesses as presently conducted or as the Prospectus
indicates the Company or such subsidiary proposes to conduct;
to the knowledge of the Company, except as otherwise
disclosed in the Prospectus, neither the Company nor any
subsidiary has infringed or is infringing, and neither the
Company nor any subsidiary has received notice of
infringement with respect to, asserted Intangibles of others;
and, to the knowledge of the Company, there is no
infringement by others of Intangibles of the Company or any
of its subsidiaries except those, in any case, which
individually or in the aggregate would not have a Material
Adverse Effect.
(xxvi) The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are
prudent in the businesses in which they are engaged; and
neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be
necessary to continue its business at a comparable cost
which, if not so renewed or obtained, would have a Material
Adverse Effect.
(xxvii) The Company is taking steps to replace
and/or modify its software systems to include the requisite
design, performance and functionality so that the Company
does not reasonably expect to experience invalid or incorrect
results or abnormal software operation related to calendar
year 2000.
(xxviii) Each of the Company and its subsidiaries
makes and keeps accurate books, records and accounts, which,
in reasonable detail, accurately and fairly reflect the
transactions and dispositions of its assets and maintains a
system of internal accounting controls sufficient to provide
reasonable assurance that (A) transactions are executed in
accordance with management's general or specific
authorization, (B) transactions are recorded as necessary to
permit preparation of the Company's consolidated financial
statements in accordance with generally accepted accounting
principles and to maintain accountability for the assets of
the Company, (C) access to the assets of the Company and each
of its subsidiaries is permitted only in accordance with
management's general or specific authorization, and (D) the
recorded accountability for assets of the Company and each of
its subsidiaries is compared with existing assets at
reasonable intervals and appropriate action is taken with
respect to any differences.
(xxix) No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends
to the Company, from making any other distributions on such
subsidiary's capital stock to the Company, from repaying to
the Company any loans or advances to such subsidiary or from
transferring any of such subsidiary's property or assets to
the Company or any other subsidiary of the Company, except as
disclosed in the Prospectus.
(xxx) The Company and its subsidiaries have filed
all foreign, federal, state and local tax returns that are
required to be filed by them or have requested extensions
thereof and have paid all taxes shown as due on such returns
as well as all other taxes, assessments and governmental
charges that are due and payable except for any such
assessment or charge
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currently being contested in good faith and of which, to the
extent material, the Company has advised the Representatives.
(xxxi) The Company is not, will not become as a
result of the transactions contemplated hereby, and does not
intend to conduct its business in a manner that would cause
it to become, an "investment company" or a company
"controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940.
(xxxii) The Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and is qualified as a
Nasdaq National Market security of The Nasdaq Stock Market,
Inc. The Company has taken no action designed to terminate,
or likely to have the effect of terminating, the registration
of the Common Stock under the Exchange Act or qualification
of the Common Stock on the Nasdaq National Market, nor has
the Company received any notification that the Commission or
the NASD is contemplating terminating such registration or
qualification.
(xxxiii) The conditions for use of a Registration
Statement on Form S-3 set forth in the General Instructions
to Form S-3 have been satisfied with respect to the Company
and the transactions contemplated by this Agreement and the
Registration Statement.
(b) REPRESENTATIONS AND WARRANTIES OF THE SELLING
SHAREHOLDERS. Each Selling Shareholder, severally and not jointly, represents
and warrants to, and agrees with, each of the several Underwriters and the
Company that:
(i) Such Selling Shareholder has full right,
power and authority to enter into this Agreement, the
Power of Attorney and the Custody Agreement (as hereinafter
defined) and to sell, assign, transfer and deliver to the
Underwriters the Shares to be sold by such Selling
Shareholder hereunder; and the execution and delivery of this
Agreement, the Power of Attorney and the Custody Agreement
have been duly authorized by all necessary action of such
Selling Shareholder.
(ii) Such Selling Shareholder has duly executed
and delivered this Agreement, the Power of Attorney and
the Custody Agreement, and each constitutes the valid and
binding agreement of such Selling Shareholder enforceable
against such Selling Shareholder in accordance with its
terms, subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws
relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles and, with
respect to this Agreement, except as the enforceability of
rights to indemnity and contribution under this Agreement may
be limited under applicable securities laws or the public
policy underlying such laws.
(iii) No consent, approval, authorization, order
or declaration of or from, or registration, qualification or
filing with, any court or governmental agency or body is
required for the sale of the Shares to be sold by such
Selling Shareholder or the consummation of the transactions
contemplated by this Agreement, the Power of Attorney or the
Custody Agreement, except the registration of such Shares
under the Act (which, if the Registration Statement is not
effective as of the time of execution hereof, shall be
obtained as provided in this Agreement) and such as may be
required under state securities or blue sky laws or the
bylaws and rules and regulations of the NASD in connection
with the offer, sale and distribution of such Shares by the
Underwriters.
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(iv) The sale of the Shares to be sold by such
Selling Shareholder and the performance of this Agreement,
the Power of Attorney and the Custody Agreement and the
consummation of the transactions herein and therein
contemplated will not conflict with, or (with or without the
giving of notice or the passage of time or both) 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, loan agreement, lease, or other material agreement or
instrument to which such Selling Shareholder is a party or to
which any of his respective properties or assets is subject,
nor will such action conflict with or violate any provisions
of any statute, rule or regulation or any order, judgment or
decree of any court or governmental agency or body having
jurisdiction over such Selling Shareholder or any of such
Selling Shareholder's properties or assets, except those, in
each such case, which would not have a material adverse
effect on the ability of such Selling Shareholder to
consummate the transactions contemplated by this Agreement.
(v) Such Selling Shareholder has, or immediately
prior to the First Time of Delivery (as hereinafter defined),
such Selling Shareholder will have, good and valid title to
the Shares to be sold by such Selling Shareholder hereunder,
without notice of any adverse claim, free and clear of all
liens, security interests, pledges, charges, encumbrances,
defects, shareholders' agreements, voting trusts, equities or
claims of any nature whatsoever; and, upon delivery of such
Shares against payment therefor as provided herein (assuming
that such Shares are purchased in good faith without notice
of adverse claim) good and valid title to such Shares, free
and clear of all liens, security interests, pledges, charges,
encumbrances, defects, shareholders' agreements, voting
trusts, equities or claims of any nature whatsoever, will
pass to the several Underwriters.
(vi) Such Selling Shareholder has not (A) taken,
directly or indirectly, any action designed to cause or
result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the
sale or resale of the Shares or (B) since the filing of the
Registration Statement (1) sold, bid for, purchased or paid
anyone any compensation for soliciting purchases of, the
Shares or (2) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other
securities of the Company.
In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Internal Revenue Code of 1986, as amended,
with respect to the transactions herein contemplated, each of the Selling
Shareholders agrees to deliver to the Representatives prior to or at the First
Time of Delivery a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
Each of the Selling Shareholders represents and warrants that
certificates in negotiable form representing all of the Shares to be sold by
such Selling Shareholder hereunder have been placed in
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custody (or, in the case of the contemplated exercise of stock options, a duly
executed notice of exercise of stock options to purchase the Shares to be sold
by the Selling Shareholders hereunder has been placed in custody) under a
custody agreement, in the form heretofore furnished to and approved by you (the
"Custody Agreement"), duly executed and delivered by such Selling Shareholder
to Wachovia Bank of North Carolina, N.A., as custodian (the "Custodian"), and
that such Selling Shareholder has duly executed and delivered a Power of
Attorney, in the form heretofore furnished to and approved by you, appointing
the persons indicated in Schedule II hereto as such Selling Shareholder's
attorney-in-fact (the "Attorneys- in-Fact") with authority to execute and
deliver this Agreement on behalf of such Selling Shareholder, to determine the
purchase price to be paid by the Underwriters to the Selling Shareholders as
provided in Section 2 hereof, to authorize the delivery of the Shares to be
sold by such Selling Shareholder hereunder and otherwise to act on behalf of
such Selling Shareholder in connection with the transactions contemplated by
this Agreement and the Custody Agreement.
Each of the Selling Shareholders specifically agrees that the Shares
represented by the certificates held in custody for such Selling Shareholder
under the Custody Agreement are subject to the interests of the Underwriters
hereunder, and that the arrangements made by such Selling Shareholder for such
custody, and the appointment by such Selling Shareholder of the
Attorneys-in-Fact by the Power of Attorney, are irrevocable. Each of the
Selling Shareholders specifically agrees that the obligations of the Selling
Shareholders hereunder shall not be terminated by operation of law, whether by
the death or incapacity of any individual Selling Shareholder, or by the
occurrence of any other event.
2. PURCHASE AND SALE OF SHARES. Subject to the terms and conditions
herein set forth, (a) each Selling Shareholder agrees, severally and not
jointly, to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Selling Shareholders,
at a purchase price of $______ per share, the number of Firm Shares (to be
adjusted by the Representatives so as to eliminate fractional shares)
determined by multiplying the aggregate number of Shares to be sold by the
Selling Shareholders as set forth opposite their respective names in Schedule
II hereto by a fraction, the numerator of which is the aggregate number of Firm
Shares to be purchased by such Underwriter as set forth opposite the name of
such Underwriter in Schedule I hereto, and the denominator of which is the
aggregate number of Firm Shares to be purchased by all of the Underwriters from
the Selling Shareholders hereunder and (b) in the event and to the extent that
the Underwriters shall exercise the election to purchase Optional Shares as
provided below, Xxxxxx X. Xxxxxxxxxx agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly,
to purchase from Xxxxxx X. Xxxxxxxxxx, at the purchase price per share set
forth in clause (a) of this Section 2, that portion of the number of Optional
Shares as to which such election shall have been exercised (to be adjusted by
the Representatives so as to eliminate fractional shares) determined by
multiplying such number of Optional Shares by a fraction, the numerator of
which is the maximum number of Optional Shares that such Underwriter is
entitled to purchase as set forth opposite the name of such Underwriter in
Schedule I hereto and the denominator of which is the maximum number of the
Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
Xxxxxx X. Xxxxxxxxxx hereby grants to the Underwriters the right to
purchase at their election in whole or in part from time to time up to 300,000
Optional Shares, at the purchase price per share set forth in clause (a) in the
paragraph above plus, if the purchase and sale of any Optional Shares take
place after the First Time of Delivery and after the Firm Shares are traded
"ex-dividend," an amount equal to the dividend payable on such Optional Shares,
for the sole purpose of covering over-allotments in the sale of Firm Shares.
Any such election to purchase Optional Shares may be exercised by written
notice from the Representatives to Xxxxxx X. Xxxxxxxxxx, given not more than
twice within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by the
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Representatives but in no event earlier than the First Time of Delivery or,
unless the Representatives and Xxxxxx X. Xxxxxxxxxx otherwise agree in writing,
earlier than two or later than ten business days after the date of such notice.
In the event the Representatives elect to purchase all or a portion of the
Optional Shares, the Company and Xxxxxx X. Xxxxxxxxxx agree to furnish or cause
to be furnished to the Representatives the certificates, letters and opinions,
and to satisfy all conditions, set forth in Section 7 hereof at each Subsequent
Time of Delivery (as hereinafter defined).
3. OFFERING BY THE UNDERWRITERS. Upon the authorization by the
Underwriters of the release of the Shares, the several Underwriters propose to
offer the Shares for sale upon the terms and conditions disclosed in the
Prospectus.
4. DELIVERY OF SHARES; CLOSING. Certificates in definitive form for
the Shares to be purchased by each Underwriter hereunder, and in such
denominations and registered in such names as The Xxxxxxxx-Xxxxxxxx Company,
Inc. may request upon at least 48 hours' prior notice to the Company shall be
delivered by or on behalf of the Selling Shareholders to the Representatives
for the account of such Underwriter, against payment by such Underwriter on its
behalf of the purchase price therefor by official bank check or checks (payable
in next day funds) drawn on an Atlanta, Georgia bank, payable to the order of
the Selling Shareholders. The closing of the sale and purchase of the Shares
shall be held at the offices of Xxxxx, Xxxxxxxx & Xxxxxxx, LLP, Suite 1800,
East Tower, Atlanta Financial Center, 0000 Xxxxxxxxx Xxxx, X.X., Xxxxxxx,
Xxxxxxx 00000, except that physical delivery of such certificates shall be made
at the office of The Depository Trust Company, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000. The time and date of such delivery and payment shall be, with
respect to the Firm Shares, at 10:00 a.m., Atlanta time, on the fourth full
business day after this Agreement is executed or at such other time and date as
the Representatives, the Company and the Attorneys-in-Fact on behalf of the
Selling Shareholders may agree upon in writing, and, with respect to the
Optional Shares, at 10:00 a.m., Atlanta time, on the date specified by the
Representatives in the written notice given by the Representatives of the
Underwriters' election to purchase all or part of such Optional Shares, or at
such other time and date as the Representatives and the Company may agree upon
in writing. Such time and date for delivery of the Firm Shares is herein called
the "First Time of Delivery," such time and date for delivery of any Optional
Shares, if not the First Time of Delivery, is herein called a "Subsequent Time
of Delivery," and each such time and date for delivery is herein called a "Time
of Delivery." The Company will make such certificates available for checking
and packaging at least 24 hours prior to each Time of Delivery at the office of
The Depository Trust Company, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at
such other location in New York, New York specified by the Underwriters in
writing at least 48 hours prior to such Time of Delivery.
5. COVENANTS.
(a) COVENANTS OF THE COMPANY. The Company covenants and
agrees with each of the Underwriters:
(i) If the Registration Statement has been declared
effective prior to the execution and delivery of this
Agreement, the Company will file the Prospectus with the
Commission pursuant to and in accordance with Rule 424(b)(1)
(or, if applicable and if consented to by the
Representatives, Rule 424(b)(4)) not later than the earlier
of (A) the second business day following the execution and
delivery of this Agreement or (B) the fifth business day
after the date on which the Registration Statement is
declared effective. The Company will advise the
Representatives promptly of any such filing pursuant to Rule
424(b). The Company will file promptly all reports and any
definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of the Prospectus and
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for so long as the delivery of a prospectus is required in
connection with the offering, sale and distribution of the
Shares.
(ii) The Company will not file with the Commission
the Prospectus or the amendment referred to in the second
sentence of Section l(a)(i) hereof, any amendment or
supplement to the Prospectus or any amendment to the
Registration Statement unless the Representatives have
received a reasonable period of time to review any such
proposed amendment or supplement and consented to the filing
thereof and will use its best efforts to cause any such
amendment to the Registration Statement to be declared
effective as promptly as possible. Upon the request of the
Representatives or counsel for the Underwriters, the Company
will promptly prepare and file with the Commission, in
accordance with the rules and regulations of the Commission,
any amendments to the Registration Statement or amendments or
supplements to the Prospectus that may be necessary or
advisable in connection with the distribution of the Shares
by the several Underwriters and will use its best efforts to
cause any such amendment to the Registration Statement to be
declared effective as promptly as possible. If required, the
Company will file any amendment or supplement to the
Prospectus with the Commission in the manner and within the
time period required by Rule 424(b) under the Act. The
Company will advise the Representatives, promptly after
receiving notice thereof, of the time when the Registration
Statement or any amendment thereto has been filed or declared
effective or the Prospectus or any amendment or supplement
thereto has been filed and will provide evidence to the
Representatives of each such filing or effectiveness.
(iii) The Company will advise the Representatives
promptly after receiving notice or obtaining knowledge of (A)
the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or any part
thereof or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, (B) the suspension of the qualification
of the Shares for offer or sale in any jurisdiction or of the
initiation or threatening of any proceeding for any such
purpose, or (C) any request made by the Commission or any
securities authority of any other jurisdiction for amending
the Registration Statement, for amending or supplementing the
Prospectus or for additional information. The Company will
use its best efforts to prevent the issuance of any such stop
order and, if any such stop order is issued, to obtain the
withdrawal thereof as promptly as possible.
(iv) If the delivery of a prospectus relating to
the Shares is required under the Act at any time prior to the
expiration of nine months after the date of the Prospectus
and if at such time any events have occurred 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 in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading, or if for any reason it is
necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus to comply with
the Act or the Exchange Act or the respective rules and
regulations thereunder, the Company will promptly notify the
Representatives and upon the request of the Representatives
(but at the Company's expense) prepare and file with the
Commission an amendment or supplement to the Prospectus or
any such document incorporated by reference that corrects
such statement or omission or effects such compliance and
will furnish without charge to each Underwriter and to any
dealer in securities as many copies of such amended or
supplemented Prospectus as the Representatives may from time
to time reasonably request. If the delivery of a
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prospectus relating to the Shares is required under the Act
at any time nine months or more after the date of the
Prospectus, upon the request of the Representatives but at
the expense of such Underwriter, the Company will prepare and
deliver to such Underwriter as many copies as the
Representatives may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act.
Neither the Representatives' 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 7.
(v) The Company promptly from time to time will
take such action as the Representatives may reasonably
request to qualify the Shares for offering and sale under the
securities or blue sky laws of such jurisdictions as the
Representatives may request and will continue such
qualifications in effect for as long as may be necessary to
complete the distribution of the Shares, provided 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.
(vi) The Company will promptly provide the
Representatives, without charge, (A) two manually executed
copies of the Registration Statement as originally filed with
the Commission and of each amendment thereto, including all
documents or information incorporated by reference therein,
(B) for each other Underwriter a conformed copy of the
Registration Statement as originally filed and of each
amendment thereto, without exhibits but including all
documents or information incorporated by reference therein,
and (C) so long as a prospectus relating to the Shares is
required to be delivered under the Act, as many copies of
each Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto as the Representatives may
reasonably request.
(vii) As soon as practicable, the Company will make
generally available to its security holders and the
Representatives an earnings statement of the Company and its
subsidiaries, if any, covering a period of at least 12 months
beginning after the effective date of the Registration
Statement (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations thereunder.
(viii) During the period beginning from the date
hereof and continuing to and including the date 120 days
after the date of the Prospectus, the Company will not,
without the prior written consent of The Xxxxxxxx-Xxxxxxxx
Company, Inc., offer, pledge, issue, sell, contract to sell,
grant any option for the sale of, or otherwise dispose (or
announce any offer, pledge, sale, grant of an option to
purchase or other disposition) of, directly or indirectly,
any shares of Common Stock or securities convertible into,
exercisable or exchangeable for, shares of Common Stock,
except as provided in Section 2 and except for the issuance
of Common Stock upon the exercise of stock options
outstanding on the date of this Agreement to the extent that
such stock options are disclosed in the Prospectus and except
for the grant of stock options under the Company's existing
stock option plans.
(ix) During a period of three years from the
effective date of the Registration Statement, the Company
will furnish to the Representatives and, upon request, to
each of the other Underwriters, without charge, (A) copies of
all reports or other communications (financial or other)
furnished to shareholders, (B) as soon as they are available,
copies of any reports and financial statements furnished to
or filed with the Commission or any national securities
exchange, and (C) such additional information concerning the
business and
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financial condition of the Company and its subsidiaries, if
any, as the Representatives may reasonably request.
(x) Except in connection with the administration
of the Company's Employee Payroll Investment Plan in the
ordinary course of business, neither the Company nor, to the
Company's knowledge, any of its officers, directors or
affiliates will prior to the termination of the underwriting
syndicate contemplated by this Agreement, (A) take, directly
or indirectly, any action designed to cause or to result in,
or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of any of the
Shares, (B) sell, bid for, purchase or pay anyone any
compensation for soliciting purchases of, the Shares, or (C)
pay or agree to pay to any person any compensation for
soliciting another to purchase any other securities of the
Company.
(xi) At each Time of Delivery, the Company will use
its best efforts to cause the Shares to continue to be listed
on the Nasdaq National Market.
(xii) If at any time during the period beginning on
the date the Registration Statement becomes effective and
ending on the later of (A) the date 30 days after such
effective date and (B) the date on which the Company next
files with the Commission a Quarterly Report on Form 10-Q
after such effective date, any rumor, publication or event
relating to or affecting the Company shall occur as a result
of which in the opinion of the Company's counsel the Company
is obligated to publicly respond to such rumor, publication,
or event (regardless of whether such rumor, publication or
event necessitates an amendment of or supplement to the
Prospectus), the Company will provide to the Representatives,
in advance of its dissemination, a copy of any press release
or other public statement responding to or commenting on such
rumor, publication or event.
(b) COVENANTS OF THE SELLING SHAREHOLDERS. Each Selling
Shareholder, severally and not jointly, covenants and agrees with each of the
Underwriters:
(i) A duly executed lock-up agreement has been
delivered to the Representatives generally providing that
during the period beginning from the date hereof and
continuing to and including the date 120 days after the date
of the Prospectus, such Selling Shareholder will not, without
the prior written consent of The Xxxxxxxx-Xxxxxxxx Company,
Inc., offer, pledge, issue, sell, contract to sell, grant any
option for the sale of, or otherwise dispose (or announce any
offer, pledge, sale, grant of an option to purchase or other
disposition) of, directly or indirectly, any shares of Common
Stock or securities convertible into, exercisable or
exchangeable for, shares of Common Stock, except as provided
in Section 2 hereof and except under certain prescribed
circumstances.
(ii) Such Selling Shareholder, prior to the
termination of the underwriting syndicate contemplated by
this Agreement, will not (A) take, directly or indirectly,
any action designed to cause or to result in, or that might
reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Shares, (B) sell,
bid for, purchase or pay anyone any compensation for
soliciting purchases of, the Shares or (C) pay to or agree to
pay any person any compensation for soliciting another to
purchase any other securities of the Company.
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6. EXPENSES. The Company and the Selling Shareholders will pay all
costs and expenses incident to the performance of their obligations under this
Agreement, in such proportions as they may agree among themselves, whether or
not the transactions contemplated hereby are consummated or this Agreement is
terminated pursuant to Section 10 hereof, including, without limitation, all
costs and expenses incident to (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the preparation,
printing and, if applicable, filing of the Registration Statement (including
all amendments thereto), any Preliminary Prospectus, the Prospectus and any
amendments and supplements thereto, this Agreement and any blue sky memoranda;
(ii) the delivery of copies of the foregoing documents to the Underwriters;
(iii) the filing fees of the Commission and the National Association of
Securities Dealers, Inc. relating to the Shares; (iv) the preparation, issuance
and delivery to the Underwriters of any certificates evidencing the Shares,
including transfer agent's and registrar's fees; (v) the qualification of the
Shares for offering and sale under state securities and blue sky laws,
including filing fees and reasonable fees and disbursements of counsel for the
Underwriters relating thereto; (vi) any listing of the Shares on the Nasdaq
National Market and (vii) any expenses for travel, lodging and meals incurred
by the Company and any of its officers, directors and employees in connection
with any meetings with prospective investors in the Shares. In addition, each
Selling Shareholder will pay all costs and expenses incident to (i) the fees,
disbursements and expenses of separate counsel for such Selling Shareholder,
(ii) such Selling Shareholder's pro rata share of the fees and expenses of the
Attorneys-In-Fact and the Custodian, and (iii) the sale and delivery of the
Shares to be sold by such Selling Shareholder to the Underwriters hereunder. It
is understood, however, that, except as provided in this Section, Section 8 and
Section 10 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, stock transfer taxes on resale
of any of the Shares by them, and any advertising expenses relating to the
offer and sale of the Shares.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder to purchase and pay for the Shares to be delivered at
each Time of Delivery shall be subject, in their discretion, to the accuracy of
the representations and warranties of the Company and the Selling Shareholders
contained herein as of the date hereof and as of such Time of Delivery, 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
respective covenants and agreements hereunder, and to the following additional
conditions precedent:
(a) If the Registration Statement as amended to date has not
become effective prior to the execution of this Agreement, such Registration
Statement shall have been declared effective not later than 11:00 a.m., Atlanta
time, on the date of this Agreement or such later date and/or time as shall
have been consented to by the Representatives in writing. The Prospectus and
any amendment or supplement thereto shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing and in accordance with Section 5(a) of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceedings for that purpose shall have been
instituted, threatened or, to the knowledge of the Company and the
Representatives, contemplated by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to the Representatives' reasonable satisfaction.
(b) Xxxxx, Xxxxxxxx & Xxxxxxx, LLP, counsel for the
Underwriters, shall have furnished to the Representatives such opinion or
opinions, dated such Time of Delivery, with respect to the incorporation of the
Company, the validity of the Shares being delivered at such Time of Delivery,
the Registration Statement, the Prospectus, and other related matters as the
Representatives may reasonably request, 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. In rendering such opinion, such counsel may rely
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as to all matters of Tennessee law upon the opinion of Company counsel referred
to in paragraphs (c) and (d) below.
(c) The Representatives shall have received an opinion, dated
such Time of Delivery, of Shereff, Friedman, Xxxxxxx & Xxxxxxx, LLP, counsel
for the Company, in form and substance satisfactory to the Representatives and
its counsel, to the effect that:
(i) The Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own or lease its
properties and conduct its business as described in the
Registration Statement and the Prospectus and to enter into
this Agreement and perform its obligations hereunder. The
Company is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of each
other jurisdiction in which it owns or leases property, or
conducts any business, so as to require such qualification,
except where the failure to so qualify would not have a
material adverse effect on the financial position, results of
operations or business of the Company and its subsidiaries
taken as a whole.
(ii) Each of the subsidiaries of the Company has
been duly incorporated or organized, is validly existing as a
corporation or limited partnership in good standing under the
laws of its jurisdiction of incorporation or organization,
and has all requisite corporate power and authority to own or
lease its properties and conduct its business as described in
the Registration Statement and the Prospectus. Each such
subsidiary is duly qualified to transact business as a
foreign corporation or limited partnership and is in good
standing under the laws of each other jurisdiction in which
its owns or leases property, or conducts any business, so as
to require such qualification, except where the failure to so
qualify would not have a material adverse effect on the
financial position, results of operations, or business of the
Company and its subsidiaries taken as a whole.
(iii) The Company's authorized common and preferred
stock is as disclosed in the Prospectus. The common stock of
the Company conforms in all material respects to the
description of the common stock contained in the Prospectus.
None of the issued shares of common stock of the Company or
its predecessors or any of its subsidiaries has been issued
or is owned or held in violation of any statutory preemptive
rights of shareholders, and no person or entity (including
any holder of outstanding shares of common stock or limited
partnership interests of the Company or its subsidiaries) has
any statutory preemptive or, to the knowledge of such
counsel, other rights to subscribe for any of the Shares.
(iv) To such counsel's knowledge, all of the issued
shares of capital stock or, in the case of limited
partnerships, limited partnership interests, of each of the
Company's subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable, and are owned
beneficially by the Company free and clear of all liens,
security interests, pledges, charges, encumbrances, defects,
equities or claims of any nature whatsoever, except as
otherwise disclosed in the Prospectus.
(v) To such counsel's knowledge, except as
disclosed in the Prospectus and except for forfeitures,
grants and exercises of stock options pursuant to the
Company's existing stock option plans in the ordinary course
of business after the date of the Prospectus, there are no
outstanding (A) securities or obligations of the Company or
any of its subsidiaries convertible into or exercisable or
exchangeable for any capital stock of the
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Company or any such subsidiary, (B) warrants, rights or
options to subscribe for or purchase from the Company or any
such subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or (C)
obligations of the Company or any such subsidiary to issue
any shares of capital stock, any such convertible or
exchangeable securities or obligations, or any such warrants,
rights or options.
(vi) Except as disclosed in the Prospectus, 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 any such right has been effectively waived) or in any
securities being registered pursuant to any other
registration statement filed by the Company under the Act.
(vii) All sales of the Company's capital stock by
the Company during the three years preceding the date of the
Prospectus were at the time of each sale duly registered
under the Act or exempt from the registration requirements of
the Act.
(viii) Neither the Company nor any of its
subsidiaries is in violation of its Articles of Incorporation
or Certificate of Limited Partnership, as applicable.
(ix) The sale of the Shares being sold at such Time
of Delivery and the performance of this Agreement and the
consummation of the transactions herein contemplated will not
conflict with, or (with or without the giving of notice or
the passage of time or both) 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, loan
agreement, lease, or other material agreement or instrument
known to such counsel to which the Company or any such
subsidiary is a party or to which any of their respective
properties or assets is subject, except where such conflict,
breach, or violation would not have a material adverse effect
on the financial position, results of operations or business
of the Company and its subsidiaries taken as a whole, nor
will such action conflict with or violate any provision of
the Articles of Incorporation or Certificate of Limited
Partnership, as applicable, or Bylaws of the Company or any
of its subsidiaries or any statute, rule or regulation or to
such counsel's knowledge any order, judgment or decree of any
court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their
respective properties or assets, except where such conflict,
breach, or violation would not have a material adverse effect
on the financial position, results of operations or business
of the Company and its subsidiaries taken as a whole.
(x) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or
filing with, any court or governmental agency or body is
required for the sale of the Shares or the consummation of
the transactions contemplated by this Agreement, except the
registration of the Shares under the Act and such as may be
required under state securities or blue sky laws or the
bylaws and rules and regulations of the NASD in connection
with the offer, sale and distribution of the Shares by the
Underwriters.
(xi) To such counsel's knowledge and other than as
disclosed in or contemplated by the Prospectus, there is no
litigation, arbitration, claim, proceeding (formal or
informal)
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or investigation pending or overtly threatened in which the
Company or any of its subsidiaries is a party or of which any
of their respective properties or assets is the subject
which, if determined adversely to the Company or any such
subsidiary, would individually or in the aggregate have a
material adverse effect on the financial position, results of
operations or business of the Company and its subsidiaries
taken as a whole;
(xii) This Agreement has been duly authorized,
executed and delivered by the Company.
(xiii) The Registration Statement and the Prospectus
and each amendment or supplement thereto (other than the
financial statements and related schedules therein, as to
which such counsel need express no opinion), as of their
respective effective or issue dates, complied as to form in
all material respects with the requirements of the Act and
the Exchange Act and the respective rules and regulations
thereunder. The descriptions in the Registration Statement
and the Prospectus of statutes, legal and governmental
proceedings or contracts and other documents (pertaining to
legal matters) are accurate in all material respects and
fairly present in all material respects the information
required to be shown;
(xiv) The Registration Statement is effective under
the Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); and to such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued
and, to such counsel's knowledge, no proceedings for that
purpose have been instituted or threatened or are
contemplated by the Commission.
(xv) The Company is not, and will not be as a
result of the consummation of the transactions contemplated
by this Agreement, an "investment company," or a company
"controlled" by an "investment company," within the meaning
of the Investment Company Act of 1940.
Such counsel shall also state that no facts have come to
their attention that have caused such counsel to believe that the Registration
Statement, or any further amendment thereto made prior to such Time of
Delivery, on its effective date and as of such Time of Delivery, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, or any amendment or
supplement thereto made prior to such Time of Delivery, as of its issue date
and as of such Time of Delivery, contained or contains any untrue statement of
a material fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading (provided that such counsel need express no belief
regarding the financial statements and related schedules and other financial
data contained in the Registration Statement, any amendment thereto, or the
Prospectus, or any amendment or supplement thereto).
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and certificates, telegrams and other
statements of public officials and, as to matters involving the application of
laws of any jurisdiction other than the State of New York or the United States
and as to real estate and trademark matters, to the extent reasonably
satisfactory in form and scope to counsel for the Underwriters, upon the
opinions of local, in-house and other counsel, provided that copies of such
opinions are delivered to the Representatives and counsel for the Underwriters.
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(d) The Representatives shall have received an opinion, dated
such Time of Delivery, of Xxxxx Xxxxxxxx, Vice President, General Counsel of
the Company, in form and substance satisfactory to the Representatives and
their counsel, to the effect that:
(i) The Company's authorized, issued and
outstanding capital stock is as disclosed in the Prospectus.
All of the issued shares of the capital stock of the Company
have been duly authorized and validly issued, are fully paid
and nonassessable and conform to the description contained in
the Prospectus.
(ii) To such counsel's knowledge, other than the
subsidiaries listed on Exhibit 21 to the Company's Annual
Report on Form 10-K for the year ended February 1, 1997, the
Company does not own, directly or indirectly, any capital
stock or other equity securities of any other corporation or
any ownership interest in any partnership, joint venture or
other association.
(iii) Neither the Company nor any of its
subsidiaries is in violation of its Articles of Incorporation
or Certificate of Limited Partnership, as applicable, or
Bylaws or in default under any indenture, mortgage, deed of
trust, loan agreement, or other material agreement or
instrument known to such counsel to which the Company or any
such subsidiary is a party or to which any of their
respective properties or assets is subject.
(iv) Any real property and buildings held under
lease by the Company or any of its subsidiaries are held by
the Company or such subsidiary under valid, subsisting and
enforceable leases with such exceptions as are disclosed in
the Prospectus or are not material and do not interfere with
the use made and proposed to be made of such property and
buildings by the Company or such subsidiary.
(v) To such counsel's knowledge, neither the
Company nor any of its subsidiaries is in violation of,or in
default with respect to, any statute, rule, regulation,
order, judgment or decree, except as described in the
Prospectus, nor is the Company or any subsidiary required to
take any action in order to avoid any such violation or
default.
(vi) Such counsel does not know of any statutes or
legal or governmental proceedings required to be described in
the Registration Statement or Prospectus that are not
described as required or of any contract or documents of a
character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described or filed as
required.
Such counsel shall also state that no facts have come to his
attention that have caused such counsel to believe that the Registration
Statement, or any further amendment thereto made prior to such Time of
Delivery, on its effective date and as of such Time of Delivery, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, or any amendment or
supplement thereto made prior to such Time of Delivery, as of its issue date
and as of such Time of Delivery, contained or contains any untrue statement of
a material fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading (provided that such counsel need express no belief
regarding the financial statements and related schedules and other financial
data contained in the Registration Statement, any amendment thereto, or the
Prospectus, or any amendment or supplement thereto).
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(e) The Representatives shall have received an opinion, dated such
Time of Delivery, of Shereff, Friedman, Xxxxxxx & Xxxxxxx, LLP, counsel for the
Selling Shareholders, in form and substance satisfactory to the Representatives
and their counsel, to the effect that:
(i) Each of the Selling Shareholders has all
requisite power and authority to enter into this Agreement,
the Power of Attorney and the Custody Agreement and to sell,
assign, transfer and deliver to the Underwriters the Shares
to be sold by such Selling Shareholder hereunder and the
execution and delivery of this Agreement, the Power of
Attorney and the Custody Agreement have been duly authorized
by all necessary action of such Selling Shareholder.
(ii) This Agreement, the Power of Attorney and the
Custody Agreement have been duly executed and delivered by
such Selling Shareholder, each of which is enforceable
against such Selling Shareholder in accordance with its terms
subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws
relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles and except as
the enforceability of rights to indemnity under this
Agreement may be limited under applicable securities laws or
the public policy underlying such laws (provided that such
counsel need express no opinion regarding the irrevocability
of the Power of Attorney and the Custody Agreement).
(iii) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or
filing with, any court or governmental agency or body is
required for the sale of the Shares being sold by such
Selling Shareholder or the consummation of the transactions
contemplated by this Agreement, the Power of Attorney or the
Custody Agreement, except the registration of such Shares
under the Act and such as may be required under state
securities or blue sky laws in connection with the offer,
sale and distribution of such Shares by the Underwriters.
(iv) Based solely upon such counsel's review of the
stock certificates representing the Shares and certificates
of the Selling Shareholders, upon delivery of such Shares
against payment therefor as provided herein, good and valid
title to such Shares, free and clear of all liens, security
interests, pledges, charges, encumbrances, defects,
shareholders' agreements, voting trusts, equities or claims
of any nature whatsoever, will pass to the several
Underwriters; provided that the Underwriters purchase such
Shares in good faith and without notice of any adverse claim
within the meaning of the Uniform Commercial Code as in
effect in the State of Georgia.
In rendering any such opinion, such counsel may
rely, as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the
Company, the Selling Shareholders and public officials, and,
as to matters involving the application of laws of any
jurisdiction other than the State of New York or the United
States, to the extent reasonably satisfactory in form and
scope to counsel for the Underwriters, upon the opinion of
local counsel, provided that copies of such opinion are
delivered to the Representatives and counsel for the
Underwriters.
(f) The Representatives shall have received from Deloitte &
Touche LLP letters dated, respectively, the date hereof (or, if the
Registration Statement has been declared effective prior to the execution and
delivery of this Agreement, dated such effective date and the date of this
Agreement) and each Time of Delivery, in form and substance satisfactory to
you, to the effect set forth in Annex I hereto.
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In the event that the letters referred to in this Section 7(f) set forth any
changes, decreases or increases in the items specified in paragraph (iv) of
Annex I, it shall be a further condition to the obligations of the Underwriters
that (i) such letters shall be accompanied by a written explanation by the
Company as to the significance thereof, unless the Representatives deem such
explanation unnecessary, and (ii) such changes, decreases or increases do not,
in the sole judgment of the Representatives, make it impracticable or
inadvisable to proceed with the purchase, sale and delivery of the Shares being
delivered at such Time of Delivery as contemplated by the Registration
Statement, as amended as of the date of such letter.
(g) Since the date of the latest audited financial statements
included in the Prospectus, neither the Company nor any of its subsidiaries
shall have sustained (i) any loss or interference with their respective
businesses from fire, explosion, flood, hurricane or other calamity, whether or
not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as disclosed in or contemplated by the
Prospectus, or (ii) any change, or any development involving a prospective
change (including without limitation a change in management or control of the
Company), in or affecting the position (financial or otherwise), results of
operations, net worth or business prospects of the Company and its
subsidiaries, otherwise than as disclosed in or contemplated by the Prospectus,
the effect of which, in either such case, is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the purchase, sale and delivery of the Shares being
delivered at such Time of Delivery as contemplated by the Registration
Statement, as amended as of the date hereof.
(h) Subsequent to the date hereof there shall not have
occurred any of the following: (i) any suspension or limitation in trading in
securities generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or in the Common Stock by the Commission
or the Nasdaq National Market; (ii) a moratorium on commercial banking
activities in New York declared by either federal or state authorities; or
(iii) any outbreak or escalation of hostilities involving the United States,
declaration by the United States of a national emergency or war or any other
national or international calamity or emergency if the effect of any such event
specified in this clause (iii) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the purchase, sale and delivery of
the Shares being delivered at such Time of Delivery as contemplated by the
Registration Statement, as amended as of the date hereof.
(i) The Company and the Selling Shareholders shall have
furnished to the Representatives at such Time of Delivery certificates of
officers of the Company and certificates of the Selling Shareholders,
satisfactory to the Representatives, as to the accuracy of the representations
and warranties of the Company and such Selling Shareholders herein at and as of
such Time of Delivery, as to the performance by the Company and such Selling
Shareholders of all of their respective obligations hereunder to be performed
at or prior to such Time of Delivery, and the Company shall have furnished or
caused to be furnished certificates as to the matters set forth in subsections
(a) and (f) of this Section 7, and as to such other matters as the
Representatives may reasonably request.
(j) The Shares shall be listed on the Nasdaq National Market.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, 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: (i) any untrue statement or
alleged untrue statement made by the Company in Section 1(a) of this Agreement;
(ii) any untrue statement or alleged untrue statement of any
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material fact contained in (A) the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or (B) any application or other document, or any amendment
or supplement thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to qualify the Shares under the securities or blue sky laws thereof or
filed with the Commission or any securities association or securities exchange
(each an "Application"); or (iii) the omission or alleged omission to state in
the Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or any
Application 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, defending against or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement or any amendment thereto,
any Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto or any Application in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives expressly for use therein; provided, further, however, that the
Company shall not be liable to any Underwriter in respect of any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus to the extent that (i) the Prospectus did not
contain such untrue statement or alleged untrue statement or omission or
alleged omission giving rise to such loss, claim, damage, liability or action,
(ii) the Prospectus was not sent or given to the purchaser of the Shares in
question at or prior to the time at which the written confirmation of the sale
of such Shares was sent or given to such person, and (iii) the failure to
deliver such Prospectus was not the result of the Company's noncompliance with
its obligations under Sections 5(a)(ii) and 5(a)(vi) hereof. The Company will
not, without the prior written consent of each Underwriter, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding (or related cause of action or portion
thereof) in respect of which indemnification may be sought hereunder (whether
or not such Underwriter is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes an unconditional release
of such Underwriter from all liability arising out of such claim, action, suit
or proceeding (or related cause of action or portion thereof).
(b) Each of the Selling Shareholders, severally and not jointly,
agrees to indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, 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: (i) any untrue statement or alleged untrue statement made by any
such Selling Shareholder in Section 1(b) of this Agreement; or (ii) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or any amendment thereto, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto, or any Application 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, defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action; provided,
however, that no such Selling Shareholder shall be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement or any amendment thereto,
any Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto or any Application in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives expressly for use therein; provided, further, however, that no
Selling
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Shareholder shall be liable to any Underwriter in respect of any Preliminary
Prospectus to the extent that (i) the Prospectus did not contain the untrue
statement or alleged untrue statement or omission or alleged omission giving
rise to such loss, claim, damage, liability or action, (ii) the Prospectus was
not sent or given to the purchaser of the Shares in question at or prior to the
time at which the written confirmation of sale of such Shares was sent or given
to such person, and (iii) the failure to deliver such Prospectus was not the
result of the Company's noncompliance with its obligations under Sections
5(a)(ii) and 5(a)(vi) hereof. No Selling Shareholder will, without the prior
written consent of each Underwriter, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding (or related cause of action or portion thereof) in respect of which
indemnification may be sought hereunder (whether or not such Underwriter is a
party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of such Underwriter
from all liability arising out of such claim, action, suit or proceeding (or
related cause of action or portion thereof).
(c) Each Underwriter, severally but not jointly, agrees to indemnify
and hold harmless the Company and each Selling Shareholder against any losses,
claims, damages or liabilities to which the Company or any 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 the Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or any Application or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that 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 expressly for use therein; and will
reimburse the Company and each Selling Shareholder for any legal or other
expenses reasonably incurred by the Company or such Selling Shareholder in
connection with investigating or defending any such loss, claim, damage,
liability or action. No Underwriter will, without the prior written consent of
the Company or any affected Selling Shareholder, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim,
action, suit, or proceeding (or related cause of action or portion thereof) in
respect of which indemnification may be sought hereunder (whether or not the
Company or such Selling Shareholder is a party to such claim, action, suit, or
proceeding), unless such settlement, compromise, or consent includes an
unconditional release of the Company or such affected Selling Shareholder from
all liability arising out of such claim, action, suit, or proceeding (or
related cause of action or portion thereof).
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection or unless the
indemnifying party is materially prejudiced by such omission. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party); provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded based upon the advice of
counsel that there may be one or more legal defenses available to it or other
indemnified parties which are different from or
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additional to those available to the indemnifying party, the indemnifying party
shall not have the right to assume the defense of such action on behalf of such
indemnified party and such indemnified party shall have the right to select
separate counsel to defend such action on behalf of such indemnified party.
After such notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, which separate counsel shall be designated by the
Representatives in the case of indemnity arising under paragraphs (a) or (b) of
this Section 8), or (ii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party
or (iii) the indemnifying party shall have failed to assume the defense
thereof. Nothing in this Section 8(d) shall preclude an indemnified party from
participating at its own expense in the defense of any such action so assumed
by the indemnifying party. An indemnified party shall not effect the settlement
of any proceeding with respect to which indemnification is sought hereunder
without the consent of the indemnifying party, which consent shall not be
unreasonably withheld or delayed; provided, however, notwithstanding the
foregoing provisions of this Section 8(d), if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel, the indemnifying party shall be liable for
any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than thirty (30) days after receipt by
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. Notwithstanding any exceptions to
the obligation to indemnify contained in the provisons of the first sentence of
paragraphs (a) (b) and (c) of this section, and unless and until it is finally
judicially determined by a court of competent jurisdiction that the indemnified
party is not entitled to indemnification by virtue thereof or otherwise, the
obligation of the indemnifying party to make reimbursement payments for the
costs and expenses of an indemnifiable claim shall arise, and such payment
shall be made promptly against proper documentation thereof, to the
indemnified party. In the event that such payments are made and it is
subsequently finally judicially determined by a court of competent jurisdiction
that the indemnified party is not entitled to indemnification by virtue of the
provisions as aforesaid or otherwise, the indemnified party who received such
indemnity payments shall reimburse the same, with interest from the date of
disbursement by the indemnifying party, to the indemnifying party to the extent
such indemnified party was not entitled to the same in the first instance.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) 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 Shares.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (d) above, 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 and the Selling Shareholders on the one
hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), 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 and the Selling Shareholders on
the one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct
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or prevent such statement or omission. The Company, the Selling Shareholders
and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (e) 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 in this subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in 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 such action or claim. 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 Shares underwritten by 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 8 shall be in addition to any liability which
the Company or such 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 8 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 officer and director of the Company and any
Selling Shareholder and to each person, if any, who controls the Company or any
Selling Shareholder within the meaning of the Act. Notwithstanding the
foregoing, the liability of the Selling Shareholders to the Underwriters
arising on account of the offering, whether such liability arises under this
Agreement or otherwise, shall not exceed the amounts set forth in Section 8(g)
of this Agreement.
(g) Notwithstanding anything to the contrary in this
Section 8, the Selling Shareholders shall be liable for indemnification and/or
reimbursement and/or contribution under Sections 8(b) and 8(e) only if and to
the extent that the Company shall have failed to indemnify or reimburse or make
contribution to the Underwriters pursuant to Sections 8(a), 8(d) and 8(e)
within 90 days after demand therefor made to the Company by the Underwriters.
The liability of each Selling Shareholder other than Xxxxxx X. Xxxxxxxxxx for
indemnification and contribution under this Section 8 shall be limited to an
amount equal to the total or aggregate public offering price of the Shares sold
by such Selling Shareholder to the Underwriters minus (i) the amount of the
underwriting discount paid thereon to the Underwriters by such Selling
Shareholder, (ii) the pro rata expenses of the offering paid by such Selling
Shareholder, and (iii) the amount of income tax paid by such Selling
Shareholder with respect to the sale of the Shares. The liability of Xxxxxx X.
Xxxxxxxxxx for indemnification and contribution under this Section 8 shall be
limited to an amount equal to the total or aggregate public offering price of
the Shares sold by Xx. Xxxxxxxxxx to the Underwriters minus the amount of the
underwriting discount paid thereon to the Underwriters by Xx. Xxxxxxxxxx. The
Company and the Selling Shareholders may agree, as among themselves and without
limiting the rights of the Underwriters under this Agreement, as to the
respective amounts of such liability for which they each shall be responsible.
9. DEFAULT OF UNDERWRITERS.
(a) If any Underwriter defaults in its obligation to purchase
Shares at a Time of Delivery, the Representatives may in their discretion
arrange for the Representatives or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six (36) hours
after such default by any Underwriter the Representatives do not arrange for
the purchase of such Shares, the Company and
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the Selling Shareholders shall be entitled to a further period of thirty-six
(36) hours within which to procure another party or other parties satisfactory
to the Representatives to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, the Underwriters notify the
Company and the Selling Shareholders that the Representatives have so arranged
for the purchase of such Shares, or the Company and the Selling Shareholders
notify the Representatives that they have so arranged for the purchase of such
Shares, the Representatives or the Company and the Selling Shareholders, as the
case may be, shall have the right to postpone a Time of Delivery for a period
of not more than seven days in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus that in the opinion
of the Representatives may thereby be made necessary. The cost of preparing,
printing and filing any such amendments shall be paid for by the Underwriters.
The term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares. The
thirty-six (36) hour periods referred to in this subsection (a) shall not
include the hours between (i) 5:00 p.m., Atlanta time, on any Friday through
9:00 a.m., Atlanta time, the following Monday or (ii) 5:00 p.m., Atlanta time,
on the day preceding a day on which the New York Stock Exchange is closed for
trading (a "holiday") through 9:00 a.m., Atlanta time, on the day following
that holiday.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by the
Representatives and the Company and the Selling Shareholders as provided in
subsection (a) above, the aggregate number of such Shares which remains
unpurchased does not exceed 10% of the aggregate number of Shares to be
purchased at such Time of Delivery, then the Company and the Selling
Shareholders shall have the right to require each non-defaulting Underwriter to
purchase the number of Shares which such Underwriter agreed to purchase
hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have
not been made, but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. TERMINATION.
(a) This Agreement may be terminated with respect to the Firm
Shares or any Optional Shares in the sole discretion of the Representatives by
notice to the Company given prior to the First Time of Delivery or any
Subsequent Time of Delivery, respectively, in the event that (i) any condition
to the obligations of the Underwriters set forth in Section 7 hereof has not
been satisfied, or (ii) the Company or the Selling Shareholders shall have
failed, refused or been unable to deliver the Shares or to perform all
obligations and satisfy all conditions on their parts to be performed or
satisfied hereunder at or prior to such Time of Delivery, in either case other
than by reason of a default by any of the Underwriters. If this Agreement is
terminated pursuant to this Section 10(a) (other than pursuant to Section
7(h)), the Company and the Selling Shareholders will reimburse the Underwriters
severally upon demand for all reasonable out-of-pocket expenses (including
counsel fees and disbursements) that shall have been incurred by them in
connection with the proposed purchase and sale of the Shares. Neither the
Company nor any Selling Shareholder shall in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by the
Representatives and the Company and the Selling Shareholders as provided in
Section 9(a), the aggregate number of such Shares which remains unpurchased
exceeds 10% of the aggregate number of Shares to be purchased at such Time of
Delivery, or if the Company and the
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Selling Shareholders shall not exercise the right described in Section 9(b) to
require non-defaulting Underwriters to purchase Shares of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to a
Subsequent Time of Delivery, the obligations of the Underwriters to purchase
and of Xxxxxx X. Xxxxxxxxxx to sell the Optional Shares) shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter, the
Company or the Selling Shareholders, except for the expenses to be borne by the
Company, the Selling Shareholders and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
11. SURVIVAL. The respective indemnities, agreements, representations,
warranties and other statements of the Company, its officers, the Selling
Shareholders and the several Underwriters, as set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Underwriter or
any controlling person referred to in Section 8(e) or the Company, any Selling
Shareholder, or any officer or director or controlling person of the Company or
any Selling Shareholder referred to in Section 8(e), and shall survive delivery
of and payment for the Shares. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 8 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
12. NOTICES. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be mailed (certified, return receipt
requested), delivered or telegraphed and confirmed in writing to the
Representatives in care of The Xxxxxxxx-Xxxxxxxx Company, Inc., 0000 Xxxxxxxxx
Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention: Corporate Finance Department,
with a copy to Xxxxx, Xxxxxxxx & Xxxxxxx, LLP, Suite 1800, East Tower Atlanta
Financial Center, 0000 Xxxxxxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000; if to any
Selling Shareholder it shall be sufficient in all respects if delivered or sent
by mail (certified, return receipt requested) to counsel for such Selling
Shareholder at its address set forth in Schedule II hereto; and if sent to the
Company, shall be mailed (certified, return receipt requested), delivered or
telegraphed and confirmed in writing to the Company at 000 Xxxxx'x Xxxx,
Xxxxxxxxx, Xxxxxxxxx 00000, Attention: President, with a copy to counsel for
the Company.
13. BINDING EFFECT. This Agreement shall be binding upon, and inure
solely to the benefit of, the Underwriters, the Company and the Selling
Shareholders and to the extent provided in Sections 8 and 10 hereof, the
officers and directors and controlling persons referred to therein and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Shares from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia without giving effect to
any provisions regarding conflicts of laws.
15. COUNTERPARTS. This Agreement may be executed by any one or more of
the parties hereto 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 instrument.
If the foregoing is in accordance with the Representatives'
understanding of our agreement, please sign and return to us one of the
counterparts hereof, and upon the acceptance hereof by The Xxxxxxxx-Xxxxxxxx
Company, Inc., on behalf of each of the Underwriters, this letter will
constitute a binding agreement among the Underwriters, the Company and the
Selling Shareholders. It is understood that the Representatives' acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
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29
set forth in the Master Agreement among Underwriters, a copy of which shall be
submitted to the Company and the Selling Shareholders for examination, upon
request.
Very truly yours,
GOODY'S FAMILY CLOTHING, INC.
By:
--------------------------------------------
Xxxxxx X. Xxxxxxxxxx
Chairman of the Board
and Chief Executive Officer
SELLING SHAREHOLDERS
By:
--------------------------------------------
Xxxxx X. Call, as Attorney-in-Fact
acting on behalf of Xxxxxx X. Xxxxxxxxxx,
Xxxxx X. Call and Xxxxxx X. Xxxxxx
The foregoing Agreement is hereby confirmed
and accepted as of the date first written above
at Atlanta, Georgia.
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
X.X. XXXXXXXX & CO.
By: The Xxxxxxxx-Xxxxxxxx Company, Inc.
By:
-------------------------------------
(Authorized Representative)
On behalf of each of the Underwriters
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SCHEDULE I
NUMBER OF
OPTIONAL
TOTAL SHARES TO BE
NUMBER OF FIRM PURCHASED IF
SHARES TO BE MAXIMUM OPTION
UNDERWRITER PURCHASED EXERCISED
----------- --------- ---------
The Xxxxxxxx-Xxxxxxxx Company, Inc..........................
X.X. Xxxxxxxx & Co..........................................
-------- -------
Total....................................................... ======== =======
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SCHEDULE II
TOTAL NUMBER OF
FIRM SHARES TO BE
SELLING SHAREHOLDERS(1) SOLD
----------------------- -----------------
Xxxxxx X. Xxxxxxxxxx 2,000,000
Xxxxx X. Call 20,000
Xxxxxx X. Xxxxxx 7,000
---------
2,027,000
-----------------------
(1) Each of the Selling Shareholders has executed and delivered a Power of
Attorney appointing Xxxxx X. Call and Xxxxxx X. Xxxxxx such Selling
Shareholder's Attorneys-in-Fact. Each of the Selling Shareholders is
represented by Shereff, Friedman, Xxxxxxx & Xxxxxxx, LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx, Esq.
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ANNEX I
Pursuant to Section 7(e) of the Underwriting Agreement, Deloitte &
Touche LLP shall furnish letters to the Underwriters to the effect that:
(i) they are independent public accountants with respect to
the Company and its consolidated subsidiaries within the meaning the
Act and the Exchange Act and the applicable published rules and
regulations thereunder;
(ii) in their opinion, the consolidated financial statements
audited by them and included in the Prospectus and the Registration
Statement 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 thereunder;
(iii) the financial statements of the Company as of and for
the thirteen weeks ended May 3, 1997 and May 4, 1996 were reviewed by
them in accordance with the standards established by the American
Institute of Certified Public Accountants and based upon their review
they are not aware of any material modifications that should be made
to such financial statements for them to be in conformity with
generally accepted accounting principles, and such financial
statements comply as to form in all material respects with the
applicable accounting requirements of the Act and the applicable rules
and regulations thereunder;
(iv) on the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and
other information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in
the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries
included in the Registration Statement and the Prospectus do
not comply in form in all material respects with the
applicable accounting requirements of the Act and the related
published rules and regulations thereunder or are not in
conformity with generally accepted principles applied on the
basis substantially consistent with that of the audited
consolidated financial statements included in the
Registration Statement and the Prospectus;
(B) as of a specified date not more than 5 days prior
to the date of such letter, there were any changes in the
capital stock (other than the issuance of capital stock upon
exercise of options which were outstanding on the date of the
latest balance sheet included in the Prospectus) or any
increase in the long-term debt or short-term debt of the
Company and its subsidiaries, or any decreases in net current
assets or net assets or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts
shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which
are described in such letter; and
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(C) for the period from the date of the latest
financial statements included in the Prospectus to the
specified date referred to in Clause (C) there were any
decreases in net sales or the total or per share amounts of
net income or other items specified by the Representatives,
or any increases in any items specified by the
Representatives, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Representatives, except
in each case for increases or decreases which the Prospectus
discloses have occurred or may occur which are described in
such letter; and
(v) In addition to the audit referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraph
(iii) above, they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives which are derived from
the general accounting records of the Company and its subsidiaries,
included in the Registration Statement and the Prospectus, or which
appear in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives, and have
compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
References to the Registration Statement and the Prospectus in this
Annex I shall include any amendment or supplement thereto at the date of such
letter.
2
