EXHIBIT 1.1
THE INTERCEPT GROUP, INC.
2,387,500 Shares
of
Common Stock
UNDERWRITING AGREEMENT
_________, 1998
X. X. XXXXXXXX & CO.
WHEAT FIRST SECURITIES, INC.
As Representatives of the Several Underwriters
c/o X. X. Xxxxxxxx & Co.
X. X. Xxxxxxxx Financial Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
The Intercept Group, Inc., a Georgia corporation (the "Company"),
proposes to sell to the underwriters named in SCHEDULE I hereto (the
"Underwriters") for whom you are acting as the representatives (the
"Representatives") 2,250,000 shares of the common stock, no par value ("Common
Stock"), of the Company (the "Company Shares"), and the shareholder of the
Company named in Schedule II hereto (the "Selling Shareholder") proposes to
sell to the Underwriters 137,500 shares of Common Stock (the "Selling
Shareholder Shares"). The Company Shares and the Selling Shareholder Shares are
hereinafter referred to as the "Firm Shares". The Firm Shares are to be sold to
the Underwriters, acting severally and not jointly, in such amounts as are set
forth in SCHEDULE I hereto opposite the name of each Underwriter. The Company
also proposes to grant to the Underwriters an option to purchase up to 358,125
additional shares of Common Stock (the "Option Shares") as provided for in
Section 3 of this Agreement for the purpose of covering over-allotments in
connection with the distribution and sale of the Firm Shares. The Firm Shares
and the Option Shares are herein called the "Shares."
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter and agrees as follows:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), a registration statement on Form S-1
(Registration No. 333-47197), including the related preliminary
prospectus relating to the Shares, and has filed one or more amendments
thereto. Copies of such registration statement and any amendments,
including any post-effective amendments, and all forms of the related
prospectuses contained therein and any supplements thereto, have been
delivered to you. Such registration statement, together with any
registration statement filed by the Company
pursuant to Rule 462(b) of the Securities Act, including the
prospectus, Part II, all financial schedules and exhibits thereto, and
all information deemed to be a part of such registration statement
pursuant to Rule 430A under the Securities Act, as amended, at the time
when it shall become effective, is herein referred to as the
"Registration Statement." The prospectus included as part of the
Registration Statement on file with the Commission that discloses all
the information that was omitted from the prospectus on the effective
date pursuant to Rule 430A of the Rules and Regulations (as defined
below) and in the form filed pursuant to Rule 424(b) under the
Securities Act is herein referred to as the "Final Prospectus." The
prospectus included as part of the Registration Statement on the date
when the Registration Statement became effective (including the
information deemed to be a part thereof pursuant to Rule 430A) is
referred to herein as the "Effective Prospectus." Any prospectus
included in the Registration Statement and in any amendment thereto
prior to the effective date of the Registration Statement is referred
to herein as a "Preliminary Prospectus." For purposes of this
Agreement, "Rules and Regulations" mean the rules and regulations
promulgated by the Commission under either the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
applicable.
(b) The Company has not received and has no knowledge of any
order preventing or suspending the use of any Preliminary Prospectus,
and each Preliminary Prospectus, at the time of filing thereof,
complied with the requirements of the Securities Act and the Rules and
Regulations, and did not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that
the foregoing does not apply to statements or omissions made in
reliance upon and in conformity with written information furnished to
the Company by any Underwriter specifically for use therein (it being
understood that the only information so provided is the information
included in the last paragraph on the cover page, the paragraph
relating to stabilization practices on the inside front cover and the
first five paragraphs and the last paragraph under the caption
"Underwriting" in the Final Prospectus). When the Registration
Statement becomes effective and at all times subsequent thereto up to
and including the later of (X) the First Closing Date (as hereinafter
defined) and (Y) the Option Closing Date (as hereinafter defined), (i)
the Registration Statement, the Effective Prospectus and Final
Prospectus and any amendments or supplements thereto will contain all
statements which are required to be stated therein in accordance with
the Securities Act, the Exchange Act and the Rules and Regulations and
will comply with the requirements of the Securities Act, the Exchange
Act and the Rules and Regulations, and (ii) neither the Registration
Statement nor any amendment thereto will include any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading and neither the Effective Prospectus nor the Final
Prospectus nor any supplement thereto will contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
except that the foregoing does not apply to statements or omissions
made in reliance upon and in conformity with written information
furnished to the Company by any Underwriter specifically for use
therein (it being understood that the only information so provided is
the information included in the last paragraph on the cover page, the
paragraph relating to stabilization practices on the inside front cover
and the first five paragraphs and the last paragraph under the caption
"Underwriting" in the Final Prospectus).
(c) The Company and each subsidiary of the Company (as used
herein, the term "subsidiary" includes any corporation, joint venture
or partnership in which the Company or any subsidiary of the Company
has an ownership interest in excess of 30%) is duly organized and
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validly existing and in good standing under the laws of the respective
jurisdictions of their organization or incorporation, as the case may
be, with full corporate power and authority to own their properties and
conduct their businesses as now conducted and described in the Final
Prospectus and the Registration Statement, and are duly qualified or
authorized to do business and are in good standing in all jurisdictions
wherein the nature of their business or the character of property owned
or leased may require them to be qualified or authorized to do business
except where the failure to be so qualified or authorized would not
have a material adverse effect on the Company's and its subsidiaries'
business, financial condition and results of operations taken as a
whole and would not materially hinder or delay the consummation of the
transactions contemplated by this Agreement and the performance of the
Company's obligations hereunder (a "Material Adverse Effect"). The
Company and its subsidiaries hold all licenses, consents and approvals,
and have satisfied all eligibility and other similar requirements
imposed by federal and state regulatory bodies, administrative agencies
or other governmental bodies, agencies or officials, except where any
failure to hold any such license, consent or approval or to satisfy any
such requirement would not have a Material Adverse Effect. Each of the
Company's subsidiaries is set forth on Exhibit 21.1 to the Registration
Statement. There are no other corporations, joint ventures or
partnerships in which the Company or any subsidiary of the Company has
an ownership interest in excess of 5%.
(d) The outstanding stock of each of the Company's corporate
subsidiaries is duly authorized, validly issued, fully paid and
nonassessable. Other than as disclosed in the Effective Prospectus and
the Final Prospectus, all of the outstanding stock of each of the
Company's subsidiaries is owned by the Company, free and clear of any
lien, encumbrance, pledge, equity or claim of any kind, and was issued
and sold in compliance with all applicable federal and state securities
laws. No shares of capital stock of any of the Company's subsidiaries
have been issued in violation of any preemptive or similar rights.
Other than as disclosed in the Effective Prospectus and the Final
Prospectus, no options or warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into any shares of capital stock or of ownership interests
in any of the Company's subsidiaries are outstanding. Other than as
disclosed in the Effective Prospectus and the Final Prospectus, neither
the Company nor any of its subsidiaries is a partner or joint venturer
in any partnership or joint venture.
(e) The historical capitalization of the Company as of
December 31, 1997 is as set forth under the caption "Capitalization" in
the Effective Prospectus and the Final Prospectus, and the Company's
capital stock conforms to the description thereof contained in the
Effective Prospectus and the Final Prospectus, including under the
caption "Description of Capital Stock." All of the issued and
outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable.
None of the issued shares of capital stock of the Company have been
issued in violation of any preemptive or similar rights. The Company
Shares have been duly and validly authorized and, upon issuance and
delivery and payment therefor in the manner herein described, will be
validly issued, fully paid and nonassessable. There are no preemptive
rights or other rights to subscribe for or to purchase, or any
restriction upon the transfer of, any shares of Common Stock pursuant
to the Company's articles of incorporation, bylaws or other governing
documents or any agreement or other instrument to which the Company is
a party or by which it is bound except as described in the Effective
Prospectus and the Final Prospectus and except for restrictions on
transfer imposed under applicable securities laws. Neither the filing
of the Registration Statement nor the offer or sale of the Shares as
contemplated by this Agreement gives rise to any rights for or relating
to the registration of any shares of
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Common Stock or any other securities of the Company, other than rights
relating to shares included in the Firm Shares or the Option Shares and
such other rights as have been waived by the holder or holders thereof
prior to the date hereof. The Underwriters will receive good and
marketable title to the Shares to be issued and delivered by the
Company hereunder, free and clear of all liens, encumbrances, claims,
security interests, restrictions, shareholders' agreements and voting
trusts whatsoever. Except as disclosed in the Effective Prospectus and
the Final Prospectus, there are no outstanding warrants, options,
convertible securities or other rights to purchase or commitments of
sale related to or entitling any person to purchase or otherwise
acquire any securities or interest in the Company or any subsidiary.
(f) All offers and sales of the Company's securities by the
Company prior to the date hereof were at all relevant times exempt from
the registration requirements of the Securities Act and were duly
registered or the subject of an available exemption from the
registration requirements of the applicable state securities or Blue
Sky laws.
(g) The Company has full legal right, power and authority to
enter into this Agreement and to issue, sell and deliver the Shares to
the Underwriters as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company and constitutes a
valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, except as may be limited by
bankruptcy and other creditor rights laws and general principles of
equity, including the availability of the equitable remedy of specific
performance. No consent, approval, authorization or order of any court
or governmental agency or body or third party is required for the
performance of this Agreement by the Company or the consummation by the
Company of the transactions contemplated hereby, except such as have
been obtained and such as may be required by the National Association
of Securities Dealers, Inc. ("NASD") or under the Securities Act, or
state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters. The issue and sale of
the Shares by the Company, the Company's performance of this Agreement
and the consummation of the transactions contemplated hereby will not
result in a breach or violation of, or conflict with, any of the terms
and provisions of, or constitute a default by the Company or any of its
subsidiaries under, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which the Company
or any of its subsidiaries is a party or to which the Company or any of
its subsidiaries or any of their respective properties is subject, the
articles of incorporation or bylaws of the Company or any of its
subsidiaries or any statute or any judgment, decree, order, rule or
regulation of any court or governmental agency or body applicable to
the Company or any subsidiary or any of their respective properties.
Neither the Company nor any subsidiary is in violation of its articles
of incorporation, bylaws or other governing instrument or any law,
administrative rule or regulation or arbitrators' or administrative or
court decree, judgment or order or, except as would not have a Material
Adverse Effect, in violation or default (there being no existing state
of facts known to the Company which with notice or lapse of time or
both would constitute a default) in the performance or observance of
any obligation, agreement, covenant or condition contained in any
material contract, indenture, deed of trust, mortgage, loan agreement,
note, lease, agreement or other instrument or permit to which it is a
party or by which it or any of its properties is bound.
(h) The consolidated financial statements and the related
notes of the Company, together with related notes and schedules,
included in the Registration Statement, the Effective Prospectus and
the Final Prospectus present fairly the financial position, results of
operations and changes in financial position and cash flow of the
Company and its subsidiaries at the dates and for the periods to which
they relate and have been prepared in accordance with generally
accepted
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accounting principles applied on a consistent basis throughout the
periods indicated (except as may otherwise be indicated in the notes
thereto), and all adjustments necessary for a fair presentation of
results for such periods have been made. The other financial statements
and schedules included in or as schedules to the Registration Statement
conform to the requirements of the Securities Act, the Exchange Act and
the Rules and Regulations and present fairly the information presented
therein for the periods shown. The financial and statistical data set
forth in the Effective Prospectus and the Final Prospectus, including
such data under the captions "Prospectus Summary," "Use of Proceeds,"
"Dilution," "Capitalization," "Selected Consolidated Financial Data,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," "Industry," "Business," "Management,"
"Principal and Selling Shareholders," and "Certain Transactions,"
present fairly the information set forth therein, and such data has
been compiled and presented on a basis consistent with the financial
statements presented therein and in the books and records of the
Company. The Company and its subsidiaries have no material contingent
obligations that are required to be disclosed in the Company's
financial statements in accordance with generally accepted accounting
principles which have not been so disclosed in the financial statements
included in the Registration Statement. Xxxxxx Xxxxxxxx LLP, who have
certified the financial statements of the Company, are independent
public accountants as required by the Securities Act and the Rules and
Regulations.
(i) Subsequent to December 31, 1997, neither the Company nor
any subsidiary has sustained any material loss or interference with its
business or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, which is not
disclosed in the Effective Prospectus and the Final Prospectus; and
subsequent to the respective dates as of which information is given in
the Registration Statement, the Effective Prospectus and the Final
Prospectus, (i) neither the Company nor any of its subsidiaries has
incurred any material liabilities or obligations, direct or contingent,
or entered into any material transactions other than in the ordinary
course of business, and (ii) there has not been any change in the
capital stock, partnership interests, joint venture interests,
long-term debt, obligations under capital leases or short-term
borrowings of the Company and its subsidiaries or any issuance of
options, warrants or rights to purchase the capital stock of the
Company, or any adverse change, or any development known to the Company
involving a prospective adverse change, in the general affairs,
management, business, prospects, financial position, net worth or
results of operations of the Company or its subsidiaries, except in
each case as described in or contemplated by the Effective Prospectus
and the Final Prospectus or as would not have a Material Adverse
Effect.
(j) Except as described in the Effective Prospectus and the
Final Prospectus, there is not pending or, to the knowledge of the
Company, threatened, any action, suit, proceeding, inquiry or
investigation to which the Company, any of its subsidiaries or any of
their officers or directors is a party, or to which the property of the
Company or any subsidiary is subject, before or brought by any court,
administrative agency, governmental agency, body or otherwise, wherein
an unfavorable decision, ruling or finding could result in a Material
Adverse Effect.
(k) There are no contracts or other documents required by the
Securities Act or by the Rules and Regulations to be described in the
Registration Statement, the Effective Prospectus or the Final
Prospectus or to be filed as exhibits to the Registration Statement
which have not been described or filed as required.
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(l) Except as described in the Effective Prospectus and the
Final Prospectus, the Company and each of its subsidiaries have good
and marketable title to all real and material personal property owned
by them, free and clear of all liens, charges, encumbrances or defects,
except those reflected in the financial statements hereinabove
described. The real and personal property and buildings referred to in
the Effective Prospectus and the Final Prospectus which are leased from
others by the Company are held under valid, subsisting and enforceable
leases. The Company or its subsidiaries owns or leases all such
properties as are necessary to its operations as now conducted.
(m) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences and (v) such controls would prevent or detect errors or
irregularities in amounts that would be material in relation to the
Company's financial statements. Neither the Company nor any of its
subsidiaries, nor any director, officer, agent, employee or other
person acting, with the Company's knowledge, on behalf of the Company
or any such subsidiary, has, directly or indirectly used any funds of
the Company or any of its subsidiaries 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 funds of the Company or any of its subsidiaries;
violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or made any bribe, rebate, payoff, influence payment, kickback
or other payment, or received or retained any funds, in violation of
any law, rule or regulation.
(n) The Company and its subsidiaries have filed all federal,
state and local tax returns required to be filed through the date
hereof and have paid all taxes shown as due therefrom; and there is no
tax deficiency, assessment, fine or penalty that has been, nor does the
Company or any subsidiary have knowledge of any tax deficiency,
assessment, fine or penalty which is likely to be, asserted against the
Company or its subsidiaries, which if determined adversely could have a
Material Adverse Effect. All tax liabilities incurred as of the
respective dates of the financial statements have been adequately
provided for in the financial statements of the Company.
(o) The Company and its subsidiaries operate their business in
each jurisdiction in which the Company or any of its subsidiaries is
doing business in conformity with all applicable statutes, ordinances,
decrees, orders, rules and regulations of all applicable governmental
bodies, including federal, state and local governing bodies in the
United States and all foreign governments in areas outside of the
United States. The Company and its subsidiaries have all material
licenses, approvals or consents necessary to operate their respective
businesses in all locations in which such businesses are currently
being operated, and the Company and its subsidiaries are not aware of
any existing or imminent matter which may adversely impact their
operations or business prospects other than as specifically disclosed
in the Effective Prospectus and the Final Prospectus. The Company has
not engaged in any activity, whether alone or in concert with one of
its customers, creating exposure to civil or criminal monetary
liability or other material sanctions under federal or state laws
regulating consumer credit transactions, debt collection practices or
other violations of law.
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(p) Neither the Company nor any of its subsidiaries have
failed to file with the applicable regulatory authorities any
statement, report, information or form required by any applicable law,
regulation or order; all such filings or submissions were in compliance
with applicable laws when filed and no deficiencies have been asserted
by any regulatory commission, agency or authority with respect to such
filings or submissions. Neither the Company nor any of its subsidiaries
have failed to maintain in full force and effect any license or permit
necessary for the conduct of its business, or received any notification
that any revocation or limitation thereof is threatened or pending,
and, to the knowledge of the Company, there is not pending any change
under any law, regulation, license or permit which could have a
Material Adverse Effect. Neither the Company nor any of its
subsidiaries have received any notice of violation of or been
threatened with a charge of violating, and, to the knowledge of the
Company, are not under investigation with respect to a possible
violation of, any provision of any law, regulation or order.
(q) No labor dispute exists with the Company's employees or
with employees of its subsidiaries or is imminent which could have a
Material Adverse Effect. The Company is not aware of any existing or
imminent labor disturbance by its employees or by any employees of its
subsidiaries which could be expected to have a Material Adverse Effect.
(r) The Company and its subsidiaries own or possess the
licenses, patents, patent rights, copyrights, trademarks, service
marks, trade names and proprietary and other confidential information
and trade secrets presently employed by them in connection with the
businesses now operated by them, and neither the Company nor any of its
subsidiaries have received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing
which, alone or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(s) 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 and adequate for the conduct
of their respective businesses and the value of their respective
properties and is customary for companies engaged in similar
industries; 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.
(t) Except as described in the Effective Prospectus and the
Final Prospectus, 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, 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.
(u) 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, as amended (the
"1940 Act").
(v) Neither the Company nor any of its subsidiaries nor, to
the Company's knowledge, any of the directors, officers, employees or
agents of the Company and its subsidiaries have taken, and the Company
and its subsidiaries will not take, directly or indirectly, any action
designed to
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cause or result in, or which has constituted or which might be expected
to constitute, stabilization or manipulation of the price of the Common
Stock.
(w) The Shares have been approved for listing on the American
Stock Exchange (or such other trading market as shall be approved by
you) upon notice of issuance.
(x) The Company has previously disclosed and delivered or made
available to the Underwriters or their representatives prior to the
date the Registration Statement was declared effective copies of all
pension, retirement, profit-sharing, deferred compensation, stock
option, employee stock ownership, severance pay, vacation, bonus or
other incentive plans, all other written employee programs,
arrangements or agreements, all medical, vision, dental or other health
plans, all life insurance plans and all other employee benefit plans or
fringe benefit plans, including, without limitation, "employee benefit
plans" as that term is defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), adopted,
maintained, sponsored in whole or in part or contributed to by the
Company, its predecessors or any subsidiary of the Company or its
predecessors for the benefit of employees, retirees, dependents,
spouses, directors, independent contractors or other beneficiaries and
under which employees, retirees, dependents, spouses, directors,
independent contractors or other beneficiaries are eligible to
participate (collectively, the "Company Benefit Plans").
The Company and its subsidiaries (and each predecessor of the
Company or a subsidiary that adopted or contributed to a Company
Benefit Plan) have maintained all Company Benefit Plans (including
filing all reports and returns required to be filed with respect
thereto) in accordance with their terms and in compliance with the
applicable terms of ERISA, the Internal Revenue Code and any other
applicable federal and state laws the breach or violation of which
would have, individually or in the aggregate, a Material Adverse
Effect. Each Company Benefit Plan which is intended to be qualified
under Section 401(a) of the Internal Revenue Code has either received a
favorable determination letter from the Internal Revenue Service or
timely requested such a letter and has at all times been maintained in
accordance with Section 401 of the Internal Revenue Code, except where
any failure to receive or seek such a favorable determination letter or
so maintain such Company Benefit Plan would not have, individually or
in the aggregate, a Material Adverse Effect. Neither the Company nor
its subsidiaries has engaged in a transaction with respect to any
Company Benefit Plan that, assuming the taxable period of such
transaction expired as of the date hereof, would subject the Company or
any subsidiary to a tax or penalty imposed by either Section 4975 of
the Internal Revenue Code or Section 502(i) of ERISA in amounts which
are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect.
Neither the Company nor any subsidiary is obligated to provide
post-retirement medical benefits or any other unfunded post-retirement
welfare benefits (except COBRA continuation coverage required to be
provided by ERISA Section 601), which such liabilities to the Company
would have, individually or in the aggregate, a Material Adverse
Effect. Neither the Company nor any member of a group of trades or
businesses under common control (as defined in ERISA Sections
4001(a)(14) and 4001(b)(1)) with the Company have at any time within
the last six years sponsored, contributed to or been obligated under
Title I or IV of ERISA to contribute to a "defined benefit plan" (as
defined in ERISA Section 3(35)). Within the last six years, neither the
Company nor any member of a group of trades or businesses under common
control (as defined in ERISA Sections 4001(a)(14) and 4001(b)(1)) with
Company have had an "obligation to
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contribute" (as defined in ERISA Section 4212) to a "multiemployer
plan" (as defined in ERISA Sections 4001(a)(3) and 3(37)(A)).
(y) Neither the Company nor any of its subsidiaries is in
violation of any federal or state law or regulation relating to
occupational safety and health, and the Company and its subsidiaries
have received all permits, licenses or other approvals required of them
under applicable federal and state laws and regulations necessary to
conduct their respective businesses, and the Company and each such
subsidiary is in compliance with all terms and conditions of any such
permit, license or approval, except any such violation of law or
regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not, singly or in the
aggregate, result in a Material Adverse Effect.
(z) The Company has not violated any applicable laws relating
to immigration and has employed only individuals authorized to work in
the United States and has never been the subject of any inspection or
investigation relating to its compliance with or violation of the
Immigration Reform and Control Act of 1986 and all Regulations
promulgated thereunder.
(aa) The property, assets and operations of the Company and
its subsidiaries comply in all material respects with all applicable
federal, state or local law, common law, doctrine, rule, order, decree,
judgment, injunction, license, permit or regulation relating to
environmental matters (the "Environmental Laws"), except to the extent
that failure to comply with such Environmental Laws would not have a
Material Adverse Effect. To the knowledge of the Company, none of the
property, assets or operations of the Company and its subsidiaries is
the subject of any foreign, federal, state or local investigation
evaluating whether any remedial action is needed to respond to a
release into the environment of any substance regulated by, or form the
basis of liability under, any Environmental Laws (a "Hazardous
Material"), or is in contravention of any Environmental Law that would
have a material adverse effect on the earnings, business, management,
properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and its subsidiaries. Neither
the Company nor the Subsidiary has received any notice or claim, nor
are there pending, reasonably anticipated or, or to the Company's
knowledge, threatened lawsuits against them with respect to violations
of an Environmental Law or in connection with the release of any
Hazardous Material into the environment. Neither the Company nor the
Subsidiary has any material contingent liability in connection with any
release of Hazardous Material into the environment.
(bb) Other than as set forth in the Effective Prospectus and
the Final Prospectus, the Company's internal systems and software and
the network connections it maintains are adequately programmed to
address the Year 2000 issue.
(cc) Neither the Company nor any of its subsidiaries has
received any communication (written or oral) relating to the
termination or modification or threatened termination or modification
of any of the agreements specifically named in the Effective Prospectus
or the Final Prospectus, nor has it received any communication (written
or oral) relating to any determination not to renew or extend any
agreement specifically named in the Effective Prospectus or the Final
Prospectus at the end of the current term of any such agreement, except
where any such termination, modification, non-renewal or non-extension
would not have a Material Adverse Effect.
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(dd) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall
be deemed to be a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLING
SHAREHOLDER. The Selling Shareholder represents, warrants and covenants to each
Underwriter and agrees as follows:
(a) Such Selling Shareholder now has, and at the First Closing
Date will have, or upon the exercise of options for the purchase of
such Shares will have, good and marketable title to the Selling
Shareholder Shares to be sold by such Selling Shareholder, free and
clear of any liens, encumbrances, equities and claims (other than as
imposed by the Securities Act or this Agreement), and full right, power
and authority to effect the sale and delivery of such Selling
Shareholder Shares; and upon the delivery of and payment for the
Selling Shareholder Shares pursuant to this Agreement, good and
marketable title to such Selling Shareholder Shares, free and clear of
any liens, encumbrances, equities, claims, security interests,
restrictions, shareholder agreements or voting trusts, will be
transferred to the Underwriters.
(b) Such Selling Shareholder has duly executed and delivered
the Custody Agreement and Power of Attorney in the form previously
delivered to the Representatives, appointing each of Xxxx X. Xxxxxxx
and Xxxxx X. Xxxxxxx as such Selling Shareholder's duly authorized
attorney-in-fact (the "Attorney-in-Fact") and SunTrust Bank, Atlanta as
the duly authorized custodian (the "Custodian") of the Selling
Shareholder Shares. The Attorneys-in-Fact are authorized to execute,
deliver and perform this Agreement on behalf of such Selling
Shareholder, to exercise options relating to Selling Shareholder
Shares, to deliver the Selling Shareholder Shares to be sold by such
Selling Shareholder hereunder, to accept payment therefor and otherwise
to act on behalf of such Selling Shareholder in connection with this
Agreement. Shares of Common Stock, in suitable form for transfer,
representing the Selling Shareholder Shares to be sold by such Selling
Shareholder hereunder have been deposited with the Custodian pursuant
to the Custody Agreement and Power of Attorney for the purpose of
delivery pursuant to this Agreement. Such Selling Shareholder agrees
that its Selling Shareholder Shares on deposit with the Custodian are
subject to the interest of the Underwriters hereunder, that the
arrangements made for such custody and the appointment of the Attorneys
in-Fact are to that extent irrevocable, and that the obligations of
such Selling Shareholder hereunder shall not be terminated by any act
or deed of the Selling Shareholder (or by any other person, firm or
corporation, including the Company or the Custodian) without the prior
written consent of the Underwriters or by operation of law (including
the death of the Selling Shareholder) or by the occurrence of any other
event or events, except as provided in this Agreement and the Custody
Agreement. If such Selling Shareholder should die or become
incapacitated or if any other event should occur before the delivery of
the Shares of such Selling Shareholder hereunder which renders such
Selling Shareholder incapable of acting on his own behalf, to
the fullest extent provided by law the Selling Shareholder's
obligations hereunder shall continue and the Selling Shareholder Shares
deposited with the Custodian shall be delivered by the Custodian in
accordance with the terms and conditions of this Agreement as if such
death, incapacity, or other event had not occurred, regardless of
whether or not the Custodian or the Attorneys-in-Fact shall have
received notice thereof.
(c) Such Selling Shareholder, acting individually or through
the Attorneys-in-Fact, has duly executed and delivered this Agreement.
This Agreement constitutes a legal, valid and binding obligation of
such Selling Shareholder, enforceable against such Selling Shareholder
in
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accordance with its terms, except as may be limited by bankruptcy and
other creditor rights laws and general principles of equity, including
the availability of the equitable remedy of specific performance. All
authorizations and consents necessary for the execution and delivery of
this Agreement and the Custody Agreement and Power of Attorney on
behalf of such Selling Shareholder and for the sale and delivery of the
Selling Shareholder Shares to be sold by such Selling Shareholder
hereunder have been given. Such Selling Shareholder has the legal
capacity and full right, power and authority to execute this Agreement
and the Custody Agreement and Power of Attorney.
(d) The performance of this Agreement and the Custody
Agreement and Power of Attorney and the consummation of the
transactions contemplated hereby and thereby by such Selling
Shareholder will not result in a breach or violation of, or conflict
with, any of the terms or provisions of, or constitute a default by
such Selling Shareholder under, any indenture, mortgage, deed of trust,
trust (constructive or other), loan agreement, lease, franchise,
license or other agreement or instrument to which such Selling
Shareholder or any of such Selling Shareholder's properties is bound,
any statute, or any judgment, decree, order, rule or regulation of any
court or governmental agency or body applicable to such Selling
Shareholder or any of such Selling Shareholder's properties.
(e) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Common Stock. Such Selling Shareholder
has not distributed and will not distribute any prospectus or other
offering material in connection with the offer and sale of the Shares
other than any Preliminary Prospectus filed with the Commission or the
Final Prospectus or other material permitted by the Securities Act.
(f) To the knowledge of such Selling Shareholder, the
representations and warranties of the Company in Section 1 of this
Agreement are true and correct. Such Selling Shareholder has reviewed
and is familiar with the Registration Statement as originally filed
with the Commission, and as amended, and the Preliminary Prospectus. To
the knowledge of such Selling Shareholder, there are no facts,
conditions or information not disclosed in such Preliminary Prospectus
that have adversely affected or could adversely affect the business,
financial position, net worth or results of operations, or could
adversely affect the properties or assets, of the Company or any of its
subsidiaries. To the knowledge of such Selling Shareholder, the
Preliminary Prospectus does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. Such Selling Shareholder
represents that it was not prompted to sell the Selling Shareholder
Shares by any information concerning the Company or any subsidiary that
is not set forth in the Preliminary Prospectus, the Effective
Prospectus or the Final Prospectus.
(g) At the time the Registration Statement became effective
(A) such parts of the Registration Statement and any amendments and
supplements thereto as specifically refer to such Selling Shareholder
did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading and (B) such parts of the Effective
Prospectus and Final Prospectus as specifically refer to such Selling
Shareholder did not and will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
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(h) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Shareholder agrees to deliver to you prior
to or at the First Closing Date (as defined below) 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).
(i) Any certificate signed by or on behalf of such Selling
Shareholder as such and delivered to the Representatives or to counsel
for the Representatives shall be deemed a representation and warranty
by such Selling Shareholder to each Underwriter as to the matters
covered thereby.
3. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company agrees to sell to the
Underwriters 2,250,000 Firm Shares; the Selling Shareholder
agrees to sell to the Underwriters the number of Firm Shares set forth
opposite such Selling Shareholder's name in Schedule II hereto; and
each of the Underwriters severally and not jointly, agrees to purchase
at a purchase price of $_____ per share, the number of Firm Shares set
forth opposite such Underwriter's name in Schedule I hereto.
(b) The Company also grants to the Underwriters an option to
purchase, solely for the purpose of covering over-allotments in
connection with the distribution and sale of the Firm Shares, all or
any portion of the Option Shares at the purchase price per share set
forth above. The option granted hereby may be exercised as to all or
any part of the Option Shares at any time within 30 days after the date
the Registration Statement becomes effective or, if such 30th day shall
be a Saturday or Sunday or a holiday, on the next business day
thereafter when the New York Stock Exchange is open for trading. The
Underwriters shall not be under any obligation to purchase any Option
Shares prior to the exercise of such option. The option granted hereby
may be exercised by the Underwriters by the Representatives giving
written notice or notice by telephone (confirmed in writing) to the
Company setting forth the number of Option Shares to be purchased and
the date and time for delivery of and payment for such Option Shares
and stating that the Option Shares referred to in such notice are to be
used for the purpose of covering over-allotments in connection with the
distribution and sale of the Firm Shares. If such notice is given prior
to the First Closing Date (as defined herein), the date set forth
therein for such delivery and payment shall not be earlier than two
full business days thereafter or the First Closing Date, whichever
occurs later. If such notice is given on or after the First Closing
Date, the date set forth therein for such delivery and payment shall
not be earlier than three full business days thereafter. In either
event, the date so set forth shall not be more than 15 full business
days after the date of such notice. The date and time set forth in such
notice is herein called the "Option Closing Date." Upon exercise of the
option, the Company shall become obligated to sell to the Underwriters,
and, subject to the terms and conditions herein set forth, the
Underwriters shall become obligated to purchase, for the account of
each Underwriter, from the Company the number of Option Shares
specified in such notice. Option Shares shall be purchased for the
accounts of the Underwriters in proportion to the number of Firm Shares
set forth opposite such Underwriter's name in Schedule I hereto, except
that the respective purchase obligations of each Underwriter shall be
adjusted so that no Underwriter shall be obligated to purchase
fractional Option Shares. To the extent, if any, that the option is
exercised, payment for the Option Shares shall be made on the Option
Closing Date in
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same day funds by wire transfer to an account designated by the Company
against delivery of certificates therefor at the offices of X.X.
Xxxxxxxx & Co., 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, or at
such other place as you, the Company and the Attorneys-in-Fact shall
agree upon.
(c) Certificates in definitive form for the Firm Shares which
each Underwriter has agreed to purchase hereunder shall be delivered by
or on behalf of the Company and the Selling Shareholder to the
Underwriters for the account of such Underwriter against payment by
such Underwriter or on its behalf of the purchase price therefor, in
same day funds by wire transfer to the respective accounts designated
by the Company or the Selling Shareholder, as the case may be, at the
offices of X. X. Xxxxxxxx & Co., 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000, or at such other place as may be agreed upon by X.X.
Xxxxxxxx & Co., the Company and the Attorneys-in-Fact, at 10:00 A.M.,
Nashville time, on the third (or if the Firm Shares are priced, as
contemplated by Rule 15c6-1(c) promulgated pursuant to the Exchange
Act, after 4:30 P.M., Washington, D.C. time, the fourth) full business
day after this Agreement becomes effective, or at such other time not
later than the seventh full business day thereafter as the
Representatives, the Company and the Attorneys-in-Fact may determine,
such time of delivery against payment being herein referred to as the
"First Closing Date." The First Closing Date and the Option Closing
Date are herein individually referred to as the "Closing Date" and
collectively referred to as the "Closing Dates." Certificates in
definitive form for the Option Shares which each Underwriter shall have
agreed to purchase hereunder shall be similarly delivered by or on
behalf of the Company on the Option Closing Date. The certificates in
definitive form for the Shares to be delivered will be in good delivery
form and in such denominations and registered in such names as X.X.
Xxxxxxxx & Co. may request not less than 48 hours prior to the First
Closing Date or the Option Closing Date, as the case may be. Such
certificates will be made available for checking and packaging, at a
location designated by you, at least 24 hours prior to the First
Closing Date or the Option Closing Date, as the case may be. It is
understood that you may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for the Shares to be
purchased by such Underwriter or Underwriters. No such payment shall
relieve such Underwriter or Underwriters from any of its or their
obligations hereunder.
4. OFFERING BY THE UNDERWRITERS. After the Registration Statement
becomes effective, the several Underwriters propose to offer for sale to the
public the Firm Shares and any Option Shares which may be sold at the price and
upon the terms set forth in the Final Prospectus.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with each
of the Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement to become effective and to comply with the
provisions of and make all requisite filings with the Commission
pursuant to Rules 424, 430A, 434 and 462(b), if relied upon by the
Company, of the Rules and Regulations and to notify you promptly in
writing of all such filings. The Company shall notify you promptly in
writing of any request by the Commission for any amendment of or
supplement (including any Term Sheet) to the Registration Statement,
the Effective Prospectus or
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the Final Prospectus or for additional information; the Company shall
prepare and file with the Commission, promptly upon your request, any
amendments of or supplements to the Registration Statement, the
Effective Prospectus or the Final Prospectus which, in your reasonable
opinion, may be necessary or advisable in connection with the
distribution of the Shares; and the Company shall not file any
amendment of or supplement to the Registration Statement, the Effective
Prospectus or the Final Prospectus to which you reasonably object after
reasonable notice thereof. The Company shall advise you promptly after
it receives notice and obtains knowledge of the issuance by the
Commission or any jurisdiction or other regulatory body of any stop
order or other order suspending the effectiveness of the Registration
Statement, suspending or preventing the use of any Preliminary
Prospectus, the Effective Prospectus or the Final Prospectus or
suspending the qualification of the Shares for offering or sale in any
jurisdiction, or of the institution of any proceedings for any such
purpose; and the Company shall use its best efforts to prevent the
issuance of any stop order or other such order and, should a stop order
or other such order be issued, to obtain as soon as possible the
lifting thereof.
(b) The Company will take or cause to be taken all necessary
action and furnish to whomever you direct such information as may be
reasonably required in qualifying the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the
Underwriters may designate and will continue such qualifications in
effect for as long as may be reasonably necessary to complete the
distribution and for a period of not less than one year after the
Effective Date; 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 in which the
Company is not currently so subject.
(c) Within the time during which a Final Prospectus relating
to the Shares is required to be delivered under the Securities Act, the
Company shall comply with all requirements imposed upon it by the
Securities Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, so far as is necessary to
permit the continuance of sales of or dealings in the Shares as
contemplated by the provisions hereof and the Final Prospectus. If
during such period any event occurs as a result of which the Final
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if during such period it is
necessary to amend the Registration Statement or supplement the Final
Prospectus to comply with the Securities Act, the Company shall
promptly notify you and shall amend the Registration Statement or
supplement the Final Prospectus (at the expense of the Company) so as
to correct such statement or omission or effect such compliance.
(d) The Company will furnish without charge to the
Representatives copies of the Registration Statement (two of which
shall be signed and shall be accompanied by all exhibits thereto) and
will furnish without charge to the Representatives, each Underwriter
and to any dealer in securities each Preliminary Prospectus, the
Effective Prospectus and the Final Prospectus, and all amendments and
supplements thereto, including any prospectus or supplement prepared
after the effective date of the Registration Statement, in each case as
soon as available and in such quantities as the Underwriters may
reasonably request.
(e) The Company will (i) deliver to you at such office or
offices as you may designate as many copies of the Preliminary
Prospectus and Final Prospectus as you may reasonably request, and (ii)
for a period of not more than nine months after the Registration
Statement becomes effective or such longer period that a Final
Prospectus relating to the Shares is required to be delivered under the
Securities Act, send to the Underwriters as many additional copies of
the Final Prospectus and any supplement thereto as you may reasonably
request.
(f) The Company shall make generally available to its security
holders, in the manner contemplated by Rule 158(b) under the Securities
Act as promptly as practicable and in any event
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no later than 45 days after the end of its fiscal quarter in which the
first anniversary of the effective date of the Registration Statement
occurs, an earnings statement satisfying the provisions of Section
11(a) of the Securities Act covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement.
(g) The Company will apply the net proceeds from the sale of
the Company Shares as set forth under the caption "Use of Proceeds" in
the Final Prospectus and will report the use of such proceeds in
accordance with Rule 463 under the Securities Act.
(h) During a period of three years from the effective date of
the Registration Statement, the Company will furnish to the
Representatives, without charge, copies of all reports and other
communications (financial or other) furnished by the Company to its
shareholders and, as soon as available, copies of any reports or
financial statements furnished or filed by the Company to or with the
Commission or any national securities exchange or over-the-counter
market on which any class of securities of the Company may be listed or
traded and such additional information concerning the business and
financial condition of the Company and its subsidiaries as you from
time to time may reasonably request.
(i) The Company will, from time to time, after the effective
date of the Registration Statement file with the Commission such
reports as are required by the Securities Act, the Exchange Act and the
Rules and Regulations, and shall also file with state securities
commissions in states where the Shares have been sold by you (as you
shall have advised us in writing) such reports as are required to be
filed by the securities acts and the regulations of those states.
(j) The Company has provided agreements executed by all of
the Company's executive officers, directors and shareholders providing
that none of them will, for a period of 180 days from the effective
date of the Registration Statement, directly or indirectly, make, agree
to or cause any offer, sale (including short sale), loan, pledge or
other disposition of, or grant any options, rights or warrants to
purchase with respect to, or otherwise transfer or reduce any risk of
ownership of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exchangeable or exercisable for shares
of Common Stock or other capital stock of the Company, or derivatives
thereof, or request the registration of any of the foregoing, except
that the Company's executive officers, directors and shareholders may
acquire shares of Common Stock pursuant to the exercise of stock
options granted pursuant to the Company's stock option plans, and may
gift, pledge or assign shares of Common Stock if the donee, pledgee or
assignee agrees similarly not to sell, contract to sell or otherwise
dispose of such shares for the remaining portion, if any, of the Lock-
up Period. Except with the prior written consent of X.X. Xxxxxxxx &
Co., the Company will not issue any of the 2,000,000 shares of
Common Stock to be registered under the Securities Act as described
under the caption "Shares Eligible for Future Sale" in the Final
Prospectus unless and until each person or entity to whom or which such
shares are to be issued agrees in writing not to sell, contract to sell
or otherwise dispose of such shares for the remaining portion, if any,
of the Lock-up Period.
(k) If at any time during the 30 day period after the
Registration Statement is declared effective, any rumor, publication or
event relating to or affecting the Company shall occur as a result of
which, in your opinion, the market price for the Shares has been or is
likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a
-15-
supplement to or amendment of the Final Prospectus), the Company will,
after written notice from you advising it to do so, prepare, consult
with you concerning the substance of, and disseminate a press release
or other public statement, reasonably satisfactory to you, responding
to or commenting on such rumor, publication or event.
(l) Neither the Company nor any of its officers, directors or
affiliates will take, directly or indirectly, any action designed to
cause or result in, or which might constitute or be expected to
constitute, stabilization or manipulation of the price of the Common
Stock.
(m) The Company will cause the Shares to be listed on the
American Stock Exchange (or such other trading market as shall be
approved by you) at each Closing Date and will use its reasonable best
efforts to cause the Shares to be so listed for at least one year from
the date hereof.
(n) The Company shall not invest or otherwise use the proceeds
received by the Company from its sale of the Shares in such a manner as
would require the Company or any subsidiary to register as an
investment company under the 0000 Xxx.
(o) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a
registrar for the Common Stock.
6. EXPENSES. The Company and the Selling Shareholder agree with the
Underwriters that (a) whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay
all fees and expenses incident to the performance of the obligations of the
Company and the Selling Shareholder, including, but not limited to, (i) the
Commission's registration fee, (ii) the expenses of printing (or reproducing)
and distributing the Registration Statement (including the financial statements
therein and all amendments and exhibits thereto), each Preliminary Prospectus,
the Effective Prospectus, the Final Prospectus, any amendments or supplements
thereto, and this Agreement and other underwriting documents, including
Underwriter's Questionnaires, Underwriter's Powers of Attorney, Blue Sky
Memoranda, Agreements Among Underwriters and Selected Dealers Agreements, (iii)
fees and expenses of accountants and counsel for the Company and the Selling
Shareholder, (iv) expenses of registration or qualification of the Shares under
state Blue Sky and securities laws, including the fees and disbursements of
counsel to the Underwriters in connection therewith, (v) filing fees paid or
incurred by the Underwriters and related fees and expenses of counsel to the
Underwriters in connection with filings with the NASD, (vi) expenses of listing
the Shares on the Nasdaq Stock Market's National Market, American Stock Exchange
or such other trading market as shall be approved by you, (vii) any expenses
for travel, lodging and meals incurred by the Company in connection with
marketing, dealer and other meetings attended by the Company and the
Underwriters in marketing the Shares, (viii) the costs and charges of the
Company's transfer agent and registrar and the cost of preparing the
certificates for the Shares, and (ix) all other costs and expenses incident to
the performance of its obligations hereunder not otherwise provided for in this
Section; and (b) all out-of-pocket expenses, including counsel fees,
disbursements and expenses, incurred by the Underwriters in connection with
investigating, preparing to market and marketing the Shares and proposing to
purchase and purchasing the Shares under this Agreement will be borne and paid
by the Company if the sale of the Shares provided for herein is not consummated
by reason of the termination of this Agreement by the Representatives pursuant
to Sections 10 or 13(iv) or pursuant to Section 13(ii) because of any failure or
refusal on the part of the Company or the Selling Shareholder to comply with the
terms in all material respects or fulfill in all material respects any of the
conditions of this Agreement. To the extent, if at all, that the Selling
Shareholder engages special legal counsel to represent him in connection with
the transactions contemplated by this Agreement, the fees and expenses of such
counsel shall be borne by such Selling Shareholder. Any transfer taxes imposed
on the sale of the Shares to the several Underwriters
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will be paid by the Company and the Selling Shareholder pro rata. The Company
and the Selling Shareholder have agreed between themselves with regard to the
sharing of fees and expenses. It is understood, however, that except as provided
in this Section 6 and Sections 8 and 10, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel and any advertising
expenses in connection with any offers they may make.
7. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The respective
obligations of the Underwriters hereunder shall be subject, in their discretion,
to the accuracy of the representations and warranties of the Company and the
Selling Shareholder herein as of the date hereof and as of the Closing Date as
if made on and as of the Closing Date, to the accuracy of the statements of the
Company's officers made pursuant to the provisions hereof, to the performance by
the Company and the Selling Shareholder of all of their covenants and agreements
hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective not later than 4:00
p.m., Washington, D.C. time, on the day following the date of this
Agreement, or such later time and date as shall have been consented to
by the Representatives and all filings required by Rule 424, Rule 430A,
Rule 434 or Rule 462(b), if applicable, of the Rules and Regulations
shall have been made; no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened or, to the
knowledge of the Company or the Underwriters, shall be contemplated by
the Commission; any request of the Commission for additional
information (to be included in the Registration Statement or the Final
Prospectus or otherwise) shall have been complied with to your
reasonable satisfaction; and the NASD, upon review of the terms of the
public offering of the Shares, shall not have objected to such offering
or the terms or the Underwriters' participation in the same.
(b) No Underwriter shall have advised the Company that the
Registration Statement or any amendment thereto contains an untrue
statement of fact which, in your judgment, is material, or omits to
state a fact which, in your judgment, is material and is required to be
stated therein or necessary to make the statements therein not
misleading, or that any Preliminary Prospectus, the Effective
Prospectus or the Final Prospectus, or any supplement thereto, contains
an untrue statement of fact which, in your judgment, is material, or
omits to state a fact which, in your judgment, is material and is
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(c) The Representatives shall have received an opinion, dated
the Closing Date, from Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P.,
counsel for the Company and the Selling Shareholder, to the effect
that:
(i) The Company is a corporation duly organized and
validly existing and in good standing under the laws of the
State of Georgia, with full corporate power and authority to
own its properties and conduct its business as now conducted.
(ii) Each of the Company's subsidiaries (as defined
in this Agreement) is a corporation duly organized and validly
existing and in good standing under the laws of the state of
its incorporation, with full corporate power and authority to
own its properties and conduct its business as now conducted.
The outstanding stock of each of the Company's subsidiaries is
duly authorized, validly issued, fully paid and nonassessable.
Other than as disclosed in the Effective Prospectus and the
Final Prospectus, all of the outstanding stock
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of each of the subsidiaries is owned by the Company, free and
clear of all possessory (and, to the knowledge of such
counsel, other) liens, encumbrances, pledges, equities or
claims of any kind. Other than as disclosed in the Effective
Prospectus and the Final Prospectus, to the knowledge of such
counsel, no options or warrants or other rights to purchase
from the Company or any subsidiary, agreements or other
obligations to issue or other rights to convert any
obligations into any shares of capital stock or of ownership
interests in any of the Company's subsidiaries are
outstanding.
(iii) The Company and each of its subsidiaries is
duly qualified or authorized to do business as a foreign
corporation in good standing in all jurisdictions where the
nature of its business or character of property owned or
leased by it require it to be so qualified or authorized to do
business, except where the failure to be so qualified or
authorized to do business would not have a Material Adverse
Effect.
(iv) As of the date specified therein, the Company
had historical authorized and issued capital stock as set
forth under the caption "Capitalization" in the Final
Prospectus, and the Company's capital stock conforms to the
description thereof contained under the caption "Description
of Capital Stock" in the Final Prospectus. All of the issued
and outstanding shares of Common Stock (including the Selling
Shareholder Shares and the Option Shares) have been duly
authorized and are validly issued, fully paid and
nonassessable. The Company Shares have been duly and validly
authorized, and upon issuance thereof and payment therefor as
provided in this Agreement, will be validly issued, fully paid
and nonassessable.
(v) None of the issued shares of capital stock of the
Company (including the Selling Shareholder Shares) have been
issued in violation of or subject to any preemptive or similar
rights arising under, and there are no preemptive rights or
other rights to subscribe for or to purchase, or any
restriction upon the transfer of, the Shares or any other
shares of Common Stock pursuant to, the Company's Articles of
Incorporation, Bylaws or, to the knowledge of such counsel,
any agreement (other than this Agreement) or instrument to
which the Company or the Selling Shareholder is a party or by
which it may be bound. To the knowledge of such counsel,
neither the filing of the Registration Statement nor the offer
or sale of the Shares as contemplated thereby gives rise to
any rights for or relating to the registration of any shares
of Common Stock or any other securities of the Company, other
than rights relating to shares included in the Firm Shares and
such other rights as have been waived by the holder or holders
thereof prior to the date hereof. Upon issuance of the Company
Shares and payment therefor as provided in this Agreement, the
Underwriters will receive good and marketable title to the
Company Shares, free and clear of all liens, encumbrances,
claims, security interests, restrictions, shareholders
agreements and voting trusts whatsoever. The form of
certificate for the Shares is in due and proper form.
(vi) To the knowledge of such counsel, all sales of
the Company's securities by the Company prior to the date
hereof were at all relevant times duly registered or exempt
from the registration requirements of the Securities Act and
were duly registered or the subject of an exemption from the
registration requirements of applicable state securities or
blue sky laws, or if not registered or exempt in compliance
with the Securities Act and applicable state securities or
blue sky laws, any private rights of action for rescission or
-18-
damages arising from such failure to register any such
securities are time barred by applicable statutes of
limitations or equitable principles, including laches.
(vii) No consent, approval, authorization or order of
any court, governmental agency or body or, to the knowledge of
such counsel, any third party, is required for the performance
of this Agreement by the Company or the consummation by the
Company of the transactions contemplated hereby, except such
as have been obtained under the Securities Act and such as may
be required from the NASD or under state securities or blue
sky laws in connection with the purchase and distribution of
the Shares by the several Underwriters. The performance of
this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby will not
conflict with or result in a breach or violation by the
Company or any of its subsidiaries of any of the terms or
provisions of, or constitute a default by the Company or any
of its subsidiaries under, (a) the Articles of Incorporation
or Bylaws of the Company or any of its subsidiaries, (b) any
indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which the Company or any of
its subsidiaries is a party or to which the Company or any of
its subsidiaries or their properties are subject and that is
an exhibit to the Registration Statement (each, a "Material
Agreement"), (c) any federal statute or (d) to the knowledge
of such counsel, any judgment, decree, order, rule or
regulation of any court or governmental agency or body
applicable to the Company or any of its subsidiaries or their
properties; provided, however, that such counsel need not
express any opinion under this paragraph (vii) as to
compliance with federal securities laws (certain aspects of
which are covered elsewhere in this Agreement) or as to
compliance with the securities or blue sky laws of any other
jurisdiction.
(viii) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the
valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms,
and the Company has the full corporate power and authority to
enter into this Agreement and to issue, sell and deliver the
Company Shares to be sold by it to the Underwriters as
provided herein.
(ix) To the knowledge of such counsel, except as
described in the Final Prospectus, there is not pending or
threatened, any action, suit, proceeding, inquiry or
investigation to which the Company or any of its subsidiaries
is a party, or to which the property of the Company or any of
its subsidiaries is subject, before or brought by any court or
governmental agency or body, which, if determined adversely to
the Company or any of its subsidiaries, could result in a
Material Adverse Effect.
(x) To the knowledge of such counsel, no default
exists and no event has occurred which, with notice or after
the lapse of time to cure or both, would constitute a default
in the due performance and observance of any term, covenant or
condition of any Material Agreement, which default or event
would have a Material Adverse Effect.
(xi) Neither the Company nor any subsidiary is in
violation of its Articles of Incorporation or Bylaws or, to
the knowledge of such counsel, in violation of any law,
administrative rule or regulation or arbitrators' or
administrative or court decree, judgment or order or, to the
knowledge of such counsel, in violation or default (there
being no existing state of facts, to the knowledge of such
counsel, which with notice or lapse of time or both would
constitute a default) in the performance or observance of any
obligation,
-19-
agreement, covenant or condition contained in any Material
Agreement where such violation or default could have a
Material Adverse Effect, taking into account any enforceable
and valid indemnity that the Company may have from a third
party.
(xii) The Registration Statement and all
post-effective amendments thereto have become effective under
the Securities Act, no stop order suspending the effectiveness
of the Registration Statement has been issued and, to the
knowledge of such counsel, no proceedings for that purpose
have been instituted or are pending, threatened or
contemplated by the Commission. All filings required by Rules
424, 430A, 434 and 462(b), if relied upon by the Company, of
the Rules and Regulations have been made. The Registration
Statement, the Effective Prospectus and Final Prospectus, and
any amendments or supplements thereto, as of their respective
effective or issue dates, complied as to form with the
requirements of the Securities Act and the Rules and
Regulations (other than the financial statements, data and
schedules which are contained therein, and the first five
paragraphs and the last paragraph of the section captioned
"Underwriting" contained therein, as to which such counsel
need not express any opinion). The descriptions in the
Registration Statement, the Effective Prospectus and the Final
Prospectus of statutes, regulations, legal and governmental
proceedings, and contracts and other documents are accurate in
all material respects and present fairly the information
required to be stated. To the knowledge of such counsel, there
are no pending or threatened legal or governmental
proceedings, statutes or regulations required to be described
in the Final Prospectus which are not described nor are there
any contracts or other documents of a character required to be
described in the Registration Statement or the Final
Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required. The
Shares have been approved for listing on the American Stock
Exchange (or such other trading market as shall be approved by
you) upon notice of issuance.
(xiii) The Company is not, and will not be as a
result of the consummation of the transactions contemplated by
this Agreement, an "investment company" within the meaning of
the 1940 Act.
(xiv) This Agreement and the Custody Agreement and
Power of Attorney described herein have been duly executed and
delivered by or on behalf of the Selling Shareholder and
constitute valid and binding agreements of such Selling
Shareholder enforceable against such Selling Shareholder. To
the knowledge of such counsel, there are no facts which would
cause the Selling Shareholder to lack the legal capacity and
full right, power and authority to execute this Agreement and
the Custody Agreement and Power of Attorney.
(xv) To the knowledge of such counsel, the
performance of this Agreement and the Custody Agreement and
Power of Attorney and the consummation of the transactions
contemplated thereby by the Selling Shareholder will not
result in a breach or violation of, or conflict with, any of
the terms or provisions of, or constitute a default by the
Selling Shareholder under, any indenture, mortgage, deed of
trust, trust (constructive or other), loan agreement, lease
franchise, license or other agreement or instrument to which
such Selling Shareholder or any of such Selling Shareholder's
properties is bound, any statute, or any judgment, decree,
order, rule or regulation of any court or governmental agency
or body applicable to such Selling Shareholder; provided,
however, that such counsel need not express any opinion under
this paragraph (xv) as to compliance with
-20-
federal securities laws (certain aspects of which are covered
elsewhere in this Agreement) or as to compliance with the
securities or blue sky laws of any other jurisdiction.
(xvi) To the knowledge of such counsel, no consent,
approval, authorization or order of any court or governmental
agency or body is required for the consummation by the Selling
Shareholder of the transactions contemplated by this Agreement
in connection with the Selling Shareholder Shares to be sold
by the Selling Shareholder hereunder, except such as have been
obtained under the Securities Act and such as may be required
from the NASD or under state securities or blue sky laws in
connection with the purchase and distribution of the Shares by
the several Underwriters.
(xvii) As of the Closing Date, the Selling
Shareholder has made good delivery, duly endorsed, to the
Underwriters or to a financial intermediary designated by the
Underwriters of the Selling Shareholder Shares and, assuming
that the Underwriters constitute bona fide purchasers as
defined in Section 8-302 of the Uniform Commercial Code, the
Selling Shareholder has transferred all rights and interests
therein to the Underwriters free and clear of any and all
liens, pledges, encumbrances, charges, agreements, equities,
claims, security interests, restrictions, shareholder
agreements or voting trusts.
In addition to the matters set forth above, such opinion
letter shall also include a statement to the effect that nothing has
come to the attention of such counsel which leads them to believe that
the Registration Statement or any amendment thereto contains an untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading (except that such counsel need express no view as to
financial statements, schedules and other financial information
included therein) or that the Effective Prospectus or the Final
Prospectus or any supplement thereto contains an untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading (except
that such counsel need express no view as to financial statements,
schedules and other financial information included therein).
(d) The Representatives shall have received an opinion or
opinions, dated the Closing Date, of Xxxxxx & Bird LLP, counsel for the
Underwriters, with respect to the Registration Statement and the Final
Prospectus and such other related matters as the Underwriters may
require, and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling
them to pass upon such matters.
(e) The Representatives shall have received from Xxxxxx
Xxxxxxxx, LLP, a letter dated the date hereof and, at the Closing Date,
a second letter dated the Closing Date in form and in substance
satisfactory to the Representatives, stating that they are independent
public accountants with respect to the Company and its subsidiaries
within the meaning of the Securities Act and the applicable Rules and
Regulations, and to the effect that:
(i) In their opinion, the financial statements and
schedules examined by them and included in the Registration
Statement comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and
the published Rules and Regulations and are presented in
accordance with generally accepted accounting principles
consistently applied; and they have made a review in
accordance with standards
-21-
established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements,
selected financial data, and/or condensed financial statements
derived from audited financial statements of the Company;
(ii) The unaudited summary and selected financial
information included in the Preliminary Prospectus and the
Final Prospectus under the captions "Prospectus Summary" and
"Selected Consolidated Financial Data" agrees with the
corresponding amounts in the audited financial statements
included in the Final Prospectus or previously reported on by
them;
(iii) On the basis of a reading of the latest
available interim consolidated financial statements
(unaudited) of the Company and its subsidiaries, a reading of
the minute books of the Company and its subsidiaries,
inquiries of officials of the Company responsible for
financial and accounting matters and other specified
procedures, all of which have been agreed to by the
Representatives, nothing came to their attention that caused
them to believe that:
(A) the unaudited financial statements
included in the Registration Statement do not comply
as to form in all material respects with the
accounting requirements of the federal securities
laws and the related published rules and regulations
thereunder or are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with the basis for the
audited financial statements contained in the
Registration Statement;
(B) any other unaudited financial statement
data included in the Final Prospectus do not agree
with the corresponding items in the unaudited
consolidated financial statements from which data was
derived and any such unaudited data were not
determined on a basis substantially consistent with
the basis for the corresponding amounts in the
audited financial statements included in the
Prospectus;
(C) at a specified date not more than three
days prior to the date of delivery of such respective
letter, there was any change in the consolidated
capital stock, decline in shareholders' equity or
increase in long-term debt of the Company and its
subsidiaries, or other items specified by the
Underwriters, in each case as compared with amounts
shown in the latest balance sheets included in the
Final Prospectus, except in each case for changes,
decreases or increases which the Final Prospectus
discloses have occurred or may occur or which are
described in such letters; and
(D) for the period from the closing date of
the latest consolidated statements of operations
included in the Effective Prospectus and the Final
Prospectus to a specified date not more than three
days prior to the date of delivery of such respective
letter, there were any decreases in total revenues or
net income of the Company, or other items specified
by the Underwriters, or any increases in any items
specified by the Underwriters, in each case as
compared with the corresponding period of the
preceding year, except in each case for decreases
which the Final Prospectus discloses have occurred or
may occur or which are described in such letter.
-22-
(iv) They have carried out certain specified
procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information specified by
you which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the
Effective Prospectus and the Final Prospectus and have
compared and agreed such amounts, percentages financial
information with the accounting records of the Company and its
subsidiaries or to analyses and schedules prepared by the
Company and its subsidiaries from its detailed accounting
records.
In the event that the letters to be delivered referred to
above set forth any such changes, decreases or increases, it shall be a
further condition to the obligations of the Underwriters that the
Underwriters shall have determined, after discussions with officers of
the Company responsible for financial and accounting matters and with
Xxxxxx Xxxxxxxx LLP, that such changes, decreases or increases as are
set forth in such letters do not reflect a material adverse change in
the shareholders' equity or long-term debt of the Company as compared
with the amounts shown in the latest consolidated balance sheets of the
Company included in the Final Prospectus, or a material adverse change
in total revenues or net income, of the Company, in each case as
compared with the corresponding period of the prior year.
(f) There shall have been furnished to you a certificate,
dated the Closing Date and addressed to you, signed by the Chief
Executive Officer and by the Chief Financial Officer of the Company to
the effect that:
(i) the representations and warranties of the Company
in Section 1 of this Agreement are true and correct, as if
made at and as of the Closing Date, and the Company has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) the Registration Statement has become effective
under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement has been issued,
and no proceedings for that purpose have been initiated or are
pending or, to their knowledge, threatened under the
Securities Act;
(iii) all filings required by Rules 424, 430A, 434
and 462(b), if relied upon by the Company, of the Rules and
Regulations have been made;
(iv) they have carefully examined the Registration
Statement, the Effective Prospectus and the Final Prospectus,
and any amendments or supplements thereto, and the
Registration Statement and any amendments thereto do not
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and
the Effective Prospectus and the Final Prospectus, and any
supplements thereto, do not contain any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made,
not misleading; and
(v) since the effective date of the Registration
Statement, there has occurred no event required to be set
forth in an amendment or supplement to the Registration
-23-
Statement, the Effective Prospectus or the Final Prospectus
which has not been so set forth.
(g) The representations and warranties of the Selling
Shareholder shall be true and correct as if made at and as of the
Closing Date, and the Selling Shareholder shall deliver to you a
certificate to that effect, dated the Closing Date, signed by the
Selling Shareholder or such Selling Shareholder's duly appointed
Attorney-in-Fact.
(h) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Final Prospectus, and
except as stated therein, the Company and its subsidiaries have not
sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor
dispute or any court or governmental action, order or decree, or become
a party to or the subject of any litigation which is material to the
Company or its subsidiaries, nor shall there have been any material
adverse change, or any development involving a prospective material
adverse change, in the business, properties, key personnel,
capitalization, net worth, results of operations or condition
(financial or other) of the Company or its subsidiaries, which loss,
interference, litigation or change, in your judgment shall render it
inadvisable to commence or continue the offering of the Shares at the
offering price to the public set forth on the cover page of the
Prospectus or to proceed with the delivery of the Shares.
(i) The Shares shall have been approved for listing upon
notice of issuance on the American Stock Exchange (or such other
trading market as shall be approved by you).
(j) The Agreements relating to the matters described in
Sections 2(f) and 5(j) hereof shall be in full force and effect.
(k) You shall have been furnished by the Company and the
Selling Shareholder such additional documents and certificates as you
may reasonably request.
All such opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory to the Representatives and their counsel. The
Company and the Selling Shareholder shall furnish to the Representatives such
conformed copies of such opinions, certificates, letters and documents in such
quantities as the Representatives shall reasonably request.
The respective obligations of the Underwriters to purchase and pay for
the Option Shares shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Firm Shares, except that all references to
the "Closing Date" shall be deemed to refer to the Option Closing Date, if it
shall be a date other than the Closing Date.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Securities Act against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter or
controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based in whole or in
part
-24-
upon (i) any inaccuracy in the representations and warranties of the
Company contained herein, (ii) any failure of the Company to perform
their obligations hereunder or under law or (iii) any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or supplement thereto,
any audio or visual materials supplied by the Company and used in
connection with the marketing of the Shares, including without
limitation, slides, videos, films and tape recordings, or in any Blue
Sky application or other written information furnished by the Company
filed in any state or other jurisdiction in order to qualify any or all
of the Shares under the securities laws thereof (a "Blue Sky
Application"), or arise out of or are based upon the omission or
alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or Final Prospectus or
any amendment or supplement thereto or any Blue Sky Application a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter
and each such controlling person of each Underwriter upon demand for
any legal or other expenses reasonably incurred by such Underwriter or
such controlling person of each Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred, whether or not such Underwriter
or controlling person is a party to any action or proceeding; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage, or liability arises out of or
is based upon (i) any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, the
Preliminary Prospectus, the Effective Prospectus or Final Prospectus or
such amendment or such supplement in reliance upon and in conformity
with written information furnished to the Company by any Underwriter
specifically for use therein (it being understood that the only
information so provided is the information included in the last
paragraph on the cover page, the paragraph relating to stabilization
practices on the inside front cover and in the first five paragraphs
and the last paragraph under the caption "Underwriting" in any
Preliminary Prospectus and the Final Prospectus and the Effective
Prospectus) or (ii) the failure of the Underwriters to deliver the
Final Prospectus after the effective date, as required under Section
4(3) of the Securities Act and Rule 174 thereunder (provided, that such
failure to deliver was not the result of the failure of the Company to
timely supply sufficient quantities of the Final Prospectus to the
Underwriters upon the Underwriter's reasonable request).
(b) The Selling Shareholder agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Securities Act against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
in whole or in part upon (i) any inaccuracy in the representations and
warranties of such Selling Shareholder contained herein, (ii) any
failure of such Selling Shareholder to perform his obligations
hereunder or under law or (iii) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement,
any Preliminary Prospectus, the Effective Prospectus or Final
Prospectus, or any amendment or supplement thereto, or in any Blue Sky
Application or arise out of or are based upon the omission or alleged
omission to state in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or Final Prospectus or any
amendment or supplement thereto or any Blue Sky Application a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter and each
such controlling person of each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter or such controlling
person of each Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such
expenses are incurred, provided, however, that the Selling
-25-
Shareholder shall only be liable in his capacity as a Selling
Shareholder pursuant to clause (iii) to the extent that any statements
in or omissions or alleged omissions to state in the Registration
Statement, any Preliminary Prospectus, the Effective Prospectus, the
Final Prospectus or any amendment or supplement thereto are based upon
written information furnished to the Company by such Selling
Shareholder specifically for use therein or to the extent such Selling
Shareholder has failed to bring to the attention of the Underwriters
anything that has come to the attention of such Selling Shareholder to
cause such Selling Shareholder to believe that there is any untrue
statement relating to the Company of any material fact contained in the
Registration Statement, the Preliminary Prospectus, the Effective
Prospectus, the Final Prospectus, or any amendment or supplement
thereto, or any omission to state therein a material fact relating to
the Company required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Selling
Shareholder shall not be liable pursuant to clause (iii) to the extent
that any such loss, claim, damage, or liability arises out of or is
based upon (a) any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, the
Preliminary Prospectus, the Effective Prospectus or Final Prospectus or
such amendment or such supplement in reliance upon and in conformity
with written information furnished to the Company by any Underwriter
specifically for use therein (it being understood that the only
information so provided is the information included in the last
paragraph on the cover page, the paragraph relating to stabilization
practices on the inside front cover and the first five paragraphs and
the last paragraph under the caption "Underwriting" in any Preliminary
Prospectus and the Final Prospectus and the Effective Prospectus), (b)
the fourth sentence under the heading "Legal Matters" or (c) the
failure of the Underwriters to deliver the Final Prospectus after the
effective date, as required under Section 4(3) of the Securities Act
and Rule 174 thereunder (provided, that if such failure to deliver was
the result of the failure of the Company to timely supply sufficient
quantities of the Final Prospectus to the Underwriters upon the
Underwriter's reasonable request, then the Company shall indemnify the
Underwriters and other persons set forth in this Section 8(b) with
respect to any associated losses, claims, damages or liabilities
pursuant to Section 8(a) above).
(c) Notwithstanding Section 8(b) above, in no event shall the
liability of the Selling Shareholder under Section 8(b) exceed the net
proceeds received by such Selling Shareholder from the Underwriters
with respect to the sale of the Selling Shareholder Shares.
(d) Neither the Company nor the Selling Shareholder will,
without prior written consent of the Representatives, 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 Representative is a party to such
claim, action, suit or proceeding) unless such settlement, compromise
or consent includes an unconditional release of such Representative
from all liability arising out of such claim, action, suit or
proceeding (or related cause of action or portion thereof).
(e) Each Underwriter will indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the
Company within the meaning of the Securities Act and the Selling
Shareholder against any losses, claims, damages or liabilities to which
the Company or any such director, officer or controlling person or the
Selling Shareholder may become subject, under the Securities 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, any Preliminary Prospectus, the
-26-
Effective Prospectus or Final Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
the alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or Final Prospectus or
any amendment or supplement thereto 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 any Underwriter
specifically for use therein (it being understood that the only
information so provided is the information included in the last
paragraph on the cover page, the paragraph relating to stabilization
practices on the inside front cover and the first five paragraphs and
the last paragraph under the caption "Underwriting" in any Preliminary
Prospectus and in the Effective Prospectus and the Final Prospectus);
(f) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, including
governmental proceedings, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may wish, jointly with
any other counsel satisfactory to such indemnified party; and after
notice from the indemnifying party to such indemnified party of its
election to so assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation, except that the indemnified party shall have the right
to employ separate counsel if, in its reasonable judgment, it is
advisable for the indemnified party and any other similarly situated
indemnified party to be represented by separate counsel, and in that
event the fees and expenses of separate counsel shall be paid by the
indemnifying party. However, in no event, shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in
addition to local counsel, if any) separate from their own counsel for
all indemnified parties in connection with any action or separate, but
similar or related, actions arising out of the same general allegations
or circumstances.
(g) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the
preceding part of this Section 8 is for any reason held to be
unavailable to the Underwriters, the Company or the Selling
Shareholder or is insufficient to hold harmless an indemnified party,
then the Company and the Selling Shareholder shall contribute to the
damages paid by the Underwriters, and the Underwriters shall contribute
to the damages paid by the Company and the Selling Shareholder;
provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. In determining the
amount of contribution to which the respective parties are entitled,
there shall be considered the relative benefits received by each party
from the offering of the Shares (taking into account the portion of the
proceeds of the offering realized by each), the parties' relative
knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and prevent
any statement or omission, and any other equitable considerations
appropriate under the circumstances. The Company and the Selling
Shareholder and the Underwriters agree that it would not be equitable
if the amount of such contribution were determined by pro rata or per
capita allocation (even if the Underwriters were
-27-
treated as one entity for such purpose). No Underwriter or person
controlling such Underwriter shall be obligated to make contribution
hereunder which in the aggregate exceeds the underwriting discount
applicable to the Shares purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages which such
Underwriter and its controlling persons have otherwise been required to
pay in respect of the same or any similar claim. The Underwriters'
obligations to contribute hereunder are several in proportion to their
respective underwriting obligations and not joint. For purposes of this
Section, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Securities Act shall have the same rights
to contribution as such Underwriter, and each director of the Company,
each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, and the Selling Shareholder shall
have the same rights to contribution as the Company.
(h) The obligations of the Company and the Selling
Shareholder under this Section 8 shall be in addition to any liability
which the Company and the Selling Shareholder 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 Securities
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 to each person, if any,
who controls the Company within the meaning of the Securities Act and
to the Selling Shareholder.
9. DEFAULT OF UNDERWRITERS. If any Underwriter defaults in its
obligation to purchase Shares hereunder and if the total number of Shares which
such defaulting Underwriter agreed but failed to purchase is ten percent or less
of the total number of Shares to be sold hereunder, the non-defaulting
Underwriters shall be obligated severally to purchase (in the respective
proportions which the number of Shares set forth opposite the name of each
non-defaulting Underwriter in Schedule I hereto bears to the total number of
Shares set forth opposite the names of all the non-defaulting Underwriters) the
Shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase. If any Underwriter so defaults and the total number of Shares with
respect to which such default or defaults occur is more than ten percent of the
total number of Shares to be sold hereunder, and arrangements satisfactory to
the other Underwriters, the Company and the Selling Shareholder for the
purchase of such Shares by other persons (who may include the non-defaulting
Underwriters) are not made within 36 hours after such default, this Agreement,
insofar as it relates to the sale of the Shares, will terminate without
liability on the part of the non-defaulting Underwriters, the Company or the
Selling Shareholder except for (i) the provisions of Section 8 hereof, and (ii)
the expenses to be paid or reimbursed by the Company pursuant to Section 6
hereof. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 9. Nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. DEFAULT BY THE SELLING SHAREHOLDER. If the Selling Shareholder
shall fail to sell the number of Selling Shareholder Shares that the Selling
Shareholder is obligated to sell, the Representatives may, at their option, by
notice to the Company, either (a) require the Company to sell and deliver the
number of Selling Shareholder Shares as to which the Selling Shareholder has
defaulted or such lesser number as may be requested by the Representatives, (b)
elect to purchase the Firm Shares that the Company has agreed to sell pursuant
to this Agreement, or (c) terminate this Agreement without liability on the part
of the Underwriters or the Company, except for the provisions of Section 8
hereof and the expenses to be paid or reimbursed by the Company pursuant to
Section 6 hereof.
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In the event of a default under this Section 10 that does not result in
the termination of this Agreement, the Representatives shall have the right to
postpone the First Closing Date or Option Closing Date for a period not
exceeding ten days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. No action
taken pursuant to this Section shall relieve the Company or the Selling
Shareholder from liability, if any, in respect of such default.
11. SURVIVAL CLAUSE. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers, the Selling Shareholder and the Underwriters 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 (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, the Selling Shareholder, any Underwriter or any controlling person,
and(ii) delivery of and payment for the Shares. The respective representations,
warranties, agreements, covenants, indemnities and other statements set forth in
Sections 1, 2, 5 (other than paragraphs (c) and (m)), 6 and 8 hereof shall
remain in full force and effect, regardless of any termination of this
Agreement.
12. EFFECTIVE DATE. This Agreement shall become effective at whichever
of the following times shall first occur: (i) at 11:30 a.m., Eastern Time, on
the next full business day following the date on which the Registration
Statement becomes effective or (ii) at such time after the Registration
Statement has become effective as the Representatives shall release the Firm
Shares for sale to the public; provided, however, that the provisions of
Sections 6, 8, 11 and 12 hereof shall at all times be effective. For purposes of
this Section 12, the Firm Shares shall be deemed to have been so released upon
the release by the Representatives for publication, at any time after the
Registration Statement has become effective, of any newspaper advertisement
relating to the Firm Shares or upon the release by the Representatives of
telegrams offering the Firm Shares for sale to securities dealers, whichever may
occur first.
13. TERMINATION.
(a) This Agreement may be terminated by the Company by notice to the
Representatives at any time before it becomes effective in accordance with
Section 12 hereof.
(b) This Agreement may be terminated by the Representatives by notice
to the Company and the Selling Shareholder (i) at any time before it becomes
effective in accordance with Section 12 hereof; (ii) in the event that at or
prior to the First Closing Date the Company or the Selling Shareholder shall
have failed, refused or been unable to perform any agreement on the part of the
Company or the Selling Shareholder to be performed hereunder (or any other
condition to the obligations of the Underwriters hereunder is not fulfilled);
(iii) if at or prior to the Closing Date trading in securities on the New York
Stock Exchange or the American Stock Exchange shall have been suspended or
materially limited or minimum prices shall have been established on the New York
Stock Exchange or the American Stock Exchange, or a banking moratorium shall
have been declared by Federal or state authorities; (iv) if at or prior to the
Closing Date trading in securities of the Company shall have been suspended; or
(v) if there shall have been such a material change in general economic,
political or financial conditions or if the effect of international conditions
on the financial markets in the United States shall be such as, in your
reasonable judgment, makes it inadvisable to commence or continue the offering
of the Shares at the offering price to the public set forth on the cover page of
the Prospectus or to proceed with the delivery of the Shares.
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(c) Termination of this Agreement pursuant to this
Section 13 shall be without liability of any party to any other party other than
as provided in Sections 6 and 8 hereof.
14. NOTICES. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be mailed or delivered or telegraphed and
confirmed in writing to the Representatives in care of X. X. Xxxxxxxx & Co., One
Buckhead Plaza, 0000 Xxxxxxxxx Xx. XX, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000,
Attention: Xxx X. Xxxxxx, or, if sent to the Company or the Selling Shareholder,
shall be mailed, delivered or telegraphed and confirmed in writing to the
Company at 0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000,
Attention: Xxxx X. Xxxxxxx.
15. MISCELLANEOUS. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Company, the Selling Shareholder and
their respective successors and legal representatives. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Company, the Selling
Shareholder and the several Underwriters and for the benefit of no other person
except that (i) the representations and warranties of the Company and the
Selling Shareholder contained in this Agreement shall also be for the benefit
of any person or persons who control any Underwriter within the meaning of
Section 15 of the Securities Act, and (ii) the indemnities by the Underwriters
shall also be for the benefit of the directors of the Company, officers of the
Company who have signed the Registration Statement and any person or persons who
control the Company within the meaning of Section 15 of the Securities Act. No
purchaser of Shares from any Underwriter will be deemed a successor because of
such purchase. The validity and interpretation of this Agreement shall be
governed by the laws of the State of Tennessee. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument. You hereby
represent and warrant to the Company that you have authority to act hereunder on
behalf of the several Underwriters, and any action hereunder taken by you will
be binding upon all the Underwriters.
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If the foregoing is in accordance with your understanding of our
agreement, please indicate your acceptance thereof in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between the Company, the Selling Shareholder and each of the several
Underwriters.
Very truly yours,
THE INTERCEPT GROUP, INC.
By:
-----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chairman and CEO
SELLING SHAREHOLDER
By:
-----------------------------------
Attorney-in-Fact
Confirmed and accepted as of the date first above written.
X. X. XXXXXXXX & CO.
WHEAT FIRST SECURITIES, INC.
For themselves and as Representatives
of the Several Underwriters
By: X. X. Xxxxxxxx & Co.
By:
---------------------------------------
(Authorized Representative)
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SCHEDULE I
UNDERWRITERS
NUMBER OF OPTION
NUMBER OF SHARES TO BE PURCHASED
FIRM SHARES IF MAXIMUM
UNDERWRITER TO BE PURCHASED OPTION EXERCISED
----------- --------------- -----------------------
X. X. Xxxxxxxx & Co.
Wheat First Securities, Inc.
--------- -------
TOTAL 2,387,500 358,125
========= =======
SCHEDULE II
SCHEDULE OF SELLING SHAREHOLDER
FIRM SHARES
NUMBER OF FIRM SHARES
SELLING SHAREHOLDER: TO BE SOLD
-------------------- ---------------------
Vir A. Nanda 137,500
TOTAL 137,500
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