EXHIBIT 1.1
Foundation Capital Resources Inc.
UP TO $55,000,000 OF CERTIFICATES OF INDEBTEDNESS
$5,000 (Minimum Purchase) Certificates of Indebtedness
UNDERWRITING AGREEMENT
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January __, 2002
Gentlemen:
Foundation Capital Resources, Inc. (the "Company"), a Georgia
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corporation hereby confirms its respective agreements with Rives, Leavell & Co.,
Inc. ("Xxxxx"), a broker-dealer registered with the Securities and Exchange
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Commission ("Commission") and a member of the National Association of Securities
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Dealers, Inc. ("NASD"), as follows:
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1. Introduction.
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The Company desires to offer up to $55,000,000 certificates of
indebtedness ("Certificates") in an offering pursuant to the Securities Act of
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1933, as amended (the "1933 Act") (the "Offering"). The Company has been advised
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by Xxxxx that it desires to use its best efforts to assist the Company with its
sale of the Certificates in the Offering pursuant to this agreement (the
"Agreement").
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2. Representations and Warranties of the Company. The Company
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represents and warrants to Xxxxx that:
(a) The Company has filed with the Commission a registration
statement on Form S-11, including exhibits and all amendments and supplements
thereto (No. 333-__________), for the registration of the Certificates under the
1933 Act. Such registration statement has been declared effective under the 1933
Act and no proceedings therefor have been initiated or, to the best of the
Company's knowledge, threatened by the Commission (provided that for this
purpose the Company shall not regard any such proceeding as "threatened" unless
the Commission has manifested to the management of the Company, or to its
counsel, a present intention to initiate such proceeding). Such registration
statement, as amended or supplemented, if amended or supplemented, on file with
the Commission at the time the registration statement becomes effective,
including the financial statements, schedules, exhibits and all other documents
filed as part thereof, is herein called the "Registration Statement."
(b) As of the date of the Registration Statement (as amended or
supplemented, if amended or supplemented) it: (i) complied and will comply in
all material respects with the
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1933 Act, (ii) did not and will not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
(iii) did not and will not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Representations or warranties in this subsection shall not apply to statements
or omissions made in reliance upon and in conformity with written information
furnished to the Company relating to Xxxxx by or on behalf of Xxxxx expressly
for use in the Registration Statement.
(c) The Company is duly organized as a business corporation under the
laws of the State of Georgia, and is validly existing and in good standing under
the laws of the State of Georgia with full power and authority to own its
property and conduct its business as described in the Registration Statement.
(d) The Company has good, marketable and insurable title to all
assets material to its business and to those assets described in the
Registration Statement as owned by the Company, free and clear of all material
liens, charges, encumbrances or restrictions, except as are described in the
Registration Statement, and all of the leases and subleases of the Company under
which it holds properties, including those described in the Registration
Statement, are in full force and effect as described therein.
(e) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized by
all necessary action on the part of the Company, and this Agreement is a valid
and binding obligation of the Company, enforceable in accordance with its terms
(except as the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally or by general equity principles),
regardless of whether such enforceability is considered in a proceeding in
equity or at law, and except to the extent that the provisions of Sections 7 and
8 hereof may be unenforceable as against public policy.
(f) There is no litigation or governmental proceeding pending or, to
the knowledge of the Company, threatened against or involving the Company or any
of its assets except as required to be disclosed in the Registration Statement.
Any litigation or governmental proceeding is not considered "threatened" unless
the potential litigant or governmental authority has manifested to the
management of the Company, or to their counsel, a present intention to initiate
such litigation or proceeding.
(g) The Company has received the opinion of Xxxxxx Xxxxxxx Xxxxxxxxx
& Xxxx, PLLC, Atlanta, Georgia, with respect to federal income tax consequences
of a real estate investment trust which is filed as an exhibit to the
Registration Statement and the facts relied upon in such opinions are true,
accurate and complete.
(h) The Company has all power, authority, authorizations, approvals
and orders as may be required to enter into this Agreement, to carry out the
provisions and conditions hereof and to issue and sell the Certificates to be
sold by it as provided herein.
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(i) The financial statements of the Company which are included in the
Registration Statement and are part of the Registration Statement fairly present
the financial condition, results of operations, retained earnings and cash flows
of the Company at the respective dates thereof and for the respective periods
covered thereby and comply as to form in all material respects with applicable
accounting requirements of the regulations promulgated under the 1933 Act (the
"1933 Act Regulations"). Such financial statements have been prepared according
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to generally accepted accounting principles consistently applied throughout the
periods involved except as noted therein. The tables in the Registration
Statement accurately present the information purported to be shown thereby at
the respective dates thereof and for the respective periods covered thereby.
(j) There has been no material change with respect to the condition
(financial or otherwise) results of operations, business, assets or properties
of the Company since the latest date as of which such condition on the latest
period for which such operations is set forth in the Registration Statement
except as referred to therein; and the capitalization, assets, properties and
businesses of the Company conform in all material respects to the descriptions
thereof contained in the Registration Statement as of the date specified and,
since such date, there has been no material adverse effect on the Company. The
Company does not have any contingent liabilities, except as set forth in the
Registration Statement.
(k) No default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default, on the part of the Company,
to the best knowledge of the Company, on its part in the due performance and
observance of any material term, covenant or condition of any agreement which
would result in a material adverse effect on the Company; said agreements are in
full force and effect; and no other party to any such agreement has instituted
or, to the best knowledge of the Company, threatened any action or proceeding
wherein the Company, would be alleged to be in default thereunder.
(l) The Company is not in violation of its Second Amended and
Restated Articles of Incorporation or Bylaws or in default in the performance of
any material obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness. The execution and
delivery of this Agreement, the fulfillment of the terms set forth herein and
the consummation of the transactions contemplated hereby shall not violate or
conflict with the Second Amended and Restated Articles of Incorporation or
Bylaws of the Company or violate, conflict with or constitute a breach of, or
default (or an event which, with notice or lapse of time, or both, would
constitute a default) in any material respects under, any agreement, indenture
or other instrument by which any of the Company is bound, or under any
governmental license or permit or any law, administrative regulation,
authorization, approval, order, court decree, injunction or order, except as may
be required under the blue sky laws and regulations (collectively, the "Blue Sky
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Laws") of various jurisdictions.
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(m) Subsequent to the respective dates as of which information is
given in the Registration Statement and prior to the date of closing ("Closing
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Date"), except as otherwise may be indicated or contemplated therein, the
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Company has not issued any securities or incurred
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any liabilities or obligation, direct or contingent, for borrowed money, or
entered into any transaction which is material in light of the businesses and
properties of the Company.
(n) The authorized, issued and outstanding equity capital of the
Company shall be as set forth in the Registration Statement under the caption
"Capitalization," and no equity or debt securities of the Company has been or
shall be issued and outstanding prior to the Closing Date except as discussed
under the caption "Capitalization" and "Concurrent Private Offering"; the
issuance and the sale of the Certificates have been duly authorized by all
necessary action of the Company and shall be validly issued, fully paid and
nonassessable and shall conform to the description thereof contained in the
Registration Statement; and good title to the Certificates will be transferred
to the purchasers thereof upon issuance thereof against payment therefore, free
and clear of all claims, encumbrances, security interests and liens whatsoever,
with respect to the Company's interest in such Certificates.
(o) No approval of any regulatory, supervisory or other public
authority is required in connection with the execution and delivery of this
Agreement or the issuance of the Certificates, except as may be required by the
Commission and under the Blue Sky Laws of various jurisdictions.
(p) All contracts and other documents required to be filed as
exhibits to the Registration Statement have been filed with the Commission.
(q) BKD, LLP, who has audited the financial statements of the
Company included in the Registration Statement for the fiscal year ended
December 31, 2000, is, and was during the periods covered in its report in the
Registration Statement, an independent public accountant with respect to the
Company within the meaning of the 1933 Act, the 1933 Act Regulations, the Code
of Professional Ethics of the American Institute of Certified Public Accountants
and 12 C.F.R. 571.2(c)(3).
(r) The Company has not made any payment of funds of the Company
prohibited by law and no funds of the Company have been set aside to be used for
any payment prohibited by law.
(s) All documents delivered by the Company in connection with the
issuance and sale of the Certificates, except for those documents which were
prepared by parties other than the Company, were on the dates on which they were
delivered, true, complete and correct.
(t) To the best knowledge of the Company, it complies with all laws,
rules and regulations relating to environmental protection, and the Company has
not been notified or is otherwise aware that it is potentially liable, or is
considered potentially liable, under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any similar state or
local laws. There are no actions, suits, regulatory investigations or other
proceedings pending or, to the best knowledge of the Company, threatened against
the Company relating to environmental protection, nor does the Company have any
reason to believe any such proceedings may be brought against it. To the best
knowledge of the Company, no disposal, release or discharge of hazardous or
toxic substances, pollutants or contaminants, including
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petroleum and gas products, as any of these terms may be defined under
applicable federal, state or local laws, has occurred on, in, at or about any of
the facilities or properties of the Company or any of the facilities or
properties pledged to the Company as collateral for any loan or other extension
of credit granted by the Company.
2. Representations and Warranties of Xxxxx. Xxxxx represents and
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warrants to the Company that:
(a) Xxxxx is registered as a broker-dealer with the Commission and a
member of the NASD, and is in good standing with the Commission and the NASD.
(b) Xxxxx is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, with full corporate power
and authority to provide the services to be furnished to the Company hereunder.
(c) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Xxxxx, and this
Agreement is a legal valid and binding obligation of Xxxxx, enforceable in
accordance with its terms (except as the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, reorganization or similar laws relating
to or affecting the enforcement of creditors' rights generally or by general
equity principles, regardless of whether such enforceability is considered in a
proceeding in equity or at law, and except to the extent that the provisions of
Sections 7 and 8 hereof may be unenforceable as against public policy).
(d) Xxxxx and each of its employees, agents and representatives who
shall perform any of the services required hereunder to be performed by Xxxxx
shall be duly authorized and shall have all licenses, approvals and permits
necessary, to perform such services, and Xxxxx is a registered selling agent in
the jurisdictions in which the Certificates are to be offered for sale and will
remain registered in such jurisdictions in which the Company is relying on such
registration for the sale of the Certificates.
(e) The execution and delivery of this Agreement by Xxxxx, the
fulfillment of the terms set forth herein and the consummation of the
transactions contemplated hereby shall not violate or conflict with the
corporate charter or bylaws of Xxxxx or violate, conflict with or constitute a
breach of, or default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, any material agreement, indenture or other
instrument by which Xxxxx is bound or under any governmental license or permit
or any law, administrative regulation, authorization, approval or order or court
decree, injunction or order.
(f) Any funds received by Xxxxx to purchase Certificates will be
handled in accordance with Rule 15c2-4 under the 0000 Xxx.
(g) There is not now pending nor, to Xxxxx' knowledge, threatened
against Xxxxx any action or proceeding before the Commission, the NASD, any
state securities commission or any state or federal court concerning Xxxxx'
activities as a broker-dealer.
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3. Employment of Xxxxx; Sale and Delivery of the Certificates. On the
basis of the representations and warranties herein but subject to the terms and
conditions set forth in this Section 3, the Company hereby employs Xxxxx as its
agent to use its best efforts in assisting the Company with the Company's sale
of the Certificates in the Offering. The employment of Xxxxx hereunder shall
terminate upon completion of the Offering.
Appropriate arrangements for placing the funds received from
subscriptions for the Certificates as described in the Registration Statement
were made prior to the commencement of the Offering for delivery to the Company
once Certificates are sold.
Upon completion of the Offering, the Company agrees to allocate
interest to the Certificate holders (the Offering will be noncertificated) and
shall promptly remit any compensation due hereunder to Xxxxx.
Xxxxx shall receive as compensation for its services hereunder, a
commission equal to ine quarter of a percent (0.25%) of the purchase price of
the Certificates due January 1, 2003, one percent (1.0%) of the purchase price
of the Certificates due January 1, 2005, one and one-half percent (1.5%) of the
purchase price of the Certificates due January 1, 2007, two percent (2%) of the
purchase price of the Certificates due January 1, 2009 and two percent (2%) of
the purchase price of the Certificates due January 1, 2012 sold by Xxxxx in the
Offering. Additionally, in the case of those Certificates whose holder has made
an election to renew the Certificates, at the time of purchase, the Company will
pay Xxxxx, upon the respective maturity and renewal of such Certificates, a
renewal fee equal to one half percent (.5%) of the aggregate gross amount of
Certificates due January 1, 2003, 2005, 2007, 2009 and 2012.
The Company shall pay all Certificate issue and transfer taxes, if
any, with respect to the sale of the Certificates. The Company shall pay all of
its expenses relating to any required Blue Sky or state securities laws,
research and filings.
4. Offering. Subject to the provisions of Section 6 hereof, Xxxxx is
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assisting the Company on a best efforts basis in offering up to $55,000,000 in
Certificates in the Offering. The Certificates are to be offered to the public
at the price set forth on the cover page of the Registration Statement.
5. Further Agreements. The Company covenants and agrees that:
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(a) The Company shall deliver to Xxxxx, from time to time, such
number of copies of the Registration Statement as Xxxxx reasonably may request.
The Company authorizes Xxxxx to use the Registration Statement in connection
with the offer and sale of the Certificates.
(b) The Company shall notify Xxxxx immediately, and confirm the
notice in writing, (i) when the Registration Statement is declared effective by
the Commission, (ii) of the issuance by the Commission of any stop order
relating to the Registration Statement or of the initiation or the threat of any
proceedings for that purpose, (iii) of the receipt of any notice with respect to
the suspension of the qualification of the Certificates for offering or sale in
any
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jurisdiction and (iv) of the receipt of any comments from the staff of the
Commission relating to the Registration Statement. If the Commission enters a
stop order relating to the Registration Statement, the Company will make every
reasonable effort to obtain the lifting of such order(s) as soon as possible.
(c) During the time when the Registration Statement is required to be
delivered under the 1933 Act, the Company will comply with all requirements
imposed upon it by the 1933 Act, as now in effect and hereafter amended, and by
the 1933 Act Regulations, as from time to time in force, so far as necessary to
permit the continuance of offers and sales of or dealings in the Certificates in
accordance with the provisions hereof and the Registration Statement. If during
the period when the Registration Statement is used in connection with the offer
and sale of the Certificates any event relating to or affecting the Company
shall occur as a result of which it is necessary, in the opinion of both counsel
for Xxxxx and counsel for the Company, to amend or supplement the Registration
Statement in order to make the Registration Statement not false or misleading in
light of the circumstances existing at the time it is delivered to a purchaser
of the Certificates, the Company forthwith shall prepare and furnish to Xxxxx a
reasonable number of copies of an amendment or amendments or of a supplement or
supplements to the Registration Statement (in form and substance satisfactory to
counsel for Xxxxx) which shall amend or supplement the Registration Statement so
that, as amended or supplemented, the Registration Statement shall not contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
existing at the time the Registration Statement is delivered to a purchaser of
the Certificates, not misleading. The Company will not file or use any amendment
or supplement to the Registration Statement of which Xxxxx has not first been
furnished a copy or to which Xxxxx shall reasonably object after having been
furnished such copy. For the purposes of this subsection, (c) the Company shall
furnish such information with respect to itself as Xxxxx from time to time may
reasonably request.
(d) The Company shall take all necessary action and furnish to counsel
for the Company such information as may be required to qualify or register the
Certificates for offer and sale by the Company under the Blue Sky Laws of such
jurisdictions as Xxxxx and the Company may reasonably agree upon; provided,
however, that the Company shall not be obligated to qualify as a foreign
corporation to do business under the laws of any such jurisdiction. In each
jurisdiction where such qualification or registration shall be effected, the
Company, unless Xxxxx agrees that such action is not necessary or advisable in
connection with the distribution of the Certificates, shall file and make such
statements or reports as are, or reasonably may be, required by the laws or
regulations of such jurisdiction.
(e) For three (3) years from the date of this Agreement, the Company
shall furnish Xxxxx, (i) as soon as publicly available after the end of each
fiscal year, a copy of its annual report to stockholders for such year; and the
Company will furnish Xxxxx a copy of each report mailed to shareholders, and
(ii) from time to time, such other public information concerning the Company as
Xxxxx may reasonably request.
(f) The Company shall use the net proceeds from the sale of the
Certificates in the manner set forth in the Registration Statement under the
caption "Use of Proceeds."
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(g) The Company shall not allocate Certificate holder interest until
it has satisfied all conditions set forth in Section 6 hereof, unless such
condition is waived in writing by Xxxxx.
(h) The Company will take such actions and furnish such information
as are reasonably requested by Xxxxx in order for Xxxxx to ensure compliance
with any NASD requests.
6. Conditions of Xxxxx' Obligations. Except as may be waived in writing
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by Xxxxx, the obligations of Xxxxx as provided herein shall be subject to the
accuracy of the representations and warranties contained in Section 2 hereof as
of the date hereof, to the accuracy of the statements of officers and directors
of the Company made pursuant to the provisions hereof, to the performance by the
Company of their obligations hereunder and to the following conditions:
(a) Counsel for Xxxxx shall have been furnished such documents as
they reasonably may require for the purpose of evidencing the accuracy,
completeness or satisfaction of any of the representations, warranties or
conditions herein contained, including but not limited to, resolutions of the
Board of Directors of the Company regarding the authorization of this Agreement
and the transactions contemplated hereby.
(b) Upon the completion of the Offering, in the reasonable opinion of
Xxxxx, (i) there shall have been no material adverse change in the condition or
affairs, financial or otherwise, of the Company from that as of the latest date
as of which such condition is set forth in the Registration Statement, except as
referred to therein; (ii) there shall have been no material transactions entered
into by the Company from the latest date as of which the financial condition of
the Company is set forth in the Registration Statement other than transactions
referred to or contemplated therein and transactions by the Company in the
ordinary course of business; (iii) no action, suit or proceeding, at law or in
equity or before or by any federal or state commission, board or other
administrative agency, shall be pending or to the Company's best knowledge
threatened against the Company or affecting any of their respective assets,
wherein an unfavorable decision, ruling or finding would result in a material
adverse effect on the Company; and (iv) the Certificates shall have been
qualified or registered for offering and sale by the Company under the Blue Sky
Laws of such jurisdictions as Xxxxx and the Company shall have agreed upon.
(c) Upon the completion of the Offering, Xxxxx shall receive a
certificate of the President of the Company, dated as of the completion date of
the Offering, that states: (i) he has carefully examined the Registration
Statement, and it does not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading; (ii)
since the date the Registration Statement became effective, no event has
occurred which should have been set forth in an amendment or supplement to the
Registration Statement which has not been so set forth, including specifically,
but without limitation, any event that has or may have a material adverse effect
on the Company, and the conditions set forth in clauses (ii) and (iii) of
subsection (b) of this Section 6 have been satisfied; (iii) no order has been
issued by the Commission to suspend the Offering or the effectiveness of the
Registration Statement and, to the best knowledge of such
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officers, no action for such purposes has been instituted or threatened by
the Commission; and, (iv) all of the representations and warranties contained in
Section 2 of this Agreement are true and correct, with the same force and effect
as though expressly made on the date of the completion of the Offering.
(d) Upon the completion of the Offering, Xxxxx shall receive, among
other documents, (i) a copy of the order of the Commission declaring the
Registration Statement effective; (ii) a copy of the letter from the Georgia
Secretary of State evidencing the good standing of the Company; (iii) a copy of
the Company's Second Amended and Restated Articles of Incorporation certified by
the Georgia Secretary of State.
All such certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Xxxxx and its counsel, satisfactory to Xxxxx and its counsel. Any
certificates signed by an officer or director of the Company and delivered to
Xxxxx or to counsel for Xxxxx shall be deemed a representation and warranty by
the Company to Xxxxx as to the statements made therein. If any condition to
Xxxxx' obligations hereunder to be fulfilled prior to or upon the completion of
the Offering is not so fulfilled, Xxxxx, in its sole discretion, may terminate
this Agreement or, if Xxxxx, in its sole discretion so elects, may waive any
such conditions which have not been fulfilled, or may extend the time of their
fulfillment.
7. Indemnification.
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(a) The Company agrees to indemnify and hold harmless Xxxxx, its
officers, directors and employees and all persons who control Xxxxx within the
meaning of Section 15 of the 1933 Act or Section 20(a) of the Securities
Exchange Act of 1934 (the "1934 Act"), against any and all loss, liability,
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claim, damage and expense whatsoever that such indemnified persons shall suffer
and shall further reimburse promptly such persons for any legal or other
expenses reasonably incurred by each or any of them investigating, preparing to
defend or defending against any such action, proceeding or claim (whether
commenced or threatened) arising out of any misrepresentation by the Company in
this Agreement, or any breach of warranty by the Company with respect to this
Agreement or arising out of or based upon any untrue or alleged untrue statement
of a material fact or the omission or alleged omission of a material fact
necessary to make it not misleading in light of the circumstances under which it
was made, any statements contained in the Registration Statement or prepared or
executed by or on behalf of the Company or based upon information furnished by
or on behalf of the Company with their consent, whether or not filed in any
jurisdiction, to effect the qualification of the Certificates under the Blue Sky
Laws thereof or filed with the Commission, unless such statement or omission was
made in reliance upon and in conformity with written information furnished to
the Company with respect to Xxxxx by or on behalf of Xxxxx expressly for use in
the Registration Statement or any amendment or supplement thereof, or any
unwritten statement made with the Company's consent to a purchaser of the
Certificates by any director or officer or any person employed by or associated
with the Company other than Xxxxx, its officers, directors or employees. This
indemnity shall be in addition to any other liability the Company may have to
Xxxxx.
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(b) Xxxxx agrees to indemnify and hold harmless the Company, its
officers, directors and employees and all persons who control the Company within
the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, to
the same extent as the foregoing indemnity from the Company to Xxxxx, but only
with respect to any statements or omissions made in the Registration Statement
or any amendment or supplement thereof in reliance upon, and in conformity with,
written information furnished to the Company with respect to Xxxxx by or on
behalf of Xxxxx expressly for use in the Registration Statement. This indemnity
shall be in addition to any other liability that Xxxxx may have to the Company.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party shall, if
a claim in respect thereof is to be made against the indemnifying party under
this Section 7, notify the indemnifying party of the commencement thereof, but
the omission to so notify the indemnifying party shall not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Section 7. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it may wish, jointly with the other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under this Section 7 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than the
reasonable cost of investigation except as otherwise provided herein. In the
event the indemnifying party elects to assume the defense of any such action and
retain counsel acceptable to the indemnified party, the indemnified party may
retain additional counsel, but shall bear the fees and expenses of such counsel
unless (i) the indemnifying party shall have specifically authorized the
indemnified party to retain such counsel or (ii) the parties to such suit
include such indemnifying party and the indemnified party, and such indemnified
party shall have been advised by counsel that one or more material legal
defenses may be available to the indemnified party which may not be available to
the indemnifying party, in which case the indemnifying party shall not be
entitled to assume the defense of such suit notwithstanding the indemnifying
party's obligation to bear the fees and expenses of such counsel. An
indemnifying party against who indemnity may be sought shall not be liable to
indemnify an indemnified party under this Section 7 if any settlement of any
such action is effected without such indemnifying party's consent.
8. Contribution. In order to provide for just and equitable contribution
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in circumstances in which the indemnity agreement provided for in Section 7
above is for any reason held to be unavailable to the Company or Xxxxx other
than in accordance with its terms, the Company and Xxxxx shall contribute to the
aggregate losses, liabilities, claims, damages, and expenses of the nature
contemplated by said indemnity agreement incurred by the Company and Xxxxx (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and Xxxxx on the other from the offering of the
Certificates or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above, but also the
relative fault of the Company on the one hand and Xxxxx on the other in
connection with the
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statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and Xxxxx on the other shall be deemed to be in the same proportion as the net
proceeds from the Offering received by the Company bear to the total fees
received by Xxxxx under this Agreement. The relative fault of the Company on the
one hand and Xxxxx on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by Xxxxx and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and Xxxxx agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any person who is
innocent of such fraudulent misrepresentation.
9. Survival of Agreements, Representations and Indemnities. The
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respective indemnities of the Company and Xxxxx and the representations and
warranties of the Company set forth in or made pursuant to this Agreement shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of Xxxxx or the
Company or any controlling person or indemnified party referred to in Section 8
hereof, and shall survive any termination or consummation of this Agreement
and/or the issuance of the Certificates, and any legal representative of Xxxxx,
the Company and any such controlling persons shall be entitled to the benefit of
the respective agreements, indemnities, warranties and representations.
10. Termination. The Company or Xxxxx may terminate this Agreement by
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giving the notice indicated in the subsection below at any time after this
Agreement becomes effective as follows:
(a) If any domestic or international event or act or occurrence has
materially disrupted the U.S. securities markets such as to make it, in Xxxxx'
reasonable opinion, impracticable to proceed with the offering of the
Certificates; or if the United States shall have become involved in a war or
major hostilities; or if a moratorium in foreign exchange trading by major
international banks or persons has been declared; or if there shall have been a
material adverse change in the capitalization, condition or business of the
Company.
(b) If any party hereto elects to terminate this Agreement as
provided in this Section, such party shall notify the other parties hereto
promptly by telephone or telegram, confirmed by letter and delivered by an
overnight courier service the same day.
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11. Notices. All communications hereunder, except as herein otherwise
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specifically provided, shall be in writing and if sent to Xxxxx shall be mailed,
delivered or faxed and confirmed to _________________________,
_________________________________, __________, _____________, or if sent to the
Company, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx, Attention: X.X. Xxxxxxxx,
President and Chief Executive Officer (with a copy to Xxxxxx Xxxxxxx Xxxxxxxxx &
Xxxx, PLLC, 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000,
Attention: Xxxxxx X. Xxxx, Esq.).
12. Governing Law. This Agreement shall be governed by the laws of the
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State of Georgia unless Federal law shall be deemed to apply.
13. Severability. Any provision of this Agreement found to be invalid,
------------
unenforceable, or otherwise limited by law or regulation shall not effect the
validity or enforceability of the remaining terms of this Agreement.
14. Miscellaneous.
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(a) Time shall be of the essence of this Agreement.
(b) This Agreement is made solely for the benefit of and will be
binding upon the parties hereto and their respective successors and the
controlling persons, directors and officers referred to in Section 7 hereof, and
no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of any of the Certificates.
(c) This Agreement sets forth the entire understanding and agreement
among the parties hereto representing the subject matter hereof and supersedes
and cancels all prior agreements and understanding, written or oral.
(d) This Agreement may be signed in various counterparts which
together will constitute one agreement.
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If the foregoing correctly sets forth the arrangement between the
Company and Xxxxx, please indicate acceptance thereof in the space provided
below for that purpose, whereupon this letter and your acceptance shall
constitute a binding agreement.
Yours very truly,
Foundation Capital Resources, Inc.
By:________________________________
X.X. Xxxxxxxx, Chief Executive Officer
and President
Agreed to and accepted
this ____ day of __________ 2002
Rives, Leavell & Co., Inc.
By:_______________________
Name: __________________________
Title:__________________________
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