1
EXHIBIT 1.1
DRAFT - SUBJECT TO NEGOTIATIONS
1,250,000 Shares
HOMECOM COMMUNICATIONS, INC.
Common Stock ($.0001 Par Value)
UNDERWRITING AGREEMENT
____, 0000
XXXXXXXXX XXXXXXXX & CO. INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. HomeCom Communications, Inc., a
Delaware corporation (the "Company"), proposes to sell, pursuant to the terms
of this Agreement, to Ladenburg Xxxxxxxx & Co. Inc. (the "Underwriter"), an
aggregate of 1,250,000 shares of Common Stock, $.0001 par value (the "Common
Stock"), of the Company. The aggregate of 1,250,000 shares so proposed to be
sold is hereinafter referred to as the "Firm Stock". The Company also proposes
to sell to the Underwriters, upon the terms and conditions set forth in Section
3 hereof, up to an additional 187,500 shares of Common Stock (the "Option
Stock"). The Firm Stock and the Option Stock are hereinafter collectively
referred to as the "Stock".
2. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, the Underwriter that:
(i) A registration statement on Form
S-1 (File No. 333-12219) in the form in which it
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became or becomes effective and also in such form as it
may be when any post-effective amendment thereto shall become
effective with respect to the Stock, including any
pre-effective prospectuses included as part of the
registration statement as originally filed or as part of any
amendment or supplement thereto, or filed pursuant to Rule 424
under the Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, copies of which have heretofore been
delivered to you, has been carefully prepared by the Company
in conformity with the requirements of the Securities Act and
has been filed with the Commission under the Securities Act;
one or more amendments to such registration statement,
including in each case an amended pre-effective prospectus,
copies of which amendments have heretofore been delivered to
you, have been so prepared and filed. Such registration
statement is referred to hereinafter as the "Registration
Statement". If it is contemplated, at the time this Agreement
is executed, that a post-effective amendment to the
Registration Statement will be filed and must be declared
effective before the offering of the Stock may commence, the
term "Registration Statement" as used in this Agreement means
the Registration Statement as amended by said post-effective
amendment. The term "Registration Statement" as used in this
Agreement shall also include any registration statement
relating to the Stock that is filed and declared effective
pursuant to Rule 462(b) under the Securities Act. The term
"Prospectus" as used in this Agreement means the prospectus in
the form included in the Registration Statement, or, (A) if
the prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Securities Act
and such information is included in a prospectus filed with
the Commission pursuant to Rule 424(b) under the Securities
Act, the term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement
as supplemented by the addition of the Rule 430A information
contained in the prospectus filed with the Commission pursuant
to Rule 424(b) and (B) if prospectuses that meet the
requirements of Section
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10 (a) of the Securities Act are delivered pursuant to Rule
434 under the Securities Act, then (i) the term "Prospectus"
as used in this Agreement means the "prospectus subject to
completion" (as such term is defined in Rule 434 (g) under the
Securities Act) as supplemented by (a) the addition of Rule
430A information or other information contained in the form of
prospectus delivered pursuant to Rule 434(b)(2) under the
Securities Act or (b) the information contained in the term
sheets described in Rule 434 (b) (3) under the Securities Act,
and (ii) the date of such prospectuses shall be deemed to be
the date of the term sheets. The term "Pre-effective
Prospectus" as used in this Agreement means the prospectus
subject to completion in the form included in the Registration
Statement at the time of the initial filing of the
Registration Statement with the Commission, and as such
prospectus shall have been amended from time to time prior to
the date of the Prospectus.
(ii) The Commission has not issued or
threatened to issue any order preventing or suspending the
use of any Pre-effective Prospectus, and, at its date of
issue, each Pre-effective Prospectus conformed in all material
respects with the requirements of the Securities Act and
did not include any untrue statement of a material fact
or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and,
when the Registration Statement becomes effective and at all
times subsequent thereto up to and including the Closing
Date[s], the Registration Statement and the Prospectus and any
amendments or supplements thereto contained and will contain
all material statements and information required to be
included therein by the Securities Act and conformed and will
conform in all material respects to the requirements of the
Securities Act and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, included
or will include any untrue statement of a material fact or
omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided,
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however, that the foregoing representations, warranties and
agreements shall not apply to information contained in or
omitted from any Pre-effective Prospectus or the Registration
Statement or the Prospectus or any such amendment or
supplement thereto in reliance upon, and in conformity with,
written information furnished to the Company by or on your
behalf specifically for use in the preparation thereof; there
is no franchise, lease, contract, agreement or document
required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed therein as required;
and all descriptions of any such franchises, leases,
contracts, agreements or documents contained in the
Registration Statement are accurate and complete descriptions
of such documents in all material respects.
(iii) Subsequent to the respective dates as of
which information is given in the Registration
Statement and Prospectus, and except as set forth or
contemplated in the Prospectus, the Company has not incurred
any liabilities or obligations, direct or contingent, nor
entered into any transactions not in the ordinary course of
business, and there has not been any material adverse change
in the condition (financial or otherwise), properties,
business, management, prospects, net worth or results of
operations of the Company or any change in the capital stock,
short-term or long-term debt of the Company.
(iv) The financial statements, together with the
related notes and schedules, set forth in the Prospectus and
elsewhere in the Registration Statement fairly present, on the
basis stated in the Registration Statement, the financial
position and the results of operations and changes in
financial position of the Company at the respective dates or
for the respective periods therein specified. Such statements
and related notes and schedules have been prepared in
accordance with generally accepted accounting principles
applied on a consistent basis except as may be set forth in
the Prospectus. The selected financial and pro forma financial
data set forth in the Prospectus under the
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caption "SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA"
fairly present, on the basis stated in the Registration
Statement, the information set forth therein.
(v) Coopers & Xxxxxxx L.L.P., who have
expressed their opinions on the audited financial statements
and related schedules included in the Registration Statement
and the Prospectus, are independent public accountants as
required by the Securities Act and the Rules and
Regulations.
(vi) The Company has been duly organized and is
validly existing and in good standing as a corporation under
the laws of its jurisdiction of organization, with power and
authority (corporate and other) to own or lease its properties
and to conduct its business as described in the Prospectus;
the Company is in possession of and operating in compliance
with all franchises, grants, authorizations, licenses,
permits, easements, consents, certificates and orders required
for the conduct of its business, all of which are valid and in
full force and effect; and the Company is duly qualified to do
business and in good standing as a foreign corporation in all
other jurisdictions where its ownership or leasing of
properties or the conduct of its business requires such
qualification. The Company has all requisite power and
authority, and all necessary consents, approvals,
authorizations, orders, registrations, qualifications,
licenses and permits of and from all public regulatory or
governmental agencies and bodies to own, lease and operate its
properties and conduct its business as now being conducted and
as described in the Registration Statement and the Prospectus,
and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a
materially burdensome restriction not adequately disclosed in
the Registration Statement and the Prospectus. The Company
does not own or control, directly or indirectly, any
corporation, association or other entity.
(vii) The Company's authorized and outstanding
capital stock is on the date hereof, and will be on the
Closing Date[s], as set forth under the
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heading "Capitalization" in the Prospectus; the outstanding
shares of Common Stock conform to the description thereof in
the Prospectus and have been duly authorized and validly
issued and are fully paid and nonassessable and have been
issued in compliance with all federal and state securities
laws and were not issued in violation of or subject to any
preemptive rights or similar rights to subscribe for or
purchase securities and conform to the description thereof
contained in the Prospectus. Except as disclosed in and or
contemplated by the Prospectus and the financial statements of
the Company and related notes thereto included in the
Prospectus, the Company does not have outstanding any options
or warrants to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, any securities or
obligations convertible into, or any contracts or commitments
to issue or sell, shares of its capital stock or any such
options, rights, convertible securities or obligations. The
description of the Company's stock option and other stock
plans or arrangements, and the options or other rights granted
or exercised thereunder, as set forth in the Prospectus,
accurately and fairly presents the information required to be
shown with respect to such plans, arrangements, options and
rights.
(viii) The shares of Stock to be issued and sold
by the Company to the Underwriter hereunder have been
duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and
validly issued, fully paid and nonassessable and free of any
preemptive or similar rights and will conform to the
description thereof in the Prospectus. The shares of Common
Stock issuable upon exercise of the Warrants (as hereinafter
defined) have been duly and validly authorized and, when
issued and delivered against payment therefor in accordance
with the terms thereof, will be duly and validly issued, fully
paid and nonassessable and free of any preemptive or similar
rights.
(ix) Except as set forth in the Prospectus,
there are no legal or governmental proceedings pending to
which the Company is a party or of which any property of the
Company is subject, which,
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if determined adversely to the Company, might individually or
in the aggregate (i) prevent or adversely affect the
transactions contemplated by this Agreement, (ii) suspend the
effectiveness of the Registration Statement, (iii) prevent or
suspend the use of the Pre-effective Prospectus in any
jurisdiction or (iv) result in a material adverse change in
the condition (financial or otherwise), properties, business,
management, prospects, net worth or results of operations of
the Company; and to the best of the Company's knowledge, no
such proceedings are threatened or contemplated against the
Company by governmental authorities or others. The Company is
not a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory
body or other governmental agency or body. The description of
the Company's litigation under the heading "Business -- Legal
Proceedings" in the Prospectus is true and correct and
complies with the Rules and Regulations.
(x) The execution, delivery and performance of
this Agreement and the consummation of the transactions
herein contemplated will not result in a breach or violation
of any of the terms or provisions of or constitute a default
under any indenture, mortgage, deed of trust, note agreement
or other agreement or instrument to which the Company is a
party or by which it or any of its properties is or may be
bound, the Certificate of Incorporation, By-laws or other
organizational documents of the Company or any law, order,
rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its properties
or will result in the creation of a lien.
(xi) No consent, approval, authorization or
order of any court or governmental agency or body is
required for the consummation by the Company of the
transactions contemplated by this Agreement, except such as
may be required by the National Association of Securities
Dealers, Inc. (the "NASD") or under the Securities Act or the
securities or "Blue Sky" laws of any jurisdiction in
connection with the purchase and distribution of the Stock by
the Underwriter.
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(xii) The Company has the full corporate power
and authority to enter into this Agreement and to
perform its obligations hereunder (including to issue, sell
and deliver the Stock), and this Agreement has been duly and
validly authorized, executed and delivered by the Company and
is a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to
the extent that rights to indemnity and contribution hereunder
may be limited by federal or state securities laws or the
public policy underlying such laws. The Company has the full
corporate power and authority to execute and deliver the
Warrants on the terms and conditions set forth in this
Agreement and in the Warrants, and such execution and delivery
of the Warrants has been duly and validly authorized, and when
executed and delivered pursuant to this Agreement, the
Warrants will be enforceable against the Company in accordance
with their terms.
(xiii) The Company is in all material respects in
compliance with, and conducts its business in conformity with,
all applicable federal, state, local and foreign laws, rules
and regulations of each court or governmental agency or body
having jurisdiction over the Company; to the knowledge of the
Company, otherwise than as set forth in the Registration
Statement and the Prospectus, no prospective change in any of
such federal or state laws, rules or regulations has been
adopted which, when made effective, would have a material
adverse effect on the operations of the Company.
(xiv) The Company has filed all necessary
federal, state, local and foreign income, payroll,
franchise and other tax returns and has paid all taxes shown
as due thereon or with respect to any of its properties, and
there is no tax deficiency that has been, or to the knowledge
of the Company is likely to be, asserted against the Company
or any of its properties or assets that would adversely affect
the financial position, business or operations of the Company.
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(xv) No person or entity has the right to
require registration of shares of Common Stock or other
securities of the Company because of the filing or
effectiveness of the Registration Statement or otherwise,
except for persons and entities who have expressly waived such
right or who have been given proper notice and have failed to
exercise such right within the time or times required under
the terms and conditions of such right.
(xvi) Neither the Company nor any of its
officers, directors or affiliates has taken or will take,
directly or indirectly, any action designed or intended to
stabilize or manipulate the price of any security of the
Company, or which caused or resulted in, or which might in the
future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any
security of the Company.
(xvii) The Company has provided you with
all financial statements since _____________________,
1996 to the date hereof that are available to the officers of
the Company.
(xviii) The Company owns or possesses all patents,
trademarks, trademark registrations, service marks,
service xxxx registrations, tradenames, copyrights, licenses,
inventions, trade secrets and rights described in the
Prospectus as being owned by it or necessary for the conduct
of its business, and the Company is not aware of any claim to
the contrary or any challenge by any other person to the
rights of the Company with respect to the foregoing. The
Company's business as now conducted and as proposed to be
conducted does not and will not infringe or conflict with any
patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses or other intellectual property or
franchise right of any person. No claim has been made against
the Company alleging the infringement by the Company of any
patent, trademark, service xxxx, tradename, copyright, trade
secret, license in or other intellectual property right or
franchise right of any person.
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(xix) The Company has performed all material
obligations required to be performed by it under any
indenture, mortgage, deed of trust, note agreement or other
agreement or instrument to which it is a party or by which it
or any of its properties may be bound, and neither the Company
nor any other party to such indenture, mortgage, deed of
trust, note agreement or other agreement or instrument is in
default under or in breach of any such obligations.
(xx) The Company is not involved in any labor
dispute nor is any such dispute threatened. The
Company is not aware that (A) any executive, key employee or
significant group of employees of the Company plans to
terminate employment with the Company or (B) any such
executive or key employee is subject to any noncompete,
nondisclosure, confidentiality, employment, consulting or
similar agreement that would be violated by the present or
proposed business activities of the Company. The Company does
not have and does not expect to have any liability for any
prohibited transaction or funding deficiency or any complete
or partial withdrawal liability with respect to any pension,
profit sharing or other plan which is subject to the Employee
Retirement Income Security Act of 1974, as amended (ERISA), to
which the Company makes or ever has made a contribution and in
which any employee of the Company is or has ever been a
participant. With respect to such plans, the Company is in
compliance in all material respects with all applicable
provisions of ERISA.
(xxi) The Company has obtained the written
agreement described in Section 8(j) of this Agreement from
each of its officers, directors and holders of Common Stock
listed on Schedule A hereto.
(xxii) The Company has, and the Company as of the
Closing Date[s] will have, good and marketable title in fee
simple to all real property and good and marketable title to
all personal property owned or proposed to be owned by it
which is material to the business of the Company, in each case
free and clear of all liens, encumbrances and defects, except
such as are described in the Prospectus or such as would not
have a
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material adverse effect on the Company; and any real property
and buildings held under lease by the Company or proposed to
be held after giving effect to the transactions described in
the Prospectus are, or will be as of the Closing Date[s],
held by it under valid, subsisting and enforceable leases with
such exceptions as would not have a material adverse effect on
the Company, in each case except as described in or
contemplated by the Prospectus.
(xxiii) The Company is insured by insurers of
recognized financial responsibility against such losses and
risks and in such amounts as are customary in the business in
which it is engaged or proposes to engage after giving effect
to the transactions described in the Prospectus; and the
Company does not have any reason to believe that it will not
be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business
at a cost that would not materially and adversely affect the
condition, financial or otherwise, or the earnings, business
or operations of the Company, except as described in or
contemplated by the Prospectus.
(xxiv) Other than as contemplated by this
Agreement, there is no broker, finder or other party that is
entitled to receive from the Company any brokerage or finder's
fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement.
(xxv) The Company has complied with all
provisions of Section ___ of the Delaware General Corporation
Law.
(xxvi) The Company maintains a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance
with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted
accounting principles and to maintain accountability
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for assets; (iii) access to assets is permitted only in
accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets
is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxvii) To the Company's knowledge, neither the
Company nor any employee or agent of the Company has made any
payment of funds of the Company or received or retained any
funds in violation of any law, rule or regulation.
(xxviii) The Company is not an "investment company"
or an entity "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940,
as amended.
(xxix) Each certificate signed by any officer of
the Company and delivered to the Underwriter or counsel for
the Underwriter shall be deemed to be a representation and
warranty by the Company as to the matters covered thereby.
3. Purchase by, and Sale and Delivery to,
Underwriter-Closing Date[s]. The Company agrees to sell to the Underwriter
the Firm Stock, and on the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Underwriter agrees, severally and not jointly, to purchase the
Firm Stock.
The purchase price per share to be paid by the Underwriter to
the Company will be $___ per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Underwriter
(in the form of definitive certificates, issued in such names and in such
denominations as the Underwriter may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York Time, on the second full
business day preceding the First Closing Date (as defined below),
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against payment of the aggregate Purchase Price therefor by
certified or official bank check or checks in Clearing House funds (next day
funds), payable to the order of the Company, all at the offices of Xxxxxxx Xxxx
& Xxxxxxxxx, One Citicorp Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000. The time and date of the delivery and closing shall be at 10:00 A.M.,
New York Time, on ____, 1996, in accordance with Rule 15c6-1 of the Securities
Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"). The time and date of such payment
and delivery are herein referred to as the "First Closing Date". The First
Closing Date and the location of delivery of, and the form of payment for, the
Firm Stock may be varied by agreement between the Company and the Underwriter.
The First Closing Date may be postponed pursuant to the provisions of Section
12.
The Company shall make the certificates for the Stock
available to the Underwriter for examination not later than 10:00 A.M., New
York Time, on the business day preceding the First Closing Date at the offices
of the Underwriter, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The Underwriter agrees to make an initial public offering of
the Firm Stock at the initial public offering price as soon after the
effectiveness of the Registration Statement as in their judgment is advisable.
The Underwriter shall promptly advise the Company of the making of the initial
public offering.
For the purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Stock as contemplated by the
Prospectus, the Company hereby grants to the Underwriter an option to purchase
up to an aggregate of 187,500 shares of Option Stock. The price per share to
be paid for the Option Stock shall be the Purchase Price.
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The option granted hereby may be exercised as to all or any part of the Option
Stock at any time, and from time to time, not more than thirty (30) days
subsequent to the effective date of this Agreement. No Option Stock shall be
sold and delivered unless the Firm Stock previously has been, or simultaneously
is, sold and delivered. The right to purchase the Option Stock or any portion
thereof may be surrendered and terminated at any time upon notice by the
Underwriter to the Company.
The option granted hereby may be exercised by the Underwriter
by giving written notice to the Company setting forth the number of shares of
the Option Stock to be purchased by them and the date and time for delivery of
and payment for the Option Stock. Each date and time for delivery of and
payment for the Option Stock (which may be the First Closing Date, but not
earlier) is herein called the "Option Closing Date" and shall in no event be
earlier than two (2) business days nor later than ten (10) business days after
written notice is given. (The Option Closing Date and the First Closing Date
are herein called the "Closing Dates".) Upon exercise of the option by the
Underwriter, the Company agrees to sell to the Underwriter the number of shares
of Option Stock set forth in the written notice of exercise and the Underwriter
agrees to purchase the number of such shares determined as aforesaid.
The Company will deliver the Option Stock to the Underwriter
(in the form of definitive certificates, issued in such names and in such
denominations as the Underwriter may direct by notice in writing to the Company
given at or prior to 12:00 Noon, New York Time, on the second full business day
preceding the Option Closing Date, against payment of the aggregate Purchase
Price therefor by certified or official bank check or checks in Clearing House
funds (next day funds), payable to the order of the Company
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all at the offices of Xxxxxxx Xxxx & Xxxxxxxxx, One Citicorp Center, 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Company shall make the
certificate[s] for the Option Stock available to the Underwriter for
examination not later than 10:00 A.M., New York Time, on the business day
preceding the Option Closing Date at the offices of the Underwriter, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Option Closing Date and the
location of delivery of, and the form of payment for, the Option Stock may be
varied by agreement between the Company and the Underwriter. The Option
Closing Date may be postponed pursuant to the provisions of Section 12.
In order to induce you to enter into this Agreement, the
Company, in consideration of the receipt of $___ for each Warrant and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, shall execute and deliver to you, or your assignees, in
compliance with the rules of the NASD, warrants exercisable during the five -
year period commencing on the date of this Agreement (the "Warrants") to
purchase an aggregate of 125,000 shares of Common Stock at an exercise price
per share equal to 120% of the initial public offering price per share set
forth on the cover page of the Prospectus. The Warrants shall be in the form
of Exhibit 4.3 to the Registration Statement. Execution and delivery of
Warrants, registered in your name or the names in which you shall notify the
Company in writing, shall be made to you, at your offices at 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at the First Closing Date. The cost of
original issue tax stamps, if any, in connection with the execution and
delivery of the Warrants shall be borne by the Company.
4. Covenants and Agreements of the Company. The
Company covenants and agrees with the Underwriter that:
(a) The Company will (i) if the Company and
the Underwriter have determined not to proceed pursuant to
Rule 430A, use its best efforts to cause the Registration
Statement to become effective, (ii) if the Company and the
Underwriter have determined to proceed pursuant to Rule
430A, use its best efforts to comply with the provisions of
and make all requisite filings with the Commission pursuant to
Rule 430A and Rule 424 of the Rules and Regulations and (iii)
if the Company and the Underwriter have determined to
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deliver Prospectuses pursuant to Rule 434 of the Rules and
Regulations, to use its best efforts to comply with all the
applicable provisions thereof. The Company will advise the
Underwriter promptly as to the time at which the
Registration Statement becomes effective, will advise the
Underwriter promptly of the issuance by the Commission of
any stop order suspending the effectiveness of the
Registration Statement or of the institution of any
proceedings for that purpose, and will use its best efforts to
prevent the issuance of any such stop order and to obtain as
soon as possible the lifting thereof, if issued. The Company
will advise the Underwriter promptly of the receipt of any
comments of the Commission or any request by the Commission
for any amendment of or supplement to the Registration
Statement or the Prospectus or for additional information and
will not at any time file any amendment to the Registration
Statement or supplement to the Prospectus which shall not
previously have been submitted to the Underwriter a
reasonable time prior to the proposed filing thereof or to
which the Underwriter shall reasonably object in writing or
which is not in compliance with the Securities Act and the
Rules and Regulations.
(b) The Company will prepare and file with the
Commission, promptly upon the request of the Underwriter,
any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Underwriter may
be necessary to enable the Underwriter to continue the
distribution of the Stock and will use its best efforts to
cause the same to become effective as promptly as possible.
(c) If at any time after the effective date of
the Registration Statement when a prospectus relating to the
Stock is required to be delivered under the Securities Act any
event relating to or affecting the Company occurs as a result
of which the Prospectus or any other prospectus as then in
effect would include an untrue statement of a material fact,
or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under
which they were made, not misleading, or if it is
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necessary at any time to amend the Prospectus to comply with
the Securities Act, the Company will promptly notify the
Underwriter thereof and will prepare an amended or
supplemented prospectus which will correct such statement or
omission; and in case the Underwriter is required to deliver a
prospectus relating to the Stock nine (9) months or more after
the effective date of the Registration Statement, the Company
upon the request of the Underwriter and at the expense of
such Underwriter will prepare promptly such prospectus or
prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Securities Act.
(d) The Company will deliver to the
Underwriter, at or before the First Closing Date, signed
copies of the Registration Statement, as originally filed with
the Commission, and all amendments thereto, including all
financial statements and exhibits thereto, and will deliver to
the Underwriter such number of copies of the Registration
Statement, including such financial statements but without
exhibits, and all amendments thereto, as the Underwriter
may reasonably request. The Company will deliver or mail to
or upon the order of the Underwriter, from time to time
until the effective date of the Registration Statement, as
many copies of the Pre-effective Prospectus as the
Underwriter may reasonably request. The Company will
deliver or mail to or upon the order of the Underwriter on
the date of the initial public offering, and thereafter from
time to time during the period when delivery of a prospectus
relating to the Stock is required under the Securities Act, as
many copies of the Prospectus, in final form or as thereafter
amended or supplemented, as the Underwriter may reasonably
request; provided, however, that the expense of the
preparation and delivery of any prospectus required for use
nine (9) months or more after the effective date of the
Registration Statement shall be borne by the Underwriter.
(e) The Company will make generally available
to its stockholders as soon as practicable,
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but not later than fifteen (15) months after the effective
date of the Registration Statement, an earnings statement
which will be in reasonable detail (but which need not be
audited) and which will comply with Section 11(a) of the
Securities Act, covering a period of at least twelve (12)
months beginning after the "effective date" (as defined in
Rule 158 under the Securities Act) of the Registration
Statement.
(f) The Company will cooperate with the
Underwriter to enable the Stock to be registered or
qualified for offering and sale by the Underwriter and by
dealers under the securities laws of such jurisdictions as the
Underwriter may designate and at the request of the
Underwriter will make such applications and furnish such
consents to service of process or other documents as may be
required of it as the issuer of the Stock for that purpose;
provided, however, that the Company shall not be required to
qualify to do business or to file a general consent (other than
that arising out of the offering or sale of the Stock) to
service of process in any such jurisdiction where it is not now
so subject. The Company will, from time to time, prepare and
file such statements and reports as are or may be required of
it as the issuer of the Stock to continue such qualifications
in effect for so long a period as the Underwriter may
reasonably request for the distribution of the Stock. The
Company will advise the Underwriter promptly after the
Company becomes aware of the suspension of the qualifications
or registration of (or any such exception relating to) the
Common Stock of the Company for offering, sale or trading in
any jurisdiction or of any initiation or threat of any
proceeding for any such purpose, and in the event of the
issuance of any orders suspending such qualifications,
registration or exception, the Company will, with the
cooperation of the Underwriter, use its best efforts to
obtain the withdrawal thereof.
(g) The Company will furnish to its stockholders
annual reports containing financial statements certified by
independent public accountants and with quarterly summary
financial information in reasonable detail which may be
unaudited. During the
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period of five (5) years from the date hereof, the Company
will deliver to the Underwriter, as soon as they are available,
copies of each annual report of the Company containing the
balance sheet of the Company as of the close of such fiscal
year and statements of income, stockholders' equity and cash
flows for the year then ended and the opinion thereon of the
Company's independent public accountants and each other report
or communication furnished by the Company to its stockholders
and will deliver to the Underwriter, (i) as soon as they
are available, copies of any other reports or communication
(financial or other) which the Company shall publish or
otherwise make available to any of its stockholders as such,
(ii) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the
Commission, the NASD or any national securities exchange and
(iii) from time to time such other information concerning the
Company as you may request.
(h) The Company will use its best efforts to
list the Stock, subject to official notice of issuance,
on the Nasdaq SmallCap Market.
(i) The Company will maintain a transfer
agent and registrar for the Common Stock.
(j) Prior to filing its quarterly statements
on Form 10-Q, the Company will have its independent
auditors perform a limited quarterly review of its
quarterly numbers.
(k) The Company will not offer, sell, assign,
transfer, encumber, contract to sell, grant an option to
purchase or otherwise dispose of any shares of Common Stock or
securities convertible into or exercisable or exchangeable for
Common Stock during the 180 days following the date on which
the price of the Common Stock to be purchased by the
Underwriter is established, other than the Company's sale of
Common Stock hereunder, the issuance of the Warrants and the
Company's issuance of Common Stock upon the exercise of the
warrants and [upon the exercise stock options which
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are presently outstanding and described in the Prospectus.
(1) The Company will apply the net proceeds
from the sale of the Stock as set forth in the description
under the heading "Use of Proceeds" in the Prospectus, which
description complies in all respects with the requirements of
Item 504 of Regulation S-K.
(m) The Company will supply you with copies
of all correspondence to and from, and all documents issued to
and by, the Commission in connection with the registration of
the Stock under the Securities Act.
(n) Prior to the Closing Date[s] the
Company will furnish to you, as soon as they have been
prepared, copies of any unaudited interim financial statements
of the Company for any periods subsequent to the periods
covered by the financial statements appearing in the
Registration Statement and the Prospectus.
(o) Prior to the Closing Date[s] the
Company will issue no press release or other communications
directly or indirectly and hold no press conference with
respect to the Company, the financial condition, results of
operation, business, prospects, assets or liabilities of the
Company or the offering of the Stock, without your prior
written consent. For a period of twelve (12) months following
the Option Closing Date, the Company will use its best efforts
to provide to you copies of each press release or other public
communications with respect to the financial condition, results
of operations, business, prospects, assets or liabilities of
the Company at least twenty-four (24) hours prior to the public
issuance thereof or such longer advance period as may
reasonably be practicable.
5. Payment of Expenses. (a) The Company will pay
(directly or by reimbursement) all costs, fees and expenses incurred in
connection with expenses incident to the performance of its obligations under
this Agreement and in connection with the transactions contemplated hereby,
including but not limited to (i) all expenses and taxes incident to the
issuance and delivery of
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the Stock to the Underwriter; (ii) all expenses incident to the registration
of the Stock under the Securities Act; (iii) the costs of preparing stock
certificates (including printing and engraving costs); (iv) all fees and
expenses of the registrar and transfer agent of the Common Stock; (v) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Stock to the Underwriter; (vi) fees and expenses of the
Company's counsel and the Company's independent accountants; (vii) all costs
and expenses incurred in connection with the preparation, printing filing,
shipping and distribution of the Registration Statement, each Pre-effective
Prospectus and the Prospectus (including all exhibits and financial statements)
and all amendments and supplements provided for herein, the Master
Selected Dealers' Agreement, the Underwriters' Questionnaire, the Blue Sky
memoranda and this Agreement; (viii) all filing fees, attorneys' fees and
expenses incurred by the Company or the Underwriter in connection with
exemptions from the qualifying or registering (or obtaining qualification or
registration of) all or any part of the Stock for offer and sale under the Blue
Sky or other securities laws of such jurisdictions as the Underwriter may
designate; (ix) all fees and expenses paid or incurred in connection with
filings made with the NASD; and (x) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section 5.
(b) In addition to its other obligations under Section
6(a) hereof, the Company agrees that, as an interim measure during the pendency
of any claim, action, investigation, inquiry or other proceeding arising out of
or based upon (i) any statement or omission or any alleged statement or omission
or (ii) any breach or inaccuracy in its representations and warranties, it will
reimburse the Underwriter on a quarterly basis for all reasonable legal or
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Company's obligation to reimburse the Underwriter for such expenses and
the possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Underwriter shall
promptly return it to the Company together with interest, compounded daily,
determined on the basis of the prime rate (or other commercial
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lending rate for borrowers of the highest credit standing) announced from time
to time by _______ , New York, New York (the "Prime Rate"). Any such interim
reimbursement payments which are not made to the Underwriter in a timely manner
as provided below shall bear interest at the Prime Rate from the due date for
such reimbursement. This expense reimbursement agreement will be in addition
to any other liability which the Company may otherwise have. The request for
reimbursement will be sent to the Company.
(c) In addition to its other obligations under Section
6(b) hereof, the Underwriter agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged
statement or omission, described in Section 6(b) hereof which relates to
written information furnished to the Company by the Underwriter specifically
for inclusion in the Registration Statement and the Prospectus, it will
reimburse the Company (and, to the extent applicable, each officer, director
or controlling person) on a quarterly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Underwriter's obligation to reimburse the Company (and, to the extent
applicable, each officer, director or controlling person) for such expenses and
the possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Company (and, to
the extent applicable, each officer, director or controlling person) shall
promptly return it to the Underwriters together with interest, compounded
daily, determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made to the Company within thirty (30)
days of a request for reimbursement shall bear interest at the Prime Rate from
the date of such request. This indemnity agreement will be in addition to any
liability which the Underwriter may otherwise have.
(d) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in paragraph (b)
or (c) of this Section 5, including the amounts of any requested reimbursement
payments and the method of determining such amounts, shall be settled by
arbitration conducted under the provisions of the Constitution and Rules of
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the Board of Governors of the New York Stock Exchange, Inc. or pursuant to the
Code of Arbitration Procedure of the NASD. Any such arbitration must be
commenced by service of a written demand for arbitration or written notice of
intention to arbitrate, therein electing the arbitration tribunal. In the
event the party demanding arbitration does not make such designation of an
arbitration tribunal in such demand or notice, then the party responding to
said demand or notice is authorized to do so. Such an arbitration would be
limited to the operation of the interim reimbursement provisions contained in
paragraph (b) or (c) of this Section 5 and would not resolve the ultimate
propriety or enforceability of the obligation to reimburse expenses which is
created by the provisions of Section 6.
6. Indemnification and Contribution. (a) The Company
agrees to indemnify and hold harmless the Underwriter and each person,
if any, who controls the Underwriter within the meaning of the Securities Act
and the respective officers, directors, partners, employees, representatives
and agents of the Underwriter (collectively, the "Underwriter Indemnified
Parties" and, each, an "Underwriter Indemnified Party"), against any losses,
claims, damages, liabilities or expenses (including the reasonable cost of
investigating and defending against any claims therefor and counsel fees
incurred in connection therewith), joint or several, which may be based upon
the Securities Act, or any other statute or at common law, on the ground or
alleged ground that any Pre-effective Prospectus, the Registration Statement or
the Prospectus (or any Pre-effective Prospectus, the Registration Statement or
the Prospectus as from time to time amended or supplemented) includes or
allegedly includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, unless such statement or omission was made in reliance upon,
and in conformity with, written information furnished to the Company by the
Underwriter specifically for use in the preparation thereof; provided, that
with respect to any untrue statement or omission or alleged untrue statement or
omission made in any Pre-effective Prospectus, the indemnity agreement
contained in this subsection (a) shall not inure to the benefit of any
Underwriter Indemnified Party from whom the person asserting any such losses,
claims, damages or liabilities purchased the shares of Stock concerned to the
extent that any such loss, claim, damage or liability of such Underwriter
-23-
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Indemnified Party results from the fact that a copy of the Prospectus was not
sent or given to such person at or prior to the written confirmation of the
sale of such shares of Stock to such person as required by the Securities Act
and if the untrue statement or omission concerned has been corrected in the
Prospectus. The Company will be entitled to participate at its own expense in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but if the Company elects to assume the defense,
such defense shall be conducted by counsel chosen by it. In the event the
Company elects to assume the defense of any such suit and retain such counsel,
any Underwriter Indemnified Parties, defendant or defendants in the suit, may
retain additional counsel but shall bear the fees and expenses of such counsel
unless (i) the Company shall have specifically authorized the retaining of such
counsel or (ii) the parties to such suit include any such Underwriter
Indemnified Parties and the Company and such Underwriter Indemnified Parties
have been advised by counsel to the Underwriter that one or more legal defenses
may be available to it or them which may not be available to the Company, in
which case the Company shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of such counsel.
This indemnity agreement is not exclusive and will be in addition to any
liability which the Company might otherwise have and shall not limit any rights
or remedies which may otherwise be available at law or in equity to each
Underwriter Indemnified Party.
(b) The Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement and each person, if any,
who controls the Company within the meaning of the Securities Act
(collectively, the "Company Indemnified Parties"), against any losses, claims,
damages, liabilities or expenses (including, unless the Underwriter or
Underwriter elects to assume the defense, the reasonable cost of investigating
and defending against any claims therefor and counsel fees incurred in
connection therewith), joint or several, which arise out of or are based in
whole or in part upon the Securities Act, the Exchange Act or any other
federal, state, local or foreign statute or regulation, or at common law, on
the ground or alleged ground that any Pre-effective Prospectus, the
Registration Statement or the Prospectus (or any Pre-effective Prospectus, the
Registration Statement or the Prospectus, as from time to time amended and
supplemented) includes an untrue
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statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances in which they were made, not misleading, but only
insofar as any such statement or omission was made in reliance upon, and in
conformity with, written information furnished to the Company by the
Underwriter, specifically for use in the preparation thereof; provided,
however, that in no case is such Underwriter to be liable with respect to any
claims made against any Company Indemnified Party against whom the action is
brought unless such Company Indemnified Party shall have notified the
Underwriter in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon the Company Indemnified Party, but failure to notify the
Underwriter of such claim shall not relieve it from any liability which it may
have to any Company Indemnified Party otherwise than on account of its
indemnity agreement contained in this paragraph. The Underwriter shall be
entitled to participate at its own expense in the defense, or, if it so elects,
to assume the defense of any suit brought to enforce any such liability, but,
if such Underwriter elects to assume the defense, such defense shall be
conducted by counsel chosen by it. In the event that the Underwriter elects to
assume the defense of any such suit and retain such counsel, the Company
Indemnified Parties and any other Underwriter or Underwriters or controlling
person or persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them, respectively. The
Underwriter shall not be liable to indemnify any person for any settlement of
any such claim effected without the Underwriter's consent. This indemnity
agreement is not exclusive and will be in addition to any liability which the
Underwriter might otherwise have and shall not limit any rights or remedies
which may otherwise be available at law or in equity to any Company Indemnified
Party.
(c) If the indemnification provided for in this Section 6
is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits
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received by the Company on the one hand and the Underwriter on the other from
the offering of the Stock. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand
and the Underwriter on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriter on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriter agree that it would not be just and
equitable if contribution were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to above. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to above shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating, defending, settling or compromising any such
claim. Notwithstanding the provisions of this subsection (c), the Underwriter
shall not be required to contribute any amount in excess of the amount by
which the total price at which the shares of the Stock underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be
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entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
7. Survival of Indemnities, Representations,
Warranties, etc. The respective indemnities, covenants, agreements,
representations, warranties and other statements of the Company and the
Underwriter, as set forth in this Agreement or made by them respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation made by or on behalf of the Underwriter, the Company or
any of its officers or directors or any controlling person, and shall survive
delivery of and payment for the Stock.
8. Conditions of Underwriter's Obligations. The
respective obligations of the Underwriter hereunder shall be subject
to the accuracy, at and (except as otherwise stated herein) as of the date
hereof and at and as of the Closing Date[s], of the representations and
warranties made herein by the Company, to compliance at and as of the Closing
Date[s] by the Company with its covenants and agreements herein contained and
other provisions hereof to be satisfied at or prior to the Closing Date[s], and
to the following additional conditions:
(a) The Registration Statement shall have
become effective and no stop order suspending the
effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to
the knowledge of the Company, shall be threatened by the
Commission, and any request for additional information on the
part of the Commission (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the
Underwriter. Any filings of the Prospectus, or any supplement
thereto, required pursuant to Rule 424(b) or Rule 434 of the
Rules and Regulations shall have been made in the manner and
within the time period required by Rule 424 (b) and Rule
434 of the Rules and Regulations, as the case may be.
(b) The Underwriter shall have been
satisfied that there shall not have occurred any change prior
to the Closing Date [s], in the condition (financial or
otherwise), properties, business, management, prospects, net
worth or results of
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operations of the Company, or any change in the capital stock,
short-term or long-term debt of the Company, such that (i) the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact
which, in the opinion of the Underwriter, is material, or
omits to state a fact which, in the opinion of the
Underwriter, is required to be stated therein or is
necessary to make the statements therein not misleading, or
(ii) it is unpracticable in the reasonable judgment of the
Underwriter to proceed with the public offering or purchase
the Stock as contemplated hereby.
(c) The Underwriter shall be satisfied
that no legal or governmental action, suit or proceeding
affecting the Company which is material and adverse to the
Company or which affects or may affect the Company's ability to
perform its obligations under this Agreement shall have been
instituted or threatened and there shall have occurred no
material adverse development in any existing such action, suit
or proceeding.
(d) At the time of execution of this
Agreement, the Underwriter shall have received from Coopers
& Xxxxxxx L.L.P., independent certified public accountants, a
letter, dated the date hereof, in form and substance
satisfactory to the Underwriter.
(e) The Underwriter shall have received
from Coopers & Xxxxxxx L.L.P., independent certified public
accountants, letters, dated the Closing Date[s], to the effect
that such accountants reaffirm, as of the Closing Date[s],
and as though made on the Closing Date[s], the statements made
in the letter furnished by such accountants pursuant to
paragraph (d) of this Section 8.
(f) The Underwriter shall have received
from Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P., counsel for the Company,
an opinion, dated the Closing Date [s] , to the effect set
forth in Exhibit I hereto. In rendering such opinion, Xxxxxx,
Xxxxxxx & Xxxxxx, L.L.P. may rely as to all matters governed
other than by the laws of
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the State of Georgia, the Delaware General Corporation Law or
federal laws on the opinion of local counsel of good standing
in such jurisdictions, provided that such local counsel is
satisfactory to the counsel to the Underwriter and that in
each case Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P. shall state that
they believe that they and the Underwriters are justified in
relying on such other counsel.
(g) The Underwriter shall have received
from Xxxxxxx Xxxx & Xxxxxxxxx, counsel for the Underwriter,
their opinion or opinions dated the Closing Date[s] with
respect to the incorporation of the Company, the validity of
the Stock, the Registration Statement and the Prospectus and
such other related matters as it may reasonably request, and
the Company shall have furnished to such counsel such documents
as they may request for the purpose of enabling them to pass
upon such matters. In rendering such opinion, Xxxxxxx Xxxx &
Xxxxxxxxx may rely as to all matters governed other than by the
laws of the State of New York, the Delaware General Corporation
Law or federal laws on the opinion of counsel referred to in
paragraph (f) of this Section 8.
(h) The Underwriter shall have received
a certificate, dated the Closing Date[s], of the chief
executive officer or the President and the chief financial or
accounting officer of the Company to the effect that:
(i) No stop order suspending the
effectiveness of the Registration Statement has
been issued, and, to the best of the knowledge of the
signers, no proceedings for that purpose have been
instituted or are pending or contemplated under
the Securities Act;
(ii) Neither any Pre-effective
Prospectus, as of its date, nor the Registration
Statement nor the Prospectus, nor any amendment or
supplement thereto, as of the time when the
Registration Statement became effective and at all
times subsequent thereto up to the delivery of such
certificate, included any untrue statement of
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a material fact or omitted to state any material fact
required to be stated therein or necessary to make
the statements therein, in light of the
circumstances under which they were made, not
misleading;
(iii) Subsequent to the respective
dates as of which information is given in the
Registration Statement and the Prospectus, and except
as set forth or contemplated in the Prospectus, the
Company has not incurred any material liabilities or
obligations, direct or contingent, nor entered into
any material transactions not in the ordinary course
of business and there has not been any material
adverse change in the condition (financial or
otherwise), properties, business, management,
prospects, net worth or results of operations of the
Company, or any change in the capital stock,
short-term or long-term debt of the Company;
(iv) The representations and
warranties of the Company in this Agreement are true
and correct at and as of the Closing Date[s], and
the Company has complied with all the agreements and
performed or satisfied all the conditions on its part
to be performed or satisfied at or prior to the
Closing Date[s]; and
(v) Since the respective dates as of which
information is given in the Registration Statement
and the Prospectus, and except as disclosed in or
contemplated by the Prospectus, (i) there has not
been any material adverse change or a development
involving a material adverse change in the condition
(financial or otherwise), properties, business,
management, prospects, net worth or results of
operations of the Company; (ii) the business
and operations conducted by the Company have not
sustained a loss by strike, fire, flood, accident or
other calamity (whether or not insured) of such a
character as to interfere materially with the conduct
of the business and operations of the Company; (iii)
no legal or governmental action, suit or proceeding
is pending
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or threatened against the Company which is material
to the Company, whether or not arising from
transactions in the ordinary course of business, or
which may materially and adversely affect the
transactions contemplated by this Agreement; (iv)
since such dates and except as so disclosed, the
Company has not incurred any material liability or
obligation, direct, contingent or indirect, made any
change in its capital stock, made any material change
in its short-term or funded debt or repurchased or
otherwise acquired any of the Company's capital
stock; and (v) the Company has not declared or paid
any dividend, or made any other distribution, upon
its outstanding capital stock payable to
stockholders of record on a date prior to the
Closing Date.
(i) The Company shall have furnished
to the Underwriter such additional certificates as
the Underwriter may have reasonably requested as to the
accuracy, at and as of the Closing Date[s], of the
representations and warranties made herein by it and as to
compliance at and as of the Closing Date[s] by it with its
covenants and agreements herein contained and other provisions
hereof to be satisfied at or prior to the Closing Date[s], and
as to satisfaction of the other conditions to the obligations
of the Underwriter hereunder.
(j) The Underwriter shall have
received the written agreements of the officers and
directors of the Company and the holders of securities of the
Company listed in Schedule A that each will not offer, sell,
assign, transfer, encumber, contract to sell, grant an option
to purchase or otherwise dispose of, other than by operation
of law, gifts, pledges or dispositions by estate
representatives, any shares of Common Stock (including,
without limitation, Common Stock which may be deemed to be
beneficially owned by such officer, director or holder in
accordance with the Rules and Regulations) or securities
convertible into or exercisable or exchangeable for Common
Stock during the 180 days following the date of the final
Prospectus.
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(k) The Nasdaq SmallCap Market shall
have approved the Stock for inclusion, subject only to official
notice of issuance.
All opinions, certificates, letters and other documents will be
in compliance with the provisions hereunder only if they are satisfactory in
form and substance to the Underwriter. The Company will furnish to the
Underwriter conformed copies of such opinions, certificates, letters and
other documents as the Underwriter shall reasonably request. If any of the
conditions hereinabove provided for in this Section shall not have been
satisfied when and as required by this Agreement, this Agreement may be
terminated by the Underwriter by notifying the Company of such termination
in writing or by telegram at or prior to the Closing Date[s], but Ladenburg
shall be entitled to waive any of such conditions.
9. Effective Date. This Agreement shall become
effective immediately as to Sections 5, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16,
and 17 and, as to all other provisions, at 11:00 a.m. New York City time, on
the first full business day following the effectiveness of the Registration
Statement or at such earlier time after the Registration Statement becomes
effective as the Underwriter may determine on and by notice to the Company
or by release of any of the Stock for sale to the public. For the purposes of
this Section 9, the Stock shall be deemed to have been so released upon the
release for publication of any newspaper advertisement relating to the Stock or
upon the release by you of telegrams (i) advising the Underwriter that the
shares of Stock are released for public offering or (ii) offering the Stock
for sale to securities dealers, whichever may occur first.
10. Termination. This Agreement (except for the
provisions of Section 5) may be terminated by the Company at any time before it
becomes effective in accordance with Section 9 by notice to the Underwriter
and may be terminated by the Underwriter at any time before it becomes
effective in accordance with Section 9 by notice to the Company. In the event
of any termination of this Agreement under this or any other provision of this
Agreement, there shall be no liability of any party to this Agreement to any
other party, other than as provided in Sections 5, 6 and 11.
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This Agreement may be terminated after it becomes effective by
the Underwriter by notice to the Company (i) if at or prior to the First
Closing Date trading in securities on any of the New York Stock Exchange,
American Stock Exchange or Nasdaq National Market shall have been suspended or
minimum or maximum prices shall have been established on any such exchange or
market, or a banking moratorium shall have been declared by New York or United
States authorities; (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market; (iii) if at
or prior to the First Closing Date there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign power or of
any other insurrection or armed conflict involving the United States or (B) any
change in financial markets or any calamity or crisis which, in the judgment of
the Underwriter, makes it impractical or inadvisable to offer or sell the
Firm Stock on the terms contemplated by the Prospectus; (iv) if there shall
have been any development or prospective development involving particularly the
business or properties or securities of the Company or the transactions
contemplated by this Agreement, which, in the judgment of the Underwriter,
makes it impracticable or inadvisable to offer or deliver the Firm Stock on the
terms contemplated by the Prospectus; (v) if there shall be any litigation or
proceeding, pending or threatened, which, in the judgment of the
Underwriter, makes it impracticable or inadvisable to offer or deliver the
Firm Stock on the terms contemplated by the Prospectus; or (vi) if there shall
have occurred any of the events specified in the immediately preceding clauses
(i) - (v) together with any other such event that makes it, in the judgment of
the Underwriter, impractical or inadvisable to offer or deliver the Firm
Stock on the terms contemplated by the Prospectus.
11. Reimbursement of Underwriter. Notwithstanding any
other provisions hereof, if this Agreement shall not become effective by reason
of any election of the Company pursuant to the first paragraph of Section 10 or
shall be terminated by the Underwriter under Section 8 or Section 10, the
Company will bear and pay the expenses specified in Section 5 hereof and, in
addition to its obligations pursuant to Section 6 hereof, the Company will
reimburse the reasonable out-of-pocket expenses of the Underwriter
(including reasonable fees and disbursements of counsel for the Underwriters)
incurred in connection with this Agreement and the proposed purchase of the
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Stock, and promptly upon demand the Company will pay such amounts to you.
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12. Notices. All communications hereunder shall be in
writing and, if sent to the Underwriter shall be mailed, delivered or
telegraphed and confirmed to you at Ladenburg Xxxxxxxx & Co. Inc. at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:_____, except that notices
given to an Underwriter pursuant to Section 6 hereof shall be sent to such
Underwriter at the address furnished by the Representative or, if sent to the
Company, shall be mailed, delivered or telegraphed and confirmed c/o HomeCom
Communications, Inc., Fourteen Xxxxxxxx Xxxxxx, Xxxxx 000, 0000 Xxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxx 00000, Attention: President.
13. Successors. This Agreement shall inure to the
benefit of and be binding upon the Underwriter, the Company and their
respective successors and legal representatives. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of
such persons and for the benefit of no other person; except that the
representations, warranties, covenants, agreements and indemnities of the
Company contained in this Agreement shall also be for the benefit of the person
or persons, if any, who control the Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, and the indemnities
of the Underwriter shall also be for the benefit of each director of the
Company, each of its officers who has signed the Registration Statement and the
person or persons, if any, who control the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act.
14. Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of [New
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York] without giving effect to the choice of law principles thereof.
15. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
16. General. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders
and the singular and the plural include one another. The section headings in
this Agreement are for the convenience of the parties only and will not affect
the construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company and the Underwriter.
17. Counterparts. This Agreement may be signed in two
(2) or more counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
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If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter and your acceptance shall constitute a binding
agreement between us.
Very truly yours,
HOMECOM COMMUNICATIONS, INC.
By:
-------------------------
Title:
Accepted and delivered in
New York, New York as of
the date first above written.
LADENBURG, XXXXXXXX & CO. INC.
Acting on its own behalf
and as Representative of several
Underwriters referred to in the
foregoing Agreement.
By: Ladenburg, Xxxxxxxx & Co. Inc.
By:
----------------------------
Title:
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SCHEDULE A
Number of
shares of
Firm Stock
to be
Name Purchased
Ladenburg, Xxxxxxxx & Co. Inc .... ---------
1,250,000
=========
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[SCHEDULE B]
40
EXHIBIT I
Matters to be covered in
opinion of Counsel to the Company(1)
1. The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
organization, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, and has
all power and authority necessary to own or hold its properties and conduct
the business in which it is engaged.
2. The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and all of the shares of Stock to be issued and sold by the
Company to the Underwriters pursuant to the Underwriting Agreement have been
duly and validly authorized and, when issued and delivered against payment
therefor as provided for in the Underwriting Agreement, will be duly and
validly issued, fully paid and nonassessable and free of any preemptive or
similar rights; and all of the shares of Common Stock to be issued upon
exercise of the Warrants have been duly and validly authorized and, when
issued and delivered against payment therefor as provided in the Warrants,
will be duly and validly issued, fully paid and nonassessable and free of
all preemptive or similar rights.
3. Except as disclosed in and or contemplated by the Prospectus and
the financial statements of the Company and
-------------
(1) Capitalized terms used herein but not defined shall have the meanings given
such terms in the Underwriting Agreement.
41
related notes thereto included in the Prospectus, the Company does not
have outstanding any options or warrants to purchase, or any preemptive
rights or other rights to subscribe for or to purchase any securities or
obligations convertible into, or any contracts or commitments to issue or
sell, shares of its capital stock or any such options, rights, convertible
securities or obligations, except for options granted subsequent to the
date of information provided in the Prospectus pursuant to the Company's
stock option plans as disclosed in the Prospectus. There are no
restrictions upon the voting or transfer of, any of the Stock pursuant to
the Certificate of Incorporation or By-Laws or any agreement or other
instrument of the Company.
4. To the best of such counsel's knowledge, except as set forth in
the Prospectus, there are no material legal or governmental proceedings
pending to which the Company is a party or of which any property or assets
of the Company is the subject which, if determined adversely to the Company,
could have a material adverse effect on the Company or prevent or adversely
affect the transactions contemplated by the Underwriting Agreement; and, to
the best of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or other third parties. To the
best of such counsel's knowledge, the Company is not a party or subject to
the provisions of any material injunction, judgment, decree or order of any
court, regulatory body or other governmental agency or body.
5. The Company has the full corporate power and authority to
enter into the Underwriting Agreement and to perform its obligations
thereunder (including to issue, sell and deliver the Stock), and the
Underwriting Agreement has been duly and validly authorized, executed and
delivered by the Company. The Company has the full corporate power and
authority to execute and deliver the Warrants on the terms and conditions
set forth in the Underwriting Agreement and in the Warrants, and such
execution and delivery of the Warrants has been duly and validly authorized,
and when executed and delivered pursuant to the Underwriting Agreement, the
Warrants will be enforceable against the Company in accordance with their
terms.
42
6. The execution, delivery and performance of the Underwriting
Agreement and the consummation of the transactions therein contemplated will
not result in a breach or violation of any of the terms or provisions of or
constitute a default under the Certificate of Incorporation, By-laws or
other organizational documents of the Company, or any indenture, mortgage,
deed of trust, note agreement or other agreement or instrument known to such
counsel to which the Company is a party or by which it or any of its
properties is or may be bound, or any law, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or
any of its properties or result in the creation of a lien.
7. No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Company
of the transactions contemplated by the Underwriting Agreement (except such
as may be required by the National Association of Securities Dealers, Inc.
or as required by the securities or "Blue Sky" laws of any jurisdiction as
to which such counsel need express no opinion) in connection with the
purchase and distribution of the Stock by the Underwriters, except such as
have been obtained or made, specifying the same.
8. The Registration Statement was declared effective under the
Securities Act as of _____, 1996, the Prospectus was filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations
on _______, 1996 and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose is pending or threatened by the
Commission.
9. The Registration Statement and the Prospectus and any amendments
or supplements thereto (except for the financial statements and notes
thereto and related schedules as to which such counsel need express no
opinion) comply as to form in all respects with the requirements of the
Securities Act and the Rules and Regulations.
10. To the best of such counsel's knowledge, there are no
franchise, lease, contract, agreement or other
43
document required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement which
is not described or filed therein as required. All descriptions of any such
franchises, leases, contracts, agreements or documents contained in the
Registration Statement are accurate and complete descriptions of such
documents in all material respects.
11. To the best of such counsel's knowledge, no person or entity
has the right to require registration of shares of Common Stock or other
securities of the Company because of the filing or effectiveness of the
Registration Statement or otherwise, except for persons and entities who
have expressly waived such right or who have been given proper notice and
have failed to exercise such right within the time or times required under
the terms and conditions of such right.
12. The statements in the Prospectus, to the extent they constitute
a summary of documents referred to therein or they reflect matters of law or
legal conclusions relating to such law, accurately summarize and fairly
present the information called for with respect to such documents and matter
and the legal and regulatory matters described therein.
13. The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
In addition to the matters set forth above, such opinion shall also include a
statement to the effect that nothing has come to the attention of such counsel
which leads them to believe that (i) the Registration Statement or any
amendment thereto, as of the time it became effective under the Securities Act
(but after giving effect to any modifications incorporated therein pursuant to
Rule 430A under the Securities Act) and as of the First Closing Date or the
Option Closing Date, as the case may be, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or (ii)
that the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the Rules and Regulations and as of the
44
First Closing Date or the Option Closing Date, as the case may be, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading (except that such counsel need express no view as to financial
statements and notes thereto, schedules and statistical information therein).
With respect to such statement, such counsel may state that their belief is
based upon the procedures set forth therein, but is without independent check
and verification.
