PGFM DRAFT OF MARCH 12, 1998
EXHIBIT 1.1
SAVOIR TECHNOLOGY GROUP, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
_______________, 1998
THE XXXXXXXX-XXXXXXXX COMPANY, LLC
XXXXXXXXX & COMPANY, INC.
XXXXXX GULL XXXXXXX & XxXXXXXX INC.
As representatives of the several
Underwriters named in Schedule I hereto,
c/o The Xxxxxxxx-Xxxxxxxx Company, LLC
0000 Xxxxxxxxx Xxxx, X.X.
Atlanta, Georgia 30326
Dear Sirs:
Savoir Technology Group, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I (the "Underwriters") an aggregate of
3,500,000 shares of common stock, par value $.01 per share (the "Common Stock"),
of the Company (the "Firm Shares"), and, at the election of the Underwriters,
subject to the terms and conditions stated herein, the Company proposes, subject
to the terms and conditions stated herein, to sell to the Underwriters up to
525,000 additional shares of Common Stock (the "Optional Shares") (the Firm
Shares and the Optional Shares that the Underwriters elect to purchase pursuant
to Section 2 hereof are collectively called the "Shares"). In your capacity as
representatives of the several Underwriters, you are referred to herein as the
"Representatives."
1. (a) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(i) A registration statement on Form S-2 (File No. 333-
_____) with respect to the Shares, including a prospectus subject to
completion, has been filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Securities Act of
1933, as amended (the "Act"), and one or more amendments to such
registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the Commission either (A)
if such registration statement, as it may have been amended, has
become effective under the Act and information has been omitted
therefrom in accordance
with Rule 430A under the Act, a prospectus in the form most recently
included in an amendment to such registration statement (or, if no
such amendment shall have been filed, in such registration statement)
with such changes or insertions as are required by Rule 430A or
permitted by Rule 424(b) under the Act and as have been provided to
and approved by the Representatives, or (B) if such registration
statement, as it may have been amended, has not become effective under
the Act, an amendment to such registration statement, including a form
of prospectus, a copy of which amendment has been provided to and
approved by the Representatives prior to the execution of this
Agreement. As used in this Agreement, the term "Registration
Statement" means such registration statement, as amended at the time
when it was or is declared effective, including all financial
statement schedules and exhibits thereto and including any information
omitted therefrom pursuant to Rule 430A under the Act and included in
the Prospectus (as hereinafter defined); the term "Preliminary
Prospectus" means each prospectus subject to completion included in
such registration statement or any amendment or post-effective
amendment thereto (including the prospectus subject to completion, if
any, included in the Registration Statement at the time it was or is
declared effective); and the term "Prospectus" means the prospectus
first filed with the Commission pursuant to Rule 424(b) under the Act
or, if no prospectus is required to be so filed, such term means the
prospectus included in the Registration Statement. For purposes of the
following representations and warranties, to the extent reference is
made to the Prospectus and at the relevant time the Prospectus is not
yet in existence, such reference shall be deemed to be to the most
recent Preliminary Prospectus. Any reference herein to the
Registration Statement, the Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-2 which were filed
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). As used herein, the term "Incorporated Documents" means the
documents which at the time are incorporated by reference in the
Registration Statement, Preliminary Prospectus or the Prospectus.
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued and no proceeding for that
purpose has been instituted or threatened by the Commission or the
securities authority of any state or other jurisdiction. If the
Registration Statement has become effective under the Act, no stop
order suspending the effectiveness of the Registration Statement or
any part thereof has been issued and no proceeding for that purpose
has been instituted or threatened or, to the best knowledge of the
Company, contemplated by the Commission or the securities authority of
any state or other jurisdiction.
(iii) When any Preliminary Prospectus was filed with the
Commission it (A) contained all statements required to be stated
therein in accordance with, and complied in all material respects with
the requirements of, the Act and the rules and regulations of the
Commission thereunder and (B) did not include any untrue statement of
a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
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under which they were made, not misleading. When the Registration
Statement or any amendment thereto was or is declared effective, and
at each Time of Delivery (as hereinafter defined), it (A) contained or
will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects
with the requirements of, the Act and the rules and regulations of the
Commission thereunder and (B) did not or will not include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the
Prospectus or any amendment or supplement thereto is filed with the
Commission pursuant to Rule 424(b) (or, if the Prospectus or such
amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such
amendment or supplement to the Prospectus was or is declared
effective) and at each Time of Delivery, the Prospectus, as amended or
supplemented at any such time, (A) contained or will contain all
statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements
of, the Act and the rules and regulations of the Commission thereunder
and (B) did not or will not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The Incorporated Documents at the time
they were filed with the Commission complied in all material respects
with the requirements of the Exchange Act and the rules and
regulations of the Commission under the Exchange Act, and, when read
together with the other information in the Prospectus, will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading. The foregoing provisions of this paragraph
(iii) do not apply to statements or omissions made in any Preliminary
Prospectus, the Registration Statement or any amendment thereto or the
Prospectus or any amendment or supplement thereto in reliance upon and
in conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein.
(iv) The descriptions in the Registration Statement and
the Prospectus of statutes, legal and governmental proceedings or
contracts and other documents are accurate and fairly present the
information required to be shown; and there are no statutes or legal
or governmental proceedings required to be described in the
Registration Statement or the Prospectus that are not described as
required and there are no contracts or documents of a character that
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described and filed as required.
(v) Each of the Company and its subsidiaries has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has
full power and authority (corporate and other) to own or lease its
properties and conduct its business as described in the Prospectus.
The Company has full power and authority (corporate and other) to
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enter into this Agreement and to perform its obligations hereunder.
Each of the Company and its subsidiaries is duly qualified to transact
business as a foreign corporation and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, except
where the failure to so qualify would not have a material adverse
effect on the financial position, results of operations or business of
the Company and its subsidiaries.
(vi) The Company's authorized, issued and outstanding
capital stock is as disclosed in the Prospectus. All of the issued
shares of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and conform to the
description of the Common Stock contained in the Prospectus. None of
the issued shares of capital stock of the Company or any of its
subsidiaries has been issued or is owned or held in violation of any
preemptive rights of shareholders, and no person or entity (including
any holder of outstanding shares of capital stock of the Company or
its subsidiaries) has any preemptive or other rights to subscribe for
any of the Shares.
(vii) All of the issued shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable and are owned beneficially by
the Company free and clear of all liens, security interests, pledges,
charges, encumbrances, defects, shareholders' agreements, voting
trusts, equities or claims of any nature whatsoever. Except as
disclosed in the Prospectus, the Company does not own, directly or
indirectly, any capital stock or other equity securities of any other
corporation or any ownership interest in any partnership, joint
venture or other association.
(viii) Except as disclosed in the Prospectus, there are no
outstanding (A) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of
the Company or any such subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any such subsidiary any
such capital stock or any such convertible or exchangeable securities
or obligations, or (C) obligations of the Company or any such
subsidiary to issue any shares of capital stock, any such convertible
or exchangeable securities or obligations, or any such warrants,
rights or options.
(ix) Since the date of the most recent audited financial
statements included in the Prospectus, neither the Company nor any of
its subsidiaries has sustained any material loss or interference with
its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as disclosed in
or contemplated by the Prospectus.
(x) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (A) neither
the Company nor any of
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its subsidiaries has incurred any liabilities or obligations, direct
or contingent, or entered into any transactions, not in the ordinary
course of business, that are material to the Company and its
subsidiaries taken as a whole, (B) the Company has not purchased any
of its outstanding capital stock or declared, paid or otherwise made
any dividend or distribution of any kind on its capital stock, (C)
there has not been any change in the capital stock (except as a result
of shares issued upon exercise of stock options pursuant to existing
stock option plans of the Company), long-term debt or short-term debt
of the Company or any of its subsidiaries (other than borrowing in the
ordinary course under the Company's credit facility with IBM Credit
Corporation), and (D) there has not been any material adverse change,
or any development involving a prospective material adverse change, in
or affecting the financial position, results of operations or business
of the Company and its subsidiaries taken as a whole, in each case
other than as disclosed in or contemplated by the Prospectus.
(xi) The Shares to be issued and sold by the Company have
been duly authorized and, when issued and delivered against payment
therefor as provided herein, will be validly issued and fully paid and
nonassessable and will conform to the description of the Common Stock
contained in the Prospectus; and the certificates evidencing the
Shares will comply with all applicable requirements of Delaware law.
(xii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statement (unless any such right has been
effectively waived) or any securities being registered pursuant to any
other registration statement filed by the Company under the Act.
(xiii) All offers and sales of the Company's capital stock
prior to the date hereof were at all relevant times duly registered
under the Act or exempt from the registration requirements of the Act
by reason of Sections 3(a)(10), 3(b), 4(2) or 4(6) thereof and were
duly registered or the subject of an available exemption from the
registration requirements of the applicable state securities or blue
sky laws.
(xiv) Neither the Company nor any of its subsidiaries is,
or with the giving of notice or passage of time or both would be, in
violation of its Certificate of Incorporation or Bylaws or in default
under any indenture, mortgage, deed of trust, loan agreement, material
lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or to which any of their respective
properties or assets are subject.
(xv) The issue and sale of the Shares to be issued and
sold by the Company and the performance of this Agreement and the
consummation of the transactions herein contemplated will not conflict
with, or (with or without the giving of notice or the passage of time
or both) result in a breach or violation of any
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of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, material lease or
other material agreement or instrument to which the Company or any of
its subsidiaries is a party or to which any of their respective
properties or assets is subject, nor will such action conflict with or
violate any provision of the Certificate of Incorporation or Bylaws of
the Company or any of its subsidiaries or any statute, rule or
regulation or any order, judgment or decree of any court or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their respective properties or
assets.
(xvi) The Company and its subsidiaries have good and
marketable title in fee simple to all real property, if any, and good
title to all personal property owned by them, in each case free and
clear of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects, except such as are disclosed in
the Prospectus or such as do not materially and adversely affect the
value of such property and do not materially and adversely interfere
with the use made or proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held
under lease by the Company or any of its subsidiaries are held under
valid, subsisting and enforceable leases, with such exceptions as are
disclosed in the Prospectus or are not material and do not adversely
interfere with the use made or proposed to be made of such property
and buildings by the Company or such subsidiary.
(xvii) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or filing with,
any court or governmental agency or body is required for the sale of
the Shares or the consummation of the transactions contemplated by
this Agreement, except the registration of the Shares under the Act
(which, if the Registration Statement is not effective as of the time
of execution hereof, shall be obtained as provided in this Agreement)
and such as may be required under state securities or blue sky laws in
connection with the offer, sale and distribution of the Shares by the
Underwriters.
(xviii) Other than as disclosed in the Prospectus, there is
no litigation, arbitration, claim, proceeding (formal or informal) or
investigation pending or threatened (or any basis therefor) in which
the Company or any of its subsidiaries is a party or of which any of
their respective properties or assets are the subject which is
individually or in the aggregate reasonably likely to have a material
adverse effect on the financial position, results of operations or
business of the Company and its subsidiaries. Neither the Company nor
any of its subsidiaries is in violation of, or in default with respect
to, any statute, rule, regulation, order, judgment or decree, except
as described in the Prospectus or such as do not and will not
individually or in the aggregate have a material adverse effect on the
financial position, results of operations or business of the Company
and its subsidiaries, taken as a whole, and neither the Company nor
any of its subsidiaries is required to take any action in order to
avoid any such violation or default.
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(xix) Xxxxxxx & Xxxxxxx L.L.P., who have certified certain
financial statements of the Company and its consolidated subsidiaries,
is and was during the periods covered by its report included in the
Registration Statement and the Prospectus, independent public
accountants as required by the Act, the Exchange Act, and the rules
and regulations of the Commission thereunder.
(xx) The consolidated financial statements and schedules
(including the related notes) of the Company and its consolidated
subsidiaries included in the Registration Statement, the Prospectus or
any Preliminary Prospectus were prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved and fairly present the financial position and results
of operations of the Company and its subsidiaries, on a consolidated
basis, at the dates and for the periods presented. The other
financial and statistical information and data included in the
Registration Statement, the Prospectus or any Preliminary Prospectus,
set forth under the captions "Prospectus Summary," "Selected Financial
Data," "Management's Discussion and Analysis of Financial Conditions
and Results of Operations," and "Business" are, in all material
respects, accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Company.
(xxi) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding
agreement of the Company enforceable against the Company in accordance
with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws relating
to or affecting the enforcement of creditors' rights generally and to
general equitable principles.
(xxii) Neither the Company nor any of its officers,
directors or affiliates has (A) taken, directly or indirectly, any
action designed to cause or result in, or that has constituted or
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares or (B) since the filing of the
Registration Statement (1) sold, bid for, purchased or paid anyone any
compensation for soliciting purchases of, the Shares or (2) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
(xxiii) The Company has obtained for the benefit of the
Company and the Underwriters from each of its directors, executive
officers and the persons whose names appear on Schedule II hereto a
written agreement to the effect that for a period of either (i) 180 or
(ii) 45 days (as set forth in Schedule II) from the date of the
Prospectus such director, officer or other person will not, without
the prior written consent of The Xxxxxxxx-Xxxxxxxx Company, LLC,
offer, sell, agree to sell, pledge, grant any option to purchase or
otherwise dispose of (or announce any offer, sale, pledge, grant of an
option to purchase or other disposition), directly or indirectly, any
shares of Common Stock
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or securities convertible into, or exercisable or exchangeable for,
shares of Common Stock.
(xxiv) Neither the Company, any of its subsidiaries, nor
any director, officer, agent, employee or other person associated with
or acting on behalf of the Company or any such subsidiary has,
directly or indirectly: used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
relating to political activity; made any unlawful payment to foreign
or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; violated
any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(xxv) The operations of the Company and its subsidiaries
with respect to any real property currently leased or owned or by any
means controlled by the Company or any subsidiary (the "Real
Property") are in compliance in all material respects with all
federal, state, and local laws, ordinances, rules, and regulations
relating to occupational health and safety and the environment
(collectively, "Laws"), and the Company and its subsidiaries have all
licenses, permits and authorizations necessary to operate under all
Laws and are in compliance in all material respects with all terms and
conditions of such licenses, permits and authorizations; neither the
Company nor any subsidiary has authorized, conducted or has knowledge
of the generation, transportation, storage, use, treatment, disposal,
or release of any hazardous substance, hazardous waste, hazardous
material, hazardous constituent, toxic substance, pollutant,
contaminant, petroleum product, natural gas, liquefied gas or
synthetic gas defined or regulated under any environmental law on, in
or under any Real Property in violation of any Laws; and there is no
pending or threatened claim, litigation or any administrative agency
proceeding, nor has the Company or any subsidiary received any written
or oral notice from any governmental entity or third party, that: (A)
alleges a violation of any Laws by the Company or any subsidiary; (B)
alleges the Company or any subsidiary is a liable party under the
Comprehensive Environmental Response, Compensation, and Liability Act,
42 U.S.C. (S) 9601 et seq. or any state superfund law; (C) alleges
------
possible contamination of the environment by the Company or any
subsidiary; or (D) alleges possible contamination of the Real
Property.
(xxvi) The Company and its subsidiaries own or have the
right to use all patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, franchises,
trade secrets, proprietary or other confidential information and
intangible properties and assets (collectively, "Intangibles")
necessary to their respective businesses as presently conducted or
proposed to be conducted or as the Prospectus indicates the Company or
such subsidiary proposes to conduct; to the knowledge of the
Company, neither the Company nor any subsidiary has infringed or is
infringing, and neither the Company nor any subsidiary has received
notice of infringement with respect to,
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asserted Intangibles of others; and, to the best knowledge of the
Company, there is no infringement by others of Intangibles of the
Company or any of its subsidiaries.
(xxvii) The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged; and neither the Company
nor any such subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a comparable cost.
(xxviii) Each of the Company and its subsidiaries makes and
keeps accurate books and records reflecting its assets and maintains
internal accounting controls which provide reasonable assurance that
(A) transactions are executed in accordance with management's general
or specific authorization, (B) transactions are recorded as necessary
to permit preparation of the Company's consolidated financial
statements in accordance with generally accepted accounting principles
and to maintain accountability for the assets of the Company, (C)
access to the assets of the Company and each of its subsidiaries is
permitted only in accordance with management's general or specific
authorization, and (D) the recorded accountability for assets of the
Company and each of its subsidiaries is compared with existing assets
at reasonable intervals and appropriate action is taken with respect
to any differences.
(xxix) No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distributions on such subsidiary's
capital stock, from repaying to the Company any loans or advances to
such subsidiary or from transferring any of such subsidiary's property
or assets to the Company or any other subsidiary of the Company,
except as disclosed in the Prospectus.
(xxx) The Company and its subsidiaries have filed all
foreign, federal, state and local tax returns that are required to be
filed by them and have paid all taxes shown as due on such returns as
well as all other materal taxes, assessments and governmental charges
that are due and payable; and no deficiency with respect to any such
return has been assessed or proposed.
(xxxi) The Company is not, will not become as a result of
the transactions contemplated hereby, and does not intend to conduct
its business in a manner that would cause it to become, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940.
(xxxii) The Common Stock is registered pursuant to Section
12(g) of the Exchange Act and is qualified as a Nasdaq National Market
security. The Company has taken no action designated to terminate, or
likely to have the effect of
9
terminating, the registration of the Common Stock under the Exchange
Act or qualification of the Common Stock on the Nasdaq National
Market, nor has the Company received any notification that the
Commission or the National Association of Securities Dealers, Inc.
(the "NASD") is contemplating terminating such registration or
qualification.
(xxxiii) No labor dispute with the employees of the Company or
any subsidiary exists or, to the knowledge of the Company, is imminent
or threatened, and the Company is not aware of any existing, imminent
or threatened labor disturbance by the employees of any of its
principal suppliers, manufacturers or contractors that, in either
case, could result in a material adverse effect on the financial
position, results of operations or business of the Company.
2. PURCHASE AND SALE OF SHARES. Subject to the terms and conditions
herein set forth, (a) the Company agrees to sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase
from the Company at a purchase price of $_________ per share, the number of
Firm Shares (to be adjusted by the Representatives so as to eliminate
fractional shares) determined by multiplying the aggregate number of Firm
Shares to be sold by the Company by a fraction, the numerator of which is the
aggregate number of Firm Shares to be purchased by such Underwriter as set
forth opposite the name of such Underwriter in Schedule I hereto, and the
denominator of which is the aggregate number of Firm Shares to be purchased by
the Underwriters from the Company hereunder and (b) in the event and to the
extent that the Underwriters shall exercise the election to purchase Optional
Shares as provided below, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly,
to purchase from the Company, at the purchase price per share set forth in
clause (a) of this Section 2, that portion of the number of Optional Shares as
to which such election shall have been exercised (to be adjusted by the
Representatives so as to eliminate fractional shares) determined by multiplying
such number of Optional Shares by a fraction, the numerator of which is the
maximum number of Optional Shares that such Underwriter is entitled to purchase
as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of the Optional Shares that all of
the Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election in whole or in part from time to time up to 525,000 Optional
Shares, at the purchase price per share set forth in clause (a) in the
paragraph above for the sole purpose of covering over-allotments in the sale of
Firm Shares. Any such election to purchase Optional Shares may be exercised by
written notice from the Representatives to the Company, given from time to time
within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by the
Representatives but in no event earlier than the First Time of Delivery (as
hereinafter defined) or, unless the Representatives and the Company otherwise
agree in writing, earlier than two or later than ten business days after the
date of such notice. In the event the Representatives elect to purchase all or
a portion of the Optional Shares, the Company agrees to furnish or cause to be
furnished to the Representatives the certificates,
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letters and opinions, and to satisfy all conditions, set forth in Section 7
hereof at each Subsequent Time of Delivery (as hereinafter defined).
3. OFFERING BY THE UNDERWRITERS. Upon the authorization by the
Representatives of the release of the Shares, the several Underwriters propose
to offer the Shares for sale upon the terms and conditions disclosed in the
Prospectus.
4. DELIVERY OF SHARES; CLOSING. Certificates in definitive form for the
Shares to be purchased by each Underwriter hereunder, and in such denominations
and registered in such names as The Xxxxxxxx-Xxxxxxxx Company, LLC may request
upon at least 48 hours' prior notice to the Company, shall be delivered by or
on behalf of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter on its behalf of the purchase
price therefor by wire transfer or certified or official bank check or checks
drawn on an Atlanta, Georgia bank, payable to the order of the Company in same
day available funds. The closing of the sale and purchase of the Shares shall
be held at the offices of Pillsbury Madison & Sutro LLP, 0000 Xxxxxxx Xxxxxx,
Xxxx Xxxx, Xxxxxxxxxx 00000, except that physical delivery of such
certificates shall be made at the office of The Depository Trust Company, 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The time and date of such delivery and
payment shall be, with respect to the Firm Shares, at [10:00 a.m.], Eastern
Time, on the third full business day after this Agreement is executed, or, if
this Agreement is executed after 4:30 p.m. Eastern Time, on the fourth full
business day after this Agreement is executed, or at such other time and date
as the Representatives and the Company may agree upon in writing, and, with
respect to the Optional Shares, at 10:00 a.m., Eastern Time, on the date
specified by the Representatives in the written notice given by the
Representatives of the Underwriters' election to purchase all or part of such
Optional Shares, or at such other time and date as the Representatives and the
Company may agree upon in writing. Such time and date for delivery of the Firm
Shares is herein called the "First Time of Delivery," such time and date for
delivery of any Optional Shares, if not the First Time of Delivery, is herein
called a "Subsequent Time of Delivery," and each such time and date for
delivery is herein called a "Time of Delivery." The Company will make such
certificates available for checking and packaging at least 24 hours prior to
each Time of Delivery at the office of The Depository Trust Company, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other location in New York, New
York specified by the Representatives in writing at least 48 hours prior to
such Time of Delivery.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with each
of the Underwriters:
(i) If the Registration Statement has been declared effective
prior to the execution and delivery of this Agreement, the Company
will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented
to by the Representatives, subparagraph (4)) of Rule 424(b) not later
than the earlier of (A) the second business day following the
execution and delivery of this Agreement or (B) the fifth business day
after the date on which the Registration Statement is declared
effective. The Company will advise the Representatives promptly of
any such filing pursuant to Rule 424(b). The Company will file
promptly all reports and any definitive proxy or information
11
statement required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15 of the Exchange Act
subsequent to the date of the Prospectus.
(ii) The Company will not file with the Commission the
Prospectus or the amendment referred to in the second sentence of
Section l(a)(i) hereof, any amendment or supplement to the Prospectus
or any amendment to the Registration Statement unless the
Representatives have received a reasonable period of time to review
any such proposed amendment or supplement and consented to the filing
thereof and will use its best efforts to cause any such amendment to
the Registration Statement to be declared effective as promptly as
possible. Upon the request of the Representatives or counsel for the
Underwriters, the Company will promptly prepare and file with the
Commission, in accordance with the rules and regulations of the
Commission, any amendments to the Registration Statement or amendments
or supplements to the Prospectus that may be necessary or advisable in
connection with the distribution of the Shares by the several
Underwriters and will use its reasonable efforts to cause any such
amendment to the Registration Statement to be declared effective as
promptly as possible. If required, the Company will file any amendment
or supplement to the Prospectus with the Commission in the manner and
within the time period required by Rule 424(b) under the Act. The
Company will advise the Representatives, promptly after receiving
notice thereof, of the time when the Registration Statement or any
amendment thereto has been filed or declared effective or the
Prospectus or any amendment or supplement thereto has been filed and
will provide evidence to the Representatives of each such filing or
effectiveness.
(iii) The Company will advise the Representatives promptly
after receiving notice or obtaining knowledge of (A) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any part thereof or any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
any amendment or supplement thereto, (B) the suspension of the
qualification of the Shares for offer or sale in any jurisdiction or
of the initiation or threatening of any proceeding for any such
purpose, or (C) any request made by the Commission or any securities
authority of any other jurisdiction for amending the Registration
Statement, for amending or supplementing the Prospectus or for
additional information or (D) any threat by the Commission or any such
securities authority to initiate proceedings for issuance of such stop
order or other order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto. The Company will use its best efforts to prevent
the issuance of any such stop order or other order and, if any such
stop order or other order is issued, to obtain the withdrawal thereof
as promptly as possible.
(iv) If the delivery of a prospectus relating to the Shares
is required under the Act at any time prior to the expiration of nine
months after the date of the Prospectus and if at such time any events
have occurred as a result of
12
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if for
any reason it is necessary during such same period to amend or
supplement the Prospectus to comply with the Act or the rules and
regulations thereunder, the Company will promptly notify the
Representatives and upon the request of the Representatives (but at
the Company's expense) prepare and file with the Commission an
amendment or supplement to the Prospectus that corrects such statement
or omission or effects such compliance and will furnish without charge
to each Underwriter and to any dealer in securities as many copies of
such amended or supplemented Prospectus as the Representatives may
from time to time reasonably request. If the delivery of a prospectus
relating to the Shares is required under the Act at any time nine
months or more after the date of the Prospectus, upon the request of
the Representatives but at the expense of the Underwriters, the
Company will prepare and deliver to the Underwriters as many copies as
the Representatives may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act. Neither the
Representatives' consent to, nor the Underwriters' delivery of, any
such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 7.
(v) The Company promptly from time to time will take such
action as the Representatives may reasonably request to qualify the
Shares for offering and sale under the securities or blue sky laws of
such jurisdictions as the Representatives may request and will
continue such qualifications in effect for as long as may be necessary
to complete the distribution of the Shares, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction.
(vi) The Company will promptly provide the Representatives,
without charge, (A) three manually executed copies of the Registration
Statement as originally filed with the Commission and of each
amendment thereto, each accompanied by all exhibits thereto, (B) for
each other Underwriter a conformed copy of the Registration Statement
as originally filed and of each amendment thereto, without exhibits,
and (C) so long as a prospectus relating to the Shares is required to
be delivered under the Act, as many copies of each Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto as
the Representatives may reasonably request.
13
(viii) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, the Company will not, without the prior written consent of
The Xxxxxxxx-Xxxxxxxx Company, LLC, offer, sell, agree to sell,
pledge, grant any option to purchase or otherwise dispose of (or
announce any offer, sale, pledge, grant of an option to purchase or
other disposition), directly or indirectly, any shares of Common Stock
or securities convertible into, exercisable or exchangeable for,
shares of Common Stock, except as provided in Section 2 and except for
the issuance of Common Stock upon the exercise of stock options or
warrants outstanding on the date of this Agreement to the extent that
such stock options or warrants are disclosed in the Prospectus.
(ix) During a period of five years from the effective date
of the Registration Statement, the Company will furnish to the
Representatives and, upon request, to each of the other Underwriters,
without charge, (A) copies of all reports or other communications
(financial or other) furnished to shareholders, (B) as soon as they
are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange, and (C) such additional information concerning the business
and financial condition of the Company and its subsidiaries, if any,
as the Representatives may reasonably request.
(x) Neither the Company nor any of its officers, directors
or affiliates will (A) take, directly or indirectly, prior to the
termination of the underwriting syndicate contemplated by this
Agreement, any action designed to cause or to result in, or that might
reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Shares, (B) sell, bid for, purchase
or pay anyone any compensation for soliciting purchases of, the Shares
or (C) pay or agree to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(xi) The Company will apply the net proceeds from the
offering in the manner set forth under "Use of Proceeds" in the
Prospectus.
(xii) The Company will cause the Shares to continue to be
listed on the Nasdaq National Market.
(xiii) If at any time during the period beginning on the
date the Registration Statement becomes effective and ending on the
later of (A) the date 30 days after such effective date and (B) the
date that is the earlier of (1) the date on which the Company first
files with the Commission a Quarterly Report on Form 10-Q after such
effective date and (2) the date on which the Company first issues a
quarterly financial report to shareholders after such effective date,
any rumor, publication or event relating to or affecting the Company
shall occur as a result of which in the reasonable opinion of the
Representatives the market price of the
14
Common Stock has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates
an amendment of or supplement to the Prospectus), the Company will,
after written notice from the Representatives advising the Company to
the effect set forth above, forthwith prepare, consult with the
Representatives concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to the
Representatives, responding to or commenting on such rumor,
publication or event.
6. EXPENSES. The Company will pay all costs and expenses incident to
the performance of its obligations under this Agreement (in such proportion as
may be agreed upon among them), whether or not the transactions contemplated
hereby are consummated or this Agreement is terminated pursuant to Section 10
hereof, including, without limitation, all costs and expenses incident to: (i)
the fees, disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and, if applicable,
filing, of the Registration Statement (including all amendments thereto), any
Preliminary Prospectus, the Prospectus and any amendments and supplements
thereto, this Agreement and any blue sky memoranda; (ii) the delivery of copies
of the foregoing documents to the Underwriters; (iii) the filing fees of the
Commission and the NASD relating to the Shares; (iv) the preparation, issuance
and delivery to the Underwriters of any certificates evidencing the Shares,
including transfer agent's and registrar's fees; (v) the qualification of the
Shares for offering and sale under state securities and blue sky laws, including
filing fees and fees and disbursements of counsel for the Underwriters relating
thereto; (vi) any listing of the securities on the Nasdaq National Market and
(vii) any expenses for travel, lodging and meals incurred by the Company and any
of its officers, directors and employees in connection with any meetings with
prospective investors in the Shares. It is understood, however, that, except as
provided in this Section, Section 8 and Section 10 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
stock transfer taxes on resale of any of the Shares by them, and any advertising
expenses relating to the offer and sale of the Shares.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder to purchase and pay for the Shares to be delivered at
each Time of Delivery shall be subject, in their discretion, to the accuracy of
the representations and warranties of the Company contained herein as of the
date hereof and as of such Time of Delivery, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its covenants and agreements hereunder, and to the following
additional conditions precedent:
(a) If the Registration Statement as amended to date has not become
effective prior to the execution of this Agreement, such Registration
Statement shall have been declared effective not later than 11:00 am.,
Atlanta time, on the date of this Agreement or such later date and/or time
as shall have been consented to by the Representatives in writing. If
required, the Prospectus and any amendment or supplement thereto shall have
been filed with the Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing and in accordance with
Section 5(a) of this Agreement; no stop order suspending the effectiveness
of the Registration Statement or any part thereof shall
15
have been issued and no proceedings for that purpose shall have been
instituted, threatened or, to the best knowledge of the Company and the
Representatives, contemplated by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the reasonable satisfaction of the Representatives.
(b) Xxxxxx, Xxxxxxxxx, Xxxxxx & Xxxxxx LLP, counsel for the
Underwriters, shall have furnished to the Representatives such opinion or
opinions, dated such Time of Delivery, with respect to the incorporation of
the Company, the validity of the Shares being delivered at such Time of
Delivery, the Registration Statement, the Prospectus, and other related
matters as the Representatives may reasonably request, and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(c) The Representatives shall have received an opinion, dated such Time
of Delivery, of Pillsbury Madison & Sutro LLP, counsel for the Company, in
form and substance satisfactory to the Representatives and counsel for the
Underwriters, to the effect that:
(i) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and
authority to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus and to
enter into this Agreement and perform its obligations hereunder. The
Company is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of each other
jurisdiction in which it owns or leases property, or conducts any
business, so as to require such qualification, except where the
failure to so qualify would not have a material adverse effect on the
financial position, results of operations or business of the Company
and its subsidiaries.
(ii) Each of the subsidiaries of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement and
the Prospectus. Each such subsidiary is duly qualified to transact
business as a foreign corporation and is in good standing under the
laws of each other jurisdiction in which it owns or leases property,
or conducts any business, so as to require such qualification, except
where the failure to so qualify would not have a material adverse
effect on the financial position, results of operations or business of
the Company and its subsidiaries.
(iii) The Company's authorized, issued and outstanding
capital stock is as disclosed in the Prospectus. All of the issued
shares of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and conform to the
description of the Common Stock contained in the Prospectus. None of
the issued shares of capital stock of the Company or any of its
subsidiaries has been issued or is owned or held in violation of any
preemptive
16
rights of shareholders, and no person or entity (including any holder
of outstanding shares of capital stock of the Company or its
subsidiaries) has any preemptive or other rights to subscribe for any
of the Shares.
(iv) All of the issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable, and are owned beneficially by the
Company free and clear of all liens, security interests, pledges,
charges, encumbrances, shareholders' agreements, voting trusts,
defects, equities or claims of any nature whatsoever. To such
counsel's knowledge, other than the subsidiaries listed on Exhibit 21
to the Registration Statement, the Company does not own, directly or
indirectly, any capital stock or other equity securities of any other
corporation or any ownership interest in any partnership, joint
venture or other association.
(v) Except as disclosed in the Prospectus, there are no
outstanding (A) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of
the Company or any such subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any such subsidiary any
such capital stock or any such convertible or exchangeable securities
or obligations, or (C) obligations of the Company or any such
subsidiary to issue any shares of capital stock, any such convertible
or exchangeable securities or obligations, or any such warrants,
rights or options.
(vi) The Shares to be issued and sold by the Company have
been duly authorized and, when issued and delivered against payment
therefor as provided herein, will be validly issued and fully paid and
nonassessable and will conform to the description of the Common Stock
contained in the Prospectus; the certificates evidencing the Shares
comply with all applicable requirements of Delaware law; the Shares
have been listed on the Nasdaq National Market.
(vii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings known to such counsel between
the Company and any person granting such person the right to require
the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement (unless
any such right has been effectively waived) or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.
(viii) All offers and sales of the Company's capital stock
prior to the date hereof were at all relevant times duly registered
under the Act or exempt from the registration requirements of the Act
by reason of Sections 3(b), 4(2) or 4(6) thereof and were duly
registered or the subject of an available exemption from the
registration requirements of the applicable state securities or blue
sky laws.
17
(ix) Neither the Company nor any of its subsidiaries is, or
with the giving of notice or passage of time or both, would be, in
violation of its Certificate of Incorporation or Bylaws or in default
under any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which the Company or any such
subsidiary is a party or to which any of their respective properties
or assets is subject.
(x) The issue and sale of the Shares being issued at such
Time of Delivery and the performance of this Agreement and the
consummation of the transactions herein contemplated will not conflict
with, or (with or without the giving of notice or the passage of time
or both) result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which the Company or any such subsidiary is a party or to which any
of their respective properties or assets is subject nor will such
action conflict with or violate any provision of the Certificate of
Incorporation or Bylaws of the Company or any of its subsidiaries or
any statute, rule or regulation or any order, judgment or decree of
any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their respective
properties or assets.
(xi) The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good title to
all personal property owned by them, in each case, free and clear of
all liens, security interests, pledges, charges, encumbrances,
mortgages and defects except such as are disclosed in the Prospectus
or such as do not materially and adversely affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by the Company and subsidiaries; and any real
property and buildings held under lease by the Company or any of its
subsidiaries are held by the Company or such subsidiary under valid,
subsisting and enforceable leases with such exceptions as are
disclosed in the Prospectus or are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by the Company or such subsidiary.
(xii) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or filing with,
any court or governmental agency or body is required for the issue and
sale of the Shares or the consummation of the transactions
contemplated by this Agreement, except the registration of the Shares
under the Act and such as may be required under state securities or
blue sky laws in connection with the offer, sale and distribution of
the Shares by the Underwriters.
(xiii) To such counsel's knowledge and other than as
disclosed in or contemplated by the Prospectus, there is no
litigation, arbitration, claim, proceeding (formal or informal) or
investigation pending or threatened in which the Company or
18
any of its subsidiaries is a party or of which any of their respective
properties or assets is the subject which, if determined adversely to
the Company or any such subsidiary, would individually or in the
aggregate have a material adverse effect on the financial position,
results of operations or business of the Company and its subsidiaries;
and, to such counsel's knowledge, neither the Company nor any of its
subsidiaries is in violation of, or in default with respect to, any
statute, rule, regulation, order, judgment or decree, except as
described in the Prospectus, nor is the Company or any subsidiary
required to take any action in order to avoid any such violation or
default.
(xiv) This Agreement has been duly authorized, executed and
delivered by the Company.
(xv) The Registration Statement and the Prospectus and each
amendment or supplement thereto (other than the financial statements
and related schedules therein, as to which such counsel need express
no opinion), as of their respective effective or issue dates, complied
as to form in all material respects with the requirements of the Act
and the rules and regulations thereunder. Each of the Incorporated
Documents (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion), as of
their respective effective dates, complied as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations thereunder. The descriptions in the Registration
Statement and the Prospectus of statutes, legal and governmental
proceedings or contracts and other documents are accurate and fairly
present the information required to be shown; and such counsel do not
know of any statutes or legal or governmental proceedings required to
be described in the Registration Statement or Prospectus that are not
described as required or of any contracts or documents of a character
required to be described in the Registration Statement or Prospectus
or to be filed as exhibits to the Registration Statement which are not
described and filed as required.
(xvi) The Registration Statement is effective under the Act;
any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and, to such counsel's
knowledge, no proceedings for that purpose have been instituted or
threatened or are contemplated by the Commission.
(xvii) The Company is not, and will not be as a result of the
consummation of the transactions contemplated by this Agreement, an
"investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940.
Such counsel shall also state that they have no reason to believe that the
Registration Statement, or any further amendment thereto made prior to such Time
of Delivery, on its effective date and as of such Time of Delivery, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
19
statements therein not misleading, or that the Prospectus, or any amendment or
supplement thereto made prior to such Time of Delivery, as of its issue date and
as of such Time of Delivery, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading (provided that such counsel need express no belief
regarding the financial statements and related schedules and other financial
data contained in the Registration Statement, any amendment thereto, or the
Prospectus, or any amendment or supplement thereto).
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deem proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of any jurisdiction other than the State of Delaware or the
United States, to the extent satisfactory in form and scope to counsel for the
Underwriters, upon the opinion of local counsel, provided that such counsel
states such counsel believes that the Underwriters are justified in relying upon
such opinion and copies of such opinion are delivered to the Representatives and
counsel for the Underwriters.
(d) The Representatives shall have received from Coopers & Xxxxxxx
L.L.P. letters dated, respectively, the date hereof (or, if the
Registration Statement has been declared effective prior to the execution
and delivery of this Agreement, dated such effective date and the date of
this Agreement) and each Time of Delivery, in form and substance
satisfactory to the Representatives, to the effect set forth in Annex I
hereto. In the event that the letters referred to in this Section 7(d) set
forth any changes, decreases or increases in the items specified in
paragraph (iv) of Annex I, it shall be a further condition to the
obligations of the Underwriters that (i) such letters shall be accompanied
by a written explanation by the Company as to the significance thereof,
unless the Representatives deem such explanation unnecessary, and (ii) such
changes, decreases or increases do not, in the sole judgment of the
Representatives, make it impracticable or inadvisable to proceed with the
purchase, sale and delivery of the Shares being delivered at such Time of
Delivery as contemplated by the Registration Statement, as amended as of
the date of such letter.
(e) Since the date of the latest audited financial statements included
in the Prospectus, neither the Company nor any of its subsidiaries shall
have sustained (i) any loss or interference with their respective
businesses from fire, explosion, flood, hurricane or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as disclosed in or
contemplated by the Prospectus, or (ii) any change, or any development
involving a prospective change (including without limitation a change in
management or control of the Company), in or affecting the position
(financial or otherwise), results of operations, net worth or business
prospects of the Company and its subsidiaries, otherwise than as disclosed
in or contemplated by the Prospectus, the effect of which, in either such
case, is in the sole judgment of the Representatives so material and
adverse as to make it impracticable or inadvisable to proceed with the
purchase, sale and delivery of the Shares being delivered at such Time of
Delivery as contemplated by the Registration Statement, as amended as of
the date hereof.
20
(f) Subsequent to the date hereof there shall not have occurred any of
the following: (i) any suspension or limitation in trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices
for trading on such exchange, or in the Common Stock by the Commission or
the Nasdaq National Market; (ii) a moratorium on commercial banking
activities in New York declared by either federal or state authorities; or
(iii) any outbreak or escalation of hostilities involving the United
States, declaration by the United States of a national emergency or war or
any other national or international calamity or emergency if the effect of
any such event specified in this clause (iii) in the sole judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
purchase, sale and delivery of the Shares being delivered at such Time of
Delivery as contemplated by the Registration Statement, as amended as of
the date hereof.
(g) The Company shall have furnished to the Representatives at such
Time of Delivery certificates of officers of the Company, satisfactory to
the Representatives and counsel to the Underwriters, as to the accuracy of
the representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of Delivery,
and as to such other matters as the Representatives may reasonably request,
and the Company shall have furnished or caused to be furnished certificates
as to the matters set forth in subsections (a) and (e) of this Section 7,
and as to such other matters as the Representatives may reasonably request.
(h) The Shares shall be listed on the Nasdaq National Market.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement made by the Company in Section
l(a) of this Agreement; (ii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or (B) any application or other document, or any amendment
or supplement thereto, executed by the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify the Shares under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange (each an
"Application"); or (iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or any Application a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating, defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement or any amendment
21
thereto, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto or any Application in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives expressly for use therein. The Company will not, without the
prior written consent of each Underwriter, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding (or related cause of action or portion thereof) in respect of which
indemnification may be sought hereunder (whether or not such Underwriter is a
party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of such Underwriter from
all liability arising out of such claim, action, suit or proceeding (or related
cause of action or portion thereof).
(b) Each Underwriter, severally but not jointly, agrees to indemnify and
hold harmless the Company against any losses, claims, damages or liabilities to
which the Company may become subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment thereto,
any Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto, or any Application or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party);
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to assume the defense of such action on behalf of such indemnified
party and such indemnified party shall have the right to select separate counsel
to defend such action on behalf of such indemnified party. After such notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be liable to
such indemnified party under this Section 8 for
22
any legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, which separate counsel shall be designated by the
Representatives in the case of indemnity arising under paragraph (a) of this
Section 8) or (ii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party.
Nothing in this Section 8(c) shall preclude an indemnified party from
participating at its own expense in the defense of any such action so assumed by
the indemnifying party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other from the offering
of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof) as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this Subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue
23
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meanings of the Act.
9. DEFAULT OF UNDERWRITERS. (a) If any Underwriter defaults in its
obligation to purchase Shares at a Time of Delivery, the Representatives may in
their discretion arrange for the Representatives or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six (36) hours after such default by any Underwriter the Representatives
do not arrange for the purchase of such Shares, the Company shall be entitled
to a further period of thirty-six (36) hours within which to procure another
party or other parties satisfactory to the Representatives to purchase such
Shares on such terms. In the event that, within the respective prescribed
periods, the Representatives notify the Company that the Representatives have
so arranged for the purchase of such Shares, or the Company notifies the
Representatives that it has so arranged for the purchase of such Shares, the
Representatives or the Company shall have the right to postpone a Time of
Delivery for a period of not more than seven days in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments to the Registration Statement or the Prospectus
that in the opinion of the Representatives may thereby be made necessary. The
cost of preparing, printing and filing any such amendments shall be paid for by
the Underwriters. The term "Underwriter" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the Representatives and
the Company as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-eleventh of the aggregate
number of Shares to be purchased at such Time of Delivery, then the Company
shall have the right to require each non-defaulting Underwriter to purchase the
number of Shares which such Underwriter agreed to purchase hereunder at such
Time of Delivery and, in addition, to require each non-defaulting Underwriter
to purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made, but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. TERMINATION. (a) This Agreement may be terminated with respect to the
Firm Shares or any Optional Shares in the sole discretion of the
Representatives by notice to the
24
Company given prior to the First Time of Delivery or any Subsequent Time of
Delivery, respectively, in the event that (i) any condition to the obligations
of the Underwriters set forth in Section 7 hereof has not been satisfied, or
(ii) the Company shall have failed, refused or been unable to deliver the
Shares or to perform all obligations and satisfy all conditions on their
respective parts to be performed or satisfied hereunder at or prior to such
Time of Delivery, in either case other than by reason of a default by any of
the Underwriters. If this Agreement is terminated pursuant to this Section
10(a), the Company will reimburse the Underwriters severally upon demand for
all out-of-pocket expenses (including counsel fees and disbursements) that
shall have been incurred by them in connection with the proposed purchase and
sale of the Shares. The Company shall not be liable to any of the Underwriters
for the loss of anticipated profits from the transactions covered by this
Agreement.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the Representatives and
the Company as provided in Section 9(a), the aggregate number of such Shares
which remains unpurchased exceeds one-eleventh of the aggregate number of Shares
to be purchased at such Time of Delivery, or if the Company shall not exercise
the right described in Section 9(b) to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to a Subsequent Time of Delivery, the obligations of the
Underwriters to purchase and of the Company to sell the Optional Shares) shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
11. SURVIVAL. The respective indemnities, agreements, representations,
warranties and other statements of the Company, its officers and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person referred to in
Section 8(d) or the Company or any officer or director or controlling person of
the Company referred to in Section 8(d), and shall survive delivery of and
payment for the Shares. The respective agreements, covenants, indemnities and
other statements set forth in Sections 6 and 8 hereof shall remain in full force
and effect, regardless of any termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be mailed, delivered or telegraphed and
confirmed in writing to the Representatives in care of The Xxxxxxxx-Xxxxxxxx
Company, LLC, 0000 Xxxxxxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention:
Corporate Finance Department (with a copy to Xxxxxx, Xxxxxxxxx, Xxxxxx & Xxxxxx
LLP, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxx X. Xxxxxxxx,
Esq.); and if sent to the Company, shall be mailed, delivered or telegraphed and
confirmed in writing, to the Company at 000 X. Xxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxx, Chief Financial Officer (with a copy
to Pillsbury Madison & Sutro LLP, 0000 Xxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx
00000, Attention: Xxxxxxxxx X. Xxxxxx, Esq.).
13. REPRESENTATIVES. The Representatives will act for the several
Underwriters in
25
connection with the transactions contemplated by this Agreement, and any action
under this Agreement taken by the Representatives jointly or by The Xxxxxxxx-
Xxxxxxxx Company, LLC will be binding upon all the Underwriters.
14. BINDING EFFECT. This Agreement shall be binding upon, and inure
solely to the benefit of, the Underwriters and the Company and to the extent
provided in Sections 8 and 10 hereof, the officers and directors and controlling
persons referred to therein and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia without giving effect to any
provisions regarding conflicts of laws.
16. COUNTERPARTS. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
[Remainder of Page Intentionally Left Blank]
26
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us one of the counterparts hereof, and upon the
acceptance hereof by The Xxxxxxxx-Xxxxxxxx Company, LLC on behalf of each of the
Underwriters, this letter will constitute a binding agreement between the
Underwriters and the Company. It is understood that the acceptance by the
Representatives of this letter on behalf of each of the Underwriters is pursuant
to the authority set forth in the Master Agreement Among Underwriters, a copy of
which shall be submitted to the Company for examination, upon request, but
without warranty on the part of the Representatives as to the authority of the
signers thereof.
Very truly yours,
SAVOIR TECHNOLOGY GROUP, INC.
By:
---------------------------------------
X. Xxxxx Xxxxx
Chairman, Chief Executive Officer,
President and Secretary
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above at
Atlanta, Georgia.
THE XXXXXXXX-XXXXXXXX COMPANY, LLC
XXXXXXXXX & COMPANY, INC.
XXXXXX GULL XXXXXXX
& XXXXXXXX INC.
By: The Xxxxxxxx-Xxxxxxxx Company, LLC
By:
---------------------------------------
(Authorized Representative)
On behalf of each of the Underwriters
27
SCHEDULE I
NUMBER OF
OPTIONAL
TOTAL SHARES TO BE
NUMBER OF FIRM PURCHASED IF
SHARES TO BE MAXIMUM OPTION
Underwriter PURCHASED EXERCISED
----------- --------- ---------
The Xxxxxxxx-Xxxxxxxx
Company, LLC ...................
Xxxxxxxxx & Company, Inc. ........
Xxxxxx Gull Xxxxxxx
& XxXxxxxx Inc. ................
Total............................. _________ _______
3,500,000 525,000
========= =======
28
SCHEDULE II
180 Day Lock-Up 45 Day Lock-Up
--------------- --------------
X. Xxxxx Xxxxx Xxxx X. Xxxxxxxx
Xxxxx X. Xxxxx Astoria Capital Partners X.X.
Xxxxxxx Xxxxxx Xxxxxxx XX Canpartners Investments IV, LLC
Xxxxx Xxxxxxxxx Commonwealth Life Ins. Co.
Xxxxxx X'Xxxxxx Xxxxxxxxxx & Co. Inc.
Xxxx X. Xxxx IBM Credit Corporation
Xxxxxx Xxxxxxxx JMG Capital Partners L.P.
Xxxxx X. Xxxxxxxxx KA Investments LDC
X. Xxxxxxx Xxxxxxx Kodiak Opportunity, L.P.
J. Xxxxx Xxxxx Kodiak Opportunity Offshore, Ltd.
Lagunitas Partners, L.P.
Xxxxx Xxxx
Microcap Partners Limited Partnership
Xxxxxx Xxxxxxx Inc.
ROI Offshore Fund Ltd.
ROI Partners, L.P.
Seneca Capital International Ltd.
Senaca Capital X.X.
Xxxxxx Hedgecap Limited
Xxxxxx Offshore Limited
Xxxxxx Partners, X.X.
Xxxxxx, Xxxxxxxx Hedgecap Fund, L.P.
Triton Capital Investments Ltd.
29
ANNEX I
Pursuant to Section 7(d) of the Underwriting Agreement, Xxxxxxx & Xxxxxxx,
L.L.C. shall furnish letters to the Underwriters to the effect that:
(i) they are independent public accountants with respect to the
Company and its consolidated subsidiaries within the meaning the Act and
the applicable published rules and regulations thereunder;
(ii) in their opinion, the consolidated financial statements and
schedules audited by them and included in the Prospectus and the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations thereunder;
(iii) on the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) as of a specified date not more than 5 days prior to the
date of such letter, there were any changes in the capital stock
(other than the issuance of capital stock upon exercise of options
which were outstanding on the date of the latest balance sheet
included in the Prospectus) or any increase in inventories or the
long-term debt or short-term debt of the Company and its
subsidiaries, or any decreases in net current assets or net assets or
other items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(B) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in Clause (B) there were any decreases in net sales or operating,
income or the total or per share amounts of net income or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in each
case for
30
increases or decreases which the Prospectus discloses have occurred
or may occur which are described in such letter; and
(iv) in addition to the audit referred to in their report included
in the Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraph (iii) above, they
have carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, included in the Registration Statement
and the Prospectus, or which appear in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives,
and have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its subsidiaries
and have found them to be in agreement.
References to the Registration Statement and the Prospectus in this Annex I
shall include any amendment or supplement thereto at the date of such letter.
31
