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EXHIBIT 1.1
__________ SHARES
XXXXXXX.XXX, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
___________, 1999
XXXXX & XXXXXXXXXXXX, INC.
SUNTRUST EQUITABLE SECURITIES CORPORATION
As representatives of the several
Underwriters named in Schedule I hereto
c/o Scott & Xxxxxxxxxxxx, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
xxxxxxx.xxx, inc., a Georgia corporation (the "Company"), proposes to
issue and sell to the several underwriters named in Schedule I hereto (the
"Underwriters"), and certain shareholders of the Company named in Schedule II
hereto (the "Selling Shareholders" and, together with the Company, the
"Sellers") severally propose to sell to the several Underwriters, an aggregate
of __________ shares of the Company's Common Stock, no par value per share (the
"Firm Securities"), of which ___________ shares are to be issued and sold by the
Company and ___________ shares are to be sold by the Selling Shareholders, each
Selling Shareholder selling the number of Firm Securities set forth opposite
such Selling Shareholder's name in Schedule II hereto. The Company also proposes
to issue and sell to the several Underwriters not more than an additional
_________ shares of the Company's Common Stock, no par value per share (the
"Optional Securities"), if requested by the Underwriters as provided in Section
3. The Firm Securities and the Optional Securities are collectively referred to
herein as the "Securities." The Company's Common Stock, no par value per share,
is referred to herein as "Common Stock."
Additionally, on the First Delivery Date (as defined in Section 5), the
Company will sell to Xxxxx & Xxxxxxxxxxxx, Inc. ("S&S") for $__________ a
warrant to purchase an aggregate of __________ shares
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of Common Stock (equal to 7.5% of the Firm Securities to be issued and sold by
the Company) in substantially the form of Annex I hereto (the "Warrant").
In connection with the transactions contemplated by this Underwriting
Agreement (this "Agreement"), the Company has prepared and filed with the
Securities and Exchange Commission (the "Commission"), in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Act"), a
registration statement on Form S-1 (File No. 333-86877), including a prospectus,
relating to the Securities. Any preliminary prospectus included in such
registration statement, as amended, or filed by the Company with the Commission
pursuant to Rule 424(a) under the Act in connection with the offering of the
Securities is referred to herein as a "Preliminary Prospectus." The registration
statement, as amended at the time it became effective, including the information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act, is referred to herein as the
"Registration Statement"; and the prospectus in the form first used to confirm
sales of Securities is referred to herein as the "Prospectus." If the Company
has filed or is required pursuant to the terms hereof to file a registration
statement pursuant to Rule 462(b) under the Act registering additional shares of
Common Stock (a "Rule 462(b) Registration Statement"), then, unless otherwise
specified, any reference herein to the term "Registration Statement" shall be
deemed to include such Rule 462(b) Registration Statement.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to and agrees with each Underwriter
that:
(a) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement) has been declared effective by the Commission, and any Rule
462(b) Registration Statement filed after the effectiveness of this Agreement
will become effective no later than 10:00 p.m., Richmond, Virginia time, on the
date of this Agreement; and the Company has not received and has no knowledge
that any stop order suspending the effectiveness of the Registration Statement
has been issued or that any proceeding for that purpose has been instituted or
threatened by the Commission.
(b) The Company has not received and has no knowledge that any
order preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission. Each Preliminary Prospectus, at the time of filing
thereof, complied in all material respects with the applicable requirements of
the Act, and did not contain 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 the light of the circumstances under which they were
made, not misleading, except that the representation and warranty set forth in
this Section 1(b) does not apply to statements or omissions in any such
Preliminary Prospectus made in reliance upon and in conformity with information
relating to any Underwriter furnished in writing to the Company by such
Underwriter through you expressly for use therein.
(c) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended, if
applicable, will not contain 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 not misleading, (ii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act,
(iii) if the Company is
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required to file a Rule 462(b) Registration Statement after the effectiveness of
this Agreement, such Rule 462(b) Registration Statement and any amendments
thereto, when they become effective (A) will not contain 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 not misleading and (B) will comply
in all material respects with the Act and (iv) the Prospectus does not contain
and, as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this Section 1(c) do not apply to statements or omissions in the Registration
Statement or the Prospectus made in reliance upon and conformity with
information relating to any Underwriter furnished in writing to the Company by
such Underwriter through you expressly for use therein. The statistical and
market-related data included in the Prospectus are based on or derived from
independent sources which the Company believes to be reliable and accurate in
all material respects or represent the Company's good faith estimates that are
made on the basis of data derived from such sources.
(d) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as set forth therein, (i)
there has not been any change in the capital stock or long term debt of the
Company or Comstar Telecom & Wireless, Inc., a Georgia corporation (the
"Subsidiary"), or any issuance of options, warrants or rights to purchase
capital stock of the Company or the Subsidiary (except options to purchase up to
[___________] shares of Common Stock granted to new employees of the Company
under the Company's Amended and Restated 1999 Stock Option and Incentive Plan),
(ii) there has not been any material adverse change or any development involving
a prospective material adverse change in or affecting the business, general
affairs, condition (financial or otherwise) or results of operations of the
Company and the Subsidiary, taken as a whole, and (iii) neither the Company nor
the Subsidiary has entered into any material transaction or incurred any
material liability or obligation, direct or contingent.
(e) Each of the Company and the Subsidiary has been duly organized
and is validly existing as a corporation in good standing under the laws of the
State of Georgia, with the requisite corporate power and authority to conduct
its business as described in the Registration Statement and the Prospectus and
to own, lease and operate its properties; each of the Company and the Subsidiary
is duly qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which it is
required to be qualified, except where the failure to be so qualified would not,
singly or in the aggregate, have a material adverse effect on the prospects,
business, general affairs, condition (financial or otherwise) or results of
operations of the Company and the Subsidiary, taken as a whole (a "Material
Adverse Effect"); and each of the Company and the Subsidiary holds all licenses,
certificates, authorizations, consents, exemptions, qualifications, franchises,
permits and other approvals (each, an "Authorization") necessary for the conduct
of its business as described in the Registration Statement and the Prospectus.
(f) The Company has no subsidiaries and owns no equity interests
in any other person, except that the Company owns (i) one hundred percent (100%)
of the issued and outstanding shares of capital stock of the Subsidiary and (ii)
twenty-five percent (25%) of the issued and outstanding shares of capital stock
of nschool Communication Systems, Inc., a Georgia corporation ("nschool"). All
of the issued and outstanding shares of capital stock of nschool that are owned
by the Company and all of the issued and outstanding shares of capital stock of
the Subsidiary are duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company free and clear of all security
interests, claims, liens, defects, adverse interests and other encumbrances
(collectively, "Liens"). The Company has no significant subsidiaries (as defined
in Rule 1-02 of the Commission's Regulation S-X).
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(g) The authorized capital stock of the Company conforms to the
description thereof contained in the Registration Statement and the Prospectus;
all of the issued and outstanding shares of capital stock of the Company
(including, without limitation, the Securities to be sold by the Selling
Shareholders) have been duly authorized and validly issued, are fully paid and
nonassessable, and conform to the description of the capital stock of the
Company contained in the Registration Statement and the Prospectus; none of the
issued and outstanding shares of the Company's capital stock were issued in
violation of any preemptive rights of any shareholder of the Company or similar
rights; there are no preemptive rights of any shareholder of the Company or
similar rights to subscribe for or to purchase any securities of the Company;
and except as disclosed in the Registration Statement and the Prospectus, no
options or warrants or other rights to purchase or otherwise acquire from the
Company or the Subsidiary, no agreements or other obligations to issue and no
other rights to convert any security or obligation into shares of capital stock
or other ownership interests in the Company or the Subsidiary are outstanding.
(h) The Company has duly authorized the execution, delivery and
performance of this Agreement and has duly executed and delivered this
Agreement. The Company has duly authorized the execution, delivery and
performance of the Warrant and, when the Warrant is duly executed and delivered
by the Company, the Warrant will be enforceable against the Company, except to
the extent that (a) enforceability may be limited by applicable bankruptcy,
insolvency, liquidation, reorganization, moratorium and other laws relating to
or affecting the rights and remedies of creditors generally and (b) the remedy
of specific performance and other forms of equitable relief may be subject to
certain defenses and to the discretion of the court before which a proceeding
may be brought.
(i) The Securities to be issued and sold by the Company and the
shares of Common Stock to be issued pursuant to the Warrant (the "Warrant
Shares") have been duly authorized for issuance and sale pursuant to this
Agreement and the Warrant, respectively, and, when issued and delivered by the
Company against payment therefor as provided herein or in the Warrant,
respectively, will be validly issued, fully paid and nonassessable and will
conform to the description of the Securities contained in the Prospectus, and
the issuance thereof will not be subject to any preemptive rights of any
shareholder of the Company or similar rights. The Company has reserved for
issuance out of its authorized but unissued Common Stock, solely for issuance
and delivery upon exercise of the Warrant, the full number of shares of Common
Stock issuable upon exercise of the Warrant.
(j) The execution, delivery and performance of this Agreement by
or on behalf of the Sellers, the compliance by the Sellers with all of the
provisions hereof, the execution, delivery and performance of the Warrant by the
Company, the compliance by the Company with all of the provisions thereof
(including, without limitation, the issuance and delivery by the Company of the
Warrant Shares), the execution, delivery and performance by each Selling
Shareholder of such Selling Shareholder's Custody Agreement (as defined in
Section 2(b)), the compliance by such Selling Shareholder with all of the
provisions thereof and the consummation of the other transactions contemplated
hereby and thereby (including, without limitation, the Company's one-for-two
reverse stock split and the amendment and restatement of the Company's Articles
of Incorporation and Bylaws, each as described in the Registration Statement and
the Prospectus) (collectively, the "Transactions") will not (with or without the
giving of notice or the passage of time or both) (i) result in any violation of
the Articles of Incorporation or Bylaws of the Company or the Subsidiary, (ii)
result in any breach of or default under, or the creation or imposition of any
Lien (other than any Lien created pursuant to this Agreement) on or against the
Company, the Subsidiary or any of their respective properties or assets pursuant
to, any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or the Subsidiary is a party or by
which the Company, the Subsidiary or any of their respective properties or
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assets is bound, (iii) violate any constitution, statute, regulation, rule,
order or law or any judicial or administrative decree, writ, judgment or order
to which the Company, the Subsidiary or any of their respective properties or
assets is subject or (iv) result in the suspension, termination or revocation of
any Authorization of the Company or the Subsidiary or any other impairment of
the rights of the Company or the Subsidiary with respect thereto; except, in the
case of clauses (ii), (iii) and (iv), for any default which would not, singly or
in the aggregate, have a Material Adverse Effect.
(k) No Authorization or other action by, or notice to or filing
with, any court, governmental authority or regulatory body is required for the
consummation of any of the Transactions, except (i) such as have been obtained
and (ii) such as may be required under state securities or Blue Sky laws in
connection with the offer, sale and distribution of the Securities by the
Underwriters.
(l) Neither the Company nor the Subsidiary is (i) in violation of
its Articles of Incorporation or Bylaws or (ii) in default in the performance of
any obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which the Company or the Subsidiary is a party or by which the Company, the
Subsidiary or their respective properties or assets is bound, except, in the
case of clause (ii), for any default which would not, singly or in the
aggregate, have a Material Adverse Effect.
(m) Each of the Company and the Subsidiary has good and marketable
title to all real and personal property reflected as owned by it in the
financial statements referred to in Section 1(s) below or which is otherwise
material to its business, in each case free and clear of all Liens, except as
disclosed in the Registration Statement and the Prospectus or such as do not
materially 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 or the Subsidiary;
and any real property and buildings held under lease by the Company or the
Subsidiary are held by it under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the use made or
proposed to be made of such property and buildings by the Company or the
Subsidiary, except as disclosed in the Registration Statement and the
Prospectus.
(n) There are no (i) legal or governmental proceedings pending or,
to the knowledge of the Company or the Subsidiary, threatened to which the
Company or the Subsidiary is or, in the case of threatened proceedings, could be
a party or of which any of the properties or assets of the Company or the
Subsidiary is or, in the case of threatened proceedings, could be subject
(including, without limitation, any action, proceeding or investigation pending
or threatened by the Federal Communications Commission (the "FCC") or any state
or local public utility commission (each, a "PUC")) that are required to be
described in the Registration Statement or the Prospectus and are not so
described as required, (ii) constitutions, statutes, regulations, rules, orders,
laws, decrees, writs or judgments (including, without limitation, any
regulation, rule, order, law, decree, writ or judgment issued by the FCC or any
state or local PUC) that are required to be described in the Registration
Statement or the Prospectus and are not so described as required or (iii)
contracts, instruments or other documents or agreements which are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement and are not so described or filed as
required. Without limiting the generality of the foregoing sentence, the Company
has no reason to believe that any legal or governmental proceedings will be
instituted against it or the Subsidiary and, to the best knowledge of the
Company, there exists no basis for any legal or governmental proceedings to be
instituted against it or the Subsidiary.
(o) Neither the Company nor the Subsidiary has violated any
federal, state, local or foreign constitution, statute, regulation, rule, order,
law, decree, writ or judgment (including, without limitation, any constitution,
statute, regulation, rule, order, law, decree, writ or judgment relating to the
protection of
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human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), the Employee
Retirement Income Security Act of 1974, as amended, and the rules and
regulations thereunder ("ERISA"), or the Foreign Corrupt Practices Act and the
rules and regulations thereunder), except for such violations which would not,
singly or in the aggregate, have a Material Adverse Effect. Neither the Company
nor the Subsidiary has any material liability (contingent or otherwise) in
connection with any Environmental Law or the release into the environment of any
substance regulated by any Environmental Law.
(p) Each of the Company and the Subsidiary has such Authorizations
of, and has made all filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and other tribunals
as are necessary to own, lease, license and operate its assets and properties
and to conduct its business (including, without limitation, (i) all
Authorizations under any applicable Environmental Law, (ii) all Authorizations
of, filings with and notices to, the FCC and all applicable state and local
PUCs, and (iii) all other Authorizations under the Telecommunications Act of
1996 (the "1996 Act"), the Communications Act of 1934, as amended (the
"Communications Act"), the rules and regulations thereunder and similar
applicable law), except where the failure to have any such Authorization or make
any such filing or notice would not, singly or in the aggregate, have a Material
Adverse Effect. Each such Authorization is valid and in full force and effect
and the Company and the Subsidiary are in compliance, in all material respects,
with all the terms and conditions thereof and with the applicable rules and
regulations of the authorities and governing bodies having jurisdiction with
respect thereto; and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body) which (with or
without the giving of notice or the passage of time or both) allows revocation,
suspension or termination of any such Authorization or results in any other
impairment of the rights under any such Authorization; and no such Authorization
contains any restriction that is materially burdensome to the Company or the
Subsidiary.
(q) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company and Athens' ISP, Inc., are independent public
accountants as required by the Act.
(r) The Company has previously disclosed and delivered or made
available to the Underwriters or their representatives copies of all pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus or other incentive plans, all other
written employee programs, arrangements or agreements, all medical, vision,
dental or other health plans, all life insurance plans and all other employee
benefit plans or fringe benefit plans, including, without limitation, "employee
benefit plans" as that term is defined in Section 3(3) of ERISA, adopted,
maintained, sponsored in whole or in part, or contributed to by the Company, its
predecessors or any subsidiary of the Company or its predecessors for the
benefit of employees, retirees, dependents, spouses, directors, independent
contractors or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors or other beneficiaries
are eligible to participate (collectively, the "Company Benefit Plans").
The Company and each predecessor of the Company or a subsidiary of the
Company that adopted or contributed to a Company Benefit Plan have maintained
all Company Benefit Plans (including, without limitation, filing all reports and
returns required to be filed with respect thereto) in accordance with their
terms and in compliance with the applicable terms of ERISA and the Internal
Revenue Code of 1986, as amended, and the rules and regulations thereunder (the
"Code"), except where the failure to do so would not, singly or in the
aggregate, have a Material Adverse Effect. Each Company Benefit Plan which is
intended to be qualified under Section 401(a) of the Code has either received a
favorable determination letter from the Internal Revenue Service or timely
requested such a letter and has at all times been
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maintained in accordance with Section 401 of the Code, except where any failure
to receive or seek such a favorable determination letter or so maintain such
Company Benefit Plan would not, singly or in the aggregate, have a Material
Adverse Effect. Neither the Company nor the Subsidiary has engaged in any
transaction with respect to any Company Benefit Plan that would subject the
Company or the Subsidiary to a tax or penalty imposed by either Section 4975 of
the Code or Section 502(i) of ERISA, except for any such transaction, tax or
penalty which would not, singly or in the aggregate, have a Material Adverse
Effect.
Neither the Company nor the Subsidiary is obligated to provide
post-retirement medical benefits or any other unfunded post-retirement welfare
benefits, except for the provisions of any such benefits which would not, singly
or in the aggregate, have a Material Adverse Effect. None of the Company, the
Subsidiary or any member of a group of trades or businesses under common control
(as defined in ERISA Sections 4001(a)(14) and 4001(b)(1)) with the Company or
the Subsidiary has at any time within the last six years sponsored, contributed
to or been obligated under Title I or IV of ERISA to contribute to a "defined
benefit plan" (as defined in ERISA Section 3(35)). Within the last six years,
none of the Company, the Subsidiary or any member of a group of trades or
businesses under common control (as defined in ERISA Sections 4001(a)(14) and
4001(b)(1)) with the Company or the Subsidiary has had an "obligation to
contribute" (as defined in ERISA Section 4212) to a "multiemployer plan" (as
defined in ERISA Sections 4001(a)(3) and 3(37)(A)).
(s) The financial statements of the Company and Athens' ISP, Inc.,
together with related notes and schedules, as set forth in the Registration
Statement and Prospectus (and any amendment or supplement thereto), present
fairly the financial position, results of operations and changes in financial
position of the Company and Athens' ISP, Inc., respectively, on the bases stated
therein and at the indicated dates and for the indicated periods, all in
accordance with generally accepted accounting principles consistently applied
throughout the periods presented, except as noted therein; all adjustments
necessary for a fair presentation of results for such periods have been made;
the selected financial information included in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) present fairly the
information shown therein and have been compiled on a basis consistent with the
financial statements presented therein; the supporting schedules, if any,
included in the Registration Statement present fairly in accordance with
generally accepted accounting principles the information required to be stated
therein; and the other financial and statistical information and data respecting
the Company and Athens' ISP, Inc. set forth in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) 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 and Athens' ISP,
Inc. No other financial statements, supporting schedules or other financial
information (whether pro forma financial statements or otherwise) are required
to be included in the Registration Statement or the Prospectus. As of the date
of the Prospectus, the Company is not engaged in substantive discussions with
any third party with respect to, or obligated to complete, any acquisitions for
which disclosure of pro forma financial information in the Prospectus is
required by the Act.
(t) The Company and the Subsidiary have (i) filed all federal,
state, local and foreign income, franchise tax and other tax returns which have
been required to be filed, other than those filings being contested in good
faith, and (ii) paid all taxes (including, without limitation, withholding
taxes), assessments, fees and other charges (including, without limitation, all
penalties and interest) due pursuant to such returns or pursuant to any other
assessment received by the Company or the Subsidiary, other than those being
contested in good faith and for which adequate reserves have been established.
All material consequences, if any, resulting from the Company's conversion from
a Subchapter S corporation
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to a Subchapter C corporation under the Code are described in the Registration
Statement and the Prospectus.
(u) The Company and the Subsidiary 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. Neither the Company nor the Subsidiary has received notice from any
insurer or agent of such insurer that substantial capital improvements or other
material expenditures will have to be made in order to continue such insurance.
Neither the Company nor the Subsidiary has any reason to believe that it will be
unable to (i) renew its existing insurance coverage as and when such coverage
expires or (ii) obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost which is not materially different
from its current cost.
(v) There is no (i) significant unfair labor practice complaint,
grievance or arbitration proceeding pending or threatened against the Company or
the Subsidiary before the National Labor Relations Board or any state or local
labor relations board, (ii) strike, labor dispute, slowdown or stoppage pending
or threatened against the Company or the Subsidiary or (iii) union
representation question existing with respect to the employees of the Company or
the Subsidiary, except for such actions specified in clause (i), (ii) or (iii)
above which would not, singly or in the aggregate, have a Material Adverse
Effect. To the best knowledge of the Company, no collective bargaining
organizing activities are taking place with respect to the Company or the
Subsidiary.
(w) The Company and the Subsidiary maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences; and (v) such controls would prevent or detect errors
or irregularities in amounts that would be material to the Company and the
Subsidiary, taken as a whole.
(x) No relationship, direct or indirect, exists between or among
the Company and the Subsidiary, on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or the Subsidiary, on the
other hand, which is required by the Act to be described in the Registration
Statement or the Prospectus and is not so described as required.
(y) The Company and the Subsidiary own or possess all patents,
patent rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade names
(collectively, "Intellectual Property") currently employed by the Company or the
Subsidiary in connection with the business now operated by them except (i) as
disclosed in the Registration Statement and the Prospectus or (ii) where the
failure to own or possess or otherwise be able to acquire such Intellectual
Property would not, singly or in the aggregate, have a Material Adverse Effect.
Except as disclosed in the Registration Statement and the Prospectus, (i)
neither the Company nor the Subsidiary has received any notice of infringement
of or conflict with asserted rights of others with respect to any Intellectual
Property, (ii) neither the Company nor the Subsidiary is infringing or otherwise
violating any Intellectual Property of others and (iii) there are no legal or
governmental proceedings pending or, to the knowledge of the Company or the
Subsidiary, threatened relating to any Intellectual Property to which the
Company or
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the Subsidiary is or, in the case of threatened proceedings, could be a party,
or of which any of the properties or assets of the Company or the Subsidiary is
or, in the case of threatened proceedings, could be subject. There are no
contracts or other documents relating to any Intellectual Property required to
be filed as an exhibit to the Registration Statement or required to be described
in the Registration Statement or the Prospectus that are not so filed or
described as required.
(z) The Company has reviewed its operations and made reasonable
investigations regarding the operations of any third parties with which the
Company or the Subsidiary has a material relationship to evaluate the extent to
which the business or operations of the Company and the Subsidiary will be
affected by the Year 2000 Problem (as defined below). As a result of such
review, except as disclosed in the Registration Statement and the Prospectus,
the Company has no reason to believe, and does not believe, that any Year 2000
Problem will have a Material Adverse Effect. The "Year 2000 Problem" as used
herein means any risk that the computer hardware or software, the internal
operating systems or the telephone or network communications connections used in
the receipt, transmission, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical systems of
any kind will not, in the case of dates or time periods occurring after December
31, 1999, function at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000.
(aa) The Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be, 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," as such terms are defined in the
Investment Company Act of 1940, as amended.
(bb) All sales of the Company's securities prior to the date hereof
were at all relevant times duly registered under the Act and applicable state
securities or Blue Sky laws or were exempt from the registration requirements of
the Act and applicable state securities laws, or if such securities were not
registered or exempt in compliance with the Act and applicable state securities
laws, any private rights of action for rescission or damages arising from the
failure to register any such securities are time barred by applicable statutes
of limitations or equitable principles, including laches.
(cc) 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 or to include any securities of the Company in any registration
statement of the Company. Neither the filing of the Registration Statement nor
the offering or sale of the Securities as contemplated by this Agreement gives
rise to any rights for or relating to the registration of any securities of the
Company.
(dd) Neither the Company nor the Subsidiary has taken, and neither
the Company nor the Subsidiary will take, directly or indirectly, any action
that is designed to or that has constituted or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities.
(ee) The Securities have been approved for listing on the Nasdaq
National Market, subject to notice of issuance. The form of the certificate
evidencing the Securities complies in all material respects with all applicable
requirements of law, the Company's Articles of Incorporation and Bylaws and the
Nasdaq National Market.
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(ff) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters on any Delivery
Date (as defined in Section 5) shall be deemed to be a representation and
warranty by the Company to the Underwriters as to the matters covered thereby.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS.
Each Selling Shareholder severally and not jointly represents and
warrants to and agrees with each Underwriter that:
(a) Such Selling Shareholder is the lawful owner of the Securities
to be sold by such Selling Shareholder pursuant to this Agreement and has, and
on the First Delivery Date will have, good and clear title to such Securities,
free of all restrictions on transfer and other Liens.
(b) Such Selling Shareholder has, and on the First Delivery Date
will have, full legal right, power and authority, and all Authorizations
required by law, to (i) enter into (A) this Agreement and (B) the Custody
Agreement and Power of Attorney signed by such Selling Shareholder and SunTrust
Bank, Atlanta, as Custodian (the "Custody Agreement"), relating to (1) the
deposit of the Securities to be sold by such Selling Shareholder and (2) the
appointment by such Selling Shareholder of certain individuals as such Selling
Shareholder's attorneys-in-fact (the "Attorneys"), to the extent set forth
therein, relating to the transactions contemplated hereby, thereby and by the
Registration Statement, (ii) sell, assign, transfer and deliver the Securities
to be sold by such Selling Shareholder in the manner provided herein and therein
and (iii) perform such Selling Shareholder's obligations hereunder and
thereunder. Pursuant to such Custody Agreement, such Selling Shareholder has,
among other things, authorized the Attorneys, or any one of them, to execute and
deliver on such Selling Shareholder's behalf this Agreement and any other
document that they, or any one of them, may deem necessary or desirable in
connection with the transactions contemplated hereby and thereby and to deliver
the Securities to be sold by such Selling Shareholder pursuant to this
Agreement.
(c) This Agreement has been duly executed and delivered by or on
behalf of such Selling Shareholder.
(d) The Custody Agreement of such Selling Shareholder has been
duly executed and delivered by such Selling Shareholder and is enforceable
against such Selling Shareholder, except to the extent that (i) enforceability
may be limited by applicable bankruptcy, insolvency, liquidation,
reorganization, moratorium and other laws relating to or affecting the rights
and remedies of creditors generally and (ii) the remedy of specific performance
and other forms of equitable relief may be subject to certain defenses and to
the discretion of the court before which a proceeding may be brought.
(e) Upon delivery of and payment for the Securities to be sold by
such Selling Shareholder pursuant to this Agreement, good and clear title to
such Securities will pass to the Underwriters, free of all restrictions on
transfer and other Liens.
(f) Neither the execution, delivery and performance of this
Agreement nor the consummation of any of the other Transactions will (with or
without the giving of notice of the lapse of time or both) (i) result in any
breach of or default under, or the creation or imposition of any Lien (other
than any Lien created pursuant to this Agreement) on or against such Selling
Shareholder or any of such Selling Shareholder's properties or assets pursuant
to, any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which such Selling Shareholder is a party or by which
such
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Selling Shareholder or any of such Selling Shareholder's properties or
assets is bound, (ii) violate any constitution, statute, regulation, rule, order
or law or any judicial or administrative decree, writ, judgment or order to
which such Selling Shareholder or any of such Selling Shareholder's properties
or assets is subject or (iii) result in the suspension, termination or
revocation of any Authorization of such Selling Shareholder or any other
impairment of such Selling Shareholder's rights with respect thereto.
(g) No Authorization or other action by, or notice to or filing
with, any court, governmental authority or regulatory body is required on the
part of such Selling Shareholder for the consummation of any of the
Transactions, except (i) such as have been obtained and (ii) such as may be
required under state securities or Blue Sky laws in connection with the offer,
sale and distribution of the Securities by the Underwriters.
(h) To the knowledge of such Selling Shareholder, (i) the
Registration Statement (other than any Rule 462(b) Registration Statement to be
filed by the Company after the effectiveness of this Agreement), when it became
effective, did not contain and, as amended, if applicable, will not contain 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 not misleading and
(ii) the Prospectus does not contain and each Preliminary Prospectus, at the
time of filing thereof, did not contain, any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this Section 2(h) do
not apply to statements or omissions in the Registration Statement, the
Prospectus or any such Preliminary Prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished in writing to
the Company by such Underwriter through you expressly for use therein.
(i) At any time during the period described in Section 6(d), if
there is any change in the information referred to in Section 2(h), such Selling
Shareholder will immediately notify you of such change.
(j) Each certificate signed by or on behalf of such Selling
Shareholder and delivered to the Underwriters or counsel for the Underwriters
shall be deemed to be a representation and warranty by such Selling Shareholder
to the Underwriters as to the matters covered thereby.
3. PURCHASE AND SALE OF THE SECURITIES AND LOCK-UP AGREEMENTS.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Company agrees to
issue and sell _______ Firm Securities to the Underwriters, (ii) each Selling
Shareholder agrees, severally and not jointly, to sell the number of Firm
Securities set forth opposite such Selling Shareholder's name in Schedule II
hereto to the Underwriters and (iii) each Underwriter agrees, severally and not
jointly, to purchase from each Seller, at a price per share of $_____ (the
"Purchase Price"), a number of Firm Securities (subject to such adjustments to
eliminate fractional shares as you may determine) determined by multiplying the
number of Firm Securities to be sold by such Seller by a fraction, the numerator
of which is the aggregate number of Firm Securities to be
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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 Securities to be purchased by all the Underwriters as set forth in Schedule
I hereto. If and to the extent the Underwriters exercise the option to purchase
Optional Securities provided below, (i) the Company agrees to issue and sell to
the Underwriters the number of Optional Securities as to which such option shall
have been exercised and (ii) each Underwriter agrees, severally and not jointly,
to purchase from the Company at the Purchase Price a number of Optional
Securities (subject to such adjustments to eliminate fractional shares as you
may determine) determined by multiplying the number of Optional Securities as to
which such option shall have been exercised by a fraction, the numerator of
which is the aggregate number of Firm Securities 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 Securities
to be purchased by all the Underwriters as set forth in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company grants the
Underwriters the right to purchase at their election up to ______ Optional
Securities at the Purchase Price, for the sole purpose of covering
overallotments made in connection with the offering of the Firm Securities. The
Underwriters may exercise this option to purchase Optional Securities in whole
or in part at any time (but only one time) by giving written notice thereof to
the Company within 30 days after the date of this Agreement. You shall give any
such notice on behalf of the Underwriters, and such notice shall specify the
aggregate number of Optional Securities to be purchased pursuant to such
exercise and the date for payment and delivery thereof, which date shall be a
business day (i) no earlier than two business days after such notice has been
given (i.e., on a "T+3" basis in accordance with the Act and the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Exchange Act")), (ii) no earlier than
the First Delivery Date and (iii) no later than ten business days after such
notice has been given.
Each Seller hereby agrees not to (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
(ii) enter into any swap or other arrangement that transfers all or a portion of
the economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, or such other securities, in
cash or otherwise), except to the Underwriters pursuant to this Agreement, for a
period of 180 days after the date of the Prospectus without the prior written
consent of S&S. Notwithstanding the immediately preceding sentence, during such
period (a) the Company may (i) grant stock options pursuant to the Company's
Amended and Restated 1999 Stock Option and Incentive Plan and Director Stock
Option Plan, as in effect on the date hereof, and may issue shares of Common
Stock upon the exercise of such options, (ii) issue shares of Common Stock upon
the exercise of any option outstanding on the date hereof that was granted under
either such plan and (iii) issue shares of Common Stock to be used as the
purchase price for any acquisition of another business and (b) each Selling
Shareholder may transfer shares of Common Stock pursuant to a bona fide gift;
provided that any recipient of Common Stock in any acquisition referred to in
clause (a)(iii) above and any recipient of Common Stock pursuant to any gift
referred to in clause (b) above shall, prior to such recipient's receipt
thereof, agree in writing to be bound by all of the restrictions applicable to
the Sellers in the immediately preceding sentence and all of the restrictions
applicable to the Selling Shareholders in the second sentence of the next
paragraph until 180 days after the date of the Prospectus.
The Company also agrees not to file any registration statement with
respect to any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock for a period of 180 days after the
date of the Prospectus without the prior written consent of S&S, other than a
registration statement on Form S-8 under the Act with respect to up to (i)
1,150,000 shares of Common
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Stock under the Company's Amended and Restated 1999 Stock Option and Incentive
Plan and (ii) 300,000 shares of Common Stock under the Company's Director Stock
Option Plan. In addition, each Selling Shareholder agrees that, for a period of
180 days after the date of the Prospectus, without the prior written consent of
S&S, such Selling Shareholder will not make any demand for, or exercise any
right with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
The Company shall, prior to or concurrently with the execution of this
Agreement, deliver an agreement (each, a "Lock-Up Agreement") executed by (i)
each Selling Shareholder, (ii) each of the directors and officers of the Company
who is not a Selling Shareholder and (iii) each Shareholder listed on Annex II
hereto (each, an "Executing Shareholder") to the effect that such person will
not, during the period commencing on the date such person signs such agreement
and ending 180 days after the date of the Prospectus, without the prior written
consent of S&S, (A) engage in any of the transactions described in the first
sentence of the third paragraph of this Section 3 or (B) make any demand for, or
exercise any right with respect to, the registration of any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock. Notwithstanding the immediately preceding sentence, during such
period, each Executing Shareholder may transfer shares of Common Stock pursuant
to a bona fide gift; provided that any recipient of Common Stock pursuant to any
such gift shall, prior to such recipient's receipt thereof, agree in writing to
be bound by all of the restrictions contained in such Executing Shareholder's
Lock-Up Agreement until 180 days after the date of the Prospectus.
4. OFFERING BY THE UNDERWRITERS.
Upon authorization by you of the release of the Securities, the
Underwriters propose to publicly offer the Securities for sale as soon after the
execution and delivery of this Agreement as in your judgment is advisable and
initially to publicly offer the Securities upon the terms and conditions set
forth in the Prospectus.
5. DELIVERY AND PAYMENT.
Certificates in definitive form for the Securities to be purchased by
each Underwriter hereunder, and in such denominations and registered in such
names as you may request upon notice to the Company given at least two business
days prior to the First Delivery Date or the Second Delivery Date (as defined
below), as the case may be, shall be delivered by or on behalf of the Sellers,
with any transfer taxes thereon duly paid by the respective Sellers, to S&S
through the facilities of the Depository Trust Company ("DTC"), for the
respective accounts of the several Underwriters, against payment of the Purchase
Price therefor by wire transfer of immediately available funds. The certificates
representing the Securities shall be made available for inspection and packaging
not later than 9:00 a.m., Richmond, Virginia time, on the business day prior to
the First Delivery Date or the Second Delivery Date, as the case may be, at the
office of DTC or its designated custodian, or at such other location which is
designated by S&S to the Sellers (the "Designated Office"). The time and date of
such delivery and payment shall be, with respect to the Firm Securities, 9:00
a.m., Richmond, Virginia time, on __________, 1999, or at such other time and
date as you, the Company and the Attorneys may agree upon in writing and, with
respect to the Optional Securities, 9:00 a.m., Richmond, Virginia time, on the
date specified by you in the applicable written notice of the Underwriters'
election to purchase such Optional Securities in accordance with the provisions
of Section 3, or at such other time and date as you and the Company may agree
upon in writing. Such time and date for delivery of the Firm Securities is
herein called the "First Delivery Date," and the time and date for delivery of
any Optional Securities, if not the First Delivery Date, is herein called a
"Second Delivery Date," and each such time and date for
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delivery is herein called a "Delivery Date." The documents to be delivered on
each Delivery Date on behalf of the parties hereto pursuant to Section 8 shall
be delivered at the offices of Xxxxxx & Bird LLP, 0000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000-0000, and the Securities shall be delivered at the
Designated Office, all on the applicable Delivery Date.
6. AGREEMENTS OF THE COMPANY.
The Company agrees with the Underwriters:
(a) To advise you promptly and, if requested by you, to confirm
such advice in writing, (i) of any request by the Commission for amendments to
the Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purposes, (iii) when any amendment to
the Registration Statement becomes effective, (iv) if the Company is required to
file a Rule 462(b) Registration Statement after the effectiveness of this
Agreement, when the Rule 462(b) Registration Statement has become effective and
(v) of the happening of any event during the period referred to in Section 6(d)
below which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires any additions to or changes
in the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time any stop order suspending the
effectiveness of the Registration Statement or any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification shall have been issued, the Company will use its best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) To furnish to you three signed copies of the Registration
Statement as first filed with the Commission and of each amendment to it,
including all exhibits, and to furnish to you and each Underwriter designated by
you such number of conformed copies of the Registration Statement as so filed
and of each amendment to it, without exhibits, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which
shall be satisfactory to you, and to file the Prospectus in such form with the
Commission within the applicable period specified in Rule 424(b) under the Act;
during the period specified in Section 6(d) below, not to file any further
amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been advised
or to which you shall reasonably object after being so advised; and, during such
period, to prepare and file with the Commission, promptly upon your request, any
amendment to the Registration Statement or amendment or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Securities, to use its best efforts to cause any such
amendment to the Registration Statement to become promptly effective and to
furnish to each Underwriter and to any dealer as many copies thereof as such
Underwriter or dealer may reasonably request.
(d) Prior to 10:00 a.m., Richmond, Virginia time, on the first
business day after the date of this Agreement and from time to time thereafter
for such period as in the opinion of counsel for the Underwriters a prospectus
is required by law to be delivered in connection with sales by an Underwriter or
a dealer, to furnish in Richmond, Virginia to each Underwriter and any dealer as
many copies of the Prospectus (and of any amendment or supplement to the
Prospectus) as such Underwriter or dealer may reasonably request.
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(e) Prior to the public offering of the Securities and promptly
from time to time thereafter, to take such actions as you or your counsel may
reasonably request to qualify, and otherwise to cooperate with you and your
counsel in connection with the qualification of, the Securities for offering and
sale under the securities laws of such jurisdictions as you may request, and to
comply with such laws so as to permit offers, sales and dealings with respect to
the Securities in such jurisdictions for as long as may be necessary to complete
the distribution of the Securities; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any Preliminary Prospectus or the offering or sale of the Securities,
in any jurisdiction in which it is not now so subject.
(f) To mail and make generally available to its shareholders as
soon as practicable an earnings statement covering the twelve-month period
ending __________, 2000 [ONE YEAR AFTER THE END OF THE COMPANY'S FISCAL QUARTER
IN WHICH THE CLOSING WILL OCCUR] that shall satisfy the provisions of Section
11(a) of the Act, and to advise you in writing when such statement has been so
made available.
(g) During the period of three years after the date of this
Agreement, to furnish to you as soon as available copies of all reports or other
communications furnished (whether financial or other) to the record holders of
Common Stock or furnished to or filed with the Commission, the Nasdaq National
Market or any national securities exchange on which any class of securities of
the Company is listed and such other information concerning the Company and its
subsidiaries as you may reasonably request from time to time, other than any
report or other communication which has been filed with the Commission under its
XXXXX system and is publicly available.
(h) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Sellers' obligations under this
Agreement, including the following: (i) the fees, disbursements and expenses of
the Company's counsel, the Company's accountants and any Selling Shareholder's
counsel (in addition to the Company's counsel) in connection with the
registration and delivery of the Securities under the Act and all other fees and
expenses in connection with the preparation, printing, filing and distribution
of the Registration Statement (including financial statements and exhibits), any
Preliminary Prospectus, the Prospectus and all amendments and supplements to any
of the foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Securities to be issued and
sold by the Company, including, without limitation, any transfer or other taxes
payable in connection therewith, (iii) all costs of printing or reproducing this
Agreement and any other agreements or documents in connection with the offering,
purchase, sale or delivery of the Securities, (iv) all expenses in connection
with the registration or qualification of the Securities for offer and sale
under the securities or Blue Sky laws of the several states and any other
jurisdiction required under Section 6(e) and all costs of printing or producing
any Preliminary and Supplemental Blue Sky Memoranda in connection therewith
(including, without limitation, the filing fees and fees and disbursements of
counsel for the Underwriters in connection with such registration or
qualification and memoranda relating thereto), (v) the filing fees and
disbursements of counsel for the Underwriters in connection with the review and
clearance of the offering of the Securities by the National Association of
Securities Dealers, Inc., (vi) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A relating to the
Common Stock and all costs and expenses incident to the listing of the
Securities on the Nasdaq National Market, (vii) the cost of printing
certificates representing the Securities, (viii) the costs and charges of any
transfer agent, registrar and/or depositary, and (ix) all other costs and
expenses incident to the performance
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of the obligations of the Company and the Selling Shareholders hereunder for
which provision is not otherwise made in this Section 6(h) or in Section 7
(including, without limitation, the costs and expenses of any "road show"
undertaken in connection with the offering or sale of the Securities). In
addition, all out-of-pocket expenses (including, without limitation, counsel
fees, disbursements and expenses) incurred by the Underwriters in connection
with investigating, preparing to market and marketing the Securities and
proposing to purchase and purchasing the Securities under this Agreement will be
borne and paid by the Company if the sale of the Securities provided for herein
is not consummated by reason of the termination of this Agreement pursuant to
Section 11 or 13(b)(i)(A) or by reason of the failure of any Seller to satisfy
any of the conditions in Section 8 required to be satisfied by such Seller. The
provisions of this Section shall not supersede or otherwise affect any agreement
that the Company and the Selling Shareholders may otherwise have for allocation
of such expenses among themselves.
(i) To use its best efforts to list the Securities for quotation
on the Nasdaq National Market and to maintain the listing of the Securities on
the Nasdaq National Market for a period of one year after the date of this
Agreement.
(j) To use its best efforts to do and perform all things required
or necessary to be done and performed under this Agreement by the Company prior
to each Delivery Date, as applicable, and to satisfy all conditions precedent to
the delivery of the Securities.
(k) If the Registration Statement at the time of the effectiveness
of this Agreement does not cover all of the Securities, to file a Rule 462(b)
Registration Statement with the Commission registering the Securities not so
covered in compliance with Rule 462(b) by 10:00 p.m., Richmond, Virginia time,
on the date of this Agreement and to pay to the Commission the filing fee for
such Rule 462(b) Registration Statement at the time of the filing thereof or to
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
(l) If, during the time a prospectus relating to the Securities is
required to be delivered by any Underwriter or its affiliates under the Act, the
Exchange Act or other applicable law, to (i) periodically amend the Registration
Statement so that the information contained in the Registration Statement
complies with the requirements of Section 10(a) of the Act, (ii) amend the
Registration Statement or amend or supplement the Prospectus when necessary to
reflect any material changes in the information provided therein and promptly
file such amendment or supplement with the Commission, (iii) provide such
Underwriter with copies of each amendment or supplement so filed and such other
documents, including opinions of counsel and "comfort" letters, as such
Underwriter may reasonably request and (iv) indemnify such Underwriter and, if
applicable, contribute to any amount paid or payable by such Underwriter in a
manner substantially identical to that specified in Section 9 (with appropriate
modifications).
(m) To file with the Commission, from time to time after the
effective date of the Registration Statement, such reports as are required by
the Act and the Exchange Act, and to also file with the securities commissions
in jurisdictions where the Securities have been sold by any Underwriter (as you
shall have advised us in writing) any such reports as are required to be filed
by the securities acts and the regulations of those jurisdictions.
(n) If at any time during the 25-day period after the Registration
Statement is declared effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which, in your opinion, the
market price for the Common Stock has been or is likely to be materially
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affected (regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), to, after written notice from you
advising the Company do so, prepare, consult with you concerning the substance
of, and disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor, publication or
event.
(o) To take no action directly or indirectly through any of its
subsidiaries, officers, directors or affiliates or otherwise, that is designed
to cause or result in, or which might constitute or be expected to constitute,
stabilization or manipulation of the price of the Common Stock.
(p) To not invest or otherwise use the proceeds received by the
Company from its sale of Securities in such a manner as would require the
Company to register as an investment company under the Investment Company Act of
1940, as amended.
(q) To maintain a transfer agent and, if necessary under the laws
of the State of Georgia, a registrar for the Securities.
(r) On the First Delivery Date, to duly issue and sell the Warrant
to S&S in accordance with the terms hereof and thereof.
(s) During the period within which the Warrant may be exercised,
to at all times have reserved for issuance out of its authorized but unissued
Common Stock, solely for issuance and delivery upon exercise of the Warrant, the
full number of shares of Common Stock issuable upon exercise of the Warrant.
(t) To file timely and accurate reports with the Commission
regarding the use of the offering proceeds in accordance with Rule 463 under the
Act or any successor provision.
7. AGREEMENTS OF THE SELLING SHAREHOLDERS.
Each Selling Shareholder agrees with you and the Company:
(a) To pay or to cause to be paid all costs and expenses related
to the transfer and delivery of the Securities to be sold by such Selling
Shareholder, including, without limitation, any transfer or other taxes payable
in connection therewith.
(b) To do and perform all things to be done and performed by such
Selling Shareholder under this Agreement prior to the First Delivery Date and to
satisfy all conditions precedent to the delivery of the Securities to be sold by
such Selling Shareholder pursuant to this Agreement.
8. CONDITIONS TO OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the Firm
Securities under this Agreement are subject to the satisfaction of each of the
following conditions:
(a) All representations and warranties and other statements of the
Company and the Selling Shareholders herein shall be true and correct on the
First Delivery Date with the same force and effect as if made on and as of the
First Delivery Date, and the Company and each Selling Shareholder shall have
complied with all of the agreements and satisfied all of the conditions herein
contained and required to be
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complied with or satisfied by the Company or such Selling Shareholder, as the
case may be, on or prior to the First Delivery Date.
(b) All filings required by Rule 424, Rule 430A, Rule 434 or Rule
462(b) under the Act, if applicable, shall have been duly made; if the Company
is required to file a Rule 462(b) Registration Statement after the effectiveness
of this Agreement, such Rule 462(b) Registration Statement shall have become
effective by 10:00 p.m., Richmond, Virginia time, on the date of this Agreement;
no stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction; and no Underwriter shall have advised the Company that the
Registration Statement or any amendment thereto contains an untrue statement of
fact which, in your good faith judgment, is material or omits to state a fact
which, in your good faith judgment, is material and is required to be stated
therein or necessary to make the statements therein not misleading, or that any
Preliminary Prospectus, the Prospectus or any supplement thereto contains an
untrue statement of fact which, in your good faith judgment, is material, or
omits to state a fact which, in your good faith judgment, is material and is
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(c) You shall have received on the First Delivery Date a
certificate dated the First Delivery Date, signed by X. Xxxx Xxxxxx, the
Company's Chief Executive Officer, and Xxxxxxxxxxx X. Xxxxxx, the Company's
Chief Financial Officer and Treasurer, confirming, among other things, the
matters set forth in Sections 1(d) and 8(b) and to the effect that (i) all
representations and warranties and other statements of the Company in this
Agreement are true and correct on the First Delivery Date with the same force
and effect as if made on and as of the First Delivery Date and (ii) the Company
has complied with all of the agreements and satisfied all of the conditions
herein contained and required to be complied with or satisfied by the Company on
or prior to the First Delivery Date.
(d) You shall have received on the First Delivery Date a
certificate dated the First Delivery Date from each Selling Shareholder to the
effect that (i) all representations and warranties and other statements of such
Selling Shareholder in this Agreement are true and correct on the First Delivery
Date with the same force and effect as if made on and as of the First Delivery
Date and (ii) such Selling Shareholder has complied with all of the agreements
and satisfied all of the conditions herein contained and required to be complied
with or satisfied by such Selling Shareholder on or prior to the First Delivery
Date.
(e) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus (exclusive of any amendment or
supplement thereto subsequent to the date of this Agreement), (i) there shall
not have been any change in the capital stock or long term debt of the Company
or the Subsidiary or any issuance of options, warrants or rights to purchase
capital stock of the Company or the Subsidiary (except options to purchase up to
[___________] shares of Common Stock granted to new employees of the Company
under the Company's Amended and Restated 1999 Stock Option and Incentive Plan),
(ii) there shall not have been any change or any development involving a
prospective change in or affecting the business, general affairs, condition
(financial or otherwise) or results of operations of the Company and the
Subsidiary, taken as a whole, and (iii) neither the Company nor the Subsidiary
shall have entered into any transaction or incurred any liability or obligation,
direct or contingent, the effect of which, in any such case described in clause
(i), (ii) or (iii), in your judgment is material and adverse and, in your
judgment, makes it impracticable or inadvisable to proceed with the
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public offering or the delivery of the Securities on the terms and in the manner
contemplated by the Prospectus.
(f) On or prior to the First Delivery Date there shall not have
occurred any of the following: (i) the suspension of trading of any securities
of the Company or, since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse change in
the prospects, business, general affairs, condition (financial or otherwise) or
results of operations of the Company and the Subsidiary, taken as a whole, or
any material adverse events or conditions in the industry of the Company or the
Subsidiary or involving their competitors or comparable companies generally,
(ii) the suspension or material limitation of trading in securities or other
instruments on the New York Stock Exchange, the American Stock Exchange, the
Chicago Board of Trade or the Nasdaq National Market or limitation on prices for
securities or other instruments on any such exchange or the Nasdaq National
Market, (iii) the declaration of a banking moratorium by federal authorities or
authorities of the States of Georgia, New York, North Carolina or Virginia, (iv)
the outbreak or escalation of hostilities or other national or international
calamity or crisis that, in your good faith judgment, makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated by the Prospectus, (v)
the enactment, publication, decree or other promulgation of any constitution,
statute, regulation, rule, order, law, decree, writ or judgment of any court or
other governmental authority which in your good faith opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and the
Subsidiary, taken as a whole, (vi) the taking of any action by any federal,
state or local government or agency in respect of its monetary or fiscal affairs
which in your good faith opinion has a material adverse effect on the financial
markets in the United States or (vii) any adverse change in general economic,
political, financial or international conditions which has an adverse impact on
trading prices of securities that, in your good faith judgment, makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated by the Prospectus.
(g) The Company shall have furnished or caused to be furnished to
you the agreements provided for in the last paragraph of Section 3, which
agreements shall be in full force and effect on the First Delivery Date.
(h) The Securities shall have been duly listed for quotation on
the Nasdaq National Market.
(i) You shall have received, on each of the date hereof and the
First Delivery Date, a letter dated the date hereof or the First Delivery Date,
as the case may be, in form and substance satisfactory to you, from Xxxxxx
Xxxxxxxx LLP, independent public accountants, containing the information and
statements of the type ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain information
contained in the Registration Statement and the Prospectus.
(j) You shall have received on the First Delivery Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the First Delivery
Date, of Nelson, Mullins, Xxxxx & Scarborough, L.L.P., counsel for the Company
and the Selling Shareholders, to the effect set forth in Annex III.
(k) You shall have received on the First Delivery Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the First Delivery
Date, of Xxxxxx, Golden & Xxxxxxx LLP, special communications counsel for the
Company, to the effect set forth in Annex IV.
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(l) You shall have received on the First Delivery Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the First Delivery
Date, of Xxxxx & Xxxxx, L.L.P., special intellectual property counsel for the
Company, to the effect set forth in Annex V.
(m) You shall have received on the First Delivery Date an opinion
(satisfactory to you), dated the First Delivery Date, of Xxxxxx & Bird LLP,
counsel for the Underwriters, with respect to the incorporation of the Company,
the validity of the Securities being issued on the First Delivery Date, the
Registration Statement, the Prospectus and such other related matters as you may
request, and such counsel shall have received such agreements, instruments,
documents and other information as they may request to enable them to pass upon
such matters.
(n) The Company and the Selling Shareholders shall not have failed
on or prior to the First Delivery Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with by the
Company or the Selling Shareholders on or prior to the First Delivery Date.
(o) The Company shall have duly issued and sold the Warrant to
S&S on the First Delivery Date in accordance with the terms hereof and
thereof, and, upon such issuance and sale, the Warrant shall be
exercisable in accordance with and subject to its terms.
(p) You shall have received on the First Delivery Date such
additional documents (including, without limitation, opinions of counsel,
certificates and agreements) as you may reasonably request.
The several obligations of the Underwriters to purchase any Optional
Securities hereunder are subject to (A) the delivery to you on the Second
Delivery Date of such documents (including, without limitation, opinions of
counsel, certificates and agreements) as you may reasonably request with respect
to the Company and the issuance of the Optional Securities and (B) the
satisfaction of such conditions as you shall reasonably determine in connection
therewith.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) Each Seller agrees, severally and not jointly, to indemnify
and hold harmless each Underwriter, its directors, its officers and each person,
if any, who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act from and against any and all losses, claims,
damages, liabilities and judgments, whether joint, several or otherwise, and
whether under the Act or otherwise, caused by, arising out of or based upon (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto) or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus (or any amendment or supplement thereto) or the
Prospectus (or any amendment or supplement thereto) or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and the Sellers severally and not
jointly agree to reimburse each Underwriter, its directors, its officers and
each such control person for any legal or other expenses (including, without
limitation, the reasonable fees and expenses of counsel) actually incurred in
connection with investigating, preparing to defend or defending, or appearing as
a third party witness in connection with, any such action, claim or other
matter, promptly as such expenses are incurred; provided, however, that no
Seller shall be liable in any such case to the extent that any such loss, claim,
damage, liability or judgment is caused by, arises out of or is based upon any
such untrue
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statement or omission or based upon information relating to any Underwriter
furnished in writing to the Company by such Underwriter through you expressly
for use therein; provided, further, that the foregoing indemnity agreement with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter who failed to deliver the Prospectus, as then amended or
supplemented (so long as the Prospectus and any amendment or supplement thereto
was provided by the Company to the several Underwriters in the requisite
quantity and on a timely basis to permit proper delivery on or prior to the
First Delivery Date) to the person asserting any losses, claims, damages,
liabilities or judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in such Preliminary Prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
omission was cured in the Prospectus, as so amended or supplemented, and such
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person. Notwithstanding the foregoing, the
aggregate liability of any Selling Shareholder pursuant to this Section 9(a) and
Section 9(e) shall be limited to an amount equal to the net proceeds (before
deducting expenses) received by such Selling Shareholder from the Underwriters
for the sale of the Securities sold by such Selling Shareholder hereunder.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify, hold harmless and reimburse (i) the Company, each of its directors
and officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act to the same extent as the foregoing indemnity from the
Company to such Underwriter and (ii) each Selling Shareholder and each person,
if any, who controls such Selling Shareholder within the meaning of Section 15
of the Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from such Selling Shareholder to such Underwriter, but in the case of
Sections 9(b)(i) and 9(b)(ii) only with reference to information relating to
such Underwriter furnished in writing to the Company by such Underwriter through
you expressly for use in the Registration Statement (or any amendment thereto),
any Preliminary Prospectus (or any amendment or supplement thereto) or the
Prospectus (or any amendment or supplement thereto).
(c) Promptly after receipt by any person that may seek indemnity
under Section 9(a) or 9(b) (an "indemnified party") of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against a person against whom such indemnity may be sought
under Section 9(a) or 9(b) (an "indemnifying party"), 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. 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 elect, jointly with any other indemnifying party
similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that any indemnified party shall have the
right to employ separate counsel in any such action and participate therein, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties in
any such action (including, without limitation, any impleaded parties) include
both the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by counsel that representation of such indemnified party
and the indemnifying party would present such counsel with a conflict of
interest under applicable standards of professional conduct due to actual or
potential differing interests between them or that there
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may be legal defenses available to it and/or other indemnified parties which are
different from or in addition to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to assume the defense
of such action on behalf of the indemnified party). It is understood that the
indemnifying party shall not be liable, in connection with any such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, for (i) the fees
and expenses of more than one separate firm of attorneys (in addition to any
local counsel) for all Underwriters, their officers and directors and all
persons, if any, who control any Underwriter within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act and (ii) the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for the Sellers, the Company's directors and officers who sign the
Registration Statement and all persons, if any, who control any Seller within
the meaning of either such section. In the case of any such separate firm for
the Underwriters, their officers and directors and such control persons of any
Underwriter, such firm shall be designated in writing by S&S. In the case of any
such separate firm for the Sellers, the Company's directors or officers who sign
the Registration Statement or such control persons of any Seller, such firm
shall be designated in writing by the Company. The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason of settlement of
any action (i) effected with its written consent or (ii) effected without its
written consent if (A) such settlement is entered into more than 30 days after
the indemnifying party shall have received a request from the indemnified party
for reimbursement for legal or other expenses (including, without limitation,
the fees and expenses of counsel), in any case where such fees and expenses are
at the expense of the indemnifying party, and (B) such indemnifying party shall
not have complied with such reimbursement request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in
this Section 9 is unavailable to or insufficient to hold harmless an indemnified
party under Section 9(a) or 9(b) in respect of any losses, claims, damages,
liabilities or judgments (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, liabilities
or judgments (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Sellers on the one
hand and the Underwriters on the other hand from the offering of the Securities.
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 Sellers on the one hand and the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Sellers on the one hand and the Underwriters on the other hand
in connection with the offering of the Securities pursuant to this Agreement,
shall be deemed to be in the same proportion as the total net proceeds from the
offering (after deducting the underwriting discounts and commissions, but before
deducting expenses) received by the Sellers, and the total underwriting
discounts and commissions received by the Underwriters, bear to the total price
to the public of the Securities, in each case as set forth on the cover page of
the Prospectus. The relative fault of the Sellers on the one hand and the
Underwriters on the other hand shall be
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determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by any Seller on the one
hand or the Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
Each Seller and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 9(d) were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to above in this Section 9(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments (or actions in respect thereof)
referred to above in this Section 9(d) shall be deemed to include any legal or
other expenses incurred by such indemnified party in connection with
investigating, preparing to defend or defending, or appearing as a third party
witness in connection with, any such action, claim or other matter.
Notwithstanding the provisions of this Section 9(d), (i) the provisions of the
Agreement Among Underwriters entered into among the Underwriters in connection
herewith shall govern contribution among the Underwriters and (ii) no
Underwriter (except as provided in such Agreement Among Underwriters) shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. Notwithstanding the
provisions of this Section 9(d), 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 under this Section 9(d) are
several in proportion to the respective number of Securities purchased by each
of the Underwriters hereunder and not joint.
(e) The remedies provided for in this Section 9 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity. Each Seller agrees,
severally and not jointly, to reimburse the several Underwriters, their
directors and officers, and any persons controlling any of the Underwriters for
any and all fees and expenses (including, without limitation, the fees
disbursements of counsel) incurred by them in connection with enforcing any of
their rights hereunder (including, without limitation, pursuant to this
Section 9).
(f) Each Selling Shareholder hereby designates
xxxxxxx.xxx, inc., 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, as its
authorized agent, upon which process may be served in any action which may be
instituted in any state or federal court by any Underwriter, any director or
officer of any Underwriter or any person controlling any Underwriter asserting a
claim for indemnification or contribution under or pursuant to this Section 9,
and each Selling Shareholder will accept the jurisdiction of such court in such
action and waives, to the fullest extent permitted by applicable law, any
defense based upon lack of personal jurisdiction or venue. A copy of any such
process shall be sent or given to such Selling Shareholder at the address for
notices specified in Section 14.
10. SUBSTITUTION OF UNDERWRITERS.
(a) If one or more of the Underwriters fails or refuses
to purchase on any Delivery Date the Securities agreed hereunder to be purchased
on such Delivery Date by such Underwriter or Underwriters, and the aggregate
number of Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase does not exceed 10% of the aggregate number of
the Securities to be purchased on such date by all Underwriters, the
non-defaulting Underwriters shall be obligated, severally, in the proportions
that the number of Firm Securities set forth opposite their respective names on
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Schedule I hereto bears to the aggregate number of Firm Securities set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as you may specify with the consent of the non-defaulting
Underwriters, to purchase the Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Securities (whether Firm Securities or
Optional Securities) which any Underwriter has agreed to purchase on a Delivery
Date pursuant to Section 3 be increased pursuant to this Section 10 by an amount
in excess of one-ninth of the Securities such Underwriter has agreed to purchase
on such Delivery Date, without the written consent of such Underwriter.
(b) If (i) one or more of the Underwriters fails or
refuses to purchase the Firm Securities on the First Delivery Date, and the
aggregate number of Firm Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase exceeds 10% of the
aggregate number of Firm Securities to be purchased on such date by all
Underwriters and (ii) arrangements satisfactory to you, the Company and the
Selling Shareholders for purchase of such Firm Securities are not made within 48
hours after such default, this Agreement will terminate without liability on
your part or on the part of any non-defaulting Underwriter or any Seller, except
as provided in Section 12. In any such case which does not result in termination
of this Agreement, either you or the Sellers shall have the right to postpone
the First Delivery Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. If one or
more of the Underwriters fails or refuses to purchase Optional Securities on the
Second Delivery Date, and the aggregate number of Optional Securities with
respect to which such default occurs exceeds 10% of the aggregate number of
Optional Securities to be purchased on such date by all Underwriters, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase such Optional Securities (without liability on
your part or on the part of any non-defaulting Underwriter or any Seller, except
as provided in Section 12) or (ii) purchase not less than the number of Optional
Securities that such non-defaulting Underwriters would have been obligated to
purchase on such date in the absence of such default.
This Section 10 will not affect the liability of the defaulting
Underwriters to the Sellers or the non-defaulting Underwriters arising out of
such default. A substitute Underwriter under this Section 10 will be deemed an
Underwriter for all purposes of this Agreement.
11. DEFAULT BY THE SELLERS.
If any Selling Shareholder shall fail to sell the number of Securities
that such Selling Shareholder is obligated to sell hereunder, you may, at your
option, by notice to the Company, either (i) require the Company to issue and
sell in the offering of Securities contemplated hereby a number of shares of
Common Stock equal to the number of Securities as to which such Selling
Shareholder has defaulted or such lesser number of shares of Common Stock as you
may request (whereupon such shares of Common Stock shall be treated as
Securities for all purposes hereof), or (ii) terminate this Agreement without
liability on your part or on the part of the Underwriters.
If the Company shall fail to issue and sell the number of Securities
that it is obligated to issue and sell hereunder, you may, at your option, by
notice to the Company terminate this Agreement without any liability on your
part or on the part of the Underwriters.
In any such case under this Section 11 which does not result in the
termination of this Agreement, either you or the non-defaulting Sellers shall
have the right to postpone the applicable Delivery Date, but
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in no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and the Prospectus or any other documents or
arrangements may be effected.
12. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
The respective indemnities, agreements, representations, warranties and
other statements of the Company, the Selling Shareholders and the several
Underwriters, 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 (or any statement as to the results thereof) made by or on
behalf of any Underwriter, the officers or directors of any Underwriter, any
controlling person of any Underwriter, the Company, the officers or directors of
the Company, any controlling person of the Company, any Selling Shareholder or
any controlling person of any Selling Shareholder, and will survive delivery of
and payment for the Securities. In addition, the agreements of the Company in
Section 6(h) and the agreements of the parties hereto in Section 9 and this
Section 12 shall survive any termination or cancellation of this Agreement.
13. EFFECTIVENESS; TERMINATION.
(a) This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
(b) This Agreement shall be subject to termination in
your absolute discretion, by notice given to the Company prior to the delivery
of any payment for the Securities, if prior to the First Delivery Date there
shall have occurred any of the following: (i) (A) the suspension of trading of
any securities of the Company or, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change in the prospects, business, general affairs, condition
(financial or otherwise) or results of operations of the Company and the
Subsidiary, taken as a whole, or (B) since the respective dates as of which
information is given in the Registration Statement and the Prospectus any
material adverse events or conditions in the industry of the Company or the
Subsidiary or involving their competitors or comparable companies generally,
(ii) the suspension or material limitation of trading in securities or other
instruments on the New York Stock Exchange, the American Stock Exchange, the
Chicago Board of Trade or the Nasdaq National Market or limitation on prices for
securities or other instruments on any such exchange or the Nasdaq National
Market, (iii) the declaration of a banking moratorium by federal authorities or
authorities of the States of Georgia, New York, North Carolina or Virginia, (iv)
the outbreak or escalation of hostilities or other national or international
calamity or crisis that, in your good faith judgment, makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated by the Prospectus, (v)
the enactment, publication, decree or other promulgation of any constitution,
statute, regulation, rule, order, law, decree, writ or judgment of any court or
other governmental authority which in your good faith opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and the
Subsidiary, taken as a whole, (vi) the taking of any action by any federal,
state or local government or agency in respect of its monetary or fiscal affairs
which in your good faith opinion has a material adverse effect on the financial
markets in the United States or (vii) any adverse change in general economic,
political, financial or international conditions which has an adverse impact on
trading prices of securities in general that, in your good faith judgment, makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities on the terms and in the manner contemplated by the
Prospectus. Any termination pursuant to this Section 13(b) shall not give rise
to any liability on the part of any party hereto, except as provided in Sections
6(h) and 12.
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14. NOTICES.
In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you. All statements, requests, notices and agreements hereunder shall
be in writing or by facsimile if promptly confirmed in writing, and if to the
Underwriters shall be sufficient in all respects if delivered or sent by mail,
hand delivery, overnight courier or facsimile transmission to: Xxxxx &
Xxxxxxxxxxxx, Inc., 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention:
Corporate Finance Department, Facsimile: (000) 000-0000, with a copy (which
shall not constitute notice) to Xxxxxx & Bird LLP, 0000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000-0000, Attention: X. Xxxx Xxxxxxxx, Esq., Facsimile: (404)
881-4777; and if to the Company or the Selling Shareholders shall be sufficient
in all respects if delivered or sent by mail, hand delivery, overnight courier
or facsimile transmission to the address of the Company set forth on the cover
page of the Registration Statement, Attention: X. Xxxx Xxxxxx, Chief Executive
Officer, with a copy (which shall not constitute notice) to Xxxxxx Xxxxxxx Xxxxx
& Scarborough, L.L.P., First Union Plaza, Suite 1400, 000 Xxxxxxxxx Xxxxxx,
X.X., Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxx, Esq., Facsimile:
(000) 000-0000. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
15. SUCCESSORS.
This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Shareholders and, to the
extent expressly provided herein, the officers and directors of the Company, the
officers and directors of each Underwriter and each person who controls the
Company, any Selling Shareholder or any Underwriter, 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 Securities from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
16. TIME OF THE ESSENCE.
Time shall be of the essence in the performance under this Agreement.
17. BUSINESS DAY.
As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
18. APPLICABLE LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
19. CAPTIONS.
The captions included in this Agreement are included solely for
convenience of reference and shall not be deemed to be a part of this Agreement.
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20. COUNTERPARTS; EXECUTION BY FACSIMILE.
This Agreement may be executed by any one or more of the parties 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 agreement. Delivery
of an executed counterpart hereof by facsimile shall be effective as manual
delivery thereof.
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If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, and upon the acceptance hereof by you,
this letter Agreement such acceptance hereof shall constitute a binding
agreement among each of the Underwriters, the Company and the Selling
Shareholders. It is understood that your acceptance of this Agreement on behalf
of each of the Underwriters is pursuant to the authority set forth in a form of
Agreement Among Underwriters, the form of which will be submitted to the Company
for examination, upon request, but without warranty on your part as to the
authority of the signers thereof.
Very truly yours,
XXXXXXX.XXX, INC.
By:
------------------------------------
Name: X. Xxxx Xxxxxx
Title: Chief Executive Officer
SELLING SHAREHOLDERS NAMED IN
SCHEDULE II HERETO
By:
------------------------------------
Name:
Title: Attorney-in-Fact
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29
Accepted and agreed:
XXXXX & XXXXXXXXXXXX, INC.
SUNTRUST EQUITABLE SECURITIES
Acting severally on their behalf and
on behalf of the several Underwriters
named in Schedule I hereto
By: XXXXX & XXXXXXXXXXXX, INC.
By:
--------------------------------------
Name:
Title:
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30
SCHEDULE I
UNDERWRITERS
Number of Firm Securities
Underwriters To Be Purchased
------------ ---------------
Xxxxx & Xxxxxxxxxxxx, Inc..............................................
SunTrust Equitable Securities Corporation..............................
Total...................
31
SCHEDULE II
SELLING SHAREHOLDERS
Number of Firm Securities
Names Being Sold
----- ----------
X. Xxxx Xxxxxx.........................................................
Xxxxxx X. Xxxxx........................................................
