3,500,000 Shares
INTELLIGENT LIFE CORPORATION,
COMMON STOCK
(Par Value $.01 Per Share)
UNDERWRITING AGREEMENT
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May 12, 1999
ING BARING XXXXXX XXXX LLC
XXXXXXX XXXXXX READ LLC
a subsidiary of UBS AG
As Representatives of the
several Underwriters
c/o ING Baring Xxxxxx Xxxx LLC
Park Avenue Plaza
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Section 1. Introduction. Intelligent Life Corporation, a Florida
corporation (the "Company"), proposes to issue and sell to the several
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underwriters named in Schedule I hereto (the "Underwriters"), for which ING
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Baring Xxxxxx Xxxx LLC and Warburg Dillon Read LLC, a subsidiary of UBS AG are
acting as representatives (the "Representatives"), an aggregate of 3,500,000
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shares of the Company's common stock, par value $.01 per share (the "Common
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Stock"). The 3,500,000 shares of Common Stock to be sold by the Company are
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referred to herein as the "Firm Shares." The Company also proposes to issue and
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sell to the several Underwriters an aggregate of not more than 525,000
additional shares of Common Stock (the "Additional Shares"), if requested by the
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Underwriters in accordance with Section 9 hereof. The Firm Shares and the
Additional Shares are collectively referred to herein as the "Shares." The
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words "you" and "your" refer to the Representatives.
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The Company hereby agrees with the several Underwriters as follows:
Section 2. Representations and Warranties of the Company. The Company
represents, warrants and agrees with each of the Underwriters that:
(a) Preparation, Filing of Registration Statement, Preliminary
Prospectuses, Prospectus. A registration statement on Form S-1 (File No.
333-74291) under the
Securities Act of 1933 as amended (the "Act"), with respect to the Shares,
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including a form of prospectus subject to completion, has been prepared by
the Company in conformity with the requirements of the Act and the rules
and regulations of the Securities and Exchange Commission (the
"Commission") thereunder (the "Rules and Regulations"). Such registration
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statement has been filed with the Commission under the Act, and one or more
amendments to such registration statement may also have been so filed. As
used in this Agreement, the term "Registration Statement" means such
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registration statement, as amended at the time when it was or is declared
effective, including all financial schedules and exhibits thereto; the
Registration Statement shall be deemed to include any information omitted
therefrom pursuant to Rule 430A under the Act and included in the
Prospectus (as hereinafter defined) and shall also mean any registration
statement filed pursuant to Rule 462(b) under the Act; the term
"Preliminary Prospectus" means each prospectus subject to completion
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contained in the Registration Statement or any amendment thereto (including
the prospectus subject to completion, if any, included in the Registration
Statement or any amendment thereto or filed pursuant to Rule 424(a) under
the Act at the time it was or is declared effective); and the term
"Prospectus" means the prospectus first filed with the Commission pursuant
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to Rule 424(b) under the Act or, if no prospectus is required to be filed
pursuant to said Rule 424(b), such term means the prospectus included in
the Registration Statement.
(b) Compliance with Registration Requirements. The Company has not
received any order preventing or suspending the use of any Preliminary
Prospectus and the Company has not received any notice that the Commission
has instituted nor, to the Company's knowledge, has the Commission
threatened to institute any proceedings with respect to such an order.
When any Preliminary Prospectus was filed with the Commission it (i)
contained all statements required to be stated therein in accordance with,
and complied in all material respects with, the requirements of the Act and
the Rules and Regulations and (ii) did not include any untrue statement of
a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading. When the Registration Statement or any
amendment thereto was or is declared effective, it (i) contained or will
contain all statements required to be stated therein in accordance with,
and complied or will comply in all material respects with, the requirements
of the Act and the Rules and Regulations and (ii) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading.
When the Prospectus and when any amendment or supplement thereto is filed
with the Commission pursuant to Rule 424(b) (or, if the Prospectus or such
amendment or supplement is not required to be so filed, when the
Registration Statement and when any amendment thereto containing such
amendment or supplement to the Prospectus was or is declared effective) and
at all times subsequent thereto up to and including the Closing Date (as
defined in Section 3 hereof) and the Option Closing Date (as defined in
Section 9 hereof), the Prospectus, as amended or supplemented at any such
time, (i) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all material
respects with the requirements of, the Act and the Rules and Regulations
and (ii) did not or will not include
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any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (b) shall not apply to (i) statements or
omissions made in any Preliminary Prospectus which have been corrected in a
subsequent Preliminary Prospectus or the Prospectus or (ii) statements or
omissions made in any Preliminary Prospectus, the Registration Statement or
any amendment thereto or the Prospectus or any amendment or supplement
thereto in reliance upon, and in conformity with, information furnished in
writing to the Company by or on behalf of the Underwriters through the
Representatives expressly for use therein.
(c) Due Incorporation, Qualification of Company. The Company (i) is
a duly incorporated and validly existing corporation in good standing under
the laws of its jurisdiction of incorporation, with sufficient corporate
power and corporate authority to own or lease its properties and to conduct
its business as described in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus); and (ii) is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction (A) in which the
conduct of its business requires such qualification (except for those
jurisdictions in which the failure so to qualify has not had and will not
have a Material Adverse Effect (as hereinafter defined)) and (B) in which
it owns or leases property. "Material Adverse Effect" means, when used in
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connection with the Company, any development, change or effect that is
materially adverse to the business, properties, assets, net worth,
condition (financial or other) or results of operations of the Company.
(d) Capitalization. The Company has the duly authorized and validly
outstanding capitalization set forth under the caption "Capitalization" in
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and will have the adjusted capitalization set forth
therein on the Closing Date and the Option Closing Date, based on the
assumptions and including the exceptions set forth therein and the
footnotes thereto. The capital stock of the Company conforms in all
material respects to the description thereof contained in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus). The outstanding shares of Common Stock have been duly
authorized and validly issued by the Company and are fully paid and
nonassessable. Except as created hereby or described in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), there are no outstanding options, warrants, rights or other
arrangements requiring the Company at any time to issue any capital stock.
As of the Closing Date, no holders of outstanding shares of capital stock
of the Company are entitled as such to any preemptive or other rights to
subscribe for any of the Shares, other than those which have been waived or
satisfied, and neither the filing of the Registration Statement nor the
offering or sale of the Shares as contemplated by this Agreement gives rise
to any rights, other than those that have been waived or satisfied, for or
relating to, the registration of any securities of the Company. All offers
and sales of the Company's capital stock prior to the date hereof were at
all relevant times exempt from the registration requirements of the Act and
were duly registered with or the subject of an available exemption from the
registration
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requirements of the applicable state securities or Blue Sky laws. The
Shares have been duly authorized; on the Closing Date or the Option Closing
Date (as the case may be), after payment therefor in accordance with the
terms of this Agreement, (i) the Firm Shares and the Additional Shares to
be sold by the Company hereunder will be validly issued, fully paid and
nonassessable, and (ii) good and marketable title to the Shares will pass
to the Underwriters on the Closing Date or the Option Closing Date (as the
case may be) free and clear of any lien, encumbrance, security interest,
claim or other restriction whatsoever.
(e) Exchange Act Registration; Nasdaq. The Company has filed a
registration statement pursuant to Section 12(g) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") to register the Common Stock
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thereunder. The Company has received, subject to notice of issuance,
approval to have the Shares quoted on the National Market System of the
National Association of Securities Dealers' Automated Quotation System, and
the Company knows of no reason or set of facts which is reasonably likely
to adversely affect such approval.
(f) Financial Statements. The consolidated financial statements and
the related notes and schedules thereto included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus) fairly present, in all material
respects, the consolidated financial condition, results of operations,
stockholders' equity and cash flows of the Company at the dates and for the
periods specified therein. Such financial statements and the related notes
and schedules thereto have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise noted therein) and such financial statements
as are audited have been examined by KPMG LLC or Xxxxxx & Xxxxxx Co., P.A.,
as indicated therein, each of which are independent public accountants
within the meaning of the Act and the Rules and Regulations, as indicated
in their reports filed therewith. The selected financial information set
forth under the captions "Prospectus Summary Summary Financial and
Operating Data" and "Selected Financial Data" in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) has
been prepared on a basis consistent with the consolidated financial
statements of the Company.
(g) Tax Returns. The Company has filed all necessary federal, state
and local income, franchise and other material tax returns and have paid
all taxes shown as due thereunder, and the Company has no knowledge of any
tax deficiency that is reasonably likely to be assessed against the Company
which, if so assessed, would have a Material Adverse Effect.
(h) Insurance. The Company maintains insurance of the types and in
amounts which it reasonably believes to be adequate for the business of the
Company, all of which insurance is in full force and effect. The Company
(i) has not received any 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 and (ii)
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has no reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or will not be able to
obtain similar coverage from similar insurers at a cost that would not have
a material adverse effect on the business, prospects, financial condition
or results of operation of the Company.
(i) Absence of Proceedings. Except as disclosed in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), there is no action, suit, proceeding or investigation pending
or, to the Company's knowledge, threatened before or by any court,
regulatory body or administrative agency or any other governmental agency
or body, domestic or foreign, that (i) questions the validity of the
capital stock of the Company or this Agreement or of any action taken or to
be taken by the Company pursuant to or in connection with this Agreement,
(ii) is required to be disclosed in the Registration Statement which is not
so disclosed (and such proceedings, if any, as are summarized in the
Registration Statement are accurately summarized in all material respects),
or (iii) if decided adversely to the Company, would have a Material Adverse
Effect.
(j) Authorization; Binding Agreement; No Violation. The Company has
all requisite corporate, power and authority to enter into this Agreement
and to consummate the transactions provided for herein. This Agreement has
been duly authorized, executed and delivered by the Company and, assuming
it is a binding agreement of the Underwriters, constitutes a legal, valid
and binding agreement of the Company enforceable against the Company in
accordance with its terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of general application relating to or affecting the enforcement of
creditors' rights and the application of general equitable principles
relating to the availability of remedies and except as rights to indemnity
or contribution may be limited by federal or state securities laws and the
public policy underlying such laws), and none of the Company's execution or
delivery of this Agreement, its performance hereunder, its consummation of
the transactions contemplated herein, its application of the net proceeds
of the offering in the manner set forth under the caption "Use of Proceeds"
or the conduct of its business as described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
conflicts or will conflict with or results or will result in any breach or
violation of any of the terms or provisions of, or constitutes or will
constitute a default under, causes or will cause (or permits or will
permit) the maturation or acceleration of any liability or obligation or
the termination of any right under, or result in the creation or imposition
of any lien, charge, or encumbrance upon, any property or assets of the
Company pursuant to the terms of (i) the articles of incorporation or by-
laws of the Company, (ii) any indenture, mortgage, deed of trust, voting
trust agreement, stockholders' agreement, note agreement or other agreement
or instrument to which the Company is a party or by which it may be bound
or to which any of its property is or may be subject or (iii) any statute,
judgment, decree, order, rule or regulation applicable to the Company of
any government, arbitrator, court, regulatory body or administrative agency
or other governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any of its activities or properties,
except, in the cases of clauses (ii) and (iii)
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above, for breaches, violations, defaults or terminations which would not
be reasonably likely to have a Material Adverse Effect.
(k) Exhibits. All executed agreements or copies of executed
agreements filed as exhibits to the Registration Statement to which the
Company is a party or by which it is or may be bound or to which any of its
assets, properties or businesses is or may be subject have been duly and
validly authorized, executed and delivered by the Company and, assuming
such agreements are the legal, valid, binding and enforceable agreements of
the other parties thereto, constitute the legal, valid and binding
agreements of the Company, enforceable against it in accordance with their
respective terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of general application relating to or affecting the enforcement of
creditors' rights generally and the application of general equitable
principles relating to the availability of remedies and except as rights to
indemnity or contribution may be limited by federal or state securities
laws and the public policy underlying such laws). The descriptions in the
Registration Statement of contracts and other documents are accurate in all
material respects and fairly present the information required to be shown
with respect thereto by the Act and the Rules and Regulations, and there
are no contracts or other documents which are required by the Act or the
Rules and Regulations to be described in the Registration Statement or
filed as exhibits to the Registration Statement which are not described or
filed as required, and the exhibits which have been filed are complete and
correct copies of the documents of which they purport to be copies.
(l) Liabilities, Obligations, Dividends; No Material Adverse Change.
Subsequent to the most recent respective dates as of which information is
given in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), and except as expressly contemplated
therein, (i) the Company has not incurred, other than in the ordinary
course of its business, any material liabilities or obligations, direct or
contingent, or purchased any of its outstanding capital stock, paid or
declared any dividends or other distributions on its capital stock or
entered into any material transactions not in the ordinary course of
business and there has been no material change in capital stock or long- or
short-term debt of the Company, and (ii) there has not been any Material
Adverse Effect.
(m) No Violation. The Company (or the manner in which it conducts
its business) is not in breach or violation of, or in default under, any
term or provision of (i) its certificate of incorporation or bylaws, (ii)
any indenture, mortgage, deed of trust, voting trust agreement,
stockholders' agreement, note agreement or other agreement or instrument to
which it is a party or by which it is or may be bound or to which any of
its property is or may be subject, or any indebtedness, the effect of which
breach or default singly or in the aggregate would have a Material Adverse
Effect, or (iii) any statute, judgment, decree, order, rule or regulation
applicable to the Company or of any arbitrator, court, regulatory body,
administrative agency or any other governmental agency or body, domestic or
foreign, having jurisdiction over the Company or any of its activities or
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properties and the effect of which breach or default singly or in the
aggregate would have a Material Adverse Effect.
(n) Labor Disturbances. No labor disturbance by the employees of the
Company exists or, to the Company's knowledge, is threatened.
(o) Intellectual Property. The Company owns and possess all right,
title and interest in and to, or have duly licensed from other parties, all
trademarks, copyrights and other proprietary rights ("Trade Rights")
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material to the business of the Company. The Company has not received any
notice of infringement, misappropriation or conflict from any party as to
such material Trade Rights that has not been resolved or disposed of and,
to the Company's knowledge, the Company has not infringed, misappropriated
or otherwise conflicted with material Trade Rights of any third parties,
which infringement, misappropriation or conflict would have a Material
Adverse Effect.
(p) Absence of Further Requirements. No consent, approval,
authorization or order of or filing with any court, regulatory body,
administrative agency or any other governmental agency or body, domestic or
foreign, is required for the performance of this Agreement or the
consummation of the transactions contemplated hereby, except such as have
been or may be required to be obtained under the Act or may be required
under state securities or Blue Sky laws in connection with the
Underwriters' purchase and distribution of the Shares.
(q) No Stabilization or Manipulation. Neither the Company nor any of
its officers, directors or affiliates (within the meaning of the Rules and
Regulations) has taken, directly or indirectly, any action designed to
stabilize or manipulate the price of any security of the Company, or which
has constituted or which might in the future reasonably be expected to
cause or result in stabilization or manipulation of the price of any
security of the Company, to facilitate the sale or resale of the Shares or
otherwise.
(r) Properties and Assets. The Company has good and valid title to,
or valid and enforceable leasehold interests in, all properties and assets
owned or leased by it, free and clear of all mortgages, liens,
encumbrances, security interests, claims, restrictions, equities, claims
and defects, except such as are described in the Registration Statement and
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), or such as do not materially adversely affect the
value of any of such properties or assets taken as a whole and do not
materially interfere with the use made and proposed to be made of any of
such properties or assets. The Company owns or leases all such properties
as are materially necessary to its operations as now conducted, and as
proposed to be conducted as set forth in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus); and the properties and business of the Company
conforms in all material respects to the descriptions thereof contained in
the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus). All the material
leases and subleases of the Company, and under which the Company holds
properties or
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assets as lessee or sublessee, constitute valid leasehold interests of the
Company free and clear of any lien, encumbrance, security interest,
restriction, equity, claim or defect, are in full force and effect, and the
Company is not in default in respect of any of the material terms or
provisions of any such material leases or subleases, and the Company does
not have notice of any claim which has been asserted by anyone adverse to
the Company's rights as lessee or sublessee under either the material lease
or sublease, or affecting or questioning the Company's right to the
continued possession of the leased or subleased premises under any such
material lease or sublease, in each case which default or claim would have
a Material Adverse Effect.
(s) Environmental, Safety, Health, Similar Laws. The Company has not
violated any environmental, safety, health or similar law applicable to the
business of the Company, nor any federal or state law relating to
discrimination in the hiring, promotion, or pay of employees, nor any
applicable federal or state wages and hours law, nor any provisions of the
federal Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, the consequences of which violation
would have a Material Adverse Effect.
(t) Licenses, Permits. The Company holds and at the Closing Date and
any later Option Closing Date, as the case may be, will hold, all material
franchises, licenses, permits, approvals, certificates and other
authorizations ("Authorizations") from federal, state and foreign and other
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governmental or regulatory authorities necessary to the ownership, leasing
and operation of their properties or required for the present conduct of
business, and such Authorizations are in full force and effect and the
Company is in compliance therewith in all material respects except where
the failure so to obtain, maintain or comply would not be reasonably likely
to have a Material Adverse Effect. No event has occurred (including,
without limitation, the receipt of any notice from any authority or
governing body) that allows or, after notice or lapse of time or both,
would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would
result in any other impairment of the material rights of the holder of any
such Authorization.
(u) Related Party Relationships/Transactions. Except as disclosed in
the Prospectus, there are no business relationships or related party
transactions required to be disclosed therein by Item 404 of Regulation S-K
of the Commission.
(v) Statistical, Market-Related Data. The statistical and market-
related data included in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) are based on or derived
from independent sources that the Company believes to be reliable and
accurate in all material respects, or represent the Company's good-faith
estimate made on the basis of data derived from such sources.
(w) Internal Accounting Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurances
that: (i) transactions are executed in accordance with management's general
or specific
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authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(x) Compliance with Cuba Act. The Company is in compliance with all
provisions of Florida Statutes (S)517.075, and the regulations thereunder,
relating to issuers doing business with Cuba.
(y) Political Contributions; Payments to Officials. The Company has
not at any time during the last five years (i) made any unlawful
contribution to any candidate for foreign office, or failed to disclose
fully any contribution in violation of law, or (ii) made any payment to any
foreign, United States or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States.
(z) Investment Company Act. The Company is not, and after giving
effect to the offering of the Shares contemplated hereby and the
application of the proceeds therefrom, will not be, an "investment company"
or an entity "controlled" by an investment company, as such terms are
defined in Section 3(a) of the Investment Company Act of 1940, as amended.
(aa) Year 2000. The Company has reviewed its operations and has made
inquiries of any other parties with which the Company has a material
relationship in order to evaluate the extent to which the business or
operations of the Company will be affected by the Year 2000 Problem (as
defined below). As a result of such review, management of the Company has
no reason to believe, and does not believe, that the Year 2000 Problem will
result in a Material Adverse Effect or result in any material loss or
interference with the business or operations of the Company. The "Year
2000 Problem" means any significant risk that computer hardware or software
used in the receipt, transmission, processing, manipulation, 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.
Section 3. Purchase, Sale and Delivery of the Shares. On the basis of the
representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to sell
to each Underwriter and each Underwriter, severally and not jointly, agrees to
purchase from the Company at a purchase price of $[____] per Share, the number
of Firm Shares set forth opposite the name of such Underwriter on Schedule I.
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Delivery of certificates, and payment of the purchase price, for the Firm
Shares shall be made at the offices of ING Baring Xxxxxx Xxxx LLC at Park Avenue
Plaza, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other location as
shall be agreed upon by the Company and the Representatives. Such delivery and
payment shall be made at 10:00 a.m., New York City time, on May 18, 1999 or at
such other time and date not more than ten business days thereafter as shall be
agreed upon by the Representatives and the Company. The time and date of such
delivery and payment are herein called the "Closing Date." Delivery of the
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certificates for the Firm Shares shall be made through the facilities of the
Depository Trust Company to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price for the Firm Shares by wire transfer of
immediately-available funds to an account designated to the Representatives in
writing at least two business days preceding the Closing Date. The certificates
for the Shares to be so delivered will be in definitive, fully-registered form,
will bear no restrictive legends and will be in such denominations and
registered in such names as the Representatives shall request, not less than two
full business days prior to the Closing Date. The certificates for the Firm
Shares will be made available to the Representatives at such office or such
other place as the Representatives may designate for inspection, checking and
packaging not later than 9:30 a.m., New York time on the business day prior to
the Closing Date.
Section 4. Public Offering of the Shares. It is understood that the
Underwriters propose to make a public offering of the Shares at the price and
upon the other terms set forth in the Prospectus.
Section 5. Covenants of the Company. The Company covenants and agrees
with each of the Underwriters that:
(a) Filing of Registration Statement, Prospectus. Promptly following
execution of this Agreement, the Company shall file with the Commission
either (i) if the Registration Statement, as it may have been amended, has
been declared by the Commission to be effective under the Act, a prospectus
in the form most recently included in an amendment to the Registration
Statement filed with the Commission (or, if no such amendment shall have
been filed, in the Registration Statement), with such insertions and
changes as are required by Rule 430A under the Act and as shall have been
provided to and approved by the Representatives prior to the filing
thereof, or (ii) if the Registration Statement, as it may have been
amended, has not been declared by the Commission to be effective under the
Act, an amendment to the Registration Statement, including a form of
prospectus, a copy of which amendment has been furnished to and approved by
the Representatives prior to the filing thereof. If the Registration
Statement does not cover all of the Shares, the Company shall file with the
Commission a registration statement under Rule 462(b) of the Rules and
Regulations registering the Shares not so covered by 10:00 p.m., New York
City time, on the date of this Agreement, and shall pay to the Commission
the filing fee for such registration statement at the time of filing or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) of the Rules and Regulations.
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(b) Effectiveness; Amendments, Final Prospectus. The Company will
use its best efforts to cause the Registration Statement, if not effective
at the time of execution of this Agreement, and any amendments thereto to
become effective as promptly as practicable. If required, the Company will
file the Prospectus and any amendment or supplement thereto with the
Commission in the manner and within the time period required by Rule 424(b)
under the Act. During any time when a prospectus relating to the Shares is
required to be delivered under the Act, the Company (i) will comply with
all requirements imposed upon it by the Act and the Rules and Regulations
to the extent necessary to permit the continuance of sales of or dealings
in the Shares in accordance with the provisions hereof and of the
Prospectus, as then amended or supplemented, and (ii) will not file with
the Commission the prospectus or the amendment referred to in the third
sentence of Section 2(a) hereof or any amendment or supplement to such
prospectus or any amendment to the Registration Statement, of which the
Representatives shall not previously have been advised and furnished with a
copy a reasonable period of time prior to the proposed filing and as to
which filing the Representatives shall not have given their consent.
(c) Information to be Provided to Representatives; Stop Orders. As
soon as the Company is advised or obtains knowledge thereof, the Company
will advise the Representatives (i) when the Registration Statement, as
amended, has become effective; if the provisions of Rule 430A promulgated
under the Act will be relied upon, when the Prospectus has been filed in
accordance with said Rule 430A and when any post-effective amendment to the
Registration Statement becomes effective; (ii) of any request made by the
Commission for amending the Registration Statement, for supplementing any
Preliminary Prospectus or the Prospectus or for additional information, or
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto or any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus in any jurisdiction or any amendment or
supplement thereto or the institution or threat of any investigation or
proceeding for that purpose, and will use its best efforts to prevent the
issuance of any such order and, if issued, to obtain the lifting thereof as
soon as possible.
(d) Blue Sky Laws. The Company will (i) use its best efforts to
arrange for the qualification of the Shares for offer and sale under the
state securities or Blue Sky Laws of such jurisdictions as the
Representatives may designate, and the continuation of such qualifications
in effect for as long as may be necessary to complete the distribution of
the Shares, and (ii) make such applications, file such documents and
furnish such information as may be required for the purposes set forth in
clause (i); provided, however, that the Company shall not be required to
qualify as a foreign corporation or file a general or unlimited consent to
service of process in any such jurisdiction.
(e) Use of Prospectus; Amendment. The Company consents to the use of
the Prospectus (and any amendment or supplement thereto) by the
Underwriters and all dealers to whom the Shares may be sold, in connection
with the offering or sale of the Shares and for such period of time
thereafter as the Prospectus is required by law to be
11
delivered in connection therewith. The Company shall promptly notify the
Representatives if, at any time when a prospectus relating to the Shares is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading, or it becomes
necessary at any time to amend or supplement the Prospectus to comply with
the Act or the Rules and Regulations. In such case, and at any other time
during such period that counsel to the Underwriters determines that it is
necessary to amend or supplement the Prospectus to comply with the Act or
the Rules and Regulations, the Company will, subject to Section 5(a)
hereof, promptly prepare and file with the Commission an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
will correct such statement or omission or effect such compliance, each
such amendment or supplement to be reasonably satisfactory to counsel to
the Underwriters, and shall use its best efforts to cause any such
amendment to the Registration Statement to become effective as soon as
possible. In the event that any Underwriter is required to deliver a
prospectus nine months or more following the effective date of the
Registration Statement, the Company shall upon request (but at the expense
of such Underwriter) prepare promptly such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section
10(a)(3) of the Act.
(f) Earnings Statement. As soon as practicable, but in any event not
later than 45 days after the end of the twelve-month period beginning on
the day after the end of the fiscal quarter of the Company during which the
effective date of the Registration Statement occurs (90 days in the event
that the end of such fiscal quarter is the end of the Company's fiscal
year), the Company will make generally available to its security holders,
in the manner specified in Rule 158(b) of the Rules and Regulations, and to
the Representatives, an earnings statement which will be in the detail
required by, and will otherwise comply with, the provisions of Section
11(a) of the Act and Rule 158(a) of the Rules and Regulations, which
statement need not be audited unless required by the Act or the Rules and
Regulations, covering a period of at least twelve consecutive months after
the effective date of the Registration Statement.
(g) Reports. During the period of five years from the date hereof,
the Company will furnish to its stockholders, as soon as practicable,
annual reports (including financial statements audited by independent
public accountants) and unaudited quarterly reports of earnings, and will
deliver to the Representatives:
(i) concurrently with furnishing any quarterly reports to its
stockholders, statements of income of the Company for each quarter in
the form furnished to the Company's stockholders;
(ii) concurrently with furnishing annual reports to its
stockholders, a balance sheet of the Company as at the end of the
preceding fiscal year, together with statements of income,
stockholders' equity and cash flows of the Company
12
for such fiscal year, accompanied by a copy of the report thereon of
independent public accountants;
(iii) as soon as they are available, copies of all information
(financial or other) mailed to stockholders;
(iv) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, the
National Association of Securities Dealers, Inc. ("NASD") or any
securities exchange;
(v) every press release and every material news item or
article of interest to the financial community in respect of the
Company or its affairs that is released or prepared by the Company;
and
(vi) any additional information of a public nature concerning
the Company or its business that is in the possession of the Company
at such time and that the Representatives may reasonably request.
During such five-year period, if the Company has active subsidiaries, the
foregoing financial statements will be on a consolidated basis to the
extent that the accounts of the Company and its subsidiaries are
consolidated, and will be accompanied by similar financial statements for
any significant subsidiary that is not so consolidated.
(h) Material Transactions. The Company will not, prior to the
earliest of the Option Closing Date, the termination or expiration of the
Underwriters' right to purchase Additional Shares, and the purchase of all
Additional Shares available for purchase pursuant to Section 9, enter into
any material transaction, other than in the ordinary course of business and
except as contemplated by the Prospectus.
(i) Transfer Agent, Registrar. The Company will maintain a transfer
agent and, if necessary under the jurisdiction of incorporation of the
Company, a registrar (which may be the same entity as the transfer agent)
for the Common Stock.
(j) Copies of Registration Statement, Preliminary Prospectus,
Prospectus. The Company will furnish to the Representatives or on the
Representatives' order, without charge, at such place as the
Representatives may designate, copies of the Registration Statement (of
which two copies will be signed, and which will include all financial
statements and exhibits) and any pre-effective or post-effective amendments
thereto (of which two copies will be signed, and which will include all
financial statements and exhibits), each Preliminary Prospectus and the
Prospectus, and all amendments and supplements thereto, in each case as
soon as available and in such quantities as the Representatives may
reasonably request.
(k) Correspondence with the Commission. The Company will promptly
deliver to the Representatives copies of all correspondence to and from,
and all
13
documents issued to and by, the Commission in connection with the
registration of the Shares under the Act.
(l) Limitation on Issuance and Sale. Without the prior written
consent of ING Baring Xxxxxx Xxxx LLC, which shall not be unreasonably
withheld, the Company will not issue or directly or indirectly offer, sell,
offer to sell, contract to sell, grant any option for the sale or purchase
of, or otherwise dispose of (or announce any issuance, offer, sale, offer
to sell, contract to sell, option grant or other disposition of) any shares
of Common Stock or any security convertible or exchangeable into or
exercisable for Common Stock, or any substantially similar securities, for
a period of 180 days from the date of the Prospectus, except for: (i) the
issuance of shares of Common Stock upon conversion of the 54,229
outstanding shares of Series A Convertible Preferred Stock and the 24,359
outstanding shares of Series B Convertible Preferred Stock in connection
with the consummation of the transactions contemplated hereby and by the
Prospectus; (ii) the issuance of options to subscribe for shares of Common
Stock or the issuance of shares of Common Stock, in each case pursuant to
the Company's 1997 Equity Compensation Plan or 1999 Equity Compensation
Plan (each as defined in the Prospectus); (iii) the issuance of shares of
Common Stock in connection with an acquisition by the Company of, or joint
venture or similar transaction with, another business or entity, provided
that either (x) the terms of such acquisition, joint venture or similar
transaction prohibit the resale or other disposition of such shares for the
period ending 180 days after the date hereof, or (y) a favorable opinion
(setting forth no material qualification other than such as are normally
included in such opinions) is issued by a nationally recognized investment
bank as to the fairness of the transaction to unaffiliated shareholders of
the other company prior to execution by the Company of any agreement
relating to such acquisition, joint venture or similar transaction; and
(iv) as contemplated by the Prospectus.
(m) Listing on Nasdaq. The Company will use its best efforts to
cause the Shares to be included for quotation on the Nasdaq National Market
prior to the Closing Date, and to maintain the listing of the Shares on the
Nasdaq National Market or a national securities exchange for a period of
three years following the date of this Agreement.
(n) Use of Proceeds. The Company will apply the net proceeds of the
offering received by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(o) Filing of Reports. The Company will timely file all such
reports, forms or other documents as may be required from time to time,
under the Act, the Rules and Regulations, the Exchange Act and the rules
and regulations thereunder, and all such reports, forms and documents filed
will comply as to form and substance with the applicable requirements under
the Act, the Rules and Regulations and the Exchange Act and the rules and
regulations thereunder.
(p) Communications with Press. Prior to the earliest of the Option
Closing Date, the termination or expiration of the Underwriters' right to
purchase Additional
14
Shares, and the purchase of all Additional Shares available for purchase
pursuant to Section 9, the Company will issue no press release or other
communication (except for communications relating to product announcements
in the ordinary course of business) and hold no press conferences with
respect to the Company or with respect to the financial condition, results
of operations, business, properties, assets or liabilities of the Company
or the Offering without the prior consent of the Representatives, which
shall not be unreasonably withheld.
(q) Other Tasks. The Company will exercise its best efforts to do
and perform all tasks required or necessary to be done or performed under
this Agreement by the Company prior to the Closing Date or any Option
Closing Date, as the case may be, and to satisfy all conditions precedent
to the delivery of the Shares.
Section 6. Expenses.
(a) Responsibility for Company/Underwriter Expenses. Regardless of
whether the transactions contemplated in this Agreement are consummated, and
regardless of whether for any reason this Agreement is terminated, subject to
Section 6(a), the Company will pay, and hereby agrees to indemnify each
Underwriter against, all fees and expenses incident to the performance of the
obligations of the Company under this Agreement, including, but not limited to,
(i) fees and expenses of accountants and counsel for the Company, (ii) all costs
and expenses incurred in connection with the preparation, duplication, printing,
filing, delivery and shipping of copies of the Registration Statement and any
pre-effective or post-effective amendments thereto, any Preliminary Prospectus
and the Prospectus and any amendments or supplements thereto (including postage
costs related to the delivery by the Underwriters of any Preliminary Prospectus
or Prospectus, or any amendment or supplement thereto), this Agreement, the
Agreement Among Underwriters, the Underwriters' Questionnaire, the Underwriters'
Power of Attorney, and all other documents in connection with the transactions
contemplated herein, including the cost of all copies thereof, (iii) fees and
expenses relating to qualification of the Shares under state securities or Blue
Sky Laws, including the cost of preparing and mailing the preliminary and final
blue sky memoranda and filing fees and disbursements and reasonable fees of
counsel for the Underwriters and other related expenses, if any, in connection
therewith, (iv) filing fees of the Commission relating to registration of the
Shares under the Act, (v) any fees and expenses in connection with the quotation
of the Shares on the Nasdaq National Market, (vi) the filing fees incident to,
and the fees and disbursements of counsel for the Underwriters in connection
with, securing any required review by the NASD of the terms of the underwriting
of the Shares as set forth in this Agreement, (vii) costs and expenses incident
to the preparation, issuance and delivery to the Underwriters of any
certificates evidencing the Shares, including the transfer agent's and the
registrar's fees and any applicable transfer taxes incurred in connection with
the delivery to the Underwriters of the Shares to be sold by the Company
pursuant to this Agreement, (viii) costs and expenses incident to any meetings
with prospective investors in the Shares (other than as shall have been
specifically approved by the Representatives to be paid for by the
Underwriters), (ix) costs and expenses of advertising relating to the offering
of the Shares (other than as shall have been specifically approved by the
Representatives to be paid for by the Underwriters), and (x) all other costs and
15
expenses incident to the performance of its obligations hereunder that are not
otherwise specifically provided for in this section. Except as set forth above
and in Section 6(b) below, the Underwriters shall pay all of their own expenses
(including the fees and disbursements of their counsel and their travel
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.
(b) Responsibility for Expenses if Purchase of Shares Not
Consummated. If the purchase of the Shares as herein contemplated is not
consummated for any reason other than the Underwriters' default under this
Agreement or other than by reason of the Representatives giving the notice to
the Company set forth in Section 11(a), the Company shall reimburse the several
Underwriters for their reasonable out-of-pocket expenses (including reasonable
counsel fees and disbursements) in connection with any investigation made by
them, and any preparation made by them in respect of marketing of the Shares or
in contemplation of the performance by them of their obligations hereunder.
Section 7. Conditions of the Underwriters' Obligations. The
obligation of each Underwriter to purchase and pay for the Shares set forth
opposite the name of such Underwriter in Schedule I is subject to, in the
----------
discretion of the Underwriters, the continuing accuracy of the representations
and warranties of the Company herein as of the date hereof and as of the Closing
Date as if they had been made on and as of the Closing Date, the accuracy on and
as of the Closing Date of the statements of officers of the Company made
pursuant to the provisions hereof, the performance by the Company on and as of
the Closing Date of all of its covenants and agreements hereunder which are to
be performed on or prior to the Closing Date, and the following additional
conditions:
(a) Effectiveness of Registration Statement, Filing of Prospectus.
If the Company has elected to rely on Rule 430A under the Act, the Registration
Statement shall have been declared effective, and the Prospectus (containing the
information omitted pursuant to Rule 430A) shall have been filed with the
Commission not later than the Commission's close of business on the second
business day following the date hereof or such later time and date to which the
Representatives shall have consented; if the Company does not elect to rely on
Rule 430A, the Registration Statement (including any registration statement
filed under Rule 462(b)) shall have been declared effective not later than 11:00
a.m. New York time, on the first business day following the date hereof or such
later time and date to which the Representatives shall have consented; if
required, in the case of any changes in or amendments or supplements to the
Prospectus in addition to those contemplated above, the Company shall have filed
such Prospectus as amended or supplemented with the Commission in the manner and
within the time period required by Rule 424(b) under the Act; no stop order
suspending the effectiveness of the Registration Statement or any amendment
thereto shall have been issued, and no proceedings for that purpose shall have
been instituted or, to the knowledge of the Company or the Representatives,
shall be contemplated or threatened by the Commission; and the Company shall
have complied with any request of the Commission for additional information (to
be included in the Registration Statement or the Prospectus or otherwise).
16
(b) No Misstatements/Omissions. The Registration Statement, or any
amendment thereto, shall not contain an untrue statement of material fact,
or omit to state a material fact that is required to be stated therein or
is necessary to make the statements therein not misleading, and the
Prospectus, or any supplement thereto, shall not contain an untrue
statement of material fact, or omit to state a material fact that is
required to be stated therein or is necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(c) Opinion of Underwriters' Counsel. On or prior to the Closing
Date, the Representatives shall have received from White & Case LLP,
counsel to the Underwriters, such opinion or opinions with respect to the
issuance and sale of the Firm Shares, the Registration Statement and the
Prospectus and such other related matters as the Representatives reasonably
may request, and such counsel shall have received such documents and other
information as they request to enable them to pass upon such matters.
(d) Opinion of Counsel to the Company. On the Closing Date, the
Underwriters shall have received the opinion, dated the Closing Date, of
Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P. counsel to the Company, in the form
attached hereto as Appendix A, addressed to the Underwriters.
----------
(e) Other Documents, Certificates, Opinions. On or prior to the
Closing Date, counsel to the Underwriters shall have been furnished such
documents, certificates and opinions as they may reasonably require in
order to evidence the accuracy, completeness or satisfaction of any of the
representations or warranties of the Company, or conditions herein
contained.
(f) Comfort Letter of Xxxxxx & Xxxxxx Co., P.A. At the time of
execution of this Agreement, the Representatives shall have received a
letter from Xxxxxx & Xxxxxx Co., P.A., addressed to the Company and the
Underwriters, confirming that it is an independent certified public
accountant with respect to the Company within the meaning of the Act and
the Rules and Regulations thereunder and setting forth certain information
as may be requested by the Representatives concerning financial and
operating data of the Company for the years ending June 30, 1996 and 1997
contained in the Preliminary Prospectus. Such letter shall be in a form
reasonably satisfactory to the Representatives and their counsel.
(g) Comfort Letter and Bringdown Letter of KPMG LLC. At the time of
execution of this Agreement, the Representatives shall have received a
letter from KPMG LLC, addressed to the Company and the Underwriters,
confirming that it is an independent certified public accountant with
respect to the Company within the meaning of the Act and the Rules and
Regulations thereunder and setting forth certain information as may be
requested by the Representatives concerning financial and operating data of
the Company for the year ending June 30, 1998 contained in the Preliminary
Prospectus (the "KPMG Original Letter"). On the Closing Date, the
--------------------
Representatives shall have received
17
a letter from KPMG LLC, addressed to the Company and the Underwriters,
dated the Closing Date, confirming that it is an independent certified
public accountant with respect to the Company within the meaning of the Act
and the Rules and Regulations thereunder and based upon the procedures
described in the KPMG Original Letter, but carried out to a date not more
than three days prior to the Closing Date, (i) confirming that the
statements and conclusions set forth in the KPMG Original Letter are
accurate as of the Closing Date; and (ii) setting forth any revisions and
additions to the statements and conclusions set forth in the KPMG Original
Letter that are necessary to reflect any changes in the facts described in
the KPMG Original Letter since the date of such letter, or to reflect the
availability of more recent financial statements, data or information. It
is a condition of your obligations hereunder that such letter not disclose
any change, or any development involving a prospective change, in or
affecting the business or properties of the Company which, in your
reasonable judgment, makes it impracticable or inadvisable to proceed with
the public offering of the Shares as contemplated by the Prospectus. In
addition, you shall have received from KPMG LLC a letter addressed to the
Company and made available to you for the use of the Underwriters stating
that its review of the Company's system of internal accounting controls, to
the extent it deemed necessary in establishing the scope of its latest
examination of the Company's financial statements, did not disclose any
weaknesses in internal controls that it considered to be material
weaknesses. All such letters shall be in a form reasonably satisfactory to
the Representatives and their counsel.
(h) Officers' Certificate. On the Closing Date, the Representatives
shall have received a certificate, dated the Closing Date, of the principal
executive officer and the principal financial or accounting officer of the
Company to the effect that each of such persons has carefully examined the
Registration Statement and the Prospectus and any amendments or supplements
thereto and this Agreement, and that:
(i) The representations and warranties of the Company set
forth in this Agreement are true and correct, as if made on and as of
the Closing Date, and the Company has complied with all agreements and
covenants and satisfied all conditions contained in this Agreement on
its part to be performed or satisfied at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for that
purpose have been instituted or are pending or, to the best knowledge
of each of such persons, are contemplated or threatened, under the Act
and any and all filings required by Rule 424 and Rule 430A have been
timely made;
(iii) The Registration Statement and Prospectus and, if any,
each amendment and each supplement thereto, contain all statements and
information required to be included therein, and neither the
Registration Statement nor any amendment thereto includes any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the
18
statements therein not misleading and neither the Prospectus nor any
supplement thereto includes any untrue statement of a material fact or
omits or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and
(iv) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus up to and
including the Closing Date, other than as contemplated by the
Prospectus: the Company has not incurred, other than in the ordinary
course of its business, any material liabilities or obligations,
direct or contingent; the Company has not purchased any of its
outstanding capital stock or paid or declared any dividends or other
distributions on its capital stock; the Company has not entered into
any transactions not in the ordinary course of business; and there has
not been any change in the capital stock or consolidated long-term
debt or any increase in the consolidated short-term borrowings (other
than any increase in short-term borrowings in the ordinary course of
business) of the Company or any material adverse change to the
business, properties, assets, net worth, condition (financial or
other), or results of operations of the Company; the Company has not
sustained any material loss or damage to its property or assets,
whether or not insured; and there is no litigation which is pending or
threatened against the Company which if adversely decided would have a
Material Adverse Effect.
References to the Registration Statement and the Prospectus in this
paragraph (h) are to such documents as amended and supplemented at the
date of the certificate.
(i) No Material Change. Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus
up to and including the Closing Date there has not been (i) any material
change specified in the letter referred to in paragraph (g) of this Section
7 or (ii) any material adverse change, or any development involving a
reasonably likely prospective material adverse change, in the business or
properties of the Company, whether or not arising in the ordinary course of
business, which change in the case of clause (i) or change or development
in the case of clause (ii) makes it impractical or inadvisable in the
Representatives' judgment to proceed with the public offering or the
delivery of the Shares as contemplated by the Prospectus.
(j) No Stop Orders by State Authorities. No order suspending the
sale of the Shares in any jurisdiction designated by you pursuant to
Section 5(d) hereof has been issued on or prior to the Closing Date and no
proceedings for that purpose have been instituted or, to your knowledge or
that of the Company, have been or are contemplated.
(k) Lockup Agreements. The Representatives shall have received from
each person identified on Appendix B attached hereto an agreement to the
----------
effect that, absent the prior written consent of ING Baring Xxxxxx Xxxx
LLC, such person will not (and, to the extent allowable by law, will not
permit any other person who is a transferee of such
19
person's shares of Common Stock or substantially similar securities of the
Company to) directly or indirectly offer, sell, offer to sell, contract to
sell, grant any option for the sale or purchase of, or otherwise dispose
of, any shares of Common Stock (including but not limited to any shares of
Common Stock issued or issuable upon conversion of shares of Series A or
Series B Preferred Stock of the Company), or any security convertible or
exchangeable into or exercisable for Common Stock (including but not
limited to shares of Series A and Series B Preferred Stock of the Company),
or any substantially similar securities, whether now owned or hereafter
acquired or owned by such person listed on Appendix B or with respect to
----------
which such person listed on Appendix B has the power of disposition or
----------
beneficial ownership (collectively, the "Lockup Shares") or, in any manner,
-------------
transfer all or a portion of the economic consequences associated with the
ownership of the Lockup Shares, for a period of 180 days from the date of
the Prospectus otherwise than (i) as a bona fide gift or gifts, provided
that the donee or donees thereof agree to be bound by this restriction.
(l) Additional Documents. The Company shall have furnished the
Underwriters with such further opinions, letters, certificates or documents
as you or counsel for the Representatives may reasonably request. All
opinions, certificates, letters and documents to be furnished by the
Company shall be deemed to comply with the provisions hereof (to the extent
a form of such document is not attached hereto) only if they are reasonably
satisfactory in all material respects to the Representatives and to counsel
for the Representatives. The Company shall furnish the Representatives
with conformed copies of such opinions, certificates, letters and documents
in such quantities as you reasonably request. The certificates delivered
under this Section 7 shall constitute representations, warranties and
agreements of the Company, as to all matters set forth therein, as fully
and effectively as if such matters had been set forth in Section 2 of this
Agreement.
(m) The Shares shall have been duly authorized for quotation on the
Nasdaq National Market.
Section 8. Indemnification.
(a) By the Company. The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
against any and all losses, claims, damages or liabilities, joint or several
(and actions in respect thereof), to which such Underwriter or such controlling
person may become subject, under the Act or other federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or the Prospectus or any Preliminary Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission therein of a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse, as
incurred, such Underwriter or such controlling persons for any legal or other
expenses reasonably incurred by
20
such Underwriter or such controlling persons in connection with investigating,
defending or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in any of such
documents in reliance upon and in conformity with information furnished in
writing to the Company on behalf of such Underwriter through the Representatives
expressly for use therein and provided further that such indemnity with respect
to any Preliminary Prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) from whom the
person asserting any such loss, claim, damage, liability or action purchased
Shares which are the subject thereof to the extent that any such loss, claim,
damage, liability or action (i) results from the fact that such Underwriter
failed to send or give a copy of the Prospectus (as amended or supplemented) to
such person at or prior to the confirmation of the sale of such Shares to such
person in any case where such delivery is required by the Act and (ii) arises
out of or is based upon an untrue statement or omission of a material fact
contained in such Preliminary Prospectus that was corrected in the Prospectus
(as amended and supplemented), unless such failure resulted from non-compliance
by the Company with Section 5(j) hereof. The indemnity agreement in this
paragraph (a) shall be in addition to any liability that the Company may
otherwise have.
(b) By the Underwriters. Each Underwriter agrees, severally but not
jointly, to indemnify and hold harmless the Company, each of its directors, each
of its officers who has 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, against any and all losses, claims, damages or
liabilities, joint or several (and actions in respect thereof), to which the
Company, its directors, each of its officers who has signed the Registration
Statement or such controlling person may become subject, under the Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or the Prospectus or any
Preliminary Prospectus, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission therein of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with information furnished in writing by that
Underwriter through the Representatives to the Company expressly for use
therein, and will reimburse, as incurred, the Company, its directors, each of
its officers who has signed the Registration Statement and such controlling
persons for any legal or other expenses reasonably incurred by the Company or
any such person in connection with investigating, defending or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action. The indemnity agreement contained in this paragraph (b) shall be in
addition to any liability that the Underwriters may otherwise have.
(c) Indemnification Procedure. Promptly after receipt by an
indemnified party under this Section 8 of notice of the commencement of any
action, such indemnified party
21
will, if a claim in respect thereof is to be made against one or more
indemnifying parties under this Section 8, notify such indemnifying party or
parties of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability to the extent that
the indemnifying party was not adversely affected by such omission, or from any
liability which it may have to any indemnified party otherwise than under
paragraph (a) or (b) of this Section 8. In case any such action is brought
against an indemnified party and it notifies an indemnifying party or parties of
the commencement thereof, the indemnifying party or parties against which a
claim is to be made will be entitled to participate therein and, to the extent
that it or they may wish, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party); provided
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party has reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to participate in the defense of such action on behalf
of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses (other than the reasonable costs of
investigation) subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party has employed such
counsel in accordance with the proviso to the immediately preceding sentence,
(ii) the indemnifying party has not employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action, or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party; provided, however, that the Company shall
only be liable for the reasonable fees and expenses of one such additional
counsel in any single jurisdiction plus appropriate local counsel in other
jurisdictions. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or failure to act, by or on behalf of any indemnified
party.
(d) Contribution. If the indemnification provided for in this
Section 8 is unavailable or insufficient to hold harmless an indemnified party
under paragraph (a) or (b) above in respect of any losses, claims, damages,
expenses or liabilities (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) (i) in such proportion as is
appropriate to reflect the relative benefits received by each of the
contributing parties, on the one hand, and the party to be indemnified, on the
other hand, from the offering of the Shares or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only
22
the relative benefits referred to in clause (i) above but also the relative
fault of each of the contributing parties, on the one hand, and the party to be
indemnified, on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand, and the Underwriters, on the other, shall be deemed to
be in the same proportion as the total net proceeds from the offering of the
Shares (before deducting expenses) bear to the total underwriting discounts
received by the Underwriters hereunder, in each case as set forth in the table
on the cover page of the Prospectus. Relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this paragraph (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to above in this paragraph (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this paragraph (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this paragraph (d), the Underwriters
shall not be required to contribute any amount in excess of the underwriting
discount applicable to the Shares purchased by the Underwriters hereunder. The
Underwriters' obligations to contribute pursuant to this paragraph (d) are
several in proportion to their respective underwriting obligations, and not
joint. 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. For purposes of this
paragraph (d), (i) each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Underwriter and (ii) each director of
the Company, each officer of the Company who has 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 shall have the same
rights to contribution as the Company, subject in each case to this paragraph
(d). Any party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in respect
to which a claim for contribution may be made against another party or parties
under this paragraph (d), notify such party or parties from whom contribution
may be sought, but the omission so to notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any other
obligation (x) it or they may have hereunder or otherwise than under this
paragraph (d) or (y) to the extent that such party or parties were not adversely
affected by such omission. The contribution agreement set forth above shall be
in addition to any liabilities which any indemnifying party may otherwise have.
Section 9. Right to Increase Offering. At any time during a period
of 30 days from the date of the Prospectus, the Underwriters, by no less than
two business days' prior notice to the Company, may designate a closing (which
may be concurrent with, and part of, the closing
23
on the Closing Date with respect to the Firm Shares or which may be a second
closing held on a date subsequent to the Closing Date; in either case the date
of such closing shall be referred to herein as the "Option Closing Date") at
-------------------
which the Underwriters may purchase all or less than all of the Additional
Shares in accordance with the provisions of this Section 9 at the purchase price
per share to be paid for the Firm Shares. In no event shall the Option Closing
Date be later than ten business days after written notice of election to
purchase Additional Shares is given.
The Company agrees to sell to the several Underwriters on the Option
Closing Date the number of Additional Shares specified in such notice and the
Underwriters agree severally and not jointly, to purchase such Additional Shares
on the Option Closing Date. Such Additional Shares shall be purchased for the
account of each Underwriter in the same proportion as the number of Firm Shares
set forth opposite the name of such Underwriter on Schedule I bears to the total
number of Firm Shares (subject to adjustment by you to eliminate fractions) and
may be purchased by the Underwriters only for the purpose of covering over-
allotments made in connection with the sale of the Firm Shares.
No Additional Shares shall be sold or delivered unless the Firm Shares
previously have been, or simultaneously are, sold and delivered. The right to
purchase the Additional Shares or any portion thereof may be surrendered and
terminated at any time upon notice by you to the Company.
Except to the extent modified by this Section 9, all provisions of
this Agreement relating to the transactions contemplated to occur on the Closing
Date for the sale of the Firm Shares shall apply, mutatis mutandis, to the
Option Closing Date for the sale of the Additional Shares.
Section 10. Representations, etc. to Survive Delivery. The
respective representations, warranties, agreements, covenants, indemnities and
statements of, and on behalf of, the Company and its officers and the
Underwriters, respectively, set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of the Underwriters, and will survive delivery of and payment for the
Shares. Any successors to the Underwriters shall be entitled to the indemnity,
contribution and reimbursement agreements contained in this Agreement.
Section 11. Effective Date and Termination.
(a) Effective Date. This Agreement shall become effective at 11:00
A.M., New York time on the first business day following the date hereof, or at
such earlier time after the Registration Statement becomes effective as the
Representatives, in their sole discretion, shall release the Shares for the sale
to the public, unless the Representatives shall have given written notice to the
Company that the Representatives on behalf of the Underwriters elect that this
Agreement shall not become effective; provided, however, that the provisions of
this Section and of Section 6 and Section 8 hereof shall at all times be
effective. For purposes of this Section 11(a), the Shares to be purchased
hereunder shall be deemed to have been so released upon the earlier of
notification by the Representatives to securities dealers releasing such Shares
for offering
24
or the release by the Representatives for publication of the first newspaper
advertisement which is subsequently published relating to the Shares.
(b) Termination. This Agreement (except for the provisions of
Sections 6 and 8 hereof) may be terminated by the Representatives by notice to
the Company if the Company has failed to comply in any material respect with any
of the provisions of this Agreement required on its part to be performed at or
prior to the Closing Date or the Option Closing Date, or if any of the
representations or warranties of the Company is not accurate in any respect or
if the covenants, agreements or conditions of, or applicable to the Company
herein contained have not been complied with in any respect or satisfied within
the time specified on the Closing Date or the Option Closing Date, respectively,
or if prior to the Closing Date or the Option Closing Date:
(i) the Company shall have sustained a loss by strike, fire,
flood, hurricane, accident or other calamity of such a character as to
interfere materially with the conduct of the business and operations
of the Company regardless of whether or not such loss is covered by
insurance;
(ii) trading in the Common Stock shall have been suspended by
the Commission or the Nasdaq National Market or trading in securities
generally on the New York Stock Exchange or the Nasdaq National Market
System shall have been suspended or a material limitation on such
trading shall have been imposed or minimum or maximum prices shall
have been established on any such exchange or market system;
(iii) a banking moratorium shall have been declared by New York
State or United States authorities;
(iv) there shall have been an outbreak or escalation of
hostilities between the United States and any foreign power or an
outbreak or escalation of any other insurrection or armed conflict
involving the United States; or
(v) there shall have been a material adverse change in (A)
general economic, political or financial conditions or (B) the present
or prospective business or condition (financial or other) of the
Company that in the Representatives' judgment makes it impracticable
or inadvisable to make or consummate the public offering, sale or
delivery of the Company's Shares on the terms and in the manner
contemplated in the Prospectus and the Registration Statement.
(c) Termination After Purchase of Firm Shares. Termination of this
Agreement under this Section 11 or Section 12 after the Firm Shares have been
purchased by the Underwriters hereunder shall be applicable only to the
Additional Shares. Termination of this Agreement shall be without liability of
any party to any other party other than as provided in Sections 6 and 8 hereof.
Section 12. Substitution of Underwriters.
25
(a) Default by Underwriter of 10% or Less. If one or more of the
Underwriters shall fail or refuse (otherwise than for a reason sufficient to
justify the termination of this Agreement under the provisions of Section 7 or
11 hereof) to purchase and pay for (a) in the case of the Closing Date, the
number of Firm Shares agreed to be purchased by such Underwriter or Underwriters
upon tender to you of such Firm Shares in accordance with the terms hereof or
(b) in the case of the Option Closing Date, the number of Additional Shares
agreed to be purchased by such Underwriter or Underwriters upon tender to you of
such Additional Shares in accordance with the terms hereof, and the number of
such Shares shall not exceed 10% of the Firm Shares or Additional Shares
required to be purchased on the Closing Date or the Option Closing Date, as the
case may be, then each of the non-defaulting Underwriters shall purchase and pay
for (in addition to the number of such Shares or Additional Shares that it has
severally agreed to purchase hereunder) that proportion of the number of Shares
or Additional Shares that the defaulting Underwriter or Underwriters shall have
so failed or refused to purchase on such Closing Date or Option Closing Date, as
the case may be, which the number of Shares or Additional Shares agreed to be
purchased by such non-defaulting Underwriter bears to the aggregate number of
Shares or Additional Shares so agreed to be purchased by all such non-defaulting
Underwriters on such Closing Date or Option Closing Date, as the case may be.
In such case, you shall have the right to postpone the Closing Date or the
Option Closing Date, as the case may be, to a date not exceeding seven full
business days after the date originally fixed as such Closing Date or the Option
Closing Date, as the case may be, pursuant to the terms hereof in order that any
necessary changes in the Registration Statement, the Prospectus or any other
documents or arrangements may be made.
(b) Default by Underwriter of More Than 10%. If one or more of the
Underwriters shall fail or refuse (otherwise than for a reason sufficient to
justify the termination of this Agreement under the provisions of Section 7 or
11 hereof) to purchase and pay for (a) in the case of the Closing Date, the
number of Firm Shares agreed to be purchased by such Underwriter or Underwriters
upon tender to you of such Firm Shares in accordance with the terms hereof or
(b) in the case of the Option Closing Date, the number of Additional Shares
agreed to be purchased by such Underwriter or Underwriters upon tender to you of
such Additional Shares in accordance with the terms hereof, and the number of
such Shares shall exceed 10% of the Firm Shares or Additional Shares required to
be purchased by all the Underwriters on the Closing Date or the Option Closing
Date, as the case may be, then (unless within 48 hours after such default
arrangements to your satisfaction shall have been made for the purchase of the
defaulted Shares by an Underwriter or Underwriters) and subject to the
provisions of Section 11(a) hereof, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or on the part of the
Company except as otherwise provided in Sections 6 and 8 hereof. As used in
this Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this paragraph. Nothing in this Section 12, and no action
taken hereunder, shall relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
Section 13. Notices. All communications hereunder shall be in
writing and if sent to the Representatives shall be mailed or delivered or
telecopied and confirmed by letter to c/o ING Baring Xxxxxx Xxxx LLC at Park
Avenue Plaza, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Department, with a copy to White & Case LLP, 1155 Avenue
26
of the Americas, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxx Xxxxx, or, if
sent to the Company, shall be mailed or delivered or telecopied and confirmed by
letter to the Company at 00000 X.X. Xxxxxxx Xxx, Xxxxx 000, Xxxxx Xxxx Xxxxx,
Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx, III, with a copy to Xxxxxx,
Xxxxxxx & Xxxxxx L.L.P., 1600 Atlanta Financial Center, 0000 Xxxxxxxxx Xxxx,
X.X., Xxxxxxx, Xxxxxxx 00000, Attention: Xxxx X. Xxxxx Xxxxx.
Section 14. Successors. This Agreement shall inure to the benefit of
and be binding upon the Company and each Underwriter and the Company's and each
Underwriter's respective successors and legal representatives, and nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained, this Agreement
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of such persons and for the benefit of no other
person, except that the representations, warranties, indemnities and
contribution agreements of the Company contained in this Agreement shall also be
for the benefit of any person or persons, if any, who control any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
and except that the Underwriters' indemnity and contribution agreements shall
also be for the benefit of the directors of the Company, the officers of the
Company who have signed the Registration Statement, and any person or persons,
if any, who control the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act. No purchaser of Shares from the Underwriters
will be deemed a successor because of such purchase.
Section 15. Applicable Law; Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without giving effect to the choice of law or conflict of law principles
thereof. Each party hereto consents to the jurisdiction of each court in which
any action is commenced seeking indemnity or contribution pursuant to Section 8
above and agrees to accept, either directly or through an agent, service of
process of each such court.
Section 16. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of which together shall be deemed to be one and the same instrument.
* * *
27
If the foregoing correctly sets forth our understanding, please
indicate the Underwriters' acceptance thereof in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement between
us.
Very truly yours,
INTELLIGENT LIFE CORPORATION
By:
---------------------------------
Name:
Title:
Accepted as of the date first
above written:
ING BARING XXXXXX XXXX LLC
Acting on its own behalf and as one of the
Representatives of the several Underwriters
referred to in the foregoing Agreement
By:
-------------------------------------
Name:
Title:
28
SCHEDULE I
UNDERWRITERS
Underwriting Agreement dated May 12, 1999
Number of Firm
Shares to be
Purchased from
Name and Address the Company
---------------- ---------------------
ING Baring Xxxxxx Xxxx LLC..........................
Warburg Dillon Read LLC, a subsidiary of UBS AG.....
-----------
Total...............................................
===========
APPENDIX A
OPINION OF COUNSEL TO THE COMPANY
---------------------------------
(a) The Company is a corporation validly existing and in good standing
under the laws of the state of its incorporation with all requisite corporate
power and corporate authority to own or lease its properties and to conduct its
business as described in the Prospectus,
(b) The authorized, issued and outstanding capital stock of the
Company is as set forth under the caption "Capitalization" in the Prospectus;
the issued and outstanding shares of the Company's capital stock have been duly
authorized and validly issued, are fully paid and nonassessable and have been
issued in compliance with all federal and state securities laws and, to the
knowledge of such counsel, have not been issued in violation of any preemptive
right, co-sale right, registration right, right of first refusal or other
similar right;
(c) The Company has duly authorized the issuance and sale of the
Shares to be sold by it hereunder; such Shares, when issued by the Company and
paid for in accordance with the terms hereof, will be validly issued, fully paid
and nonassessable and will conform in all material respects to the description
thereof contained in the Prospectus and, to such counsel's knowledge, will be
sold free and clear of any pledge, lien, security interests, encumbrance, claim,
or equitable interest, and, to the knowledge of such counsel, not in violation
of or subject to any preemptive right, co-sale right, right of first refusal or
other similar right, which rights have not previously been waived, in connection
with the purchase or sale of any of the Shares;
(d) To the knowledge of such counsel, there are no contracts or
documents which are required by the Act to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement which are not described or filed as required by the Act and the Rules
and Regulations;
(e) The statements set forth under the headings "Risk Factors -- Our
Articles of Incorporation and Bylaws, as well as Florida law, may prevent or
delay a future takeover," "Risk Factors -- future sales of common stock could
adversely affect stock price," "Management -- Stock Option and Other
Compensation Plans," "Certain Transactions," Description of Capital Stock and
"Shares Eligible for Future Sale" in the Prospectus and the statements in
response to Items 14 and 15 of Form S-1 of the Registration Statement, insofar
as such statements constitute a summary of the legal matters, documents or
proceedings referred to therein, provide an accurate summary in all material
respects of such legal matters, documents and proceedings;
(f) The Company has all requisite corporate legal right, power, and
authority to enter into this Agreement and to consummate the transactions
provided for herein; this Agreement has been duly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company;
(g) None of the Company's execution or delivery of this Agreement, its
performance hereof or its consummation of the transactions contemplated herein
conflicts or will conflict with or results or will result in any breach or
violation of any of the terms or provisions
1
of, or constitute a default under, the terms of the certificate of incorporation
or by-laws of the Company, the terms of any indenture, mortgage, deed of trust,
voting trust agreement, stockholder's agreement, note agreement or other
agreement or instrument filed as an exhibit to the Registration Statement to
which the Company is a party or by which it is or may be bound or to which any
of its properties may be subject, or any Florida or United States statute, rule
or regulation, or any rule or regulation of any state or federal regulatory body
or administrative agency or other governmental agency or body, or, to the
knowledge of such counsel, of any arbitrator or court having such jurisdiction;
(h) No consent, approval, authorization or order of any state or
federal court regulatory body or administrative agency or Florida or federal
governmental agency or body has been or is required for the Company's
performance of this Agreement or the consummation of the transactions
contemplated hereby, except such as have been obtained under the Act or may be
required under state securities or Blue Sky laws or may be required by the
National Association of Securities Dealers, Inc. (as to which such counsel may
express no opinion) in connection with the purchase and distribution by the
Underwriters of the Shares;
(i) All holders of Series A and Series B Preferred Stock of the
Company who have rights pursuant to a duly executed Shareholders' Agreement to
cause the Company to register shares of Common Stock because of the filing of
the Registration Statement by the Company, have validly and irrevocably waived
such rights; to the best knowledge of such counsel, after due investigation, no
other holder of securities of the Company has such registration rights;
(j) No transfer taxes are required to be paid in connection with the
sale or delivery to the Underwriters of the Shares;
(k) The Company is not an "investment company" or an entity
"controlled" by an investment company, as those terms are defined in the
Investment Company Act of 1940, as amended;
(l) The Common Stock has been registered pursuant to Section 12(g) of
the Exchange Act; the Shares have been duly authorized for listing on the Nasdaq
National Market System;
(m) To such counsel's knowledge, there is not pending or threatened
against the Company any action, suit, proceeding or investigation before or by
any court, regulatory body or administrative agency, or any other governmental
agency or body, domestic or foreign of a character required to be disclosed in
the Registration Statement or the Prospectus, which is not so disclosed therein;
(n) The Registration Statement has become effective under the Act, and
to such counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued by the Commission nor, to such counsel's
knowledge, has any proceeding been instituted or contemplated for that purpose
under the Act. The Prospectus has
2
been filed with the Commission pursuant to Rule 424(b) of the rules and
regulations promulgated under the Act within the time period required thereby;
(o) The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company prior to the Closing Date
appeared on their face to be appropriately responsive in all material respects
to the requirements of the Act and the applicable Rules and Regulations
promulgated under the Act; and
(p) Such counsel have no reason to believe that the Registration
Statement at the effective date thereof contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus as of its date or at the Closing Date or the Option Closing Date, as
the case may be, contained or contains any untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
In rendering any such opinion, which shall be in accord with the
"Interpretive Standards Applicable to Certain Legal Opinions to Third Parties in
Corporate Transactions" issued by the State Bar of Georgia, such counsel may
rely, (i) as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and public officials and
(ii) as to matters of Florida law, upon counsel admitted to practice in such
jurisdictions who are satisfactory to the Underwriters and their counsel,
provided that counsel for the Company shall state that the opinions of such
other counsel are satisfactory in scope and substance and that the Underwriters
are justified in relying thereon.
References to the Registration Statement and the Prospectus in such
opinion shall include any amendment or supplement thereto at the date of such
opinion.
3
APPENDIX B
SHAREHOLDERS SUBJECT TO LOCKUP AGREEMENTS
-----------------------------------------
ABS Ventures IV, L.P.
ABX Fund, L.P.
ACF II Side Fund Limited Partnership
Antares Capital Partners II, Inc.
BRM Holdings LLC
Xxxxxxx X. Xxxxxxxx, III
Xxxxxx Xxxxx
Xxxxxx Xxxxxxxxxx
Xxxx Xxxxxxx
Xxxx Xxxxxxxxx
Xxxxxx Xxxxxxx
Xxxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxxx Xxxxxxx
Xxxxx Xxxxxxx
Xxxxx Xxxxx
Xxxxx X. Xxxxx
Xxxxxx O'Block
Xxxx Xxxxxxxx Xxxxxx
Xxxxx Tobeason
