EXHIBIT 1.1
CLARUS CORPORATION
2,100,000 Shares/1/
Common Stock
UNDERWRITING AGREEMENT
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February ____, 2000
CHASE SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
U.S. BANCORP XXXXX XXXXXXX
XXXXXXXX INC.
c/o Chase Securities Inc.
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Clarus Corporation, a Delaware corporation (herein called the Company),
proposes to issue and sell 1,928,000 shares of its authorized but unissued
Common Stock, $.0001 par value (herein called the Common Stock), and the
stockholders of the Company named in Schedule II hereto (herein collectively
called the Selling Securityholders) propose to sell an aggregate of 172,000
shares of Common Stock of the Company (said 2,100,000 shares of Common Stock
being herein called the Underwritten Stock). The Company proposes to grant to
the Underwriters (as hereinafter defined) an option to purchase up to 315,000
additional shares of Common Stock (herein called the Option Stock and with the
Underwritten Stock herein collectively called the Stock). The Common Stock is
more fully described in the Registration Statement and the Prospectus
hereinafter mentioned.
The Company and the Selling Securityholders severally hereby confirm the
agreements made with respect to the purchase of the Stock by the several
underwriters, for whom you are acting, named in Schedule I hereto (herein
collectively called the Underwriters, which term shall also include any
underwriter purchasing Stock pursuant to Section 3(b) hereof). You represent
and warrant that you have been authorized by each of the other Underwriters to
enter into this Agreement on its behalf and to act for it in the manner herein
provided.
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/1/Plus an option to purchase from the Underwriters up to 315,000 additional
shares to cover over-allotments.
1. Registration Statement. The Company has filed with the Securities and
Exchange Commission (herein called the Commission) a registration statement on
Form S-3 (No. 333-94199), including the related preliminary prospectus, for the
registration under the Securities Act of 1933, as amended (herein called the
Securities Act) of the Stock. Copies of such registration statement and of each
amendment thereto, if any, including the related preliminary prospectus (meeting
the requirements of Rule 430A of the rules and regulations of the Commission)
heretofore filed by the Company with the Commission have been delivered to you.
The term Registration Statement as used in this agreement shall mean such
registration statement, including all documents incorporated by reference
therein, all exhibits and financial statements, all information omitted
therefrom in reliance upon Rule 430A and contained in the Prospectus referred to
below, in the form in which it became effective, and any registration statement
filed pursuant to Rule 462(b) of the rules and regulations of the Commission
with respect to the Stock (herein called a Rule 462(b) registration statement),
and, in the event of any amendment thereto after the effective date of such
registration statement (herein called the Effective Date), shall also mean (from
and after the effectiveness of such amendment) such registration statement as so
amended (including any Rule 462(b) registration statement). The term Prospectus
as used in this Agreement shall mean the prospectus, including the documents
incorporated by reference therein, relating to the Stock first filed with the
Commission pursuant to Rule 424(b) and Rule 430A (or if no such filing is
required, as included in the Registration Statement) and, in the event of any
supplement or amendment to such prospectus after the Effective Date, shall also
mean (from and after the filing with the Commission of such supplement or the
effectiveness of such amendment) such prospectus as so supplemented or amended.
The term Preliminary Prospectus as used in this Agreement shall mean each
preliminary prospectus, including the documents incorporated by reference
therein, included in such registration statement prior to the time it becomes
effective.
The Registration Statement has been declared effective under the Securities
Act, and no post-effective amendment to the Registration Statement has been
filed as of the date of this Agreement. The Company has caused to be delivered
to you copies of each Preliminary Prospectus and has consented to the use of
such copies for the purposes permitted by the Securities Act.
2. Representations and Warranties of the Company and the Management
Selling Securityholders.
(a) Each of the Company and the Management Selling Securityholders
identified as such in Schedule II hereto hereby represents and warrants as
follows:
(i) Each of the Company and its subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has full corporate power and
authority to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus and as being
conducted, and is duly qualified as a foreign corporation and in good
standing in all jurisdictions in which the character of the property owned
or leased or the nature of the business transacted by it makes
qualification necessary (except where the failure to be so qualified would
not have a material adverse effect on the business, properties, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole). All of the issued and outstanding capital stock of each
of the subsidiaries of the Company has been duly authorized and validly
issued and is fully paid and nonassessable, and is owned by the Company
free and clear of all liens, encumbrances and security interests, and no
options, warrants or other rights to purchase, agreements or other
obligations to
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issue or other rights to convert any obligations into shares of capital
stock or ownership interests in such subsidiaries are outstanding.
(ii) The Registration Statement and the Prospectus comply, and on the
Closing Date (as hereinafter defined) and any later date on which Option
Stock is to be purchased, the Prospectus will comply, in all material
respects, with the provisions of the Securities Act and the Securities
Exchange Act of 1934, as amended (herein called the Exchange Act) and the
rules and regulations of the Commission thereunder and, if filed by
electronic transmission pursuant to the Electronic Data Gathering Analysis
and Retrieval System (XXXXX) (except as may be permitted by Regulation S-T
under the Securities Act), the Registration Statement and the Prospectus
are or will be identical in all substantive respects to the copies thereof
delivered to the Underwriters for use in connection with the offer and sale
of the Stock. On the Effective Date, the Registration Statement did not
contain any untrue statement of a material fact and did not omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and on the Effective Date the
Prospectus did not and, on the Closing Date and any later date on which
Option Stock is to be purchased, will not contain 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; provided, however, that none of the
representations and warranties in this subparagraph (ii) shall apply to
statements in, or omissions from, the Registration Statement or the
Prospectus made in reliance upon and in conformity with information herein
or otherwise furnished in writing to the Company by or on behalf of the
Underwriters for use in the Registration Statement or the Prospectus. There
are no contracts or other documents required to be described in the
Prospectus or to be filed as exhibits to the Registration Statement which
have not been described or filed as required.
(iii) The Registration Statement and any Rule 462(b) registration
statement have been declared effective by the Commission under the
Securities Act. The Company has complied to the Commission's satisfaction
with all requests of the Commission for additional or supplemental
information. No stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) registration statement is in effect, and no
proceedings for such purpose have been instituted or, to the best knowledge
of the Company and the Management Selling Securityholders, are contemplated
or threatened by the Commission.
(iv) The Common Stock is included in the Nasdaq National Market, and
the Company has notified the Nasdaq National Market of the proposed
issuance of the Stock by the Company in accordance with the Nasdaq Stock
Market Marketplace Rules.
(v) The Company has delivered to the Representatives one complete
manually signed copy of the Registration Statement and of each consent and
certificate of experts filed as a part thereof and conformed copies of the
Registration Statement (without exhibits) and Preliminary Prospectuses and
the Prospectus, as amended or supplemented, in such quantities and at such
places as the Representatives have reasonably requested for each of the
Underwriters.
(vi) The Company has not distributed and will not distribute, prior to
the later of the Closing Date (as defined below) and the completion of the
Underwriters' distribution of the Stock, any offering material in
connection with the offering and sale of the Stock other than a Preliminary
Prospectus, the Prospectus or the Registration Statement and any other
material permitted under the Securities Act.
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(vii) This Agreement has been duly authorized, executed and delivered
by, and is a valid and binding agreement of, the Company, enforceable in
accordance with its terms, except as rights to indemnification hereunder
(including rights under Section 11) may be limited by applicable law and
except as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles.
(viii) There are no persons with registration or other similar rights
to have any equity or debt securities registered for sale under the
Registration Statement or included in the offering contemplated by this
Agreement, except for such rights as have been duly exercised or waived.
(ix) Except as otherwise disclosed in the Prospectus, subsequent to the
respective dates as of which information is given in the Prospectus: (i)
there has been no material adverse change, or any development that could
reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings, business, operations
or prospects, whether or not arising from transactions in the ordinary
course of business of the Company and its subsidiaries, considered as one
entity (any such change is called a Material Adverse Change); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred
any material liability or obligation, indirect, direct or contingent, not
in the ordinary course of business nor entered into any material
transaction or agreement not in the ordinary course of business; and (iii)
there has been no dividend or distribution of any kind declared, paid or
made by the Company or, except for dividends paid to the Company, or by any
of its subsidiaries on any class of capital stock, any repurchase or
redemption by the Company or any of its subsidiaries of any class of
capital stock.
(x) Xxxxxx Xxxxxxxx LLP, which has expressed its opinion with respect
to the financial statements (which term as used in this Agreement includes
the related notes thereto) and supporting schedules filed with the
Commission as a part of the Registration Statement and included in the
Prospectus, are independent public or certified public accountants as
required by the Securities Act.
(xi) The financial statements filed with the Commission as a part of
the Registration Statement included in the Prospectus present fairly the
consolidated financial position of the Company and its subsidiaries as of
and at the dates indicated and the results of their operations and cash
flows for the periods specified. Any supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein. Such financial statements and supporting schedules have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except as
may be expressly stated in the related notes thereto. No other financial
statements or supporting schedules are required to be included in the
Registration Statement. The financial data set forth in the Prospectus
under the captions "Prospectus Summary - Summary Consolidated Financial
Data," "Selected Consolidated Financial Information" and "Capitalization"
present the information set forth therein on a basis consistent with the
audited financial statements contained in the Registration Statement.
(xii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption
"Capitalization" (other than for subsequent issuances, if any, pursuant to
the employee benefit plans described in the Prospectus or upon exercise of
outstanding options or warrants described in the Prospectus). There are no
authorized or outstanding options, warrants, preemptive rights, rights of
first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or
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exercisable for, any capital stock of the Company or any of its
subsidiaries other than those described in the Prospectus. The Stock is
duly and validly authorized, is (or, in the case of shares of the Stock to
be sold by the Company, will be, when issued and sold to the Underwriters
as provided herein) duly and validly issued, fully paid and nonassessable
and conforms to the description thereof incorporated by reference in the
Prospectus. No further approval or authority of the stockholders or the
Board of Directors of the Company will be required for the transfer and
sale of the Stock to be sold by the Selling Securityholders or the issuance
and sale of the Stock as contemplated herein. None of the outstanding
shares of Common Stock were issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company.
(xiii) Neither the Company nor any of its subsidiaries is in violation
of its charter or bylaws or is in default (or, with the giving of notice or
lapse of time, would be in default) (herein called a Default) under any
indenture, mortgage, loan or credit agreement, note, contract, franchise,
lease or other instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound or to which any of
the property or assets of the Company or any of its subsidiaries is subject
(herein each, an Existing Instrument), except for such Defaults as would
not, individually or in the aggregate, result in a Material Adverse Change.
The Company's execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby and by the Prospectus
(i) will not result in any violation of the provisions of the charter or
bylaws of the Company or any subsidiary, (ii) will not conflict with or
constitute a breach of, or Default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of its subsidiaries pursuant to, or require the
consent of any other party to, any Existing Instrument, except for such
conflicts, breaches, Defaults, liens, charges, encumbrances or failures to
obtain consents as would not, individually or in the aggregate, result in a
Material Adverse Change and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable
to the Company or any subsidiary. No consent, approval, authorization or
other order of, or registration or filing with, any court or other
governmental or regulatory authority or agency is required for the
Company's execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby and by the Prospectus,
except such as have been obtained or made by the Company and are in full
force and effect under the Securities Act, and such as may be required
under applicable state securities or blue sky laws and from the National
Association of Securities Dealers, Inc. (herein the NASD).
(xiv) There are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company's or each Management Selling
Securityholder's knowledge, threatened (i) against or affecting the Company
or any of its subsidiaries, or (ii) which has as the subject thereof any
person in his or her capacity as an officer or director of, or property
owned or leased by, the Company or any of its subsidiaries, where in any
such case (A) there is a reasonable possibility that such action, suit or
proceeding might be determined adversely to the Company or such subsidiary
and (B) any such action, suit or proceeding, if so determined adversely,
would reasonably be expected to result in a Material Adverse Change or
adversely affect the consummation of the transactions contemplated by this
Agreement. No material labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the best of the Company's or each
Management Selling Securityholder's knowledge, is threatened or imminent.
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(xv) The Company and its subsidiaries own or possess sufficient
trademarks, trade names, patent rights, copyrights, licenses, approvals,
trade secrets and other similar rights (herein called Intellectual Property
Rights) reasonably necessary to conduct their businesses as now conducted;
and the expected expiration of any of such Intellectual Property Rights
would not result in a Material Adverse Change. Neither the Company nor any
of its subsidiaries has received any notice of infringement or conflict
with asserted Intellectual Property Rights of others, which infringement or
conflict, if the subject of an unfavorable decision, would result in a
Material Adverse Change.
(xvi) The Company and each subsidiary possess such valid and current
certificates, authorizations or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct their
respective businesses, and neither the Company nor any subsidiary has
received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate,
authorization or permit which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would reasonably be expected
to result in a Material Adverse Change.
(xvii) The Company and each of its subsidiaries have good and
marketable title to all the properties and assets reflected as owned in the
financial statements referred to in Section 2(xi) above, and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and
other defects, except such as (i) are disclosed in the Prospectus or (ii)
do not materially and adversely affect the value of such property and do
not materially interfere with the use made or proposed to be made of such
property by the Company or such subsidiary. The real property,
improvements, equipment and personal property held under lease by the
Company or any subsidiary are held under valid and enforceable leases, with
such exceptions as are not material and do not materially interfere with
the use made or proposed to be made of such real property, improvements,
equipment or personal property by the Company or such subsidiary.
(xviii) The Company and its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns and have paid
all taxes required to be paid by them and, if due and payable, any related
or similar assessment, fine or penalty levied against them. The Company has
made adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 2(xi) above with respect to all federal,
state and foreign income and franchise taxes for all periods as to which
the tax liability of the Company has not been finally determined.
(xix) The Company has been advised of the rules and requirements under
the Investment Company Act of 1940, as amended (herein called the
Investment Company Act). The Company is not and, after receipt of payment
for the Stock, will not be, an "investment company" within the meaning of
the Investment Company Act and will conduct its business in a manner so
that it will not become subject to the Investment Company Act.
(xx) The Company and its subsidiaries are insured by recognized,
financially sound and reputable institutions with policies in such amounts
and with such deductibles and covering such risks as are generally deemed
adequate and customary for their businesses including, but not limited to,
policies covering real and personal property owned or leased by the Company
and its subsidiaries against theft, damage, destruction, acts of vandalism
and earthquakes. The Company and the Management Selling Securityholders
have no reason to believe that the Company or any subsidiary will not be
able (i) to renew its existing insurance coverage as and when such policies
expire or (ii) to obtain comparable coverage from similar institutions as
may be necessary or
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appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Change. Neither the Company nor any
of its subsidiaries has been denied any insurance coverage which it has
sought or for which it has applied.
(xxi) The Company has not taken and will not take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Stock.
(xxii) There are no business relationships or related party
transactions involving the Company or any subsidiaries or any other person
required to be described in the Prospectus that have not been described as
required.
(xxiii) Neither the Company nor any subsidiaries nor, to the best
knowledge of the Company and each Management Selling Securityholder, any
employee or agent of the Company or any subsidiaries, has made any
contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law or of a character
required to be disclosed in the Prospectus.
(xxiv) The Company maintains a system of accounting controls sufficient
to provide reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to maintain accountability 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 regular intervals and appropriate action is taken with respect to
any differences.
(b) Each of the Selling Securityholders hereby represents and warrants as
follows:
(i) Such Selling Securityholder has good and marketable title to all
the shares of Stock to be sold by such Selling Securityholder hereunder,
free and clear of all liens, encumbrances, equities, security interests and
claims whatsoever, with full right and authority to deliver the same
hereunder, subject, in the case of each Selling Securityholder, to the
rights of the Company, as Custodian (herein called the Custodian), and that
upon the delivery of and payment for such shares of the Stock hereunder,
the several Underwriters will receive good and marketable title thereto,
free and clear of all liens, encumbrances, equities, security interests and
claims whatsoever.
(ii) Certificates in negotiable form for the shares of the Stock to be
sold by such Selling Securityholder have been placed in custody under a
Custody Agreement for delivery under this Agreement with the Custodian;
such Selling Securityholder specifically agrees that the shares of the
Stock represented by the certificates so held in custody for such Selling
Securityholder are subject to the interests of the several Underwriters and
the Company, that the arrangements made by such Selling Securityholder for
such custody, including the Power of Attorney included in such Custody
Agreement, are to that extent irrevocable, and that the obligations of such
Selling Securityholder shall not be terminated by any act of such Selling
Securityholder or by operation of law, whether by the death or incapacity
of such Selling Securityholder (or, in the case of a Selling Securityholder
that is not an individual, the dissolution or liquidation of such Selling
Securityholder) or the occurrence of any other event; if any such death,
incapacity, dissolution, liquidation or other such event should occur
before the delivery of such shares of the Stock hereunder, certificates for
such shares of the
7
Stock shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such death, incapacity, dissolution,
liquidation or other event had not occurred, regardless of whether the
Custodian shall have received notice of such death, incapacity,
dissolution, liquidation or other event.
(iii) The Custody Agreement and Power of Attorney signed by such
Selling Securityholder appointing the Company as Custodian for his or her
shares of Stock to be sold pursuant to this Agreement and appointing
Xxxxxxx X. Xxxxxxx as such Selling Securityholder's attorney-in-fact, to
the extent set forth therein with regard to the transactions contemplated
hereby and by the Registration Statement and the Prospectus, has been duly
authorized, executed and delivered by or on behalf of such Selling
Securityholder and is a valid and binding instrument of such Selling
Securityholder enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles.
Pursuant to such Power of Attorney, the Selling Securityholder has
authorized Xxxxxxx X. Xxxxxxx to execute and deliver any document necessary
or desirable in connection with the transactions contemplated hereby and to
deliver the Stock to be sold by such Selling Securityholder pursuant to
this Agreement.
(iv) Such Selling Securityholder has reviewed the Registration
Statement and Prospectus and nothing has come to the attention of such
Selling Securityholder that would lead such Selling Securityholder to
believe that on the Effective Date, the Registration Statement contained
any untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading.
(v) Such Selling Securityholder has not taken, and will not take,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price
of the Common Stock to facilitate the sale or resale of the Stock.
(vi) The execution, delivery and performance of this Agreement by such
Selling Securityholder, compliance by such Selling Securityholder with all
the provisions hereof and the consummation of the transactions contemplated
hereby will not require any consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other governmental
body (except such as may be required under the Securities Act, state
securities laws or blue sky laws or except such as may have been obtained)
and will not conflict with or constitute a breach of the terms or
provisions of, or a Default under, the charter or bylaws, if applicable, of
such Selling Securityholder or any material agreement, indenture or other
instrument to which the Selling Securityholder is a party or by which the
Selling Securityholder or property of the Selling Securityholder is bound,
or violate or conflict with any laws, administrative regulation or ruling
or court decree applicable to the Selling Securityholder or property of the
Selling Securityholder.
3. Purchase of the Stock by the Underwriters.
(a) On the basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Company agrees to issue and sell
1,928,000 shares of the Underwritten Stock to the several Underwriters, each
Selling Securityholder agrees to sell to the several Underwriters the number of
shares of the Underwritten Stock set forth in Schedule II opposite the name of
such Selling Securityholder, and each of the Underwriters agrees to purchase
from the Company and the Selling Securityholders the respective aggregate number
of shares of Underwritten Stock set forth opposite its name in Schedule I. The
price at which such
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shares of Underwritten Stock shall be sold by the Company and the Selling
Securityholders and purchased by the several Underwriters shall be $___ per
share. The obligation of each Underwriter to the Company and each of the Selling
Securityholders shall be to purchase from the Company and the Selling
Securityholders that number of shares of the Underwritten Stock which represents
the same proportion of the total number of shares of the Underwritten Stock to
be sold by each of the Company and the Selling Securityholders pursuant to this
Agreement as the number of shares of the Underwritten Stock set forth opposite
the name of such Underwriter in Schedule I hereto represents of the total number
of shares of the Underwritten Stock to be purchased by all Underwriters pursuant
to this Agreement, as adjusted by you in such manner as you deem advisable to
avoid fractional shares. In making this Agreement, each Underwriter is
contracting severally and not jointly; except as provided in paragraphs (b) and
(c) of this Section 3, the agreement of each Underwriter is to purchase only the
respective number of shares of the Underwritten Stock specified in Schedule I.
(b) If for any reason 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 8 or 9 hereof) to purchase and pay for
the number of shares of the Stock agreed to be purchased by such Underwriter or
Underwriters, the Company or the Selling Securityholders shall immediately give
notice thereof to you, and the non-defaulting Underwriters shall have the right
within 24 hours after the receipt by you of such notice to purchase, or procure
one or more other Underwriters to purchase, in such proportions as may be agreed
upon between you and such purchasing Underwriter or Underwriters and upon the
terms herein set forth, all or any part of the shares of the Stock which such
defaulting Underwriter or Underwriters agreed to purchase. If the non-
defaulting Underwriters fail so to make such arrangements with respect to all
such shares and portion, the number of shares of the Stock which each non-
defaulting Underwriter is otherwise obligated to purchase under this Agreement
shall be automatically increased on a pro rata basis to absorb the remaining
shares and portion which the defaulting Underwriter or Underwriters agreed to
purchase; provided, however, that the non-defaulting Underwriters shall not be
obligated to purchase the shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase if the aggregate number of such shares of the
Stock exceeds 10% of the total number of shares of the Stock which all
Underwriters agreed to purchase hereunder. If the total number of shares of the
Stock which the defaulting Underwriter or Underwriters agreed to purchase shall
not be purchased or absorbed in accordance with the two preceding sentences, the
Company and the Selling Securityholders shall have the right, within 24 hours
next succeeding the 24-hour period above referred to, to make arrangements with
other underwriters or purchasers satisfactory to you for purchase of such shares
and portion on the terms herein set forth. In any such case, either you or the
Company and the Selling Securityholders shall have the right to postpone the
Closing Date determined as provided in Section 5 hereof for not more than seven
business days after the date originally fixed as the Closing Date pursuant to
said Section 5 in order that any necessary changes in the Registration
Statement, the Prospectus or any other documents or arrangements may be made.
If neither the non-defaulting Underwriters nor the Company and the Selling
Securityholders shall make arrangements within the 24-hour periods stated above
for the purchase of all the shares of the Stock which the defaulting Underwriter
or Underwriters agreed to purchase hereunder, this Agreement shall be terminated
without further act or deed and without any liability on the part of the Company
or the Selling Securityholders to any non-defaulting Underwriter and without any
liability on the part of any non-defaulting Underwriter to the Company or the
Selling Securityholders. Nothing in this paragraph (b), and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants herein
contained, and subject to the terms and conditions herein set forth, the Company
grants an option to the several Underwriters to purchase, severally and not
jointly, up to 315,000 shares in the aggregate
9
of the Option Stock from the Company at the same price per share as the
Underwriters shall pay for the Underwritten Stock. Said option may be exercised
only to cover over-allotments in the sale of the Underwritten Stock by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the thirtieth day after the date of this Agreement upon
written or telegraphic notice by you to the Company setting forth the aggregate
number of shares of the Option Stock as to which the several Underwriters are
exercising the option. Delivery of certificates for the shares of Option Stock,
and payment therefor, shall be made as provided in Section 5 hereof. The number
of shares of the Option Stock to be purchased by each Underwriter shall be the
same percentage of the total number of shares of the Option Stock to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Stock, as adjusted by you in such manner as you deem advisable to
avoid fractional shares.
4. Offering by Underwriters.
(a) The terms of the follow-on public offering by the Underwriters of the
Stock to be purchased by them shall be as set forth in the Prospectus. The
Underwriters may from time to time change the public offering price after the
closing of the follow-on public offering and increase or decrease the
concessions and discounts to dealers as they may determine.
(b) The information set forth under "Underwriting" in the Registration
Statement, any Preliminary Prospectus and the Prospectus (insofar as such
information relates to the Underwriters) constitutes the only information
furnished by the Underwriters to the Company for inclusion in the Registration
Statement, any Preliminary Prospectus, and the Prospectus, and you on behalf of
the respective Underwriters represent and warrant to the Company that the
statements made therein are correct.
5. Delivery of and Payment for the Stock.
(a) Payment of the purchase price for and delivery of the Underwritten
Stock shall be made at the offices of Powell, Goldstein, Xxxxxx & Xxxxxx LLP,
000 Xxxxxxxxx Xxxxxx, X.X., 00xx Xxxxx, Xxxxxxx, Xxxxxxx 00000, or at such other
place as shall be agreed upon by you, the Company and the Selling
Securityholders, at 10:00 a.m., Atlanta time, on the third business day (as
permitted under Rule 15c6-1 under the Exchange Act) (unless postponed in
accordance with the provisions of Section 3(b) hereof) following the Effective
Date (or, if the Company has elected to rely on Rule 430A of the rules and
regulations of the Commission, the third business day (as permitted under Rule
15c6-1 under the Exchange Act) after the determination of the public offering
price of the Stock), or such other time not later than ten business days after
such date as shall be agreed upon by you, the Company and the Selling
Securityholders (such time and date for payment and delivery being called herein
the Closing Date).
(b) If the option granted by Section 3(c) hereof is exercised on or before
the 30th day following the date of this Agreement, delivery of the Option Stock
shall be made at the office of Powell, Goldstein, Xxxxxx & Xxxxxx LLP, 000
Xxxxxxxxx Xxxxxx, X.X., 00xx Xxxxx, Xxxxxxx, Xxxxxxx 00000, not earlier than the
Closing Date nor earlier than the second full business day after the date on
which the option shall have been exercised nor later than the 8th full business
day after the date on which the option shall have been exercised (unless such
time and date are postponed in accordance with the provisions of Section 3(b)
hereof).
(c) Payment for the Stock purchased from the Company shall be made to the
Company or its order, and payment for the Stock purchased from the Selling
Securityholders shall be made to the Custodian, for the account of the Selling
Securityholders, in each case by certified or official bank check or wire
transfer in same day funds. Such payment shall be made upon delivery of
certificates for the Stock to you for the respective accounts of the several
Underwriters against receipt therefor signed by you. Certificates for the Stock
to be delivered to
10
you shall be registered in such name or names and shall be in such denominations
as you may request at least one business day before the Closing Date, in the
case of Underwritten Stock, and at least one business day prior to the purchase
thereof, in the case of the Option Stock. Such certificates will be made
available to the Underwriters for inspection, checking and packaging at the
offices of Lewco Securities Corporation, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on
the business day prior to the Closing Date or, in the case of the Option Stock,
by 3:00 p.m., New York time, on the business day preceding the date of purchase.
If you so elect, delivery of the Shares may be made by credit through full fast
transfer to the Depository Trust Company account(s) that you designate.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
and the Selling Securityholders for shares to be purchased by any Underwriter
whose check shall not have been received by you on the Closing Date or any later
date on which Option Stock is purchased for the account of such Underwriter.
Any such payment by you shall not relieve such Underwriter from any of its
obligations hereunder.
6. Further Agreements of the Company and the Selling Securityholders.
Each of the Company and, where indicated, the Selling Securityholders,
respectively covenants and agrees as follows:
(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted at
the time of effectiveness of the Registration Statement in reliance on Rule
430A and (ii) not file any amendment to the Registration Statement or
supplement to the Prospectus of which you shall not previously have been
advised and furnished with a copy or to which you shall have reasonably
objected in writing or which is not in compliance with the Securities Act
or the rules and regulations of the Commission.
(b) The Company will promptly notify each Underwriter in the event of
(i) the request by the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional
information, (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, (iii) the
institution or notice of intended institution of any action or proceeding
for that purpose, (iv) the receipt by the Company of any notification with
respect to the suspension of the qualification of the Stock for sale in any
jurisdiction, or (v) the receipt by it of notice of the initiation or
threatening of any proceeding for such purpose. The Company and the Selling
Securityholders will make every reasonable effort to prevent the issuance
of such a stop order and, if such an order shall at any time be issued, to
obtain the withdrawal thereof at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date, deliver to you
a signed copy of the Registration Statement as originally filed and of each
amendment thereto filed prior to the time the Registration Statement
becomes effective and, promptly upon the filing thereof, a signed copy of
each post-effective amendment, if any, to the Registration Statement and of
any Rule 462(b) registration statement (together with, in each case, all
exhibits thereto unless previously furnished to you) and will also deliver
to you, for distribution to the Underwriters, a sufficient number of
additional conformed copies of each of the foregoing (but without exhibits)
so that one copy of each may be distributed to each Underwriter, (ii) as
promptly as possible deliver to you and send to the several Underwriters,
at such office or offices as you may designate, as many copies of the
Prospectus as you may reasonably request, and (iii) thereafter from time to
time during the period in which a prospectus is required by law to be
delivered by an Underwriter or dealer, likewise send to the Underwriters as
many additional copies of the
11
Prospectus and as many copies of any supplement to the Prospectus and of
any amended prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is required
by law to be delivered by an Underwriter or dealer any event relating to or
affecting the Company, or of which the Company shall be advised in writing
by you, shall occur as a result of which it is necessary, in the opinion of
counsel for the Company or of counsel for the Underwriters, to supplement
or amend the Prospectus in order to make the Prospectus not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser of the Stock, the Company will forthwith prepare and file with
the Commission a supplement to the Prospectus or an amended prospectus so
that the Prospectus as so supplemented or amended will not contain 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 existing at the time such Prospectus is delivered to such
purchaser, not misleading. If, after the follow-on public offering of the
Stock by the Underwriters and during such period, the Underwriters shall
propose to vary the terms of offering thereof by reason of changes in
general market conditions or otherwise, you will advise the Company in
writing of the proposed variation, and, if in the opinion either of counsel
for the Company or of counsel for the Underwriters such proposed variation
requires that the Prospectus be supplemented or amended, the Company will
forthwith prepare and file with the Commission a supplement to the
Prospectus or an amended prospectus setting forth such variation. The
Company authorizes the Underwriters and all dealers to whom any of the
Stock may be sold by the several Underwriters to use the Prospectus, as
from time to time amended or supplemented, in connection with the sale of
the Stock in accordance with the applicable provisions of the Securities
Act and the applicable rules and regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will
submit to you, for your information, a copy of any post-effective amendment
to the Registration Statement and any supplement to the Prospectus or any
amended prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or blue
sky laws of such jurisdictions as you may designate and, during the period
in which a prospectus is required by law to be delivered by an Underwriter
or dealer, in keeping such qualifications in good standing under said
securities or blue sky laws; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified. The Company will, from time to time, prepare and file such
statements, reports, and other documents as are or may be required to
continue such qualifications in effect for so long a period as you may
reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof, the
Company will furnish to you, and to each Underwriter who may so request in
writing, copies of all periodic and special reports furnished to
stockholders of the Company and of all information, documents and reports
filed with the Commission.
(h) Not later than the 45th day following the end of the fiscal quarter
first occurring after the first anniversary of the Effective Date, the
Company will make generally available to its security holders an earnings
statement in accordance with Section 11(a) of the Securities Act and Rule
158 thereunder.
12
(i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company hereby agrees to
pay all costs and expenses incident to the performance of the obligations
of the Company and the Selling Securityholders hereunder, excluding the
fees and expenses of any separate counsel to the Selling Securityholders,
which shall be paid by the individual Selling Securityholders, including
those in connection with (i) preparing, printing, duplicating, filing and
distributing the Registration Statement, as originally filed and all
amendments thereof (including all exhibits thereto), any Preliminary
Prospectus, the Prospectus and any amendments or supplements thereto
(including, without limitation, fees and expenses of the Company's
accountants and counsel), the underwriting documents (including this
Agreement, the Master Agreement among Underwriters and the Master Selected
Dealers Agreement) and all other documents related to the public offering
of the Stock (including those supplied to the Underwriters in quantities as
stated herein), (ii) the issuance, transfer and delivery of the Stock to
the Underwriters, including any transfer or other taxes payable thereon,
(iii) the qualification of the Stock under state or foreign securities or
blue sky laws, including the costs of printing and mailing any preliminary
or final "blue sky survey" and the fees of counsel for the Underwriters and
such counsel's disbursements in relation thereto, (iv) quotation of the
Stock on the Nasdaq National Market, (v) filing fees of the Commission and
the NASD, (vi) the cost of printing certificates representing the Stock,
(vii) the cost and charges of any transfer agent or registrar, (viii) the
fees and disbursements of the Company's accountants and the fees and
expenses of counsel for the Company, (ix) all miscellaneous expenses
referred to in Part II of the Registration Statement, (x) costs related to
travel and lodging incurred by the Company and its representatives relating
to meetings with and presentations to prospective purchasers of the Stock
reasonably determined to be necessary or desirable to effect the sale of
the Stock to the public, and (xi) all other costs and expenses incident to
the performance of the Company's and the Selling Securityholders'
obligations hereunder (including costs incurred in closing the purchase of
the Option Stock, if any) that are not otherwise specifically provided for
in this subsection. The provisions of this Section are intended to relieve
the Underwriters from the payment of the expenses and costs that the
Company and the Selling Securityholders hereby agree to pay and shall not
affect any agreement that the Company and the Selling Securityholders may
make, or may have made, for the sharing of any such expenses and costs.
(j) The Company and each of the Selling Securityholders hereby agrees
that, without the prior written consent of Chase Securities Inc. (or its
successor entity) on behalf of the Underwriters, the Company or such
Selling Securityholder, as the case may be, will not, for a period of 90
days after the Effective Date (herein called the Lockup Period), directly
or indirectly, sell, offer, contract to sell, transfer the economic risk of
ownership in, make any short sale, pledge, or otherwise dispose of any
shares of Common Stock or any securities convertible into or exchangeable
or exercisable for or any rights to purchase or acquire Common Stock. The
foregoing sentence shall not apply to (A) the Stock to be sold to the
Underwriters pursuant to this Agreement, (B) shares of Common Stock issued
by the Company upon the exercise of options granted under the stock option
plans of the Company (herein called the Option Plans) or upon the exercise
of warrants outstanding as of the date hereof, (C) warrants granted by the
Company in connection with strategic relationships that may be entered into
after the date hereof, so long as any Common Stock that may be obtained
upon exercise of such warrants cannot be resold in the public market during
the Lockup Period, (D) restricted Common Stock granted by the Company in
connection with strategic relationships that may be entered into after the
date hereof, so long as the aggregate number of such shares granted during
the Lockup Period does not exceed five percent of the number of shares
outstanding on the date of grant and so long as such shares cannot be
resold in the public market during the Lockup Period, (E) restricted Common
Stock issuable upon conversion of subordinated debt that may be issued by
the Company in connection with strategic relationships so long as such
shares cannot be resold in the public market during the Lockup Period, (F)
options to purchase Common Stock granted under the Option Plans, and (G)
the transfer by an individual Selling Securityholder of shares of Common
Stock, or securities convertible into or exchangeable or exercisable for
Common Stock, either during his or her lifetime or on death by will or
intestacy, to his or her immediate family or to a trust, the beneficiaries
of which are exclusively the Selling Securityholder and/or a member or
members of his or her immediate family; provided, however, that prior to
any such transfer each transferee shall execute an agreement, satisfactory
to Chase Securities Inc. (or its successor entity),
13
pursuant to which each transferee shall agree to receive and hold such
shares of Common Stock, or securities convertible into or exchangeable or
exercisable for the Common Stock, subject to the provisions set forth in
this Section 6(j), and that there shall be no further transfer except in
accordance with provisions hereof. For the purposes of this clause (G),
"immediate family" shall mean spouse, lineal descendant, father, mother,
brother or sister of the transferor.
(k) If at any time during the 25-day period after the Registration
Statement becomes effective any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion the
market price for the Stock has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after
written notice from you advising the Company to the effect set forth above,
forthwith prepare, consult with you concerning the substance of, and
disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor, publication
or event.
(l) The Company and the Selling Securityholders will use their best
efforts to do and perform all things required or necessary to be done and
performed under this Agreement by them prior to or after the Closing Date
or the date of the purchase, if applicable, of the Option Stock and to
satisfy all conditions precedent to the delivery of the Stock.
7. Indemnification and Contribution.
(a) Subject to the provisions of paragraph (f) of this Section 7, the
Company and the Selling Securityholders jointly and severally agree to indemnify
and hold harmless each Underwriter and each person (including each partner or
officer thereof) who controls any Underwriter within the meaning of Section 15
of the Securities Act from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Securities Act, the Exchange Act, or the common law
or otherwise, and the Company and the Selling Securityholders jointly and
severally agree to reimburse each such Underwriter and controlling person for
any legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement), or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto) or the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that (1) the indemnity agreements of the Company and the Selling Securityholders
contained in this paragraph (a) shall not apply to any such losses, claims,
damages, liabilities or expenses if such statement or omission was made in
reliance upon and in conformity with information furnished as herein stated or
otherwise furnished in writing to the Company by or on behalf of any Underwriter
for use in any Preliminary Prospectus or the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto, (2) the
indemnity agreement contained in this paragraph (a) with respect to any
Preliminary
14
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages, liabilities or expenses
purchased the Stock which is the subject thereof (or to the benefit of any
person controlling such Underwriter) if at or prior to the written confirmation
of the sale of such Stock a copy of the Prospectus (or the Prospectus as amended
or supplemented) was not sent or delivered to such person (excluding the
documents incorporated therein by reference) and the untrue statement or
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus (or the Prospectus as amended or supplemented)
unless the failure is the result of noncompliance by the Company with paragraph
(c) of Section 6 hereof, and (3) each Selling Securityholder (other than the
Management Selling Securityholders) shall only be liable under this paragraph
with respect to (A) information pertaining to such Selling Securityholder
furnished by or on behalf of such Selling Securityholder expressly for use in
any Preliminary Prospectus or the Registration Statement or the Prospectus or
any such amendment thereof or supplement thereto or (B) facts that would
constitute a breach of any representation or warranty of such Selling
Securityholder set forth in Section 2(b) hereof. The indemnity agreements of the
Company and the Selling Securityholders contained in this paragraph (a) and the
representations and warranties of the Company and the Selling Securityholders
contained in Section 2 hereof shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any indemnified
party and shall survive the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of its officers who signs the Registration Statement on his own
behalf or pursuant to a power of attorney, each of its directors, each other
Underwriter and each person (including each partner or officer thereof) who
controls the Company or any such other Underwriter within the meaning of Section
15 of the Securities Act, and each of the Selling Securityholders and each
person who controls such Selling Securityholder from and against any and all
losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the Securities Act,
the Exchange Act, or the common law or otherwise and to reimburse each of them
for any legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement) or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, if such statement or omission was made in reliance upon
and in conformity with information furnished as herein stated or otherwise
furnished in writing to the Company by or on behalf of such indemnifying
Underwriter for use in the Registration Statement or the Prospectus or any such
amendment thereof or supplement thereto. The indemnity agreement of each
Underwriter contained in this paragraph (b) shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and (b) of
this Section 7 agrees that, upon the service of a summons or other initial legal
process upon it in any action or suit instituted against it or upon its receipt
of written notification of the commencement of any investigation or inquiry of,
or proceeding against, it in respect of which indemnity may be
15
sought on account of any indemnity agreement contained in such paragraphs, it
will promptly give written notice (herein called the Notice) of such service or
notification to the party or parties from whom indemnification may be sought
hereunder. No indemnification provided for in such paragraphs shall be available
to any party who shall fail so to give the Notice if the party to whom such
Notice was not given was unaware of the action, suit, investigation, inquiry or
proceeding to which the Notice would have related and was prejudiced by the
failure to give the Notice, but the omission so to notify such indemnifying
party or parties of any such service or notification shall not relieve such
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of such
indemnity agreement. Any indemnifying party shall be entitled at its own expense
to participate in the defense of any action, suit or proceeding against, or
investigation or inquiry of, an indemnified party. Any indemnifying party shall
be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (herein called the Notice of Defense) to the
indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; provided, however, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or parties
shall be entitled to conduct the defense to the extent reasonably determined by
such counsel to be necessary to protect the interests of the indemnified party
or parties and (ii) in any event, the indemnified party or parties shall be
entitled to have counsel chosen by such indemnified party or parties participate
in, but not conduct, the defense. If, within a reasonable time after receipt of
the Notice, an indemnifying party gives a Notice of Defense and the counsel
chosen by the indemnifying party or parties is reasonably satisfactory to the
indemnified party or parties, the indemnifying party or parties will not be
liable under paragraphs (a) through (c) of this Section 7 or Section 11 for any
legal or other expenses subsequently incurred by the indemnified party or
parties in connection with the defense of the action, suit, investigation,
inquiry or proceeding, except that (A) the indemnifying party or parties shall
bear the legal and other expenses incurred in connection with the conduct of the
defense as referred to in clause (i) of the proviso to the preceding sentence
and (B) the indemnifying party or parties shall bear such other expenses as it
or they have authorized to be incurred by the indemnified party or parties. If,
within a reasonable time after receipt of the Notice, no Notice of Defense has
been given, the indemnifying party or parties shall be responsible for any legal
or other expenses incurred by the indemnified party or parties in connection
with the defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is unavailable or
insufficient to hold harmless an indemnified party under paragraph (a) or (b) of
this Section 7, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in paragraph (a) or (b) of this Section 7 (i) in such proportion as
is appropriate to reflect the relative benefits received by each indemnifying
party from the offering of the Stock or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of each indemnifying party in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Securityholders on the one hand and the Underwriters on the other shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Stock received by the Company and the Selling
Securityholders and the
16
total underwriting discount received by the Underwriters, as set forth in the
table on the cover page of the Prospectus, bear to the aggregate public offering
price of the Stock. 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 each indemnifying party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission.
The parties agree that it would not be just and equitable if contributions
pursuant to this paragraph (d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities, or actions in respect thereof, referred to in the first sentence
of this paragraph (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigation,
preparing to defend or defending against any action or claim which is the
subject of this paragraph (d). Notwithstanding the provisions of this paragraph
(d), no Underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to the Stock purchased by such Underwriter. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this paragraph (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
(e) Neither the Company nor the Selling Securityholders will, without the
prior written consent of each Underwriter, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not such Underwriter or any person who controls such Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding) unless such settlement,
compromise or consent includes an unconditional release of such Underwriter and
each such controlling person from all liability arising out of such claim,
action, suit or proceeding.
(f) The liability of each Selling Securityholder under such Selling
Securityholder's representations and warranties contained in paragraph (a) of
Section 2 hereof and under the indemnity and reimbursement agreements contained
in the provisions of this Section 7 and Section 11 hereof shall be limited to an
amount equal to the public offering price of the stock sold by such Selling
Securityholder to the Underwriters. The Company and the Selling Securityholders
may agree, as among themselves and without limiting the rights of the
Underwriters under this Agreement, as to the respective amounts of such
liability for which they each shall be responsible.
8. Termination. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company and the
Selling Securityholders if after the date of this Agreement trading in the
Common Stock shall have been suspended, or if there shall have occurred (i) the
engagement in hostilities or an escalation of major hostilities by the United
States or the declaration of war or a national emergency by the United States on
or after the date
17
hereof, (ii) any outbreak of hostilities or other national or international
calamity or crisis or change in economic or political conditions if the effect
of such outbreak, calamity, crisis or change in economic or political conditions
in the financial markets of the United States would, in the Underwriters'
reasonable judgment, make the offering or delivery of the Stock impracticable,
(iii) suspension of trading in securities generally or a material adverse
decline in value of securities generally on the New York Stock Exchange, the
American Stock Exchange, or The Nasdaq Stock Market, or limitations on prices
(other than limitations on hours or numbers of days of trading) for securities
on either such exchange or system, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order
of, or commencement of any proceeding or investigation by, any court,
legislative body, agency or other governmental authority which in the
Underwriters' reasonable opinion materially and adversely affects or will
materially or adversely affect the business or operations of the Company, (v)
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in the
Underwriters' reasonable opinion has a material adverse effect on the securities
markets in the United States. If this Agreement shall be terminated pursuant to
this Section 8, there shall be no liability of the Company or the Selling
Securityholders to the Underwriters and no liability of the Underwriters to the
Company or the Selling Securityholders; provided, however, that in the event of
any such termination the Company and the Selling Securityholders agree to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company and the Selling
Securityholders under this Agreement, including all costs and expenses referred
to in paragraph (i) of Section 6 hereof.
9. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company and by the Selling Securityholders of all their
respective obligations to be performed hereunder at or prior to the Closing Date
or any later date on which Option Stock is to be purchased, as the case may be,
and to the following further conditions:
(a) The Registration Statement shall have become effective; and no
stop order suspending the effectiveness thereof shall have been issued and
no proceedings therefor shall be pending or threatened by the Commission.
(b) The legality of the sale of the Stock hereunder and the validity
and form of the certificates representing the Stock, all corporate
proceedings and other legal matters incident to the foregoing, and the form
of the Registration Statement and of the Prospectus (except as to the
financial statements contained therein), shall have been approved at or
prior to the Closing Date by Powell, Goldstein, Xxxxxx & Xxxxxx LLP,
counsel for the Underwriters.
(c) You shall have received from Xxxxxx Xxxxxxx Xxxxxxxxx Xxxx, PLLC,
counsel for the Company and the Selling Securityholders, an opinion,
addressed to the Underwriters and dated the Closing Date, covering the
matters set forth in Annex A hereto, and if Option Stock is purchased at
-------
any date after the Closing Date, an additional opinion from such counsel,
addressed to the Underwriters and dated such later date, confirming that
the statements expressed as of the Closing Date in such opinions remain
valid as of such later date.
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true
and correct and neither the Registration Statement nor the Prospectus
omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein, respectively, not
misleading, (ii) since the Effective Date, no event has occurred which
should have been
18
set forth in a supplement or amendment to the Prospectus which has not been
set forth in such a supplement or amendment, (iii) since the respective
dates as of which information is given in the Registration Statement in the
form in which it originally became effective and the Prospectus contained
therein, there has not been any material adverse change or any development
involving a prospective material adverse change in or affecting the
business, properties, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, and, since such dates,
except in the ordinary course of business, neither the Company nor any of
its subsidiaries has entered into any material transaction not referred to
in the Registration Statement in the form in which it originally became
effective and the Prospectus contained therein, (iv) neither the Company
nor any of its subsidiaries has any material contingent obligations that
are not disclosed in the Registration Statement and the Prospectus, (v)
there are not any pending or known threatened legal proceedings to which
the Company or any of its subsidiaries is a party or of which property of
the Company or any of its subsidiaries is the subject that are material and
that are not disclosed in the Registration Statement and the Prospectus,
(vi) there are not any franchises, contracts, leases or other documents
which are required to be filed as exhibits to the Registration Statement
which have not been filed as required, (vii) the representations and
warranties of the Company herein are true and correct in all material
respects as of the Closing Date or any later date on which Option Stock is
to be purchased, as the case may be, and (viii) there has not been any
material change in the market for securities in general or in political,
financial or economic conditions from those reasonably foreseeable as to
render it impracticable in your reasonable judgment to make a public
offering of the Stock, or a material adverse change in market levels for
securities in general (or those of companies in particular) or financial or
economic conditions which render it inadvisable to proceed.
(e) You shall have received on the Closing Date and on any later date
on which Option Stock is purchased a certificate, dated the Closing Date or
such later date, as the case may be, and signed by the President and the
Chief Financial Officer of the Company, stating that the respective signers
of said certificate have carefully examined the Registration Statement in
the form in which it originally became effective and the Prospectus
contained therein and any supplements or amendments thereto, and that the
statements included in clauses (i) through (vii) of paragraph (d) of this
Section 9 are true and correct.
(f) You shall have received from Xxxxxx Xxxxxxxx, LLP, a letter or
letters, addressed to the Underwriters and dated the Closing Date and any
later date on which Option Stock is purchased, confirming that they are
independent public accountants with respect to the Company within the
meaning of the Securities Act and the applicable published rules and
regulations thereunder and based upon the procedures described in their
letter delivered to you concurrently with the execution of this Agreement
(herein called the Original Letter), but carried out to a date not more
than three business days prior to the Closing Date or such later date on
which Option Stock is purchased (i) confirming, to the extent true, that
the statements and conclusions set forth in the Original Letter are
accurate as of the Closing Date or such later date, as the case may be, and
(ii) setting forth any revisions and additions to the statements and
conclusions set forth in the Original Letter which are necessary to reflect
any changes in the facts described in the Original Letter since the date of
the Original Letter or to reflect the availability of more recent financial
statements, data or information. The letters shall not disclose any
change, or any development involving a prospective change, in or affecting
the business or properties of the Company or any of its subsidiaries which,
in your sole judgment, makes it impractical or inadvisable to proceed with
the public offering of the Stock or the purchase of the Option Stock as
contemplated by the Prospectus.
19
(g) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several
jurisdictions, or other evidence satisfactory to you, of the qualification
referred to in paragraph (f) of Section 6 hereof.
(h) Prior to the Closing Date, the Stock to be issued and sold by the
Company shall have been duly authorized for inclusion in the Nasdaq
National Market upon official notice of issuance.
(i) On or prior to the Closing Date, you shall have received from all
directors, executive officers, and beneficial holders of more than 5% of
the outstanding Common Stock (excluding HarbourVest Partners IV - Direct
Fund L.P., and Greylock Limited Partnership) agreements, in form reasonably
satisfactory to Chase Securities Inc., stating that without the prior
written consent of Chase Securities Inc. (or its successor entity) on
behalf of the Underwriters, such person or entity will not, for a period of
90 days following the Effective Date, directly or indirectly sell, offer,
contract to sell, transfer the economic risk of ownership in, make any
short sale, pledge or otherwise dispose of any shares of Common Stock or
any securities convertible into or exchangeable or exercisable for or any
rights to purchase or acquire Common Stock. Such agreement shall be
subject to the exceptions set forth in Section 6(j) hereof.
All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Powell, Goldstein, Xxxxxx & Xxxxxx LLP, counsel for
the Underwriters, shall be satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company and to the Selling Securityholders. Any such termination shall be
without liability of the Company or the Selling Securityholders to the
Underwriters and without liability of the Underwriters to the Company or the
Selling Securityholders; provided, however, that (i) in the event of such
termination, the Company and the Selling Securityholders agree to indemnify and
hold harmless the Underwriters from all costs or expenses incident to the
performance of the obligations of the Company and the Selling Securityholders
under this Agreement, including all costs and expenses referred to in paragraph
(i) of Section 6 hereof, and (ii) if this Agreement is terminated by you because
of any refusal, inability or failure on the part of the Company or the Selling
Securityholders to perform any agreement herein, to fulfill any of the
conditions herein (other than the condition specified in Section 9(d)(viii)), or
to comply with any provision hereof other than by reason of a default by any of
the Underwriters, the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the transactions contemplated hereby.
10. Conditions of the Obligation of the Company and the Selling
Securityholders. The obligation of the Company and the Selling Securityholders
to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission. In case either of
the conditions specified in this Section 10 shall not be fulfilled, this
Agreement may be terminated by the Company and the Selling Securityholders by
giving notice to you. Any such termination shall be without liability of the
Company and the Selling Securityholders to the Underwriters and without
liability of the Underwriters to the Company or the Selling Securityholders;
provided, however, that in the event of any such termination the Company and the
Selling Securityholders
20
jointly and severally agree to indemnify and hold harmless the Underwriters from
all costs or expenses incident to the performance of the obligations of the
Company and the Selling Securityholders under this Agreement, including all
costs and expenses referred to in paragraph (i) of Section 6 hereof.
11. Reimbursement of Certain Expenses. In addition to their other
obligations under Section 7 of this Agreement (and subject, in the case of a
Selling Securityholder, to the provisions of paragraph (f) of Section 7), the
Company and the Selling Securityholders hereby jointly and severally agree to
reimburse on a quarterly basis the Underwriters for all reasonable legal and
other expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 11 and the possibility that such payments might later be held
to be improper; provided, however, that (i) to the extent any such payment is
-----------------
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of the Company, the Selling Securityholders and the several
Underwriters and, with respect to the provisions of Section 7 hereof, the
several parties (in addition to the Company, the Selling Securityholders and the
several Underwriters) indemnified under the provisions of said Section 7, and
their respective personal representatives, successors and assigns. Nothing in
this Agreement is intended or shall be construed to give to any other person,
firm or corporation any legal or equitable remedy or claim under or in respect
of this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser, of
any of the Stock from any of the several Underwriters.
13. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by facsimile and, if to the Underwriters, shall
be mailed, telecopied or delivered to Chase Securities Inc., Xxx Xxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 (facsimile no. 415-439-3624); and if to the
Company, shall be mailed, telecopied or delivered to it at its office, Clarus
Corporation, 0000 Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, XX 00000, Attention:
Chief Executive Officer (facsimile no. 770-291-8599); and if to the Selling
Securityholders, shall be mailed, telecopied or delivered to the Selling
Securityholders in care of Clarus Corporation at 0000 Xxxxx Xxxxx Xxxxx, Xxxxx
000, Xxxxxxxx, XX 00000 (facsimile no. 770-291-8599). All notices given by
telecopy shall be promptly confirmed by letter transmitted by mail or hand
delivered.
14. Miscellaneous. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or the Selling Securityholders or their respective directors or
officers, and (c) delivery and payment for the Stock under this Agreement;
provided, however, that if this Agreement is terminated prior to the Closing
-------- -------
Date, the provisions of paragraphs (j) and (k) of Section 6 hereof shall be of
no further force or effect.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of California.
21
Please sign and return to the Company and to the Selling Securityholders in
care of the Company the enclosed duplicates of this letter, whereupon this
letter will become a binding agreement among the Company, the Selling
Securityholders and the several Underwriters in accordance with its terms.
Very truly yours,
SELLING SECURITYHOLDERS: CLARUS CORPORATION
As set forth on Schedule II
By By
--------------------------------- -------------------------------
Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
Attorney-in-Fact Chairman, Chief Executive Officer
and President
[Signatures Continue on Next Page]
22
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
CHASE SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
U.S. BANCORP XXXXX XXXXXXX
XXXXXXXX INC.
By Chase Securities Inc.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
23
SCHEDULE I
UNDERWRITERS
Number of Shares
Underwriters Purchased
------------ ----------------
Chase Securities Inc..........................
Banc of America Securities LLC................
U.S. Bancorp Xxxxx Xxxxxxx....................
Xxxxxxxx Inc..................................
___________
Total
===========
24
SCHEDULE II
SELLING SECURITYHOLDERS
Name [and Address] of Number of Shares
Selling Securityholders to be Sold
----------------------- ----------------
Management Selling Securityholders:
[list Selling Securityholders who are also
directors, officers or employees of the
Company]
Other Selling Securityholders:
___________
Total
===========
25
ANNEX A
Matters to be Covered in the Opinion of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
Counsel for the Company
[and the Selling Securityholders]
(i) The Company and each significant subsidiary (as defined in Rule 405
under the Securities Act) of the Company are corporations in existence and in
good standing under the laws of the State of Delaware. All of the issued and
outstanding capital stock of each significant subsidiary of the Company has been
duly authorized by all necessary corporate action on the part of the respective
subsidiary, is validly issued, fully paid and nonassessable, and is owned by the
Company free and clear of all liens, encumbrances and security interests, and to
such counsel's knowledge, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership interests in such
subsidiaries are outstanding.
(ii) The authorized capital stock of the Company consists of 25,000,000
shares of common stock, $0.0001 par value, of which there are _________________
outstanding shares (exclusive of shares issued after the date of the Prospectus
pursuant to employee benefit plans or upon exercise of options and warrants
described in the Prospectus and the Underwritten Stock or Option Stock to be
issued by the Company pursuant to the Underwriting Agreement), and 5,000,000
shares of preferred stock, $0.0001 par value, of which there are no outstanding
shares. All of the outstanding shares of such capital stock are validly issued,
fully paid and nonassessable. The Underwritten Stock being sold by the Company
and any Option Stock, when issued and delivered to and paid for by the
Underwriters as provided in the Underwriting Agreement, will be validly issued,
fully paid and nonassessable. No preemptive rights of, or rights of refusal in
favor of, stockholders exist with respect to the Stock, or the issue and sale
thereof, pursuant to the Certificate of Incorporation or Bylaws of the Company
and, to the knowledge of such counsel, there are no contractual preemptive
rights that have not been waived, rights of first refusal or rights of co-sale
which exist with respect to the Underwritten Stock being sold by the Selling
Securityholders or the issue and sale of the Stock.
(iii) Except as disclosed in or specifically contemplated by the
Registration Statement and the Prospectus, to such counsel's knowledge, there
are no outstanding options, warrants or other rights calling for the issuance
of, and no commitments, obligations, plans or arrangements to issue, any shares
of capital stock of the Company or any security convertible into or exchangeable
for capital stock of the Company.
(iv) The Registration Statement has become effective under the Securities
Act and, to such counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement or suspending or preventing the use of the
Prospectus is in effect and no proceedings for that purpose have been instituted
or threatened by the Commission.
(v) The Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Securities Act, the Exchange Act and the rules and
regulations of the Commission thereunder.
(vi) The information required to be set forth or incorporated by reference
in the Registration Statement in answer to Item 9 and, insofar as it relates to
such counsel, Item 10 of Form S-3 is to such counsel's knowledge accurately and
adequately set forth therein in all material respects or no response is required
with respect to such Items.
26
(vii) Such counsel do not know of any franchises, contracts, leases,
documents or legal proceedings, pending or threatened, which are of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement and which are not described
and filed as required.
(viii) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The Company's execution and delivery of the Underwriting Agreement and
the issue and sale by the Company of the Stock being sold by the Company as
provided for in the Underwriting Agreement (A) will not result in any violation
of the provisions of the charter or bylaws of the Company or any significant
subsidiary, (B) will not violate or constitute a breach of, or Default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its significant subsidiaries
pursuant to, or require the consent of any other party to, any contract or
agreement that is filed as an exhibit to the Registration Statement, the
Company's Annual Report on Form 10-K for the year ended December 31, 1998 or any
report filed by the Company under Section 13(a) of the Exchange Act since
December 31, 1998, except for such conflicts, breaches, Defaults, liens, charges
or encumbrances or failures to obtain consents as would not, individually or in
the aggregate, materially and adversely affect the business, financial condition
or results of operations of the Company and its significant subsidiaries taken
as a whole and (C) to such counsel's knowledge, will not result in any violation
of any applicable law, administrative regulation or administrative or court
decree that is binding on the Company or any of its significant subsidiaries or
any of their assets. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency is required for the Company's execution and delivery of the
Underwriting Agreement and consummation of the transactions provided for
therein, except such as have been obtained or made by the Company and are in
full force and effect under the Securities Act, and such as may be required
under applicable state securities or blue sky laws and from the NASD.
(x) All holders of securities of the Company who, to such counsel's
knowledge, have rights to the registration of shares of Common Stock, or other
securities, because of the filing of the Registration Statement by the Company
have exercised or waived such rights or such rights have expired by reason of
lapse of time following notification of the Company's intent to file the
Registration Statement.
(xi) The Common Stock is included in the Nasdaq National Market, and the
Company has notified the Nasdaq National Market and the Company has notified the
Nasdaq National Market of the proposed issuance of the Stock to be issued and
sold by the Company in accordance with the Nasdaq Stock National Marketplace
Rules.
(xii) The Underwriters (assuming they are bona fide purchasers within the
meaning of the Uniform Commercial Code as in effect in the governing
jurisdiction) will, upon payment therefor in accordance with the terms of the
Underwriting Agreement, acquire all of the rights of the Selling Securityholders
in the Underwritten Stock sold by them to the Underwriters, free and clear of
all liens, encumbrances, equities or claims.
(xiii) The Underwriting Agreement and the Custody Agreement and Power of
Attorney among the Selling Securityholders, the Company, as Custodian, and
Xxxxxxx X. Xxxxxxx, as Attorney-in-Fact, have been duly executed and delivered
by or on behalf of the several Selling Securityholders.
27
(xiv) To such counsel's knowledge, based as to factual matters solely on
certifications by the Selling Securityholders, the execution and delivery of the
Underwriting Agreement by each Selling Securityholder and the sale by the
Selling Securityholders of the Underwritten Stock being sold by them will not
require any consent, approval, authorization or other order of any court,
regulatory body, administrative agency, or other governmental body (except as
such may be required under the Securities Act, state securities laws or blue sky
laws or except as such may have been obtained).
In addition, such opinion shall also contain a statement that such counsel
has participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company
and representatives of the Underwriters at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus (other than as
specifically provided above), and any amendments or supplements thereto, on the
basis of the foregoing, no facts have come to the attention of such counsel that
would lead such counsel to believe that either the Registration Statement at the
time it became effective (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A(b) or
Rule 434, if applicable) or any amendment thereof made prior to the Closing Date
as of the date of such amendment, contained an untrue statement of a material
fact or omitted to state any 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 any amendment thereof or supplement thereto made prior to the
Closing Date as of the date of such amendment or supplement) and as of the
Closing Date contained or contains an untrue statement of a material fact or
omitted or omits to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need express no belief or opinion with respect to the financial
statements and schedules and other financial and statistical data included or
incorporated by reference therein).
____________________________________
Counsel rendering the foregoing opinion may rely as to questions of law not
involving the laws of the United States or of the State of Georgia or the
corporate law of the State of Delaware, upon opinions of local counsel
satisfactory in form and scope to counsel for the Underwriters. Copies of any
opinions so relied upon shall be delivered to the Representatives and to counsel
for the Underwriters and the foregoing opinion shall also state that counsel
knows of no reason the Underwriters are not entitled to rely upon the opinions
of such local counsel.
