EXHIBIT 10.9
▇▇▇▇▇.▇▇▇, Inc.
8% Cumulative Convertible Preferred Stock
Agency Agreement
June 18, 2001
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
▇▇▇▇▇.▇▇▇, Inc., a Georgia corporation (the "Company"), hereby confirms its
agreement with ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ (the "Agent"), as follows:
1. General. The Company proposes to offer, through the Agent on a "best
efforts basis", up to 100,000 units (the "Maximum Offering") consisting
of four shares of 8% cumulative convertible preferred stock (the
"Preferred Stock") and a warrant to Purchase two shares of the
Company's common stock (the "Common Stock") for $4.00 per share (the
"Units") at a price of $10.00 per Unit. The warrants shall terminate on
the earlier of five years or 30 days after the Company notifies the
holder that the closing price of the Common Stock has equaled or
exceeded $5.50 per share for 20 consecutive days. One share of
Preferred Stock will be convertible into one share of Common Stock. In
addition, the Company may require conversion of the Preferred Stock
when the closing price of the Common Stock equals or exceeds $10.00 per
share for 15 consecutive trading days. The Company will file a
registration statement on Form SB-2 covering the shares of Common Stock
issuable upon conversion of the Preferred Stock or the exercise of the
warrant within 60 days of the termination of the offering and will use
its best efforts to have the registration statement declared effective
as soon as practicable thereafter. In addition, the Company will grant
"piggy-back" registration rights for the six months following the
Closing. The investors and the Agent will agree to a lock-up period
restricting the resale of the common stock registered on the Form SB-2
to the following schedule: no more than 50% of the shares during the
120 day period following the termination of the offering and an
additional 50% of the shares on the 180th day following the termination
of the offering. The lock-up period will expire in accordance with the
foregoing schedule whether or not the registration statement has become
effective. The Company and the investors will enter into a registration
rights agreement containing terms and conditions customary for such
agreements consistent with the terms hereof.
On terms and conditions specified in this Agency Agreement (the
"Agreement"), the Agent, for the compensation specified below, will
provide the services specified in this Agreement to assist the Company
in the Offering.
2. The Offering
2.1 Services to be Rendered. Subject to the terms and conditions
hereof and upon the basis of the representations, warranties
and agreements herein set forth, the Company hereby appoints
the Agent as its agent to sell the Units on a best efforts
basis. The Agent hereby accepts such appointment and agrees to
use its best efforts to find purchasers for the Units. The
Company and the Agent agree that the Units shall be offered in
a private offering solely to qualified accredited investors in
compliance with Section 4(2) of the Securities Act of 1933
(the "Securities Act") and other federal and state securities
laws.
2.2 Exclusive Engagement. The Company shall not engage any
other person other than the Agent to solicit offers or sales
of Units during the Offering Period (as such term is herein
defined). However, the Company may in its sole discretion
terminate this Agreement after 45 days from the date hereof.
The agent will be reimbursed only for actual out of pocket
expenses in the event the offering is terminated.
2.3 Compensation. The Company agrees to pay to the Agent
for the Agent's services in connection with the Offering a
commission equal to 10% of the sales price for each Unit sold
by the Agent in the Offering. Except for units purchased by
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇▇, no
commissions are payable on Units sold to directors and
officers of the Company or on Units sold to investors who are
located by the directors or officers of the Company and who
purchase at least $50,000 of Units. A commission equal to 10%
of the sale price is payable to the Agent for Units sold to
investors located by the directors and officers and who
purchase less than $50,000 of Units. The Company from time to
time will provide the Agent with a written list of potential
investors identified by the directors and officers..
2.4 Payment of Expenses. The Company will pay all expenses
in connection with the Offering including, but not limited to,
the Company's attorneys' fees, expenses for auditing and
accounting services, advertising fees, any NASD filing fees,
postage, and document reproduction expenses, and the
engraving, issuance, transfer and delivery of certificates for
the Stock. The Company's obligation to reimburse legal fees of
Agent will be limited to $15,000.
2.5 Blue Sky. The Company contemplates that the Offering will be
made in those states listed in Exhibit A attached hereto. The
Company shall, at its sole expense, take or cause to be taken
all necessary action and shall furnish to whomever the Agent
may direct such information as may be required to qualify the
Units for sale under the laws of such jurisdictions and any
other jurisdictions where the Company may hereafter elect that
Units shall be offered and shall continue such qualifications
in effect for as long as may be necessary for the distribution
of the Units. At the request of the Agent the Company shall
cause its counsel to prepare and furnish to the Agent "Blue
Sky" memoranda concerning the requirements for qualification
of the Units for sale under the law of such jurisdictions, and
the Agent shall be entitled to rely on such memoranda in
carrying out its obligations under this Agreement.
2.6 Offering Period. The Units will be offered for sale during the
period (the "Offering Period") commencing on the date hereof
and continuing until the termination of the Offering by the
Company or the Agent by written notice.
2.7 Escrow Agreement. During the period of the Offering, the
proceeds from the sale of Units shall, upon receipt by the
Agent, be promptly placed in a special account with a bank
(the "Escrow Agent"), subject to an escrow agreement
containing terms and conditions customary for such agreements
and consistent with the terms hereof (the "Escrow Agreement").
2.8 Delivery of and Payment for the Unit. Payment for the Units
shall be made at one or more closings (a "Closing") to be held
at the offices of the Company's counsel (or such other place
as the parties hereto may agree), as provided herein. The date
of a Closing hereunder is sometimes referred to as a "Closing
Date". Payment for the Units sold on behalf of the Company by
the Agent shall be made to the Company or to the order of the
Company by the Escrow Agent acting upon instructions from the
Company and the Agent pursuant to the terms and conditions of
the Escrow Agreement, and payment shall be delivered to the
Company by the Escrow Agent by one or more certified or
official bank checks in next-day funds. Such payment shall be
made upon delivery by the Company of the preferred stock
certificates and warrant certificates to the Agent, for the
respective accounts of the several purchasers of the Units
against receipt therefor signed by the Agent. The certificates
for the preferred stock and warrants to be delivered at any
Closing will be registered in such name or names, and shall be
in such denominations, as the Agent may request; provided,
however, that such request shall be made no sooner than three
(3) business days
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prior to the Closing Date. The certificates representing the
preferred stock and warrants will be made available to the
Agent for inspection, checking and packaging at the office of
the Company's transfer agent and registrar (the "Transfer
Agent"), not less than one (1) business day prior to the
Closing Date.
2.9 Closings.
(a) From time to time the Agent shall report to the Company
on sales by written notice, The Agent's notice to the
Company hereunder shall set forth the number of shares of
common stock underlying the warrants and number of shares
of preferred stock to be delivered to the Agent by the
Company against payment therefor by the Escrow Agent. The
initial Closing hereunder (the "Initial Closing") shall
take place at 10:00 a.m., Atlanta time on the fifth (5th)
business day after the date on which the Agent first
notifies the Company as provided herein or on such other
date and time as agreed to in writing by the parties
hereto; provided, however, that the Initial Closing must
occur no later than the tenth (10th) business day after
such notice is given by the Agent.
(b) By notice given in writing at each Closing hereunder, the
Company may elect to continue this Agreement until such
time as the maximum number of Units as provided herein
has been sold, or until July 13, 2001, whichever is
earlier; provided, however, that such Units may be sold
only in compliance with the terms and conditions of this
Agreement and the Private Placement Memorandum.
(c) Closing with respect to Units sold pursuant to a
continuation of this Agreement pursuant to Section 2.9(b)
hereof will occur on such date(s) and time(s) as the
parties may agree in writing from time to time.
3. Representations, Warranties and Agreements of the Company. The Company
hereby represents and warrants to, and agrees with, the Agent that:
(a) The confidential private placement memorandum, including
any amendments or supplements thereto (the "Private
Placement Memorandum") when made available to prospective
purchasers throughout the Offering Period, will comply in
all material respects with federal statutes regulations
and policy statements applicable thereto, including,
without limitation, the applicable rules, regulations and
policy statements of the SEC. At all times during the
Offering Period, the Private Placement Memorandum will
contain all information including financial statements
that are required to be included therein in accordance
with applicable regulations (including interpretations
thereof), and policy statements of the SEC and the
Private Placement Memorandum will not include any untrue
statement of material fact or omit to state any material
fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances
under which they are made, not misleading; provided,
however, that no representations or warranties are made
to the Agent with respect to statements or omissions made
in reliance upon, or in conformity with, written
information furnished to the Company with respect to the
Agent, by the Agent, or on its behalf expressly for use
in the Private Placement Memorandum.
(b) The Company is, and at all times during the Offering
Period will be, a corporation duly incorporated and
organized and is, and will be, validly existing and in
good standing under the laws of the State of Georgia. The
Company has, and at all times during the Offering Period
will have, full power and authority to own or lease all
of its properties and conduct all of its business as
described in the Private Placement Memorandum.
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(c) The Company is, and at all times during the Offering
Period will be, duly qualified to do business and in good
standing as a foreign corporation in each jurisdiction
where the ownership or leasing of its properties or the
conduct of its business required such qualification.
(d) The financial statements contained in the Private
Placement Memorandum present fairly and accurately the
financial position of the Company as the respective dates
thereof and the results of operations of the Company for
the respective periods covered thereby, all in conformity
with generally accepted accounting principles applied on
a consistent basis throughout the entire periods
involved.
(e) At all times during the Offering Period except as set
forth in or contemplated by the Private Placement
Memorandum; (i) the Company will not have incurred and
will not incur any material liabilities or obligations,
direct or contingent, except for liabilities or
obligations entered into in the ordinary course of
business, and will not have entered into and will not
enter into any material transactions, and (ii) there will
have been no, and there will be no, material adverse
change, or any development relating to the Company which
the Company has cause to believe would involve a
prospective material adverse change in or affecting the
business, business prospects, general affairs,
management, financial position, net worth, results of
operations, or properties of the Company, or the value of
the assets of the Company.
(f) Except as set forth in or contemplated by the
Private Placement Memorandum, to the best of its
knowledge, the Company does not have and will not have
during the Offering Period any material contingent
liabilities or obligations.
(g) Except as set forth in the Private Placement
Memorandum and the Company's SEC filings, there are no
actions, suits or proceedings pending or, to the best of
its knowledge, threatened against or affecting the
Company or its business, business prospects, financial
condition, results of operations or properties, or
against or affecting any of its principal officers,
before or by any federal or state court, commission,
regulatory body, administrative agency or other
governmental body, domestic or foreign, wherein an
unfavorable ruling or decision or finding would
materially and adversely affect the business, business
prospects, financial condition, results of operations, or
properties of the Company.
(h) At all times during the Offering Period, the Company
will have title to all properties and assets described in
the Private Placement Memorandum as being owned by the
Company, free and clear of all liens, charges,
encumbrances or restrictions, except such as are
described in the Private Placement Memorandum or which
are not material to the business of the Company. At all
times during the Offering Period, the Company will have
valid, existing and enforceable leases to the properties
and equipment described in the Private Placement
Memorandum as being leased by the Company, with such
exceptions as are not material and do not materially
interfere with the uses made, and proposed to be made, of
such properties by the Company.
(i) The Company has filed all federal and state income
tax returns which are required to be filed by it and has
paid all taxes shown on such returns and on all
assessments received by it to the extent such taxes have
become due. To the best of its knowledge, all taxes with
respect to which the Company is obligated have been paid
or adequate accruals have been established to cover any
such unpaid taxes.
(j) The Company is not, and at all times during the
Offering Period will not be, in violation of its articles
of incorporation or bylaws, or, except as set forth or
contemplated in the
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Private Placement Memorandum, in default in the
performance or observance of any obligation, agreement,
covenant or condition contained in any bond, debenture,
note or other evidence of indebtedness or in any material
contract, indenture, mortgage, loan agreement or other
agreement or instrument to which the Company is a party
or by which it or any of its properties is bound, except
for the Agreement with Sutro & Co. Incorporated dated
December 13, 1999 and June 30, 1999 (collectively, the
"Sutro Agreements"), and the Company is not, and at all
times during the Offering Period will not be, in
violation of any law, order, rule, regulation, writ,
injunction or decree of any government, governmental
instrumentality or court, domestic or foreign, of which
it has knowledge. Neither the Company, nor any employee
or agent thereof, has made any payment of funds of the
Company or received or retained any funds in violation of
any law, rule or regulation which payment, receipt or
retention of funds is not fully disclosed in the Private
Placement Memorandum.
(k) At all times during the Offering Period, there will
be no document or contract of the character required to
be described in the Private Placement Memorandum which is
not described as required, and the descriptions in the
Private Placement Memorandum are accurate and complete
and fairly present the information required to be shown.
(l) No statement, representation, warranty or covenant
made by the Company in this Agreement or made in any
certificate or document required by this Agreement to be
delivered to the Agent was or will be, when made,
inaccurate, untrue or incorrect in any material respect.
(m) The Company has full right, power and authority to
enter into this Agreement and this Agreement has been
duly authorized, executed and delivered by the Company
and will be, upon acceptance by the Agent, a valid and
binding agreement of the Company enforceable in
accordance with its terms. The performance of this
Agreement and the consummation of the transactions
contemplated herein will not result in a breach or
violation of any of the terms or provision of, or
constitute a default under the articles of incorporation
or the bylaws of the Company, any obligation, agreement,
covenant or condition contained in any bond, debenture,
note or other evidence or indebtedness or in any material
contract, indenture, mortgage, loan agreement or other
agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or
any of its subsidiaries or any of their respective
properties is bound, except for the Sutro Agreements, or
any law, order, rule, regulation, writ, injunction or
decree of any government, governmental instrumentality or
court, domestic or foreign, and will not result in the
creation or imposition of any lien, charge claim or
encumbrance upon any property or asset of the Company. No
consent, approval, authorization or order of any
government, governmental instrumentality or court is
required in connection with the execution of this
Agreement or the consummation of the transactions
contemplated by this Agreement except such as may be
required by the NASD or by state regulatory authorities
under state securities or blue sky laws in connection
with the distribution of the Units or in connection with
the Agent's Services hereunder.
(n) Except with respect to the proposed public offering
in 1999, the proposed private offering in 2000 with Sutro
& Co. Incorporated, and the completed offering of 500,00
units with ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ closed on June 5,
2001 (i) the Company has not placed any securities within
the last eighteen months; (ii) there have been no
material dealings within the last twelve months between
the Company and any NASD member or any person related to
or associated with any such member, (iii) except as
contemplated by this Agreement, no financial or
management consulting contracts are outstanding with any
other person (iv) there has been no intermediary between
the Agent and the Company in connection with the Offering
and no person is being compensated in any manner for
providing such service.
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4. Representations, Warranties and Agreements of the Agent. The Agent
represents and warrants to, and agrees with the Company that:
(a) Any and all information furnished to the Company by the
Agent in writing expressly for use in the Private
Placement Memorandum will not contain any untrue
statement of material fact or omit to state any material
fact necessary in order to make the statements therein,
in light of the circumstances under which they were made,
not misleading.
(b) The Agent is registered with the Securities and Exchange
Commission as a broker-dealer and is a member in good
standing with the National Association of Securities
Dealers, Inc. (the "NASD"), and the Agent and all its
agents and representatives have or will have required
licenses and registrations to perform its obligations
under this Agreement, and such registrations, membership
and licenses will remain in effect during the term of
this Agreement. The Agent agrees that, in performing its
obligations under this Agreement, the Agent will comply
with all applicable statutes and the rules and
regulations of the NASD and any other federal or state
governmental agency which are applicable to it. This
Agreement has been duly and validly authorized, executed
and delivered by the agent and is its valid and binding
agreement and obligation.
(c) All checks and funds received by the Agent with respect
to the subscription price from prospective purchasers in
the Offering shall be made payable to the escrow agent
and transmitted directly to the Escrow Agent by noon of
the next business day after receipt by the Agent.
Subscription funds received after the termination of the
offering shall be promptly returned to the subscribers
for the Units, without interest.
(d) The Agent will deliver to the Company the original copies
of all subscription documents of prospective purchasers
received by the Agent in the Offering, and the Agent will
promptly inform the Company of any facts which come to
the Agent's attention which would cause a reasonable
person to believe that such subscription documents
contain any material misstatement or omission.
5. Covenants of the Company. The Company further agrees with and covenants
to the Agent as follows:
(a) To comply with the "Blue Sky" and other securities laws
and regulations of each state in which subscriptions are
solicited in the Offering pursuant to the mutual
agreement of the Agent and the Company and to assist the
Agent in any necessary registration or filings that may
be required of the Agent with respect to the Offering, in
the states mutually agreed upon by the Agent and the
Company. The Company will advise the Agent promptly of
the issuance by any state regulatory authority of any
stop order or other order suspending the registrations or
exemptions therefrom of the Private Placement Memorandum
or of the institution of any proceedings for that
purpose, will use its best efforts to prevent the
issuance of any stop order or other such order, and
should a stop order or other such order be issued, to
obtain as soon as possible the lifting thereof.
(b) To furnish the Agent with such numbers of printed copies
of the Private Placement Memorandum, with all amendments,
supplements and exhibits thereto, together with
subscription materials, as the Agent may reasonable
request, and similarly, to furnish the Agent and others
designated by the Agent with as many copies of additional
sales literature or other materials approved by the
Company for use in connection with the Offering as the
Agent may reasonably request.
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(c) Promptly to furnish such information and execute and file
such documents as may be necessary for the Company to
offer and sell the Units in full compliance with
applicable state and federal statutes, regulations and
policy statements.
(d) To advise the Agent promptly if any event known to the
Company shall have occurred as a result of which the
Private Placement Memorandum in its then current form
(including any amendments or supplements thereto) would
include an untrue statement of a material fact or omit to
stale any material fact necessary in order to make the
statements therein, in light of the Circumstances under
which they were made, not misleading.
(e) To utilize or furnish no sales literature in connection
with the Offering, other than the Private Placement
Memorandum, unless such other sales literature has been
approved by the SEC and the NASD, if necessary, and
furnished to the Agent at least ten (10) days prior to
its first use and the Agent has failed to object to the
contents of, or the proposed use of, such other sales
literature.
6. Conditions of the Agent's Obligations. The Agent's obligation to effect
the transactions contemplated by this Agreement shall be subject to the
continuing accuracy throughout the Offering Period of the
representations, warranties and agreements of the Company, the
performance by the Company of all of its obligations under this
Agreement, and the following further terms and conditions:
(a) The Agent shall have received on any Closing Date
hereunder the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Scarborough LLP, counsel for the Company, dated as of
such Closing Date. Such opinion may be given subject to
the January 1, 1992 edition of the Interpretive Standards
applicable to Legal Opinion to Third Parties in Corporate
Transactions adopted by the Legal Opinion Committee of
the Corporate and Banking Law Section of the State Bar of
Georgia (the "Interpretive Standards"), and shall be
substantially to the effect that;
(i) the Company is a corporation duly organized,
validly existing and in good standing, under the
laws of the State of Georgia.
(ii) the Units to be sold by the Company have been duly
authorized and will be, upon issuance and delivery
against payment therefor in accordance with the
terms of this Agreement, validly issued, fully paid
and non-assessable and will not be subject to any
preemptive or other rights to subscribe for or
purchase Units pursuant to the organizational
documents of the Company or, to the best of such
counsel's knowledge, otherwise.
(iii) the Company's authorized shares consist of
10,000,000 shares of common stock, $.01 par value,
of which 1,469,250 shares are outstanding and
10,000,000 shares of preferred stock, of which
2,000,000 shares are outstanding. The outstanding
shares of the Company's stock have been duly
authorized and validly issued, were not issued in
violation of any statutory preemptive rights of
shareholders, and are fully paid and nonassessable.
Except as described in the Private Placement
Memorandum, there are no options, subscriptions,
warrants, calls, rights or commitments obligating
the Company to issue equity securities or acquire
its equity securities.
(iv) the amounts, terms and designations of the capital
stock of the Company conform as to legal matters in
all material respects to the description thereof
contained in the Private Placement Memorandum under
the caption "Description of Capital Stock".
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(v) this Agreement has been duly authorized, executed
and delivered by the Company and, when so executed
and delivered, constitutes the legal, valid and
binding obligation of the Company, enforceable
against the Company.
(vi) the execution and delivery by Company of this
Agreement do not, and if Company were now to
perform its obligation under this Agreement such
performance would not, result in any: (1) violation
of Company's articles or incorporation or bylaws;
(2) violation of any existing federal or state
constitution, statute, regulation, rule, order, or
law to which Company or its assets are subject; (3)
breach of or default under any Material Agreements;
(4) creation or imposition of a contractual lien or
security interest in, on or against its assets
under any Material Agreements; or (5) violation of
any judicial or administrative decree, writ,
judgment or order to which, to our knowledge,
Company or its assets are subject.
(vii) to the knowledge of such counsel, the Company has
all necessary consents, authorizations, approvals,
orders, certificates and permits of and from, and
has made all declarations and filings with, all
federal, state, local and other governmental
authorities, all self-regulatory organizations, all
courts and other tribunals, to own, lease, license
and use its properties and assets and to conduct
its business in the manner described in the Private
Placement Memorandum, except to the extent that the
failure to obtain or file would not have a material
adverse effect on the Company.
(viii)to the knowledge of such counsel, no authorization,
consent, approval of or qualification with any
federal or state governmental authority is required
for the execution, delivery or performance by the
Company of this Agreement, except such as have been
previously made or obtained, in connection with the
distribution of the Units by the Agent, and except
those which, if not made or obtained, will not
individually or in the aggregate, have a material
adverse effect on the Company.
(ix) nothing has come to the attention of such counsel
to cause such counsel to believe that (except for
financial statements, projections, schedules and
other financial and statistical information
included or incorporated by reference in the
Private Placement Memorandum as to which such
counsel need not express any opinion) the Private
Placement Memorandum contained any untrue statement
of a material fact or omitted to state a material
fact required to be stated therein or necessary to
make the statements therein, in light of the
circumstances under which they were made, not
misleading, or that the Private Placement
Memorandum as of the Closing Date, contained any
untrue statement of a material fact or omitted to
state a material fact necessary in order to make
the statements therein, in light of the
circumstances under which they were made, not
misleading.
(x) to such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to
which the Company is a party or to which any of the
properties of the Company is subject that are not
fairly summarized in all material respects in the
Private Placement Memorandum or the Company's
filings with the SEC, and
(xi) after due inquiry, such counsel does not know of
any pending or threatened proceeding relating to
the revocation or modification of any consent,
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authorization, approval, order, certificate or
permit necessary to the conduct of the business of
the Company.
As to questions of fact material to such opinion, counsel
may rely on (without independent verification of the
accuracy or completeness thereof), the representations
and warranties of the Company contained in this Agreement
as well as the Material Agreements. The term "Material
Agreement", for purposes of such opinion, shall mean each
of the agreements which has been filed with the
Securities and Exchange Commission as an exhibit
(including any document which in lieu of being filed as
an exhibit is incorporate by reference or which the
Company agrees or has agreed to provide to the Securities
and Exchange Commission upon request) to the Company's
most recently-filed Annual Report on Form 10-KSB or any
subsequently filed report on Form 10-QSB or Form 8-K,
pursuant to the requirements of Item 601(b)(10) of SEC
Regulation ▇-▇, ▇▇ ▇▇▇ 228.601(b)(10), as amended.
(b) On the Closing Date of any Closing hereunder, the Agent
shall have received from the Chief Financial Officer of
the Company a letter dated as of such Closing Date, in
form and substance satisfactory to the Agent in all
respects, concerning the accuracy, to his best knowledge
and belief, of the financial information included in the
Private Placement Memorandum.
(c) At the Closing Date of any Closing hereunder, there shall
be furnished to the Agent a certificate, dated as of such
Closing Date, signed by the President and Secretary of
the Company (collectively the "Officers") in form and
substance satisfactory to the Agent (the "Certificate")
to the effect that, to their best knowledge and belief:
(i) The Officers of the Company have carefully examined
the Private Placement Memorandum, and as of the
date of such Certificate, the statements in the
Private Placement Memorandum are true and correct,
and the Private Placement Memorandum does not
misstate or omit to state a material fact required
to be stated therein or necessary to make the
statements therein not untrue or misleading.
(ii) The Company has complied with all conditions
precedent to the performance of the Agent's
obligations under this Agreement.
(iii) Each of the representations and warranties of the
Company contained in this Agreement was when
originally made and is as of the date of such
Certificate true and correct.
(iv) No order from any regulatory body has been issued
and no proceedings have been instituted, or to the
knowledge of such Officers contemplated, to prevent
the consummation of the Offering.
7. Indemnification.
(a) The Company will indemnify and hold harmless the Agent,
its officers, directors, counsel, representatives and
persons who control the Agent within the meaning of the
Exchange Act, from and against all losses, claims,
damages and liabilities, joint and several, to which any
of the aforesaid parties, including the Agent
(collectively, the "Agent Parties"), may become subject,
under federal or state securities laws or otherwise,
insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue
statement of a material fact contained in the Private
Placement Memorandum, or in any Blue Sky
9
application or other document executed by the Company or
on its behalf for the purpose of qualifying any or all of
the Stock for sale under the securities laws of any
jurisdiction, or based upon written information furnished
by the Company under the securities laws thereof (any
such application, document, or information being
hereinafter referred to as a "Blue Sky Application") or
(d) the omission to state in the Private Placement
Memorandum, or in any Blue Sky Application, a material
fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances
under which they were made, not misleading. The Company
will further reimburse the Agent Parties, and each and
every one of them, for any legal or other expenses
reasonably incurred by any one or more of the Agent
Parties in connection with investigating and defending
such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any case
to the extent that the subject loss, claim, damage or
liability arises out of, or is based upon, an untrue
statement or alleged untrue statement or omission or
alleged omission made in reliance upon and unconformity
with written information furnished to the Company by the
Agent specifically for use in the preparation of the
subject Private Placement Memorandum, Blue Sky
Application, or any amendment or supplement thereto or
the Agent's failure to deliver to the investors any
amendment or supplement to the Private Placement
Memorandum prepared by the Company and timely furnished
to the Agent in sufficient quantities to permit delivery
to the investors. The indemnity provided for in this
Section 7(a) will be in addition to any liability which
the Company may otherwise have.
(b) The Agent will indemnify and hold harmless the Company,
its officers, directors, counsel, representatives and
persons who control the Company which the meaning of the
Securities Exchange Act of 1934, from and against all
losses, claims, damages and liabilities, joint and
several, to which any of the aforesaid parties, including
the Company (collectively, the "Company Parties"), may
become subject, under federal or state securities laws or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of
or are based upon: (i) any untrue statement of material
fact contained in the Private Placement Memorandum, any
Blue Sky Application, or any amendment or supplement
thereto; (ii) the omission to state in the Private
Placement Memorandum, any Blue Sky Application, or any
amendment or supplement to any of the foregoing, a
material fact required to be stated therein or necessary
to make the statements therein not misleading; provided,
in the case of Sections (7)(b)(i) and (7)(b)(ii) to the
extent, but only to the extent, that such untrue
statement or omission was made in reliance upon or in
conformity with written information furnished to the
Company by the Agent specifically for use with reference
to the Agent in preparation of the Private Placement
Memorandum, any Blue Sky Application, or any supplement
or amendment thereto; or (iii) arising out of any
misrepresentation by the Agent in this Agreement or any
breach of warranty by the Agent with respect to this
Agreement. The Agent will further reimburse the Company
Parties for legal or other expenses reasonably incurred
by the Company Parties in connection with investigating
or defending any loss, claim, damage, liability or action
under this Section (7)(b). The indemnification provided
for in this Section 7(b) shall be in addition to any
liability which the Agent may otherwise have.
(c) Promptly after receipt by an indemnified party under
Section (7)(a) or (7)(b) above of notice of the
commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the
indemnifying party under such Section, notify the
indemnifying party in writing of the commencement of the
action; but the omission so to notify the indemnified
part shall not relieve it from any liability which it may
have to an indemnified party otherwise and under such
Section. In any case any such action shall be brought
against any indemnified person, then it shall notify the
indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate
therein, and, to the extent it shall wish, jointly with
any other indemnifying party similarly
10
notified, the indemnifying party may assume the defense
thereof, with counsel satisfactory to such indemnified
party (who may also be counsel to the indemnifying party
only if the representation of both parties does not
constitute a conflict) and after notice from the
indemnifying party to such indemnified party of its
election so to assume the defense thereof, the
indemnifying party shall not be liable to such
indemnified party under such Section for any legal
expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable
costs of investigation.
8. Survival Clause. The respective indemnities, agreements (including,
without limitation, the agreement set forth in Section 7 hereof),
representations, warranties and other statements of the Company and the
Agent as set forth in this Agreement shall remain in full force and
effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of the Agent, any officer or
director of the Agent, or counsel therefor, or the Company or any
officer or director of the Company, or counsel therefor, and shall
survive any termination of this Agreement and the receipt of any
payment for the Units.
9. Notices. All notices under this Agreement shall be in writing and if
sent to the Agent shall be mailed, delivered or telecopied to the Agent
at the address first provided above, and if sent to the Company shall
be mailed or delivered to the Company at its present headquarters
address, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇ ▇. Box or to such other address as may be delivered to the Agent
from time to time. Any notice shall be deemed to have given when it is
received by the party to whom it is addressed.
10. Governing Law. Except to the extent governed by preemptive federal law,
this Agreement shall be governed by and construed in accordance with
the substantive laws of the State of Georgia.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.
▇▇▇▇▇.▇▇▇, Inc.
By:
-----------------------------------------
Title:
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ACCEPTED AND AGREED TO this ____ day of ____________, 2001.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
By:
-----------------------------------------
Title:
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Exhibit A
OFFERING STATES
Georgia
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