K & G MEN'S CENTER, INC.
COMMON STOCK
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UNDERWRITING AGREEMENT
November __, 1996
THE ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY, INC.
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
INTERSTATE/▇▇▇▇▇▇▇ ▇▇▇▇ CORPORATION
As representatives of the several
Underwriters named in Schedule I hereto,
c/o The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
K & G Men's Center, Inc., a Georgia corporation (the "Company") proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I (the "Underwriters") an aggregate of 313,850
shares of common stock, par value $.01 per share ("Common Stock"), of the
Company, and the undersigned shareholders of the Company (the "Selling
Shareholders") propose, subject to the terms and conditions stated herein, to
sell to the Underwriters an aggregate of 886,150 shares of Common Stock (such
1,200,000 shares are collectively called the "Firm Shares"), and, at the
election of the Underwriters, subject to the terms and conditions stated herein,
the Company proposes to sell to the Underwriters up to 45,000 additional shares
of Common Stock and certain of the Selling Shareholders propose to sell to the
Underwriters up to 135,000 additional shares of Common Stock (such 180,000
additional shares are collectively called the "Optional Shares") (the Firm
Shares and the Optional Shares that the Underwriters elect to purchase pursuant
to Section 2 hereof are collectively called the "Shares") (the Selling
Shareholders who propose to sell Optional Shares hereunder, as indicated on
Schedule II hereof, are referred to herein as "Designated Selling
Shareholders").
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. (a) The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(i) A registration statement on Form S-1 (File No. __________)
with respect to the Shares, including a prospectus subject to completion,
has been filed by the
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Company with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), and one or more
amendments to such registration statement may have been so filed. After
the execution of this Agreement, the Company will file with the Commission
either (A) if such registration statement, as it may have been amended, has
become effective under the Act, either (1) if the Company relies on Rule
434 under the Act, a Term Sheet (as defined below) relating to the Shares,
that identifies the Preliminary Prospectus (as defined below) that it
supplements and contains such information as is required or permitted by
Rules 434, 430A and 424(b) under the Act or (2) if the Company does not
rely on Rule 434 under the Act, a prospectus in the form most recently
included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement) with such
changes or insertions as are required by Rule 430A or permitted by Rule
424(b) under the Act, and in the case of either (i)(A)(1) or (i)(A)(2) of
this sentence, as has been provided to and approved by the Representatives,
or (B) if such registration statement, as it may have been amended, has not
become effective under the Act, an amendment to such registration
statement, including a form of prospectus, a copy of which amendment has
been provided to and approved by the Representatives prior to the execution
of this Agreement. As used in this Agreement, the term "Registration
Statement" means such registration statement, as amended at the time when
it was or is declared effective, including all exhibits thereto and
including any information omitted therefrom pursuant to Rule 430A under the
Act and included in the Prospectus (as hereinafter defined); the term
"Preliminary Prospectus" means each prospectus subject to completion
included in such registration statement or any amendment or post-effective
amendment thereto or filed with the Commission pursuant to Rule 424(a)
under the Act (including the prospectus subject to completion, if any,
included in the Registration Statement at the time it was or is declared
effective); and the term "Prospectus" means (X) if the Company relies on
Rule 434 under the Act, the Term Sheet relating to the Shares that is first
filed pursuant to Rule 424(b)(7) under the Act together with the
Preliminary Prospectus identified therein that such Term Sheet supplements,
(Y) if the Company does not rely on Rule 434 under the Act, the prospectus
first filed with the Commission pursuant to Rule 424(b) under the Act, or
(Z) if the Company does not rely on Rule 434 and if no prospectus is
required to be filed pursuant to Rule 424(b) under the Act, such term means
the prospectus included in the Registration Statement. For purposes of the
following representations and warranties, to the extent reference is made
to the Prospectus and at the relevant time the Prospectus is not yet in
existence, such reference shall be deemed to be to the most recent
Preliminary Prospectus. The term "Term Sheet" means any term sheet that
satisfies the requirements of Rules 434 and 424(b) under the Act. Any
reference in this Agreement to the "date" of a Prospectus that includes a
Term Sheet means the date of such Term Sheet.
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued and no proceeding for that purpose has been
instituted or threatened by
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the Commission or the securities authority of any state or other
jurisdiction. If the Registration Statement has become effective under the
Act, no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceeding for that
purpose has been instituted or threatened or, to the best knowledge of the
Company, contemplated by the Commission or the securities authority of any
state or other jurisdiction.
(iii) When any Preliminary Prospectus was filed with the
Commission it (A) contained all statements required to be stated therein in
accordance with, and complied in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (B) did not include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. When the Registration Statement or any amendment or
supplement thereto was or is declared effective, and at each Time of
Delivery (as hereinafter defined), it (A) contained or will contain all
statements required to be stated therein in accordance with, and complied
or will comply in all material respects with the requirements of, the Act
and the rules and regulations of the Commission thereunder and (B) did not
or will not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not
misleading. When the Prospectus or any amendment or supplement thereto is
filed with the Commission pursuant to Rule 424(b) (or, if the Prospectus or
such amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such amendment
or supplement to the Prospectus was or is declared effective) and at each
Time of Delivery, the Prospectus, as amended or supplemented at any such
time, (A) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all material
respects with the requirements of, the Act and the rules and regulations of
the Commission thereunder and (B) did not or will not include any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The foregoing provisions of
this paragraph (iii) do not apply to statements or omissions made in any
Preliminary Prospectus, the Registration Statement or any amendment thereto
or the Prospectus or any amendment or supplement thereto in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter through you specifically for use therein.
(iv) The descriptions in the Registration Statement and the
Prospectus of statutes, legal and governmental proceedings or contracts and
other documents are accurate and fairly present the information required to
be shown; and there are no statutes or legal or governmental proceedings
required to be described in the Registration Statement or the Prospectus
that are not described as required and no contracts or documents of a
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character that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(v) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and has full power and
authority (corporate and other) to own or lease its properties and conduct
its business as described in the Prospectus. The Company has full power
and authority (corporate and other) to enter into this Agreement and to
perform its obligations hereunder. Each of the Company and its
subsidiaries is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, except where the failure to
so qualify would not have a material adverse effect on the financial
position, results of operations or business of the Company and its
subsidiaries taken as a whole.
(vi) The Company's authorized, issued and outstanding capital
stock is and will be at the Time of Delivery (as hereinafter defined) as
disclosed in the Prospectus under the caption "Capitalization." All of the
issued shares of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and at the Time of
Delivery (as hereinafter defined) will conform to the description of the
Common Stock contained in the Prospectus. None of the issued shares of
capital stock of the Company or any of its subsidiaries has been issued or
is owned or held in violation of any preemptive rights of shareholders, and
at the Time of Delivery (as hereinafter defined) no person or entity
(including any holder of outstanding shares of capital stock of the Company
or its subsidiaries) will have any preemptive or other rights to subscribe
for any of the Shares.
(vii) All of the issued shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable and except as disclosed in Annex II hereto
are owned beneficially by the Company free and clear of all liens, security
interests, pledges, charges, encumbrances, defects, shareholders
agreements, voting trusts, equities or claims of any nature whatsoever.
Other than the subsidiaries listed on Exhibit 22 to the Registration
Statement, the Company does not own, directly or indirectly, any capital
stock or other equity securities of any other corporation or any ownership
interest in any partnership, joint venture or other association other than
as disclosed in the Prospectus.
(viii) Except as disclosed in the Prospectus, there are no
outstanding (A) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any such subsidiary any such
capital stock or any such convertible or exchangeable securities or
obligations, or (C) obligations of the Company or any such subsidiary to
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issue any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
(ix) Since the date of the most recent audited financial
statements included in the Prospectus, neither the Company nor any of its
subsidiaries has sustained any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as disclosed in or contemplated by
the Prospectus.
(x) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as disclosed in
the Prospectus (A) neither the Company nor any of its subsidiaries has
incurred any liabilities or obligations, direct or contingent, or entered
into any transactions, not in the ordinary course of business, that are
material to the Company and its subsidiaries, (B) the Company has not
purchased any of its outstanding capital stock or declared, paid or
otherwise made any dividend or distribution of any kind on its capital
stock, (C) there has not been any change in the capital stock, long-term
debt or short-term debt (other than changes effected in the ordinary course
of business consistent with past practice) of the Company or any of its
subsidiaries, and (D) there has not been any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the financial position, results of operations or business of the
Company and its subsidiaries taken as a whole, in each case other than as
disclosed in or contemplated by the Prospectus.
(xi) The Shares have been duly authorized and, when issued and
delivered against payment therefor as provided herein, will be validly
issued and fully paid and nonassessable and will conform to the description
of the Common Stock contained in the Prospectus; and the certificates
evidencing the Shares will comply with all applicable requirements of
Georgia law and the delivery of certificates for the Shares sold by the
Company and payment therefor pursuant to the terms of this Agreement will
pass valid title to such Shares to the several Underwriters, free and clear
of any claim, encumbrance or defect in title.
(xii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement (or any such right has been effectively exercised or
waived) or, except with respect to registration rights relating to
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registration of shares on Form S-8 granted to ▇▇▇▇ ▇▇▇▇▇ in his employment
agreement with the Company dated March 20, 1995, any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.
(xiii) All offers and sales of the Company's capital stock
prior to the date hereof within the period covered by Item 15 of Part II of
the Registration Statement were at all relevant times duly registered under
the Act or exempt from the registration requirements thereof and were duly
registered or the subject of an available exemption from the registration
requirements of the applicable state securities or blue sky laws.
(xiv) Neither the Company nor any of its subsidiaries is, or
with the giving of notice or passage of time or both will be, in violation
of its Articles of Incorporation or Bylaws or in default under any
indenture, mortgage, deed of trust, loan agreement, lease or other material
agreement or instrument to which the Company or any of its subsidiaries is
a party or to which any of their respective properties or assets are
subject.
(xv) The issue and sale of the Shares and the performance of this
Agreement and the consummation of the transactions herein contemplated will
not conflict with, or (with or without the giving of notice or the passage
of time or both) result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement, lease or other material agreement or instrument
to which the Company or any of its subsidiaries is a party or to which any
of their respective properties or assets is subject, nor will such action
conflict with or violate any provision of the Articles of Incorporation or
Bylaws of the Company as in effect at the First Time of Delivery (as
hereinafter defined) or any Subsequent Time of Delivery (as hereinafter
defined) or the Articles of Incorporation or Bylaws of any of the Company's
subsidiaries or any statute, rule or regulation or any order, judgment or
decree of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their respective
properties or assets.
(xvi) Neither the Company nor its subsidiaries own any real
property. The Company and its subsidiaries have good title to all personal
property owned by them, in each case free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and defects, except
such as are disclosed in the Prospectus or such as do not materially and
adversely affect the value of such property and do not interfere with the
use made of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company or any of its
subsidiaries are held under valid, subsisting and enforceable leases, with
such exceptions as are disclosed in the Prospectus or are not material and
do not interfere with the use made or proposed to be made of such property
and buildings by the Company or such subsidiary; and any such real property
utilized by the Company or any subsidiary as a retail store, whether owned
by the Company or any of its subsidiaries or held under lease, is, to the
Company's knowledge, currently zoned in a classification such as will
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permit the operation of such property as a retail store with related
parking and the conditions, if any, to the granting of the zoning of such
property have, to the Company's knowledge, been satisfied and the Company
has no knowledge of any pending or threatened application for changes in
the zoning applicable to such property or any portion thereof.
(xvii) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or filing with, any
court or governmental agency or body is required for the issue and sale of
the Shares or the consummation of the transactions contemplated by this
Agreement, except the registration of the Shares under the Act (which, if
the Registration Statement is not effective as of the time of execution
hereof, shall be obtained as provided in this Agreement) and under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and such
as may be required under state securities or blue sky laws in connection
with the offer, sale and distribution of the Shares by the Underwriters.
(xviii) Other than as disclosed in the Prospectus, there is no
litigation, arbitration, claim, proceeding (formal or informal) or
investigation pending or threatened (or, to the knowledge of the Company,
any basis therefor) in which the Company or any of its subsidiaries is a
party or of which any of their respective properties or assets are the
subject which, if determined adversely to the Company or any such
subsidiary, would individually or in the aggregate have a material adverse
effect on the financial position, results of operations or business of the
Company and its subsidiaries taken as a whole. Neither the Company nor any
of its subsidiaries is in violation of, or in default with respect to, any
statute, rule, regulation, order, judgment or decree, except as described
in the Prospectus or such as do not and will not individually or in the
aggregate have a material adverse effect on the financial position, results
of operations or business of the Company and its subsidiaries taken as a
whole, and neither the Company nor any of its subsidiaries is required to
take any action in order to avoid any such violation or default.
(xix) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent public accountants,
who have certified certain financial statements of the Company and its
consolidated subsidiaries, are, and were during the periods covered by
their reports included in the Registration Statement and the Prospectus,
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
(xx) The consolidated financial statements (including the related
notes) of the Company and its consolidated subsidiaries included in the
Registration Statement, the Prospectus or any Preliminary Prospectus were
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved and fairly present the
financial position and results of operations of the Company and its
subsidiaries, on a consolidated basis, at the dates and for the periods
presented.
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(xxi) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding agreement of
the Company enforceable against the Company in accordance with its terms,
subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws relating to or affecting
the enforcement of creditors rights generally and to general equitable
principles and except as the enforceability of rights to indemnity and
contribution under this Agreement may be limited under applicable
securities laws or the public policy underlying such laws.
(xxii) Neither the Company nor any of its officers, directors
or affiliates (A) has taken or will take or has induced or will induce
others to take, directly or indirectly, any action designed to cause or
result in, or that has constituted or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares or (B) has,
since the filing of the Registration Statement, (1) sold, bid for,
purchased or paid anyone any compensation for soliciting purchases of, the
Shares or (2) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(xxiii) The Company has obtained for the benefit of the Company
and the Underwriters, from each of its directors and officers and from each
of the Selling Shareholders, a written agreement, enforceable by you, that
for a period of 120 days from the date the Registration Statement is
declared effective under the Act such director, officer or shareholder will
not, without your prior written consent, offer, pledge, sell, contract to
sell, grant any option for the sale of, or otherwise dispose of (or
announce any offer, pledge, sale, grant of an option to purchase or other
disposition), directly or indirectly, any shares of Common Stock or
securities convertible into, or exercisable or exchangeable for, shares of
Common Stock; and from each shareholder having registration rights a
written agreement that it will not exercise such registration rights for a
period of 120 days from the date the Registration Statement is declared
effective under the Act except to the extent such shareholder has elected
to sell shares of Common Stock to the Underwriters under this Agreement.
(xxiv) Neither the Company, any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any such subsidiary has, directly or
indirectly, used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity;
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
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(xxv) The operations of the Company and its subsidiaries with
respect to any real property currently leased by the Company or any
subsidiary (the "Real Property") are in compliance with all federal, state,
and local laws, ordinances, rules, and regulations relating to occupational
health and safety and environmental protection (collectively, "Laws"), and
the Company and its subsidiaries have all licenses, permits and
authorizations necessary to operate under all Laws and are in material
compliance with all terms and conditions of such licenses, permits and
authorizations; neither the Company nor any subsidiary has authorized,
conducted or has knowledge of the unlawful generation, transportation,
storage, use, treatment, disposal or release of any hazardous substance,
hazardous waste, hazardous material, hazardous constituent, toxic
substance, pollutant, contaminant, petroleum product, natural gas,
liquefied gas or synthetic gas defined or regulated under any environmental
law on, in or under any Real Property; and there is no pending or
threatened claim, litigation or any administrative agency proceeding, nor
has the Company or any subsidiary received any written or oral notice from
any governmental entity or third party, that: (A) alleges a violation of
any Laws by the Company or any subsidiary; (B) alleges the Company or any
subsidiary is a liable party under the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. (S) 9601 et seq. or
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any state superfund law; or (C) alleges possible contamination of the
environment by the Company or any subsidiary. Additionally, with the
exception of the underground storage tank release experienced by AJS Shoes
and discussed in the September 28, 1995 ATEC Phase I Environmental Site
Assessment, neither the Company nor any subsidiary has received any written
or oral notice that alleges possible contamination of the Real Property.
(xxvi) The Company and its subsidiaries own or have the right
to use all patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, franchises, trade
secrets, proprietary or other confidential information and intangible
properties and assets (collectively, "Intangibles") necessary to their
respective businesses as presently conducted or as the Prospectus indicates
the Company or such subsidiary proposes to conduct; to the best knowledge
of the Company, neither the Company nor any subsidiary has infringed or is
infringing, and neither the Company nor any subsidiary has received notice
of infringement with respect to, asserted Intangibles of others; and, to
the best knowledge of the Company, there is no infringement by others of
Intangibles of the Company or any of its subsidiaries.
(xxvii) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses in
which they are engaged.
(xxviii) Each of the Company and its subsidiaries makes and
keeps accurate books and records reflecting its assets and maintains
internal accounting controls which provide reasonable assurance that (A)
transactions are executed in accordance with management's authorization,
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(B) transactions are recorded as necessary to permit preparation of the
Company's consolidated financial statements in accordance with generally
accepted accounting principles and to maintain accountability for the
assets of the Company, (C) access to the assets of the Company and each of
its subsidiaries is permitted only in accordance with management's
authorization, and (D) the recorded accountability for assets of the
Company and each of its subsidiaries is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxix) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distributions on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary or from
transferring any of such subsidiary's property or assets to the Company or
any other subsidiary of the Company, except as disclosed in the Prospectus.
(xxx) The Company and its subsidiaries have filed all
foreign, federal, state and local tax returns that are required to be filed
by them and have paid all taxes shown as due on such returns as well as all
other taxes, assessments, amounts required to be withheld and governmental
charges that are due and payable; and no deficiency with respect to any
such return, tax or similar charge or payment has been assessed or
proposed.
(xxxi) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it to become, an "investment company"
or a company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940.
(xxxii) The Common Stock has been approved for quotation upon
notice of issuance as a National Market System security on Nasdaq.
(b) Each of the Selling Shareholders, severally and not jointly,
represents and warrants to and agrees with, each of the Underwriters that:
(i) Such Selling Shareholder has not, directly or indirectly,
used any corporate funds of the Company or any subsidiary for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds of the Company or any subsidiary;
on behalf of the Company or any subsidiary violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or on behalf of the
Company or any subsidiary made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
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(ii) The Shares to be sold by such Selling Shareholder pursuant
to this Agreement are duly authorized, validly issued, fully paid and
nonassessable and have not been issued and are not owned or held in
violation of any preemptive right of shareholders.
(iii) Such Selling Shareholder has duly executed this Agreement
and a durable power of attorney and custody agreement ("Durable Power of
Attorney and Custody Agreement"), naming ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇.
▇▇▇▇▇, or either of them, as such Selling Shareholder's attorney(s)-in-fact
("Attorneys-in-Fact") for the purpose of entering into and carrying out
this Agreement and naming Hunton & ▇▇▇▇▇▇▇▇ as custodian ("Custodian") of
the Shares of such Selling Shareholder to be sold to the Underwriters
hereunder for the purpose of selling such Shares to the Underwriters at the
First Time of Delivery (as hereinafter defined) or any Subsequent Time of
Delivery (as hereinafter defined), as the case may be, and receiving
payment therefor.
(iv) There is no litigation, arbitration, claim, governmental or
other proceeding (formal or informal), or investigation pending or
threatened against or affecting such Selling Shareholder that would affect
the ability of such Selling Shareholder to perform his or its obligations
under this Agreement or the Durable Power of Attorney and Custody
Agreement.
(v) Such Selling Shareholder, if a corporation, is a corporation
duly organized, validly existing, and in good standing under the laws of
its jurisdiction of incorporation. Such Selling Shareholder, if an
executor of an estate, has been duly appointed as executor of such estate
and is fully and legally authorized to act in such capacity. Such Selling
Shareholder has all requisite power and authority to execute, deliver, and
perform this Agreement and the Durable Power of Attorney and Custody
Agreement. All necessary corporate proceedings of such Selling
Shareholder, if a corporation, have been duly taken to authorize the
execution, delivery, and performance of this Agreement and the Durable
Power of Attorney and Custody Agreement by such Selling Shareholder. This
Agreement and the Durable Power of Attorney and Custody Agreement have been
duly authorized by such Selling Shareholder, if a corporation, and executed
and delivered by such Selling Shareholder, are the legal, valid, and
binding obligations of such Selling Shareholder, and are enforceable as to
such Selling Shareholder in accordance with their respective terms subject,
as to enforcement, to applicable bankruptcy, insolvency, reorganization and
moratorium or other laws relating to or affecting creditor's rights
generally and to general equitable principles and except as the
enforceability of rights to indemnity and contribution under this Agreement
may be limited under applicable securities laws or the public policy
underlying such laws. No consent, authorization, approval, order, license,
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certificate, or permit of or from, or declaration or filing with, any
federal, state, local, or other governmental authority or any court or
other tribunal is required by such Selling Shareholder for the execution,
delivery, or performance of this Agreement (except filings under the Act
and the Exchange Act and consents under applicable "blue sky" or securities
laws) or the Durable Power of Attorney and Custody Agreement by such
Selling Shareholder. No consent of any party to any material contract,
agreement, instrument, lease, license, arrangement, or understanding to
which such Selling Shareholder is a party, or to which any of such Selling
Shareholder's properties or assets are subject, is required for the
execution, delivery, or performance of this Agreement or the Durable Power
of Attorney and Custody Agreement; and the execution, delivery, and
performance of this Agreement and the Durable Power of Attorney and Custody
Agreement will not violate, result in a breach of, conflict with, or (with
or without the giving of notice or the passage of time or both) entitle any
party to terminate or call a default under any such material contract,
agreement, instrument, lease, license, arrangement, or understanding, or
violate or result in a breach of, any term of such Selling Shareholder's
certificate of incorporation (or other charter document) or by-laws, if
such Selling Shareholder is a corporation, or violate, result in a breach
of, or conflict with, any law, rule, regulation, order, judgment, or decree
binding on such Selling Shareholder or to which any of such Selling
Shareholder's operations, business, properties, or assets are subject.
Such Selling Shareholder, if a corporation, is not in violation or breach
of, or in default with respect to, any term of its articles of
incorporation (or other charter document) or bylaws.
(vi) Such Selling Shareholder has, and immediately prior to the
First Time of Delivery (as hereinafter defined) such Selling Shareholder
will have, good and valid title to the Shares to be sold by such Selling
Shareholder hereunder, free and clear of all liens, security interests,
pledges, charges, encumbrances, defects, shareholders agreements, voting
trusts, equities or claims of any nature whatsoever; and upon delivery of
such Shares, against payment therefor as provided herein, good and valid
title to such Shares, free and clear of all liens, security interests,
pledges, charges, encumbrances, defects, shareholders agreements, voting
trusts, equities or claims of any nature whatsoever, will pass to the
several Underwriters.
(vii) Such Selling Shareholder further represents, warrants and
agrees that such Selling Shareholder has deposited in custody, under the
Durable Power of Attorney and Custody Agreement, certificates in negotiable
form for the Shares to be sold by such Selling Shareholder hereunder as set
forth opposite such Selling Shareholder's name on Schedule II annexed
hereto (including the maximum number of Optional Shares, if any, so set
forth in Schedule II) for the purpose of further delivery pursuant to this
Agreement. Such Selling Shareholder agrees that the Shares of such Selling
Shareholder on deposit with the Custodian are subject to the interests of
the Company, the Underwriters and the other Selling Shareholders, that the
arrangements made for such custody, and the appointment of the Attorneys-
in-Fact pursuant to the Durable Power of Attorney and Custody Agreement,
are to that extent irrevocable, and that the obligations of such Selling
Shareholder hereunder and under the Durable Power of Attorney and Custody
Agreement shall not be terminated, except as provided in this Agreement and
-12-
the Durable Power of Attorney and Custody Agreement, by any act of such
Selling Shareholder, by operation of law, whether, in the case of an
individual Selling Shareholder, by the death or incapacity of such Selling
Shareholder or, in the case of a trust or estate, by the death of the
trustee or trustees or the executor or executors or the termination of such
trust or estate, or, in the case of a partnership or corporation, by the
dissolution, winding-up or other event affecting the legal life of such
entity, or by the occurrence of any other event. If any individual Selling
Shareholder, trustee or executor should die or become incapacitated, or any
such trust, estate, partnership or corporation should be terminated, or if
any other event should occur before the delivery of the Shares hereunder,
the certificates for Shares then on deposit with the Custodian shall, to
the extent such Shares are purchased by the Underwriters, be delivered by
the Custodian in accordance with the terms and conditions of this Agreement
and the Durable Power of Attorney and Custody Agreement as if such death,
incapacity, termination or other event had not occurred, regardless of
whether or not the Custodian shall have received notice thereof.
(viii) Neither such Selling Shareholder nor any of such Selling
Shareholder's affiliates (as defined in the Regulations) (A) has taken or
will take or has or will induce others to take, directly or indirectly, any
action designed to cause or result in or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company, to facilitate the sale or resale
of any of the Shares or (B) has, since the filing of the Registration
Statement, (1) sold, bid for, purchased or paid anyone any compensation for
soliciting purchases of, the Shares or (2) paid or agreed to pay any person
any compensation for soliciting another to purchase any other securities of
the Company.
(ix) To the extent any statements or omissions have been made in
any Preliminary Prospectus, the Registration Statement or any amendments
thereto or the Prospectus or any amendments or supplements thereto, in
reliance upon or in conformity with written information furnished to the
Company by the Selling Shareholder specifically for use therein, such
statements or omissions conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(x) Except as may be set forth in the Prospectus, such Selling
Shareholder has not incurred any liability for a fee, commission, or other
compensation on account of the employment of a broker or finder in
connection with the transactions contemplated by this Agreement.
-13-
2. PURCHASE AND SALE OF SHARES. Subject to the terms and conditions
herein set forth, (a) the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $_______ per share (the
"Purchase Price"), the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto, and (b) each Selling Shareholder agrees,
severally and not jointly to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Selling
Shareholders at the Purchase Price, the number of Firm Shares set forth opposite
the name of such Selling Shareholder in Schedule II hereto. The number of Firm
Shares to be sold by each Selling Shareholder to each Underwriter shall be the
number which bears the same ratio to the number set forth opposite the name of
such Underwriter in Schedule I hereto as the number of shares to be sold by such
Selling Shareholder, as indicated in Schedule II hereto, bears to the aggregate
number of Firm Shares to be sold by the Selling Shareholders, subject, however,
to such adjustment as you may at any time approve to eliminate fractional
shares. Subject to the terms and conditions herein set forth, in the event and
to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, (a) the Company agrees to issue and sell, and
the Designated Selling Shareholders agree, severally and not jointly, to sell,
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company and the Designated Selling
Shareholders, at the Purchase Price, that portion of the number of Optional
Shares as to which such election shall have been exercised (to be adjusted by
you so as to eliminate fractional shares) determined by multiplying such number
of Optional Shares by a fraction, the numerator of which is the maximum number
of Optional Shares that such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of the Optional Shares that all of the
Underwriters are entitled to purchase hereunder. The number of Optional Shares
to be sold by the Company to the Underwriters shall be twenty-five percent (25%)
of the aggregate number of Optional Shares being purchased and seventy-five
percent (75%) of such aggregate number of shares shall be sold by the Designated
Selling Shareholders. The number of Optional Shares to be sold by each
Designated Selling Shareholder to the Underwriters as a group shall be the
number which bears the same ratio to the aggregate number of Optional Shares
being purchased from the Designated Selling Shareholders as the maximum number
of Optional Shares to be sold by such Designated Selling Shareholder, as
indicated in the Schedule II hereto, bears to the aggregate number of Optional
Shares to be sold by the Designated Selling Shareholders as a group. The number
of shares resulting from any computations contemplated by this paragraph are
subject to adjustment by you to eliminate fractional shares.
The Company and the Designated Selling Shareholders, severally and not
jointly, hereby grant to the Underwriters the right to purchase at their
election in whole or in part from time to time up to 180,000 Optional Shares, at
the Purchase Price, for the sole purpose of covering over-allotments in the sale
of Firm Shares. Any such election to purchase Optional Shares may be exercised
by written notice from you to the Company and the Custodian, given from time to
time within a period of 30 calendar days after the date of this Agreement and
-14-
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you,
but in no event earlier than the First Time of Delivery (as hereinafter defined)
or, unless you, the Company and the Custodian otherwise agree in writing,
earlier than two or later than ten business days after the date of such notice.
In the event you elect to purchase all or a portion of the Optional Shares, the
Company and the Designated Selling Shareholders agree to furnish or cause to be
furnished to you the certificates, letters and opinions, and to satisfy all
conditions set forth in Section 7 hereof at each Subsequent Time of Delivery (as
hereinafter defined).
3. OFFERING BY THE UNDERWRITERS. Upon the authorization by you of
the release of the Shares, the several Underwriters propose to offer the Shares
for sale upon the terms and conditions disclosed in the Prospectus.
4. DELIVERY OF SHARES; CLOSING. Certificates in definitive form for
the Shares to be purchased by each Underwriter hereunder, and in such
denominations and registered in such names as The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company,
Inc. may request upon at least 48 hours' prior notice to the Company shall be
delivered by or on behalf of the Company and the Selling Shareholders to you for
the account of such Underwriter, against payment by such Underwriter on its
behalf of the purchase price therefor by official bank check or checks (payable
in next day funds) drawn on an Atlanta, Georgia bank, one payable to the order
of the Company in next day available funds (with respect to shares being sold by
the Company hereunder) and separate checks payable to the order of each Selling
Shareholder, in next day available funds (with respect to shares being sold by
the Selling Shareholders or Designated Selling Shareholders hereunder). The
closing of the sale and purchase of the Shares shall be held at the offices of
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, except that physical delivery of such certificates shall be made at the
office of The Depository Trust Company, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇. The time and date of such delivery and payment shall be, with respect to
the Firm Shares, at 10:00 a.m., Atlanta time, on the third (or, if the Shares
are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30
p.m., Washington, D.C. time, the fourth) full business day after the execution
of this Agreement or at such other time and date as you and the Company may
agree upon in writing, and, with respect to the Optional Shares, at 10:00 a.m.,
Atlanta time, on the date specified by you in the written notice given by you of
the Underwriters' election to purchase all or part of such Optional Shares, or
at such other time and date as you the Attorney-in-Fact (on behalf of the
Designated Selling Shareholders) and the Company may agree upon in writing.
Such time and date for delivery of the Firm Shares is herein called the "First
Time of Delivery," such time and date for delivery of the Optional Shares, if
not the First Time of Delivery, is herein called a "Subsequent Time of
Delivery," and each such time and date for delivery is herein called a "Time of
Delivery." Such certificates will be made available for checking and packaging
at least 24 hours prior to each Time of Delivery at the office of The Depository
Trust Company, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or at such other
location in New York, New York specified by you in writing at least 48 hours
prior to such Time of Delivery.
-15-
5. COVENANTS OF THE COMPANY AND THE SELLING SHAREHOLDERS. (a) The
Company covenants and agrees with each of the Underwriters:
(i) If the Registration Statement has been declared effective
prior to the execution and delivery of this Agreement, the Company will
file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by you,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day following the execution and delivery of this Agreement
or (B) the fifth business day after the date on which the Registration
Statement is declared effective. The Company will advise you promptly of
any such filing pursuant to Rule 424(b).
(ii) The Company will not file with the Commission the Prospectus
or the amendment referred to in the second sentence of Section l(a)(i)
hereof, any amendment or supplement to the Prospectus or any amendment to
the Registration Statement unless you have received a reasonable period of
time to review any such proposed amendment or supplement and consented to
the filing thereof and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective as
promptly as possible. Upon the request of the Representatives or counsel
for the Underwriters, the Company will promptly prepare and file with the
Commission, in accordance with the rules and regulations of the Commission,
any amendments to the Registration Statement or amendments or supplements
to the Prospectus that may be necessary or advisable in connection with the
distribution of the Shares by the several Underwriters and will use its
best efforts to cause any such amendment to the Registration Statement to
be declared effective as promptly as possible. If required, the Company
will file any amendment or supplement to the Prospectus with the Commission
in the manner and within the time period required by Rule 424(b) under the
Act. The Company will advise the Representatives, promptly after receiving
notice thereof, of the time when the Registration Statement or any
amendment thereto has been filed or declared effective or the Prospectus or
any amendment or supplement thereto has been filed and will provide
evidence to the Representatives of each such filing or effectiveness.
(iii) The Company will advise you promptly after receiving
notice or obtaining knowledge of (A) the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
any part thereof or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, (B) the suspension of the qualification of the Shares for offer or
sale in any jurisdiction or of the initiation or threatening of any
proceeding for any such purpose, or (C) any request made by the Commission
or any securities authority of any other jurisdiction for amending the
Registration Statement, for amending or supplementing the Prospectus or for
additional information. The Company will use its best efforts to prevent
-16-
the issuance of any such stop order and, if any such stop order is issued,
to obtain the withdrawal thereof as promptly as possible.
(iv) If at any time when the delivery of a prospectus relating to
the Shares is required under the Act any events have occurred as a result
of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if for any
reason it is necessary during such same period to amend or supplement the
Prospectus to comply with the Act or the rules and regulations thereunder,
the Company will promptly notify you and upon your request (but at the
Company's expense) prepare and file with the Commission an amendment or
supplement to the Prospectus that corrects such statement or omission or
effects such compliance and will furnish without charge to each Underwriter
and to any dealer in securities as many copies of such amended or
supplemented Prospectus as you may from time to time reasonably request.
If the delivery of a prospectus relating to the Shares is required under
the Act at any time nine months or more after the date of the Prospectus,
upon your request but at the expense of such Underwriter, the Company will
prepare and deliver to such Underwriter as many copies as you may request
of an amended or supplemented Prospectus complying with Section 10(a)(3) of
the Act. Neither your consent to, nor the Underwriters' delivery of, any
such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 7.
(v) The Company promptly from time to time will take such action
as you may reasonably request to qualify the Shares for offering and sale
under the securities or blue sky laws of such jurisdictions as you may
request and will continue such qualifications in effect for as long as may
be necessary to complete the distribution of the Shares, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation in any jurisdiction.
(vi) The Company will promptly provide you, without charge, (A)
three manually executed copies of the Registration Statement as originally
filed with the Commission and of each amendment thereto, including
financial statements and all exhibits to the Registration Statement, (B)
for each other Underwriter a conformed copy of the Registration Statement
as originally filed and of each amendment thereto, without exhibits, and
(C) so long as a prospectus relating to the Shares is required to be
delivered under the Act, as many copies of each Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto as you may reasonably
request. Prior to the execution and delivery of the Agreement, the Company
will have delivered to you, without charge, in such quantities as you have
requested, copies of each Preliminary Prospectus. The Company consents to
the use, in accordance with the provisions of the Act and with the
securities or blue sky laws of the jurisdictions in which the Shares are
offered by the several Underwriters and by dealers, prior to the date of
the Prospectus, of each Preliminary Prospectus so furnished by the Company.
-17-
(vii) As soon as practicable, but in any event not later than
the last day of the fifteenth month after the effective date of the
Registration Statement, the Company will make generally available to its
security holders an earnings statement of the Company and its subsidiaries,
if any, covering a period of at least 12 months beginning after the
effective date of the Registration Statement (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations
thereunder.
(viii) During the period of 120 days from the date the
Registration Statement is declared effective under the Act, the Company
will not, without your prior written consent, offer, pledge, issue, sell,
contract to sell, grant any option for the sale of, or otherwise dispose of
(or announce any offer, pledge, sale, grant of an option to purchase or
other disposition), directly or indirectly, any shares of Common Stock or
securities convertible into, exercisable or exchangeable for, shares of
Common Stock, except as provided in Section 2 and except for the issuance
of Common Stock upon the exercise of stock options or warrants outstanding
on the date of this Agreement to the extent that the aggregate number of
such stock options or warrants are disclosed in the Prospectus and except
for options granted pursuant to the Company's Stock Option Plan for
Employees, subject to the limitation on the number of shares of Common
Stock issuable thereunder disclosed in the Prospectus.
(ix) During a period of five years from the effective date of the
Registration Statement, the Company will furnish to you and, upon request,
to each of the other Underwriters, without charge, (i) copies of all
reports or other communications (financial or other) furnished to
shareholders, (ii) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange, and (iii) such additional publicly available
information concerning the business and financial condition of the Company
and its subsidiaries, if any, as you may reasonably request.
(x) Neither the Company nor any of its officers, directors or
affiliates will (A) take, directly or indirectly, prior to the termination
of the underwriting syndicate contemplated by this Agreement, any action
designed to cause or to result in, or that might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of any of the Shares, (B)
sell, bid for, purchase or pay anyone any compensation for soliciting
purchases of, the Shares or (C) pay or agree to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.
(xi) The Company will apply the net proceeds from the offering in
the manner set forth under "Use of Proceeds" in the Prospectus.
(xii) The Company will cause the Shares to be listed on the
Nasdaq National Market System at each Time of Delivery and for at least one
year from the date hereof.
-18-
(xiii) If at any time during the period beginning on the date
the Registration Statement becomes effective and ending on the later of (i)
the date 30 days after such effective date and (ii) the date that is the
earlier of (A) the date on which the Company first files with the
Commission its first Annual Report on Form 10-K after such effective date
and (B) the date on which the Company first issues a quarterly financial
report to shareholders after such effective date, any rumor, publication or
event relating to or affecting the Company shall occur as a result of which
in your reasonable opinion the market price of the Common Stock has been or
is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates an amendment of or supplement to the
Prospectus), the Company will, after written notice from 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.
(xiv) The Company confirms that, as of the date hereof, it is
in compliance with all provisions of Section 1 of the laws of Florida,
Chapter 92-198 ("An Act Relating to Disclosure of Doing Business with
Cuba"), and the Company further agrees that if it commences engaging in
business with the government of Cuba or with any person or affiliate
located in Cuba after the date the Registration Statement becomes or has
become effective with the Commission or with the Florida Department of
Banking and Finance (the "Department"), whichever date is later, or if the
information, if any, reported in the Prospectus concerning the Company's
business with Cuba or with any person or affiliate located in Cuba changes
in any material way, the Company will provide the Department of notice of
such business or change, as appropriate, in a form acceptable to the
Department.
(b) Each of the Selling Shareholders, severally and not jointly,
covenants and agrees with each of the Underwriters:
(i) Such Selling Shareholder will cooperate to the extent
necessary to cause the registration statement or any post-effective
amendment thereto to become effective at the earliest possible time.
(ii) Such Selling Shareholder will pay all federal and other
taxes, if any, on the transfer or sale of the Shares being sold by such
Selling Shareholder to the Underwriters.
(iii) Such Selling Shareholder will do or perform all things
required to be done or performed by such Selling Shareholder prior to the
First Time of Delivery or any Subsequent Time of Delivery, as the case may
-19-
be, to satisfy all conditions precedent to the delivery of the Shares
pursuant to this Agreement or the Durable Power of Attorney and Custody
Agreement.
(iv) That such Selling Shareholder has delivered to the Company
an agreement pursuant to which such Selling Shareholder has agreed that
during the period of 120 days from the date the Registration Statement is
declared effective under the Act, such Selling Shareholder will not,
without your prior written consent, offer, pledge, issue, sell, contract to
sell, grant any option for the sale of, or otherwise dispose of (or
announce any offer, pledge, sale, grant of an option to purchase or other
disposition), directly or indirectly, any shares of Common Stock or
securities convertible into, exercisable or exchangeable for, shares of
Common Stock, except as provided in Section 2 and except for the sale of
Common Stock upon the exercise of stock options or warrants outstanding on
the date of this Agreement to the extent that such stock options or
warrants are disclosed in the Prospectus.
(v) No Selling Shareholder will (A) take, directly or indirectly,
prior to the termination of the underwriting syndicate contemplated by this
Agreement, any action designed to cause or to result in, or that might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of any of the Shares, (B) sell, bid for, purchase or pay anyone any
compensation for soliciting purchases of, the Shares or (C) pay or agree to
pay to any person any compensation for soliciting another to purchase any
other securities of the Company.
(vi) Such Selling Shareholder agrees to deliver to the Custodian
on or prior to the First Time of Delivery (or the Subsequent Time of
Delivery, as the case may be) a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form or statement
specified by Treasury Department Regulations in lieu thereof).
(vii) Such Selling Shareholder will furnish any documents,
instruments or other information which you may reasonably request in
connection with the sale and transfer of the Shares.
(viii) Such Selling Shareholder will use its or his best
efforts to comply or cause to be complied with the conditions to the
obligations of the Underwriters in subsections (d), (i) and (j) of Section
7 hereof insofar as such conditions relate to such Selling Shareholder.
6. EXPENSES. The Company will pay all costs and expenses incident
to the performance of its obligations under this Agreement, whether or not the
transactions contemplated hereby are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including without limitation all costs and
-20-
expenses incident to (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the Act and all other expenses in connection with the preparation, printing and,
if applicable, filing of the Registration Statement (including all amendments
thereto), any Preliminary Prospectus, the Prospectus and any amendments and
supplements thereto, this Agreement and any blue sky memoranda; (ii) the
delivery of copies of the foregoing documents to the Underwriters; (iii) the
filing fees of the Commission and the National Association of Securities
Dealers, Inc. relating to the Shares; (iv) the preparation, issuance and
delivery to the Underwriters of any certificates evidencing the Shares,
including transfer agent's and registrar's fees; (v) the qualification of the
Shares for offering and sale under state securities and blue sky laws, including
filing fees and fees and disbursements of counsel for the Underwriters relating
thereto; (vi) any listing of the Shares on the National Association Securities
Dealers Automated Quotation National Market System and (vii) any expenses for
travel, lodging and meals incurred by the Company and any of its officers,
directors and employees in connection with any meetings with prospective
investors in the Shares. It is understood, however, that, except as provided in
this Section, Section 8 and Section 10 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, stock
transfer taxes on resale of any of the Shares by them, and any advertising
expenses relating to the offer and sale of the Shares.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters hereunder to purchase and pay for the Shares to be delivered at
each Time of Delivery shall be subject, in their discretion, to the accuracy of
the representations and warranties of the Company and the Selling Shareholders
contained herein as of the date hereof and as of such Time of Delivery, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company and the Selling Shareholders of its
and their covenants and agreements hereunder, and to the following additional
conditions precedent:
(a) If the Registration Statement as amended to date has not become
effective prior to the execution of this Agreement, such registration statement
shall have been declared effective not later than 11:00 a.m., Atlanta time, on
the date of this Agreement or such later date and/or time as shall have been
consented to by you in writing. The Prospectus and any amendment or supplement
thereto shall have been filed with the Commission pursuant to Rule 424(b) within
the applicable time period prescribed for such filing and in accordance with
Section 5(a) of this Agreement; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and no
proceedings for that purpose shall have been instituted, threatened or, to the
knowledge of the Company, the Selling Shareholders or the Representatives,
contemplated by the Commission; and all requests for additional information on
the part of the Commission shall have been complied with to your reasonable
satisfaction.
(b) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated such Time of Delivery, with
respect to the incorporation of the Company, the validity of the Shares being
-21-
delivered at such Time of Delivery, the Registration Statement, the Prospectus,
and other related matters as you may reasonably request, and the Company shall
have furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(c) You shall have received an opinion, dated such Time of Delivery,
of Hunton & ▇▇▇▇▇▇▇▇, counsel for the Company in form and substance satisfactory
to you and your counsel, to the effect that:
(i) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement and the Prospectus and to enter into this Agreement and perform
its obligations hereunder. The Company is duly qualified to transact
business as a foreign corporation and is in good standing under the laws of
each other jurisdiction in which it owns or leases property, or conducts
any business, so as to require such qualification, except where the failure
to so qualify would not have a material adverse effect on the financial
position, results of operations or business of the Company and its
subsidiaries taken as a whole.
(ii) Each of the subsidiaries of the Company has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and has the corporate power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus. Each such
subsidiary is duly qualified to transact business as a foreign corporation
and is in good standing under the laws of each other jurisdiction in which
it owns or leases property, or conducts any business, so as to require such
qualification, except where the failure to so qualify would not have a
material adverse effect on the financial position, results of operations or
business of the Company and its subsidiaries taken as a whole.
(iii) The Company's authorized, issued and outstanding
capital stock is as disclosed in the Prospectus. All of the issued shares
of capital stock of the Company, including the Shares to be sold to the
Underwriters by the Selling Shareholders hereunder, have been duly
authorized and validly issued, are fully paid and nonassessable and conform
to the description of the Common Stock contained in the Prospectus. None
of the issued shares of capital stock of the Company or any of its
subsidiaries has been issued or is owned or held in violation of any
preemptive rights of shareholders, and no person or entity (including any
holder of outstanding shares of capital stock of the Company or its
subsidiaries) has any statutory preemptive or, to our knowledge, other
rights to subscribe for any of the Shares.
(iv) All of the issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable, and except as set forth on Annex II hereto
are owned beneficially by the Company free and clear of all liens, security
interests, pledges, charges, encumbrances, shareholders' agreements, voting
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trusts, defects, equities or claims of any nature whatsoever. Other than
the subsidiaries listed on Exhibit 22 to the Registration Statement, to
such counsel's knowledge the Company does not own, directly or indirectly,
any capital stock or other equity securities of any other corporation or
any ownership interest in any partnership, joint venture or other
association.
(v) Except as disclosed in the Prospectus and except for warrants
issued to ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ each dated January 23, 1996, to
such counsel's knowledge there are no outstanding (A) securities or
obligations of the Company or any of its subsidiaries convertible into or
exchangeable for any capital stock of the Company or any such subsidiary,
(B) warrants, rights or options to subscribe for or purchase from the
Company or any such subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or (C) obligations
of the Company or any such subsidiary to issue any shares of capital stock,
any such convertible or exchangeable securities or obligations, or any such
warrants, rights or options.
(vi) The Shares to be issued and sold by the Company have been
duly authorized and, when issued and delivered against payment therefor as
provided herein, will be validly issued and fully paid and nonassessable
and will conform to the description of the Common Stock contained in the
Prospectus; the certificates evidencing the Shares comply with all
applicable requirements of Georgia law; and, based solely upon a letter
from Nasdaq to such effect, the Shares have been listed on the Nasdaq
National Market System.
(vii) Except as disclosed in the Prospectus under the caption
"Description of Capital Stock -- Registration Rights," there are no
contracts, agreements or understandings known to such counsel between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to the Registration Statement (or any such right has been
effectively exercised or waived) or, except with respect to registration
rights relating to registration of shares on Form S-8 granted to ▇▇▇▇ ▇▇▇▇▇
in his employment agreement with the Company dated March 20, 1995, in any
securities being registered pursuant to any other registration statement
filed by the Company under the Act.
(viii) All offers and sales of the Company's capital stock
prior to the date hereof within the period covered by Item 15 of Part II of
the Registration Statement were at all relevant times duly registered under
the Act or exempt from the registration requirements thereof.
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(ix) Neither the Company nor any of its subsidiaries is, or with
the giving of notice or passage of time or both, will be, in violation of
its Articles of Incorporation or Bylaws or in default under any indenture,
mortgage, deed of trust, loan agreement, lease or other material agreement
or instrument known to such counsel to which the Company or any such
subsidiary is a party or to which any of their respective properties or
assets is subject.
(x) The issue and sale of the Shares being issued at such Time of
Delivery and the performance of this Agreement and the consummation of the
transactions herein contemplated will not conflict with, or (with or
without the giving of notice or the passage of time or both) result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement,
lease or other material agreement or instrument known to such counsel to
which the Company or any such subsidiary is a party or to which any of
their respective properties or assets is subject, nor will such action
conflict with or violate any provision of the Articles of Incorporation or
Bylaws of the Company or any of its subsidiaries or any statute, rule or
regulation or any order, judgment or decree of which such counsel has
knowledge of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their respective
properties or assets; provided, however, that counsel need express no
opinion as to blue sky laws.
(xi) No consent, approval, authorization, order or declaration of
or from, or registration, qualification or filing with, any court or
governmental agency or body is required for the issue and sale of the
Shares or the consummation of the transactions contemplated by this
Agreement, except the registration of the Shares under the Act, the
registration of the Common Stock under the Exchange Act and such as may be
required under state securities or blue sky laws in connection with the
offer, sale and distribution of the Shares by the Underwriters as to which
laws such counsel need express no opinion.
(xii) To such counsel's knowledge, and other than as
disclosed in or contemplated by the Prospectus, there is no litigation,
arbitration, claim, proceeding (formal or informal) or investigation
pending or threatened in which the Company or any of its subsidiaries is a
party or of which any of their respective properties or assets is the
subject which, if determined adversely to the Company or any such
subsidiary, would individually or in the aggregate have a material adverse
effect on the financial position, results of operations or business of the
Company and its subsidiaries taken as a whole; and, to such counsel's
knowledge, neither the Company nor any of its subsidiaries is in violation
-24-
of, or in default with respect to, any statute, rule, regulation, order,
judgment or decree, except as described in the Prospectus or where such
violations or defaults would not individually or in the aggregate have a
material adverse effect on the financial position, results of operations or
business of the Company and its subsidiaries, nor is the Company or any
subsidiary required to take any action in order to avoid any such violation
or default.
(xiii) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding agreement of
the Company enforceable against the Company in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally, by general principles of equity whether such
enforceability is considered in a proceeding in law or equity and by the
discretion of the court before which any proceeding therefor may be
brought, and except to the extent that rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or the public
policy underlying such laws.
(xiv) The Registration Statement and the Prospectus and each
amendment or supplement thereto (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), as of their respective effective or issue dates, complied as to
form in all material respects with the requirements of the Act and the
rules and regulations thereunder. The descriptions in the Registration
Statement and the Prospectus of statutes, legal and governmental
proceedings or contracts and other documents and statements of law or legal
conclusions are accurate and fairly present the information required to be
shown; and such counsel do not know of any statutes or legal or
governmental proceedings required to be described in the Registration
Statement or Prospectus that are not described as required or of any
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described or filed as required.
(xv) The Registration Statement and all post-effective
amendments, if any, have become effective under the Act; any required
filing of the Preliminary Prospectus pursuant to Rule 424(a) or of the
Prospectus pursuant to Rule 424(b) has been made in the manner and within
the time period required by such Rule; and no stop order suspending the
effectiveness of the Registration Statement or any part thereof has been
issued and, to such counsel's knowledge, no proceedings for that purpose
have been instituted or threatened or are contemplated by the Commission.
(xvi) The Company is not, and will not be as a result of the
consummation of the transactions contemplated by this Agreement, an
"investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940.
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Such counsel shall also state that in its capacity as counsel to the
Company, it has participated in conferences with officers and other
representatives of the Company and representatives of the Underwriters and their
counsel, during which the contents of the Registration Statement and the
Prospectus were discussed and reviewed. Such counsel shall further state that
although it is not passing judgment upon, and does not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, on the basis of the information that
was developed in the course of the performance of the services referred to
above, considered in light of its understanding of the applicable law, nothing
came to such counsel's attention that has caused it to believe that the
Registration Statement or any further amendment thereto made prior to such Time
of Delivery, on its effective date and as of such Time of Delivery, or the
Prospectus or any further amendment or supplement thereto made prior to such
Time of Delivery, as of its issue date and as of such Time of Delivery, (other
than, in each case, the financial statements and schedules and the other
financial and statistical data included therein, as to which such counsel need
express no belief) contained or contains any untrue statement of a material fact
or omitted or omits to state any material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in which
they were made not misleading.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deem proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws Texas, to the extent satisfactory in form and scope to
counsel for the Underwriters, upon the opinion of ▇▇▇▇▇▇ ▇▇▇, Esquire, provided
that such counsel states such counsel has no reason to believe that the
Underwriters are not justified in relying upon such opinion and copies of such
opinion are delivered to the Representatives and counsel for the Underwriters.
Whenever used in any statement set forth in such opinion, the phrase
"to [such counsel's] knowledge" and other words of similar meaning qualify and
limit such statement to the current awareness of the lawyers in such firm who
have had responsibility for devoting substantive attention to the representation
of the Company in the transactions contemplated by this Agreement, the
preparation of the Registration Statement and any due diligence in connection
therewith, of factual matters that such lawyers recognize as being relevant to
the statements so qualified and limited.
(d) You shall have received an opinion, dated such Time of Delivery,
of Hunton & ▇▇▇▇▇▇▇▇, counsel for the Selling Shareholders in form and substance
satisfactory to you and your counsel, to the effect that:
(i) This Agreement and the Durable Power of Attorney and Custody
Agreement have each been duly executed and delivered by or on behalf of
each of the Selling Shareholders and are valid and binding agreements of
each Selling Shareholder enforceable against each Selling Shareholder in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or affecting creditors' rights generally, by general principles of
-26-
equity whether such enforceability is considered in a proceeding in law or
equity and by the discretion of the court before which any proceeding
therefor may be brought, and except to the extent that rights to indemnity
and contribution hereunder may be limited by federal or state securities
laws or the public policy underlying such laws.
(ii) To the best knowledge of such counsel, each Selling
Shareholder has duly authorized, executed and delivered this Agreement and
the Durable Power of Attorney and Custody Agreement and has full legal
right, power and authorization, and any approval required by law, to enter
into this Agreement and the Durable Power of Attorney and Custody Agreement
and to sell, assign, transfer and deliver good and valid title to the
Shares which such Selling Shareholder has agreed to sell pursuant to this
Agreement.
(iii) The execution and delivery of this Agreement and the
Durable Power of Attorney and Custody Agreement by the Selling Shareholders
and the consummation of the transactions contemplated hereby and thereby
will not conflict with, or (with or without the giving of notice or the
passage of time or both) result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, lease or other material agreement
or instrument known to such counsel to which any Selling Shareholder is a
party or to which any of them or any of their assets or property is
subject, nor will such action conflict with or violate any provision of the
Articles of Incorporation or Bylaws of such Selling Shareholder or any
statute, rule or regulation or any order, judgement or decree of which such
counsel has knowledge of any court or governmental agency or body having
jurisdiction over such Selling Shareholder or any of such Selling
Shareholder's properties or assets; provided, however, that counsel need
express no opinion as to blue sky laws.
(iv) Delivery of certificates for the Shares to be sold by such
Selling Shareholder pursuant to the terms of this Agreement will pass valid
and marketable title thereto to each Underwriter that purchased such Shares
for value in good faith and without notice of any adverse claim with
respect thereto, within the meaning of the Uniform Commercial Code as in
effect in the State of Georgia, free and clear of all liens, security
interests, pledges, charges, encumbrances, defects, shareholders
agreements, voting trusts, equities or claims of any nature whatsoever.
(v) No consent, approval, authorization, order or declaration of
or from, or registration, qualification or filing with, any court or
governmental agency or body is required for the issue and sale of the
Shares being sold by such Selling Shareholder or the consummation of the
transactions contemplated by this Agreement or the Durable Power of
Attorney and Custody Agreement except the registration of such Shares under
the Act, the registration of the Common Stock under the Exchange Act and
-27-
such as may be required under state securities or blue sky laws in
connection with the offer, sale and distribution of such Shares by the
Underwriters, as to which laws counsel need express no opinion.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deem proper, on certificates of
responsible officers of the Selling Shareholders and public officials and,
as to matters involving the application of laws of Texas, to the extent
satisfactory in form and scope to counsel for the Underwriters, upon the
opinion of ▇▇▇▇▇▇ ▇▇▇, Esquire, provided that such counsel states such
counsel has no reason to believe that the Underwriters are not justified in
relying upon such opinion and copies of such opinion are delivered to the
Representatives and counsel for the Underwriters.
Whenever used in any statement set forth in such opinion, the phrase
"to [such counsel's] knowledge" and other words of similar meaning qualify and
limit such statement to the current awareness of the lawyers in such firm who
have had responsibility for devoting substantive attention to the representation
of the Company in the transactions contemplated by this Agreement, the
preparation of the Registration Statement and any due diligence in connection
therewith, of factual matters that such lawyers recognize as being relevant to
the statements so qualified and limited.
(e) You shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent
public accountants letters dated, respectively, the date hereof (or, if the
Registration Statement has been declared effective prior to the execution and
delivery of this Agreement, dated such effective date and the date of this
Agreement) and each Time of Delivery, in form and substance satisfactory to you,
to the effect set forth in Annex I hereto. In the event that the letters
referred to in this Section 7(e) set forth any changes, decreases or increases
in the items specified in paragraph (iv) of Annex I, it shall be a further
condition to the obligations of the Underwriters that (i) such letters shall be
accompanied by a written explanation by the Company as to the significance
thereof, unless the Representatives deem such explanation unnecessary, and (ii)
such changes, decreases or increases do not, in your sole judgment, make it
impracticable or inadvisable to proceed with the purchase, sale and delivery of
the Shares being delivered at such Time of Delivery as contemplated by the
Registration Statement, as amended as of the date of such letter.
(f) Since the date of the latest audited financial statements included
in the Prospectus, neither the Company nor any of its subsidiaries shall have
sustained (i) any loss or interference with their respective businesses from
fire, explosion, flood, hurricane or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as disclosed in or contemplated by the Prospectus, or
(ii) any change, or any development involving a prospective change (including
without limitation a change in management or control of the Company), in or
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affecting the position (financial or otherwise), results of operations or net
worth of the Company and its subsidiaries taken as a whole, otherwise than as
disclosed in or contemplated by the Prospectus, the effect of which, in either
such case, is in your judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the purchase, sale and delivery of
the Shares being delivered at such Time of Delivery as contemplated by the
Registration Statement, as amended as of the date hereof.
(g) Subsequent to the date hereof there shall not have occurred any of
the following: (i) any suspension or limitation in trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices for
trading on such exchange, or in the Common Stock by the Commission or the Nasdaq
National Market System; (ii) a moratorium on commercial banking activities in
New York declared by either federal or state authorities; or (iii) any outbreak
or escalation of hostilities involving the United States, declaration by the
United States of a national emergency or war or any other national or
international calamity or emergency if the effect of any such event specified in
this clause (iii) in your judgment makes it impracticable or inadvisable to
proceed with the purchase, sale and delivery of the Shares being delivered at
such Time of Delivery as contemplated by the Registration Statement, as amended
as of the date hereof.
(h) The Company shall have furnished to you at such Time of Delivery
certificates of officers of the Company, satisfactory to you as to the accuracy
of the representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to such Time of Delivery, and as to such
other matters as you may reasonably request, and the Company shall have
furnished or caused to be furnished certificates as to the matters set forth in
subsections (a) and (f) of this Section 7, and as to such other matters as you
may reasonably request.
(i) Each Selling Shareholder shall have furnished to you at such Time
of Delivery a certificate of such Selling Shareholder (which may be executed on
behalf of such Selling Shareholder by the Attorney-in-Fact), satisfactory to you
as to the accuracy of the representations and warranties of such Selling
Shareholder herein at and as of such Time of Delivery, as to the performance by
such Selling Shareholder of all of its obligations hereunder to be performed at
or prior to such Time of Delivery, and as to such other matters as you may
reasonably request.
(j) A copy of the Durable Power of Attorney and Custody Agreement
executed by each Selling Shareholder shall have been furnished to your counsel
prior to the First Time of Delivery, along with such information as such counsel
may reasonably request in connection with their review thereof.
(k) The Shares shall be listed on the Nasdaq National Market System.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon: (i)
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any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or (ii) the
omission or alleged omission to state in the Registration Statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus or any amendment
or supplement thereto, 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, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating, defending against or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case to the
-------- -------
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement or any amendment thereto,
any Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by any Underwriter through you expressly for use therein; and
provided, further, that the Company shall not be liable to any Underwriter in
respect of any Preliminary Prospectus or any amendment or supplement to any
Preliminary Prospectus to the extent that (A) the Prospectus did not contain the
untrue statement or alleged untrue statement or omission or alleged omission
giving rise to such loss, claim, damage or liability, (B) the Prospectus was not
sent or given to the purchaser of the Shares in question at or prior to the
written confirmation of the sale of such Shares to such person and (C) the
failure to deliver such Prospectus was not the result of non-compliance by the
Company with its obligations under Section 5(a)(vi). The Company will not,
without the prior written consent of each Underwriter, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding (or related cause of action or portion thereof) in respect of
which indemnification may be sought hereunder (whether or not such Underwriter
is a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of such Underwriter from
all liability arising out of such claim, action, suit or proceeding (or related
cause of action or portion thereof).
(b) Each Selling Shareholder, severally and not jointly, agrees to
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities to which such Underwriter may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement or
any amendment thereto, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or the omission or alleged omission to state
therein 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, in each case to the extent, but only to the extent, that such
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untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company by or on behalf of such Selling Shareholder for use therein, and
will reimburse such Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, the liability
of each Selling Shareholder for indemnification under this Section 8 shall be
limited to an amount equal to the net proceeds received by such Selling
Shareholder from the Underwriters in the offering; and provided, further, that
the Selling Shareholder shall not be liable to any Underwriter in respect of any
Preliminary Prospectus or any amendment or supplement to any Preliminary
Prospectus to the extent that (A) the Prospectus did not contain the untrue
statement or alleged untrue statement or omission or alleged omission giving
rise to such loss, claim, damage or liability, (B) the Prospectus was not sent
or given to the purchaser of the Shares in question at or prior to the written
confirmation of the sale of such Shares to such person and (C) the failure to
deliver such Prospectus was not the result of non-compliance by the Company with
its obligations under Section 5(a)(vi). No Selling Shareholder 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 (or related cause of action or portion thereof) in respect of which
indemnification may be sought hereunder (whether or not such Underwriter is a
party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of such Underwriter from
all liability arising out of such claim, action, suit or proceeding (or related
cause of action or portion thereof).
(c) Each Underwriter, severally but not jointly, agrees to indemnify
and hold harmless the Company and each Selling Shareholder against any losses,
claims, damages or liabilities to which the Company or any Selling Shareholder
may become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through you expressly for use
therein; and will reimburse the Company and each Selling Shareholder for any
legal or other expenses reasonably incurred by the Company, such Selling
Shareholder and any such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
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any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party); provided, however, that if the defendants in any such action include
-------- -------
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be one or more legal defenses
available to it or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnifying party
shall not have the right to assume the defense of such action on behalf of such
indemnified party and such indemnified party shall have the right to select
separate counsel to defend such action on behalf of such indemnified party.
After such notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such indemnified party
of counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances, which
separate counsel shall be designated by the Representatives in the case of
indemnity arising under paragraph (a) of this Section 8) or (ii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. Nothing in this Section 8(d)
shall preclude an indemnified party from participating at its own expense in the
defense of any such action so assumed by the indemnifying party.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Shareholders,
respectively, on the one hand, and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (d) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the Selling
Shareholders, respectively, on the one hand, and the Underwriters on the other
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
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other relevant equitable considerations. The relative benefits received by the
Company and the Selling Shareholders, respectively, on the one hand, and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company and the Selling Shareholders, respectively, bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company and the Selling Shareholders, respectively, on the one hand, or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission and
in the case of a failure to give notice as required under subsection (d) above,
the extent to which the indemnifying party was prejudiced thereby. The Company,
the Selling Shareholders and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subsection (e) were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (e), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (e) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Shareholders under
this Section 8 shall be in addition to any liability which the Company or such
Selling Shareholders may otherwise have and shall extend, upon the same terms
and conditions, to each officer, director, agent and employee of any Underwriter
and to each person, if any, who controls any Underwriter within the meaning of
the Act or the Exchange Act; the obligations of the Underwriters under this
Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and any Selling
Shareholder and to each person, if any, who controls the Company or any Selling
Shareholder within the meaning of the Act or the Exchange Act.
9. DEFAULT OF UNDERWRITERS. (a) If any Underwriter defaults in its
obligation to purchase Shares at a Time of Delivery, you may in your discretion
arrange for you or another party or other parties to purchase such Shares on the
terms contained herein. If within thirty-six (36) hours after such default by
-33-
any Underwriter you do not arrange for the purchase of such Shares, the Company
shall be entitled to a further period of thirty-six (36) hours within which to
procure another party or other parties satisfactory to you to purchase such
Shares on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Shares, or the Company notifies you that it has so arranged for the
purchase of such Shares, you or the Company shall have the right to postpone a
Time of Delivery for a period of not more than seven days in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus that in your opinion may thereby be made necessary. The cost of
preparing, printing and filing any such amendments shall be paid for by the
Underwriters. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of
Shares to be purchased at such Time of Delivery, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and , in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made, but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. TERMINATION. (a) This Agreement may be terminated with respect
to the Firm Shares or any Optional Shares in the sole discretion of the
Representatives by notice to the Company given prior to the First Time of
Delivery or any Subsequent Time of Delivery, respectively, in the event that (i)
any condition to the obligations of the Underwriters set forth in Section 7
hereof has not been satisfied, or (ii) the Company shall have failed, refused or
been unable to deliver the Shares or to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior to
such Time of Delivery, in either case other than by reason of a default by any
of the Underwriters. If this Agreement is terminated pursuant to this Section
10(a), the Company will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including counsel fees and disbursements) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Shares. The Company shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company as
-34-
provided in Section 9(a), the aggregate number of such Shares which remains
unpurchased exceeds one-eleventh of the aggregate number of Shares to be
purchased at such Time of Delivery, or if the Company shall not exercise the
right described in Section 9(b) to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to a Subsequent Time of Delivery, the obligations of the
Underwriters to purchase and of the Company and the Selling Shareholders to sell
the Optional Shares) shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company, except for the expenses to be
borne by the Company and the Underwriters as provided in Section 6 hereof and
the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
11. SURVIVAL. The respective indemnities, agreements,
representations, warranties and other statements of the Company, its officers,
the several Underwriters and the Selling Shareholders, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person referred to in Section 8(f) or the
Company, or any officer or director or controlling person of the Company
referred to in Section 8(f), or any Selling Shareholder, and shall survive
delivery of and payment for the Shares. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 8 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
12. NOTICES. All communications hereunder shall be in writing and,
if sent to any of the Underwriters, shall be mailed, delivered or telegraphed
and confirmed in writing to you in care of The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance
Department (with a copy to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, III, Esquire); if
sent to the Company, shall be mailed, delivered or telegraphed and confirmed in
writing to the Company at ▇▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇ (with a copy to Hunton & ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: J. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, Esq.); and if sent to the Selling Shareholders, shall be mailed,
delivered or telegraphed to the Selling Shareholders in care of ▇▇▇▇ ▇. ▇▇▇▇▇
(with a copy to Hunton & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.).
13. REPRESENTATIVES. You will act for the several Underwriters in
connection with the transactions contemplated by this Agreement, and any action
under this Agreement taken by you jointly or by The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company,
Inc. will be binding upon all the Underwriters.
14. BINDING EFFECT. This Agreement shall be binding upon, and inure
solely to the benefit of, the Underwriters and the Company and to the extent
provided in Sections 8 and 10 hereof, the officers and directors and controlling
persons referred to therein and their respective heirs, executors,
-35-
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
15. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia without giving effect to any
provisions regarding conflicts of laws.
16. COUNTERPARTS. This Agreement may be executed by any one or more
of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us one of the counterparts hereof, and upon
the acceptance hereof by The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc., on behalf of each
of the Underwriters, this letter will constitute a binding agreement among the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in the Master Agreement among Underwriters, a copy of which shall be
submitted to the Company for examination, upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
K & G MEN'S CENTER, INC.
By:
------------------------------------
Name:
Title:
THE SELLING SHAREHOLDERS
By:
------------------------------------
, Attorney-in-Fact
-36-
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above at
Atlanta, Georgia.
THE ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY, INC.
▇. ▇. ▇▇▇▇▇▇▇▇ & CO.
INTERSTATE/▇▇▇▇▇▇▇ ▇▇▇▇ CORPORATION
By: The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc.
By:
----------------------------------
(Authorized Representative)
On behalf of each of the Underwriters
-37-
SCHEDULE I
Number of
Optional
Shares to be
Total Purchased if
Number of Firm Maximum
Shares to be Option
Underwriter Purchased Exercised
------------------------------------- -------------- ------------
The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc.
▇. ▇. ▇▇▇▇▇▇▇▇ & Co.
Interstate/▇▇▇▇▇▇▇ ▇▇▇▇ Corporation
-------------- ------------
Total 1,200,000 180,000
============== ============
-38-
SCHEDULE II
Number of Optional
Shares to be Sold
Total Number of if Maximum
Selling Shareholder Firm Shares to be Sold Option Exercised
------------------- ---------------------- ------------------
ITC Holding Company 80,000 13,953
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 150,000 26,163
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ 50,000 -
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. as
Independent Executors of the Estate
of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. 50,000 -
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. 12,150 -
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 300,000 52,326
W. ▇▇▇▇ ▇▇▇▇▇ 175,000 30,523
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 60,000 10,465
▇▇▇▇ ▇. ▇▇▇▇▇ 9,000 1,570
------- -------
TOTAL 886,150 135,000
------- -------
-39-
ANNEX I
Pursuant to Section 7(e) of the Underwriting Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
shall furnish letters to the Underwriters to the effect that:
(i) they are independent public accountants with respect to the
Company and its consolidated subsidiaries within the meaning the Act and
the applicable published rules and regulations thereunder;
(ii) in their opinion, the consolidated financial statements and
schedules audited by them and included in the Prospectus and the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations thereunder;
(iii) on the basis of a reading of the latest available
interim unaudited consolidated financial statements of the Company and its
consolidated subsidiaries and a reading of the unaudited amounts for
revenues and total and per share amounts of net income for the [insert
periods for which "capsule" information is provided] and of the unaudited
consolidated financial statements of the Company and its consolidated
subsidiaries for the periods from which such amounts are derived, limited
procedures, not constituting an audit in accordance with generally accepted
auditing standards, consisting of a reading of the unaudited financial
statements and other information referred to below, a reading of the latest
available interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries since
the date of the latest audited financial statements included in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the unaudited consolidated financial statements of the
Company and its consolidated subsidiaries included in the Registration
Statement and the Prospectus do not comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published rules and regulations thereunder or are not in
conformity with generally accepted principles applied on a basis
substantially consistent with that of the audited consolidated
financial statements included in the Registration Statement and the
Prospectus;
(B) as of a specified date not more than 5 days prior to the
date of such letter, there were any changes in the capital stock
(other than the issuance of capital stock upon exercise of employee
stock options that were outstanding on the date of the latest balance
sheet included in the Prospectus) or any increase in inventories or
-40-
the long-term debt or short-term debt of the Company and its
subsidiaries, or any decreases in net current assets or net assets or
other items specified by the Representatives, or any increases in any
other items specified by the Representatives, in each case as compared
with amounts shown in the latest balance sheet included in the
Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur, or which
are described in such letter; and
(C) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in clause (B) there were any decreases in revenues or operating
income or the total or per share amounts of net income or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in each
case for increases or decreases which the Prospectus discloses have
occurred or may occur, or which are described in such letter; and
(iv) in addition to the audit referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraph (iii) above,
they have carried out certain specified procedures, not constituting an
audit in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information specified
by the Representatives that are included in the Registration Statement and
the Prospectus, or which appear in Part II of, or in exhibits or schedules
to, the Registration Statement and have compared certain of such amounts,
percentages and financial information with the accounting records of the
Company and its subsidiaries and have found them to be in agreement.
References to the Registration Statement and the Prospectus in this
Annex I shall include any amendment or supplement thereto at the date of such
letter.
-41-
ANNEX II
[To Come]
-42-
