XXXXX.XXX, INC.
8% Cumulative Convertible Preferred Stock
Agency Agreement
September 11, 2000
XXXXXXXXX, XXXXXX & XXXXX
0000 Xxxxxxxxx Xxxx, XX
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Dear Sirs:
xxxxx.xxx, Inc., a Georgia corporation (the "Company"), hereby confirms its
agreement with XXXXXXXXX XXXXXX & XXXXX (the "Agent"), as follows:
1. General. The Company proposes to offer, through the Agent on a "best
efforts basis", up to 500,000 units (the "Maximum Offering") consisting
of four shares of 8% cumulative convertible preferred stock (the
"Preferred Stock") and a warrant to purchase two shares of the
Company's common stock (the "Common Stock") for $3.50 per share (the
"Units") at a price of $10.00 per Unit. The warrants shall terminate on
the earlier of five years or 30 days after the Company notifies the
holder that the closing price of the Common Stock has equaled or
exceeded $5.00 per share for 20 consecutive days. One share of
Preferred Stock will be convertible into one share of Common Stock. The
Company will file a registration statement on Form S-3 covering the
shares of Common Stock issuable upon conversion of the Preferred Stock
or the exercise of the warrant no later than 180 days after the Closing
of the offering, and will use its best efforts to have the registration
statement declared effective as soon as practicable thereafter. In
addition, the Company will grant "piggy-back" registration rights for
the six months following the Closing. The investors and the Agent will
agree to a lock-up period restricting the resale of the common stock
registered on the Form S-3 to the following schedule: 25% of the shares
on the effective date of the registration statement and an additional
25% of the shares on the 60th, 120th, and 180th day following the
effective date of the registration statement.
On terms and conditions specified in this Agency Agreement (the
"Agreement"), the Agent, for the compensation specified below, will
provide the services specified in this Agreement to assist the Company
in the Offering.
2. The Offering.
2.1 Services to be Rendered. Subject to the terms and conditions
hereof and upon the basis of the representations, warranties
and agreements herein set forth, the Company hereby appoints
the Agent as its agent to sell the Units on a best efforts
basis and on terms satisfactory to the Company. The Agent
hereby accepts such appointment and agrees to use its best
efforts to find purchasers for the Units. The Company and the
Agent agree that the Units shall be offered in a private
offering primarily to qualified accredited investors in
compliance with Section 4(2)of the Securities Act of 1933 (the
"Securities Act") and other federal and state securities laws.
2.2 Exclusive Engagement. The Company shall not engage any other
person other than the Agent to solicit offers or sales of
Units during the Offering Period (as such term is herein
defined). However the Company may in its sole discretion
terminate this Agreement after 45 days from the date hereof.
The agent will be reimbursed only for actual out of pocket
expenses in the event the offering is terminated.
2.3 Compensation. The Company agrees to pay to the Agent for the
Agent's services in connection with the Offering a commission
on all Units sold in the Offering as follows: (a) a commission
equal to 10% of the sale price for each Share sold by the
Agent, except as described below, plus (b) a $25,000 fee when
$500,000 of Units have been sold by the Agent, plus (c) a
warrant to purchase 200,000 shares of the Company's common
stock at a price of $4.00 per share, exercisable for a period
of five years. No commissions are payable on Units sold to
directors of the Company or on Units sold to investors who are
located by the directors or officers of the Company and who
purchase at least $50,000 of Units. A commission equal to 5%
of the sale price is payable to the Agent for Units sold to
investors located by the directors and officers and who
purchase less than $50,000 of Units. The Company from time to
time will provide the Agent with a written list of potential
investors identified by the directors and officers. The shares
of common stock issuable upon exercise of the warrants shall
have "piggy-back" registration rights for the six months
following the Closing and the Company shall file a
registration statement on Form S-3 within 180 days after the
Closing. Resale of the common stock is subject to the
restrictions described in Section 1.
2.4 Payment of Expenses. The Company will pay all expenses in
connection with the Offering including, but not limited to,
the Company's attorneys' fees, expenses for auditing and
accounting services, advertising fees, any NASD filing fees,
postage, and document reproduction expenses, and the
engraving, issuance, transfer and delivery of certificates for
the Stock. The Agent shall pay its own expenses incurred in
connection with the Offering, including, but not limited to,
the Agent's attorneys' fees.
2.5 Blue Sky. The Company contemplates that the Offering will be
made in those states listed in Exhibit A attached hereto. The
Company shall, at its sole expense, take or cause to be taken
all necessary action and shall furnish to whomever the Agent
may direct such information as may be required to qualify the
Units for sale under the laws of such jurisdictions and any
other jurisdictions where the Company may hereafter elect that
Units shall be offered and shall continue such qualifications
in effect for as long as may be necessary for the distribution
of the Units. At the request of the Agent the Company shall
cause its counsel to prepare and furnish to the Agent "Blue
Sky" memoranda concerning the requirements for qualification
of the Units for sale under the law of such jurisdictions, and
the Agent shall be entitled to rely on such memoranda in
carrying out its obligations under this Agreement.
2.6 Offering Period. The Units will be offered for sale during the
period (the "Offering Period") commencing on the date hereof
and continuing until the termination of the Offering by the
Company.
2.7 Escrow Agreement. During the period of the Offering, the
proceeds from the sale of Units shall, upon receipt by the
Agent, be promptly placed in a special account with SunTrust
Bank (the "Escrow Agent"), subject to an escrow agreement
substantially in the form of the Escrow Agreement which is
attached hereto as Exhibit B and incorporated herein by this
reference (the "Escrow Agreement"). Each of the parties hereto
agrees that this Agreement shall be automatically terminated
and the entire proceeds received from subscriptions for the
Units shall be returned to the subscribers for such Units,
without interest, upon the failure of the minimum offering of
one million dollars ($1,000,000.00) (the "Minimum Offering")
to be achieved.
2.8 Delivery of and Payment for the Units. Provided that the
Escrow Agent is authorized and empowered in accordance with
the terms of the Escrow Agreement to release the proceeds of
the Offering from escrow as described in the Escrow Agreement,
and provided further that this Agreement shall not have been
terminated pursuant to the terms hereof, payment for the Units
shall be made at a closing (the "Closing") to be held at the
offices of the Company's counsel (or such other place as the
parties hereto may agree), as provided herein. The date of a
Closing hereunder is sometimes referred to as the "Closing
Date". Payment for the Units sold on behalf of the Company by
the Agent shall be made to the Company or to the order of the
Company by the Escrow Agent acting upon instructions from the
Company and the Agent pursuant to the terms and
conditions of the Escrow Agreement, and payment shall be
delivered to the Company by the Escrow Agent by one or more
certified or official bank checks in next-day funds. Such
payment shall be made upon delivery by the Company of the
certificates for the Units to the Agent, for the respective
accounts of the several purchasers of the Units against
receipt therefor signed by the Agent. The certificates for the
Units to be delivered at any Closing will be registered in
such name or names, and shall be in such denominations, as the
Agent may request; provided, however, that such request shall
be made no sooner than three (3) business days prior to the
Closing Date. The certificates representing the Units will be
made available to the Agent for inspection, checking and
packaging at the office of the Company's transfer agent and
registrar (the "Transfer Agent"), not less than one (1)
business day prior to the Closing Date.
2.9 Closings.
(a) As soon as practicable after the Agent has determined
that the Minimum Offering has been achieved, the
Agent shall notify the Company in writing thereof.
The Agent's notice to the Company hereunder shall set
forth the number of shares of common stock to be
delivered to the Agent by the Company against payment
therefor by the Escrow Agent. The initial Closing
hereunder (the "Initial Closing") shall take place at
10:00 a.m., Atlanta time on the fifth (5th) business
day after the date on which the Agent notifies the
Company as provided herein or on such other date and
time as agreed to in writing by the parties hereto;
provided, however, that the Initial Closing must
occur no later than the tenth (10th) business day
after such notice is given by the Agent.
(b) By notice given in writing at each Closing hereunder,
the Company may elect to continue this Agreement
until such time as the maximum number of Units as
provided herein has been sold, or until the offering
deadline as specified in the Private Placement
Memorandum, whichever is earlier; provided, however,
that such Units may be sold only in compliance with
the terms and conditions of this Agreement and the
Private Placement Memorandum.
(c) Closing with respect to Units sold pursuant to a
continuation of this Agreement pursuant to Section
2.9(b) hereof will occur on such date(s) and time(s)
as the parties may agree in writing from time to
time.
3. Representations, Warranties and Agreements of the Company. The Company
hereby represents and warrants to, and agrees with, the Agent that:
(a) The confidential private placement memorandum, including any
amendments or supplements thereto (the "Private Placement
Memorandum") when made available to prospective purchasers
throughout the Offering Period, will comply in all material
respects with federal statutes, regulations and policy
statements applicable thereto, including, without limitation,
the applicable rules, regulations and policy statements of the
SEC. At all times during the Offering Period, the Private
Placement Memorandum will contain all information including
financial statements that are required to be included therein
in accordance with applicable regulations (including
interpretations thereof), and policy statements of the SEC and
the Private Placement Memorandum will not include any untrue
statement of material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they are made, not misleading; provided, however, that no
representations or warranties are made to the Agent with
respect to statements or omissions made in reliance upon, or
in conformity with, written information furnished to the
Company with respect to the Agent, by the Agent, or on its
behalf expressly for use in the Private Placement Memorandum.
(b) The Company is, and at all times during the Offering Period
will be, a corporation duly incorporated and organized and is,
and will be, validly existing and in good standing under the
laws of the State of Georgia. The Company has, and at all
times during the Offering Period will
have, full power and authority to own or lease all of its
properties and conduct all of its business as described in the
Private Placement Memorandum.
(c) The Company is, and at all times during the Offering Period
will be, duly qualified to do business and in good standing as
a foreign corporation in each jurisdiction where the ownership
or leasing of its properties or the conduct of its business
required such qualification.
(d) The financial statements contained in the Private Placement
Memorandum present fairly and accurately the financial
position of the Company as the respective dates thereof and
the results of operations of the Company for the respective
periods covered thereby, all in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the entire periods involved.
(e) At all times during the Offering Period except as set forth in
or contemplated by the Private Placement Memorandum: (i) the
Company will not have incurred and will not incur any material
liabilities or obligations, direct or contingent, except for
liabilities or obligations entered into in the ordinary course
of business, and will not have entered into and will not enter
into any material transactions; and (ii) there will have been
no, and there will be no, material adverse change, or any
development relating to the Company which the Company has
cause to believe would involve a prospective material adverse
change in or affecting the business, business prospects,
general affairs, management, financial position, net worth,
results of operations, or properties of the Company, or the
value of the assets of the Company.
(f) Except as set forth in or contemplated by the Private
Placement Memorandum, to the best of its knowledge, the
Company does not have and will not have during the Offering
Period any material contingent liabilities or obligations.
(g) Except as set forth in the Private Placement Memorandum and
the Company's SEC filings, there are no actions, suits or
proceedings pending or, to the best of its knowledge,
threatened against or affecting the Company or its business,
business prospects, financial condition, results of operations
or properties, or against or affecting any of its principal
officers, before or by any federal or state court, commission,
regulatory body, administrative agency or other governmental
body, domestic or foreign, wherein an unfavorable ruling or
decision or finding would materially and adversely affect the
business, business prospects, financial condition, results of
operations, or properties of the Company.
(h) At all times during the Offering Period, the Company will have
title to all properties and assets described in the Private
Placement Memorandum as being owned by the Company, free and
clear of all liens, charges, encumbrances or restrictions,
except such as are described in the Private Placement
Memorandum or which are not material to the business of the
Company. At all times during the Offering Period, the Company
will have valid, existing and enforceable leases to the
properties and equipment described in the Private Placement
Memorandum as being leased by the Company, with such
exceptions as are not material and do not materially interfere
with the uses made, and proposed to be made, of such
properties by the Company.
(i) The Company has filed all federal and state income tax returns
which are required to be filed by it and has paid all taxes
shown on such returns and on all assessments received by it to
the extent such taxes have become due. To the best of its
knowledge, all taxes with respect to which the Company is
obligated have been paid or adequate accruals have been
established to cover any such unpaid taxes.
(j) The Company is not, and at all times during the Offering
Period will not be, in violation of its articles of
incorporation or bylaws or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any bond, debenture, note or other evidence of
indebtedness or in any contract, indenture, mortgage, loan
agreement or other agreement or instrument to which the
Company is a party or by which it or any of its properties is
bound, and the Company is not, and at all times during the
Offering Period will not be, in violation of any law, order,
rule, regulation, writ, injunction or decree of any
government, governmental instrumentality or court, domestic or
foreign, of which it has knowledge. Neither the Company, nor
any employee or agent thereof, has made any payment of funds
of the Company or received or retained any funds in violation
of any law, rule or regulation which payment, receipt or
retention of funds is not fully disclosed in the Private
Placement Memorandum.
(k) At all times during the Offering Period, there will be no
document or contract of the character required to be described
in the Private Placement Memorandum which is not described as
required, and the descriptions in the Private Placement
Memorandum are accurate and complete and fairly present the
information required to be shown.
(l) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or
document required by this Agreement to be delivered to the
Agent was or will be, when made, inaccurate, untrue or
incorrect in any material respect.
(m) The Company has full right, power and authority to enter into
this Agreement and this Agreement has been duly authorized,
executed and delivered by the Company and will be, upon
acceptance by the Agent, a valid and binding agreement of the
Company enforceable in accordance with its terms. The
performance of this Agreement and the consummation of the
transactions contemplated herein will not result in a breach
or violation of any of the terms or provision of, or
constitute a default under the articles of incorporation or
the bylaws of the Company, any obligation, agreement, covenant
or condition contained in any bond, debenture, note or other
evidence or indebtedness or in any contract, indenture,
mortgage, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any of their
respective properties is bound, or any law, order, rule,
regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign,
and will not result in the creation or imposition of any lien,
charge claim or encumbrance upon any property or asset of the
Company. No consent, approval, authorization or order of any
government, governmental instrumentality or court is required
in connection with the execution of this Agreement or the
consummation of the transactions contemplated by this
Agreement except such as may be required by the NASD or by
state regulatory authorities under state securities or blue
sky laws in connection with the distribution of the Units or
in connection with the Agent's services hereunder.
(n) Except with respect to the proposed public offering in 1999
and the proposed private offering in 2000 with Sutro & Co.
Incorporated, (i) the Company has not placed any securities
within the last eighteen months; (ii) there have been no
material dealings within the last twelve months between the
Company and any NASD member or any person related to or
associated with any such member; (iii) except as contemplated
by this Agreement, no financial or management consulting
contracts are outstanding with any other person; (iv) there
has been no intermediary between the Agent and the Company in
connection with the Offering and no person is being
compensated in any manner for providing such service.]
4. Representations, Warranties and Agreements of the Agent. The Agent
represents and warrants to, and agrees with the Company that:
(a) Any and all information furnished to the Company by the Agent
in writing expressly for use in the Private Placement
Memorandum will not contain any untrue statement of material
fact or omit to state any material fact necessary in order to
make the statements therein, in light of the circumstances
under which they were made, not misleading.
(b) The Agent is registered with the Securities and Exchange
Commission as a broker-dealer and is a member in good standing
with the National Association of Securities Dealers, Inc. (the
"NASD"), and the Agent and all its agents and representatives
have or will have required licenses and registrations to
perform its obligations under this Agreement; and such
registrations, membership
and licenses will remain in effect during the term of this
Agreement. The Agent agrees that, in performing its
obligations under this Agreement, the Agent will comply with
all applicable statutes and the rules and regulations of the
NASD and any other federal or state governmental agency which
are applicable to it. This Agreement has been duly and validly
authorized, executed and delivered by the agent and is its
valid and binding agreement and obligation.
(c) All checks and funds received by the Agent with respect to the
subscription price from prospective purchasers in the Offering
shall be made payable to the escrow agent and transmitted
directly to the escrow agent by noon of the next business day
after receipt by the Agent. If the Offering is terminated
prior to the end of the Offering Period by the Company, then
subscription funds received after any such termination shall
be promptly returned to the subscribers for the Units, without
interest.
(d) The Agent will deliver to the Company the original copies of
all subscription documents of prospective purchasers received
by the Agent in the Offering, and the Agent will promptly
inform the Company of any facts which come to the Agent's
attention which would cause a reasonable person to believe
that such subscription documents contain any material
misstatement or omission.
5. Covenants of the Company. The Company further agrees with and
covenants to the Agent as follows:
(a) To comply with the "Blue Sky" and other securities laws and
regulations of each state in which subscriptions are solicited
in the Offering pursuant to the mutual agreement of the Agent
and the Company and to assist the Agent in any necessary
registration or filings that may be required of the Agent with
respect to the Offering, in the states mutually agreed upon by
the Agent and the Company. The Company will advise the Agent
promptly of the issuance by any state regulatory authority of
any stop order or other order suspending the registrations or
exemptions therefrom of the Private Placement Memorandum or of
the institution of any proceedings for that purpose, will use
its best efforts to prevent the issuance of any stop order or
other such order, and should a stop order or other such order
be issued, to obtain as soon as possible the lifting thereof.
(b) To furnish the Agent with such numbers of printed copies of
the Private Placement Memorandum, with all amendments,
supplements and exhibits thereto, together with subscription
materials, as the Agent may reasonable request, and similarly,
to furnish the Agent and others designated by the Agent with
as many copies of additional sales literature or other
materials approved by the Company for use in connection with
the Offering as the Agent may reasonably request.
(c) Promptly to furnish such information and execute and file such
documents as may be necessary for the Company to offer and
sell the Units in full compliance with applicable state and
federal statutes, regulations and policy statements.
(d) To advise the Agent promptly if any event known to the Company
shall have occurred as a result of which the Private Placement
Memorandum in its then current form (including any amendments
or supplements thereto) would include an untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) To utilize or furnish no sales literature in connection with
the Offering, other than the Private Placement Memorandum,
unless such other sales literature has been approved by the
SEC and the NASD, if necessary, and furnished to the Agent at
least ten (10) days prior to its first use and the Agent has
failed to object to the contents of, or the proposed use of,
such other sales literature.
6. Conditions of the Agent's Obligations. The Agent's obligation to effect
the transactions contemplated by this Agreement shall be subject to the
continuing accuracy throughout the Offering Period of the
representations, warranties and agreements of the Company, the
performance by the Company of all of its obligations under this
Agreement, and the following further terms and conditions:
(a) The Agent shall have received on any Closing Date hereunder
the opinion of Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx LLP, counsel
for the Company, dated as of such Closing Date. Such opinion
may be given subject to the January 1, 1992 edition of the
Interpretive Standards applicable to Legal Opinions to Third
Parties in Corporate Transactions adopted by the Legal Opinion
Committee of the Corporate and Banking Law Section of the
State Bar of Georgia (the "Interpretive Standards"), and shall
be substantially to the effect that:
(i) the Company is a corporation duly organized, validly
existing and in good standing, under the laws of the
State of Georgia.
(ii) the Units to be sold by the Company have been duly
authorized and will be, upon issuance and delivery
against payment therefor in accordance with the terms
of this Agreement, validly issued, fully paid and
non-assessable and will not be subject to any
preemptive or other rights to subscribe for or
purchase Units pursuant to the organizational
documents of the Company or, to the best of such
counsel's knowledge, otherwise.
(iii) the Company's authorized shares consist of 10,000,000
shares of common stock, $.01 par value, of which
1,469,250 shares are outstanding and 10,000,000shares
of preferred stock, of which no shares are
outstanding. The outstanding shares of the Company's
stock have been duly authorized and validly issued,
were not issued in violation of any statutory
preemptive rights of shareholders, and are fully paid
and nonassessable. Except as described in the Private
Placement Memorandum, there are no options,
subscriptions, warrants, calls, rights or commitments
obligating the Company to issue equity securities or
acquire its equity securities.
(iv) the amounts, terms and designations of the capital
stock of the Company conform as to legal matters in
all material respects to the description thereof
contained in the Private Placement Memorandum under
the caption "Description of Capital Stock".
(v) this Agreement has been duly authorized, executed and
delivered by the Company and, when so executed and
delivered, constitutes the legal, valid and binding
obligation of the Company, enforceable against the
Company.
(vi) the execution and delivery by Company of this
Agreement do not, and if Company were now to perform
its obligation under this Agreement such performance
would not, result in any: (1) violation of Company's
articles or incorporation or bylaws; (2) violation of
any existing federal or state constitution, statute,
regulation, rule, order, or law to which Company or
its assets are subject; (3) breach of or default
under any Material Agreements; (4) creation or
imposition of a contractual lien or security interest
in, on or against its assets under any Material
Agreements; or (5) violation of any judicial or
administrative decree, writ, judgment or order to
which, to our knowledge, Company or its assets are
subject.
(vii) to the knowledge of such counsel, the Company has all
necessary consents, authorizations, approvals,
orders, certificates and permits of and from, and has
made all declarations and filings with, all federal,
state, local and other governmental authorities, all
self-regulatory organizations, all courts and other
tribunals, to own, lease, license and use its
properties and assets and to conduct its business in
the manner described in the Private Placement
Memorandum, except to the extent that the failure to
obtain or file would not have a material adverse
effect on the Company.
(viii) to the knowledge of such counsel, no authorization,
consent, approval of or qualification with any
federal or state governmental authority is required
for the execution, delivery or performance by the
Company of this Agreement, except such as have been
previously made or obtained, in connection with the
distribution of the Units by the Agent, and
except those which, if not made or obtained, will
not, individually or in the aggregate, have a
material adverse effect on the Company.
(ix) nothing has come to the attention of such counsel to
cause such counsel to believe that (except for
financial statements, projections, schedules and
other financial and statistical information included
or incorporated by reference in the Private Placement
Memorandum as to which such counsel need not express
any opinion) the Private Placement Memorandum
contained any untrue statement of a material fact or
omitted to state a material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances under which
they were made, not misleading, or that the Private
Placement Memorandum as of the Closing Date,
contained any untrue statement of a material fact or
omitted to state a material fact necessary in order
to make the statements therein, in light of the
circumstances under which they were made, not
misleading.
(x) to such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to
which the Company is a party or to which any of the
properties of the Company is subject that are not
fairly summarized in all material respects in the
Private Placement Memorandum or the Company's filings
with the SEC; and
(xi)
(xii) after due inquiry, such counsel does not know of any
pending or threatened proceeding relating to the
revocation or modification of any consent,
authorization, approval, order, certificate or permit
necessary to the conduct of the business of the
Company.
As to questions of fact material to such opinion, counsel may
rely on (without independent verification of the accuracy or
completeness thereof), the representations and warranties of
the Company contained in this Agreement as well as the
Material Agreements. The term "Material Agreement", for
purposes of such opinion, shall mean each of the agreements
which has been filed with the Securities and Exchange
Commission as an exhibit (including any document which in lieu
of being filed as an exhibit, is incorporate by reference or
which the Company agrees or has agreed to provide to the
Securities and Exchange Commission upon request) to the
Company's most recently-filed Annual Report on Form 10-KSB or
any subsequently filed report on Form 10-QSB or Form 8-K,
pursuant to the requirements of Item 601(b)(10) of SEC
Regulation X-X, 00 XXX 228.601(b)(10), as amended.
(b) On the Closing Date of any Closing hereunder, the Agent shall
have received from the Chief Financial Officer of the Company
a letter dated as of such Closing Date, in form and substance
satisfactory to the Agent in all respects, concerning the
accuracy, to his best knowledge and belief, of the financial
information included in the Private Placement Memorandum.
(c) At the Closing Date of any Closing hereunder, there shall be
furnished to the Agent a certificate, dated as of such Closing
Date, signed by the President and Secretary of the Company
(collectively the "Officers") in form and substance
satisfactory to the Agent (the "Certificate") to the effect
that, to their best knowledge and belief:
(i) The Officers of the Company have carefully examined
the Private Placement Memorandum, and as of the date
of such Certificate, the statements in the Private
Placement Memorandum are true and correct, and the
Private Placement Memorandum does not misstate or
omit to state a material fact required to be stated
therein or necessary to make the statements therein
not untrue or misleading.
(ii) The Company has complied with all conditions
precedent to the performance of the Agent's
obligations under this Agreement.
(iii) Each of the representations and warranties of the
Company contained in this Agreement was when
originally made and is as of the date of such
Certificate true and correct.
(iv) No order from any regulatory body has been issued and
no proceedings have been instituted, or to the
knowledge of such Officers contemplated, to prevent
the consummation of the Offering.
7. Indemnification.
(a) The Company will indemnify and hold harmless the Agent, its
officers, directors, counsel, representatives and persons who
control the Agent within the meaning of the Exchange Act, from
and against all losses, claims, damages and liabilities, joint
and several, to which any of the aforesaid parties, including
the Agent (collectively, the "Agent Parties"), may become
subject, under federal or state securities laws or otherwise,
insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a
material fact contained in the Private Placement Memorandum,
or in any Blue Sky application or other document executed by
the Company or on its behalf for the purpose of qualifying any
or all of the Stock for sale under the securities laws of any
jurisdiction, or based upon written information furnished by
the Company under the securities laws thereof (any such
application, document, or information being hereinafter
referred to as a "Blue Sky Application") or (ii) the omission
to state in the Private Placement Memorandum, or in any Blue
Sky Application, a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
Company will further reimburse the Agent Parties, and each and
every one of them, for any legal or other expenses reasonably
incurred by any one or more of the Agent Parties in connection
with investigating and defending such loss, claim, damage,
liability or action; provided, however, that the Company will
not be liable in any case to the extent that the subject loss,
claim, damage or liability arises out of, or is based upon, an
untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and unconformity with
written information furnished to the Company by the Agent
specifically for use in the preparation of the subject Private
Placement Memorandum, Blue Sky Application, or any amendment
or supplement thereto or the Agent's failure to deliver to the
investors any amendment or supplement to the Private Placement
Memorandum prepared by the Company and furnished to the Agent
The indemnity provided for in this Section 7(a) will be in
addition to any liability which the Company may otherwise
have.
(b) The Agent will indemnify and hold harmless the Company, its
officers, directors, counsel, representatives and persons who
control the Company which the meaning of the Securities
Exchange Act of 1934, from and against all losses, claims,
damages and liabilities, joint and several, to which any of
the aforesaid parties, including the Company (collectively,
the "Company Parties"), may become subject, under federal or
state securities laws or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon: (i) any untrue statement of
material fact contained in the Private Placement Memorandum,
any Blue Sky Application, or any amendment or supplement
thereto; (ii) the omission to state in the Private Placement
Memorandum, any Blue Sky Application, or any amendment or
supplement to any of the foregoing, a material fact required
to be stated therein or necessary to make the statements
therein not misleading; provided, in the case of Sections
(7)(b)(i) and (7)(b)(ii) to the extent, but only to the
extent, that such untrue statement or omission was made in
reliance upon or in conformity with written information
furnished to the Company by the Agent specifically for use
with reference to the Agent in preparation of the Private
Placement Memorandum, any Blue Sky Application, or any
supplement or amendment thereto; or (iii) arising out of any
misrepresentation by the Agent in this Agreement or any breach
of warranty by the Agent with respect to this Agreement. The
Agent will further reimburse the Company Parties for legal or
other expenses reasonably incurred by the Company Parties in
connection with investigating or defending any loss, claim,
damage, liability or action under this Section (7)(b). The
indemnification provided for in this Section 7(b) shall be in
addition to any liability which the Agent may otherwise have.
(c) Promptly after receipt by an indemnified party under Section
(7)(a) or (7)(b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under
such Section, notify the indemnifying party in writing of the
commencement of the action; but the omission so to notify the
indemnified part shall not relieve it from any liability which
it may have to an indemnified party otherwise and under such
Section. In any case any such action shall be brought against
any indemnified person, then it shall notify the indemnifying
party of the commencement thereof, the indemnifying party
shall be entitled to participate therein, and, to the extent
it shall wish, jointly with any other indemnifying party
similarly notified, the indemnifying party may assume the
defense thereof, with counsel satisfactory to such indemnified
party (who may also be counsel to the indemnifying party only
if the representation of both parties does not constitute a
conflict) and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such
indemnified party under such Section for any legal expenses of
other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation.
8. Survival Clause. The respective indemnities, agreements (including,
without limitation, the agreement set forth in Section 7 hereof),
representations, warranties and other statements of the Company and the
Agent as set forth in this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the
results thereof) made by or behalf of the Agent, any officer or
director of the Agent, or counsel therefor, or the Company or any
officer or director of the Company, or counsel therefor, and shall
survive any termination of this Agreement and the receipt of any
payment for the Units.
9. Notices. All notices under this Agreement shall be in writing and if
sent to the Agent shall be mailed, delivered or telecopied to the Agent
at the address first provided above, and if sent to the Company shall
be mailed or delivered to the Company at its present headquarters
address, 0000 Xxxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, Attention:
Xxxxx X. Box or to such other address as may be delivered to the Agent
from time to time. Any notice shall be deemed to have given when it is
received by the party to whom it is addressed.
10. Governing Law. Except to the extent governed by preemptive federal law,
this Agreement shall be governed by and construed in accordance with
the substantive laws of the State of Georgia.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.
xxxxx.xxx, Inc.
By: /s/ Xxxxx X. Box
------------------------------------
Xxxxx X. Box
Title: Chief Executive Officer
ACCEPTED AND AGREED TO this 11th day of September, 2000.
XXXXXXXXX XXXXXX & XXXXX
By: /s/
Title: Senior Vice President
Exhibit A
OFFERING STATES
