EXHIBIT 1
EUFAULA BANCCORP, INC.
___________ SHARES COMMON STOCK
UNDERWRITING AGREEMENT
________________, 1998
STERNE, AGEE & ▇▇▇▇▇, INC.
As Representative of the several Underwriters
named in Schedule I attached hereto
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Gentlemen:
The undersigned, Eufaula BancCorp, Inc., a Delaware corporation (the
"Company"), hereby confirms its agreement with Sterne, Agee & ▇▇▇▇▇, Inc.
(individually, "Sterne Agee"), as representative (the "Representative") of the
several underwriters named in Schedule I hereto (the "Underwriters"), as
follows:
1. INTRODUCTION.
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(a) The Company proposes to issue and sell to the Underwriters
________ shares of its common stock, par value $1.00 per share (the "Common
Stock"), as set forth in Schedule I hereto and pursuant to the Underwriters'
agreement to purchase the Common Stock in Section 3(a) hereof. The Common Stock
to be purchased pursuant to Section 3(a) of this Agreement may be hereinafter
referred to as the "Firm Shares".
(b) Solely for the purpose of covering over-allotments, if any, the
Company proposes to grant to the Underwriters a one-time option (the "Over-
allotment Option") to purchase from the Company in the aggregate, up to an
additional _________ shares of Common Stock (15% of the Firm Shares) pursuant to
the terms and conditions of Section 3(b) herein. Such shares of Common Stock
are hereinafter referred to as the "Option Shares."
2. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
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to, and agrees with, the several Underwriters that:
(a) A registration statement on Form SB-2 (File No. 333-_______) with
respect to the Common Stock, including a prospectus subject to completion, has
been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the applicable rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") under the Act and has been filed with the
Commission; such amendments to such registration statement, such amended
prospectuses subject to completion and such abbreviated registration statements
pursuant to Rule 462(b) of the Rules and Regulations as may have been required
prior to the date hereof have been similarly prepared and filed with the
Commission; and the Company will file such additional amendments to such
registration statement, such amended prospectuses subject to completion and such
abbreviated registration statements as may hereafter be required. Copies of
such registration statement and amendments, of each related prospectus subject
to completion (the "Preliminary Prospectuses") and of any
abbreviated registration statement pursuant to Rule 462(b) of the Rules and
Regulations have been delivered to Sterne Agee.
If the registration statement relating to the Common Stock has been
declared effective under the Act by the Commission, the Company will prepare and
promptly file with the Commission the information omitted from the registration
statement pursuant to Rule 430A(a) or, if Sterne Agee, on behalf of the
Underwriters, shall agree to the utilization of Rule 434 of the Rules and
Regulations, the information required to be included in any term sheet filed
pursuant to Rule 434(b) or (c), as applicable, of the Rules and Regulations
pursuant to subparagraph (1), (4) or (7) of Rule 424(b) of the Rules and
Regulations or as part of a post-effective amendment to the registration
statement (including a final from of prospectus). If the registration statement
relating to the Common Stock has not been declared effective under the Act by
the Commission, the Company will prepare and promptly file an amendment to the
registration statement, including a final form of prospectus, or, if Sterne Agee
on behalf of the Underwriters, shall agree to the utilization of Rule 434 of the
Rules and Regulations, the information required to be included in any term sheet
filed pursuant to Rule 434(b) or (c), as applicable, of the Rules and
Regulations. The term "Registration Statement" as used in this Agreement shall
mean such registration statement, including financial statements, schedules and
exhibits, in the form in which it became or becomes, as the case may be,
effective (including, if the Company omitted information from the registration
statement pursuant to Rule 430A(a) or files a term sheet pursuant to Rule 434 of
the Rules and Regulations, the information deemed to be a part of the
registration statement at the time it became effective pursuant to Rule 430A(b)
or Rule 434(d) of the Rules and Regulations) and, in the event of any amendment
thereto or the filing of any abbreviated registration statement pursuant to Rule
462(b) of the Rules and Regulations relating thereto after the effective date of
such registration statement, shall also mean (from and after the effectiveness
of such amendment or the filing of such abbreviated registration statement) such
registration statement as so amended, together with any such abbreviated
registration statement. The term "Prospectus" as used in this Agreement shall
mean the prospectus relating to the Common Stock as included in such
Registration Statement at the time it becomes effective (including, if the
Company omitted information from the Registration Statement pursuant to Rule
430A(a) of the Rules and Regulations, the information deemed to be a part of the
Registration Statement at the time it became effective pursuant to Rule 430A(b)
of the Rules and Regulations); provided, however, that if in reliance on Rule
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434 of the Rules and Regulations and with the consent of Sterne Agee, on behalf
of the several Underwriters, the Company shall have provided to the Underwriters
a term sheet pursuant to Rule 434(b) or (c), as applicable, prior to the time
that a confirmation is sent or given for purposes of Section 2(10)(a) of the
Act, the term "Prospectus" shall mean the "prospectus subject to completion" (as
defined in Rule 434(g) of the Rules and Regulations) last provided to the
Underwriters by the Company and circulated by the Underwriters to all
prospective purchasers of the Common Stock (including the information deemed to
be a part of the Registration Statement at the time it became effective pursuant
to Rule 434(d) of the Rules and Regulations). Notwithstanding the foregoing, if
any revised prospectus shall be provided to the Underwriters by the Company for
use in connection with the offering of the Common Stock that differs from the
prospectus referred to in the immediately preceding sentence (whether or not
such revised prospectus is required to be filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to the
Underwriters for such use. If in reliance on Rule 434 of the Rules and
Regulations and with the consent of Sterne Agee on behalf of the Underwriters,
the Company shall have provided to the Underwriters a term sheet pursuant to
Rule 434(b) or (c), as applicable, prior to the time that a confirmation is sent
or given for purposes of Section 2(10)(a) of the Act, the Prospectus and the
term sheet, together, will not be materially different from the prospectus in
the Registration Statement.
(b) The Commission has not issued an order (a "Stop Order") suspending
the effectiveness of, or preventing or suspending the use of, the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, refusing to permit the effectiveness of the Registration
Statement, or suspending the registration or qualification of the Common Stock
nor has any such authorities instituted or threatened to institute any
proceedings with respect to a Stop Order. In the event a Stop Order is issued
by any "blue sky" or securities authority of any jurisdiction, then either the
Company or the Representative may abandon the Registration Statement or void
this
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Agreement. The Registration Statement, Preliminary Prospectus and Prospectus
and any amendments and supplements thereto have conformed in all material
respects to the requirements of the Act and the Rules and Regulations and, as of
its date, has not included any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and at the time
the Registration Statement became or becomes, as the case may be, effective and
at all times subsequent thereto up to and on the Closing Date (hereinafter
defined) and on any later date on which Option Shares are to be purchased, (i)
the Registration Statement and the Prospectus, and any amendments or supplements
thereto, contained and will contain all material information required to be
included therein by the Act and the Rules and Regulations and will in all
material respects conform to the requirements of the Act and the Rules and
Regulations, (ii) the Registration Statement, and any amendments or supplements
thereto, did not and will not include any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and (iii) the Prospectus, and any
amendments or supplements thereto, did not and will not include any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that none of the representations and
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warranties contained in this subparagraph (b) shall apply to information
contained in or omitted from the Registration Statement or Prospectus, or any
amendment or supplement thereto, in reliance upon, and in conformity with,
written information relating to any Underwriter furnished to the Company by such
Underwriter specifically for use in the preparation thereof.
(c) The Company and each subsidiary of the Company (as used herein,
the terms "subsidiary" includes any corporation, national or state bank, federal
savings bank, joint venture or partnership in which the Company or any
subsidiary of the Company has an ownership interest) is duly organized and
validly existing and in good standing under the laws of the respective
jurisdictions of their organization or incorporation, as the case may be, with
full power and authority (corporate, partnership and other, as the case may be)
to own their properties and conduct their businesses as now conducted and are
duly qualified or authorized to do business and are in good standing in all
jurisdictions wherein the nature of their business or the character of property
owned or leased may require them to be qualified or authorized to do business,
except for jurisdictions in which the failure to so qualify would not have a
material adverse effect on the Company and its subsidiaries taken as a whole.
The Company has been legally constituted and is validly existing in good
standing as a registered bank holding company under the Bank Holding Company Act
of 1956, as amended (the "BHC Act"), and the rules and, to the extent
applicable, regulations thereunder. Each subsidiary bank of the Company has
been duly incorporated and is a validly existing banking corporation under the
laws of the jurisdiction of its incorporation. The Company and its subsidiaries
hold all licenses, consents and approvals, and have satisfied all eligibility
and other similar requirements imposed by federal and state regulatory bodies,
administrative agencies or other governmental bodies, agencies or officials, in
each case as material to the conduct of the respective businesses in which they
are engaged in the Prospectus. Each of the Company's subsidiaries is set forth
on Exhibit 22 of the Registration Statement.
(d) The outstanding stock of each of the Company's corporate
subsidiaries is duly authorized, validly issued, fully paid and nonassessable
(except, to the extent permitted by the National Bank Act, the stock of the
Company's national bank subsidiaries). All of the outstanding stock of each of
the Company's corporate subsidiaries owned beneficially and of record by the
Company is owned clear of any lien, encumbrance, pledge, equity or claim of any
kind. Neither the Company nor any of its subsidiaries is a partner or joint
venturer in any partnership or joint venture.
(e) The Company has all requisite legal right, power and authority to
execute, deliver, and perform this Agreement. All necessary corporate
proceedings of the Company have been duly taken to authorize the execution,
delivery, and performance by the Company of this Agreement. This Agreement has
been duly authorized, executed, and delivered by the Company, is the legal,
valid, and binding obligation of the Company, and is enforceable as to the
Company in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization,
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moratorium or other laws affecting the rights of creditors generally, and
subject, as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law). No consent,
authorization, approval, order, license, 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 the Company for the
execution, delivery, or performance by the Company of this Agreement, except as
required by the National Association of Securities Dealer, Inc. or under the Act
or state securities or Blue Sky laws which have been or will be made before the
Closing Date. No consent of any party to any contract, agreement, instrument,
lease, license, arrangement, or understanding to which the Company is a party,
or to which any of its properties or assets is subject, is required for the
execution, delivery, or performance of this Agreement, and the execution,
delivery, and performance of this Agreement will not violate, result in a breach
of, conflict with, result in the creation or imposition of any lien, charge, or
encumbrance upon any properties or assets of the Company pursuant to the terms
of, 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 contract,
agreement, instrument, lease, license, arrangement, or understanding, or
violate, result in a breach of, or conflict with any term of the certificate of
incorporation (or other charter document) or by-laws of the Company or any of
its subsidiaries, or violate, result in a breach of, or conflict with, any law,
rule, regulation, order, judgment, or decree binding on the Company or any of
its subsidiaries or to which any of their operations, businesses, properties, or
assets are subject.
(f) There is not any pending or, to the best of the Company's
knowledge, threatened any action, suit, claim or proceeding against the Company,
or any of its officers or any of its properties, assets or rights before any
court, government or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or over its officers or properties or otherwise
which (i) might result in any material adverse change in the condition
(financial or otherwise), earnings, operations, business or business prospects
of the Company or might materially and adversely affect its properties, assets
or rights, (ii) might prevent consummation of the transactions contemplated
hereby or (iii) is required to be disclosed in the Registration Statement or
Prospectus and is not so disclosed; and there are no agreements, contracts,
leases or documents of the Company of a character required to be described or
referred to in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement by the Act or the Rules and Regulations
which have not been accurately described in all material respects in the
Registration Statement or Prospectus or filed as exhibits to the Registration
Statement.
(g) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and the authorized and outstanding capital
stock of the Company as of March 31, 1998 is as set forth in the Prospectus
under the caption "Capitalization" and conforms in all material respects to the
statements relating thereto contained in the Registration Statement and the
Prospectus under the caption "Description of Capital Stock" (and such statements
correctly state the substance of the instruments defining the capitalization of
the Company); the Firm Shares and the Option Shares have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company against payment therefor in accordance with
the terms of this Agreement, will be duly and validly issued and fully paid and
nonassessable, and will be sold free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest; and no preemptive right, co-
sale right, registration right, right of first refusal or other similar right of
stockholders exists with respect to any of the Firm Shares or Option Shares or
the issuance and sale thereof other than those that have been expressly waived
prior to the date hereof and those that will automatically expire upon the
consummation of the transactions contemplated on the Closing Date. No further
approval or authorization of any stockholder, the Board of Directors of the
Company or others is required for the issuance and sale or transfer of the
Common Stock except as may be required under the Act or under state or other
securities or Blue Sky laws. Except as disclosed in or contemplated by the
Prospectus and the financial statements of the Company, and the related notes
thereto, included in the Prospectus, the Company does not have outstanding any
options to purchase, or any preemptive rights or other rights to subscribe for
or to purchase, any securities or obligations convertible into, or any contracts
or commitments to issue or sell, shares of its capital stock or any such
options, rights,
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convertible securities or obligations. The description of the Company's stock
option, stock bonus and other stock plans or arrangements, and the options or
other rights granted and exercised thereunder, set forth in the Prospectus
accurately and fairly presents the information required to be shown with respect
to such plans, arrangements, options and rights.
(h) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC, which has examined the financial
statements of the Company, together with the related schedules and notes filed
with the Commission as a part of the Registration Statement, which are included
in the Prospectus, are independent accountants within the meaning of the Act and
the Rules and Regulations; the audited financial statements of the Company,
together with the related schedules and notes, and the unaudited financial
information, forming part of the Registration Statement and Prospectus, fairly
present the financial position and the results of operations and changes in
financial position and cash flow of the Company and its subsidiaries at the
respective dates and for the respective periods to which they apply and have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved except as may be otherwise
stated therein. The other financial statements and schedules included in or as
schedules to the Registration Statement conform to the material requirements of
the Act and the Rules and Regulations and present fairly the information
presented therein for the periods shown. All of the financial and statistical
data set forth in the Prospectus under the captions "Prospectus Summary," "Use
of Proceeds," "Capitalization," "Selected Consolidated Financial Data,"
"Management's Discussions and Analysis of Financial Condition and Results of
Operations," "Business" and "Voting Securities and Principal Stockholders,"
fairly present the information set forth therein on the basis stated in the
Prospectus. No other financial statements or schedules are required to be
included in the Registration Statement or Prospectus.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, neither the Company nor any
subsidiary has sustained any material loss or interference with its business or
properties from fire, flood, hurricane, earthquake, accident or other calamity,
whether or not covered by insurance or for any labor dispute or court or
governmental action, order or decree, which is not disclosed in the Prospectus;
and subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) neither the Company nor any of
its subsidiaries has incurred any material liabilities or obligations, direct or
contingent, or entered into any material transaction not within the ordinary
course of business, and (ii) there has not been any change in the capital stock,
partnership interest, joint venture interest, long-term debt, obligations under
capital leases or short-term borrowings of the Company or its subsidiaries,
taken as a whole, or any issuance of options, warrants or rights to purchase the
capital stock of the Company, or any adverse change, or any development
involving a prospective material adverse change in the management, business,
prospects, financial position, net worth or results of operations of the Company
or its subsidiaries, taken as a whole, except in each case as described in or
contemplated by the Prospectus.
(j) Except as set forth in the Registration Statement and Prospectus,
(i) the Company and its subsidiaries has good and marketable title to all
properties and assets described in the Registration Statement and Prospectus as
owned by it, free and clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest, other than such as would not have a material
adverse effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries, (ii) the
agreements to which the Company and its subsidiaries are a party described in
the Registration Statement and Prospectus are valid agreements, enforceable by
the Company and its subsidiaries, except as the enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights, generally or by
general equitable principles and, to the best of the Company's knowledge, the
other contracting party or parties thereto are not in material breach or
material default under any of such agreements, and (iii) the Company and its
subsidiaries have valid and enforceable leases for all properties described in
the Registration Statement and Prospectus as leased by it, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general
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equitable principles. Except as set forth in the Registration Statement and
Prospectus, the Company and its subsidiaries own or lease all such properties as
are necessary to its operations as now conducted or as proposed to be conducted.
(k) The Company and its subsidiaries have timely filed all necessary
federal, state and foreign income and franchise tax returns and have paid all
taxes shown thereon as due, and there is no tax deficiency that has been or, to
the best of the Company's knowledge, might be asserted against the Company or
any of its subsidiaries that might have a material adverse effect on the
condition (financial or otherwise), earnings, operations, business or business
prospects of the Company or its subsidiaries; and all tax liabilities are
adequately provided for on the books of the Company.
(l) The Company and its subsidiaries maintain insurance with insurers
of recognized financial responsibility of the types and in the amounts generally
deemed adequate for their respective businesses and consistent with insurance
coverage maintained by similar companies in similar businesses, including, but
not limited to, insurance covering real and personal property owned or leased by
the Company and its subsidiaries against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect; the Company and its subsidiaries have not
been refused any insurance coverage sought or applied for; and the Company has
no reason to believe that it will not be able to renew its or its subsidiaries
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition
(financial or otherwise), earnings, operations, business or business prospects
of the Company.
(m) To the best of the Company's knowledge, no labor disturbance by
the employees of the Company or its subsidiaries exist or is imminent that might
be expected to result in a material adverse change in the condition (financial
or otherwise), earnings, operations, business or business prospects of the
Company. No collective bargaining agreement exists with any of the Company's or
its subsidiaries' employees and, to the best of the Company's knowledge, no such
agreement is imminent.
(n) The Company and its subsidiaries own or possess adequate rights to
use all patents, patent rights, inventions, trade secrets, know-how, trademarks,
service marks, trade names and copyrights which are necessary to conduct its
businesses as described in the Registration Statement and Prospectus; the
expiration of any patents, patent rights, trade secrets, trademarks, service
marks, trade names or copyrights would not have a material adverse effect on the
condition (financial or otherwise), earnings, operations, business or business
prospects of the Company and its subsidiaries; the Company and its subsidiaries
have not received any notice of, and has no knowledge of, any infringement of or
conflict with asserted rights of the Company and it subsidiaries by others with
respect to any patent, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names or copyrights; and neither the Company
nor its subsidiaries have received any notice of, and have any knowledge of, any
infringement of or conflict with asserted rights of others with respect to any
patent, patent rights, inventions, trade secrets, know-how, trademarks, service
marks, trade names or copyrights which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a material
adverse effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company.
(o) There are no contracts or other documents required by the Act or
by the Rules and Regulations to be described in the Registration Statement, the
Prospectus, or to be filed as exhibits to the Registration Statement which have
not been described or filed as required.
(p) The Company has been advised concerning the Investment Company Act
of 1940, as amended (the "1940 Act"), and the rules and regulations thereunder,
and has in the past conducted, and intends in the future to conduct, its affairs
in such a manner as to ensure that it will not become an "investment company" or
a company "controlled" by an "investment company" within the meaning of the 1940
Act and such rules and regulations.
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(q) The Company has not distributed and will not distribute prior to
the later of (i) the Closing Date or the Option Closing Date, as the case may
be, and (ii) completion of the distribution of the Firm Shares, any offering
material in connection with the offering and sale of the Firm Shares or the
Option Shares, as the case may be, other than any Preliminary Prospectuses, the
Prospectus, the Registration Statement and other materials, if any, permitted by
the Act.
(r) The Company has not at any time since its inception (i) made any
unlawful contribution to any candidate for foreign office or failed to disclose
fully any contribution in violation of law, or (ii) made any payment to any
federal or state governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or permitted
by the laws of the United States or any jurisdiction thereof.
(s) Neither the Company nor any of its subsidiaries, nor any of the
directors, officers, employees or agents of the Company and its subsidiaries
have taken and will not take, directly or indirectly, any action designed to
cause or result in, or that might reasonably be expected to cause or result in,
stabilization or manipulation of the price of the Common Stock.
(t) Each officer and director of the Company has agreed in writing
pursuant to a lock-up agreement in the form attached hereto as Exhibit A that
such person will not, from the date of the lock-up agreement through a period of
one hundred twenty (120) days after the effective date of the Registration
Statement (the "Lock-up Period"), offer to sell, contract to sell, or otherwise
sell (including without limitation in a short sale), dispose of, loan, pledge or
grant any rights with respect to any shares of Common Stock, or any securities
convertible into or exchangeable for Common Stock, any options or warrants to
purchase any shares of Common Stock, or any securities convertible into or
exchangeable for shares of Common Stock (collectively, "Securities") now owned
or hereafter acquired directly by such person or with respect to which such
person has or hereafter acquires the power of disposition (collectively, a
"Disposition"), otherwise than (i) as a bona fide gift or gifts, provided the
donee or donees thereof agree in writing to be bound by this restriction or (ii)
with the prior written consent of Sterne Agee, provided that the foregoing shall
not apply to any shares sold to the Underwriters pursuant to the Underwriting
Agreement. Following the expiration of the one hundred twenty (120) day period,
the undersigned may dispose of such Common Stock free of any contractual
obligation hereunder. Furthermore, such person will also agree and consent to
the entry of stop transfer instructions with the Company's transfer agent
against the transfer of the securities held by such person, except in compliance
with this Agreement. The Company has provided to counsel for the Underwriters a
complete and accurate list of all security-holders of the Company and the number
and type of securities held by each security-holder. The Company has provided
to counsel for the Underwriters true, accurate and complete copies of all of the
agreements pursuant to which its officers, directors and security-holders have
agreed to such or similar restrictions (the "Lock-up Agreements") presently in
effect or effected hereby. The Company hereby represents and warrants that it
will not release any of its officers, directors or security-holders from any
Lock-up Agreements currently existing or hereafter effected without the prior
written consent of Sterne Agee.
(u) Except as set forth in the Registration Statement and Prospectus,
(i) the Company is in compliance with all rules, laws and regulations relating
to the use, treatment, storage and disposal of toxic substances and protection
of health or the environment ("Environmental Laws") which are applicable to its
business, (ii) the Company has received no notice from any governmental
authority or third party of an asserted claim under Environmental Laws, which
claim is required to be disclosed in the Registration Statement and the
Prospectus, (iii) to the best of the Company's knowledge, the Company will not
be required to make future material capital expenditures to comply with
Environmental Laws and (iv) no property which is owned, leased or occupied by
the Company has been designated as a Superfund site pursuant to the
Comprehensive Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. (S) 9601, et seq.), or otherwise designated as a contaminated site under
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applicable state or local law.
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(v) The Company's system of internal accounting controls taken as a
whole is sufficient to meet the broad objectives of internal accounting control
insofar as those objectives pertain to the prevention or detection of errors or
irregularities in amounts that would be material in relation to the Company's
financial statements; and, except as disclosed in the Prospectus, neither the
Company nor any of its subsidiaries nor any employee or agent of the Company or
any subsidiary has made any payment of funds of the Company or any subsidiary or
received or attained any funds in violation of any law, rule or regulation, the
receipt or payment of which could have a material effect (financial or
otherwise), on the Company.
(w) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company or its subsidiaries to or for the benefit of any of
the officers or directors of the Company or its subsidiaries or any of the
members of the families of any of them, except as disclosed in the Registration
Statement and the Prospectus.
(x) The Company has taken such action as necessary to have the Firm
Shares and Option Shares authorized for trading on The Nasdaq National Market,
or, if the Company is unable to obtain approval of listing on The Nasdaq
National market, then The Nasdaq SmallCap Market, upon the Closing Date and
Option Closing Date, as applicable.
(y) The Company's Common Stock is registered with the Commission
pursuant to Section 12 of the Securities Exchange Act of 1934 ("Exchange Act")
and has complied with and will continue to comply with all registration, filing,
and reporting requirements of the Exchange Act, which have been and will be
applicable to the Company.
3. PURCHASE, SALE, AND DELIVERY OF THE FIRM SHARES AND OPTION SHARES.
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(a) On the basis of the representations, warranties, covenants, and
agreements of the Company herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to the several
Underwriters, and, each of the Underwriters, severally and not jointly, agree to
purchase from the Company at a purchase price of $_____ per share, the number of
Firm Shares as set forth opposite the respective names of the Underwriters in
Schedule I hereto.
(b) The Company hereby grants to the Underwriters the Over-allotment
Option to purchase up to __________ shares of Common Stock, as may be necessary
to cover over-allotments, at the same purchase price per share, to be paid by
the several Underwriters to the Company for the Firm Shares as provided for in
this Section 3. The Over-allotment Option may be exercised only to cover over-
allotments in Common Stock by the Underwriters. The Over-allotment Option may
be exercised as to all or any part of the _______ shares of Common Stock
included therein at any time (but only once) within thirty (30) days after the
date the Registration Statement becomes effective. The Underwriters shall not
be under any obligation to purchase any Option Shares prior to the exercise of
such option. The Over-allotment Option may be exercised by the Representative
of the several Underwriters, by giving written notice to the Company setting
forth the number of Option Shares to be purchased from the Company and the date
and time for delivery of and payment for such Option Shares and stating that the
Option Shares therein are to be used for the purpose of covering over-allotments
in connection with the distribution and sale of the Firm Shares. If such
notice is given prior to the Closing Date, the date set forth therein for such
delivery and payment shall not be earlier than two (2) full business days
thereafter or the Closing Date, whichever occurs later. If such notice is given
on or after the Closing Date, the date set forth therein for such delivery and
payment shall not be earlier than three (3) full business days thereafter. In
either event, the date so set forth shall not be more than fifteen (15) full
business days after the date of such notice. The date and time set forth in
such notice, or such other time not later than the seventh full business day
thereafter as the Representative and the Company may determine, is herein called
the "Option Closing Date". Upon exercise of the option, the Company shall
become obligated to sell to the Representative for the account of the several
8
Underwriters, and, subject to the terms and conditions herein set forth, the
Representative shall become obligated to purchase, for the account of each
Underwriter, from the Company, the number of Option Shares specified in such
notice. The number of Option Shares to be purchased for the account of each
Underwriter shall bear the same ratio to the total number of Option Shares to be
purchased for the account of all Underwriters as the total number of Firm Shares
to be purchased from the Company set forth opposite the name of such Underwriter
on Schedule 1 hereto bears to the total number of Firm Shares to be purchased by
all the Underwriters from the Company, subject in each case to such adjustments
as the Representative in its discretion may make so that allocations may be made
to each Underwriter in round lot amounts to the extent practicable.
(c) Delivery of the definitive certificates for the Firm Shares to be
purchased by the Underwriters pursuant to this Section 3 shall be made against
payment of the purchase price therefor by the several Underwriters in same-day
federal funds by wire transfer to the Company at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (or at such other place as may be agreed
upon between the Representative and the Company), at 10:00 A.M. Atlanta time
either (a) on the third (3rd) full business day after this Agreement becomes
effective or (b) if this Agreement is executed and delivered after 3:30 P.M.,
Atlanta time, the fourth (4th) full business day following the day that this
Agreement becomes effective (or at such time and date to which payment and
delivery shall have been postponed pursuant to Section 9 hereof), such time and
date of payment and delivery being herein called the "Closing Date;" provided,
--------
however, that if the Company has not made available to the Representative copies
-------
of the Prospectus within the time provided in Section 5(d) hereof, the
Representative may, in its sole discretion, postpone the Closing Date until no
later than two (2) full business days following delivery of copies of the
Prospectus to the Representative. Certificates in definitive form for the Option
Shares which each Underwriter shall have agreed to purchase hereunder shall be
similarly delivered on the Option Closing Date. The certificates in definitive
form for the Firm Shares and the Option Shares to be so delivered will be made
available to Sterne Agee for checking and packaging at such office or such other
location including, without limitation, in New York, New York, as Sterne Agee
may reasonably designate at least one (1) full business day prior to the Closing
Date or the Option Closing Date, as the case may be, and will be in good
delivery form and will be in such names and denominations as Sterne Agee may
request, such request to be made at least two (2) full business days prior to
the Closing Date or the Option Closing Date, as the case may be. If the
Representative so elects, delivery of the Firm Shares and Option Shares may be
made by credit through full fast transfer to the accounts at The Depository
Trust Company designated by the Representative.
(d) It is understood that the Representative may (but shall not be
obligated to) make any and all payments required pursuant to this Section 3 on
behalf of any Underwriters whose check or checks shall not have been received by
the Representative at the time of delivery of the Firm Shares or any Option
Shares to be purchased by such Underwriter or Underwriters. Any such payment by
the Representative shall relieve any such Underwriter or Underwriters of any of
its or their obligations hereunder.
4. OFFERING BY UNDERWRITER AND UNDERWRITER DISCLOSURE.
--------------------------------------------------
(a) After the Registration Statement becomes effective, the several
Underwriters propose to offer for sale to the public the Firm Shares and any
Option Shares which may be sold at the price and upon the terms set forth in the
Prospectus.
(b) The information set forth in (i) the last paragraph on the front
cover page and (ii) the second paragraph under the caption "Underwriting" in
any Preliminary Prospectus and in the final form of Prospectus filed pursuant to
Rule 424(b) constitutes the only information furnished by the Underwriters to
the Company for inclusion in any Preliminary Prospectus, the Prospectus or the
Registration Statement, and Sterne Agee, on behalf of the respective
Underwriters, represents and warrants to the Company that the statements made
therein do not include any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
9
5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the
---------------------------------
several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and date that
this Agreement is executed and delivered by the parties hereto, to become
effective as promptly as possible; the Company will use its best efforts to
cause any abbreviated registration statement pursuant to Rule 462(b) of the
Rules and Regulations as may be required subsequent to the date the Registration
Statement is declared effective to become effective as promptly as possible; the
Company will notify Sterne Agee, promptly after it shall receive notice thereof,
of the time when the Registration Statement, any subsequent amendment to the
Registration Statement or any abbreviated registration statement has become
effective or any supplement to the Prospectus has been filed; if the Company
omitted information from the Registration Statement at the time it was
originally declared effective in reliance upon Rule 430A(a) of the Rules and
Regulations, the Company will provide evidence satisfactory to Sterne Agee that
the Prospectus contains such information and has been filed, within the time
period prescribed, with the Commission pursuant to subparagraph (1) or (4) of
Rule 424(b) of the Rules and Regulations or as part of a post-effective
amendment to such Registration Statement as originally declared effective which
is declared effective by the Commission; if the Company files a term sheet
pursuant to Rule 434 of the Rules and Regulations, the Company will provide
evidence satisfactory to Sterne Agee that the Prospectus and term sheet meeting
the requirements of Rule 434(b) or (c), as applicable, of the Rules and
Regulations, have been filed, within the time period prescribed, with the
Commission pursuant to subparagraph (7) of Rule 424(b) of the Rules and
Regulations; if for any reason the filing of the final form of Prospectus is
required under Rule 424(b)(3) of the Rules and Regulations, it will provide
evidence satisfactory to Sterne Agee that the Prospectus contains such
information and has been filed with the Commission within the time period
prescribed; it will notify Sterne Agee promptly of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; promptly upon Sterne ▇▇▇▇'▇ request,
it will prepare and file with the Commission any amendments or supplements to
the Registration Statement or Prospectus which, in the opinion of counsel for
the several Underwriters ("Underwriters' Counsel"), may be necessary or
advisable in connection with the distribution of the Firm Shares and any Option
Shares by the Underwriters; it will promptly prepare and file with the
Commission, and promptly notify Sterne Agee of the filing of, any amendments or
supplements to the Registration Statement or Prospectus which may be necessary
to correct any statements or omissions, if, at any time when a prospectus
relating to the Common Stock is required to be delivered under the Act, any
event shall have occurred as a result of which the Prospectus or any other
prospectus relating to the Common Stock as then in effect would include any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; in case any Underwriter is required to deliver a
prospectus nine (9) months or more after the effective date of the Registration
Statement in connection with the sale of the Common Stock, it will prepare
promptly upon request, but at the expense of such Underwriter, such amendment or
amendments to the Registration Statement and such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section 10(a)(3)
of the Act; and it will file no amendment or supplement to the Registration
Statement or Prospectus which shall not previously have been submitted to Sterne
Agee a reasonable time prior to the proposed filing thereof or to which Sterne
Agee shall reasonably object in writing, subject, however, to compliance with
the Act and the Rules and Regulations and the provisions of this Agreement.
(b) The Company will advise Sterne Agee, promptly after it shall
receive notice or obtain knowledge, of the issuance of any stop order by the
Commission suspending the effectiveness of the Registration Statement or of the
initiation or threat of any proceeding for that purpose; and it will promptly
use its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop order should be issued.
(c) The Company will use its best efforts to qualify the Common Stock
for offering and sale under the securities laws of such jurisdictions as Sterne
Agee may designate and to continue such qualifications in effect for so long as
may be required for purposes of the distribution of the Common Stock, except
that the Company shall
10
not be required in connection therewith or as a condition thereof to qualify as
a foreign corporation or to execute a general consent to service of process in
any jurisdiction in which it is not otherwise required to be so qualified or to
so execute a general consent to service of process. In each jurisdiction in
which the Common Stock shall have been qualified as above provided, the Company
will make and file such statements and reports in each year as are or may be
reasonably required by the laws of such jurisdiction.
(d) The Company will deliver without charge to each of the several
Underwriters such number of copies of each Preliminary Prospectus as may
reasonably be requested by the Underwriters and, as soon as the Registration
Statement, or any amendment thereto, becomes effective under the Act or a
supplement is filed with the Commission, deliver without charge to the
Representative who signed copies of the Registration Statement, including
exhibits, or such amendment thereto, as the case may be, and two copies of any
supplement thereto, and delivery without charge to each of the several
Underwriters such number of copies of the Prospectus, the Registration
Statement, and amendments and supplements thereto, if any, without exhibits, as
the Representative may reasonably request for the purposes contemplated by the
Act.
(e) The Company will make generally available to its security-holders
as soon as practicable, but in any event not later than the forty-fifth (45th)
day following the end of the fiscal quarter first occurring after the first
anniversary of the effective date of the Registration Statement, an earnings
statements (which will be in reasonable detail but need not be audited)
complying with the provisions of Section 11(a) of the Act and covering a twelve
(12) month period beginning after the effective date of the Registration
Statement.
(f) During a period of three (3) years after the date hereof, the
Company will furnish to its stockholders as soon as practicable after the end of
each respective period, annual reports (including financial statements audited
by independent certified public accountants), and will furnish to Sterne, Agee
and the other several Underwriters hereunder, (i) concurrently with furnishing
to its stockholders, a balance sheet of the Company as of the end of such fiscal
year, together with statements of operations, of stockholders' equity, and of
cash flows of the Company or such fiscal year, accompanied by a copy of the
certificate or report thereon of independent certified public accountants, (ii)
as soon as they are available, copies of all reports (financial or other) mailed
to stockholders, (iii) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, any securities
exchange or the National Association of Securities Dealers, Inc. (the "NASD"),
(iv) every material press release and every material news item or article in
respect of the Company or its affairs which was generally released to
stockholders or prepared by the Company or any of its subsidiaries, and (v) any
additional information of a public nature concerning the Company or its
subsidiaries, or its business which Sterne Agee may reasonably request. During
such three (3) year period, if the Company shall have active subsidiaries, the
foregoing financial statements shall be on a consolidated basis to the extent
that the accounts of the Company and any subsidiaries are consolidated, and
shall be accompanied by similar financial statements for any significant
subsidiary which is not so consolidated.
(g) The Company will apply the net proceeds from the sale of the Firm
Shares and any Option Shares being sold by it in the manner set forth under the
caption "Use of Proceeds" in the Prospectus.
(h) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, a registrar (which may be the
same entity as the transfer agent) for the Common Stock.
(i) The Company will comply with all registration, filing, and
reporting requirements of the Exchange Act, which may from time to time be
applicable to the Company.
(j) The Company will comply with all provisions of all undertakings
contained in the Registration Statement.
11
(k) Prior to the Closing Date or the Option Closing Date, as the case
may be, the Company will issue no press release or other communication, directly
or indirectly, and hold no press conference with respect to the Company, the
financial condition, results of operations, business, properties, assets,
liabilities of the Company, or this offering, without the prior consent of the
Representative, which consent shall not be unreasonably withheld.
(l) Use its best efforts to list itself in ▇▇▇▇▇'▇ OTC Industrial
Manual within ten (10) days of the date hereof, and maintain such listing for a
period of at least five years from the date hereof.
(m) If the transactions contemplated hereby are not consummated by
reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed hereunder or to fulfill any
condition of the Underwriters' obligations hereunder, or if the Underwriters
shall terminate this Agreement pursuant to Section 11(b)), the Company will
reimburse the several Underwriters for all out-of-pocket expenses (including
fees and disbursement of Underwriters' Counsel) incurred by the Underwriters in
investigating or preparing to market or marketing any Common Stock.
(n) If at any time during the twenty-five (25) day period after the
Registration Statement becomes effective, any rumor, publication or event
relating to or affecting the Company shall occur as a result of which, in the
opinion of Sterne Agee, 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 a supplement to or amendment of the Prospectus), the
Company will, after written notice from Sterne Agee advising the Company to the
effect set forth above, forthwith prepare, consult with Sterne Agee concerning
the substance of and disseminate a press release or other public statement,
reasonably satisfactory to Sterne Agee responding to or commenting on such
rumor, publication or event.
(o) During the ninety (90) day period following the effective date of
the Registration Statement, the Company will not file a registration statement
registering shares under the Company's 1994 Stock Option Plan, the Company's
Director Stock Purchase Plan, the Company's Employee Stock Purchase Plan or any
other employee benefit plans.
(p) The Company will not take, directly or indirectly, any action
designed to cause or result in, or which might constitute or might be expected
to constitute, stabilization or manipulation of the price of the Common Stock.
5. PAYMENT OF EXPENSES. The Company hereby agrees to pay all expenses
-------------------
(other than fees of counsel of the Underwriters, except as provided in Section
6(c), below), in connection with (a) the preparation , printing, filing,
distribution, and mailing of the Registration Statement and the Prospectus and
the printing, filing, distribution, and mailing of this Agreement and the Master
Agreement Among Underwriters, any Master Selected Dealer Agreement, and related
documents, including the cost of all copies thereof and of the Preliminary
Prospectuses and of the Prospectus and any amendments or supplements thereto
supplied to the Underwriters in quantities as hereinabove stated, (b) the
issuance, offer, sale, transfer, and delivery (as applicable) of the Common
Stock, including any transfer or other taxes payable thereon, (c) the
qualification of the Common Stock under state or foreign "blue sky" or
securities laws, including the costs of printing and mailing the preliminary and
final "Blue Sky Survey" and the fees of counsel for the Underwriters, and the
disbursements in connection therewith, (d) the filing fees payable to the
Commission, the NASD, and the jurisdictions in which such qualification is
sought, (e) any fees relating to the listing of the Common Stock on either The
Nasdaq National Market, The Nasdaq SmallCap Market or any other market upon
which the Company lists the Common Stock, (f) the cost of printing certificates
representing the Common Stock, (g) the fees of the transfer agent for the Common
Stock, and (h) the cost of a Company "roadshow" including, without limitation,
Sterne ▇▇▇▇'▇ out-of-pocket expenses, expenses associated with presentations of
the Company and the preparation of visual materials associated therewith.
12
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
---------------------------------------
several Underwriters to purchase and pay for the Firm Shares and the Option
Shares, as provided herein, shall be subject, in the discretion of the
Representative, to the continuing accuracy in all material respects, of the
representations and warranties of the Company contained herein and in each
certificate and document contemplated under this Agreement to be delivered to
the Underwriters, as of the date hereof and as of the Closing Date (or the
Option Closing Date, as the case may be), to the performance by the Company of
its obligations hereunder, and to the following conditions:
(a) The Registration Statement shall have become effective under the
Act not later than 6:00 P.M., Atlanta local time, on the date of this Agreement
or such later date and time as shall be consented to in writing by the
Representative; on or prior to the Closing Date, or the Option Closing Date, as
the case may be, no Stop Order shall have been issued and no proceeding shall
have been initiated or threatened with respect to a Stop Order; and any request
by the Commission for additional information shall have been complied with by
the Company to the reasonable satisfaction of the Representative. If required,
the Prospectus shall have been filed with the Commission in the manner and
within the time period required by Rule 424(b) under the Act.
(b) All corporate proceedings and other legal matters in connection
with this Agreement, the form of Registration Statement and the Prospectus, and
the registration, authorization, issue, sale and delivery of the Common Stock,
shall have been reasonably satisfactory to Underwriters' Counsel, and such
counsel shall have been furnished with such papers and information as they may
reasonably have requested to enable them to pass upon the matters referred to in
this Section.
(c) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have been any change in the condition
(financial or otherwise), earnings, operations, business, or business prospects
of the Company from that set forth in the Registration Statement or Prospectus,
which, in Sterne ▇▇▇▇'▇ sole judgment, is material and adverse and that makes
it, in Sterne ▇▇▇▇'▇ sole judgment, impracticable or inadvisable to proceed with
the public offering of the Common Stock as contemplated by the Prospectus.
(d) At the Closing Date and the Option Closing Date, as the case may
be, Sterne Agee shall have received the Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel
for the Company, dated the date of delivery, addressed to the Underwriters, and
in form and scope satisfactory to the Representative, with reproduced copies or
signed counterparts thereof for each of the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing in good standing as a corporation under the laws of the State of
Delaware, with corporate power and authority to own its properties and conduct
its business as now conducted, and is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions where the failure to so
qualify would have a material adverse effect upon the Company and its
subsidiaries taken as a whole. The Company holds all licenses, certificates,
permits, franchises and authorizations from governmental authorities which are
material to the conduct of its business in all locations in which such business
is currently being conducted.
(ii) Each of the Company's subsidiaries is validly existing and
in good standing under the laws of the state of its incorporation or
organization, as the case may be, with power and authority to own its properties
and conduct its business as now conducted, and is duly qualified or authorized
to do business and is in good standing in all other jurisdictions where the
failure to so qualify would have a material adverse effect upon the business of
the Company and its subsidiaries taken as a whole. The outstanding stock of
each of the Company's subsidiaries is duly authorized, validly issued and fully
paid. The outstanding stock of each of the Company's subsidiaries is
nonassessable (except, to the extent permitted by the National Bank Act, the
stock of the Company's national bank subsidiaries.) All of the outstanding
stock of each of the corporate subsidiaries owned beneficially and of record by
the Company is owned free and clear of all liens, encumbrances, equities and
claims. No options or warrants or other rights
13
to purchase, agreements or other obligations to issue or other rights to convert
any obligations into any shares of capital stock or of ownership interests in
any of the Company's subsidiaries are outstanding. Each of the Company's
subsidiaries holds all licenses, certificates, permits, franchises and
authorizations from governmental authorities which are material to the conduct
of its business in all locations in which such business is currently being
conducted.
(iii) As of the dates specified therein, the Company had
authorized and issued capital stock as set forth under the caption
"Capitalization" in the Prospectus. All of the outstanding shares of the capital
stock of the Company have been duly authorized and are validly issued, fully
paid and nonassessable, and the Firm Shares and Option Shares have been duly
authorized, and upon issuance thereof and payment therefor as provided herein,
will be validly issued, fully paid and nonassessable; none of the issued shares
have been issued in violation of or subject to any preemptive rights provided
for by law or by the Company's Certificate of Incorporation. There are no
preemptive rights or, to the knowledge of such counsel, other rights to
subscribe for or to purchase, or any restriction upon the transfer of, the Firm
Shares or Option Shares pursuant to the Company's Certificate of Incorporation,
bylaws or other governing documents or, to the knowledge of such counsel, any
agreement or other instrument to which the Company is a party or by which it may
be bound except as described in the Prospectus and except for restrictions on
transfer imposed under applicable securities laws. Neither the filing of the
Registration Statement nor the offer or sale of the Firm Shares or Option Shares
as contemplated by this Agreement gives rise to any rights, other than those
which have been waived or satisfied, for or relating to the registration of any
shares of Common Stock or any other securities of the Company. The Underwriters
will receive good and marketable title to the Firm Shares and Option Shares to
be issued and delivered pursuant to this Agreement, free and clear of all liens,
encumbrances, claims, security interests, restrictions, shareholder agreements
and voting trusts whatsoever. The capital stock of the Company and the Firm
Shares and Option Shares conform to the description thereof set forth under the
caption "Description of Capital Stock" in the Prospectus. All offers and sales
of the Company's securities prior to the date hereof were at all relevant times
duly registered or exempt from the registration requirements of the Act and were
duly registered or the subject of an exemption from the registration
requirements of applicable state securities or Blue Sky laws, or if not
registered in compliance with the applicable federal and state securities laws,
any actions arising from such failure to register any such securities are barred
by applicable statute of limitations; provided, however, the foregoing does not
include and no opinion shall be given regarding the issuance of securities
pursuant to the Company's Employee Stock Purchase Plan.
(iv) The Company has full legal right, power and authority to
enter into this Agreement and to issue, sell and deliver the Firm Shares and
Option Shares to be sold by it to the Underwriters as provided herein, and this
Agreement has been duly authorized, executed and delivered by the Company and
constitutes the valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms, except as enforceability may
be limited by general equitable principles, bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer, fraudulent conveyance or other
laws affecting creditors' rights generally, including, without limitation, the
United States Bankruptcy Code and applicable state laws.
(v) No consent, approval, authorization or order of any court or
governmental agency or body or third party is required for the performance of
this Agreement by the Company or the consummation by the Company of the
transactions contemplated hereby, except such as have been obtained under the
Act and such as may be required by the NASD and under state securities or Blue
Sky laws in connection with the purchase and distribution of the Firm Shares and
any Option Shares by the several Underwriters. The performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby will not conflict with or result in a material breach or
violation by the Company of any of the terms or provisions of, or constitute a
material default by the Company under, any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument known to such counsel to
which the Company is a party or to which the Company or its properties is
subject, or a violation or breach of the Certificate of Incorporation or bylaws
of the Company, any material breach or violation of any statute, or any
judgment, decree, order, rule or regulation known to such counsel of any court
or governmental agency or body applicable to the Company or any of its
subsidiaries or their properties.
14
(vi) Except as described in the Prospectus, there is not pending,
or to the best knowledge of such counsel threatened, any action, suit,
proceeding, inquiry or investigation, to which the Company or any of its
subsidiaries is a party, or to which the property of the Company or any of its
subsidiaries is subject, before or brought by any court or governmental agency
or body, which, if determined adversely to the Company or any of its
subsidiaries, could result in any material adverse change in the business,
financial position, net worth or results of operations, or could materially
adversely affect the properties or assets, of the Company or any of its
subsidiaries.
(vii) To the knowledge of such counsel, no material default
exists, and no event has occurred which with notice or after the lapse of time
to cure or both, would constitute a material default, in the due performance and
observance of any term, covenant or condition of any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or to which they or their
properties are subject, or of the Certificate of Incorporation or bylaws of the
Company or any of its subsidiaries.
(viii) To the knowledge of such counsel after reasonable inquiry,
neither the Company nor any of its subsidiaries is in material violation of any
law, ordinance, administrative or governmental rule or regulation applicable to
the Company and its subsidiaries and material to the Company and its
subsidiaries taken as a whole or any decree of any court or governmental agency
or body having jurisdiction over the Company or any of its subsidiaries.
(ix) The Registration Statement and all post effective amendments
thereto have become effective under the Act, and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are threatened, pending or contemplated by the Commission. All
filings required by Rule 424 and Rule 430A of the Rules and Regulations have
been made; the Registration Statement, the Prospectus and any amendments or
supplements thereto (except for the financial statements and schedules included
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; the
descriptions in the Registration Statement and the Prospectus of statutes,
regulations, legal and governmental proceedings, and contracts and other
documents are accurate in all material respects and present fairly the
information required to be stated; and such counsel does not know of any pending
or threatened legal or governmental proceedings, statutes or regulations
required to be described in the Prospectus which are not described as required
nor of any contracts or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as required.
(x) On the basis of the participation of such counsel in
conferences at which the contents of the Registration Statement and the
Prospectus and related matters were discussed, but without independent
verification by such counsel of the accuracy, completeness, or fairness of
statements contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, such counsel has no knowledge that (other than
financial statements and other financial schedules which are or should be
contained therein, as to which such counsel need express no opinion): (A) the
Registration Statement, any Rule 430A prospectus, and the Prospectus, and any
amendment or supplement thereto, does not appear on its face to comply as to
form in any material respects with the requirements of the Act and the Rules and
Regulations; (B) the Registration Statement, any Rule 430A prospectus, and the
Prospectus, or any amendment or supplement thereto, contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; or (C) since
the date of effectiveness under the Act of the Registration Statement, any event
has occurred which should have been set forth in an amendment or supplement to
the Registration Statement or the Prospectus which has not been set forth in
such an amendment or supplement.
15
Counsel rendering the foregoing opinion may rely as to questions of law not
involving the laws of the United States, the laws of the State of Alabama or the
corporate laws of the State of Delaware upon opinions of local counsel, and as
to questions of fact upon representations or certificates of the Company and its
officers or other representatives and of governmental officials, in which case
their opinion is to state that they are so relying and that they have no
knowledge of any material misstatement or inaccuracy in any such opinion,
representation or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to Sterne Agee, as representative
of the Underwriter, and to Underwriters' counsel.
(e) On or prior to the Closing Date and the Option Closing Date, as
the case may be, the Underwriters shall have been furnished such information,
documents, certificates, and opinions as they may reasonably require for the
purpose of enabling them to review the matters referred to in Section 7(d), and
in order to evidence the accuracy, completeness, or satisfaction of any of the
representations, warranties, covenants, agreements, or conditions herein
contained, or as the Representative may reasonably request.
(f) At the Closing Date or the Option Closing Date, as the case may
be, (i) the Registration Statement and the Prospectus and any amendments or
supplements thereto shall contain all statements which are required to be stated
therein in accordance with the Act and the Rules and Regulations, and in all
material respects conform to the requirements thereof, and neither the
Registration Statement nor the Prospectus nor any amendment or supplement
thereto shall contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein no misleading, (ii) there shall have been, since the
respective dates as of which information is given in the Registration Statement
and the Prospectus, no material adverse change, or any development involving a
prospective material adverse change, in the business, properties, or condition
(financial or otherwise), results of operations, capital stock, long-term or
short-term debt, or general affairs of the Company from that set forth in the
Registration Statement and the Prospectus, except changes which the Registration
Statement and Prospectus indicate might occur after the date on which the
Registration Statement becomes effective under the Act, and the Company shall
not have incurred any material liabilities or entered into any agreements not in
the ordinary course of business other than as referred to in the Registration
Statement and Prospectus, and (iii) except as set forth in the Prospectus, no
litigation, arbitration, claim, governmental, or other proceeding (formal or
informal) or investigation shall be pending, or, to our knowledge threatened or
in prospect (or any basis therefor), with respect to the Company or any of its
operations, businesses, properties, or assets which would be required to be set
forth in the Registration Statement, wherein an unfavorable decision, ruling, or
finding would materially adversely affect the business, property, condition
(financial or otherwise), results of operations, or general affairs of the
Company.
(g) At the Closing Date and the Option Closing Date, as the case may
be, Sterne Agee shall have received a certificate of the chief executive officer
and the chief financial officer of the Company, dated the Closing Date or the
Option Closing Date, as the case may be, to the effect, among other things, that
(i) the conditions set forth in Section 7(a) and 7(f) have been satisfied, (ii)
as of the date of this Agreement and as of the Closing Date or the Option
Closing Date, as the case may be, the representations and warranties of the
Company contained herein were and are accurate and correct in all material
respects, and (iii) as of the Closing Date or the Option Closing Date, as the
case may be, the obligations to be performed by the Company hereunder on or
prior to such time have been fully performed in all material respects.
(h) At the time this Agreement is executed and at the Closing Date and
the Option Closing Date, as the case may be, Representative shall have received
a letter, addressed to the Underwriters, and in form and substance reasonably
satisfactory to the Representative, from ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC, independent
public accountants for the Company, dated the date of delivery:
(i) confirming that they are, and during the period covered by
their report(s) included in the Registration Statement and the Prospectus were,
independent certified public accountants with respect to the
16
Company within the meaning of the Act and the published Rules and Regulations
and stating that the disclosure under the heading entitled "Experts" in the
Registration Statement is correct insofar as it relates to them;
(ii) stating that, in their opinion, the financial statements and
the footnotes thereto of the Company included in the Registration Statement
examined by them comply in form and in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iii) stating that, on the basis of procedures (but not an
examination made in accordance with generally accepted auditing standards)
consisting of a reading of the latest available unaudited interim consolidated
financial statements of the Company (with an indication of the date of the
latest available unaudited interim financial statements), a reading of the
latest available minutes of the shareholders and Boards of Directors of the
Company and committees of such Board of Directors, inquiries to certain officers
and other employees of the Company responsible for financial and accounting
matters, and other specified procedures and inquiries, nothing has come to their
attention that caused them to believe that: (A) any unaudited financial
statements and schedules of the Company included in the Registration Statement
and Prospectus do not comply in form and in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related published rules and regulations under the Act or the Exchange Act or are
not fairly presented in conformity with generally accepted accounting principles
(except to the extent that certain footnote disclosures regarding any stub
period may have been omitted in accordance with the applicable rules and
regulations of the Commission under the Exchange Act) applied on a basis
consistent with that of the audited financial statements appearing therein, (B)
there was any change in the capital stock or long-term debt of the Company or
any decrease in the net current assets or shareholders' equity of the Company as
of the date of the latest available monthly financial statements of the Company
as of a specified date not more than five business days prior to the date of
such letter, each as compared with the amounts shown in the December 31, 1997
balance sheet included in the Registration Statement and Prospectus, other than
as properly described in the Registration Statement and Prospectus or any change
or decrease (which shall be set forth therein) which, in the sole discretion of
the Representative, the Representative shall accept, or (C) there was a net
decrease in net sales or an increase in total or per share losses of the Company
during the period from December 31, 1997 to the date of the latest available
monthly financial statements of the Company or to a specified date nor more than
five business days prior to the date of such letter, each as compared to the
corresponding period from January 1, 1997 to December 31, 1997, other than as
properly described in the Registration Statement and Prospectus or any decrease
(which shall be set forth therein) which, at the sole discretion of the
Representative, the Representative shall accept; and
(iv) stating that they have compared specific numerical data and
financial information pertaining to the Company set forth in the Registration
Statement (including, but not limited to, the number of shareholders of the
Company and the number of issued and outstanding shares of the Common Stock of
the Company as of December 31, 1997), which have been specified by the
Representative prior to the date of this Agreement, to the extent that such data
and information may be derived from the general accounting records of the
Company, and excluding any questions requiring any interpretation by legal
counsel, with the results obtained from the application of specified readings,
inquiries, and other appropriate procedures (which procedures do not constitute
an examination in accordance with generally accepted auditing standards) set
forth in the letter, and found them to be in agreement.
(i) All proceedings taken in connection with the issuance, sale,
transfer, and delivery of the securities offered by the Registration Statement
and Prospectus shall be reasonably satisfactory in form and substance to the
Representative and to counsel for the Underwriters, and the Underwriters shall
have received from such counsel for the Underwriters the opinion, dated as of
the Closing Date and the Option Closing Date, as the case may be, with respect
to the sufficiency of all such corporate proceedings and other legal matters
relating to this Agreement and the transactions contemplated hereby as the
representative may reasonably require, and the Company shall have furnished to
such counsel such documents as they may have requested for the purpose of
enabling them to pass upon such matters.
17
(j) The NASD Regulation, Inc., upon review of the terms of the
public offering of the Stock, shall not have objected to the Underwriters'
participation in such offering.
(k) Prior to or on the Closing Date, The Nasdaq Stock Market, Inc.
shall have approved the Firm Shares and Option Shares for listing on The Nasdaq
National Market or, if the Company is unable to obtain approval for listing on
The Nasdaq National Market, then The Nasdaq Stock Market, Inc. shall have
approved the Firm Shares and Option Shares for listing on The Nasdaq SmallCap
Market.
(l) Prior to or on the Closing Date, the Company shall have provided
to the Representative, or its counsel, copies of the Lock-up Agreements referred
to in Section 2(t).
Any certificate or other document signed by any officer of the Company and
delivered to the Representative or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company hereunder to the
Underwriters as to the statements made therein. If any condition to the
Underwriters' obligations hereunder to be fulfilled prior to or at the Closing
Date or the Option Closing Date, as the case may be, is not so fulfilled, the
Representative may, on behalf of the several Underwriters, terminate this
Agreement or, if the Representative so elects, in writing waive any such
conditions which have not been fulfilled or extend the time for their
fulfillment.
7. 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 (including, without limitation, in its
capacity as an Underwriter or as a "qualified independent underwriter" within
the meaning of SCHEDULE E OF THE BYLAWS OF THE NASD), under the Act, the
Exchange Act or otherwise, specifically including, but not limited to, losses,
claims, damages or liabilities, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any breach of representation, warranty, agreement or covenant of the Company
herein contained, (ii) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement 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 not misleading, or (iii) any untrue statement or alleged untrue
statement of any material fact contained in any Preliminary Prospectus or 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, and agrees to reimburse each Underwriter
for any legal or other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case to the
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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, such Preliminary Prospectus
or the Prospectus, or any such amendment or supplement thereto, in reliance
upon, and in conformity with, written information relating to any Underwriter
furnished to the Company by such Underwriter, directly or through Sterne Agee,
specifically for use in the preparation thereof and, provided further, that the
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indemnity agreement provided in this Section 8(a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any losses, claims, damages, liabilities or actions
based upon any untrue statement or alleged untrue statement of material fact or
omission or alleged omission to state therein a material fact purchased Common
Stock, if a copy of the Prospectus in which such untrue statement or alleged
untrue statement or omission or alleged omission was corrected had not been sent
or given to such person within the time required by the Act and the Rules and
Regulations, unless such failure is the result of noncompliance by the Company
with Section 5(d) hereof.
18
The indemnity agreement in this Section 8(a) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each person, if any,
who controls any Underwriter within the meaning of the Act or the Exchange Act.
This indemnity agreement shall be in addition to any liabilities which the
Company may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company against any losses, claims, damages or
liabilities, joint or several, to which the Company may become subject under the
Act or otherwise, specifically including, but not limited to, losses, claims,
damages or liabilities, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) any breach of
any representation, warranty, agreement or covenant of such Underwriter herein
contained, (ii) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement 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 not
misleading, or (ii) any untrue statement or alleged untrue statement of any
material fact contained in any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or the omission or alleged omission to state
therein a material fact necessary to make the statements therein not misleading,
or (iii) any untrue statement or alleged untrue statement of any material fact
contained in any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in the case of
subparagraphs (ii) and (iii) of this Section 8(c) to the extent, but only to the
extent, that such untrue statements 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, directly or through
Sterne Agee, specifically for use in the preparation thereof (it being
understood that the only information so provided is the information set forth in
Section 4(b) of this Agreement), and agrees to reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action.
The indemnity agreement in this Section 8(c) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each officer of the
Company who signed the Registration Statement and each director of the Company,
and each person, if any, who controls the Company within the meaning of the Act
or the Exchange Act. This indemnity agreement shall be in addition to any
liabilities which each Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party shall, if
a claim in respect thereof is to be made against any indemnifying party under
this Section 8, notify the indemnifying party in writing of the commencement
thereof but the omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party otherwise than
under this Section 8. In case any such action is brought against any
indemnified party, and it notified the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it shall elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
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include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses 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 the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with appropriate
19
local counsel) approved by the indemnifying party representing all the
indemnified parties under Section 8(a) or 8(b) hereof who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time (no more than fifteen (15) days) after notice of commencement
of the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party. In
no event shall any indemnifying party be liable in respect of any amounts paid
in settlement of any action unless the indemnifying party shall have approved
the terms of such settlement; provided that such consent shall not be
--------
unreasonably withheld. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party or indemnification could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) In order to provide for just and equitable contribution in any
action in which a claim for indemnification is made pursuant to this Section 8
but it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 8 provided for
indemnification in such case, all the parties hereto shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that, except as set forth
in Section 8(f) hereof, the Underwriters severally and not jointly are
responsible pro rata for the portion represented by the percentage that the
underwriting discount bears to the initial public offering price, and the
Company are responsible for the remaining portion, provided, however, that (i)
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no Underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to the Common Stock purchased by such
Underwriter in excess of the amount of damages which such Underwriter has
otherwise required to pay and (ii) no person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. The contribution agreement in this Section 8(e) shall extend
upon the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls the Underwriters or the Company within the meaning
of the Act or the Exchange Act and each officer of the Company who signed the
Registration Statement and each director of the Company.
(e) The parties of this Agreement hereby acknowledge that they are
sophisticated business persons who are represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 8, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 8 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act and the Exchange
Act.
8. SUBSTITUTION OF UNDERWRITERS.
----------------------------
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Option Shares hereunder, and if the number
of Firm Shares or Option Shares to which the defaults of all Underwriters in the
aggregate relate does not exceed 10% of the aggregate number of Firm Shares or
Option Shares, as the case may be, which all Underwriters have agreed to
purchase hereunder, then such Firm Shares or Option Shares to which such
defaults relate shall be purchased by the non-defaulting Underwriters in
proportion to their respective commitments hereunder.
(b) If such defaults exceed in the aggregate 10% of the number of
shares of Firm Shares or Option Shares, as the case may be, which all
Underwriters have agreed to purchase hereunder, the Representative may, in its
discretion, arrange to purchase itself or for another party or parties to
purchase such shares of Firm Shares or Option Shares, as the case may be, to
which such default relates on the terms contained herein. If the Representative
20
does not arrange for the purchase of such Firm Shares or Option Shares, as the
case may be, within one business day after the occurrence of defaults relating
to in excess of 10% of the Firm Shares and Option Shares, as the case may be,
then the Company shall be entitled to a further period of three business days
within which to procure another party or parties reasonably satisfactory to the
Representative to purchase Firm Shares or the Option Shares, as the case may be,
on such terms. If the Representative or the Company does not arrange for the
purchase of Firm Shares or the Option Shares, as the case may be, to which such
defaults relate as provided in this Section 9(b), this Agreement may be
terminated by the Representative or by the Company without liability on the part
of the Company (except that the provisions of Sections 5(a), 6, 8, 10 and 13
shall survive such termination) or the several Underwriters, but nothing in this
Agreement shall relieve a default Underwriter of its liability, if any, to the
other several Underwriters and to the Company for any damages occasioned by its
default hereunder.
(c) If the Firm Shares or Option Shares to which such defaults relate
are to be purchased by the non-defaulting Underwriters, or are to be purchased
by another party or parties as aforesaid, the Representative or the Company
shall have the right to postpone the Closing Date or the Option Closing Date, as
the case may be, for a reasonable period but in any event not more than seven
business days in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents and
arrangements with respect to the Firm Shares or the Option Shares, and the
Company agrees to prepare and file promptly any amendment or supplement to the
Registration Statement or the Prospectus which in the opinion of counsel for the
Underwriters may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any party substituted under this Section 9 as if
such party had originally been a party to this Agreement and had been allocated
the number of shares of Firm Shares and Option Shares actually purchased by it
as a result this Section 9.
9. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
--------------------------------------------------
representations, warranties, covenants, and agreements contained in this
Agreement shall be deemed to be representations, warranties, covenants, and
agreements at the Closing Date and the Option Closing Date, and such
representations, warranties, covenants, and agreements of the Underwriters and
the Company, including the indemnity and contribution agreements contained in
Section 8, shall remain operative and in full force and effect regardless of any
investigation made by, or on behalf of, any Underwriter or any indemnified
person, or by, or on behalf of, the Company, or any person or entity which is
entitled to be indemnified under Section 8(b), and shall survive termination of
this Agreement or the delivery of the Firm Shares and the Option Shares, if any,
to the several Underwriters. In addition, the provisions of Sections 5(a), 6,
8, 10, 11 and 13 shall survive termination of this Agreement, whether such
termination occurs before or after the Closing Date or the Option Closing Date.
Notwithstanding anything in the second sentence of Section 6 hereof to the
contrary, and in addition to the obligations assumed by the Company pursuant to
the first sentence of Section 6 hereof, if the offering should be terminated,
the Company shall be liable to the Underwriters only for out-of-pocket expenses
incurred by the Underwriters in connection with this Agreement or the proposed
offer, sale, and delivery of the Firm Shares and Option Shares.
10. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION THEREOF.
--------------------------------------------------------
(a) This Agreement shall become effective at the later to occur of
either (i) the execution of this Agreement or (ii) the earlier of (a) 9:30 A.M.,
Atlanta local time, on the first full business day following the day on which
the Registration Statement becomes effective under the Act or (b) the time of
the initial public offering of any of the Common Stock by the Underwriters after
the Registration Statement becomes effective provided, however, that the
provisions of Sections 6, 8, 10 and 11 hereof shall at all times be effective.
The time of the initial public offering shall mean the time of the release by
Sterne Agee, for publication, of the first newspaper advertisement relating to
the Common Stock, or the time at which the Common Stock are first generally
offered by the Underwriters to the public by letter, telephone, telegram or
telecopy, whichever shall first occur. The Representative or the Company may
prevent this Agreement from becoming effective without liability of any party to
any other party, except as provided in Section
21
5(n), Section 6 and Section 8, by giving the notice indicated in Section 11(c)
before the time this Agreement becomes effective under this Section 11(a).
(b) In addition to the right to terminate this Agreement pursuant to
Sections 7 and 9 hereof, the Representative shall have the right to terminate
this Agreement at any time prior to the Closing Date or the Option Closing Date,
as the case may be, by giving notice to the Company, and, if exercised, the
Over-allotment Option, at any time prior to the Option Closing Date, by giving
notice to the Company in the event of the following: (i) if any domestic or
international event, act, or occurrence has materially and adversely disrupted,
or, in the reasonable opinion of the Representative, will in the immediate
future materially and adversely disrupt, the securities markets; or (ii) if
there shall have been a general suspension of, or a general limitation on prices
for, trading in securities on the New York Stock Exchange or the American Stock
Exchange or in the over-the-counter market; or (iii) if there shall have been an
outbreak or increase in the level of major hostilities or other national or
international calamity; or (iv) if a banking moratorium has been declared by a
state or federal authority; or (v) if a moratorium in foreign exchange trading
by major international banks or persons has been declared; or (vi) if there
shall have been a material interruption in the mail service or other means of
communication within the United States; or (vii) if the Company shall have
sustained a material or substantial loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage, or other calamity or malicious act, whether or not
such loss shall have been insured, or from any labor dispute or court or
government action, order, or decree, which will, in the reasonable opinion of
the Representative, make it inadvisable to proceed with the offering, sale, or
delivery of the Firm Shares or the Option Shares, as the case may be; or (viii)
if any material governmental restrictions shall have been imposed on trading in
securities in general, which restrictions are not in effect on the date hereof,
or (ix) if there shall be passed by the Congress of the United States or by any
state legislature any act or measure, or adopted by any governmental body or
authoritative accounting institute or board, or any governmental executive, any
orders, rules, or regulations, which the Representative believes likely to have
a material adverse effect on the business, financial condition, or financial
statements of the Company or the market for the Common Stock; or (x) if there
shall have been such material and adverse change in the market for the Company's
securities or securities in general or in political, financial, or economic
conditions as in the judgment of the Representative makes it inadvisable to
proceed with the offering, sale, and delivery of the Firm Shares or the Option
Shares, as the case may be, on the terms contemplated by the Prospectus.
(c) If the Representative elects to prevent this Agreement from
becoming effective, as provided in this Section 11, or to terminate this
Agreement pursuant to Section 7 of this Agreement or this Section 11, the
Representative shall notify the Company promptly by telephone, telex, or
telegram, confirmed by letter. If, as so provided, the Company elects to
prevent this Agreement from becoming effective or to terminate this Agreement,
the Company shall notify the Representative promptly by telephone, telex, or
telegram, confirmed by letter.
(d) Notwithstanding anything herein to the contrary, if this
Agreement shall not become effective by reason of the election of the Company
pursuant to Section 11(a) or if this Agreement shall terminate or shall
otherwise not be carried out by July 1, 1998 by reason of any failure on the
part of the Company to perform any covenant or agreement of this Agreement or
satisfy any condition of this Agreement by it to be performed or satisfied, the
sole liability of the Company to the several Underwriters, in addition to the
obligations the Company assumed pursuant to Section 6, will be to reimburse the
several Underwriters for such out-of-pocket expenses (including the fees and
disbursements of their counsel) as shall have been incurred by them in
connection with this Agreement or the proposed offer, sale, and delivery of the
Firm Shares and Option Shares, and, upon demand, the Company agrees to pay
promptly the full amount thereof to the Representative for the respective
accounts of the Underwriters up to a maximum reimbursement of $60,000 (of which
no more than $40,000 may be attributable to fees of their counsel). Anything in
this Agreement to the contrary notwithstanding other than Section 11(e), if this
Agreement shall not be carried out within the time specified herein for any
reason other than the failure on the part of the Company to perform any covenant
or agreement or satisfy any condition of this Agreement by it to be performed or
satisfied, the Company shall
22
have no liability to the several Underwriters other than for obligations assumed
by the Company pursuant to Section 6.
(e) Notwithstanding any election hereunder or any termination of this
Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Sections 5(a), 6, 8, 10 and 13 shall not be in any way affected by
such election or termination or failure to carry out the terms of this Agreement
or any part hereof.
11. NOTICES. All communications hereunder, except as may be otherwise
--------
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and confirmed
by letter, to such Underwriter, c/o Sterne, Agee & ▇▇▇▇▇, Inc., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇., with a copy to ▇▇▇▇ & ▇▇▇▇▇▇ LLP, 3100 SouthTrust Tower, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esq., or if sent to the Company, shall be mailed, delivered, or
telexed or telegraphed and confirmed by letter, to the Company, Eufaula
BancCorp, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇▇, President, with a copy to ▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. All notices hereunder shall
be effective upon receipt by the party to which it is addressed.
12. PARTIES. Sterne Agee represents that it is authorized to act as
--------
Representative on behalf of the several Underwriters named in Schedule I hereto,
and the Company shall be entitled to act and rely on any request, notice,
consent, waiver, or agreement purportedly given on behalf of the Underwriters
when the same shall have been given by Sterne Agee on such behalf. This
Agreement shall inure solely to the benefit of, and shall be binding upon, the
several Underwriters and the Company and the persons and entities referred to in
Section 8 who are entitled to indemnification or contribution, and their
respective successors, legal representatives, and assigns (which shall not
include any buyer, as such, of the Firm Shares or the Option Shares), and no
other person shall have, or be construed to have, any legal or equitable right,
remedy, or claim under, in respect of, or by virtue of this Agreement or any
provision herein contained. Notwithstanding anything contained in this
Agreement to the contrary, all of the obligations of the Underwriters hereunder
are several and not joint.
13. CONSTRUCTION. This Agreement shall be governed by, and construed in
------------
accordance with, the laws of the State of Alabama, without giving effect to
conflict of laws. TIME IS OF THE ESSENCE IN THIS AGREEMENT.
14. SERVICE OF PROCESS. In any such action or proceeding with respect to
------------------
this Agreement, the Company waives personal service of any summons, complaint,
or other process and agrees that service thereof may be made in accordance with
Section 12.
15. COUNTERPARTS. This Agreement may be signed in several counterparts,
------------
each of which will constitute an original.
23
If the foregoing correctly sets forth the understandings between the
Representative and the Company, please so indicate in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between us.
Very truly yours,
EUFAULA BANCCORP, INC.
By:______________________
▇▇▇▇ ▇▇▇▇▇▇, President
ACCEPTED as of the date first above
written in Birmingham, Alabama
STERNE, AGEE & ▇▇▇▇▇, INC.*
By:_________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., President
*On behalf of itself and the other several
Underwriters named in Schedule I hereto
24
SCHEDULE I
----------
--------------------------------------------------------------------------------
TOTAL
NUMBER
OF COMMON STOCK
TO BE
Underwriter PURCHASED
----------- ---------------
--------------------------------------------------------------------------------
Sterne, Agee & ▇▇▇▇▇, Inc. .............................
--------------------------------------------------------------------------------
Total..............................................
--------------------------------------------------------------------------------
25
EXHIBIT A
---------
LOCK-UP AGREEMENT
March __, 1998
Sterne, Agee & ▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
In order to induce you and Eufaula BancCorp, Inc., a Delaware corporation
(the "Company"), to enter into an underwriting agreement with respect to the
public offering (the "Offering") of up to ________________________ shares of
Common Stock, par value $1.00 per share ("Common Stock") (including _______
shares of Common Stock issuable solely to cover over-allotments, if any) of the
Company, I hereby agree that for the period of time ("Period") commencing on the
date hereof and ending on the date 120 days following the date on which the
Company's registration statement, filed with respect to the Offering, under the
Securities Act of 1933, as amended (the "Act"), becomes effective under the Act,
I will not, without your prior written consent, publicly offer, sell, contract
to sell, grant any option for the sale of, or otherwise dispose of, directly or
indirectly, any shares of Common Stock or any security or other instrument which
by its terms is convertible into, or exercisable or exchangeable for, shares of
Common Stock or other securities of the Company, including, without limitation,
any shares of Common Stock issuable pursuant to the terms of any employee stock
options. In order to enable you to enforce the aforesaid restrictions on
transfer, I hereby agree that the Company may impose stop-transfer instructions
with respect to the securities of the Company owned beneficially or of record by
me, and affix to the certificates evidencing such securities a restrictive
legend to such effect, in each case until the end of the Period.
This letter agreement shall be governed by, and construed in accordance
with, the laws of the State of Alabama, without giving effect to conflict of law
principals.
________________________________________
Signature
________________________________________
Name (please print or type)
________________________________________
Address (please print or type)
________________________________________
Print Social Security Number or Taxpayer
Identification Number
26
