<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 29, 1997
FILE NO. 333-21647
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- -------------------------------------------------------------------------------
U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
---------------
AMENDMENT NO. 3
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------------
INTERNATIONAL COMPUTEX, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
GEORGIA 7372 58-1938206
(STATE OR (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
---------------
5500 INTERSTATE NORTH PARKWAY, SUITE 507
ATLANTA, GEORGIA 30328
(770) 953-1464
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES
AND PRINCIPAL PLACE OF BUSINESS)
---------------
HENRY B. LEVI, ESQ.
GAMBRELL & STOLZ, L.L.P.
SUITE 4300, ONE PEACHTREE CENTER
303 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30308
(404) 577-6000
FACSIMILE: (404) 221-6501
(NAME, ADDRESS, AND TELEPHONE AND FACSIMILE NUMBERS OF AGENT FOR SERVICE)
---------------
COPY TO:
JAMES M. JENKINS, ESQ.
HARTER, SECREST & EMERY
700 MIDTOWN TOWER
ROCHESTER, NEW YORK 14604-2070
FACSIMILE: (716) 232-2152
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APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE OFFERING PRICE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT (1) (1) FEE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1,293,750
Common Stock, par value $.001 per share... shares(2) $9.00 $11,643,750 $3,528.41
Warrant to Purchase Common Stock, par
value $.001 per share (3)................ One Warrant $5.00 $5.00 --
Common Stock, par value $.001 per
share (4)................................ 112,500 shares $10.80 $1,215,000 $368.18
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee under
Rule 457(a).
(2) Includes 168,750 shares which the Underwriters have the option to purchase
solely to cover over-allotments, if any.
(3) To be issued to H. J. Meyers & Co., Inc., as Representative of the
Underwriters.
(4) Issuable upon exercise of Warrant.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Articles of Incorporation and By-Laws of the Registrant provide
that the Registrant shall indemnify any person to the full extent permitted by
the Georgia Business Corporation Code (the "GBCC"). Sections 14-2-850-859 of
the GBCC, relating to indemnification, are hereby incorporated herein by
reference.
In accordance with Sections 14-2-830-832 of the GBCC, the Articles of
Incorporation of the Registrant eliminate the personal liability of directors
to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director with certain limited exceptions.
The Registrant also has entered into indemnification agreements with each of
its officers and directors, the form of which is filed as Exhibit 10.4, and
reference is hereby made to such form of agreement.
Reference is made to Section 10 of the Underwriting Agreement (Exhibit 1.1),
which provides for indemnification by the Underwriters of the Registrant, its
officers and directors.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered (other than
underwriting discounts and commissions) are as follows:
<TABLE>
<CAPTION>
AMOUNT
-----------
<S> <C>
SEC Registration Fee............................................... $ 4,099.32
NASD Filing Fees................................................... 1,786.00
NASDAQ Filing Fees................................................. 21,250.00
Printing and Engraving Expenses.................................... 55,000.00
Accounting Fees and Expenses....................................... 45,000.00
Legal Fees and Expenses............................................ 70,000.00
Blue Sky Fees and Expenses......................................... 10,000.00
Transfer Agent's Fees and Expenses................................. 3,500.00
Underwriters' Non-Accountable Expense Allowance.................... 202,500.00
Miscellaneous Expenses............................................. 20,000.00
-----------
Total.............................................................. $433,135.32
===========
</TABLE>
- --------
*To be completed by amendment.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
The following discussion gives retroactive effect to the stock splits
effected in March 1996 and December 1996. Commencing January 1, 1994, the
Registrant has sold and issued the following unregistered securities:
In January 1997, the Registrant issued Senior Debentures in the aggregate
principal amount of $1,115,000 to 17 accredited investors, with warrants to
purchase up to 250,000 shares of Common Stock from certain stockholders of the
Company. The placement of Senior Debentures was sold by H. J. Meyers & Co.,
Inc., which received for such services an aggregate of 11% of the gross
proceeds of that offering as commissions and nonaccountable expense
reimbursement. At the time this Registration Statement was filed, the
Registrant was preparing to offer to these investors the right to rescind
their investment in Senior Debentures. The Registrant determined that it was
necessary to make that rescission offer due to certain misunderstandings that
occured in the placement of the Senior Debentures. Those misunderstandings
related to the terms of the warrants, and the resale and registration rights
related thereto. Each of the investors declined the recission offer and
affirmed the investment.
In July 1995, pursuant to a nonqualified stock option plan, the Company
granted options to three key employees to purchase an aggregate of 140,745
shares of Common Stock, at $0.543 per share. One of such options, covering
66,233 shares, has subsequently been terminated.
II-1
<PAGE>
In February 1996, pursuant to that same option plan, the Company granted
options to nine key employees to purchase an aggregate of 107,079 shares of
Common Stock, at $0.543 per share. Four of such options, covering 11,040
shares, have subsequently been terminated.
In January 1997, pursuant to the 1996 Stock Option Plan, the Company granted
options to 32 employees to purchase an aggregate of 163,200 shares of Common
Stock at $4.80 per share. These options were granted to each of the employees
of the Company who were not directors of the Company. Three of such options,
covering 13,240 shares, have subsequently been terminated.
The above transactions were private transactions not involving a public
offering and were exempt from the registration provisions of the Securities
Act of 1933, as amended (the "Securities Act"). The offering by the Registrant
of Debentures was exempt under SEC Rule 506 promulgated under Section 4(2) and
under Section 4(6) of the Securities Act, on the basis that each of the
purchasers of the Debentures was an accredited investor. The offering of the
Warrants by Company Stockholders was exempt under the Section 4(1 1/2)
exemption analysis under the Securities Act. The granting of employee options
did not necessarily involve the sale of a security, but to the extent that a
sale of a security was involved, it was effected pursuant to an employee
benefit plan and exempt under Rule 701 promulgated under Section 3(b) of the
Securities Act and under Section 4(2) under the Securities Act. If a
Registration Statement under the Securities Act is not effective with respect
to the option shares at the time options are exercised, the option agreements
provide for compliance with an applicable exemption from the registration
requirements, such as Rule 701 or Section 4(2), before shares are issued
pursuant to option exercises. A selling agent was utilized in connection with
the sale of the Senior Debentures and Warrants; no selling agent was involved
in connection with the granting of the employee stock options.
II-2
<PAGE>
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement
3.1 Restated Articles of Incorporation of the Registrant, included as
Exhibit 2.1 in the Registration Statement on Form 10-SB filed by the
Registrant, dated February 11, 1997 and incorporated herein by this
reference (the "Form 10-SB").
3.2 By-Laws of the Registrant, included as Exhibit 2.2 in the Form 10-SB
and incorporated herein by this reference.
4.1 Form of Senior Debenture, included as Exhibit 3.1 in the Form 10-SB and
incorporated herein by this reference.
4.2 Form of Representative's Warrants.
4.3+ Specimen Certificate Representing the Common Stock.
5.1 Opinion of Gambrell & Stolz, L.L.P.
10.1 1995 Restricted Non-qualified Incentive Option Plan, dated August 1,
1995, included as Exhibit 6.1 in the Registration Statement on Form 10-
SB and incorporated herein by this reference.
10.2 1996 Stock Option Plan, included as Exhibit 6.2 in the Form 10-SB and
incorporated herein by this reference.
10.3 Forms of Stock Option Agreements, included as Exhibit 6.3 in the Form
10-SB and incorporated herein by this reference.
10.4 Escrow Agreement by and between the Registrant, Gambrell & Stolz,
L.L.P. and certain stockholders of the Registrant, included as Exhibit
6.4 in Form 10-SB and incorporated herein by this reference.
10.5 Form of Indemnity Agreement, included as Exhibit 6.5 in the Form 10-SB
and incorporated herein by this reference.
10.6 Form of Warrant attached to Senior Debentures, included as Exhibit 6.6
in the Form 10-SB and incorporated herein by this reference.
10.7 Offer letter to Ron Friedman dated September 15, 1995, included as
Exhibit 6.7 in the Form 10-SB and incorporated herein by this
reference.
10.8 Offer letter to Charles J. Giarratana dated February 13, 1996, included
as Exhibit 6.8 in the Form 10-SB and incorporated herein by this
reference.
10.9 Agreement dated as of February 7, 1997 between the Registrant and H.J.
Meyers & Co., Inc., relating to the offer of the Registrant to rescind
the sale of the Senior Debentures, included as Exhibit 6.9 in the Form
10-SB and incorporated herein by this reference.
10.10 Form rescission offer letter with respect to Senior Debentures,
included as Exhibit 6.10 in the Form 10-SB and incorporated herein by
this reference.
10.11+ S Corporation Termination, Tax Allocation and Indemnification Agreement
dated as of March 24, 1997.
10.12+ Lease Agreement between Registrant and Riveredge One Associates, Ltd.,
dated April 1, 1997.
Subcontractor Agreement between the Company and IBM, dated September
10.13+ 17, 1996.
Subcontractor Agreement between the Company and IBM, dated August 27,
10.14+ 1993, as amended.
11.1+ Statement re: Computation of Per Share Earnings
23.1 Consent of Gambrell & Stolz, L.L.P.--included in Exhibit 5.1
23.2 Consent of Habif, Arogeti & Wynne, Certified Public Accountants
24.1 Power of Attorney--Included on Page II-4.
27.0+ Financial Data Schedule
</TABLE>
- --------
+ Previously filed.
(b) Financial Statement Schedules
None
II-3
<PAGE>
ITEM 28. UNDERTAKINGS
(1) The undersigned Registrant hereby undertakes that it will:
(a) File, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement; and
(iii) Include any additional or changed material information on the
plan of distribution;
(b) For determining liability under the Securities Act, treat each post-
effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time
to be the initial bona fide offering; and
(c) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of this offering.
(2) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.
(3) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding), is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
(4) The undersigned Registrant hereby undertakes that it will:
(a) For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4), or Rule 497(h) under the Securities Act as part of
this Registration Statement as of the time it was declared
effective.
(b) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the
registration statement, and the offering of such securities at that
time as the initial bona fide offering of those securities.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints Haim E. Dahan and Michael J. Galvin, or either
of them, as his or her true and lawful attorney-in-fact and agent with full
power of substitution, for him or her and in his or her name, place and stead,
in any and all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully as to
all items and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or their
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
II-4
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form SB-2 and authorized this Pre-
Effective Amendment No. 3 to the Registration Statement to be signed on its
behalf by the undersigned, in the City of Atlanta, State of Georgia, on April
29, 1997.
INTERNATIONAL COMPUTEX, INC.
BY:
----------------------------------
HAIM E. DAHAN, CHIEF EXECUTIVE
OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Pre-
Effective Amendment No. 3 to the Registration Statement has been signed below
by the following persons in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
- ----------------------------- Director, Chief
Haim E. Dahan Executive Officer and April 29,
Chief Financial Officer 1997
and Selling Stockholder
- ----------------------------- Director and Selling
Michael J. Galvin Stockholder April 29,
1997
- ----------------------------- Director and Chief
Patricia Tuxbury Salem Accounting Officer April 28,
1997
II-5
<PAGE>
EXHIBIT 1.1
UNDERWRITING AGREEMENT
Dated: April ___, 1997
H.J. MEYERS & CO., INC.
AS REPRESENTATIVE OF THE
UNDERWRITERS NAMED IN
SCHEDULE I HERETO
1895 Mt. Hope Avenue
Rochester, New York 14620
Ladies and Gentlemen:
INTERNATIONAL COMPUTEX, INC., a Georgia corporation (the "Company"),
proposes to issue and sell to the one or more Underwriters named in Schedule I
hereto (the "Underwriters"), including H.J. Meyers & Co., Inc. (the
"Representative" or "you"), the Representative of the several Underwriters,
pursuant to this Underwriting Agreement (this "Agreement"), 1,125,000 shares of
the Common Stock, $.001 par value, of the Company (the "Common Stock").
In addition, the Company and those individuals set forth on Schedule II
hereto (the "Selling Stockholders") propose to grant to the Underwriters the
Over-Allotment Option, referred to and defined in Section 2(c), to purchase all
or any part of an aggregate of 168,750 additional shares of Common Stock, and
the Company proposes to issue to you the Representative's Warrant, referred to
and defined in Section 12, to purchase certain further additional shares of
Common Stock.
The 1,125,000 shares of Common Stock to be sold by the Company, together
with the 168,750 additional shares of Common Stock that are the subject of the
Over-Allotment Option, are herein collectively called the "Shares." The Shares
and the shares of Common Stock issuable upon exercise of the Representative's
Warrant, are herein collectively called the "Securities." The term
"Representative's Counsel" shall mean the firm of Harter, Secrest & Emery,
counsel to the Representative, and the term "Company Counsel" and "Selling
Stockholder Counsel" shall mean the firm of Gambrell & Stolz, LLP, counsel to
the Company. Unless the context otherwise requires, all references herein to a
"Section" shall mean the appropriate Section of this Agreement.
You have advised the Company that the Underwriters desire to purchase the
Shares as herein provided, and that you have been authorized to execute this
Agreement as representative of the Underwriters. The Company confirms the
agreements made by it with respect to the purchase of the Shares by the
Underwriters, as follows:
<PAGE>
1. REPRESENTATIONS AND WARRANTIES.
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each Underwriter that:
(A) REGISTRATION STATEMENT; PROSPECTUS. A registration statement (File
No. 333-21647) on Form SB-2 relating to the public offering of the Shares (the
"Offering"), including a preliminary form of prospectus, copies of which have
heretofore been delivered to you, has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations of the Securities and Exchange Commission (the
"Commission") promulgated thereunder (the "Rules and Regulations"), and has been
filed with the Commission under the Act. As used herein, the term "Preliminary
Prospectus" shall mean each prospectus filed pursuant to Rule 430 or Rule 424(a)
of the Rules and Regulations. The Preliminary Prospectus bore the legend
required by Item 501 of Regulation S-B under the Act and the Rules and
Regulations. Such registration statement (including all financial statements,
schedules and exhibits) as amended at the time it becomes effective and the
final prospectus included therein are herein respectively called the
"Registration Statement" and the "Prospectus," except that (i) if the prospectus
first filed by the Company pursuant to Rule 424(b) or Rule 430A of the Rules and
Regulations shall differ from such final prospectus as then amended, then the
term "Prospectus" shall instead mean the prospectus first filed pursuant to said
Rule 424(b) or Rule 430A, and (ii) if such registration statement is amended or
such prospectus is amended or supplemented after the effective date of such
registration statement and prior to the Option Closing Date (as defined in
Section 2(c)), then (unless the context necessarily requires otherwise) the term
"Registration Statement" shall include such registration statement as so
amended, and the term "Prospectus" shall include such prospectus as so amended
or supplemented, as the case may be.
(B) CONTENTS OF REGISTRATION STATEMENT. On the Effective Date, and at
all times subsequent thereto for so long as the delivery of a prospectus is
required in connection with the offering or sale of any of the Securities, (i)
the Registration Statement and the Prospectus shall conform in all material
respects to the requirements of the Act and the Rules and Regulations, and (ii)
neither the Registration Statement nor the Prospectus shall include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make statements therein not misleading; provided,
however, that the Company makes no representations, warranties or agreements as
to information contained in or omitted from the Registration Statement or
Prospectus in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of the Underwriters specifically for
use in the preparation thereof. It is understood that the statements set forth
in the Prospectus with respect to stabilization, the material set forth under
the caption "UNDERWRITING," and the identity of counsel to the Representative
under the caption "LEGAL MATTERS," constitute the only information furnished in
writing by or on behalf of the Underwriters for inclusion in the Registration
Statement and Prospectus, as the case may be.
-2-
<PAGE>
(C) ORGANIZATION, STANDING, ETC. The Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
State of Georgia, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus, and is duly qualified or
licensed to do business as a foreign corporation and is in good standing in each
other jurisdiction in which the nature of its business or the character or
location of its properties requires such qualification, except where failure so
to qualify will not materially affect the business, properties or financial
condition of the Company, as the case may be.
(D) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company as of the date of the Prospectus is as set forth in the
Prospectus under the caption "CAPITALIZATION" and consists of 20,000,000 shares
of Common Stock, $.001 par value, of which no more than 2,125,000 shares,
options, and Common Stock equivalents are issued and outstanding or reserved for
issuance, except (i) 500,000 shares of Common Stock reserved for issuance under
employee stock option plans, and (ii) shares reserved for issuance under this
Agreement. The shares of Common Stock issued and outstanding on the Effective
Date have been duly authorized, validly issued and are fully paid and non-
assessable. There are no other options, warrants or other rights to purchase,
agreements or other obligations to issue, or agreements or other rights to
convert any obligation into, any shares of capital stock of the Company. The
Securities conform to all statements relating thereto contained in the
Registration Statement or the Prospectus.
(E) SECURITIES. The Shares and the Representative's Warrant have been
duly authorized and, when issued and delivered against payment therefor pursuant
to this Agreement, will be duly authorized, validly issued, fully paid and non-
assessable and free of preemptive rights of any security holder of the Company.
Neither the filing of the Registration Statement nor the offering or sale of any
of the Shares or the Representative's Warrant 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 securities of the Company, except as
described in the Registration Statement.
(F) AUTHORITY, ETC. This Agreement and the Representative's Warrant
have been duly authorized, executed and delivered by the Company and, assuming
due execution of this Agreement and such other agreements by the other party or
parties hereto and thereto, constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their respective
terms. All consents, approvals, authorizations and orders of any court or
governmental authority which are required in connection with the authorization,
execution and delivery of such agreements, the authorization, issue and sale of
the Shares and the Representative's Warrant, and the consummation of the
transactions contemplated hereby, except such additional actions as may be
required by the Commission, the National Association of Securities Dealers, Inc.
("NASD") or such additional actions as may be necessary to qualify the Common
Stock for public offering by the Underwriters under state or foreign Blue Sky
Laws, have been obtained.
(G) NO CONFLICT. Except as described in the Prospectus, the Company is
not in violation, breach or default of or under, and consummation of the
transactions hereby contemplated and fulfillment of the terms of this Agreement
will not conflict with or result in
-3-
<PAGE>
a breach of, any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance
pursuant to the terms of, any contract, indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which the Company is a
party or by which the Company may be bound or to which any of the property or
assets of the Company are subject, nor will such action result in any violation
of the provisions of the Articles of Incorporation or the By-laws of the
Company, or any statute, order, rule or regulation applicable to the Company of
any court or governmental authority, except in any such case for conflicts,
breaches, or defaults that, in the aggregate, would not materially affect the
business, properties or financial condition of the Company.
(H) ASSETS. Subject to the qualifications stated in the Prospectus: (i)
the Company has good and marketable title to all properties and assets described
in the Prospectus as owned by it, including without limitation intellectual
property, free and clear of all liens, charges, encumbrances or restrictions,
except such as are not materially significant or important in relation to its
business; (ii) all of the material leases and subleases under which the Company
is the lessor or sublessor of properties or assets or under which the Company
holds properties or assets as lessee or sublessee, as described in the
Prospectus, are in full force and effect and, except as described in the
Prospectus, the Company is not in default in any material respect with respect
to any of the terms or provisions of any of such leases or subleases, and no
claim has been asserted by any party adverse to the rights of the Company as
lessor, sublessor, lessee or sublessee under any such lease or sublease, or
affecting or questioning the right of the Company to continued possession of the
leased or subleased premises or assets under any such lease or sublease, except
as described or referred to in the Prospectus; and (iii) the Company owns or
leases all such properties, described in the Prospectus, as are necessary to its
operations as now conducted.
(I) INDEPENDENT ACCOUNTANTS. Habif, Arogeti & Wynne, P.C. are, with
respect to the Company, independent public accountants as required by the Act
and the Rules and Regulations.
(J) FINANCIAL STATEMENTS. The financial statements and schedules,
together with related notes, set forth in the Registration Statement and the
Prospectus present fairly, in all material respects, the financial position,
results of operations and cash flows of the Company on the basis stated in the
Registration Statement, at the respective dates and for the respective periods
to which they apply. Such financial statements, schedules and related notes
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the entire period involved, except to
the extent disclosed therein. The financial information for each of the periods
presented in the Registration Statement and the Prospectus present a true and
complete statement of the financial position of the Company, in all material
respects, at the dates indicated and the results of its operations for such
periods. The Summary Financial Information and Selected Financial Data included
in the Registration Statement and the Prospectus present fairly the information
shown therein, in all material respects, and have been prepared on a basis
consistent with that of the audited financial statements included in the
Registration Statement and the Prospectus.
-4-
<PAGE>
(K) NO MATERIAL CHANGE. Except as otherwise set forth in the
Prospectus, subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, the Company has not: (i)
incurred any liability or obligation, direct or contingent, or entered into any
transaction, which is material and adverse to its business; (ii) effected or
experienced any change in its capital stock; (iii) issued any options, warrants
or other rights to acquire its capital stock; (iv) declared, paid or made any
dividend or distribution of any kind on its capital stock; or (v) effected or
experienced any material adverse change, or development involving a prospective
material adverse change, in its business, property, operations, condition
(financial or otherwise) or earnings.
(L) LITIGATION. Except as set forth in the Prospectus, there is not now
pending nor, to the best knowledge of the Company, threatened, any action, suit
or proceeding (including any related to environmental matters or discrimination
on the basis of age, sex, religion or race), whether or not in the ordinary
course of business, to which the Company is a party or its business or property
is subject, before or by any court or governmental authority, which might result
in any material adverse change in the business, property, operations, condition
(financial or otherwise) or earnings of the Company; and no labor disputes
involving the employees of the Company exist which might be expected to affect
materially adversely the business, property, operations, condition (financial or
otherwise) or earnings of the Company.
(M) NO UNLAWFUL PROSPECTUSES. The Company has not distributed any
prospectus or other offering material in connection with the Offering
contemplated herein, other than any Preliminary Prospectus, the Prospectus or
other material permitted by the Act and the Rules and Regulations.
(N) TAXES. Except as disclosed in the Prospectus, the Company has filed
all necessary federal, state, local and foreign income and franchise tax returns
that have been required to be filed and has paid all taxes shown as due thereon
to the extent such taxes have become due and are not being contested in good
faith; and there is no tax deficiency which has been or, to the best knowledge
of the Company, might be asserted against the Company.
(O) LICENSES, ETC. The Company has in effect all necessary and material
licenses, permits and other governmental authorizations currently required for
the conduct of its business or the ownership of its property, as described in
the Prospectus, and is in all material respects in compliance therewith. The
Company owns or possesses adequate rights to use all material patents, patent
applications, trademarks, mark registrations, copyrights and licenses disclosed
in the Prospectus and/or which are necessary for the conduct of such business,
and except as disclosed in the Prospectus has not received any notice of
conflict with the asserted rights of others in respect thereof. To the best
knowledge of the Company, none of the activities or business of the Company is
in violation of, or would cause the Company to violate, any law, rule,
regulation or order of the United States, any state, county or locality, the
violation of which would have a material adverse effect upon the business,
property, operations, condition (financial or otherwise) or earnings of the
Company.
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(P) NO PROHIBITED PAYMENTS. The Company has not, directly or
indirectly, at any time: (i) made any contribution to any candidate for
political office, or failed to disclose fully any such contribution in violation
of law; or (ii) made any payment to any federal, state, local or foreign
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments or contributions required or allowed by
applicable law. The Company's internal accounting controls and procedures are
sufficient to cause the Company to comply in all material respects with the
Foreign Corrupt Practices Act of 1977, as amended.
(Q) TRANSFER TAXES. On the Closing Dates (as defined in Section 2(d)),
all transfer and other taxes (including franchise, capital stock and other tax,
other than income taxes, imposed by any jurisdiction), if any, which are
required to be paid in connection with the sale and transfer of the Securities
to the Underwriters hereunder shall have been fully paid or provided for by the
Company, and all laws imposing such taxes shall have been fully complied with.
(R) EXHIBITS. All contracts and other documents of the Company which
are, under the Rules and Regulations, required to be filed as exhibits to the
Registration Statement have been so filed.
(S) SUBSIDIARIES. The Company has no Subsidiaries.
(T) SHAREHOLDER AGREEMENTS, REGISTRATION RIGHTS. Except as described in
the Prospectus, no security holder of the Company has any rights with respect to
the purchase, sale or registration of any Securities, and all registration
rights with respect to the Offering have been effectively waived.
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each of the
Selling Stockholders, for himself individually and not jointly, represents and
warrants to, and agrees with, each Underwriter and the Company with respect to
the Common Stock sold pursuant to the exercise of the Over-Allotment Option,
that:
(A) AUTHORITY, ETC. This Agreement has been duly and validly executed
and delivered by such Selling Stockholder and, assuming due execution hereof by
the other parties hereto, constitutes the valid and binding obligation of such
Selling Stockholder enforceable against him in accordance with its terms. Such
Selling Stockholder has full right, power and lawful authority to enter into
this Agreement and to sell, assign, transfer and deliver the Shares to be sold
by him or her hereunder on the terms and conditions set forth herein. All
consents, approvals, authorizations and orders of any court or governmental
authority required in connection with the execution and delivery of this
Agreement by such Selling Stockholder and the sale and delivery of the Shares to
be sold by him or her hereunder have been obtained.
(B) NO CONFLICT. The sale of the Shares to be sold by such Selling
Stockholder hereunder and the compliance by such Selling Stockholder with all of
the provisions of this Agreement will not conflict with or result in a breach
of, any of the terms or provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge or
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encumbrance pursuant to the terms of, any contract, indenture, mortgage, deed of
trust, loan agreement or other material agreement or instrument to which such
Selling Stockholder is a party or by which he or she may be bound or to which
any of his property or assets are subject, nor will such action result in any
violation of the provisions of any statute, order, rule or regulation applicable
to such Selling Stockholder of any court or governmental authority having
jurisdiction over such Selling Stockholder's property.
(C) TITLE TO SHARES. Such Selling Stockholder has, and on the Option
Closing Date (as hereinafter defined) such Selling Stockholder will have, good
and valid title to the Shares to be sold on the Option Closing Date by such
Selling Stockholder hereunder, free and clear of all liens, encumbrances,
equities or claims other than pursuant to this Agreement; and, upon delivery of
such Shares and payment therefor pursuant hereto, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or claims, will pass
to the Underwriters or the Representative, as the case may be.
(D) CERTAIN CONTENTS OF REGISTRATION STATEMENT. To the extent that any
statements or omissions made in the Registration Statement or the Prospectus are
made in reliance upon and in conformity with written information furnished to
the Company by such Selling Stockholder expressly for use therein, on the
Effective Date, and at all times subsequent thereto for so long as the delivery
of a prospectus is required in connection with the offering or sale of the
Shares, (i) the Registration Statement and the Prospectus shall in all respects
conform to the requirements of the Act and the Rules and Regulations, and (ii)
neither the Registration Statement nor the Prospectus shall include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make statements therein not misleading.
(E) STOCKHOLDER AGREEMENTS, REGISTRATION RIGHTS. Except for options
granted under the stock option plans of the Company and disclosed in the
Prospectus, and except as provided by this Agreement, such Selling Stockholder
has no rights with respect to the purchase, sale or registration of any
Securities.
2. PURCHASE, DELIVERY AND SALE OF SHARES.
(A) PURCHASE PRICE FOR SHARES. The Shares of Common Stock shall be sold
to and purchased by the Underwriters hereunder at the purchase price of $ _____
per Share (that being the public offering price of $9.50 per Share less an
underwriting discount of 9.0 percent) (the "Purchase Price").
(B) FIRM SHARES.
(i) Subject to the terms and conditions of this Agreement, and on the
basis of the representations, warranties and agreements herein contained the
Company agrees to issue and sell to the Underwriters, severally and not jointly,
and each of the Underwriters agrees, severally and not jointly, to buy from the
Company at the Purchase Price, the number of Shares set forth opposite such
Underwriter's name in Schedule I hereto (the "Firm Shares").
(ii) Delivery of the Firm Shares against payment therefor shall take
place at the offices of Gambrell & Stolz, LLP, Suite 4300, One Peachtree Center,
303 Peachtree
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Street, N.E., Atlanta, Georgia at 10:00 a.m., New York time, on _______________,
1997, or at such later time and date, not later than five banking days after the
Effective Date, or such earlier date as may be required by applicable law, as
you may designate (such time and date of payment and delivery for the Firm
Shares being herein called the "First Closing Date"). Time shall be of the
essence and delivery of the Firm Shares at the time and place specified in this
Section 2(b)(ii) is a further condition to the obligations of the Underwriters
hereunder.
(C) OPTION SHARES.
(i) In addition, subject to the terms and conditions of this
Agreement, and on the basis of the representations, warranties and agreements
herein contained, the Company and the Selling Stockholders hereby grant to the
Underwriters an option (the "Over-Allotment Option") to purchase from the
Company all or any part of an aggregate of an additional 168,750 Shares at the
Purchase Price (the "Option Shares"). In the event that the Over-Allotment
Option is exercised by the Underwriters in whole or in part, each Underwriter
shall purchase Option Shares in the same proportion as the number of Firm Shares
purchased by it bore to the total number of Firm Shares, unless the Company and
the Selling Stockholders and the other Underwriters shall otherwise agree.
(ii) The Over-Allotment Option may be exercised by the Underwriters,
in whole or in part, within 30 days after the Effective Date, upon notice by you
to the Company and the Selling Stockholders advising them of the number of
Option Shares as to which the Over-Allotment Option is being exercised, the
names and denominations in which the certificates for the Shares comprising such
Option Shares are to be registered, and the time and date when such certificates
are to be delivered. Such time and date shall be determined by you but shall
not be less than four nor more than five banking days after exercise of the
Over-Allotment Option, nor in any event prior to the First Closing Date (such
time and date being herein called the "Option Closing Date"). Delivery of the
Option Shares against payment therefor shall take place at the Representative's
Offices. Time shall be of the essence and delivery at the time and place
specified in this Section 2(c)(ii) is a further condition to the obligations of
the Underwriters hereunder.
(iii) The Over-Allotment Option may be exercised only to cover over-
allotments in the sale by the Underwriters of Firm Shares.
(iv) If Over-Allotment Option is exercised, 50% of the Option Shares
shall be delivered and sold by the Company, and 50% shall be delivered and sold
by the Selling Stockholders in the proportions set forth in Schedule II.
(D) DELIVERY OF CERTIFICATES; PAYMENT.
(i) The Company shall make the certificates for the Shares to be
purchased hereunder available to you for checking at least one banking day prior
to the First Closing Date or the Option Closing Date (each, a "Closing Date"),
as the case may be. The certificates shall be in such names and denominations
as you may request at least two full banking days prior to the relevant Closing
Date. Time shall be of the essence and the
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availability of the certificates at the time and place specified in this Section
2(d)(i) is a further condition to the obligations of the Underwriters hereunder.
(ii) On the First Closing Date: the Company shall deliver to you for
the several accounts of the Underwriters definitive engraved certificates in
negotiable form representing all of the Firm Shares to be sold by the Company,
against payment of the Purchase Price therefor by you for the several accounts
of the Underwriters, in New York Clearing House funds by certified or bank
cashier's checks payable to the order of the Company, such payment to be made
not later than five days after the Effective Date.
(iii) In addition, if and to the extent that the Underwriters exercise
the Over-Allotment Option, then on the Option Closing Date: the Company and the
Selling Stockholders shall deliver to you for the several accounts of the
Underwriters definitive engraved certificates in negotiable form representing
the Shares comprising the Option Shares to be sold by the Company, against
payment of the Purchase Price therefor by you for the several accounts of the
Underwriters, in New York Clearing House funds by certified or bank cashier's
checks payable in next day funds to the order of the Company.
(iv) It is understood that the Underwriters propose to offer the
Shares to be purchased hereunder to the public at the initial public offering
price and, upon the other terms and conditions set forth in the Registration
Statement, after the Registration Statement becomes effective.
3. COVENANTS.
A. COVENANTS OF THE COMPANY. The Company covenants and agrees with each
Underwriter that:
(A) REGISTRATION.
(i) The Company shall use its best efforts to cause the Registration
Statement to become effective and, upon notification from the Commission that
the Registration Statement has become effective, shall so advise you and shall
not at any time, whether before or after the Effective Date, file any amendment
to the Registration Statement or any amendment or supplement to the Prospectus
of which you shall not previously have been advised and furnished with a copy,
or to which you or Representative's Counsel shall have reasonably objected in
writing, or which is not in compliance with the Act and the Rules and
Regulations. At any time prior to the later of (A) the completion by the
Underwriters of the distribution of the Shares contemplated hereby (but in no
event more than nine months after the Effective Date), and (B) 25 days after the
Effective Date, the Company shall prepare and file with the Commission, promptly
upon your request, any amendments to the Registration Statement or any
amendments or supplements to the Prospectus which, in your reasonable opinion,
may be necessary or advisable in connection with the distribution of the Shares.
(ii) Promptly after you or the Company shall have been advised
thereof, you shall advise the Company or the Company shall advise you, as the
case may be, and confirm such advice in writing, of (A) the receipt of any
comments of the Commission,
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(B) the effectiveness of any post-effective amendment to the Registration
Statement, (C) the filing of any supplement to the Prospectus or any amended
Prospectus, (D) any request made by the Commission for amendment of the
Registration Statement or amendment or supplementing of the Prospectus, or for
additional information with respect thereto, or (E) the issuance by the
Commission or any state or regulatory body of any stop order or other order
denying or suspending the effectiveness of the Registration Statement, or
preventing or suspending the use of any Preliminary Prospectus, or suspending
the qualification of the Securities for offering in any jurisdiction, or
otherwise preventing or impairing the Offering, or the institution or threat of
any proceeding for any of such purposes. The Company and you shall not
acquiesce in such order or proceeding, and shall instead actively defend such
order or proceeding, unless the Company and you agree in writing to such
acquiescence.
(iii) The Company has caused to be delivered to you copies of each
Preliminary Prospectus, and the Company has consented and hereby consents to the
use of such copies for the purposes permitted by the Act. The Company
authorizes the Underwriters and selected dealers to use the Prospectus in
connection with the sale of the Shares for such period as in the opinion of
Representative's Counsel the use thereof is required to comply with the
applicable provisions of the Act and the Rules and Regulations. In case of the
happening, at any time within such period as a prospectus is required under the
Act to be delivered in connection with sales by an underwriter or dealer, of any
event of which the Company has knowledge and which materially affects the
Company or the Securities, or which in the opinion of Company Counsel or of
Representative's Counsel should be set forth in an amendment to the Registration
Statement or an amendment or supplement to the Prospectus in order to make the
statements made therein not then misleading, in light of the circumstances
existing at the time the Prospectus is required to be delivered to a purchaser
of the Shares, or in case it shall be necessary to amend or supplement the
Prospectus to comply with the Act or the Rules and Regulations, the Company
shall notify you promptly and forthwith prepare and furnish to the Underwriters
copies of such amended Prospectus or of such supplement to be attached to the
Prospectus, in such quantities as you may reasonably request, in order that the
Prospectus, as so amended or supplemented, shall not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements in the Prospectus, in the light of the
circumstances under which they are made, not misleading. The preparation and
furnishing of each such amendment to the Registration Statement, amended
Prospectus or supplement to be attached to the Prospectus shall be without
expense to the Underwriters, except that in the case that the Underwriters are
required, in connection with the sale of the Shares, to deliver a prospectus
nine months or more after the Effective Date, the Company shall upon your
request and at the expense of the Underwriters, amend the Registration Statement
and amend or supplement the Prospectus, or file a new registration statement on
Form SB-2 (if applicable) or Form S-1, if necessary, and furnish the
Underwriters with reasonable quantities of prospectuses complying with section
10(a)(3) of the Act.
(iv) The Company shall comply with the Act, the Rules and Regulations,
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the rules and regulations promulgated thereunder in connection with the offering
and issuance of the Securities.
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<PAGE>
(B) BLUE SKY. The Company shall cooperate with the Representative to
qualify or register the Securities for sale under the securities or "blue sky"
laws of such jurisdictions as you may reasonably designate, and shall make such
applications and furnish such information to Representative's Counsel as may be
required for that purpose, and shall comply with such laws; provided, however,
that the Company shall not be required to qualify as a foreign corporation or a
dealer in securities or to execute a general consent to service of process in
any jurisdiction in any action other than one arising out of the offering or
sale of the Shares or take any action that would subject it to general taxation
in any jurisdiction. The Company shall bear all of the expense of such
qualifications and registrations, including without limitation the legal fees
and disbursements of Representative's Counsel, which fees, exclusive of
disbursements, shall not exceed $35,000 (unless otherwise agreed). After each
Closing Date the Company shall, at its own expense, from time to time prepare
and file such statements and reports as may be required to continue each such
qualification in effect for so long a period as you may reasonably request.
(C) EXCHANGE ACT REGISTRATION. The Company has, at its own expense,
prepared and filed with the Commission a registration statement (on Form 10 S-B)
under section 12(g) or 12(b) of the Exchange Act and will use its best efforts
to have such registration statement declared effective by the Commission
concurrently with the Registration Statement being declared effective.
(D) PROSPECTUS COPIES. The Company shall deliver to you on or before
the First Closing Date two signed copies of the Registration Statement including
all financial statements, schedules and exhibits filed therewith, and of all
amendments thereto. The Company shall deliver to or on the order of the
Underwriters, from time to time until the Effective Date, as many copies of any
Registration Statement, Preliminary Prospectus and related exhibits filed with
the Commission prior to the Effective Date as the Underwriters may reasonably
request. The Company shall deliver to the Underwriters on the Effective Date,
and thereafter for so long as a prospectus is required to be delivered under the
Act, from time to time, as many copies of the Registration Statement,
Prospectus, and related exhibits in final form, or as thereafter amended or
supplemented, as the Underwriters may from time to time reasonably request.
(E) AMENDMENTS AND SUPPLEMENTS. The Company shall, promptly upon your
request, prepare and file with the Commission any amendments to the Registration
Statement, and any amendments or supplements to the Preliminary Prospectus or
the Prospectus, and take any other action which in the reasonable opinion of
Representative's Counsel may be reasonably necessary or advisable in connection
with the distribution of the Shares, and shall use its best efforts to cause the
same to become effective as promptly as possible.
(F) CERTAIN MARKET PRACTICES. The Company has not taken, and shall not
take, directly or indirectly, any action designed, or which might reasonably be
expected, to cause or result in, or which has constituted, the stabilization or
manipulation of the price of the Securities to facilitate the sale or resale
thereof.
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(G) CERTAIN REPRESENTATIONS. Neither the Company nor any representative
of the Company has made or shall make any written or oral representation in
connection with the Offering and sale of the Shares or the Representative's
Warrant which is not contained in the Prospectus, which is otherwise
inconsistent with or in contravention of anything contained in the Prospectus,
or which shall constitute a violation of the Act, the Rules and Regulations, the
Exchange Act or the rules and regulations promulgated under the Exchange Act.
(H) CONTINUING REGISTRATION OF WARRANTS AND UNDERLYING COMMON STOCK. In
order to facilitate the exercise of the registration rights provided in the
Representative's Warrant, for so long as any portion of the Representative's
Warrant is outstanding, the Company shall, at its own expense: (i) use its best
efforts to cause post-effective amendments to the Registration Statement, or new
registration statements (which may be on Forms SB-2, S-2 or S-3, as the case may
be) relating to the Representative's Warrant and the Common Stock underlying the
Representative's Warrants to become effective in compliance with the Act and
without any lapse of time between the effectiveness of the Registration
Statement and of any such post-effective amendment or new registration
statement; (ii) cause a copy of each Prospectus, as then amended, to be
delivered to each holder of record of any portion of the Representative's
Warrant; (iii) furnish to the Underwriters and dealers as many copies of each
such Prospectus as the Underwriters or dealers may reasonably request; and (iv)
maintain the "blue sky" qualification or registration of the Representative's
Warrant and the Common Stock underlying the Representative's Warrant, or have a
currently available exemption therefrom, in each jurisdiction in which the
Securities were so qualified or registered for purposes of the Offering. In
addition, for so long as the Representative's Warrant is outstanding, the
Company shall promptly notify you of any material change in the business,
financial condition or prospects of the Company.
(I) USE OF PROCEEDS. The Company shall apply the net proceeds from the
sale of the Shares for the purposes substantially as set forth in the Prospectus
under the caption "USE OF PROCEEDS," and shall file such reports with the
Commission with respect to the sale of the Shares and the application of the
proceeds therefrom as may be required pursuant to Rule 463 of the Rules and
Regulations.
(J) NASDAQ, EXCHANGE LISTINGS, ETC. The Company shall immediately make
all filings required to seek approval for the quotation of the Securities on The
Nasdaq National Market System ("Nasdaq") and shall use its best efforts to
effect and maintain such approval for at least five years from the Effective
Date. Unless the Company qualifies for listing on Nasdaq, the Company shall
also use its best efforts to cause the Shares to be accepted for listing on the
Boston Stock Exchange, and/or such other exchange acceptable to you, prior to
the Effective Date or, failing that, as soon as is possible after the First
Closing Date, and to maintain such listings for five years. Within 10 days
after the Effective Date, the Company shall also use its best efforts to list
itself in Moody's OTC Industrial Manual or Standard and Poors Corporate Records
and to cause such listing to be maintained for at least five years from the
Effective Date.
(K) PERIODIC REPORTS. For so long as the Company is a reporting company
under section 12(g) or section 15(d) of the Exchange Act, and to the extent
required under
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the Exchange Act, the Company shall, at its own expense, furnish to its
shareholders an annual report (including financial statements audited by
certified public accountants) in reasonable detail. In addition, during the
period ending five years from the date hereof, the Company shall, at its own
expense, furnish to you: (i) within 90 days of the end of each fiscal year, a
balance sheet of the Company and its Subsidiaries as at the end of such fiscal
year, together with statements of income, stockholders' equity and cash flows of
the Company and its Subsidiaries as at the end of such fiscal year, all in
reasonable detail and accompanied by a copy of the certificate or report thereon
of certified public accountants; (ii) as soon as they are available, a copy of
all reports (financial or otherwise) distributed to security holders; (iii) as
soon as they are available, a copy of all non-confidential reports and financial
statements furnished to or filed with the Commission; and (iv) such other
information as you may from time to time reasonably request. The financial
statements referred to herein shall be on a consolidated basis to the extent the
accounts of the Company are consolidated in reports furnished to its
shareholders generally. In addition, during the period ending one year from the
date hereof, the Company shall, at its own expense, furnish you monthly with
Depository Trust Company stock transfer sheets.
(L) FUTURE SALES. For a period of 12 months following the Effective
Date, the Company shall not sell or otherwise dispose of any securities of the
Company without your prior written consent, which consent shall not be
unreasonably withheld; provided, however, that the Company may at any time issue
shares of Common Stock pursuant to the exercise of the Representative's Warrant,
and options, warrants or other convertible securities issued and outstanding
prior to the Effective Date and described in the Prospectus, and with respect to
any acquisition or joint venture by the Company. In addition, for a period of
24 months following the First Closing Date, the Company shall not sell or
otherwise dispose of any shares of Preferred Stock without your prior written
consent, which consent shall not be unreasonably withheld. Furthermore, for a
period of 24 months from the Effective Date, the Company shall not sell or issue
any securities pursuant to Regulation S under the Act without your prior written
consent.
(M) AVAILABLE SHARES. The Company shall reserve and at all times keep
available that maximum number of its authorized but unissued shares of Common
Stock which are issuable upon exercise of the Representative's Warrant, taking
into account the anti-dilution provisions thereof.
(N) MANAGEMENT. On each Closing Date, management of the Company shall
include Haim E. Dahan as Chief Executive Officer.
(O) PUBLIC RELATIONS. Within 25 days after the Effective Date, the
Company shall have retained a public relations firm reasonably acceptable to
you, and shall continue to retain such firm, or an alternate firm acceptable to
you, for a minimum period of two years on such terms as are reasonably
acceptable to you.
(P) BOARD OF DIRECTORS OBSERVER. For a period of 36 months from the
Effective Date, the Company shall allow an observer designated by you and
acceptable to the Company, to receive notice of and to attend all meetings of
the Board of Directors of the Company. Such observer shall have no voting
rights, and shall be reimbursed by the
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Company for all reasonable out-of-pocket expenses incurred in attending such
meetings. The Company shall hold at least four meetings per year during this
period. The observer will be indemnified by the Company (to the same extent the
Company provides for indemnification of its directors) against any claims
arising out of his participation at Board meetings.
(Q) STOCK TRANSFER SHEETS. The Company shall supply you with DTC Stock
Transfer sheets on a weekly basis for the first six weeks following the First
Closing Date, and for six weeks following the Option Closing Date, and on a
monthly basis thereafter for a period of 24 months from the effective date.
B. CERTAIN COVENANTS OF SELLING STOCKHOLDERS. Each of the Selling
Stockholders, for himself individually and not jointly, covenants and agrees
with each Underwriter and the Company that:
(A) CERTAIN MARKET PRACTICES. Such Selling Stockholder represents that
he has not taken, and agrees that he shall not take, directly or indirectly, any
action designed, or which might reasonably be expected, to cause or result in,
or which has constituted, the stabilization or manipulation of the price of the
Securities to facilitate the sale or resale thereof.
(B) CERTAIN REPRESENTATIONS. Such Selling Stockholder shall not make
any written or oral representation in connection with the Offering and sale of
the Securities or the Representative's Warrant which is not contained in the
Prospectus, which is otherwise inconsistent with or in contravention of anything
contained in the Prospectus, or which shall constitute a violation of the Act,
the Rules and Regulations, the Exchange Act or the rules and regulations
promulgated under the Exchange Act.
4. CONDITIONS TO UNDERWRITERS' OBLIGATIONS. The obligations of the several
Underwriters to purchase and pay for the Shares which they have agreed to
purchase hereunder are subject to the accuracy (as of the date hereof and as of
each Closing Date) of and compliance with the representations and warranties of
the Company contained herein, the performance by the Company of all of its
respective obligations hereunder, and the following further conditions:
(A) EFFECTIVE REGISTRATION STATEMENT; NO STOP ORDER. The Registration
Statement shall have become effective and you shall have received notice thereof
not later than 6:00 p.m., New York time, on the date of this Agreement, or at
such later time or on such later date as to which you may agree in writing. In
addition, on each Closing Date (i) no stop order suspending the effectiveness of
the Registration Statement shall be in effect, and no proceedings for that or
any similar purpose shall have been instituted or shall be pending or, to your
knowledge or to the knowledge of the Company, shall be contemplated by the
Commission, and (ii) all requests on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
Representative's Counsel.
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(B) OPINION OF COMPANY COUNSEL. On the First Closing Date, you shall
have received the opinion, dated as of the First Closing Date, of Company
Counsel, in form and substance satisfactory to Representative's Counsel, to the
effect that:
(i) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Georgia,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and is duly qualified or licensed
to do business as a foreign corporation and is in good standing in each
other jurisdiction in which the nature of its business or the character or
location of its properties requires such qualification, except where failure
so to qualify will not materially affect the business, properties or
financial condition of the Company;
(ii) (A) the authorized capitalization of the Company as of the date
of the Prospectus was as is set forth in the Prospectus under the caption
"CAPITALIZATION;" (B) all of the shares of Common Stock now outstanding have
been duly authorized and validly issued, are fully paid and non-assessable,
conform to the description thereof contained in the Prospectus, have not
been issued in violation of the preemptive rights of any shareholder and,
except as described in the Prospectus, are not subject to any restrictions
upon the voting or transfer thereof; (C) all of the Shares have been duly
authorized and, when paid for as provided herein, shall be validly issued,
fully paid and non-assessable, shall not have been issued in violation of
the preemptive rights of any shareholder, and no personal liability shall
attach to the ownership thereof; (D) the shareholders of the Company do not
have any preemptive rights or other rights to subscribe for or purchase, and
there are no restrictions upon the voting or transfer of, any of the Shares
and the shares of Common Stock underlying the Representative's Warrant; (E)
the Shares and the Representative's Warrant conform to their respective
descriptions thereof contained in the Prospectus; (F) 112,500 shares of
Common Stock have been reserved for issuance, for all times when the
Representative's Warrant is outstanding; and (G) to the best knowledge of
such counsel, neither the filing of the Registration Statement nor the
offering or sale of the Shares as contemplated by this Agreement gives rise
to any registration rights or other rights, other than those which have been
effectively waived or satisfied, for or relating to the registration of any
securities of the Company;
(iii) the certificates evidencing the Shares are each in valid and
proper legal form; and the Representative's Warrant is exercisable for
shares of Common Stock in accordance with its terms and at the price therein
provided for;
(iv) this Agreement and the Representative's Warrant have been duly
authorized, executed and delivered by the Company (assuming due execution
and delivery thereof by the Representative);
(v) to the knowledge of such counsel, (A) there is no pending,
threatened or contemplated legal or governmental proceeding affecting the
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Company which could materially and adversely affect the business, property,
operations, condition (financial or otherwise) or earnings of the Company,
or which questions the validity of the Offering, the Securities, this
Agreement or the Representative's Warrant, or of any action taken or to be
taken by the Company pursuant thereto; and (B) there is no legal or
governmental proceeding or regulation required to be described or referred
to in the Registration Statement which is not so described or referred to;
(vi) to the knowledge of such counsel, (A) the Company is not in
violation of or default under this Agreement or the Representative's
Warrant; and (B) the execution and delivery hereof and thereof and the
incurrence of the obligations herein and therein set forth and the
consummation of the transactions herein or therein contemplated shall not
result in a violation of, or constitute a default under, the Articles of
Incorporation or By-laws of the Company, or any material obligation,
agreement, covenant or condition contained in any bond, debenture, note or
other evidence of indebtedness, or in any material contract, indenture,
mortgage, loan agreement, lease, joint venture or other agreement or
instrument to which the Company is a party or by which its assets are bound,
or any material order, rule, regulation, writ, injunction or decree of any
government, governmental instrumentality or court;
(vii) the Registration Statement has become effective under the
Act, and to the knowledge of such counsel, no stop order proceedings with
respect thereto have been instituted or are pending before or threatened by
the Commission;
(viii) the Registration Statement and the Prospectus (except for
the financial statements, notes thereto and other financial information and
statistical data contained therein, as to which no opinion need be
rendered), comply as to form in all material respects with the Act and the
Rules and Regulations;
(ix) all descriptions contained in the Registration Statement or the
Prospectus of contracts and other documents are accurate and fairly present
the information required to be described in all material respects, and such
counsel is familiar with all contracts and other documents referred to in
the Registration Statement and the Prospectus or filed as exhibits to the
Registration Statement and, to the knowledge of such counsel, no contract or
document of a character required to be summarized or described therein or to
be filed as an exhibit thereto is not so summarized, described or filed;
(x) the descriptions contained in the Registration Statement and the
Prospectus which purport to summarize the provisions of statutes, rules and
regulations are accurate summaries in all material respects, and such
descriptions fairly present in all material respects the information shown,
and the descriptions contained in the Registration Statement and the
Prospectus that concern matters of law or legal conclusions have been
reviewed by such counsel and are correct in all material respects;
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(xi) except for registration under the Act, registration or
qualification of the Securities under applicable state or foreign securities
or blue sky laws and qualification with the NASD, no authorization,
approval, consent or license of any governmental or regulatory authority or
agency is necessary in connection with: (A) the authorization, issuance,
sale, transfer or delivery of the Securities by the Company; (B) the
execution, delivery and performance of this Agreement by the Company or the
taking of any action contemplated herein; or (C) the issuance of the
Representative's Warrant or the Shares of Common Stock issuable upon
exercise thereof.
Such opinion shall also state that such counsel has participated in the
preparation of the Registration Statement and the Prospectus, and no facts have
come to the attention of such counsel to cause such counsel to have reason to
believe that the Registration Statement at the time it became effective
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading (except, in the case of both the Registration Statement and the
Prospectus, for the financial statements, notes thereto and other financial
information and statistical data contained therein, as to which no opinion need
be expressed). Such opinion shall also cover such matters incident to the
transactions contemplated hereby as you or Representative's Counsel shall
reasonably request. In rendering such opinion, Company Counsel may rely as to
matters of fact upon certificates of officers of the Company, and of public
officials and may rely as to all matters of law other than the law of the United
States or the State of Georgia upon opinions of local counsel, in which case the
opinion shall state that they have no reason to believe that you and they are
not entitled so to rely.
(C) OPINION OF COUNSEL TO SELLING STOCKHOLDERS. At the Closing of the
Over-Allotment Option, Counsel to the Selling Stockholders shall submit an
opinion in form reasonably acceptable to the Representative and its Counsel.
(D) CORPORATE PROCEEDINGS. All corporate proceedings and other legal
matters relating to this Agreement, the Registration Statement, the Prospectus
and other related matters shall be reasonably satisfactory to or approved by
Representative's Counsel, and you shall have received from such counsel a signed
opinion, dated as of the First Closing Date, with respect to the validity of the
issuance of the Securities, the form of the Registration Statement and
Prospectus (other than the financial statements and other financial or
statistical data contained therein), the execution of this Agreement and other
related matters as you may reasonably require. The Company shall have furnished
to Representative's Counsel such documents as they may reasonably request for
the purpose of enabling them to render such opinion.
(E) COMFORT LETTER. Prior to the Effective Date, and again on and as of
the First Closing Date, you shall have received letters from Habif, Arogeti &
Wynne, P.C., certified public accountants for the Company, substantially in the
form approved by you with respect to the financial information and other data
contained in the Registration Statement
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with regard to the period from the date of the audited financial statements to a
date not more than five days prior to the Effective Date, the First Closing Date
and the Option Closing Date, respectively.
(F) BRING DOWN. At each of the Closing Dates, (i) the representations
and warranties of the Company and the Selling Stockholder (as the case may be)
contained in this Agreement shall be true and correct with the same effect as if
made on and as of such Closing Date, and the Company shall have performed all of
its respective obligations hereunder and satisfied all the conditions to be
satisfied at or prior to such Closing Date; (ii) the Registration Statement and
the Prospectus shall contain all statements which are required to be stated
therein in accordance with the Act and the Rules and Regulations, and shall in
all material respects conform to the requirements of the Act and the Rules and
Regulations, and neither the Registration Statement nor the Prospectus shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; (iii) there shall have been, since the respective dates
as of which information is given, no material adverse change in the business,
property, operations, condition (financial or otherwise), earnings, 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
Effective Date, and the Company shall not have incurred any material liabilities
nor entered into any material agreement other than as referred to in the
Registration Statement and Prospectus or in the ordinary course of business; and
(iv) except as set forth in the Prospectus, no action, suit or proceeding shall
be pending or threatened against the Company which would be required to be
disclosed in the Registration Statement, and no proceedings shall be pending or
threatened against the Company before or by any commission, board or
administrative agency in the United States or elsewhere, wherein an unfavorable
decision, ruling or finding would materially adversely affect the business,
property, operations, condition (financial or otherwise), earnings or general
affairs of the Company. In addition, you shall have received, at the First
Closing Date, a certificate signed by the principal executive officer and by the
principal financial or accounting officer of the Company, dated as of the First
Closing Date, evidencing compliance with the provisions of this Section 4(f),
evidencing as to him compliance with the provisions of this Section 4(f).
(G) TRANSFER AND WARRANT AGENT. On or before the Effective Date, the
Company shall have appointed American Stock Transfer & Trust Company (or other
agent mutually acceptable to the Company and you), as its transfer agent and
warrant agent to transfer all of the Shares issued in the Offering, as well as
to transfer other shares of the Common Stock outstanding from time to time,
including those issuable upon exercise of the Representative's Warrant.
(H) CERTAIN FURTHER MATTERS. On each Closing Date, Representative's
Counsel shall have been furnished with all such other documents and certificates
as they may reasonably request for the purpose of enabling them to render their
legal opinion to the Underwriters and in order to evidence the accuracy and
completeness of any of the representations, warranties or statements, the
performance of any of the covenants, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the
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Company on or prior to each of the Closing Dates in connection with the
authorization, issuance and sale of the Securities as herein contemplated shall
be reasonably satisfactory in form and substance to you and to Representative's
Counsel.
(I) ADDITIONAL CONDITIONS. Upon exercise of the Over-Allotment Option,
the Underwriters' obligations to purchase and pay for the Option Shares shall be
subject (as of the date hereof and as of the Option Closing Date) to the
following additional conditions:
(i) The Registration Statement shall remain effective at the Option
Closing Date, no stop order suspending the effectiveness thereof shall have been
issued, and no proceedings for that or any similar purpose shall have been
instituted or shall be pending or, to your knowledge or the knowledge of the
Company, shall be contemplated by the Commission, and all reasonable requests on
the part of the Commission for additional information shall have been complied
with to the satisfaction of Representative's Counsel.
(ii) On the Option Closing Date there shall have been delivered to you
the signed opinion of Company Counsel, dated as of the Option Closing Date, in
form and substance satisfactory to Representative's Counsel, which opinion shall
be substantially the same in scope and substance as the opinion furnished to you
on the First Closing Date pursuant to Section 4(b), except that such opinion,
where appropriate, shall cover the Option Shares, including those Option Shares
sold by the Selling Stockholders, rather than the Firm Shares. If the First
Closing Date is the same as the Option Closing Date, such opinions may be
combined.
(iii) All proceedings taken at or prior to the Option Closing Date in
connection with the sale and issuance of the Option Shares shall be satisfactory
in form and substance to you, and you and Representative's Counsel shall have
been furnished with all such documents, certificates and opinions as you may
reasonably request in connection with this transaction in order to evidence the
accuracy and completeness of any of the representations, warranties or
statements of the Company or its compliance with any of the covenants or
conditions contained herein.
(iv) On the Option Closing Date there shall have been delivered to you
a letter in form and substance satisfactory to you from Habif, Arogeti & Wynne,
P.C. dated the Option Closing Date and addressed to you, confirming the
information in their letter referred to in Section 4(e) as of the date thereof
and stating that, without any additional investigation required, nothing has
come to their attention during the period from the ending date of their review
referred to in such letter to a date not more than five banking days prior to
the Option Closing Date which would require any change in such letter if it were
required to be dated the Option Closing Date.
(v) On the Option Closing Date there shall have been delivered to you
a certificate signed by the principal executive officer and by the principal
financial or accounting officer of the Company, dated the Option Closing Date,
in form and substance satisfactory to Representative's Counsel, substantially
the same in scope and substance as the certificate furnished to you on the First
Closing Date pursuant to Section 4(f).
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(J) CANCELLATION. If any of the conditions provided by this Section 4
shall not have been completely fulfilled as of the date indicated, then this
Agreement and all obligations of the Underwriters hereunder may be cancelled at,
or at any time prior to, either Closing Date by your notifying the Company of
such cancellation in writing or by telegram at or prior to the applicable
Closing Date. Any such cancellation shall be without liability of the
Underwriters to the Company, except as otherwise provided herein.
5. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND SELLING STOCKHOLDERS. The
obligations of the Company and the Selling Stockholders (with respect to the
Over-Allotment Option only) to sell and deliver the Shares are subject to the
following conditions:
(A) EFFECTIVE REGISTRATION STATEMENT. The Registration Statement shall
have become effective not later than 6:00 p.m. New York time, on the date of
this Agreement, or at such later time or on such later date as the Company and
you may agree in writing.
(B) NO STOP ORDER. On the applicable Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the Act or any proceedings therefor initiated or threatened by the
Commission.
(C) PAYMENT FOR SHARES. On the applicable Closing Date, you shall have
made payment, for the several accounts of the Underwriters, of the aggregate
Purchase Price for the Shares then being purchased, in New York Clearing House
funds, by certified or bank cashier's checks payable in next day funds to the
order of the Company.
If the conditions to the obligations of the Company provided by this Section 5
have been fulfilled on the First Closing Date but are not fulfilled after the
First Closing Date and prior to the Option Closing Date, then only the
obligation of the Company and the Selling Stockholders to sell and deliver the
Option Shares upon exercise of the Over-Allotment Option shall be affected.
6. INDEMNIFICATION.
(A) INDEMNIFICATION BY THE COMPANY. As used in this Agreement, the term
"Liabilities" shall mean any and all losses, claims, damages and liabilities,
and actions and proceedings in respect thereof (including without limitation all
reasonable costs of defense and investigation and all reasonable attorneys'
fees) including without limitation those asserted by any party to this Agreement
against any other party to this Agreement. The Company hereby indemnifies and
holds harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Act, from and against all Liabilities,
joint or several, to which such Underwriter or such controlling person may
become subject, under the Act or otherwise, insofar as such Liabilities arise
out of or are based upon: (i) any untrue statement or alleged untrue statement
of any material fact contained in (A) the Registration Statement or any
amendment thereto, or the Prospectus or any Preliminary Prospectus, or any
amendment or supplement thereto, or (B) any "blue sky" application or other
document executed by the Company specifically for that purpose, or based upon
written
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information furnished by the Company, filed in any state or other jurisdiction
in order to qualify any or all of the Securities under the securities laws
thereof (any such application, document or information being herein called a
"Blue Sky Application"); or (ii) the omission or alleged omission to state in
the Registration Statement or any amendment thereto, or the Prospectus or any
Preliminary Prospectus, or any amendment or supplement thereto, or in any Blue
Sky Application, a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that the Company
shall not be liable in any such case to the extent, but only to the extent, that
any such Liabilities arise out of or are based upon (i) an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company through you
by or on behalf of any Underwriter specifically for use in the preparation of
the Registration Statement or any such amendment thereto, or the Prospectus or
any such Preliminary Prospectus, or any such amendment or supplement thereto, or
any such Blue Sky Application or (ii) any untrue statement or omission or
alleged untrue statement or omission in a Preliminary Prospectus if the
Prospectus (or the Prospectus as amended and supplemented) corrects the untrue
statement or omission or the alleged untrue statement or omission which is the
basis for the loss, claim, damage, liability, action or proceeding for which
indemnification is sought and a copy of the Prospectus (or the Prospectus as
amended and supplemented) was not sent or given to any person who received a
Preliminary Prospectus, at or before the confirmation of the sale to any such
person, in any case where such delivery is required by the Act. The foregoing
indemnity shall be in addition to any other liability which the Company may
otherwise have.
(B) INDEMNIFICATION BY THE SELLING STOCKHOLDERS. In the event that the
Over-Allotment Option is exercised, each Selling Stockholder, severally and not
jointly, hereby indemnifies and holds harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of the Act, from and
against all Liabilities, joint or several, to which such Underwriter or such
controlling person may become subject, under the Act or otherwise, insofar as
such Liabilities arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of any material fact contained in (A) the Registration
Statement or any amendment thereto, or any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or (B) any Blue Sky
Application; or (ii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, or any Preliminary Prospectus
or the Prospectus or any amendment or supplement thereto, or in any Blue Sky
Application, a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that no Selling
Stockholder shall be liable in any such case to the extent, but only to the
extent, that any such Liabilities arise out of or are based upon (i) an untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company through you by or on behalf of any Underwriter specifically for use in
the preparation of the Registration Statement or any such amendment thereto, any
such Blue Sky Application, or any such Preliminary Prospectus or the Prospectus
or any such amendment or supplement thereto or (ii) any untrue statement or
omission or alleged untrue statement or omission in a Preliminary Prospectus if
the Prospectus (or the Prospectus as amended and supplemented) corrects the
untrue statement or omission or the alleged untrue statement or omission which
is the basis for the loss, claim, damage, liability, action or proceeding for
which indemnification is sought and a copy of the Prospectus (or the Prospectus
as amended
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and supplemented) was not sent or given to any person who received a Preliminary
Prospectus, at or before the confirmation of the sale to any such person, in any
case where such delivery is required by the Act; and provided further that in no
event shall the liability of any Selling Stockholder for indemnification under
this Section 6(b) (and for contribution under Section 7 with respect to
indemnification under this Section 6(b)) exceed the amount of the aggregate
Share Purchase Price paid to such Selling Stockholder under this Agreement. The
foregoing indemnity shall be in addition to any other liability which any
Selling Stockholder may otherwise have.
(C) INDEMNIFICATION BY UNDERWRITERS. Each Underwriter, severally and
not jointly, hereby indemnifies and holds harmless the Company, each of its
directors, each nominee (if any) for director named in the Prospectus, each of
its officers who have signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of the Act, from and against
all Liabilities to which the Company or any such director, nominee, officer or
controlling person may become subject under the Act or otherwise, insofar as
such Liabilities arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or any amendment thereto, or the Prospectus or any Preliminary
Prospectus, or any amendment or supplement thereto, or (ii) the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such Liabilities arise out of or are
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement or any amendment thereto, or
the Prospectus or any Preliminary Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company through you, by or on behalf of such Underwriter, specifically
for use in the preparation thereof. In no event shall any Underwriter be liable
or responsible for any amount in excess of the compensation received by such
Underwriter, in the form of underwriting discounts or otherwise, pursuant to
this Agreement or any other agreement contemplated hereby. The foregoing
indemnity shall be in addition to any other liability which any Underwriter may
otherwise have.
(D) PROCEDURE. Promptly after receipt by an indemnified party under
this Section 6 of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify in writing the indemnifying
party of the commencement thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 6. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
subject to the provisions hereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under this
Section 6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. The indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and
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expenses of such counsel shall not be at the expense of the indemnifying party
if the indemnifying party has assumed the defense of the action with counsel
reasonably satisfactory to the indemnified party; provided, however, that if the
indemnified party is any Underwriter or a person who controls any Underwriter
within the meaning of the Act, the fees and expenses of such counsel shall be at
the expense of the indemnifying party if (i) the employment of such counsel has
been specifically authorized in writing by the indemnifying party, or (ii) the
named parties to any such action (including any impleaded parties) include both
such Underwriter or such controlling person and the indemnifying party and it is
advisable for such Underwriter or controlling person to be represented by
separate counsel due to actual or potential material differing interests between
them (in which case the indemnifying party shall not have the right to assume
the defense of such action on behalf of such Underwriter or such controlling
person, it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys). No settlement of any action against
an indemnified party shall be made without the consent of the indemnified party,
which shall not be unreasonably withheld in light of all factors of importance
to such indemnified party.
7. CONTRIBUTION. In order to provide for just and equitable contribution under
the Act in any case in which (a) any indemnified party makes claims for
indemnification pursuant to Section 6 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 the express provisions of Section 6 provide for indemnification in such
case, or (b) contribution under the Act may be required on the part of any
indemnified party, then such indemnified party and each indemnifying party (if
more than one) shall contribute to the aggregate Liabilities to which it may be
subject, in either such case (after contribution from others) in such
proportions that the Underwriters are responsible in the aggregate for that
portion of such Liabilities represented by the percentage that the underwriting
discount per Share appearing on the cover page of the Prospectus bears to the
public Offering price per Share appearing thereon, and the Company shall be
responsible for the remaining portion; provided, however, that if such
allocation is not permitted by applicable law, then the relative fault of the
Company, and the Underwriters in connection with the statements or omissions
which resulted in such Liabilities and other relevant equitable considerations
shall also be considered. The relative fault shall be determined by reference
to, among other things, whether in the case of an untrue statement of a material
fact or the omission to state a material fact, such statement or omission
relates to information supplied by the Company or the Underwriters, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if the respective
obligations of the Company and the Underwriters to contribute pursuant to this
Section 7 were to be determined by pro rata or per capita allocation of the
aggregate Liabilities (even if the Underwriters were to be treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the first sentence of
this Section 7. In addition, the contribution of any Underwriter shall not be
in
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excess of its proportionate share of the portion of such Liabilities for which
such Underwriter is responsible. 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. As used in this Section 7, the term "Company" shall include
any officer, director or person who controls the Company within the meaning of
section 15 of the Act. The Underwriters' obligations under this Section 7 to
contribute are several in proportion to their respective underwriting
obligations and not joint. If the full amount of the contribution specified in
this Section 7 is not permitted by law, then each indemnified party and each
person who controls an indemnified party shall be entitled to contribution from
each indemnifying party to the full extent permitted by law. The foregoing
contribution agreement shall in no way affect the contribution liabilities of
any persons having liability under section 11 of the Act other than the Company
and Underwriters. No contribution shall be requested with regard to the
settlement of any matter from any party who did not consent to the settlement;
provided, however, that such consent shall not be unreasonably withheld in light
of all factors of importance to such party.
8. COSTS AND EXPENSES.
(A) CERTAIN COSTS AND EXPENSES. Whether or not this Agreement becomes
effective or the sale of the Shares to the Underwriters is consummated, the
Company shall pay all costs and expenses incident to the issuance, offering,
sale and delivery of the Shares and the performance of its obligations under
this Agreement, including without limitation: (i) all fees and expenses of the
Company's legal counsel and accountants; (ii) all costs and expenses incident to
the preparation, printing, filing and distribution of the Registration Statement
(including the financial statements contained therein and all exhibits and
amendments thereto), each Preliminary Prospectus and the Prospectus, each as
amended or supplemented, this Agreement and the other agreements and documents
referred to herein, each in such quantities as you shall deem necessary; (iii)
all fees of NASD required in connection with the filing required by NASD to be
made by the Representative with respect to the Offering; (iv) all expenses,
including fees (but not in excess of the amount set forth in Section 3(b)) and
disbursements of Representative's Counsel in connection with the qualification
of the Securities under the "blue sky" laws which you shall designate; (v) all
costs and expenses of printing the respective certificates representing the
Shares; (vi) the expense of placing one or more "tombstone" advertisements or
promotional materials as directed by you (provided, however, that the aggregate
amount thereof shall not exceed $10,000); (vii) all costs and expenses of the
Company and its employees (but not of the Representative or its employees)
associated with due diligence meetings and presentations; (viii) all costs and
expenses associated with the preparation of a slide presentation concerning the
Company, its products and its management for broker due diligence purposes; (ix)
any and all taxes (including without limitation any transfer, franchise, capital
stock or other tax imposed by any jurisdiction) on sales of the Shares to the
Underwriters hereunder; and (x) all costs and expenses incident to the
furnishing of any amended Prospectus or any supplement to be attached to the
Prospectus as required by Sections 3(A) and 3(A), except as otherwise provided
by said Sections.
(B) REPRESENTATIVE'S EXPENSE ALLOWANCE. In addition to the expenses
described in Section 8(a), the Company shall on the First Closing Date pay to
you, based on the
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number of Firm Shares to be sold by the Company, the balance of a non-
accountable expense allowance (which shall include fees of Representative's
Counsel exclusive of the fees referred to in Section 3(A)) of $__________ (that
being an amount equal to 2.0 percent of the gross proceeds received upon sale of
the Firm Shares), of which $10,000 has been paid to you prior to the date
hereof. In the event that the Over-Allotment Option is exercised, then the
Company and the Selling Stockholders shall on the Option Closing Date pay to
you, pro rata based on the respective numbers of Option Shares to be sold by the
Company and the Selling Stockholders, an additional amount equal to 2.0 percent
of the gross proceeds received upon sale of any of the Option Shares. In the
event that the transactions contemplated hereby fail to be consummated for any
reason, then you shall return to the Company that portion of the $10,000
heretofore paid by the Company to the extent that it has not been utilized by
you in connection with the Offering for accountable out-of-pocket expenses;
provided, however, that if such failure is due to a breach by the Company of any
covenant, representation or warranty contained herein or because any other
condition to the Underwriters' obligations hereunder required to be fulfilled by
the Company is not fulfilled, then the Company shall be liable for your
accountable out-of-pocket expenses to the full extent thereof (with credit given
to the $10,000 paid); but neither the Company nor the Selling Stockholders shall
in any event be liable to any of the several Underwriters for damages based on
account of loss of anticipated profits from the sale by them or from exercise of
the Representative's Warrant.
(C) NO FINDERS. No person is entitled either directly or indirectly to
compensation from the Company, the Underwriters or any other person for services
as a finder in connection with the Offering, and the Company hereby indemnifies
and holds harmless the Underwriters, and the Underwriters hereby indemnify and
hold harmless the Company from and against all Liabilities, joint or several, to
which the indemnified party may become subject insofar as such Liabilities arise
out of or are based upon the claim of any person (other than an employee of the
party claiming indemnity) or entity that he or it is entitled to a finder's fee
in connection with the Offering by reason of such person's or entity's influence
or prior contact with the indemnifying party. The Representative may compensate
any of its personnel as it shall determine in its sole discretion.
9. SUBSTITUTION OF UNDERWRITERS.
(A) SUBSTITUTION. If on the First Closing Date or the Option Closing
Date, as the case may be, any Underwriter shall fail to purchase and pay for the
portion of the Firm Shares or Option Shares, as the case may be, that such
Underwriter has agreed hereunder to purchase and pay for on such date (otherwise
than by reason of any default on the part of the Company or the Selling
Stockholders), you, as Representative of the Underwriters, shall use your
reasonable best efforts to procure within 24 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company and the Selling
Stockholders such amounts as may be agreed and upon the terms set forth herein,
the Firm Shares or Option Shares, as the case may be, that the defaulting
Underwriter or Underwriters failed to purchase. If during such 24 hours you, as
such Representative, shall not have procured such other Underwriters, or any
others, to purchase the Firm Shares or Option Shares, as the case may be, agreed
to be purchased by the defaulting Underwriter or Underwriters, then (i) if the
aggregate number of shares with respect to which such default shall occur does
not exceed
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20% of the Firm Shares, the other Underwriters shall be obligated, severally, in
proportion to the respective numbers of Firm Shares or Option Shares, as the
case may be, that they are obligated to purchase hereunder, to purchase the Firm
Shares or Option Shares, as the case may be, that such defaulting Underwriter or
Underwriters failed to purchase or (ii) if the aggregate number of Firm Shares
or Option Shares, as the case may be, with respect to which such default shall
occur exceeds 20% of the Firm Shares, the Company or you as the Representative
of the Underwriters will have the right, by written notice given within the next
24-hour period to the parties to this Agreement, to terminate this Agreement
without liability on the part of the non-defaulting Underwriters or of the
Company or of the Selling Stockholders except to the extent provided in Section
6. In the event of a default by any Underwriter or Underwriters, as set forth
in this Section (a), the Closing Date or Option Closing Date, as the case may
be, may be postponed for such period, not exceeding seven days, to the extent
you reasonably deem necessary in order that the required changes in the
Registration Statement or in the Prospectus or in any other documents or
arrangements may be effected. The term "Underwriter" includes any person
substituted for a defaulting Underwriter.
(B) FURTHER MATTERS. Nothing contained herein shall relieve a
defaulting Underwriter of any liability it may have for damages caused by its
default. If the other Underwriters satisfactory to you are obligated or agree
to purchase the Shares of a defaulting Underwriter, either you or the Company
may postpone the First Closing Date for up to seven banking days in order to
effect any changes that may be necessary in the Registration Statement, any
Preliminary Prospectus or the Prospectus or in any other document or agreement,
and to file promptly any amendments to the Registration Statement, or any
amendments or supplements to any Preliminary Prospectus or the Prospectus, which
in your opinion may thereby be made necessary.
10. EFFECTIVE DATE. The Agreement shall become effective upon its execution,
except that you may, at your option, delay its effectiveness until 10:00 a.m.,
New York time, on the first full business day following the Effective Date, or
at such earlier time after the Effective Date as you in your discretion shall
first commence the initial public offering by the Underwriters of any of the
Shares. The time of the initial public offering shall mean the time of release
by you of the first newspaper advertisement with respect to the Shares, or the
time when the Shares are first generally offered by you to dealers by letter or
telegram, whichever shall first occur. This Agreement may be terminated by you
at any time before it becomes effective as provided above, except that the
provisions of Sections 6, 7, 8, 13, 14, 15 and 16 shall remain in effect
notwithstanding such termination.
11. TERMINATION.
(A) GROUNDS FOR TERMINATION. This Agreement, except for Sections 6, 7,
8, 13, 14, 15 and 16, may be terminated at any time prior to the First Closing
Date, and the Over-Allotment Option, if exercised, may be cancelled at any time
prior to the Option Closing Date, by you if in your sole judgment it is
impracticable to offer for sale or to enforce contracts made by the Underwriters
for the resale of the Shares agreed to be
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purchased hereunder, by reason of: (i) the Company having sustained a material
loss, whether or not insured, by reason of fire, earthquake, flood, accident or
other calamity, or from any labor dispute or court or government action, order
or decree; (ii) trading in securities on the New York Stock Exchange or the
American Stock Exchange having been suspended or limited; (iii) material
governmental restrictions having been imposed on trading in securities generally
which are not in force and effect on the date hereof; (iv) a banking moratorium
having been declared by federal or New York State authorities; (v) an outbreak
or significant escalation of major international hostilities or other national
or international calamity having occurred; (vi) the passage by the Congress of
the United States or by any state legislature, of any act or measure, or the
adoption of any order, rule or regulation by any governmental body or any
authoritative accounting institute or board, or any governmental executive,
which is reasonably believed by you likely to have a material adverse effect on
the business, property, operations, condition (financial or otherwise) or
earnings of the Company; (vii) any material adverse change in the financial or
securities markets beyond normal fluctuations in the United States having
occurred since the date of this Agreement; or (viii) any material adverse change
having occurred since the respective dates for which information is given in the
Registration Statement and Prospectus, in the business, property, operations,
condition (financial or otherwise), earnings or business prospects of the
Company, whether or not arising in the ordinary course of business.
(B) NOTIFICATION. If you elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided by this Section 11 or by
Section 10, the Company shall be promptly notified by you, by telephone or
telegram, and confirmed by letter.
12. REPRESENTATIVE'S WARRANT. On the First Closing Date, the Company shall
issue and sell to you, for a total purchase price of $5.00, and upon the terms
and conditions set forth in the form of Representative's Warrant filed as an
exhibit to the Registration Statement, a warrant entitling you to purchase
112,500 Shares (the "Representative's Warrant"). In the event of conflict in
the terms of this Agreement and the Representative's Warrant, the terms and
conditions of the Representative's Warrant shall control.
13. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties, covenants and
other statements of the Company and the Underwriters set forth in or made
pursuant to this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any other party, and shall survive
delivery of and payment for the Shares and the termination of this Agreement.
The Company hereby indemnifies and holds harmless the Underwriters from and
against all Liabilities, joint or several, to which the Underwriters may become
subject insofar as such Liabilities arise out of or are based upon the breach or
failure of any representation, warranty or covenant of the Company contained in
this Agreement.
14. NOTICES. All communications hereunder shall be in writing and, except as
otherwise expressly provided herein, if sent to you, shall be mailed, delivered
or telegraphed and confirmed to you at H.J. Meyers & Co., Inc., 1895 Mt. Hope
Avenue, Rochester, New York 14620, with a copy sent to James M. Jenkins, Esq.,
Harter, Secrest & Emery,
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700 Midtown Tower, Rochester, New York 14604; or if sent to the Company or
Selling Stockholders, shall be mailed, delivered, or telegraphed and confirmed
to it or them at International CompuTex, Inc., Attn: Haim E. Dahan, Chief
Executive Officer, 5500 Interstate North Parkway, Suite 507, Atlanta, Georgia
30328 with a copy sent to Henry B. Levi, Esq., Gambrell & Stolz, LLP, Suite
4300, One Peachtree Center, 303 Peachtree Street, N.E., Atlanta, Georgia 30308.
15. PARTIES IN INTEREST. This Agreement is made solely for the benefit of the
Underwriters, the Company, and to the extent expressed, any person controlling
the Company or an Underwriter, as the case may be, and the directors of the
Company, nominees for directors of the Company (if any) named in the Prospectus,
officers of the Company who have signed the Registration Statement, and their
respective executors, administrators, successors and assigns; and no other
person shall acquire or have any right under or by virtue of this Agreement.
The term "successors and assigns" shall not include any purchaser, as such, from
an Underwriter of the Shares.
16. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made
and to be performed entirely within such State, without reference to such
State's principles regarding the conflict of laws.
17. COUNTERPARTS. This Agreement may be executed in two or more counterpart
copies, each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.
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If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return this Agreement, whereupon it will become a binding
agreement between the Company and the Underwriters in accordance with its terms.
Yours very truly,
INTERNATIONAL COMPUTEX, INC.
By: /s/ Haim E. Dahan
--------------------------------
Name: Haim E. Dahan
Title: Chief Executive Officer
/s/ Haim E. Dahan
_______________________________
Haim E. Dahan
/s/ Michael J. Galvin
_______________________________
Michael J. Galvin
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
H.J. MEYERS & CO., INC.
AS REPRESENTATIVE OF THE
SEVERAL UNDERWRITERS NAMED
IN SCHEDULE I HERETO
By: /s/ Michael A. Bresner
-------------------------------
Name: Michael A. Bresner
Title:
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<PAGE>
SCHEDULE I
UNDERWRITING AGREEMENT DATED _______________
Number of
Firm Shares
Underwriter to be Purchased
H.J. Meyers & Co., Inc.
__________
TOTAL 1,125,000
I-1
<PAGE>
SCHEDULE II
UNDERWRITING AGREEMENT DATED ___________
Maximum
Number of
Option Shares
Selling Shareholder to be Sold
Haim E. Dahan 68,304
Michael J. Galvin 16,071
------
TOTAL 84,375
I-2
<PAGE>
EXHIBIT 4.1
WARRANT TO PURCHASE 112,500 SHARES OF
COMMON STOCK
REPRESENTATIVE'S WARRANT
Dated: [CLOSING DATE]
THIS CERTIFIES THAT H.J. MEYERS & CO., INC. (herein sometimes called the
"Holder") is entitled to purchase from INTERNATIONAL COMPUTEX, INC., a (the
"Company"), at the price and during the period hereinafter specified, up to
112,500 shares of the Common Stock, $.001 par value, of the Company (the "Common
Stock"). This Warrant is non-exercisable and transferable only to the officers
of the Holder for a period of 12 months after April __, 1997 (that being the
date on which the Registration Statement (as hereinafter defined) became
effective) (the "Effective Date"), and shall be exercisable and transferable for
a period of four years thereafter, at an exercise price of $10.80 per share of
Common Stock as hereinafter set forth. This Representative's Warrant (this
"Warrant") is issued pursuant to an Underwriting Agreement dated April __, 1997
between the Company and H.J. Meyers & Co., Inc. (the "Representative"), as
representative of certain underwriters, including itself (the "Underwriters"),
in connection with the public offering, through the Underwriters (the
"Offering"), of 1,125,000 Shares (and up to 168,750 additional Shares covered by
an over-allotment option granted to the Underwriters), in consideration of $5.00
received by the Company for this Warrant. Except as otherwise expressly
provided herein, the shares of Common Stock issued upon exercise of this Warrant
shall bear the same terms and conditions described under the caption
"Description Of Securities" in the registration statement (File No. 333-21647)
on Form SB-2 relating to the Offering (the "Registration Statement"), except
that the Holder shall have registration rights under the Securities Act of 1933,
as amended (the "Act"), as more fully described in Section 6 herein. Each
certificate evidencing the Registrable Securities (as hereinafter defined) shall
bear the appropriate restrictive legend set forth below, except that any such
certificate shall not bear such restrictive legend if (a) it is transferred
pursuant to an effective registration statement under the Act or in compliance
with Rule 144 or Rule 144A promulgated under the Act, or (b) the Company is
provided with an opinion of counsel to the effect that such legend is not
required in order to establish compliance with the provisions of the Act:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF
THE
<PAGE>
REPRESENTATIVE'S WARRANT COVERING REGISTRATION RIGHTS PERTAINING TO THESE
SECURITIES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF THE COMPANY AT THE OFFICE OF THE COMPANY AT ATLANTA, GEORGIA."
Unless the context otherwise requires, all references herein to a "Section"
shall mean the appropriate Section of this Warrant.
1. EXERCISE PRICE AND PERIOD. The rights represented by this Warrant
shall be exercised at the price and during the periods set forth below:
(a) During the period from [EFFECTIVE DATE] to [EFFECTIVE DATE+1 YEAR-
1 DAY] (the "First Anniversary Date") inclusive, the Holder shall have no right
to purchase any Common Stock hereunder, except that in the event of any merger
or consolidation of the Company into another entity, or any sale of
substantially all of the assets of the Company as an entirety, prior to the
First Anniversary Date, the Holder shall have the right to exercise this Warrant
at such time and into such kinds and amounts of shares of stock and other
securities and property (including cash) as would be receivable by a holder of
the number of shares of Common Stock into which this Warrant might have been
exercisable immediately prior thereto.
(b) Between [EFFECTIVE DATE+1 YEAR] and [EFFECTIVE DATE+5 YEARS-1 DAY]
(the "Expiration Date") inclusive, the Holder shall have the right to purchase
hereunder up to 112,500 shares of Common Stock at a price of $10.80 per share
(that being 120 percent of the initial public offering price per share of Common
Stock) (the "Share Exercise Price") (the Share Exercise Price being sometimes
called herein the "Exercise Price").
(c) Notwithstanding the provisions of Section 1(b) with respect to the
Exercise Price to the contrary, the Holder may elect to exercise this Warrant,
in whole or in part, by receiving shares of Common Stock equal to the value (as
herein determined) of the portion of this Warrant then being exercised, as of
the date on which this Warrant is so exercised in accordance with Section 2, in
which event the Company shall issue to the Holder the number of shares of Common
Stock determined by using the following formula:
X = Y(A-B)
------
A
where: X = the number of shares of such Common Stock to be issued to
the Holder under the provisions of this Section 1(c)
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Y = the number of shares of such Common Stock that would
otherwise be issued upon such exercise
A = the Current Fair Market Value (as hereinafter defined) of
one Share of Common Stock
B = the applicable Exercise Price of such Common Stock
As used herein, the "Current Fair Market Value" of the Common Stock as of a
specified date shall mean with respect to each share of such Common Stock, (i)
the average of the closing prices of such Common Stock sold on all securities
exchanges on which such Common Stock may at the time be listed, or (ii) if there
have been no sales on any such exchange on such day, the average of the highest
bid and lowest asked prices on all such exchanges at the end of such day, or
(iii) if on such day such Common Stock is not so listed, the average of the
representative bid and asked prices quoted in the NASDAQ System as of 4:00 p.m.,
New York time, or (iv) if on such day such Common Stock is not quoted in the
NASDAQ System, the average of the highest bid and lowest asked prices on such
day in the domestic over-the-counter market as reported by the National
Quotation Bureau, Incorporated or any similar successor organization, in each
such case calculated on the basis of the average over a period of 5 days
consisting of the day as of which the Current Fair Market Value is being
determined and the 4 consecutive business days prior to such day. If on the
date for which Current Fair Market Value is to be determined such Common Stock
is not listed on any securities exchange or quoted in the NASDAQ System or the
over-the-counter market, then Current Fair Market Value of such Common Stock
shall be the highest price per share thereof which the Company could then obtain
from a willing buyer (not a current employee or director) for such Common Stock
sold by the Company, from original issuance, as determined in good faith by the
Board of Directors of the Company, unless prior to such date the Company has
become subject to a merger, consolidation, reorganization, acquisition or other
similar transaction pursuant to which the Company is not the surviving entity,
in which case the Current Fair Market Value of such Common Stock shall be deemed
to be the per share value received or to be received in such transaction by the
holders of such Common Stock.
(d) After the Expiration Date, the Holder shall have no right to
purchase any Common Stock hereunder.
2. EXERCISE. The rights represented by this Warrant may be exercised, in
whole or in part by the Holder at any time within the periods specified in
Section 1 by: (a) surrender of this Warrant for cancellation (with the purchase
form at the end hereof properly executed) at the principal executive office of
the Company (or at such other office or agency of the Company as it may
designate by notice in writing to the Holder at the address of the Holder
appearing on the books of the Company); (b) to the extent that the
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Holder does not use the election provided by Section 1(c), payment to the
Company of the applicable Exercise Price(s), by certified or bank cashier's
check, for the number(s) of shares of Common Stock specified in the such
purchase form, together with the amount of applicable stock transfer taxes, if
any; and (c) delivery to the Company of a duly executed agreement signed by the
person(s) designated in the purchase form to the effect that such person(s)
agree(s) to be bound by all of the terms and conditions of this Warrant,
including without limitation the provisions of Sections 6 and 7. This Warrant
shall be deemed to have been exercised, in whole or in part to the extent
specified, immediately prior to the close of business on the date on which all
of the provisions of this Section 2 are satisfied, and the person(s) designated
in the purchase form shall become the holder(s) of record of the shares of
Common Stock issuable upon such exercise at that time and date. The
certificates representing the Common Stock so purchased shall be delivered to
the Holder within a reasonable time, not exceeding 10 business days, after this
Warrant shall have been so exercised.
3. TRANSFER OF WARRANT.
(a) During the period from [EFFECTIVE DATE] to the First Anniversary
Date inclusive, this Warrant shall not be transferred, sold, assigned or
hypothecated, except that during such period this Warrant may be transferred (i)
to successors in interest of the Holder, or (ii) in whole or in part to any one
or more shareholders, directors or officers of the Holder, in each case subject
to compliance with applicable Federal and state securities laws and
Interpretations of the Board of Governors of the National Association of
Securities Dealers, Inc.
(b) Between [EFFECTIVE DATE+1 YEAR] and the Expiration Date inclusive,
this Warrant shall be freely transferable, in whole or in part, subject to the
other terms and conditions hereof and to compliance with applicable Federal and
state securities laws.
(c) Any transfer of this Warrant permitted by this Section 3 shall be
effected by: (i) surrender of this Warrant for cancellation (with the assignment
form at the end hereof properly executed) at the office or agency of the Company
referred to in Section 2; (ii) delivery of a certificate (signed, if the Holder
is a corporation or partnership, by an authorized officer or partner thereof),
stating that each transferee designated in the assignment form is a permitted
transferee under this Section 3; and (iii) delivery of an opinion of counsel
stating that the proposed transfer may be made without registration or
qualification under applicable Federal or state securities laws. This Warrant
shall be deemed to have been transferred, in whole or in part to the extent
specified, immediately prior to the close of business on the date the provisions
of this Section 3(c) are satisfied, and the transferee(s) designated in the
assignment form shall become the holder(s) of record at that time and date. The
Company shall issue, in the name(s) of the designated transferee(s)
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<PAGE>
(including the Holder if this Warrant has been transferred in part) a new
Warrant or Warrants of like tenor and representing, in the aggregate, rights to
purchase the same number of shares of Common Stock as are then purchasable under
this Warrant. Such new Warrant or Warrants shall be delivered to the record
holder(s) thereof within a reasonable time, not exceeding ten business days,
after the rights represented by this Warrant shall have been so transferred. As
used herein (unless the context otherwise requires), the term "Holder" shall
include each such transferee, and the term "Warrant" shall include each such
transferred Warrant.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees that all
shares of Common Stock which may be issued upon exercise of this Warrant, shall,
upon issuance in accordance with the terms hereof, be duly and validly issued,
fully paid and non-assessable, with no personal liability attaching to the
Holder thereof. The Company further covenants and agrees that during the period
within which this Warrant may be exercised, the Company shall at all times have
authorized and reserved a sufficient number of shares of Common Stock for
issuance upon exercise of this Warrant.
5. SHAREHOLDERS' RIGHTS. This Warrant shall not entitle the Holder to any
voting rights or other rights as a shareholder of the Company.
6. REGISTRATION RIGHTS.
(a) CERTAIN DEFINITIONS. As used herein, the term:
(i) "Registrable Securities" shall mean this Warrant, and/or any or
all of the shares of Common Stock issuable upon exercise of this Warrant.
(ii) "50% Holder" shall mean the Holder(s) of at least 50 percent of
the total number of shares of Common Stock initially comprising the Registrable
Securities (whether or not this Warrant has been exercised), and shall include
any Holder or combination of Holders.
(b) "PIGGYBACK" REGISTRATION. From the date hereof until the Expiration
Date, the Company shall advise the Holder, whether the Holder holds this Warrant
or has exercised this Warrant and holds any of the Common Stock, by written
notice at least four weeks prior to the filing of any post-effective amendment
to the Registration Statement (unless the Company determines that to comply with
Federal securities law it must file such post-effective amendment in less than
four weeks' time, in which case the Company shall give the Holder the most
notice practicable under the circumstances), or of any new registration
statement or post-effective amendment thereto under the Act (other than a
registration
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<PAGE>
statement on Form S-8 or its counterpart), or any Notification on Form 1-A under
the Act, covering any securities of the Company, whether for its own account or
for the account of others, and shall, upon the request of the Holder, include in
any such post-effective amendment or new registration statement such information
as may be required to permit a public offering of any or all of the Common Stock
of the Holder, if such offering is to be effected after the First Anniversary
Date, all at no expense whatsoever to the Holder, except that each Holder whose
Registrable Securities are included in such registration shall bear the fees of
its own counsel and any underwriting discounts or commissions and expenses
applicable to the Common Stock sold by it, provided that they shall furnish the
Company with such appropriate information in connection therewith as the company
shall reasonably request in writing.
(c) DEMAND REGISTRATION.
(i) If any 50% Holder of the total unexercised Warrant (based on
shares purchasable directly or indirectly hereunder) shall give notice to the
Company, at any time after the First Anniversary Date and prior to the
Expiration Date, to the effect that such 50% Holder desires to register under
the Act any Registrable Securities under such circumstances that a public
distribution (within the meaning of the Act) of any such securities shall be
involved, then the Company shall promptly, but no later than 30 days after
receipt of such notice, file a post-effective amendment to the Registration
Statement or a new registration statement under the Act, to the end that
Registrable Securities of such 50% Holder may be publicly sold under the Act as
promptly as practicable thereafter, and the Company shall use its reasonable
best efforts to cause such registration to become effective as soon as possible;
provided, however, that such 50% Holder shall furnish the Company with
appropriate information in connection therewith as the Company may reasonably
request in writing; and provided further that the Company shall then have
available current financial statements (unless the unavailability of current
financial statements results from the Company's fault or neglect). Registrable
Securities may be included in such registration under this Section 6(c) on a
maximum of two occasions during the four-year period beginning on the First
Anniversary Date and ending on the Expiration Date.
(ii) Within ten days after receiving any such notice pursuant to this
Section 6(c), the Company shall give notice to each other Holder (whether such
Holder holds a Warrant or has exercised the Warrant and holds any of the Common
Stock), advising that the Company is proceeding with such post-effective
amendment or new registration statement and offering to include therein
Registrable Securities held by such other Holders, provided that they shall
furnish the Company with such appropriate information in connection therewith as
the Company shall reasonably request in writing.
(iii) All costs and expenses (including without limitation, legal,
accounting, printing, mailing and filing fees) of the first such registration
effected under this Section 6(c) shall be borne by the Company, except that the
Holder(s) whose Registrable Securities are
-6-
<PAGE>
included in such registration shall bear the fees of their own counsel and any
underwriting discounts, commissions, and expenses applicable to the Common Stock
sold by them. All costs and expenses of the second such registration effected
under this Section 6(c) shall be borne by the Holder(s) whose Registrable
Securities are included in such registration.
(iv) The Company shall cause each registration statement or post-
effective amendment filed pursuant to this Section 6(c) to remain current under
the Act (including the taking of such steps as are necessary to obtain the
removal of any stop order) for a period of at least three months from the
effective date thereof, or until all the Registrable Securities included in such
registration have been sold, whichever is earlier.
(v) The Company agrees to use its reasonable best efforts to cause
the above filings to be declared effective by the Securities and Exchange
Commission provided that, and subject to, such Holder providing to the Company
for inclusion in the Registration Statement such information concerning the
Holder and the plan of distribution as required by the Act and the rules and
regulations thereunder.
(d) FURTHER RIGHTS. The registration rights provided by this Section 6
may be exercised by the Holder either prior or subsequent to its exercise of
this Warrant. A 50% Holder may, at its option, request registration pursuant to
Section 6(b) and/or pursuant to Section 6(c), and its request for registration
under one such Section shall not affect its right to request registration under
the other. The registration rights provided by this Section 6 shall supersede
and be prior in right to any registration rights granted by the Company to other
holders of its outstanding securities other than holders of registration rights
granted by the Company to purchasers of the Senior Debentures of the Company.
(e) FURTHER OBLIGATIONS OF COMPANY. With respect to all registrations
under this Section 6, the Company shall: (i) supply prospectuses and such other
documents as the Holder may reasonably request in order to facilitate the public
sale or other disposition of the Registrable Securities; (ii) use its best
efforts to register and qualify the Registrable Securities for sale in such
states as the Holder designates (provided, however, that in no event shall the
Company be required to qualify as a foreign corporation or a dealer in
securities or to execute a general consent to service of process); and (iii) do
any and all other acts and things which may be necessary or desirable to enable
the Holder to consummate the public sale or other disposition of the Registrable
Securities.
7. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. As used in this Section 7, the term
"Liabilities" shall mean any and all losses, claims, damages and liabilities,
and actions and proceedings in respect thereof, including without limitation all
reasonable costs of defense and investigation and all attorneys' fees. Whenever
pursuant to Section 6 a registration
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<PAGE>
statement relating to any Registrable Securities is filed under the Act, or
amended or supplemented, the Company shall indemnify and hold harmless each
Holder of Registrable Securities included in such registration statement,
amendment or supplement (each, a "Distributing Holder"), and each person (if
any) who controls (within the meaning of the Act) the Distributing Holder, and
each underwriter (within the meaning of the Act) of such Registrable Securities,
and each person (if any) who controls (within the meaning of the Act) any such
underwriter, from and against all Liabilities, joint or several, to which the
Distributing Holder or any such controlling person or underwriter may become
subject, under the Act or otherwise, insofar as such Liabilities arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any such registration statement, or any preliminary prospectus
or final prospectus constituting a part thereof, or any amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that the Company
shall not be liable in any such case to the extent that any such Liabilities
arise out of or are based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, preliminary
prospectus, final prospectus, or amendment or supplement thereto, in reliance
upon and in conformity with written information furnished by such Distributing
Holder or by any other Distributing Holder for use in the preparation thereof.
The foregoing indemnity shall be in addition to any other liability which the
Company may otherwise have.
(b) INDEMNIFICATION BY HOLDER. The Distributing Holder(s) shall
indemnify and hold harmless the Company, and each of its directors, each nominee
(if any) named in any preliminary prospectus or final prospectus constituting a
part of such registration statement, each of its officers who have signed such
registration statement and such amendments or supplements thereto, and each
person (if any) who controls the Company (within the meaning of the Act) against
all Liabilities, joint or several, to which the Company or any such director,
nominee, officer or controlling person may become subject, under the Act or
otherwise, insofar as such Liabilities arise out of or are based upon any untrue
or alleged untrue statement of any material fact contained in such registration
statement, preliminary prospectus, final prospectus, or amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent that such Liabilities arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, preliminary prospectus, final prospectus or
amendment or supplement thereto in reliance upon and in conformity with written
information furnished by such Distributing Holder(s) for use in the preparation
thereof. The foregoing indemnity shall be in addition to any other liability
which the Distributing Holder(s) may otherwise have.
(c) PROCEDURE. Promptly after receipt by an indemnified party under
this Section 7 of notice of the commencement of any action, such indemnified
party shall, if a
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<PAGE>
claim in respect thereof is to be made against any indemnifying party, give the
indemnifying party notice of the commencement thereof; but the omission so to
notify the indemnifying party shall not relieve it from any liability which it
may have to any indemnified party otherwise than under this Section 7. In case
any such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(d) LIMITATION. Notwithstanding the foregoing, if the Registrable
Securities are to be distributed by means of an underwritten public offering, to
the extent that the provisions on indemnification and contribution contained in
the underwriting agreement entered into in connection with such underwriting are
in conflict with the provisions of this Section 7, the provisions of such
underwriting agreement shall be controlling, provided that the Holder is a party
to such underwriting agreement.
8. ANTI-DILUTION. In the event that the outstanding shares of Common Stock
are at any time increased or decreased in number, or changed into or exchanged
for a different number or kind of shares or other security of the Company or of
another corporation through reorganization, merger, consolidation, liquidation,
recapitalization, stock split, reverse split, combination of shares or stock
dividends payable with respect to such Common Stock, appropriate adjustments
shall be made in the number and kind of such securities then subject to this
Warrant and in the Exercise Price of this Warrant, effective as of the date of
such occurrence, so that the position of the Holder upon exercise of this
Warrant shall be the same as it would have been had it owned immediately prior
to the occurrence of such event the Common Stock subject to this Warrant;
provided, however, that in no event shall two adjustments be made for the same
event. For example, if the Company declares a 2-for-1 stock dividend or stock
split, then the number of Common Stock then subject to this Warrant shall be
doubled and the per Share Exercise Price shall be reduced by 50 percent. Such
adjustments shall be made successively whenever any event described by this
Section 8 shall occur.
9. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Georgia applicable to agreements made
and to be performed entirely within such State.
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<PAGE>
10. AMENDMENT OR WAIVER. Any provision of this Warrant may be amended,
waived or modified upon the written consent of the Company and (a) any 50%
holder or (b) holders of this Warrant which, at that time, hold individually or
collectively the right to purchase 50% of the Common Stock issuable or issued
pursuant to this Warrant and not yet sold pursuant to exercise of registration
rights under Section 6; provided, however, that such amendment, waiver or
modification applies by its terms to each Holder; and provided further, that a
Holder may waive any of its rights or the Company's obligations to such Holder
without obtaining the consent of any other Holder.
IN WITNESS WHEREOF, INTERNATIONAL COMPUTEX, INC. has caused this Warrant to
be signed by its duly authorized officers under its corporate seal and to be
dated as of the date set forth on the first page hereof.
INTERNATIONAL COMPUTEX, INC.
By:______________________________
Its:
(Corporate Seal)
Attest:
________________________________
Secretary
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<PAGE>
PURCHASE FORM
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT)
The undersigned, the Holder of the foregoing Warrant, hereby
irrevocably elects to exercise the purchase rights represented by such Warrant
for, and to purchase thereunder, ________ shares of Common Stock, $.001 par
value, of INTERNATIONAL COMPUTEX, INC. (the "Company") and (i) herewith makes
payment of an aggregate of $____________ therefor and/or (ii) pursuant to
Section 1(c) of such Warrant hereby tenders the right to exercise such Warrant
to the extent of ________ shares of the Common Stock of the Company. The
undersigned requests that the certificates for the shares of such Common Stock
be issued in the name(s) of, and delivered to, the person(s) whose name(s) and
address(es) are set forth below:
Dated: _____________________
_________________________________
_________________________________
Address
Signatures guaranteed by:
_____________________________
Taxpayer Identification Number:
_____________________________
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<PAGE>
TRANSFER FORM
(TO BE SIGNED ONLY UPON TRANSFER OF WARRANT)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
unto ___________________________________________ the right to purchase shares of
the Common Stock, $.001 par value per share, of INTERNATIONAL COMPUTEX, INC.
(the "Company") represented by the foregoing Warrant to the extent of _______
shares of Common Stock and appoints ________________________ attorney to
transfer such rights on the books of the Company, with full power of
substitution in the premises.
Dated: _____________________
_________________________________
_________________________________
Address
Signatures guaranteed by:
_____________________________
Taxpayer Identification Number:
_____________________________
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<PAGE>
[LETTERHEAD OF GAMBRELL & STOLZ, L.L.P.]
EXHIBIT 5.1
April 28, 1997
International CompuTex, Inc.
5500 Interstate North Parkway, Suite 507
Atlanta, Georgia 30328-4662
Re: Registration Statement on Form SB-2
(Registration No. 333-21647)
Ladies and Gentlemen:
We have acted as counsel to International CompuTex, Inc., a Georgia
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "1933 Act)", of a Registration Statement on Form
SB-2 (Registration No. 333-21647) (the "Registration Statement"), relating to
1,125,000 shares of the Company's Common Stock, $.001 par value (the "Common
Stock"), being offered by the Company, an additional 168,750 shares solely to
cover over-allotments, including 84,375 shares to be issued by the Company and
84,375 shares to be sold by the selling stockholders, and 112,500 shares that
may be issued upon exercise of the warrant granted to H.J. Meyers & Co., Inc.,
as Representative of the Underwriters (collectively, the "Shares").
In so acting, we have examined and relied upon the originals, or copies
certified or otherwise identified to our satisfaction, of such records,
documents, certificates and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinion expressed below.
Based upon the foregoing, we are of the opinion that, upon issuance and
delivery of the Shares and payment therefor in the manner described in the
Registration Statement and in accordance with the terms of the underwriting
agreement (the form of which is filed as
<PAGE>
International CompuTex, Inc.
April 28, 1997
Page 2.
- ----------------------------
Exhibit 1.1 to the Registration Statement), the Shares will be duly authorized,
validly issued and outstanding, and fully paid and non-assessable.
Our opinion expressed above is limited to the laws of the State of Georgia
and the Federal laws of the United States of America.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus. In giving such consent, we do not thereby concede
that we are within the category of persons whose consent is required under
Section 7 of the 1933 Act or the Rules and Regulations of the Commission
thereunder.
Very truly yours,
GAMBRELL & STOLZ, L.L.P.
Henry B. Levi
HBL:hc
<PAGE>
EXHIBIT 23.2
[LETTERHEAD OF HABIF, AROGETI & WYNNE APPEARS HERE]
April 29, 1997
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Amendment No. 3 to the Registration Statement of
International CompuTex,Inc. on Form SB-2 of our report dated January 24, 1997,
appearing in the Prospectus, which is part of this Registration Statement. We
also consent to the reference to us under the headings "Selected Financial Data"
and "Experts" in such Prospectus.
Very truly yours,
HABIF, AROGETI & WYNNE, P.C.
