<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 21, 1999
REGISTRATION NO. 333-69683
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AHL SERVICES, INC.
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<S> <C>
GEORGIA 58-2277249
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
</TABLE>
3353 PEACHTREE ROAD, NE
SUITE 1120, NORTH TOWER
ATLANTA, GEORGIA 30326
(404)267-2222
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
FRANK A. ARGENBRIGHT, JR.
CHAIRMAN AND CO-CHIEF EXECUTIVE OFFICER
AHL SERVICES, INC.
3353 PEACHTREE ROAD, NE
SUITE 1120, NORTH TOWER
ATLANTA, GEORGIA 30326
(404)267-2222
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
<TABLE>
<S> <C>
JEFFREY M. STEIN, ESQ. DONALD J. MURRAY, ESQ.
KING & SPALDING DEWEY BALLANTINE LLP
191 PEACHTREE STREET 1301 AVENUE OF THE AMERICAS
ATLANTA, GEORGIA 30303 NEW YORK, NEW YORK 10019
(404) 572-4600 (212) 259-8000
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of the Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans check the following box. [ ]
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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE
AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF
TITLE OF SHARES TO BE REGISTERED REGISTERED(1) PER UNIT(2) PRICE(2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share................. 4,600,000 $28.0625 $129,087,500 $35,886(3)
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</TABLE>
(1) Includes 600,000 shares which the Underwriters have the option to purchase
solely to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c). Based on the average of the high and low sales
price for the Common Stock on December 17, 1998.
(3) Previously paid
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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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses in connection with the
issuance and distribution of the securities being registered hereunder, all of
which are being paid by the Company. Except for the SEC registration fee and
NASD filing fee, all amounts are estimates.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 35,886
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NASD filing fee............................................. 13,409
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Nasdaq National Market Listing Fee.......................... 17,500
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Accounting fees and expenses................................ 50,000
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Legal fees and expenses..................................... 120,000
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Printing and Engraving expenses............................. 75,000
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Transfer Agent and Registrar fees and expenses.............. 10,000
--------
Miscellaneous Expenses...................................... 78,205
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Total............................................. $400,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Georgia Business Corporation Code permits a corporation to eliminate or
limit the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of duty of care or other duty as a
director, provided that no provision shall eliminate or limit the liability of a
director: (A) for any appropriation, in violation of his duties, of any business
opportunity of the corporation; (B) for acts or omissions which involve
intentional misconduct or a knowing violation of law; (C) for unlawful corporate
distributions; or (D) for any transaction from which the director received an
improper personal benefit. This provision pertains only to breaches of duty by
directors in their capacity as directors (and not in any other corporate
capacity, such as officers) and limits liability only for breaches of fiduciary
duties under Georgia corporate law (and not for violation of other laws, such as
the Federal securities laws). The Company's Restated and Amended Articles of
Incorporation (the "Restated Articles") exonerate the Company's directors from
monetary liability to the extent permitted by this statutory provision.
The Company's Bylaws (the "Bylaws") also provide that the Company shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (including any action by or in
the right of the Company), by reason of the fact that such person is or was a
director or officer of the Company, or is or was serving at the request of the
Company as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including reasonable
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the Company
(and with respect to any criminal action or proceeding, if such person had no
reasonable cause to believe such person's conduct was unlawful), to the maximum
extent permitted by, and in the manner provided by, the Georgia Business
Corporation Code. In addition, the Bylaws provide that the Company will advance
to its directors or officers reasonable expenses of any such proceeding.
Notwithstanding any provision of the Company's Amended and Restated
Articles and Bylaws to the contrary, the Georgia Business Corporation Code
provides that the Company shall not indemnify a director or officer for any
liability incurred in a proceeding in which the director is adjudged liable to
the Company or is subjected to injunctive relief in favor of the Company: (1)
for any appropriation, in violation of his duties, of any business opportunity
of the Company; (2) for acts or omissions which involve intentional misconduct
or a
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knowing violation of law; (3) for unlawful corporate distributions; (4) for any
transaction from which the director or officer received an improper personal
benefit.
Section 8 of the Underwriting Agreement filed as Exhibit 1.1 hereto also
contains certain provisions pursuant to which certain officers, directors and
controlling persons of the Company may be entitled to be indemnified by the
underwriters named therein.
The Company has purchased insurance with respect to, among other things,
any liabilities that may accrue under the statutory provisions referred to
above.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
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EXHIBIT
NUMBER NUMBER DESCRIPTION
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1.1 -- Form of Underwriting Agreement
3.1 -- Restated and Amended Articles of Incorporation of the
Company (incorporated by reference to the Registration
Statement on Form 8-A dated March 25, 1997)
3.2 -- Bylaws of the Company (incorporated by reference to the
Registration Statement on Form 8-A dated March 25, 1997)
4.1 -- Specimen common stock certificate (incorporated by reference
to the Registration Statement on Form S-1, File No.
333-20315)
4.2 -- 1997 Stock Incentive Plan (incorporated by reference to the
Registration Statement on Form S-1, File No. 333-20315)
4.1 -- Convertible Subordinated Promissory Note dated July 24, 1998
(incorporated by reference to the Current Report on Form 8-K
dated July 24, 1998).
5.1** -- Opinion of King and Spalding as to the legality of the
common stock being registered
10.1 -- Restated Employment Agreement between the Company and Edwin
R. Mellett dated as of February 1, 1997, as amended on
February 28, 1997 (incorporated by reference to the
Registration Statement on Form S-1, File No. 333-20315)
10.2 -- Restated Employment Agreement between the Company and Thomas
J. Marano dated as of February 1, 1997, as amended on
February 28, 1997 (incorporated by reference to the
Registration Statement on Form S-1, File No. 333-20315)
10.3 -- Restated Employment Agreement between the Company and David
L. Gamsey dated as of February 1, 1997, as amended on
February 28, 1997 (incorporated by reference to the
Registration Statement on Form S-1, File No. 333-20315)
10.4 -- Letter Agreement between the Company and Ernest Patterson
dated as of May 23, 1997 (incorporated by reference to the
Registration Statement on Form S-1, File No. 333-37327)
10.5 -- Credit Agreement dated as of February 10, 1998 by and among
AHL Services, Inc., Argenbright Security, Inc., Argenbright,
Inc., Intersec, Inc., ADI U.K. Limited, Aviation Defence
International Germany Limited, Argenbright Holdings Limited
and The ADI Group Limited, as borrowers, the Lenders
referred to therein, First Union National Bank (London
Branch), as European Facility Lender and First Union
National Bank of Georgia, as Administrative Agent
(incorporated by reference to Annual Report on Form 10-K for
the year ended December 31, 1997)
10.6** -- First Amendment to Amended and Restated Credit Agreement
dated as of July 9, 1998 by and among AHL Services, Inc.,
Argenbright Security, Inc., Argenbright, Inc., Intersec,
Inc., ADI U.K. Limited, Aviation Defence International
Germany Limited, Argenbright Holdings Limited and The ADI
Group Limited, as borrowers, the Lenders referred to
therein, First Union National Bank (London Branch), as
European Facility Lender and First Union National Bank of
Georgia, as Administrative Agent
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER NUMBER DESCRIPTION
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<S> <C> <C>
10.7** -- Second Amendment to Amended and Restated Credit Agreement
dated as of November 18, 1998 by and among AHL Services,
Inc., Argenbright Security, Inc., Argenbright, Inc.,
Intersec, Inc., ADI U.K. Limited, Aviation Defence
International Germany Limited, Argenbright Holdings Limited
and The ADI Group Limited, as borrowers, the Lenders
referred to therein, First Union National Bank (London
Branch), as European Facility Lender and First Union
National Bank of Georgia, as Administrative Agent
10.8 -- Purchase Agreement, dated as of July 24, 1998, by and among
Argenbright, Inc., Gage Marketing Group, LLC and Adistra LLC
(incorporated by reference to the Current Report on Form 8-K
dated July 24, 1998).
10.9 -- First Amendment to Purchase Agreement, dated as of July 24,
1998, by and among Argenbright, Inc., Gage Marketing Group,
LLC and Adistra LLC (incorporated by reference to the
Current Report on Form 8-K dated July 24, 1998).
10.10** -- Stock Purchase Agreement for the Acquisition of UNICCO
Security Services, Inc. dated as of October 26, 1998 by and
among Argenbright Security, Inc., UNICCO Security Services,
Inc., USC, Inc. and UNICCO Service Company.
10.11** -- First Amendment to Stock Purchase Agreement, dated December
11, 1998, by and among Argenbright Security, Inc., UNICCO
Security Services, Inc., USC, Inc. and UNICCO Service
Company.
10.12 -- Registration Rights Agreement, dated July 24, 1998, by and
between AHL Services, Inc. and Gage Marketing Group, LLC
(incorporated by reference to the Current Report on Form 8-K
dated July 24, 1998).
10.13 -- Consulting Agreement, dated July 24, 1998, by and between
AHL Services, Inc. and Edwin C. Gage (incorporated by
reference to the Current Report on Form 8-K dated July 24,
1998).
23.1 -- Consent of King and Spalding (contained in Exhibit 5.1)
23.2 -- Consent of Arthur Andersen LLP
23.3 -- Consent of Price Waterhouse GmbH
24.1** -- Powers of Attorney (contained on signature page)
</TABLE>
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** Previously filed
(b) Financial Statement Schedules.
Not Applicable
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act of 1933 (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 Securities and Exchange 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,
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or controlling person in connection with the securities being registered
hereunder, 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 Act and will be governed by the final adjudication of
such issue.
The Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, 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 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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SIGNATURES AND POWER OF ATTORNEY
Pursuant to 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 for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia, on January 21, 1999.
AHL SERVICES, INC.
By: /s/ DAVID L. GAMSEY
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David L. Gamsey
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
has been signed by the following persons in the capacities indicated on January
21, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
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<C> <S>
* Chairman and Co-Chief Executive Officer
- ----------------------------------------------------- (Principal Executive Officer)
Frank A. Argenbright, Jr.
* Vice Chairman and Co-Chief Executive Officer
- -----------------------------------------------------
Edwin R. Mellett
/s/ DAVID L. GAMSEY Chief Financial Officer (Principal Financial
- ----------------------------------------------------- and Principal Accounting Officer)
David L. Gamsey
* Director
- -----------------------------------------------------
Edwin C. Gage
* Director
- -----------------------------------------------------
Robert F. McCullough
* Director
- -----------------------------------------------------
Hamish Leslie Melville
*By: /s/ DAVID L. GAMSEY
----------------------------------------------
David L. Gamsey
Attorney-in-fact
</TABLE>
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<PAGE> 1
EXHIBIT 1.1
AHL SERVICES, INC.
4,000,000 Shares
Common Stock
($.01 par value per share)
UNDERWRITING AGREEMENT
New York, New York
January , 1999
Salomon Smith Barney Inc.
BT Alex. Brown Incorporated
Credit Suisse First Boston Corporation
The Robinson-Humphrey Company, LLC
As Representatives of the several Underwriters,
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
AHL Services, Inc., a Georgia corporation (the
"Company"), proposes to sell to the several underwriters named in Schedule I
hereto (the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, 3,755,570 shares of Common Stock, $.01 par value per share (the
"Common Stock"), of the Company, and the person named in Schedule II-A hereto
(the "Prime Selling Shareholder") proposes to sell to the several Underwriters
244,430 shares of Common Stock (said shares to be issued and sold by the Company
and shares to be sold by the Prime Selling Shareholder collectively being
hereinafter called the "Underwritten Securities"). The Company and the persons
named in Schedule II-B hereto (the "Option Selling Shareholders" and together
with the Prime Selling Shareholder, the "Selling Shareholders") also propose to
grant to the Underwriters an option to purchase up to 320,000 and 280,000
additional shares of Common Stock, respectively, to cover over-allotments (the
"Option Securities"; the Option Securities, together with the Underwritten
Securities, being hereinafter called the "Securities"). To the extent there are
no additional Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as
<PAGE> 2
the context requires. Any reference herein to the Registration Statement, a
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3,
which were filed pursuant to the Exchange Act on or before the Effective Date of
the Registration Statement or the date of such Preliminary Prospectus or the
Prospectus, as the case may be (the "Incorporated Documents"); and any reference
herein to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement, or the date of any
Preliminary Prospectus or the Prospectus, as the case may be, deemed to be
incorporated therein by reference. Certain other terms used herein are defined
in Section 17 hereof.
1. Representations and Warranties.
(a) The Company represents and warrants as follows:
(i) The Company meets the requirements for use of
Form S-3 under the Act and has prepared and filed with the Commission a
registration statement (Commission File No. 333-69683) on Form S-3,
including a related Preliminary Prospectus, for registration under the
Act of the offering and sale of the Securities. The Company may have
filed one or more amendments thereto, each of which has previously been
furnished to you. The Company will next file with the Commission one of
the following: either (1) prior to the Effective Date of such
registration statement, a further amendment to such registration
statement, (including the form of final prospectus) or (2) after the
Effective Date of such registration statement, a final prospectus in
accordance with Rules 430A and 424(b). In the case of clause (2), the
Company has included in the Registration Statement, as amended at the
Effective Date, all information (other than Rule 430A Information)
required by the Act to be included in such registration statement and
the Prospectus. As filed, such amendment to the registration statement
and form of final prospectus, or such final prospectus, shall contain
all Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree
in writing to a modification, shall be in all substantive respects in
the form furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, or your
counsel, prior to the Execution Time, will be included or made therein.
(ii) On the Effective Date, the Registration Statement did
or will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein)
and on the date on which Option Securities are purchased, if such date
is not the Closing Date (the "Option Closing Date"), the Prospectus
(and any supplements thereto) will, comply in all material respects
with the applicable requirements of the Act and the Exchange Act and
the respective rules and regulations thereunder; on the Effective Date
and at the
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Execution Time, the Registration Statement did not or will not 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; and, on the Effective Date, the
Prospectus, if not subsequently filed pursuant to Rule 424(b), will
not, and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date and the Option Closing Date, the Prospectus (together with
any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished herein or in writing to the
Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the
Prospectus (or any supplement thereto).
(iii) The Company has been duly organized 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 Registration Statement;
each of the subsidiaries of the Company that conduct business and hold
assets (collectively, the "Subsidiaries") has been duly organized and
is validly existing as a corporation in good standing (to the extent
that good standing is a concept recognized by such jurisdiction) under
the laws of the jurisdiction of its incorporation, with corporate power
and authority to own or lease its properties and conduct its business
as described in the Registration Statement; the Company and each of the
Subsidiaries are duly qualified to transact business in all
jurisdictions in which the conduct of their business requires such
qualification, except to the extent that the failure to be so qualified
would not have a material adverse effect on the Company and the
Subsidiaries taken as a whole; the outstanding shares of capital stock
of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable and are owned by the Company
or another Subsidiary free and clear of all liens, encumbrances and
security interests, other than the security interest granted to First
Union National Bank of Georgia ("First Union") pursuant to the
Company's 1997 credit facility with First Union, as amended through the
date hereof; and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.
(iv) The outstanding shares of Common Stock of the
Company, including all shares to be sold by the Prime Selling
Shareholder, Frank A. Argenbright, Jr. and the Frank A. Argenbright,
Jr., Charitable Remainder Trust No. 1, have been duly authorized and
validly issued and are fully paid and non-assessable; the Option
Securities on the Option Closing Date will be validly issued, fully
paid and non-assessable; the Securities to be issued and sold by the
Company have been duly authorized and when issued and paid for as
contemplated herein will be validly issued, fully paid and
non-assessable; and no preemptive rights of
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shareholders exist with respect to any of the Securities or the issue
and sale thereof.
(v) The Securities conform to the description thereof
incorporated by reference in the Registration Statement.
(vi) The Commission has not issued an order preventing or
suspending the use of any Preliminary Prospectus relating to the
proposed offering of the Securities nor instituted proceedings for that
purpose.
(vii) The combined financial statements of the Company and
its subsidiaries, together with related notes and schedules
incorporated by reference in the Registration Statement, present fairly
in all material respects the financial position and the results of
operations of the Company and its subsidiaries, taken as a whole, at
the indicated dates and for the indicated periods and comply in all
material respects with the applicable accounting requirements of
Regulation S-X under the Act. Such financial statements have been
prepared in accordance with generally accepted principles of accounting
and all adjustments necessary for a fair presentation of results for
such periods have been made. The selected and summary financial,
operating and statistical data included in the Registration Statement
present fairly in all material respects the information shown therein
and have been compiled on a basis consistent with the financial
statements presented therein. The pro forma financial statements
included or incorporated by reference in the Registration Statement
include assumptions that provide a reasonable basis for presenting the
significant effects directly attributable to the transactions and
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma adjustments
reflect the proper application of those adjustments to the historical
financial statement amounts in the pro forma financial statements
included in the Registration Statement. The pro forma financial
statements included or incorporated by reference in the Registration
Statement comply in all material respects with the applicable
accounting requirements of Regulation S-X under the Act.
(viii) There is no action or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of the
Subsidiaries before any court or administrative agency which might
reasonably be expected to result in any material adverse change in the
business or financial condition of the Company and of the Subsidiaries
taken as a whole, except as set forth in the Registration Statement.
(ix) The Company and the Subsidiaries have good and
marketable title to all of the real properties and own all assets
reflected in the financial statements hereinabove described (or as
described in the Registration Statement as owned), subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except those
reflected in such financial statements (or as described in the
Registration Statement) or which are not material. The Company and the
Subsidiaries occupy their leased properties under valid and binding
leases with such exceptions as are
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not material to the Company and the Subsidiaries taken as a whole. Such
leases conform to such descriptions thereof as may be set forth in the
Registration Statement.
(x) The Company and the Subsidiaries have filed all
Federal, state and foreign income tax returns which have been required
to be filed and have paid all taxes indicated by said returns and all
assessments received by them or any of them to the extent that such
taxes have become due and are not being contested in good faith.
(xi) Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), subsequent to
the respective dates as of which such information is given in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), neither the Company nor any of the Subsidiaries
has incurred any liability or obligation, direct or contingent, or
entered into any transaction which is material to the Company and the
Subsidiaries taken as a whole, and there has not been any change in the
capital stock or material increase in the consolidated short-term or
long-term debt of the Company, or any material adverse change, or any
development involving or which may reasonably be expected to involve a
prospective material adverse change, in the condition (financial or
other), business, properties or results of operations of the Company
and the Subsidiaries taken as whole. The Company and the Subsidiaries
have no material contingent obligations which are required to be
disclosed by generally accepted accounting principles and which are not
disclosed in the Registration Statement, as it may be amended or
supplemented.
(xii) Neither the Company nor any of the Subsidiaries is in
default under any agreement, lease, contract, indenture or other
instruments or obligation to which it is a party or by which it or any
of its properties is bound, except for such defaults that would not
have a material adverse effect on the Company and the Subsidiaries
taken as a whole. The consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will not conflict
with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any Subsidiary is
a party, or of the charter or by-laws of the Company or any Subsidiary
or any order, rule or regulation applicable to the Company or any
Subsidiary of any court or of any regulatory body or administrative
agency or other governmental body having jurisdiction over the Company
or any Subsidiary, except for such breaches that would not result in a
material adverse effect on the Company and the Subsidiaries taken as a
whole.
(xiii) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with
the execution and delivery by the Company of this Agreement and the
consummation of the transactions herein contemplated (except such steps
as may be required by the National Association of Securities Dealers,
Inc. (the "NASD") or may be necessary to qualify the
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<PAGE> 6
Securities for public offering by the Underwriters under state
securities or "blue sky" laws) has been obtained or made and is in full
force and effect.
(xiv) The Company and each of the Subsidiaries holds all
material licenses, certificates and permits from governmental
authorities which are necessary for the conduct of their businesses,
except where the failure to possess such licenses, certificates and
permits would not have a material adverse effect on the Company and the
Subsidiaries taken as a whole; and, to the knowledge of the Company,
neither the Company nor any of the Subsidiaries has received notice of
infringement of any patents, patent rights, trade names, trademarks or
copyrights, which infringement is material to the business of the
Company and the Subsidiaries taken as a whole.
(xv) Each of Arthur Andersen LLP and
PricewaterhouseCoopers, the firms that have certified certain of the
financial statements filed with the Commission as part of the
Registration Statement, are independent public accountants as required
by the Act.
(xvi) The Company's application for listing of the
Securities on the Nasdaq Stock Market has been approved.
(xvii) To the best of the Company's knowledge, there are no
affiliations or associations between any member of the NASD and any of
the Company's officers, directors or 5% or greater security holders,
except that Hamish Leslie Melville, a director of the Company, is a
Managing Director of Credit Suisse First Boston (Europe) Ltd., an
affiliate of an NASD member.
(xviii) There are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement or any Incorporated Document that are not
described or filed as required by the Act. The Company is not currently
involved in any strike, job action or labor dispute, and, to the
Company's best knowledge, no such action or dispute has been
threatened.
(xix) The Company has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement. The
execution and delivery of, and the performance by the Company of its
obligations under, this Agreement have been duly and validly authorized
by the Company. This Agreement has been duly executed and delivered by
the Company and constitutes the valid and legally binding agreement of
the Company, enforceable against the Company in accordance with its
terms, except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws or principles of public
policy and subject to the qualification that the enforceability of the
Company's obligations hereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by
general equitable principles.
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<PAGE> 7
(xx) The Company has not distributed and, prior to the
later to occur of the Closing Date, the Option Closing Date or the
completion of the distribution of the Securities, will not distribute
any offering material in connection with the offering and sale of the
Securities other than the Registration Statement, the Preliminary
Prospectus, the Prospectus or other materials, if any, permitted by the
Act and state securities or "blue sky" laws.
(xxi) No holder of any security of the Company has any
right (other than rights that have been complied with or validly
waived) to require registration of shares of Common Stock or any other
security of the Company because of the filing of the Registration
Statement or the consummation of the transactions contemplated by this
Agreement and, except as disclosed in the Prospectus, no person has the
right to require registration under the Act of any shares of Common
Stock or other securities of the Company. No person has the right,
contractual or otherwise, to cause the Company to permit such person to
underwrite the sale of any of the Securities. Except as described in or
contemplated by the Prospectus, there are no outstanding options,
warrants or other rights calling for the issuance of, and there are no
commitments, plans or arrangements to issue, any shares of capital
stock of the Company or any security convertible into or exchangeable
or exercisable for capital stock of the Company.
(xxii) The Incorporated Documents were filed in a timely
manner and, when they were filed (or, if any amendment with respect to
any such document was filed, when such document was filed), conformed
in all material respect with the requirements of the Exchange Act and
did not contain an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
(b) Each Selling Shareholder represents and warrants to, and
agrees with, each Underwriter that:
(i) The consummation by such Selling Shareholder of the
transactions herein contemplated and the fulfillment by such Selling
Shareholder of the terms hereof will not result in a breach of any of
the terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or instrument to
which such Selling Shareholder is a party, or of any order, rule or
regulation applicable to such Selling Shareholder of any court or of
any regulatory body or administrative agency or other governmental body
having jurisdiction over such Selling Shareholder.
(ii) Such Selling Shareholder has not taken and will not
take, directly or indirectly, any action designed to, or which has
constituted, or which might
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<PAGE> 8
reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock of the Company.
(iii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
by such Selling Shareholder of the transactions contemplated herein,
except such as may have been obtained under the Act, such as may be
required by the NASD and such as may be required under the "blue sky"
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such other
approvals as have been obtained.
(iv) Without having undertaken to determine independently
the accuracy or completeness of either the representations and
warranties of the Company contained herein or the information contained
in the Registration Statement, such Selling Shareholder has no reason
to believe that the representations and warranties of the Company
contained in Section 1(a) hereof are not true and correct, has read the
Registration Statement and has no knowledge of any material fact,
condition or information not disclosed in the Registration Statement
which has adversely affected or may be reasonably likely to adversely
affect the business of the Company or any of the Subsidiaries; and the
sale of the Securities by such Selling Shareholder pursuant hereto is
not prompted by any information concerning the Company or any of the
Subsidiaries which is not set forth in the Registration Statement.
(c) The Prime Selling Shareholder, Frank A. Argenbright, Jr.,
and The Frank A. Argenbright, Jr., Charitable Remainder Trust No. 1, each
represent and warrant to, and agree with, each Underwriter that:
(i) Such Selling Shareholder has, and at the Closing Date
and on the Option Closing Date, as the case may be, will have, good and
marketable title to the Securities to be sold by such Selling
Shareholder, free of any liens, encumbrances, equities and claims, and
full right, power and authority to effect the sale and delivery of such
Securities; and upon the delivery of and payment for such Securities
pursuant to this Agreement, good and marketable title thereto, free of
any liens, encumbrances, equities and claims, will be transferred to
the several Underwriters.
(ii) Certificates in negotiable form for such Selling
Shareholder's Securities have been placed in custody, for delivery
pursuant to the terms of this Agreement, under a Custody Agreement and
Power of Attorney executed and delivered by such Selling Shareholder,
in the form heretofore furnished to you (the "Custody Agreement") with
First Union National Bank, as Custodian (the "Custodian"); the
Securities represented by the certificates so held in custody for such
Selling Shareholder are subject to the interests hereunder of the
Underwriters; the arrangements for custody and delivery of such
certificates, made by such Selling Shareholder hereunder and under the
Custody Agreement, are not subject to termination by any acts of such
Selling Shareholder, or by
8
<PAGE> 9
operation of law, whether by the death or incapacity of such Selling
Shareholder or the occurrence of any other event; and if any such
death, incapacity or any other such event shall occur before the
delivery of such Securities hereunder, certificates for the Securities
will be delivered by the Custodian in accordance with the terms and
conditions of this Agreement and the Custody Agreement as if such
death, incapacity or other event had not occurred, regardless of
whether or not the Custodian shall have received notice of such death,
incapacity or other event.
(d) Edwin R. Mellett represents and warrants to, and agrees
with, each Underwriter, that:
(i) Such Selling Shareholder will have, on the Option
Closing Date, good and marketable title to the Option Securities to be
sold by him, free of any liens, encumbrances, equities and claims, and
full right, power and authority to effect the sale and delivery of such
Securities; and upon the delivery of and payment for such Securities
pursuant to this Agreement, good and marketable title thereto, free of
any liens, encumbrances, equities and claims, will be transferred to
the several Underwriters.
(ii) A Custody Agreement and Power of Attorney has been
executed and delivered by him, in the form heretofore furnished to you,
with First Union National Bank, as Custodian (the "Custodian"),
instructing his Attorney-in-Fact to take all steps necessary for
exercise of the stock options exercisable for the Option Securities to
be sold by Edwin R. Mellett; the Option Securities to be received upon
exercise by such Selling Shareholder of such stock options are subject
to the interests hereunder of the Underwriters; such exercise will not
be subject to termination or revocation by any acts of Edwin R.
Mellett, or by operation of law, whether by the death or incapacity of
Edwin R. Mellett or the occurrence of any other event; and if any such
death, incapacity or any other such event shall occur before the
exercise of the stock options with respect to any Option Securities and
the delivery of the Option Securities to the Underwriters, such options
will be exercised, and the Option Securities will be delivered to the
Underwriters in accordance with the terms and conditions of this
Agreement as if such death, incapacity or other event had not occurred,
regardless of whether or not the Attorney-in-Fact shall have received
notice of such death, incapacity or other event.
In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 and the Interest and Dividend Tax Compliance Act of 1983 with
respect to the transactions herein contemplated, each Selling Shareholder agrees
to deliver to you prior to or at the Closing Date a properly completed and
executed United States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
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<PAGE> 10
Any certificate signed by any Selling Shareholder and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by such Selling Shareholder, as to matters covered thereby, to each
Underwriter.
2. Purchase and Sale.
(a) Subject to such adjustments as you, in your absolute
discretion, may determine in order to avoid fractional shares, the Company
hereby agrees, subject to all the terms and conditions set forth herein, to
issue and sell to each Underwriter and, upon the basis of the representations,
warranties and agreements of the Company and the Selling Shareholders herein
contained and subject to all the terms and conditions set forth herein, each
Underwriter agrees, severally and not jointly, to purchase from the Company, at
a purchase price of $ per share (the "Purchase Price Per Share"), that number of
Underwritten Securities which bears the same proportion to the aggregate number
of Underwritten Securities to be issued and sold by the Company as the number of
Underwritten Securities set forth opposite the name of such Underwriter in
Schedule I hereto bears to the aggregate number of Underwritten Securities
listed on Schedule I.
(b) Subject to such adjustments as you, in your absolute
discretion, may determine in order to avoid fractional shares, the Prime Selling
Shareholder hereby agrees, subject to all the terms and conditions set forth
herein, to issue and sell to each Underwriter and, upon the basis of the
representations, warranties and agreements of the Company and the Selling
Shareholders herein contained and subject to all the terms and conditions set
forth herein, each Underwriter agrees, severally and not jointly, to purchase
from the Prime Selling Shareholder at the Purchase Price Per Share that number
of Underwritten Securities which bears the same proportion to the number of
Underwritten Securities set forth opposite the name of the Selling Shareholder
in Schedule II-A hereto as the number of Underwritten Securities set forth
opposite the name of such underwriter in Schedule I hereto bears to the
aggregate number of Underwritten Securities listed on Schedule I.
(c) Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company and the
Option Selling Shareholders hereby grant an option to the several Underwriters
to purchase, severally and not jointly, up to an aggregate of 600,000 Option
Securities at the Purchase Price Per Share. The option may be exercised only to
cover over-allotments in the sale of the Underwritten Securities by the
Underwriters. The option may be exercised in whole or in part at any time (but
not more than once) on or before the 30th day after the date of the Prospectus
upon written or telegraphic notice by the Representatives to the Company and the
Option Selling Shareholders setting forth the number of Option Securities as to
which the several Underwriters are exercising the option and the Option Closing
Date, which shall be within three Business Days of delivery of the notice (the
"Option Notice"). The maximum number of Option Securities to be sold by the
Company is 320,000, and the maximum aggregate number of Option Securities to be
sold by the Option Selling Shareholders is 280,000. The maximum number of Option
Securities which each Option Selling Shareholder agrees to sell is set forth in
Schedule II-B hereto. In the event that
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<PAGE> 11
the Underwriters exercise less than their full over-allotment option, the number
of Option Securities to be sold by each Option Selling Shareholder shall,
subject to such adjustments as you in your absolute discretion shall make to
eliminate any fractional shares, bear the same proportion to the total number of
Option Securities being purchased by the Underwriters or 280,000, whichever is
less, as the maximum number of Option Securities subject to sale by such party
bears to the maximum aggregate number of Option Securities subject to sale by
the Option Selling Shareholders, and the number of Option Securities to be sold
by the Company shall be equal to the total number of Option Securities being
purchased by the Underwriters minus the number of Option Securities being sold
by the Option Selling Shareholders. The number of Option Securities to be
purchased by each Underwriter shall, subject to such adjustments as you in your
absolute discretion shall make to eliminate any fractional shares, be in the
same proportion to the total number of Option Securities to be purchased by the
several Underwriters as the number of Underwritten Securities to be purchased by
such Underwriter bears to the total number of Underwritten Securities to be
purchased by the several Underwriters.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(c) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
, 1999, or at such time on such later date not more than three Business
Days after the foregoing date as the Representatives shall designate, which date
and time may be postponed by agreement among the Representatives, the Company
and the Selling Shareholders or as provided in Section 9 hereof (such date and
time of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment therefor by the
several Underwriters through the Representatives of the respective aggregate
purchase prices of the Securities being sold by the Company and each of the
Selling Shareholders to or upon the order of the Company and the Selling
Shareholders by wire transfer payable in same-day funds to the accounts
specified by the Company and the Selling Shareholders, as the case may be.
Delivery of the Underwritten Securities and the Option Securities shall be made
through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
Each Selling Shareholder will pay all applicable state
transfer taxes, if any, involved in the transfer to the several Underwriters of
the Securities to be purchased by them from such Selling Shareholder, and the
respective Underwriters will pay any additional stock transfer taxes involved in
further transfers.
If the option provided for in Section 2(c) hereof is exercised
after the third Business Day prior to the Closing Date, the Company and the
Option Selling Shareholders will deliver the Option Securities (at the expense
of the Company) to the Representatives on the date specified by the
Representatives in the Option Notice for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company and the Option Selling Shareholders by wire transfer payable in same-day
funds to the accounts specified by the Company and the Option Selling
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<PAGE> 12
Shareholders, as the case may be. If settlement for the Option Securities occurs
after the Closing Date, the Company and such Option Selling Shareholders will
deliver to the Representatives on the Option Closing Date, and the obligation of
the Underwriters to purchase the Option Securities shall be conditioned upon
receipt of, supplemental opinions, certificates and letters confirming as of
such date the opinions, certificates and letters delivered on the Closing Date
pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the
several Underwriters propose to offer the Securities for sale to the public as
set forth in the Prospectus.
5. Covenants.
(a) Covenants of the Company. The Company hereby covenants and
agrees with each Underwriter as follows:
(i) The Company will (A) prepare and timely file with the
Commission under Rule 424(b) of the Act a Prospectus containing
information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Act, and (B) not
file any amendment to the Registration Statement or supplement to the
Prospectus of which the Underwriters shall not previously have been
advised and furnished with a copy or to which the Underwriters shall
have reasonably objected in writing or which is not in compliance with
the Act and (C) file on a timely basis all reports and any definitive
proxy or information statements required to be filed by the Company
with the Commission subsequent to the date of the Prospectus and prior
to the termination of the offering of the Shares by the Underwriters.
(ii) The Company will advise the Underwriters promptly of
(A) any request of the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional
information, or of (B) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use
of the Prospectus or of the institution of any proceedings for that
purpose, or (C) if there shall be any change in the Company's condition
(financial or other), business, prospects, properties or results of
operations or the happening of any event which makes any statement of a
material fact made in the Registration Statement or the Prospectus (as
then amended or supplemented) untrue or which requires the making of
any additions to or changes in the Registration Statement or the
Prospectus (as then amended or supplemented) in order to state a
material fact required by the Act to be stated therein or necessary in
order to make the statements therein not misleading in any material
respect, or of (D) the necessity to amend or supplement the Prospectus
(as then amended or supplemented) to comply with the Act or any other
law. The Company will use its best efforts to prevent the issuance of
any such stop order preventing or suspending the use of the Prospectus
and to obtain as soon as possible the lifting thereof, if issued.
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(iii) The Company will cooperate with the Underwriters in
endeavoring to qualify the Securities for sale under the securities
laws of such jurisdictions as the Underwriters may reasonably have
designated in writing and will make such applications, file such
documents, and furnish such information as may be reasonably required
for that purpose, provided the Company shall not be required to qualify
as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or
required to file such a consent. The Company will, from time to time,
prepare and file such statements, reports, and other documents, as are
or may be required to continue such qualifications in effect for so
long a period as the Underwriters may reasonably request for
distribution of the Securities.
(iv) The Company will deliver to, or upon the order of,
the Underwriters, from time to time, as many copies of any Preliminary
Prospectus as the Underwriters may reasonably request. The Company will
deliver to, or upon the order of, the Underwriters during the period
when delivery of a Prospectus is required under the Act, as many copies
of the Prospectus in final form, or as thereafter amended or
supplemented, as the Underwriters may reasonably request. The Company
will deliver to the Underwriters at or before the Closing Date, five
copies of the Registration Statement, all amendments thereto,
Incorporated Documents and all exhibits filed therewith, and will
deliver to the Underwriters such number of copies of the Registration
Statement, but without exhibits and Incorporated Documents, and of all
amendments thereto, as the Underwriters may reasonably request.
(v) If during the period in which a Prospectus is
required by law to be delivered by an Underwriter or dealer any event
shall occur as a result of which, in the judgment of the Company or in
the opinion of counsel for the Underwriters, it becomes necessary to
amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading, or, if it is
necessary at any time to amend or supplement the Prospectus to comply
with any law, the Company promptly will prepare and file with the
Commission an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with
law.
(vi) The Company will make generally available to its
security holders, as soon as it is practicable to do so, but in any
event not later than 15 months after the effective date of the
Registration Statement, an earnings statement (which need not be
audited) in reasonable detail, covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement, which earnings statement shall satisfy the
requirements of Section 11(a) and Rule 158 of the Act, and will advise
you in writing when such statement has been so made available.
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<PAGE> 14
(vii) The Company will, for a period of five years from the
Closing Date, deliver to the Underwriters copies of annual reports and
copies of all other documents, reports and information furnished by the
Company to its stockholders or filed with any securities exchange
pursuant to the requirements of such exchange or with the Commission
pursuant to the Act or the Exchange Act. The Company will deliver to
the Underwriters similar reports with respect to significant
subsidiaries, as that term is defined in the Exchange Act, which are
not consolidated in the Company's financial statements.
(viii) No offering, sale or other disposition of any Common
Stock of the Company, any options or warrants to purchase shares of
Common Stock or any securities convertible into or exchangeable for
shares of Common Stock will be made, and no public announcement with
respect to any of the foregoing will be made, for a period of 60 days
after the date of this Agreement, directly or indirectly, by the
Company otherwise than hereunder or with the prior written consent of
Salomon Smith Barney Inc. except that the Company may, without such
consent, (A) issue stock options and shares of Common Stock pursuant to
the Company's Stock Option Plan and the Employee Stock Purchase Plan to
the extent they are described in the Registration Statement and (B)
issue shares of Common Stock as consideration for future acquisitions,
provided that each recipient of such shares in any such acquisition
agrees in writing to be subject to the transfer restrictions imposed
pursuant to this Section 5(a)(viii) to the extent the 60 day period
following the date of this Agreement has not expired.
(ix) The Company will not take, directly or indirectly,
any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(x) If, at the time this Agreement is delivered and
executed, it is necessary for the Registration Statement or a
post-effective amendment thereto or any Rule 462(b) Registration
Statement to be declared effective or, in the case of a Rule 462(b)
Registration Statement, to become effective before the offering of the
Securities may commence, the Company will endeavor to cause the
Registration Statement or such post-effective amendment or Rule 462(b)
Registration Statement to become effective as soon as possible and will
advise you promptly and, if requested by you, will confirm such advice
in writing, when the Registration Statement or such post-effective
amendment or Rule 462(b) Registration Statement has become effective.
(xi) The Company will apply the net proceeds from the sale
of the Securities substantially in accordance with the description set
forth in the Prospectus.
(b) Covenants of the Selling Shareholders. Each Selling
Shareholder hereby covenants and agrees with each Underwriter as follows:
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<PAGE> 15
(i) Such Selling Shareholder will not, without the prior
written consent of Salomon Smith Barney Inc., offer, sell, contract to
sell, pledge or otherwise dispose of, or participate in the filing of a
registration statement with the Commission in respect of, or establish
or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange
Act with respect to, any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for such
capital stock, or publicly announce an intention to effect any such
transaction, for a period of 60 days after the date of this Agreement,
other than shares of Common Stock disposed of as bona fide gifts to
doneees who agree in writing with the Underwriters to the foregoing
restrictions on sale.
(ii) Such Selling Shareholder will not take any action
designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(iii) Such Selling Shareholder will advise you promptly,
and if requested by you, will confirm such advice in writing, so long
as delivery of a prospectus relating to the Securities by an
underwriter or dealer may be required under the Act, if it becomes
aware of (A) any material change in the Company's condition (financial
or otherwise), prospects, earnings, business or properties, (B) any
change in information in the Registration Statement or the Prospectus
relating to such Selling Shareholder or (C) any new material
information relating to the Company or relating to any matter stated in
the Prospectus which comes to the attention of such Selling
Shareholder.
6. Conditions to the Obligations of the Underwriters.
(a) The obligations of the Underwriters to purchase the
Underwritten Securities and the Option Securities, as the case may be pursuant
to Section 3 hereof, shall be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Shareholders contained
herein as of the Execution Time, the Closing Date and the Option Closing Date,
as the case may be, to the accuracy of the statements of the Company and the
Selling Shareholders made in any certificates pursuant to the provisions hereof,
to the performance by the Company and the Selling Shareholders of their
respective obligations hereunder and to the following additional conditions:
(i) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later time,
the Registration Statement will become effective not later than (A) 6:00 p.m.
New York City time on the date of determination of the public offering price, if
such determination occurred at or prior to 3:00 p.m. New York City time on such
date or (B) 9:30 a.m. on the Business Day following the day on which the public
offering price was determined, if such determination occurred after 3:00 p.m.
New York City time on such date; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the
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<PAGE> 16
Prospectus, and any such supplement, will be filed in the manner and within the
time period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(ii) The Underwriters shall have received on the Closing Date or
the Option Closing Date, as the case may be, the opinion of King & Spalding,
counsel for the Company and the Option Selling Shareholders, dated the Closing
Date or the Option Closing Date, as the case may be, addressed to the
Underwriters that:
(A) 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; each of the
Subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation (to the extent good standing is a concept recognized by
such jurisdiction), with corporate power and authority to own its
properties and conduct its business as described in the Prospectus; the
Company and each of the Subsidiaries are duly qualified to transact
business in all jurisdictions in which the conduct of their business
requires such qualification, except where the failure to be so
qualified would not have a material adverse effect upon the business of
the Company and the Subsidiaries taken as a whole; and the outstanding
shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and non-assessable and
are owned of record by the Company or a Subsidiary; and, to such
counsel's knowledge, (1) the outstanding shares of capital stock of
each of the Subsidiaries is owned free and clear of all liens,
encumbrances and security interests, other than the security interest
granted to First Union National Bank of Georgia ("First Union")
pursuant to the Company's 1997 credit facility with First Union, as
amended, and (2) no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into any shares of capital stock or of ownership interests
in the Subsidiaries are outstanding.
(B) The Company has authorized and outstanding capital
stock as set forth under the caption "Capitalization" in the
Prospectus; the outstanding shares of its Common Stock, including the
Securities to be sold by the Prime Selling Shareholder and Frank A.
Argenbright, Jr. have been duly authorized and validly issued and are
fully paid and non-assessable; the Securities which may be sold by
Edwin R. Mellett will, when issued pursuant to the exercise of stock
options, be validly issued, fully paid and non-assessable; the
Securities conform to the description thereof incorporated by reference
to the Prospectus; the certificates for the Securities comply with the
requirements of Georgia law; the shares of Common Stock, including the
Option Securities, if any, to be sold by the Company pursuant to this
Agreement have been duly authorized and will be validly issued, fully
paid and nonassessable when issued and paid for as contemplated by this
Agreement; and no preemptive rights of shareholders exist with respect
to any of the Securities or the issue and sale thereof.
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<PAGE> 17
(C) The authorized capital stock of the Company conforms
in all material respects as to legal matters to the description
contained in the Company's Registration Statement on Form 8-A, as filed
with the Commission on March 3, 1997.
(D) 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 or
threatened under the Act.
(E) The Registration Statement (including the
Incorporated Documents), the Prospectus and each amendment or
supplement thereto comply as to form in all material respects with the
requirements of the Act and the applicable rules and regulations
thereunder (except that such counsel need express no opinion as to the
financial statements and the notes thereto, financial statement
schedules and other financial and statistical information included
therein).
(F) The statements under the captions "Risk Factors --
Reliance on Major Clients and Aviation Industry," " -- Risks of
Conducting International Operations," "-- Risks Relating to, and
Dependence on, Government Regulation," " -- Dependence on Key
Personnel," "-- Shares Eligible for Future Sale," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources," "Business -- Contract
Terms" and "-- Government Regulation" in the Prospectus, the statements
under the captions "Business -- Contract Terms," "-- Government
Regulation," "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Overview" in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997 (the
"10-K"), the statements contained under the caption "Executive
Compensation" in the Company's Proxy Statement for the Annual Meeting
of Shareholders to be held May 14, 1998 which is incorporated to the
10-K by reference, and the statements under the caption "Description of
Capital Stock -- Georgia Anti-Takeover Statutes" in the Company's
Registration Statement on Form S-1 (Commission File No. 333-20315) in
the form in which it became effective, which are incorporated by
reference in the description of common stock included in the Company's
Registration Statement on Form 8-A as filed with the Commission on
March 3, 1997 (Commission File No. 000-22195), insofar as such
statements constitute a summary of documents referred to therein or
matters of law, are accurate summaries and fairly and correctly present
the information called for with respect to such documents and matters.
(G) Such counsel does not know of any contracts or
documents required to be filed as exhibits to the Registration
Statement or described in the Registration Statement or the Prospectus
which are not so filed or described as required, and such contracts and
documents as are summarized in the Registration Statement or the
Prospectus are fairly summarized in all material respects.
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<PAGE> 18
(H) Such counsel knows of no material legal proceedings
pending or threatened against the Company or any of the Subsidiaries,
except as set forth in the Prospectus.
(I) The Company has the corporate power and authority to
enter into this Agreement and to issue, sell and deliver the Securities
to the Underwriters as provided herein, and this Agreement has been
duly authorized, executed and delivered by the Company.
(J) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will
not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, the Charter or by-laws of
the Company, or any agreement or instrument that is an exhibit to the
Registration Statement or any Incorporated Document and to which the
Company or any of the Subsidiaries is a party or by which the Company
or any of the Subsidiaries may be bound.
(K) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body is necessary in connection
with the execution and delivery of this Agreement and the consummation
of the transactions herein contemplated (other than as may be required
by the NASD or as required by state securities and "blue sky" laws, as
to which such counsel need express no opinion) except such as have been
obtained or made.
(L) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Company and the Option Selling
Shareholders.
(M) To such counsel's knowledge, the Option Selling
Shareholders have full legal right, power and authority, and any
approval required by law (other than as required by state securities
and "blue sky" laws, as to which such counsel need express no opinion),
to sell, assign, transfer and deliver the portion of the Securities to
be sold by them.
(N) The Underwriters (assuming that they are bona fide
purchasers within the meaning of the Uniform Commercial Code) will
acquire all of the rights of the Option Selling Shareholders in the
Securities being sold by each of them on the Option Closing Date, free
and clear of any adverse claim.
In rendering such opinion, King & Spalding may rely as to
matters governed by the laws of states other than Georgia or Federal laws, and
as to matters governed by the laws of the United Kingdom or other foreign
jurisdictions, on local counsel in such jurisdictions, provided that in each
case King & Spalding shall state that they believe that they are justified in
relying on such other counsel. In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing has come to
the attention of such counsel which leads them to believe that the Registration
Statement, as of the time it became effective under the Act, the Prospectus or
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<PAGE> 19
any amendment or supplement thereto, on the date it was filed pursuant to Rule
424(b) and the Registration Statement and the Prospectus, or any amendment or
supplement thereto, as of the Closing Date or the Option Closing Date, as the
case may be, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading (except that such counsel need express no view as to
financial statements and notes thereto, financial statement schedules and other
financial or statistical information included therein). With respect to such
statement, King & Spalding may state that their belief is based upon the
procedures set forth therein, but is without independent verification.
(iii) The Underwriters shall have received on the Closing Date the
opinion of Robert Sondag, counsel for the Prime Selling Shareholder, dated the
Closing Date and addressed to the Underwriters that:
(A) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Prime Selling Shareholder.
(B) To such counsel's knowledge, the Prime Selling
Shareholder has full legal right, power and authority, and any approval
required by law (other than as required by state securities and "blue
sky" laws, as to which such counsel need express no opinion), to sell,
assign, transfer and deliver the portion of the Securities to be sold
by the Prime Selling Shareholder.
(C) The Underwriters (assuming that they are bona fide
purchasers within he meaning of the Uniform Commercial Code) will
acquire all of the rights of the Prime Selling Shareholder in the
Securities being sold by it on the Closing Date, free and clear of any
adverse claim.
(iv) The Representatives shall have received from Dewey Ballantine
LLP , counsel for the Underwriters, such opinion or opinions, dated the Closing
Date and the Option Closing Date, as the case may be, and addressed to the
Representatives, with respect to the issuance and sale of the Securities, the
Registration Statement, the Prospectus (together with any supplement thereto)
and other related matters as the Representatives may reasonably require, and the
Company and each Selling Shareholder shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.
(v) The Underwriters shall have received a letter dated the date
hereof and the Closing Date and the Option Closing Date, as the case may be,
from Arthur Andersen LLP, independent certified public accountants and a letter
dated the date hereof from PricewaterhouseCoopers, independent certified public
accountants, substantially in the forms heretofore approved by the Underwriters.
(vi) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or a Co-Chief
Executive Officer and the principal financial or accounting officer of the
Company, dated the Closing Date and the Option Closing Date, as the case may be,
to the effect that the signers of such certificate
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<PAGE> 20
have carefully examined the Registration Statement, the Prospectus, any
supplements to the Prospectus and this Agreement and that:
(A) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on and as
of the Closing Date and the Option Closing Date, as the case may be,
with the same effect as if made on the Closing Date and the Option
Closing Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date and the Option Closing Date, as the
case may be;
(B) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(C) since the date of the most recent financial
statements incorporated by reference in the Prospectus (exclusive of
any supplement thereto), there has been no material adverse change in
the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(vii) Each Selling Shareholder shall have furnished or caused to be
furnished to the Representatives a certificate, signed by or on behalf of such
Selling Shareholder or such Selling Shareholder's Attorney-In-Fact, dated the
Closing Date and the Option Closing Date, as the case may be, to the effect that
the signer of such certificate has carefully examined the Registration
Statement, the Prospectus, any supplement to the Prospectus and this Agreement
and that the representations and warranties of such Selling Shareholder in this
Agreement are true and correct in all material respects on and as of the Closing
Date and the Option Closing Date, as the case may be, to the same effect as if
made on the Closing Date and the Option Closing Date, as the case may be, and
that such Selling Shareholder has complied with all agreements and satisfied all
the conditions on his or its part to be performed or satisfied at or prior to
the Closing Date and the Option Closing Date, as the case may be.
(viii) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), earnings,
business or properties of the Company and its Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto) the effect of which, in the sole judgment of the
Representatives, is so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement
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<PAGE> 21
(exclusive of any amendment thereof) and the Prospectus (exclusive of any
supplement thereto).
(ix) At or prior to the Execution Time, the Company shall have
furnished to the Representatives a letter substantially in the form of Exhibit A
hereto from each executive officer and director of the Company and such other
shareholders of the Company as have been specified by the Representatives.
(x) Prior to the Closing Date, the Company and the Selling
Shareholders shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may reasonably
request.
(b) If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company and
each Selling Shareholder in writing or by telephone or facsimile confirmed in
writing.
(c) The documents required to be delivered by this Section 6 shall
be delivered at the office of Dewey Ballantine LLP, counsel for the
Underwriters, at 1301 Avenue of the Americas, New York City, on the Closing Date
or Option Closing Date, as the case may be.
7. Reimbursement of Underwriters' Expenses. If the sale
of the Securities provided for herein is not consummated because any condition
to the obligations of the Underwriters set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or because
of any refusal, inability or failure on the part of the Company or any Selling
Shareholder to perform any agreement herein or comply with any provision hereof
other than by reason of a default or omission by any of the Underwriters, the
Company will reimburse the Underwriters severally through Salomon Smith Barney
Inc. on demand for all reasonable out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities. If the Company
is required to make any payments to the Underwriters under this Section 7
because of any Selling Shareholder's refusal, inability or failure to satisfy
any condition to the obligations of the Underwriters set forth in Section 6, the
Selling Shareholders pro rata in proportion to the percentage of Securities to
be sold by each shall reimburse the Company on demand for all amounts so paid.
8. Indemnification and Contribution.
(a) The Company and the Option Selling Shareholders
jointly and severally agree to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person
who controls any
21
<PAGE> 22
Underwriter within the meaning of either the Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in any Preliminary Prospectus or the Prospectus, or in any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as requested, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company and the Option Selling Shareholders will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company or the Option Selling
Shareholders may otherwise have.
(b) The Prime Selling Shareholder agrees to indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act to the same extent as the indemnity from the
Company and the Option Selling Shareholders set forth in Section 8(a) hereof,
but only to the extent that such losses, claims, damages or liabilities arise
out of or are based upon Prime Selling Shareholder Information. For purposes of
the foregoing, "Prime Selling Shareholder Information" shall mean the
information indicated on exhibit B hereto. This indemnity agreement will be in
addition to any liability which the Prime Selling Shareholder may otherwise
have.
(c) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement and each person who controls the
Company within the meaning of either the Act or the Exchange Act and each
Selling Shareholder, to the same extent as the foregoing indemnity to each
Underwriter, but only with reference to written information relating to such
Underwriter furnished to the Company by or on behalf of such Underwriter through
the Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company and each Selling
Shareholder acknowledge that the statements set forth in the last paragraph of
the cover page regarding delivery of the Securities, the legend in block capital
letters on page 2 related to stabilization and the first, third, eighth and
ninth paragraphs under the caption "Underwriting" of any Preliminary Prospectus
and the Prospectus constitute the only
22
<PAGE> 23
information furnished in writing by or on behalf of the several Underwriters for
inclusion in any Preliminary Prospectus or the Prospectus.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve the indemnifying party from liability under paragraph (a), (b)
or (c) above unless and to the extent the indemnifying party did not otherwise
learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights or defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a), (b)
or (c) above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (w) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (x) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (y) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (z) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. It is understood, however,
that the Company shall, 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 fees and
expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Underwriters and controlling persons, which
firm shall be designated in writing by Salomon Smith Barney Inc. An indemnifying
party will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a), (b)
or (c) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any
23
<PAGE> 24
reason, the Company and the Selling Shareholders, jointly and severally, and the
Underwriters, severally, agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively "Losses") to
which the Company, the Selling Shareholders and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholders on the one hand
and by the Underwriters on the other from the offering of the Securities;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Selling Shareholders, jointly
and severally, and the Underwriters, severally, shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Shareholders on the one hand
and of the Underwriters on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the Selling Shareholders
shall be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the Underwriters
shall be deemed to be equal to the total underwriting discounts and commissions,
in each case as set forth on the cover page of the Prospectus. Relative fault
shall be determined by reference to, among other things, whether any untrue or
any alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information provided by the Company
or the Selling Shareholders on the one hand or the Underwriters on the other,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company, the Selling Shareholders and the Underwriters agree that it would not
be just and equitable if contribution were determined by pro rata allocation or
any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph 8(e), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (e).
(f) The liability of each Selling Shareholder under such Selling
Shareholder's representations and warranties contained in Section 1 hereof and
under the indemnity and contribution agreements contained in this Section 8
shall be limited to an amount equal to the Purchase Price Per Share multiplied
by the number of Securities sold by such Selling Shareholder to the Underwriters
pursuant hereto. The Company and the Selling
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<PAGE> 25
Shareholders may agree, as among themselves and without limiting the rights of
the Underwriters under this Agreement, as to the respective amounts of such
liability for which they each shall be responsible.
9. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Securities agreed to
be purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the amount
of Securities set forth opposite their names in Schedule I hereto bears to the
aggregate amount of Securities set forth opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the event that the
aggregate amount of Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the aggregate amount of
Securities set forth in Schedule I hereto, the remaining Underwriters shall have
the right to purchase all, but shall not be under any obligation to purchase
any, of the Securities, and if such nondefaulting Underwriters do not purchase
all the Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter, the Selling Shareholders or the Company. In the event
of a default by any Underwriter as set forth in this Section 9, the Closing Date
shall be postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company, the Selling
Shareholders and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by written notice
given to the Company prior to delivery of and payment for the Securities, if at
any time prior to such time (a) trading in the Company's Common Stock shall have
been suspended by the Commission or the Nasdaq Stock Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq Stock Market
shall have been suspended or limited or minimum prices shall have been
established on either of such Exchange or Stock Market, (b) a banking moratorium
shall have been declared either by Federal, Georgia or New York State
authorities or (c) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers, of each Selling Shareholder and of
the Underwriters set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter, any Selling Shareholder or the
25
<PAGE> 26
Company or any of the officers, directors or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if delivered (a) to the Company, at
the office of the Company at 3353 Peachtree Road, NE, Suite 1120, North Tower,
Atlanta, Georgia 30326, Attention: David L. Gamsey, with a copy to King &
Spalding, 191 Peachtree Street, Atlanta, Georgia 30303, Attention: Jeffrey M.
Stein, Esq.; (b) if to the Selling Shareholders, at the address of each Selling
Shareholder set forth on Schedule II-A hereto; or (c) if to the Representatives,
care of Salomon Smith Barney Inc., 388 Greenwich Street, New York, New York,
Attention: John Chambers, Investment Banking Division, with a copy to Dewey
Ballantine LLP, 1301 Avenue of the Americas, New York, New York, 10019-6092,
Attention: Donald J. Murray, Esq.
13. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in
this Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday,
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Closing Date" shall have the meaning set forth in Section 3.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
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<PAGE> 27
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(i)(a) above, including exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto or
any Rule 462(b) Registration Statement becomes effective prior to the
Closing Date, shall also mean such registration statement as so amended
or such Rule 462(b) Registration Statement, as the case may be. Such
term shall include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes or became effective pursuant
to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
under the Act relating to the offering covered by the registration
statement referred to in Section 1(a) hereof.
27
<PAGE> 28
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Selling Shareholders and the several Underwriters.
Very truly yours,
AHL SERVICES, INC.
By:
-----------------------------------
Name:
Title:
EACH OF THE SELLING
SHAREHOLDERS NAMED IN
SCHEDULE II HERETO
By:
-----------------------------------
Attorney-in-fact
<PAGE> 29
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Smith Barney Inc.
BT Alex. Brown Incorporated
Credit Suisse First Boston Corporation
The Robinson-Humphrey Company, LLC
By: Salomon Smith Barney Inc.
By:
----------------------------------
Name:
Title:
For itself and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
<PAGE> 30
SCHEDULE I
<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF UNDERWRITTEN
- ----------- ----------------------
SECURITIES TO BE PURCHASED
--------------------------
<S> <C>
Salomon Smith Barney Inc...........................................
BT Alex. Brown Incorporated........................................
Credit Suisse First Boston Corporation.............................
The Robinson-Humphrey Company, LLC.................................
Total.............................................................. 4,000,000
=========
</TABLE>
<PAGE> 31
SCHEDULE II-A
<TABLE>
<CAPTION>
NUMBER OF UNDERWRITTEN
PRIME SELLING SHAREHOLDER SECURITIES TO BE SOLD
------------------------- ---------------------
<S> <C>
Gage Marketing Group, LLC
10000 Highway 35
Minneapolis, Minnesota 55441
Attn: Edwin C. Gage
Fax: (612) 595-5924.............................................. 244,430
</TABLE>
<PAGE> 32
SCHEDULE II-B
<TABLE>
<CAPTION>
NUMBER OF OPTION
----------------
OPTION SELLING SHAREHOLDER SECURITIES TO BE SOLD
-------------------------- ---------------------
<S> <C>
Frank A. Argenbright, Jr.
c/o AHL Services, Inc.
Atlanta Financial Center
3353 Peachtree Road NE
Suite 1120, North Tower
Atlanta, Georgia 30326
Fax: (404) 267-2230.......................................................... 120,000
Frank A. Argenbright, Jr.
Charitable Remainder Trust No.1
c/o AHL Services, Inc.
Atlanta Financial Center
3353 Peachtree Road NE
Suite 1120, North Tower
Atlanta, Georgia 30326....................................................... 80,000
Edwin R. Mellett
c/o AHL Services, Inc.
Atlanta Financial Center
3353 Peachtree Road NE
Suite 1120, North Tower
Atlanta, Georgia 30326 80,000
Fax: (404) 267-2230.......................................................... -------
Total............................................................... 280,000
=======
</TABLE>
<PAGE> 33
EXHIBIT A
[FORM OF LOCK-UP AGREEMENT]
<PAGE> 1
EXHIBIT 23.2
As independent public accountants, we hereby consent to the use of our reports
included in or made a part of this registration statement, and to all
references to our firm herein.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
January 21, 1999
<PAGE> 1
EXHIBIT 23.3
As independent public accountants, we hereby consent to the use of our reports
included in or made a part of this registration statement, and to all
references to our firm herein.
PRICE WATERHOUSE GMBH
January 21, 1999
/s/Price Waterhouse GmbH
Wirtschaftsprufungsgesellschaft
70191 Stuttgart - Heilbronner Strasse 190
70033 Stuttgart - Postfach 103853
