EXHIBIT 1.1
900,000 Shares of Series A Preferred Stock
FORM OF UNDERWRITING AGREEMENT
Dated: [Effective Date]
Civilian Capital, Inc.
as the Underwriter named herein
▇▇ ▇. ▇▇▇▇▇▇ ▇▇., ▇▇▇. ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned, ▇▇▇▇▇ Dead, Inc., a Delaware corporation, (herein called
the "Company"), hereby confirms its agreement with Civilian Capital, Inc. (the
"Underwriter") as follows:
1. Description of Shares. The Company has authorized by appropriate
corporate action, and proposes to issue up to 900,000 shares of Series A
Preferred Stock of the Company, $.001 par value (hereinafter called the
"Shares") and up to an additional 54,000 shares of Series A Preferred Stock (the
"Warrant Shares") issuable upon the exercise of the Underwriter's Warrants (the
"Underwriter's Warrants"), as described herein, to be delivered to the
Underwriter at the Closing Date (as defined in Section 3 hereof).
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with the Underwriter that:
(a) A registration statement on Form SB-2 with respect to the Shares and
the Warrant Shares, including a preliminary prospectus, copies of which have
heretofore been delivered by the Company to the Underwriter, has been prepared
by the Company in conformity with the requirements of the Securities Act of
1933, as amended (hereinafter called the "Act"), and the Rules and Regulations
of the Securities and Exchange Commission (hereinafter called the "Commission")
under such Act (the "Rules and Regulations"), and has been filed with the
Commission (File No. 333-104620). On or prior to the effective date of such
registration statement (the "Effective Date"), one or more amendments to such
registration statement, copies of which have heretofore been or will be
delivered to the Underwriter, will have been so prepared and filed including a
final prospectus, in the form heretofore delivered to the Underwriter. Such
registration statement (including all exhibits thereto) as finally amended prior
to the effective date thereof, each related preliminary prospectus, and the
final prospectus as filed pursuant to Rule 424(b) under the Act, are hereby
respectively referred to as the "Registration Statement," the "Preliminary
Prospectus" and the "Prospectus."
(b) At the Effective Date, and at all times subsequent thereto up to and
including the Closing Date (as defined in Section 3 hereof), (i) the
Registration Statement and the Prospectus and any amendments or supplements
thereto will contain all statements which are required to be stated therein by
the Act and the Rules and Regulations and will in all respects conform to the
requirements of the Act and the Rules and Regulations, and (ii) neither the
Registration Statement nor the Prospectus nor any amendment or supplement
thereto will include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted from the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use in the preparation thereof.
(c) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware, with all corporate and
other power and authority necessary to carry on its business; and the Company is
qualified and in good standing in all other jurisdictions in which the nature of
its business requires such qualification. The Company has no subsidiaries.
(d) The consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company is a party or by which it or any of
its properties is bound, or of its Certificate of Incorporation, or By-laws, or
any order, rule or regulation applicable to the Company or any of its
properties, of any court or other governmental body.
(e) The Company has full power and authority to authorize, issue and sell
the Shares, the Underwriter's Warrants and the Warrant Shares on the terms and
conditions herein set forth, and has taken all corporate action necessary
therefor. No consent, approval, authorization or other order of any regulatory
authority is required for such authorization, issue or sale, except as may be
required under the Act or state securities or blue sky laws. This Agreement and
the Underwriter's Warrant each has been duly authorized, executed and delivered
by the Company and is a valid and legally binding agreement of the Company
enforceable in accordance with its terms.
(f) The Shares, the Underwriter's Warrant and the Warrant Shares and the
authorized capitalization of the Company conform to the description thereof
contained in the Registration Statement and Prospectus. The outstanding shares
of capital stock are, and the Shares and Warrant Shares issuable pursuant to the
public offering contemplated hereby and upon the exercise of the Underwriter's
Warrant, as the case may be, will upon such issuance be, duly authorized and
issued and fully paid and non-assessable. There are no options, rights of
conversion, indebtedness or calls in equity other than as disclosed in the
Prospectus and Registration Statement.
(g) Except as set forth or contemplated in the Registration Statement and
Prospectus, subsequent to the respective date as of which information is given
in the Registration Statement and the Prospectus, the Company has not incurred
any material liabilities or obligations, direct or contingent, or entered into
any material transactions, not in the ordinary course of business, and there has
not been any material change in the capital stock or funded debt of the Company,
or any material adverse change in the condition (financial or other) or results
of operations of the Company.
(h) The financial statements (audited and unaudited) set forth in the
Registration Statement and Prospectus fairly present the financial condition of
the Company and the results of its operations as of the dates and for the
periods therein specified; and said financial statements (including the related
notes and schedules) have been prepared in accordance with generally accepted
accounting principles which have been consistently applied throughout the
periods covered thereby.
(i) The accountants whose opinion is included in the Registration
Statement are independent public accountants within the meaning of the Act and
the Rules and Regulations.
(j) There is not pending any action, suit or other proceeding to which the
Company is a party or of which any property of the Company is subject, before or
by any court or other governmental body, which might result in any material
adverse change in the condition, business or prospects of the Company, or might
materially adversely affect the properties or assets of the Company; and, except
as indicated in the Prospectus, no such proceeding is known by the Company to be
threatened or contemplated.
(k) The Company knows of no claim for services, either in the nature of a
finder's fee, brokerage fee or otherwise, with respect to this financing,
whether or not heretofore satisfied, for which it or the Underwriter or any of
them may be responsible, other than as expressly disclosed in the Prospectus.
(l) On the Effective Date, the outstanding capital stock of the Company
will consist of 900,000 shares of Common Stock, $0.001 per share par value. No
shares of Series A preferred stock, $0.001 per share par value will be issued or
outstanding.
(m) All executed agreements, contracts or other documents or copies of
executed agreements, contracts or other documents filed as exhibits to the
Registration Statement to which the Company is a party have been duly and
validly authorized, executed and delivered by the Company, and constitute the
legal, valid and binding agreements of the Company, enforceable against the
Company, in accordance with their respective terms. The descriptions in the
Registration Statement of agreements, contracts and other documents are accurate
in all material respects and fairly present the information required to be shown
with respect thereto by Form SB-2, and there are no contracts or other documents
which are required by the Act to be described in the Registration Statement or
filed as exhibits to the Registration Statement which are not described or filed
as required, and the exhibits which have been filed are in all material respects
complete and correct copies of the documents of which they purport to be copies.
(n) No default exists in the due performance and observance of any term,
covenant or condition of any material agreement or instrument to which the
Company is a party or by which the Company may be bound or to which the property
or assets (tangible or intangible) of the Company is subject or affected.
(o) The Company owns and has the unrestricted right to use all
intellectual property that is necessary for the production and distribution of
the "Film," as that term is defined in the Prospectus (the "Film").
(p) The Company has caused to be duly executed legally binding and
enforceable agreements ("Lock-Up Agreements") with each of ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, who together constitute all of the Company's current officers
and directors, and ▇▇▇▇▇ ▇▇▇▇▇▇, the director of the Film (collectively, the
"Founders"), who together hold 100% of the outstanding Common Stock of the
Company, pursuant to which each of the Founders has agreed not to, directly or
indirectly, offer, sell, grant any option for the sale of, assign, transfer,
pledge, hypothecate, distribute or otherwise encumber or dispose of any shares
of Common Stock, or securities convertible into, exercisable or exchangeable for
or evidencing any right to purchase or subscribe for any shares of Common Stock
(either pursuant to Rule 144 of the Rules and Regulations or otherwise) or
dispose of any beneficial interest therein for a period of not less than four
(4) years following the Closing Date, without the prior written consent of the
Underwriter and the Company. The Company has placed an appropriate restricted
legend on the certificates of Common Stock registered in the name of the
Founders.
(q) Any certificate signed by any officer of the Company, and delivered to
the Underwriter shall be deemed a representation and warranty by the Company to
the Underwriter.
(r) The minute books of the Company have been made available to the
Underwriter and contain a complete summary of all meetings and actions of the
directors, stockholders, audit committee, compensation committee and any other
committee of the Board of Directors of the Company, respectively, since the time
of its incorporation, and reflect all transactions referred to in such minutes
accurately in all material respects.
(s) The Company has filed a Form 8-A with the Commission providing for the
registration under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") of the Shares and such Form 8-A has been declared effective by
the Commission.
3. Retention of the Underwriter. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth:
(a) The Company hereby retains the Underwriter as its exclusive agent to
sell for its account 900,000 Shares as defined in Section 1 hereof, on a "best
efforts, all or none" basis as to all such Shares (the "Offering"). The Shares
must be sold by 5 PM, New York time, by the date that is 90 days from the
Effective Date, which date may be extended an additional 90 days by mutual
consent of the Underwriter and the Company (the "Offering Period"). The Company
will conduct a closing ("Closing") promptly after being informed by the
Underwriter that it has remitted to the Escrow Agent, as defined in Section 3(d)
below, funds representing subscriptions for all of the Shares being sold in the
Offering. The date of the Closing shall be referred to as the "Closing Date."
(b) If all of the Shares are not sold by the end of the Offering Period,
the Offering will be terminated and this Agreement will be of no further force
and effect (except as provided in Sections 4(e), 6 and 7).
(c) The Shares shall be offered to the general public at the initial
public offering price of $8.75 per Share.
(d) Any conditional offers from customers of the Underwriter in purchasing
the Shares existing as of the Effective Date have automatically become orders to
purchase Shares. Funds for such subscriptions, as well as from subsequent
subscriptions received from the Underwriter, will be transferred from customers'
brokerage accounts with the Underwriter held at the Underwriter's clearing
broker to Bank of the West, as Escrow Agent (the "Escrow Agent"), no later than
noon of the next business day after final customer authorization and otherwise
in accordance with the terms of the Escrow Agreement (the "Escrow Agreement")
dated as of the date hereof between the Company, the Underwriter, and the Escrow
Agent. The amount of such debit will equal the purchase price of the Shares
being sold to such customers. At the Closing, the Underwriter will additionally
debit from the accounts of its customers who purchased Shares in the Offering
its customary trading charge, which will not be subject to the Escrow Agreement.
(e) The Company agrees to issue or have the Shares issued in such names
and denominations as may be specified by the Underwriter and to deliver the
Shares on the Closing Date against payment in the form of wire transfer, bank
check or certified check to the Company at $8.75 per Share, less the accountable
expenses as set forth in Paragraph 4(e).
(f) If all of the Shares are sold, the Underwriter shall be entitled to
receive as compensation a commission of $0.61 per Share with respect to all
Shares sold, which represents a commission of 7% and which compensation the
Underwriter shall be entitled to deduct and retain from the proceeds of the sale
of the Shares prior to transmittal of payment to the Company.
(g) The Underwriter and the Company, by mutual agreement may, at any time
prior to Closing Date terminate the Offering.
(h) As additional compensation to the Underwriter, the Company will issue
at the Closing Date to the Underwriter the Underwriter's Warrant to purchase the
Warrant Shares. The exercise price for 18,000
of the Underwriter's Warrants will be $9.19 per Warrant Share; for another
18,000 of the Underwriter's Warrants $9.63 per Warrant Share; and for the
remaining 18,000 Underwriter's Warrants $10.06 per Warrant Share. The
Underwriter's Warrants will become exercisable on the first anniversary of the
Closing Date and will expire on the fifth anniversary. The Underwriter's
Warrants will provide for a restriction on their sale, transfer, assignment or
hypothecation for a period of one year from the Closing Date except to officers
of the Underwriter. The Warrant Shares to be issued upon exercise of the
Underwriter's Warrants will be identical in all respects to the Shares. The
Underwriter will pay to the Company on the Closing Date the purchase price of
$.001 per Underwriter's Warrant (an aggregate of $54.00). The Underwriter's
Warrant and form of warrant certificate shall be substantially in the form filed
as Exhibit 4.3 to the Registration Statement.
4. Covenants of the Company. The Company further covenants and agrees with
the Underwriter that:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective and will not at any time, whether before or after
the Effective Date, file any amendment to the Registration Statement or
supplement to the Prospectus of which the Underwriter shall not previously have
been advised and furnished with a copy or to which the Underwriter shall have
reasonably objected in writing or which is not in compliance with the Act, or
the Rules and Regulations of the Commission thereunder.
(b) The Company will notify the Underwriter immediately and confirm in
writing (i) when the Registration Statement and any post-effective amendment
thereto becomes effective, (ii) of the issuance of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any Preliminary Prospectus or of the Prospectus or of the
initiation of any proceedings for such purposes, and (iii) of the receipt of any
comments (in writing or orally) from the Commission in respect of the
Registration Statement or Prospectus. If the Commission shall enter a stop order
or any order preventing or suspending the use of any Preliminary Prospectus or
of the Prospectus at any time, or shall initiate any proceedings for such
purpose, the Company will make every reasonable effort to prevent the issuance
of such order and if issued, to obtain the withdrawal thereof.
(c) Within the time during which a prospectus relating to the Shares is
required to be delivered under the Act, the Company will comply with all
requirements imposed upon it by the Act, as now and hereafter amended, and by
the Rules and Regulations of the Commission thereunder, from time to time in
force, so far as necessary to permit the continuance of sales or dealings in the
Shares, (or the Warrant Shares to be acquired upon the exercise of the
Underwriter's Warrants) as contemplated by the provisions hereof and the
Prospectus; and if during such period any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend or supplement the
Prospectus to comply with the Act, the Company will promptly notify the
Underwriter and will amend or supplement the Prospectus (in form reasonably
satisfactory to your counsel and at the expense of the Company) so as to correct
such statement or omission or effect such compliance.
(d) The Company will cooperate with the Underwriter and will take all
necessary action, and furnish to whomever the Underwriter may direct such proper
information, as may be lawfully required in qualifying the Shares and the
Warrant Shares for offering and sale under the securities or blue sky law of
such states as the Underwriter may designate, and in continuing such
qualifications in effect so long as required for the distribution; provided that
the Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of any such state or to submit to any requirements which
it reasonably deems unduly burdensome.
(e) The Company will pay any and all fees, taxes and expenses incident to
the performance of its obligations under this Underwriting Agreement, including,
but not limited to: (i) expenses and taxes incident to the issuance and delivery
to the Underwriter of the Shares to be sold in the Offering; (ii) all fees and
disbursements of counsel and accountants for the Company (including any
specifically identified fees and expenses of counsel for the Underwriter related
to such counsel's assisting in the preparation of certain organizational
materials, corporate documents and material agreements for the Company and the
fees of special entertainment counsel, which fees have been advanced by the
Underwriter); (iii) expenses and filing fees incident to the preparation,
printing, delivery, shipment and filing with the Commission and state blue sky
authorities of the Registration Statement and all exhibits thereto and the
Prospectus, and any amendments or supplements thereto; (iv) fees of blue sky
counsel (which counsel is to be designated by the Underwriter and who may be
Underwriter's counsel) to cover the fees attendant to the qualification of the
Shares in those states or jurisdictions reasonably agreed to by counsel for the
Company and counsel for the Underwriter (it hereby being agreed by the Company
that a minimum of twenty (20) states is deemed to be reasonable); (v)
advertising costs and expenses in connection with any "road show", information
meetings and presentations, bound volumes and prospectus memorabilia and
"tombstone" advertisement expenses; (vi) fees and expenses of the transfer agent
and registrar, (vii) the fees payable to the Commission and the National
Association of Securities Dealers, Inc. ("NASD"). It is expressly understood by
and between the parties hereto that if this Agreement is terminated by the
Underwriter pursuant to Section 9(b), the Company shall reimburse and indemnify
the Underwriter for all of its actual out-of-pocket expenses. The Company also
agrees that if the Closing Date has not occurred by the 90th day following the
Effective Date and the Company then elects not to extend the Offering Period, as
provided in Section 3(a), despite the willingness of the Underwriter to so
extend the Offering Period, the Company shall be liable for all expenses
identified in this Section 4(e).
(f) The Company will apply the net proceeds from the sale of the Shares
substantially as set forth under the caption "Use of Proceeds" in the
Prospectus.
(g) The Company will deliver to the Underwriter as promptly as practicable
three signed copies of the Registration Statement and all amendments thereto,
including all exhibits filed therewith or incorporated therein by reference, and
signed consents, certificates and opinions of accountants and of any other
persons named in the Registration Statement as having prepared, certified or
reviewed any part thereof, and will deliver to the Underwriter such number of
unsigned copies of the Registration Statements, without exhibits, and of all
amendments thereto, as the Underwriter may reasonably request. The Company will
deliver to the Underwriter or upon its order, on the Effective Date and
thereafter, subject to the provisions of Section 4(c) hereof, from time to time,
as many copies of the Prospectus in final form or as thereafter amended or
supplemented, as the Underwriter may reasonably request. The Company will
deliver to the Underwriter, promptly after the Closing Date, three (3) bound
volumes of all of the documents, papers, exhibits correspondence and records
forming the materials involved in this public offering.
(h) The Company will make generally available to its security holders, as
soon as is practicable to do so (in no event later than fifteen months after the
effective date of the Registration Statement), an Earnings Statement of the
Company (which need not be audited) covering a period of at least twelve months
beginning not later than the first day of the fiscal quarter next succeeding
such effective date which shall satisfy the provisions of Section 11 (a) of the
Act.
(i) For a period of at least three years from the date hereof, the Company
will supply to the Underwriter, (i) as soon as practicable after the end of each
fiscal year, an annual report of the Company and its consolidated subsidiaries
(if any) for such period, (ii) copies of such financial statements and reports
as the Company may, from time to time, furnish generally to holders of any class
of its stock, (iii)
copies of each report which it shall be required to file with the Commission or
any securities exchange at the same time as such reports are filed and (iv)
copies of the daily stock transfer sheets of the Company, (v) copies of every
press release which was released or prepared by or on behalf of the Company, and
(v) from time to time such other information concerning the Company as the
Underwriter may reasonably request.
(j) For a period of three (3) years after the effective date of the
Registration Statement, the Underwriter shall have the right to designate for
election one (1) individual to the Company's Board of Directors (the "Board").
Such person shall be mutually acceptable to the Company and the Underwriter. If
the Underwriter elects not to exercise such right, then it may designate one (1)
individual to attend meetings of the Company's Board. The Company shall notify
the Underwriter of each meeting of the Board and the Company shall send to such
individual all notices and other correspondence and communications sent by the
Company to members of the Board. Such individual shall be reimbursed for all
out-of-pocket expenses incurred in connection with his attendance of meetings of
the Board.
(k) The Company shall cooperate with the Underwriter in making available
such information as it may request in making an investigation of the Company and
its affairs.
(l) The Company will pay the fees and expenses (but not transfer taxes, if
any) of the Company's stock transfer agent and registrar (if any), without
charge to stockholders, for not less than three years after the Effective Date.
(m) Neither the Company, nor any of its officers, directors, stockholders,
nor any of their respective affiliates (within the meaning of the Rules and
Regulations) will take, directly or indirectly, any action designed to, or which
might in the future reasonably be expected to cause or result in, stabilization
or manipulation of the price of any securities of the Company.
(n) The Company shall timely file all such reports, forms or other
documents as may be required from time to time, under the Act, the Exchange Act,
and the Rules and Regulations, and all such reports, forms and documents filed
will comply as to form and substance with the applicable requirements under the
Act, the Exchange Act, and the Rules and Regulations.
(o) The Company agrees that it will not, for a period of six (6) months
from the Effective Date, issue any new shares of Common Stock or Series A
Preferred Stock, or any option, warrant, convertible security or contract right
to acquire shares of Common Stock or Series A Preferred Stock, other than in
connection with the exercise by the Underwriter of the Underwriter's Warrants or
the reissuance of shares of Common Stock necessitated by the replacement of any
current officers, directors or employees of the Company whose shares were first
repurchased as a result of the termination of their affiliation with the
Company.
(p) Until the completion of the distribution of the Shares, the Company
shall not without the prior written consent of the Underwriter, issue, directly
or indirectly, any press release or other communication or hold any press
conference with respect to the Company or its activities or the offering
contemplated hereby, other than trade releases issued in the ordinary course of
the Company's business consistent with past practices with respect to the
Company's operations.
(q) For a period equal to the lesser of (i) five (5) years from the date
hereof, and (ii) the sale to the public of the Warrant Shares, the Company will
not take any action or actions which may prevent or disqualify the Company's use
of Form SB-2 or Form S-1 (or other appropriate form) for the registration under
the Act of the Warrant Shares, other than as a result of the dissolution and
liquidation of the Company, as disclosed in the Prospectus. The Company further
agrees to use its best efforts to file such
post-effective amendments to the Registration Statement as may be necessary, in
order to maintain its effectiveness and to keep such Registration Statement
effective as long as any of the Underwriter's Warrants remain outstanding or as
long as any outstanding Warrant Shares have not yet been sold to the public.
(r) For a period of twelve (12) months after the effective date of the
Registration Statement, the Company shall not restate, amend or alter any term
of any written employment, consulting or similar agreement entered into between
the Company and any of the Founders in a manner which is more favorable to such
officer, director or key employee, without the prior written consent of the
Underwriter.
(s) Prior to the commencement of commercial production of the Film, the
Company will obtain and maintain insurance policies, including, but not limited
to, general liability and property insurance, to insure the Company and its
employees, against such losses and risks generally insured against by comparable
businesses.
5. Conditions of the Underwriter's Obligation. The Underwriter's
obligations to proceed with the Closing and to deliver to the Company payment
for the Shares as provided herein, assuming that all of the Shares have been
sold and payment therefor (including the applicable clearing charges) is
then-available in its customers' accounts, shall be subject to the accuracy, as
of the date hereof and as of the Closing Date (as if made on the Closing Date),
of the representations and warranties of the Company herein, to the accuracy of
statements of Company officers made in certificates delivered pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not later than
5:30 p.m., New York time on the day following the date of this Agreement, unless
a later time and date be agreed to by the Underwriter; and no stop order
suspending the effectiveness of the Registration Statement, or order preventing
or suspending the use of any Preliminary Prospectus or of the Prospectus, shall
have been issued and no proceedings for such purpose shall have been instituted
or will be pending or, to the knowledge of the Company or the Underwriter, shall
be contemplated by the Commission; and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the satisfaction of
the Underwriter's Counsel.
(b) On the Closing Date the Underwriter shall have received an opinion of
Howard, Rice, Nemerovski, Canady, ▇▇▇▇ & ▇▇▇▇▇▇, A Professional Corporation,
counsel to the Company, dated the Closing Date, to the effect that:
(i) This Agreement and the Underwriter's Warrants each has been duly
authorized, executed and delivered by the Company and constitutes the
legal, valid and binding obligations of the Company enforceable in
accordance with their respective terms (except insofar as enforcement of
the indemnification and contribution provisions thereof may be limited by
applicable federal securities laws or principles of public policy and
subject to bankruptcy, insolvency, moratorium, reorganization and similar
laws affecting creditors' rights generally and to general principles of
equity). The Company has full corporate power and authority to enter into
this Agreement and the Underwriter's Warrants and to sell, issue and
deliver the Shares, the Underwriter's Warrants and the Warrant Shares;
(ii) The Company has an authorized and outstanding capital stock as set
forth under "Capitalization" in the Prospectus; all of the Company's
outstanding shares have been duly authorized and validly issued, and are
fully paid and non assessable; all of the securities sold and to be issued
by the Company pursuant to this Agreement have been duly and validly
authorized,
issued and delivered and are fully paid and non assessable, and conform to
the description thereof in the Prospectus and such description conforms to
the rights duly set forth in the Certificate of Incorporation of the
Company; the holders of the Shares, the Underwriter's Warrants and the
Warrant Shares are not, and will not be, subject to any personal liability
by reason of being holders thereof; and none of such securities has been
issued in violation of the preemptive rights or any other rights of any
stockholder of the Company and no stockholder has any preemptive right to
subscribe for or to purchase any Shares;
(iii) The Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of Delaware, has full
corporate power and authority to conduct its business as presently
conducted and as described in the Prospectus and to own its properties and
is duly qualified to do business and is in good standing in such
jurisdiction wherein the property owned or leased by it makes such
qualification necessary (except where failure to so qualify would not have
a material adverse effect on the Company);
(iv) The Registration Statement has become effective under the Securities
Act and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceeding for that purpose has been instituted or is pending or
contemplated by the Commission;
(v) The Registration Statement and the Prospectus, and any amendment or
supplement thereto, comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations
promulgated thereunder (except that such counsel need express no opinion
as to the financial statements and schedules and financial data included
therein);
(vi) Such counsel has assisted in the preparation of the Registration
Statement and the Prospectus and no fact has come to the attention of such
counsel which leads such counsel to believe that, either as of the
Effective Date or the date of the opinion, (a) either the Registration
Statement or the Prospectus or any amendment or supplement thereto (except
for the financial statements and schedules and financial data included
therein, as to which such counsel need express no opinion) contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, (b) there is any legal, governmental or administrative
proceeding pending, threatened or contemplated to which the Company is or
may become a party or of which any of its property is or may become
subject, or any basis for any legal, governmental or administrative
proceeding, required to be described in the Prospectus which is not
described as required, or (c) there is any contract or document of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required;
(vii) The execution, delivery and performance of this Agreement and the
Underwriter's Warrants by the Company and the consummation of the
transactions contemplated therein have not and will not conflict with or
result in a breach or violation of any of the terms or provisions of,
constitute a default under, the Certificate of Incorporation or Bylaws of
the Company or any indenture, mortgage, deed of trust, note agreement or
other agreement or instrument known to such counsel to which the Company
is a party or by which it is bound or to which any or its property is
subject, or any federal or state statute, law, rule or regulation, or any
judgment, order or decree of any court or governmental agency or body
known to such counsel having jurisdiction over the Company or any of its
property;
(viii) No consent, approval, authorization or order of, or declaration or
filing with, any government, governmental instrumentality or court, is
required for the valid consummation by the
Company of the transactions contemplated by this Agreement except such as
may be required under the Securities Act or any state securities or "blue
sky" laws in connection with the purchase, sale and distribution of the
Shares and the Underwriter's Warrant;
(ix) To the best of such counsel's knowledge after due inquiry, the
Company possesses all permits, certificates of compliance, approvals,
licenses, waivers, consents and other rights from governmental authorities
and other third parties which are requisite for the material conduct of
its business as presently conducted and as described in the Prospectus
(except such as in the aggregate would not materially affect the business
or operations of the Company and except for matters relating to the
Company's intellectual property, as to which no opinion is expressed), for
the consummation of the transactions contemplated in this Agreement and
for the offering contemplated by the Prospectus, such permit, certificate
of compliance, approval, license, waiver, consent and right is valid and
in full force and effect.
(x) To the best of such counsel's knowledge, except as described in the
Prospectus, the Company is not in breach of, or in default under, any term
or provision of any material agreement or instrument to which the Company
is a party or by which the Company may be bound or to which the property
or assets (tangible or intangible) of the Company is subject or affected;
and the Company is not in violation of any term or provision of (A) its
certificate of incorporation or by-laws, (B) any order, license,
certificate, franchise or permit of any governmental or regulatory
official or body or (C) any judgment, decree, order, statute, rule or
regulation to which it is subject;
(xi) assuming due execution by each of the Founders, the Lock-up
Agreements are legal, valid and binding obligations of the parties
thereto, enforceable against the party and any subsequent holder of the
securities subject thereto in accordance with their terms; and
(xii) none of the Company or any of its affiliates shall be subject to the
requirements of or shall be deemed an "Investment Company."
(c) On the Closing Date, the Underwriter shall have received from ▇▇▇▇▇▇▇
▇▇▇▇▇▇ and Parent, special entertainment counsel for the Underwriter, to the
effect that:
(i) Except as otherwise disclosed in the Prospectus, based solely on our
review of the agreements between the Company and TAP Entertainment, Inc.
dated April 7, 2003 and the agreement between the Company and ▇▇▇▇
▇▇▇▇▇▇▇, dated April 15, 2003, copies of which have been provided to us,
which we are assuming have been duly authorized, executed and delivered by
all parties thereto, (A) the Company owns or possesses, free and clear of
all liens or encumbrances and rights thereto or therein by third parties,
the requisite options (the "Options") to acquire the licenses and other
rights to produce and distribute a film (the "Film") based on the novel
written by ▇▇▇▇ ▇▇▇▇▇▇▇ entitled "▇▇▇▇▇ Dead" (the "Novel") and the
screenplay written by ▇▇▇▇▇ ▇▇▇▇▇▇ based on the Novel (the "Screenplay"),
(B) upon the Company's exercise of such Options in accordance with the
terms of the applicable agreements pertaining thereto, the Company will
own or possess, free and clear of all liens or encumbrances and rights
thereto or therein by third parties, the licenses and other rights to
produce and distribute the Film based on the Novel and the Screenplay, and
(C) to the best of our knowledge, there is no existing or pending action
or proceeding which challenges the exclusive rights of the Company with
respect to the Novel and the Screenplay or which would otherwise affect
the Company's business, as described in the Prospectus, in any material
respect; and
(ii) Except as described in the Prospectus, the Company is not under any
obligation to pay to any third party, royalties or fees of any kind
whatsoever with respect to any intellectual property developed, employed,
licensed or used by the Company.
(d) On the Closing Date, the Underwriter shall have received from ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Group, a letter dated as of such date, to the effect that:
(i) They are independent accountants with respect to the Company within
the meaning of the Act and the applicable published Rules and Regulations;
(ii) In their opinion, the financial statement (including the schedules,
if any) in the Registration Statement examined by such firm, comply as to form
in all material respects with applicable accounting requirements of the Act and
the published Rules and Regulations thereunder with respect to registration
statements on Form SB-2; and
(iii) On the basis of procedures (in accordance with generally accepted
accounting standards) consisting of reading the minutes of meetings of the
shareholders and the Board of Directors of the Company since the date of the
latest audited balance sheet as set forth in the minute book through a specified
date not more than five business days prior to the Closing Date, reading the
unaudited interim financial statements (if any), including the schedules (if
any), of the Company included in the Registration Statement and making inquiries
of certain officials of the Company who have responsibility for financial and
accounting matters regarding the specific items for which representations are
requested below, nothing has come to their attention as a result of the
foregoing procedures that caused them to believe that (a) the unaudited
financial statements (if any), including the schedules (if any), of the Company
included in the Registration Statement do not comply as to form in all material
respects with applicable accounting requirements of the Act and the published
Rules and Regulations thereunder, (b) said financial statements including the
schedules (if any), are not presented fairly, in conformity with generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited financial statements, or (c) during the period from the date
of the latest balance sheet covered by their report(s) included in the
Registration Statement to a specific date not more than five business days prior
to the Closing Date, there has been any change in the capital stock or long-term
debt of the Company as compared with the amounts shown in the balance sheet
included in the Registration Statement, except as set forth in or contemplated
by the Registration Statement, and for the period from the date of the last
balance sheet contained in the Prospectus to a specified date not more than five
days prior to the date of such letter, there has been any decrease, except as
described in such letter and previously discussed with the Underwriter, in
consolidated gross revenues, net income, consolidated assets or total
stockholders' equity as compared with the amounts shown on such balance sheet,
except for such changes or decreases which the Registration Statement discloses
have occurred or may occur.
(e) The Underwriter shall have received a certificate or certificates,
dated the Closing Date, executed by the Chairman of the Board or the President
or a Vice President of the Company and by a principal financial or accounting
officer of the Company to the effect that, to the best of their knowledge based
on a reasonable investigation:
(i) No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act;
(ii) Neither the Registration Statement nor the Prospectus nor any
amendment or supplement thereto contains any untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary to make the statement therein not misleading and
since the
effective date of the Registration Statement, there has occurred no event
required to be set forth in an amendment or supplemented Prospectus which
has not been so set forth;
(iii) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, the Company has not incurred any material
liabilities or obligations, direct or contingent, or entered into any
material transaction, not in the ordinary course of business, and there
has not been any material change in the capital stock or funded debt of
the Company, or any material adverse change in the condition (financial or
other) or results of operations of the Company;
(iv) There are no legal proceedings pending or threatened against the
Company of a character effecting the validity of this Agreement or
required to be disclosed in the Prospectus which are not disclosed
therein; there are no transactions or contracts which are required to be
filed as exhibits to the Registration Statement which are not so filed;
(v) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, the Company has not
sustained any material loss or damage to its properties, whether or not
insured; and
(vi) The representations and warranties of the Company in this Agreement
are true and correct, as if made on and as of the 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.
(f) All such opinions, letters, certificates and documents will be in
compliance with the provisions hereof only if they are satisfactory to the
Underwriter and to its counsel. The Company will furnish the Underwriter with
such signed or conformed copies of such opinions, letters, certificates and
documents and with such additional documents, certificates or letters as the
Underwriter may reasonably request.
(g) If any condition to the Underwriter's obligations hereunder to be
satisfied at or prior to the Closing Date is not so satisfied, the Underwriter
may terminate this Agreement without liability on its part or on the part of the
Company, except for the expenses to be paid or reimbursed by the Company
pursuant to Section 4(e) of this Agreement and except for any liability under
Section 6 of this Agreement.
6. Indemnification.
(a) The Company will indemnify and hold harmless the Underwriter and each
person, if any, who controls the Underwriter within the meaning of the Act
against any losses, claims, damages or liabilities, joint or several, to which
it or such controlling person may become subject, under the Act or otherwise,
insofar as such loses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
or in any blue sky application or other document executed by the Company
specifically for that purpose or based upon written information furnished by the
Company filed in any state or other jurisdiction in order to qualify any or all
of the Shares under the securities laws thereof, 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 will reimburse it and each such controlling person for any legal or other
expenses reasonably incurred by it or such controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company 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 an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, such Preliminary Prospectus, the
Prospectus or such amendment or supplement, or in such blue sky application or
such other document, in reliance upon and in conformity with written information
furnished to the Company by the Underwriter specifically for use in the
preparation thereof; and provided, further, that the Company will not be liable
under this indemnity agreement, insofar as it relates to any Preliminary
Prospectus, to the extent that any such loss, claim, damage, liability or action
results from the fact that the Underwriter sold Shares to a person to whom there
was not sent or given, at or prior to the written confirmation of such sales, a
copy of the Prospectus (or of the Prospectus as then amended or supplemented if
the Company had previously furnished copies thereof to you). This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) The Underwriter will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of the Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Company or any such director, officer or controlling person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or in any blue sky application or other
document executed by the Company specifically for that purpose filed in any
state or other jurisdiction in order to qualify any or all of the Shares under
the securities laws thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, such Preliminary Prospectus, the Prospectus or such amendment or
supplement, or in such blue sky application or such other document, in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter specifically for use in the preparation thereof; and will reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which the Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 6, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 6. In case any such action is brought against any indemnified party, and
it notifies an indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in, and, to the extent that it may wish,
jointly with any other indemnifying party, similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
7. Contribution.
(a) In order to provide for just and equitable contribution under the Act
in any case in which (i) the Underwriter (or any person who controls the
Underwriter within the meaning of the Act) makes claim for indemnification
pursuant to Paragraph 6 (a) hereof but it is judicially determined by the entry
of final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal, or the denial of the last right of appeal, that
such indemnification may not be enforced in such case notwithstanding the
fact that Paragraph 6(a) provides for indemnification in such case or (ii)
contribution under the Act may be required on the part of the Underwriter or any
such controlling person in circumstances for which indemnification is provided
under Paragraph 6(b), then, and in each such case, the Company and the
Underwriter shall contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion so that the Underwriter is responsible for an aggregate of 7%
(being the amount of the Underwriter's commission) and the Company is
responsible for the remaining portion; provided, however, that, in any such
case, no person guilty of a fraudulent misrepresentation (within the meaning of
Section 11 (f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
(b) Promptly after receipt by any party to this Agreement of notice of the
commencement of any action, suit or proceeding, such party will, if a claim for
contribution in respect thereof is to be made against another party (the
"contributing party"), notify the contributing party of the commencement
thereof; but the omission so to notify the contributing party will not relieve
it from any liability which it may have to any other party other than for
contribution under the Act. In case any such action, suit or proceeding is
brought against any party, any such party notifies a contributing party of the
commencement thereof, the contributing party will be entitled to participate
with the notifying party and any other contributing party similarly notified.
8. Representations and Indemnities to Survive Delivery. All
representations and warranties of the Company contained herein and in the
certificate or certificates delivered pursuant to Section 5(e) hereof, and the
indemnity agreements contained in Section 6 and 7 hereof, shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Underwriter or any controlling person, or by or on behalf of the
Company or any officer, director or controlling person, or any termination of
this Agreement, shall survive delivery of any payment for the Shares.
9. Effective Date of this Agreement and Termination Thereof.
(a) This Agreement shall become effective at 9 a.m., New York time, on the
first full business day after the Effective Date, or at such earlier time after
the Registration Statement has become effective as the Underwriter in its
discretion shall first release the Shares for sale to the public. The
Underwriter or the Company may prevent this Agreement from becoming effective
without liability of any party to any other party, except as noted below, by
giving the notice hereinafter specified at or before the time this Agreement
becomes effective; provided, however, that the provisions of this Section 6 and
of Section 4(e) hereof shall at all times be effective.
(b) The Underwriter shall have the right to terminate this Agreement by
giving the notice hereinafter specified at any time at or prior to the Closing
Date if (i) the Company shall have failed, refused or been unable, at or prior
to the Closing Date, to perform any agreement on its part or be performed
hereunder, or because any other condition precedent to the Underwriter's
obligation hereunder required to be fulfilled by the Company is not fulfilled,
or if (ii) trading on the New York Stock Exchange or Over-the-Counter Markets
for the trading of securities shall have been generally suspended, or minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices
for securities shall have been generally required, on the Over-the-Counter
Markets, by the New York Stock Exchange or the NASD, or by order of the
Commission or any other governmental authority having jurisdiction, or if there
has been a substantial adverse change in general market or economic conditions,
or if a banking moratorium shall have been declared by Federal or New York
authorities, or if an outbreak of hostilities or other national or international
calamity of such nature as to disorganize the securities markets in the United
States shall have occurred since the execution hereof. If the Underwriter elects
to prevent this Agreement from becoming effective or to terminate this Agreement
as provided in this Section 9, the Underwriter shall notify the Company promptly
by telephone, fax or email, confirmed by
letter. If the Company elects to prevent this Agreement from becoming effective,
the Company shall notify the Underwriter promptly by telephone, fax or email,
confirmed by letter.
10. Notices. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and if sent to the Underwriter shall
be mailed, delivered or telegraphed and confirmed to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Civilian
Capital, Inc., ▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇., ▇▇▇▇▇▇▇, ▇▇ , ▇▇▇▇▇, with a copy to
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇ ▇. ▇▇▇▇ ▇▇., ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇, or if sent to the Company shall be mailed, delivered
or telegraphed and confirmed to it at ▇▇▇▇▇ Dead, Inc., Attn: ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, with a copy to ▇▇▇▇▇ ▇▇▇▇, Esq., Howard,
Rice, Nemerovski, Canady, ▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
11. Parties. This Agreement shall insure to the benefit of and be binding
upon the Underwriter and the Company and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any person or corporation, other than the parties hereto
and their respective successors and assigns, and the controlling persons and the
officers and directors referred to in Section 6 hereof, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained, this Agreement and all conditions and provision hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective successors and assigns, and said selling security
holders and said controlling persons and said officers and directors, and for
the benefit of no other person or corporation. No purchaser of any of the Shares
from any Underwriter shall be construed a successor or assign by reason merely
of such purchase.
12. Information Furnished by Underwriters. The statement set forth in the
last paragraph on the cover page and under the caption "Underwriting" in any
Preliminary Prospectus and in the Prospectus and in blue sky reports of sales,
if any, constitute written information furnished by or on behalf of the
Underwriter referred to in Sections 2(b), 6(a) and 6(b) hereof.
13. Miscellaneous. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of California.
If the foregoing correctly sets forth the understanding between the
Company and the Underwriter, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement between
the Company and the Underwriter.
Very truly yours,
▇▇▇▇▇ DEAD, INC.
By:__________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ III, Chief
Executive Officer
Accepted as of ____________, 2003:
CIVILIAN CAPITAL, INC.
By:_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chief
Executive Officer