UNDERWRITING AGREEMENT 5,000,000 SHARES WILSON HOLDINGS, INC.
Exhibit
1.1
5,000,000
SHARES
▇▇▇▇▇▇
HOLDINGS, INC.
_______________,
2007
Capital
Growth Financial, LLC
As
Representative of the several Underwriters
▇▇▇▇
▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
▇▇▇▇▇▇
Holdings, Inc., a Nevada corporation (the “Company”) proposes to issue and sell
to the several underwriters named in Schedule
I
(the
“Underwriters”) an aggregate of up to 5,000,000 shares (the “Firm Shares”) of
the Company's common stock, par value $0.001 per share (the “Common Stock”)
In
addition, the Company has granted to the Underwriters an option to
purchase up
to an additional 750,000 Shares (the “Optional Shares”), as provided in Section
2 of this Agreement. The Firm Shares and, if and to the extent such
option is
exercised, the Optional Shares, are collectively called the “Shares.”
Capital
Growth Financial, LLC (“CGF”) has agreed to act as representative of the several
Underwriters (in such capacity, the “Representative”) in connection with the
offering and sale of the Shares.
The
terms
Representative and Underwriters shall mean either the singular or plural
as the
context requires.
The
Company understands that the Underwriters propose to undertake a public
offering
of the Shares pursuant to the terms and conditions of this Agreement.
|
Section
1.
|
Representations and Warranties |
1
|
| Section 2. | Purchase of the Shares by the Underwriters |
17
|
| Section 3. | Delivery of and Payment for Shares |
18
|
| Section 4. | Covenants |
19
|
| Section 5. | Conditions of Underwriters' Obligations |
26
|
| Section 6. | Qualified Independent Underwriter |
31
|
| Section 7. | Indemnification and Contribution |
32
|
| Section 8. | Substitution of Underwriters |
38
|
| Section 9. | Effective Date and Termination |
40
|
| Section 10. | Right to Appoint an Observer |
42
|
| Section 11. | Survival of Indemnities, Contribution, Warranties and Representations |
43
|
| Section 12. | Notices |
43
|
| Section 13. | Information Furnished by Underwriters |
44
|
| Section 14. | Parties |
44
|
| Section 15. | No Fiduciary Relationship |
44
|
| Section 16. | Definition of “Business Day” and “Subsidiary” |
45
|
| Section 17. | Governing Law |
45
|
| Section 18. | Counterparts |
45
|
i
Section
1. Representations
and Warranties
(a) A
registration statement on Form S-1 (File No. 333-140747) with respect
to the
Securities has been prepared by the Company in conformity with the
requirements
of the Securities Act, and the rules and regulations of the Securities
and
Exchange Commission (the “Commission”) thereunder and has been filed with the
Commission. Copies of such registration statement and any amendments,
and all
forms of the related prospectuses contained therein, have been delivered
to the
Representative. Such registration statement, including the prospectus,
Part II,
any documents incorporated by reference therein and all financial schedules
and
exhibits thereto, as amended at the time when it shall become effective,
is
herein referred to as the “Registration Statement,” and the prospectus included
as part of the Registration Statement on file with the Commission when
it shall
become effective or, if the procedure in Rule 430A of the Rules and
Regulations
(as defined below) is followed, the prospectus that discloses all the
information that was omitted from the prospectus on the effective date
pursuant
to such Rule 430A, and in either case, together with any changes contained
in
any prospectus filed with the Commission by the Company with the
Representative's consent after the effective date of the Registration
Statement,
is herein referred to as the “Final Prospectus.” If the procedure in Rule 430A
is followed, the prospectus included as part of the Registration Statement
on
the date when the Registration Statement became effective is referred
to herein
as the “Effective Prospectus.” Any prospectus included in the Registration
Statement of the Company and in any amendments thereto prior to the
effective
date of the Registration Statement is referred to herein as a “Pre-Effective
Prospectus.” If the Company has filed an abbreviated registration statement to
register additional Shares pursuant to Rule 462(b) under the Securities
Act
(including the exhibits thereto, the “Rule 462 Registration Statement”), then
any reference herein to the Registration Statement shall also be deemed
to
include such Rule 462 Registration Statement. For purposes of this
Agreement,
the term “Rules and Regulations” means the rules and regulations adopted by the
Commission under either the Securities Act or the Securities Exchange
Act of
1934 (the "Exchange Act"), as applicable.
(b) No
order
preventing or suspending the use of any Pre-Effective Prospectus has
been issued
by the Commission and each Pre-Effective Prospectus, at the time of
filing
thereof, did not 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, in the light of the circumstances under which they
were
made, not misleading; except that the foregoing shall not apply to
statements in
or omissions from any Pre-Effective Prospectus in reliance upon, and
in
conformity with, written information furnished to the Company by the
Representative, or by any Underwriter through the Representative, specifically
for use in the preparation thereof.
(c) As
of the
Applicable Time (as defined below), the Pricing Prospectus (as defined
below and
included on Schedule
II
hereto),
all considered together (collectively, the “Pricing Disclosure Package”) did 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.
1
“Applicable
Time” means ______ p.m. (Florida time) on the date of this Agreement or such
other time as agreed to by the Company and the Representative.
“Pricing
Prospectus” as of any time means the Pre-Effective Prospectus relating to the
Shares that is included in the Registration Statement immediately prior
to that
time.
(d) When
the
Registration Statement becomes effective and as of the Closing Date
(as defined
herein), the Registration Statement, any post-effective amendment thereto
and
the Effective Prospectus and the Final Prospectus as amended or supplemented
shall conform in all material respects to the requirements of the Securities
Act
and the Rules and Regulations. At the time the Registration Statement
becomes
effective, the Registration Statement will not contain any untrue statement
of a
material fact or omit to state a material fact required to be stated
therein or
necessary to make the statements therein,
in
light of the circumstances under which they were made,
not
misleading. The Effective Prospectus, at the time the Registration
Statement
becomes effective, and the Final Prospectus, at the time the Registration
Statement becomes effective and as of the Closing Date (unless the
term “Final
Prospectus” refers to a prospectus which has been provided to the Underwriters
for use in connection with the offering of the Shares which differs
from the
prospectus on file at the Commission at the time the Registration Statement
becomes effective, in which case at the time it is first provided to
the
Underwriters for such use), will not contain any untrue statement of
a material
fact or omit to state a material fact required to be stated therein
or necessary
to make the statements therein, in the light of the circumstances under
which
they were made, not misleading. The representations, warranties and
agreements
in this paragraph shall not apply to statements in, or omissions from,
any such
document in reliance upon, and in conformity with, written information
furnished
to the Company by the Representative, or by any Underwriter through
the
Representative, specifically for use in the preparation thereof. There
is no
contract or document required to be described in the Registration Statement
or
Pricing Disclosure Package, Effective Prospectus or Final Prospectus
or to be
filed as an exhibit to the Registration Statement that is not described
or filed
as required.
(e) No
such
documents when they were filed (or, if amendments with respect to such
documents
were filed, when such amendments were filed), contained an untrue statement
of a
material fact or omitted to state a material fact required to be stated
therein,
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
(f) PMB
▇▇▇▇▇
▇▇▇▇▇▇▇, LLP, whose report appears in the Effective Prospectus and
the Final
Prospectus, is an independent registered public accounting firm with
respect to
the Company as required by the Securities Act and the Rules and Regulations.
The
financial statements and schedules (including the related notes) included
in the
Registration Statement, any Pre-effective Prospectus, the Effective
Prospectus
or Final Prospectus, present fairly the financial condition, the results
of the
operations and changes in financial condition of the entities purported
to be
shown thereby at the dates or for the periods indicated and have been
prepared
in accordance with generally accepted accounting principles applied
2
(g) Each
of
the Company and its Subsidiaries (as defined herein) has been duly
organized and
is validly existing as a corporation in good standing under the laws
of the
jurisdiction of its organization, with full power and authority (corporate
and
other) to own or lease its properties and conduct its business as described
in
the Pricing Disclosure Package, Effective Prospectus and Final Prospectus,
and
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the character of the business
conducted by it or the location of the properties owned or leased by
it makes
such qualification necessary. Each of the Company and its Subsidiaries
is in
possession of and operating in compliance with all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates
and orders
required for the conduct of its business, all of which are valid and
in full
force and effect except where any failure to do so would not result
in a
material adverse change in the condition (financial or otherwise),
business,
properties,
net worth or results of operations of the Company and its Subsidiaries
considered as a whole, whether or not arising from transactions in
the ordinary
course of business, (any such change or effect, where the context so
requires,
is referred to as a "Material Adverse Change" or a "Material Adverse
Effect").
Neither the Company nor any of its Subsidiaries has received any notice
of
proceedings relating to the revocation or modification of any such
franchise,
grant, authorization, license, permit, easement, consent, certificate
or order
which, individually or in the aggregate, if the subject of an unfavorable
decision, would result in a Material Adverse Effect.
(h) The
capitalization of the Company as of _____, 2007, is as set forth under
the
caption “Capitalization” in the Pricing Disclosure Package, Effective Prospectus
and Final Prospectus, and the Shares, conform
to the
description thereof contained under the caption “Description of Securities” in
the Pricing Disclosure Package, Effective Prospectus and Final Prospectus;
the
outstanding shares of Common Stock have been, and the Shares, upon
issuance and
delivery and payment therefore in the manner herein described, will
be, duly
authorized, validly issued, fully paid and nonassessable. There are
no
preemptive rights or other rights to subscribe for or to purchase,
or any
restriction upon the voting or transfer of, any shares of Common Stock
pursuant
to the Company’s articles of incorporation, bylaws or other governing documents
or any agreement or other instrument to which the Company or any of
its
Subsidiaries is a party or by which any of them may be bound. Neither
the filing
of the Registration Statement nor the offering or sale of the Securities
as
contemplated by this Agreement gives rise to any rights, other than
those which
have been waived or satisfied, for or relating to the registration
of any shares
of Common Stock. All of the outstanding shares of capital stock of
each
Subsidiary of the Company have been duly authorized and validly issued,
are
fully paid and nonassessable and are owned directly or indirectly by
the
Company, free and clear of any claim, lien, encumbrance or security
interest.
3
(i) Subsequent
to the respective dates as of which information is given in the Pricing
Disclosure Package, Effective Prospectus and the Final Prospectus,
and except as
described or contemplated in the Pricing Disclosure Package, Effective
Prospectus and Final Prospectus,
neither
the Company nor any of its Subsidiaries has incurred any liabilities
or
obligations, direct or contingent, nor entered into any transactions
not in the
ordinary course of business, which in either case, individually
or in the aggregate, has had a
Material
Adverse Effect;
and
there has been no dividend or distribution of any kind declared, paid
or made by
the Company on any class of its capital stock.
(j) Neither
the Company nor any of its Subsidiaries is, or with the giving of notice
or
lapse of time or both would be, in violation of or in default under,
nor will
the execution or delivery hereof or consummation of the transactions
contemplated hereby result in a violation of, or constitute a default
under, the
articles of incorporation, bylaws or other governing documents of the
Company or
any of its Subsidiaries, or any agreement, contract, mortgage, deed
of trust,
loan agreement, note, lease, indenture or other instrument, to which
the Company
or any of its Subsidiaries is a party or by which any of them is bound,
or to
which any of their properties is subject, nor will the performance
by the
Company of its obligations hereunder violate any law, rule, administrative
regulation or decree of any court, or any governmental agency or body
having
jurisdiction over the Company, its Subsidiaries or any of their properties,
or
result in the creation or imposition of any lien, charge, claim or
encumbrance
upon any property or asset of the Company or any of its Subsidiaries.
Except for
permits and similar authorizations required under the Securities Act
and the
securities or “Blue Sky” laws of certain jurisdictions, and for such permits and
authorizations which have been obtained, no consent, approval, authorization
or
order of any court, governmental agency or body or financial institution
is
required in connection with the consummation of the transactions contemplated
by
this Agreement.
(k) This
Agreement has been duly authorized, executed and delivered by the Company
and
constitutes a legal, valid and binding obligation of the Company and
is
enforceable against the Company in accordance with its terms,
except
as such enforceability may be limited by bankruptcy, insolvency, moratorium
and
other similar laws affecting creditors’ rights generally and by general
principles of equity.
(l) The
Company and its Subsidiaries have good and marketable title in fee
simple to all
items of real property and good and marketable title to all personal
property
owned by them, in each case clear of all liens, encumbrances and defects
except
such as are described or referred to in the Pricing Disclosure Package,
Effective Prospectus and Final Prospectus or such as do not materially
affect
the value of such property and do not interfere with the use made or
proposed to
be made of such property by the Company or such Subsidiaries. Any real
property
and buildings held under lease by the Company and its Subsidiaries
are held by
them under valid, existing and enforceable leases with such exceptions
as
would
not
have a Material Adverse Effect on the Company
and do
not interfere with the use made or proposed to be made of such property
and
buildings by the Company or such Subsidiaries.
4
(m) Except
as
described in the Pricing Disclosure Package, Effective Prospectus and
Final
Prospectus, there is no litigation or governmental proceeding to which
the
Company or any of its Subsidiaries is a party or to which any property
of the
Company or any of its Subsidiaries is subject or which is pending or,
to the
knowledge of the Company, threatened against the Company which would
have a
Material
Adverse Effect
on
the Company,
which
would materially and adversely affect the consummation of this Underwriting
Agreement or the transactions contemplated hereby or which is required
to be
disclosed in the Pricing Disclosure Package, Effective Prospectus and
Final
Prospectus.
(n) Neither
the Company nor any Subsidiary is in violation of any law, ordinance,
governmental rule or regulation or court decree to which it may be
subject which
violation would
have a
Material Adverse Effect.
(o) Neither
the Company, nor any of its officers, directors or affiliates has taken
and may
not take, directly or indirectly, any action designed to cause or result
in, or
which has constituted or which might reasonably be expected to constitute,
the
stabilization or manipulation of the price of the shares of Common
Stock to
facilitate the sale or resale of the Shares.
(p) The
Company and its Subsidiaries have filed all necessary federal, state
and foreign
income and franchise tax returns, and all such tax returns are complete
and
correct in all material respects, and the Company and its Subsidiaries
have not
failed to pay any taxes which were payable pursuant to said returns
or any
assessments with respect thereto. The Company has no knowledge of any
tax
deficiency that has been or is likely to be threatened or asserted
against the
Company or its Subsidiaries.
(q) The
Company and its Subsidiaries maintain a system of internal accounting
controls
sufficient to provide reasonable assurances that (i) transactions are
executed
in accordance with management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles
and to
maintain accountability for assets; (iii) access to assets is permitted
only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets
at
reasonable intervals and appropriate action is taken with respect to
any
differences.
(r) The
Company and its Subsidiaries maintain “disclosure controls and procedures” (as
defined in Rule 13a-14(i) under the Exchange Act) and the Company and
its
Subsidiaries are in compliance with all applicable effective provisions
of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations issued
thereunder.
(s) The
Company and its Subsidiaries maintain insurance of the types and in
the amounts
generally deemed adequate for its business, including, but not limited
to,
directors’ and officers’ insurance, insurance covering real and personal
property owned or leased by the Company and
5
(t) Neither
the Company nor any of its Subsidiaries nor, to the best of the Company’s
knowledge, any of its employees or agents has at any time during the
last five
years (i) made any unlawful contribution to any candidate for foreign
office, or
failed to disclose fully any contribution in violation of law, or (ii)
made any
payment to any foreign, federal or state governmental officer or official
or
other person charged with similar public or quasi-public duties, other
than
payments required or permitted by the laws of the United States or any
jurisdiction thereof.
(u) The
Company is not an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.
(v) The
Shares
are
registered pursuant to Section 12(b) of the Exchange Act.
(w) No
labor
dispute with the employees of the Company exists or, to the knowledge
of the
Company, is threatened or imminent, and the Company is not aware of any
existing
labor disturbance by any of its employees, or principal suppliers, contractors
or customers.
(x) Except
as
otherwise described in the Pricing Disclosure Package, Effective Prospectus
and
the Final Prospectus, the Company owns, licenses or otherwise has rights
in all
United States and foreign patents, trademarks, service marks, tradenames,
copyrights, trade secrets and other proprietary rights necessary for
the conduct
of its business as currently carried on and as currently proposed to
be carried
on as described in the Pricing Disclosure Package, Effective Prospectus
and the
Final Prospectus (collectively, and together with any applications or
registrations for the foregoing, the “Intellectual Property”). Except as
specifically described in the Pricing Disclosure Package, Effective Prospectus
and the Final Prospectus, (i) no third parties have obtained rights to
any such
Intellectual Property from the Company other than licenses granted in
the
ordinary course and those that would not result in a Material Adverse
Effect
on
the Company;
(ii) to
the Company's knowledge, there
is
no infringement or misappropriation by third parties of any such Intellectual
Property; (iii) there is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others challenging the Company’s rights in
or to any such Intellectual Property, and the Company is unaware of any
facts
that would form a basis for any such claim; (iv) there is no pending
or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others
challenging the validity, enforceability, or scope of any such Intellectual
Property, and the Company is unaware of any facts that would form a basis
for
any such claim; (v) there is no prior, pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others that the
6
(y) The
Company possesses such valid and current licenses, certificates, authorizations
or permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies (“Licenses”) necessary to conduct its business, except where
the failure to have such Licenses would not result
in
a Material Adverse Effect
on
the Company,
and the
Company has not received any notice of proceedings relating to the revocation
or
modification of, or non-compliance with, any such License which, individually
or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding,
would
result
in a Material Adverse Effect
on
the Company.
The
Company is in compliance with the terms of the Licenses, except where
the
failure to so comply would not result
in
a Material Adverse Effect
on
the Company.
No
registrations, filings, applications, notices, transfers, consents, approvals,
audits, qualifications, waivers or other actions of any kind is required
by
virtue of the execution and delivery of this Agreement, or of the consummation
of the transactions contemplated hereby, by the Pricing Disclosure Package,
Effective Prospectus or by the Final Prospectus (a) to avoid the loss
of any
such License or any asset, property or right pursuant to the terms thereof,
or
the violation or breach of any applicable law thereto or (b) to enable
the
Company to hold and enjoy the same after the Closing Date or any Subsequent
Closing Date, as the case may be, in the conduct of its business as conducted
prior to the Closing Date.
(z) There
are
no business relationships or related-party transactions involving the
Company
or, to the Company's knowledge, any other person required by the Securities
Act
or the Exchange Act to be described in the Pricing Disclosure Package,
Effective
Prospectus or the Final Prospectus that have not been described as
required.
7
(aa) (i)
The
Company is not in violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, order, permit, policy or rule
of common
law or any judicial or administrative order, consent, decree or judgment
or
other requirement relating to pollution or protection of human health
or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including
without
limitation, laws and regulations relating to emissions, discharges, releases
or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, “Materials of Environmental Concern”), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environment Concern (collectively,
“Environmental Laws”), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations required
for
the operation of the business of the Company under applicable Environmental
Laws, or noncompliance with the terms and conditions thereof, nor has
the
Company received any written communication, whether from a governmental
authority, citizens group, employee or otherwise, that alleges that the
Company
is in violation of any Environmental Law, except as would not
reasonably be expected to result
in
a Material Adverse Effect
on
the Company;
(ii)
the Company has all permits, authorizations and approvals required under
any
applicable Environmental Laws and is in compliance with their requirements,
except where the failure to have such permits, authorizations and approvals
would not result
in
a Material Adverse Effect
on
the Company;
(iii)
there is no claim, action or cause of action filed with a court or governmental
authority, no investigation with respect to which the Company has received
written notice, and no written notice by any person or entity alleging
potential
liability for investigatory costs, cleanup costs, governmental responses
costs,
natural resources damages, property damages, personal injuries, attorneys’ fees
or penalties arising out of, based on or resulting from the presence,
or release
into the environment, of any Material of Environmental Concern at any
location
owned, leased or operated by the Company now or in the past (collectively,
“Environmental Claims”), pending or, to the best of the Company’s knowledge,
threatened against the Company, any person or entity whose liability
for any
Environmental Claim the Company has retained or assumed either contractually
or
by operation of law, except as would not result
in
a Material Adverse Effect
on
the Company;
(iv) to
the best of the Company’s knowledge, there are no past, present or anticipated
future actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge, presence
or
disposal of any Material of Environmental Concern, that reasonably could
be
expected to result in a violation of any Environmental Law, require expenditures
to be incurred pursuant to Environmental Law, or form the basis of a
potential
Environmental Claim against the Company, or against any person or entity
whose
liability for any Environmental Claim the Company has retained or assumed
either
contractually or by operation of law, except as would not result in a
Material
Adverse Effect
on
the Company;
and (v)
the Company is not subject to any pending or, to the Company's knowledge,
threatened
proceeding under
an
Environmental Law to which a governmental authority is a party and which
is
reasonably likely to result in monetary sanctions.
8
(bb) Except
as
disclosed in the Pricing Disclosure Package, the Effective Prospectus
and the
Final Prospectus, no “prohibited
transaction” (as defined in Section 406 of the Employee Retirement Income
Security Act of 1974, as amended from time to time, including the regulations
and published interpretations thereunder (“ERISA”), or Section 4975 of the
Internal Revenue Code of 1986, as amended from time to time (the “Code”)) or
“accumulated funding deficiency” (as defined in Section 302 of ERISA) or any of
the reportable events set forth in Section 4043(c) of ERISA (other than
events
with respect to which the 30 day notice requirement under Section 4043
of ERISA
has been waived) has occurred with respect to any employee benefit plan
of the
Company which would result
in
a Material Adverse Effect
on
the Company,
each
such employee benefit plan is in compliance with applicable law, including
ERISA
and the Code, except where such noncompliance
would
not result
in
a Material Adverse Effect
on
the Company,
the
Company has not incurred and does not
currently
expect
to incur liability under Title IV of ERISA with respect to the termination
of,
or withdrawal from, any pension plan for which the Company would reasonably
be
expected to have any liability that would result in a Material Adverse
Change;
and each such pension plan maintained by the Company that is intended
to be
qualified under Section 401(a) of the Code is so qualified and nothing
has
occurred, whether by action or by failure to act, which would cause the
loss of
such qualification.
(cc) There
is
no broker, finder or other party, except for the Underwriters, that is
entitled
to receive from the Company any brokerage or finder’s fee, commission or other
similar payment as a result of any transactions contemplated by this
Agreement.
(dd) The
Company has not extended or maintained credit, arranged for the extension
of
credit, or renewed any extension of credit, in the form of a personal
loan, to
or for any director or executive officer (or equivalent thereof) of the
Company
at a time such transaction was prohibited by law.
Section
2. Purchase
of the Shares by the Underwriters
(a) Subject
to the terms and conditions and upon the basis of the representations,
warranties and agreements herein set forth, the Company agrees to issue
and sell
to the Underwriters, and each of the Underwriters agrees, severally and
not
jointly, to purchase at a price of $_____ per Share, the number of Firm
Shares
set forth opposite such Underwriter’s name in Schedule
I
hereto,
subject to adjustment in accordance with Section 8 of this Agreement.
The
Underwriters agree to offer the Firm Shares to the public as set forth
in the
Final Prospectus.
(b) The
Company hereby grants to the Underwriters an option to purchase from
the
Company, solely for the purpose of covering over-allotments in connection
with
the distribution and sale of the Firm Shares, all or any portion of the
Option
Shares for a period of 30 days from the date hereof at the purchase price
per
Share set forth in Section 2(a). Option Shares shall be purchased from
the
Company, severally and not jointly, for the accounts of the several Underwriters
in proportion to the number of Firm Shares set forth opposite such Underwriter’s
name in Schedule
I
hereto,
except that the respective purchase obligations of each Underwriter shall
be
adjusted by the Representative so that no Underwriter shall be obligated
to
purchase fractional Option Shares. No Option Shares shall be sold and
delivered
unless the Firm Shares previously have been, or simultaneously are, sold
and
delivered.
9
Section
3. Delivery
of and Payment for Shares
(a) Delivery
of certificates for the Firm Shares to be purchased by the Underwriters
from the
Company and payments therefore shall be made at the offices of Capital
Growth
Financial, Inc. (or such other place as mutually may be agreed upon),
on the
third full Business Day following the date hereof or, if the pricing
of the Firm
Shares occurs after 4:30 p.m., Florida time, on the fourth full Business
Day
thereafter, or at such other date as shall be determined by the Representative
and the Company (the “First Closing Date”).
(b) The
option to purchase Option Shares granted in Section 2 of this Agreement
may be
exercised during the term thereof by written notice to the Company from
the
Representative. Such notice shall set forth the aggregate number of Option
Shares as to which the option is being exercised and the time and date,
not
earlier than either the First Closing Date or the second Business Day
after the
date on which the option shall have been exercised nor later than the
fifth
Business Day after the date of such exercise, as determined by the
Representative, when the Option Shares are to be delivered (the “Option Closing
Date”). Delivery and payment for such Option Shares is to be at the offices
set
forth above for delivery and payment of the Firm Shares. The First Closing
Date
and the Option Closing Date are herein individually referred to as the
“Closing
Date” and collectively referred to as the “Closing Dates.”
(c) Delivery
of certificates for the Shares shall be made by or on behalf of the Company
to
the Representative, for the respective accounts of the Underwriters,
against
payment by the Representative, for the several accounts of the Underwriters,
of
the purchase price therefore by (i) federal funds wire transfer; or (ii)
certified or official bank check payable in next day funds to the order
of the
Company. The certificates for the Shares shall be registered in such
names and
denominations as the Representative shall have requested at least two
full
Business Days prior to the applicable Closing Date, and shall be made
available
for checking and packaging at a location in [____________] as may be
designated
by the Representative at least one full Business Day prior to such Closing
Date.
Time shall be of the essence and delivery at the time and place specified
in
this Agreement is a further condition to the obligations of each
Underwriter.
Section
4. Covenants
The
Company
covenants and agrees with each Underwriter that:
(a) The
Company
shall use its best efforts to cause the Registration Statement to become
effective under the Securities Act and, if the procedure in Rule 430A
of the
Rules and Regulations is followed, comply with the provisions of and
make all
requisite filings with the Commission pursuant to such Rule and to notify
the
Representative promptly (in writing, if requested) of all such filings.
The
Company shall notify the
10
(b) The
Company shall (i) not make any offer relating to the Shares that would
constitute a “free writing prospectus” (as defined in Rule 405 under the
Securities Act) required to be filed by the Company with the Commission
under
Rule 433 under the Securities Act; and (ii) not take any action that
would
result in an Underwriter or the Company being required to file with the
Commission pursuant to Rule 433(d) under the Securities Act a free writing
prospectus prepared by or on behalf of such Underwriter that such Underwriter
otherwise would not have been required to file thereunder.
(c) The
Company shall furnish to the Underwriters, from time to time and without
charge,
____ copies of the Registration Statement of which two shall be signed
and shall
include exhibits and all amendments and supplements to any of such Registration
Statement, in each case as soon as available and in such quantities as
the
Representative may from time to time reasonably request.
(d) Within
the time during which a Final Prospectus relating to the Shares is required
to
be delivered under the Securities Act (or, in lieu thereof, the notice
referred
to in Rule 173(a) under the Securities Act), the Company shall comply
with all
requirements imposed upon it by the Securities Act, as now and hereafter
amended, and by the Rules and Regulations, as from time to time in force,
so far
as is necessary to permit the continuance of sales of or dealings in
the Shares
as contemplated by the provisions hereof and the Final Prospectus. If
during
such period any event occurs as a result of which the Final Prospectus,
as then
amended or supplemented, would include an untrue statement of a material
fact or
omit to
11
(e) The
Company shall take or cause to be taken all necessary action and furnish
to
whomever the Representative may direct such information as may be required
in
qualifying the Shares for sale under the laws of such jurisdictions which
the
Representative shall designate and to continue such qualifications in
effect for
as long as may be necessary for the distribution of the Shares; except
that in
no event shall the Company be obligated in connection therewith to qualify
as a
foreign corporation, to
execute a general consent for service of process;
or to
subject itself to taxation in respect of doing business in any jurisdiction
in
which it is not otherwise so subject.
(f) The
Company shall make generally available to its security-holders, in the
manner
contemplated by Rule 158(b) under the Securities Act, as soon as practicable
but
in any event not later than 60 days after the end of its fiscal quarter
in which
the first anniversary date of the effective date of the Registration
Statement
occurs, an earning statement which will comply with Section 11(a) of
the
Securities Act covering a period of at least 12 consecutive months beginning
after the effective date of the Registration Statement.
(g) The
Company shall engage and maintain, at its expense, a registrar and transfer
agent for the Shares and Common Stock.
(h) As
soon
as practicable, but in no event not later than 15 months after the date
of this
Agreement, the Company shall make generally available to its security
holders
and to the Representative an earnings statement (which need not be audited)
covering a period of at least the twelve-months ending beginning after
the date
of this Agreement which shall satisfy the provisions of Section 11(a)
of the
Securities Act and Rule 158 under the Securities Act
Regulations.
(i) The
Company shall cause each officer and director of the Company and each
holder of
the Company's convertible debt acquired in December 2005 and September
2006,
to
furnish to the Representative, on or prior to the date of this Agreement,
a
letter or letters, in form and substance satisfactory to counsel for
the
Underwriters, pursuant to which each such person shall agree not to offer
for
sale, contract to sell, sell, distribute, grant any option, right or
warrant to
purchase, pledge, hypothecate or otherwise dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into, or exercisable
or
exchangeable for, shares of Common Stock during the 12 months in the
case of
officers and directors; 90 days in the case of holders who acquired convertible
debentures in the December 2005 offering; and 180 days in the case of
holders
who
12
acquired
debentures in the September 2006
offering
in each case following the effective date of the Registration Statement,
except
with the Representative's prior written consent.
(j) The
Company shall apply the net proceeds of the sale of the Shares in the
manner
specified in the Prospectus under the heading “Use of
Proceeds.”
(k) The
Company will furnish to its security holders annual reports containing
financial
statements audited by independent public accountants and quarterly reports
containing financial statements and financial information that may be
unaudited.
During the period of three
years
from the date hereof, the Company will deliver to the Representative
and, upon
request, to each of the other Underwriters, copies of each annual report
of the
Company and each other report furnished by the Company to its security
holders
and will deliver to the Representative, as soon as they are available,
copies of
any other reports (financial or otherwise) which the Company shall publish
or
otherwise make available to any of its security holders as such, and
as soon as
they are available, copies of any reports and financial statements furnished
to
or filed with the Commission.
(l) Whether
or not this Agreement becomes effective or is terminated or the sale
of the
Shares to the Underwriters is consummated, the Company shall pay or cause
to be
paid:
(i) All
expenses
(including stock transfer taxes) incurred in connection with the delivery
to the
several Underwriters of the Shares;
(ii) All
fees
and expenses (including, without limitation, fees and expenses of the
Company’s
accountants and counsel, but excluding fees and expenses of counsel for
the
Underwriters) in connection with the preparation, printing, filing, delivery
and
shipping of the Registration Statement (including the financial statements
therein and all amendments and exhibits thereto), each Pre-Effective
Prospectus,
the Effective Prospectus and the Final Prospectus as amended or supplemented
and
the printing, delivery and shipping of this Agreement and other underwriting
documents, including Underwriters’ Questionnaires, Underwriters’ Powers of
Attorney, Blue Sky Memoranda, the Agreement Among Underwriters and Selected
Dealer Agreements;
(iii) All
filing fees and disbursements of counsel to the Underwriters incurred
in
connection
with the
qualification of the Shares for sale under state securities laws:
(iv) The
filing fee of the National Association of Securities Dealers, Inc. (the
“NASD”)
and any applicable expenses of counsel for the Underwriters in connection
with a
review of the offering by the NASD;
(v) Any
applicable American Stock Exchange listing fees;
(vi) The
cost
of printing certificates representing the Shares;
13
(vii) The
cost
and charges of any transfer agent or registrar; and
(viii) All
other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise provided for in this Section.
It
is
understood, however, that, except as provided in this Section, Section
7 and
Section 10 of this Agreement, the Underwriters shall pay all of their
own costs
and expenses, including the fees of their counsel, stock transfer taxes
on
resale of any of the Shares by them and any advertising expenses connected
with
any offers they may make. If the sale of the Shares provided for herein
is not
consummated by reason of acts of the Company pursuant to Section 10(a)
of this
Agreement which prevent this Agreement from becoming effective, or by
reason of
any failure, refusal or inability on the part of the Company to perform
any
agreement on its part to be performed or because any other condition
of the
Underwriters’ obligations hereunder is not fulfilled, unless the failure to
perform the agreement or fulfill the condition is due to the default
or omission
of any Underwriter, the Company shall reimburse the several Underwriters
for all
reasonable out-of-pocket disbursements (including fees and disbursements
of
counsel) incurred by the Underwriters in connection with their investigation,
preparing to market and marketing the Securities or in contemplation
of
performing their obligations hereunder. The Company shall not in any
event be
liable to any of the Underwriters for loss of anticipated profits from
the
transactions covered by this Agreement.
Section
5. Conditions
of Underwriters' Obligations
The
respective obligations of the several Underwriters hereunder are subject
to the
accuracy, at and as of the date hereof and each Closing Date (as if made
at such
Closing Date), of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder
and to
the following additional conditions:
(a) The
Registration Statement and all post-effective amendments thereto shall
have
become effective not later than ______ p.m., Florida time, on the date
hereof,
or, with the Representative’s
consent,
at a later time and date, not later, however, than _____ p.m., Florida
time, on
the first Business Day following the date hereof, or at such later date
and time
as may be approved by a majority in interest of the Underwriters; if
the Company
has elected to rely on Rule 462(b), the Rule 462(b) Registration Statement
shall
have become effective not later than the earlier of (x) 10:00 p.m., Florida
time, on the date hereof, or (y) at such later date and time as may be
approved
by a majority in interest of the Underwriters; all filings required by
Rule 424,
Rule 430A and Rule 433 of the Rules and Regulations have been timely
made; no
stop order suspending the effectiveness of the Registration Statement
or any
amendment or supplement thereto shall have been issued; no proceedings
for the
issuance of such an order shall have been initiated or, to the knowledge
of the
Company, threatened; and any request of the Commission for additional
information (to be included in the Registration Statement or the Final
Prospectus or otherwise) shall have been disclosed to the Representative
and
complied with to the Representative's satisfaction.
14
(b) No
Underwriter shall have advised the Company that (i) the Pricing Disclosure
Package, Effective Prospectus or Final Prospectus, or any supplement
thereto,
contains an untrue statement of fact which, in the Representative's opinion,
is
material, or omits to state a fact which, in the Representative's opinion,
is
material and is required to be stated therein or is necessary to make
the
statements therein, in the light of the circumstances under which they
were
made, not misleading; or (ii) that the Registration Statement, or any
amendment
thereto, contains an untrue statement of fact which, in the Representative's
opinion, is material, or omits to state a fact which, in the
Representative’s
opinion
is material and is required to be stated therein or is necessary to make the
statements therein,
in
light of the circumstances under which they were made,
not
misleading.
(c) On
each
Closing Date there shall have been furnished to the Representative the
opinion
(addressed to the Underwriters) of ▇▇▇▇▇▇▇▇
and Wedge LLP, Nevada counsel for the Company and ▇▇▇▇▇▇▇
▇▇▇▇▇
LLP, special
securities
counsel
for the Company, dated such Closing Date and in form and substance satisfactory
to counsel for the Underwriters which will be substantially in the form
attached
as Schedule
III-A,
and
Schedule
III-B,
respectively.
In
rendering their opinion as aforesaid, such counsel may rely as to matters
of
fact upon certificates of officers of the Company and written communications
from the Commission, the NASD and state officials.
(d) There
shall have been furnished to the Representative a certificate of the
Company,
dated such Closing Date and addressed to the Representative, signed by
the
President and by the Chief Financial Officer of the Company to the effect
that:
(i) The
representations and warranties of the Company in this Agreement are true
and
correct, as if made at and as of such 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 such Closing Date;
(ii) No
stop
order suspending the effectiveness of the Registration Statement has
been
issued, and no proceedings for that purpose have been initiated or are
pending
or, to their knowledge, contemplated;
(iii) Any
and
all filings required by Rule 424 and Rule 430A of the Rules and Regulations
have
been timely made;
(iv) The
signers of said certificate have carefully examined the Registration
Statement,
the Pricing Disclosure Package, the Effective Prospectus and the Final
Prospectus, and any amendments or supplements thereto, and such documents
contain all statements and information required to be included therein;
the
Registration Statement or any amendment thereto does not 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,
in
light of the circumstances under which they were made,
not
misleading; the Pricing Disclosure Package or any supplements thereto
did not as
of the Applicable Time include any
15
(v) Since
the
effective date of the Registration Statement, there has occurred no event
required to be set forth in an amendment or supplement to the Registration
Statement or the Pricing Disclosure Package, the Effective Prospectus
and the
Final Prospectus which has not been so set forth and Regulations that
upon such
filing would be deemed to be incorporated by reference into the Pricing
Disclosure Package, the Effective Prospectus and the Final Prospectus
that has
not been so filed; and
(vi) Since
the
effective date of the Registration Statement, neither the Company nor
any of its
Subsidiaries shall have sustained any loss by strike, fire, flood, accident
or
other calamity (whether or not insured), or shall have become a party
to or the
subject of any litigation, which could
have
a
Material Adverse Effect
on
the Company, whether or not arising in the ordinary course of business,
which
loss, litigation or change,
in the
Representative's
judgment, shall render it inadvisable to proceed with the delivery of
the
Shares.
(e) On
the
date of this Agreement and on each Closing Date the Representative shall
have
received a letter dated the date hereof or such Closing Date, as applicable,
and
addressed to the Representative, in form and substance previously approved
by
the Representative, containing statements and information of the type
ordinarily
included in accountant's "comfort letters" to underwriters, confirming,
among
other things, that they are an independent registered public accounting
firm
with respect to the Company and its Subsidiaries within the meaning of
the
Securities Act and the Rules and Regulations, and stating, as of the
date of
such letter (or, with respect to matters involving changes or developments
since
the respective dates as of which specified financial information is given
or
incorporated in the Pricing Disclosure Package, the Effective Prospectus
and the
Final Prospectus, as of a date not more than five days prior to the date
of such
letter), the conclusions and findings of such firm with respect to the
financial
information and other matters covered by its letter delivered to the
Representative concurrently with the execution of this Agreement, and
confirming
the conclusions and findings set forth in such prior letter.
(f) The
Representative
shall
have been furnished such additional documents and certificates as the
Representative may reasonably request.
(g) The
Shares
and Common Stock shall have been duly authorized for listing on the American
Stock Exchange.
16
(h) The
Company shall have executed and delivered to the Representative, its
(i)
consulting agreement; and (ii) a warrant entitling the Representative
to
purchase an aggregate of 10% of the number of Shares sold in the public
offering, not including
any
Shares sold in any over-allotment
(the “Representative's
Warrant”).
All
such
opinions, certificates, letters and documents shall be in compliance
with the
provisions hereof only if they are satisfactory in form and substance
to the
Representative and to counsel for the Underwriters. The Company shall
furnish
the Representative with such conformed copies of such opinions, certificates,
letters and other documents, as the Representative shall reasonably request.
If
any of the conditions specified in this Section 5 shall not have been
fulfilled
when and as required by this Agreement, this Agreement and all obligations
of
the Underwriters hereunder may be canceled at, or at any time prior to,
each
Closing Date, by the Representative; provided, however,
that
any failure to satisfy any of the conditions to be satisfied as of the
Option
Closing Date shall not affect the purchase and sale of the Firm Shares
as of the
First Closing Date. Any such cancellation shall be without liability
of the
Underwriters to the Company, except as provided in Section 6
hereof.
Notice
of such cancellation shall be given to the Company in writing, or by
telephone
and confirmed in writing.
Section
6. Qualified
Independent Underwriter
The
Company hereby confirms that at its request CGF
shall,
without additional compensation, act as “qualified independent underwriter” (in
such capacity, the “QIU”) within the meaning of Rule 2720 of the Conduct
Rules of
the NASD in connection with the offering of the Shares.
Section
7. Indemnification
and Contribution
(a) The
Company shall indemnify and hold harmless each Underwriter against any
loss,
claim, damage or liability, joint or several, as incurred, to which such
Underwriter may become subject, under the Securities Act or otherwise,
insofar
as such loss, claim, damage or liability (or action in respect thereof)
arises
out of or is based upon (i) any untrue statement or alleged untrue statement
made
by
the Company in Section 1 hereof; or (ii) any untrue statement or alleged
untrue
statement of a material fact contained (A) in the Registration Statement,
any
Pre-Effective Prospectus, the Effective Prospectus, or the Final Prospectus
or
any amendment or supplement thereto, or (B) 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 (any such application, documents or information being hereinafter
called a “Blue Sky Application”); or (iii)
the
omission or alleged omission to state in the Registration Statement or
any
amendment
17
(b) Each
Underwriter severally, but not jointly, shall indemnify and hold harmless
the
Company against any loss, claim, damage or liability, joint or several,
as
incurred, to which the Company may become subject, under the Securities
Act or
otherwise, insofar as such loss, claim, damage or liability (or action
in
respect thereof) arises out of or is based upon (i) any untrue statement
or
alleged untrue statement of a material fact contained (A) in the Registration
Statement any Pre-Effective Prospectus, the Effective Prospectus, the
Final
Prospectus or any amendment or supplement thereto, or (B) in any Blue
Sky
Application, or (ii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto a material fact required
to be
stated therein or necessary to make the statements therein,
in
light of the circumstances under which they were made,
not
misleading, or the omission or alleged omission to state in any Pre-Effective
Prospectus, the Effective Prospectus, Final Prospectus or any supplement
thereto
or in any Blue Sky Application a material fact required to be stated
therein or
necessary to make the statements therein,
in the
light of the circumstances under which they were made, not misleading;
except
that such indemnification shall be available in each such 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 reliance upon and in conformity
with
written information furnished to the Company through the Representative
by or on
behalf of such Underwriter specifically for use in the preparation thereof,
and
shall reimburse any legal or other expenses reasonably incurred by the
Company
in connection with investigating
or
defending against any such loss, claim, damage, liability or
action.
(c) Promptly
after receipt by an indemnified party under sub-section (a) or (b) above
of
notice of any claim or the commencement of any action the indemnified
party
shall,
if a
claim in respect thereof is to be made against the indemnifying party
under such
subsection, notify the indemnifying party in writing of the claim or
the
commencement of that action; the failure to notify the indemnifying party
shall
not relieve it from any liability which it may have to an indemnified
party
otherwise than under such subsection. If any such claim or action shall
be
brought against an indemnified party, and it shall notify the indemnifying
party
thereof, the indemnifying party shall be entitled to participate therein
and, to
the extent
18
(d) If
the
indemnification provided for in this Section 7 is unavailable or insufficient
to
hold harmless an indemnified party under subsection (a) or (b) above,
then each
indemnifying party shall contribute to the amount paid or payable by
such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (i) in such proportion as
is
appropriate to reflect the relative benefits received by the Company
on the one
hand and the Underwriters on the other from the offering of the Shares
or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the
Company on the one hand and the Underwriters on the other in connection
with the
statements or omissions that resulted in such losses, claims, damages
or
liabilities, as well as any other relevant equitable considerations.
The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total
net
proceeds from the offering of the Shares (before deducting expenses)
received by
the Company bear to the total underwriting discounts and commissions
received by
the Underwriters, in each case as set forth in the table on the cover
page of
the Final Prospectus. The
relative fault of the Company on the one hand and the Underwriters on
the
other
shall be
determined by reference to, among other things, whether the untrue or
alleged
untrue statement of a material fact or the omission or alleged omission
to state
a material fact relates to information supplied by the Company or the
Underwriters and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue or
alleged untrue statement
or
omission
or alleged
omission. The Company and the Underwriters agree that it would not be
just and
equitable if contributions pursuant to this subsection (d) were to be
determined
by pro rata allocation (even if the Underwriters were treated as one
entity for
such purpose) or by any other method of allocation which does not take
into
account the equitable considerations referred to in the first sentence
of this
subsection (d). The amount paid or payable by an
19
(e) The
obligations of the Company under Section 7 shall be in addition to any
liability
which the Company may otherwise have, and shall extend, upon the same
terms and
conditions, to each officer and director of each Underwriter and to each
person,
if any, who controls any Underwriter or the QIU within the meaning of
the
Securities Act; and the obligations of the Underwriters under this Section
7
shall be in addition to any liability that the respective Underwriters
may
otherwise have, and shall extend, upon the same terms and conditions,
to each
director of the Company (including any person who, with his consent,
is named in
the Registration Statement as about to become a director of the Company),
to
each officer of the Company who has signed the Registration Statement
and to
each person, if any, who controls the Company within the meaning of the
Securities Act, in either case, whether or not such person is a party
to any
action or proceeding.
(f) Without
limitation of and in addition to its obligations under the other paragraphs
of
this Section 7, the Company agrees to indemnify and hold harmless the
QIU, its
partners, members, directors, officers, affiliates and each person, if
any, who
controls the QIU within the meaning of Section 15 of the Act from and
against
any and all losses, claims, damages or liabilities, joint or several,
or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Shares)
to which
the QIU, director, officer, employee or controlling person may become
subject,
under the Act or otherwise, insofar as such loss, claim, damage, liability
or
action arises out of, or is based upon, the QIU’s acting as such “qualified
independent underwriter” in connection with the offering contemplated by this
Agreement; and agrees to reimburse each such indemnified party promptly
upon
demand for any legal or other expenses reasonably incurred by them in
connection
with investigating or defending or preparing to defend 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 it is determined in a final
judgment
by a court of competent jurisdiction that such loss, claim, damage, liability
or
action resulted directly from the gross negligence or willful misconduct
of the
QIU. The relative benefits received by the QIU with respect to the offering
contemplated by this Agreement will, for purposes of Section
7(d), be
deemed to be equal to the compensation received by the QIU for acting
in such
capacity. In addition, notwithstanding the provisions of Section
7(d),
the QIU will not be required to contribute any amount in excess of the
compensation received by the QIU for acting in such capacity.
20
Section
8. Substitution
of Underwriters
If
any
Underwriter defaults in its obligation to purchase the number of Shares
which it
has agreed to purchase under this Agreement, the non-defaulting Underwriters
shall be obligated to purchase (in the respective proportions which the
number
of Shares set forth opposite the name of each non-defaulting Underwriter
in
Schedule
I
hereto
bears to the total number of Shares set forth opposite the names of all
the
non-defaulting Underwriters in Schedule I hereto) the Shares which the
defaulting Underwriter agreed but failed to purchase; except that the
non-defaulting Underwriters shall not be obligated to purchase any of
the Shares
if the total number of Shares which the defaulting Underwriter or Underwriters
agreed but failed to purchase exceeds 10% of the total number of Firm
Shares,
and any non-defaulting Underwriter shall not be obligated to purchase
more than
110% of the number of Shares set forth opposite its name in Schedule
I hereto
plus
the
total number of Option Shares,
purchasable by it pursuant to the terms of Section 2. If the foregoing
maximums
are exceeded, (i) the non-defaulting Underwriters, and any other underwriters
satisfactory to the Representative who so agree, shall have the right,
but shall
not be obligated, to purchase (in such proportions as may be agreed upon
among
them) all the Shares. If the non-defaulting Underwriters or the other
underwriters satisfactory to the Representative do not elect to purchase
the
Shares which the defaulting Underwriter or Underwriters agreed but failed
to
purchase, this Agreement shall terminate without liability on the part
of any
non-defaulting Underwriter or the Company except for the payment of expenses
to
be borne by the Company and the Underwriters as provided in Section (4)(k)
and
the indemnity and contribution agreements of the Company and the Underwriters
contained in Section 7 hereof.
Nothing
contained herein shall relieve a defaulting Underwriter of any liability
it may
have for damages caused by its default. If the other underwriters satisfactory
to the Representative are obligated or agree to purchase the Shares of
a
defaulting Underwriter, either the Representative or the Company may
postpone
the First Closing Date for up to five full Business Days in order to
effect any
changes that may be necessary in the Registration Statement, the Pricing
Disclosure Package, the Effective Prospectus or the Final Prospectus
or in any
other document or agreement, and to file promptly any amendments or any
supplements to the Registration Statement, the Pricing Disclosure Package,
the
Effective Prospectus or the Final Prospectus which in the
Representative’s
opinion
may thereby be made necessary.
Section
9. Effective
Date and Termination
(a) This
Agreement shall become effective at _____ a.m., Florida time, on the
first full
Business Day following the earlier of (i) the date hereof, or (ii) the
day on
which the Representative releases
the
initial public offering of the Firm Shares for sale to the public. The
Representative shall
21
(b) Until
the
First Closing Date, this Agreement may be terminated by the Representative
by
giving notice as hereinafter provided to the Company, if (i) the Company
shall
have failed, refused or been unable, at or prior to the First Closing
Date, to
perform any agreement on its part to be performed hereunder unless the
failure
to perform any agreement is due to the default or omission by any Underwriter;
(ii) any other condition of the obligations of the Underwriters hereunder
is not
fulfilled; (iii) trading in securities generally on the New York Stock
Exchange
or the American Stock Exchange or the over-the-counter market shall have
been
suspended or minimum or maximum prices shall have been established on
either of
such exchanges or such market by the Commission or by such exchange or
other
regulatory body or governmental authority having jurisdiction; (iv) trading
or
quotation in any of the Company’s securities shall have been suspended or
limited by the Commission or by such exchange or other regulatory body
or
governmental authority having jurisdiction; (v) a general banking moratorium
shall have been declared by federal or state authorities; (vi) a material
disruption in securities settlement, payment or clearance services in
the United
States shall have occurred; (vii) there shall have been any downgrading
or any
notice of intended or potential downgrading in the rating accorded any
securities of the Company or its Subsidiaries by any “nationally recognized
statistical rating organization” as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; (viii) there shall have been any
material
adverse change in general economic, political or financial conditions
or if the
effect of international conditions on the financial markets in the United
States
shall be such as, in the Representative's judgment, makes it inadvisable
to
proceed with the delivery of the Shares; or (ix) any attack on, outbreak
or
escalation of hostilities, declaration of war or act of terrorism involving
the
United States or any other national or international calamity or emergency
if,
in the Representative’s
judgment, the effect of any such attack, outbreak, escalation, declaration,
act,
calamity or emergency makes it impractical or inadvisable to proceed
with the
completion of the public offering or the delivery of the Shares. Any
termination
of this Agreement pursuant to this Section 9 shall be without liability
on the
part of the Company or any Underwriter, except as otherwise provided
in Sections
4(l) and 6 hereof.
Any
notice referred to above may be given at the address specified in Section
12 of
this Agreement in writing or by telegraph or telephone, and if by telegraph
or
telephone, shall be immediately confirmed in writing.
(c) This
Agreement may also be terminated as provided in Section 8
hereof.
22
Section
10. Right
to
Appoint an Observer
For
the
period of two years from the effective date (as that term is defined
in Section
9), the Representative shall have the right to send a representative
(who need
not be the same individual from meeting to meeting) to observe each
meeting of
the Board of Directors of the Company; provided that
in
each instance (i) the Company shall give the Representative reasonable,
advance
written notice of each meeting of the Board of Directors of the Company;
(ii)
the Representative shall give the Company reasonable, advance written
notice of
the representative attending any such meeting; (iii)
such
representative shall sign a Regulation FD compliant confidentiality
agreement
which is reasonably acceptable to the Representative and its counsel
in
connection with such representative's attendance at meetings of the
Board of
Directors; and (iv) such representative shall be reasonably acceptable
to the
Company except that upon reasonable, advance written notice to the
Underwriters,
the Company may exclude the representative from meetings where, in
the
opinion
of counsel for the Company, the representative's presence may
cause
the
loss
of
attorney-client privilege,
or if,
in the opinion of the Company’s Board of Directors, it would be in the best
interest of the Company to exclude the observer for such portion of
the
meeting.
The
Company hereby agrees to give the Representative reasonable, advance
written
notice of each such meeting and to provide the Representative with
an agenda and
minutes of the meeting no later than it gives such notice and provides
such
items to the other directors.
Section
11.
Survival
of Indemnities, Contribution, Warranties and Representations
The
indemnity and contribution agreements contained in Section 7
and the
representations, warranties and agreements of the Company in Sections
1 and
4(a), (b),
(f),
(g), (h), (i), (j),
(k)
and
(l), and the obligations of the Company pursuant to this
Section
11,
shall
survive the delivery of the Shares to the Underwriters hereunder and
shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any indemnified
party.
Section
12. Notices
Except
as
otherwise provided in this Agreement, (a) whenever notice is required
by the
provisions of this Agreement to be given to the Company, such notice
shall be in
writing addressed and mailed or delivered to the Company at ▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ with a copy sent to:
▇▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇; and
(b)
whenever notice is required by the provisions of this Agreement to be
given to
the Representative or the several Underwriters, such notice shall be
in writing
addressed and mailed or delivered to Capital Growth Financial, LLC, ▇▇▇▇
▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ with a copy sent to ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
23
Section
13. Information
Furnished by Underwriters
The
statements set forth in the last paragraph on the cover page [refer to
paragraph
containing stabilization language, if appropriate] and under the caption
“Underwriting” in any Pre-Effective Prospectus and in the Effective Prospectus
and the Final Prospectus, [except for the statements made in the paragraph
under
the caption “Underwriting” in the Effective Prospectus and the Final Prospectus
relating to sales or dispositions by the Company] constitute the only
written
information furnished by or on behalf of any Underwriter referred to
in
paragraphs (b) and (d) of Section 1 and in paragraphs (a) and (b) of
Section 7
of this Agreement.
Section
14. Parties
This
Agreement is made solely for the benefit of the several Underwriters,
the
Company, any officer, director or controlling person referred to in Section
7 of
this Agreement and their respective successors and assigns, and no other
person
shall acquire or have any right by virtue of this Agreement. The term
“successors and assigns,” as used in this Agreement, shall not include any
purchaser of any of the Shares from any of the Underwriters merely by
reason of
such purchase.
Section
15. No
Fiduciary Relationship
The
Company acknowledges and agrees that each Underwriter in providing underwriting
services to the Company in connection with the offering of the Shares,
including
in acting pursuant to the terms of this Agreement, has acted and is acting
as an
independent contractor on an arm’s length basis and not as a fiduciary and the
Company does not intend such Underwriter to act in any capacity other
than as an
independent contractor, including as a fiduciary or in any other position
of
higher trust. The Company shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated by this
Agreement
and the Underwriters shall have no responsibility or liability with respect
thereto.
Section
16. Definition
of “Business Day” and “Subsidiary”
For
purposes of this Agreement, (a) “Business Day” means any day on which the
American Stock Exchange is open for trading; and (b) “Subsidiary” has the
meaning set forth in Rule 405 under the Securities Act.
Section
17. Governing
Law
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Florida, without giving effect to the choice of law or conflict
of laws
principles thereof.
24
Section
18. 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.
[SIGNATURE
PAGE TO FOLLOW]
25
Please
confirm, by signing and returning to us the counterparts of this Underwriting
Agreement, that the Representative is acting on behalf of itself and
the several
Underwriters and that the foregoing correctly sets forth the agreement
among the
Company and the several Underwriters.
Very
truly yours,
▇▇▇▇▇▇
HOLDINGS, INC.
By:___________________________________
Print
Name:____________________________
Title:_________________________________
Confirmed
and accepted as of the date
first
above mentioned:
CAPITAL
GROWTH FINANCIAL, LLC
as
Representative of the Several
Underwriters
named in Schedule I hereto
By:
_____________________________________
Print
Name: ______________________________
Title:____________________________________
26
SCHEDULE
I
Underwriting
Agreement dated ______________, 2007
Number
of
Firm
Shares
Underwriter to
be
Purchased
Total:
SCHEDULE
II
Underwriting
Agreement dated ______________, 2007
Information
that is part of the Pricing Disclosure Package but not included in Schedule
II.
SCHEDULE
III-A
Form
of Opinion of
Nevada
Counsel for the
Company
Opinion
of counsel for the Company to be delivered pursuant to Section 5(c)
of the
Underwriting Agreement.
References
to the Final Prospectus in this Schedule
include any supplements thereto at the Closing Date.
1) The
Company has been duly incorporated and is validly existing as a corporation
in
good standing under the laws of the State of Nevada.
2) The
Company has corporate power and authority to perform its obligations
under the
Underwriting Agreement, the Warrant Agreement and the Representative's
Warrant.
3) The
Company has corporate power and authority to own, or lease, as the case
may be,
and to operate its properties and to conduct its business as described
in the
Effective Prospectus and the Final Prospectus.
4) The
authorized capital stock of the Company consists of [_________] shares
of common
stock, par value $_____ per share, and [_________] shares of preferred
stock,
par value $_____ per share. The authorized Shares
and the
issued and outstanding securities of the Company conform to the descriptions
thereof set forth in the Effective Prospectus and Final Prospectus.
5) No
stockholder of the Company or any other person has any preemptive right,
right
of first refusal or other similar right to subscribe for or purchase
securities
of the Company arising (i) by operation of the charter or bylaws of the
Company;
(ii) Nevada General Corporation Law; or (iii) otherwise.
6) The
Shares to be purchased by the Underwriters from the Company have been
duly
authorized for issuance and sale and, when issued and delivered by the
Company
pursuant to the Underwriting Agreement against payment of the consideration
set
forth therein, will be validly issued, fully paid and nonassessable.
7) To
such
counsel's knowledge, the Company has reserved a number of its authorized,
but
unissued shares of common stock, that permit the issuance of the Shares,
Warrant
Shares, the Representative's Warrant and the Shares of Common Stock issuable
upon exercise of the Representative's Warrant outstanding from time to
time.
SCHEDULE
III-B
Form
of Opinion of Securities Counsel for the Company
Opinion
of counsel for the Company to be delivered pursuant to Section 5(c)
of the
Underwriting Agreement.
References
to the Final Prospectus in thisSchedule
include
any supplements thereto at the Closing Date.
1) The
Company is duly qualified as a foreign corporation and is in good standing
in
each jurisdiction in which such qualification is required, except for
such
jurisdictions where the failure to so qualify would not result in a Material
Adverse Change.
2) The
authorized capital stock of the Company consists of 100,000,000 shares
of common
stock, par value $0.001 per share, and 10,000,000 shares of preferred
stock, par
value $0.001 per share. The authorized Shares and the issued and outstanding
securities of the Company conform to the descriptions
thereof
set forth in the Effective Prospectus and Final Prospectus.
3) The
Registration Statement has been declared effective by the Commission
under the
Securities Act. To such counsel’s knowledge, no stop order suspending the
effectiveness of the Registration Statement, if any, has been issued
under the
Securities Act and no proceedings for such purpose have been instituted
or are
pending or are contemplated or threatened by the Commission.
4) The
Registration Statement, Effective Prospectus and Final Prospectus and
each
amendment or supplement to the Registration Statement, the Effective
Prospectus
and Final Prospectus, as of their respective effective or issue dates
(other
than the financial statements and supporting schedules included therein
or in
exhibits to or excluded from the Registration Statement, as to which
no opinion
need be rendered) comply as to form in all material respects with the
applicable
requirements of the Securities Act.
5) To
such
counsel’s knowledge, there are no legal or governmental actions, suits or
proceedings pending or threatened that are required to be disclosed in
the
Registration Statement, other than those disclosed therein.
6) No
consent, approval, authorization or other order of, or registration or
filing
with, any court, regulatory body or other governmental authority or agency,
is
required for the Company’s execution, delivery and performance of the
Underwriting Agreement
or the
Representative's
Warrant
and
consummation of the transactions contemplated thereby and by the Effective
Prospectus and the Final Prospectus, except as required under the Securities
Act, applicable state securities or blue sky laws and from the NASD.
1
7) The
execution and delivery of the Underwriting Agreement or the Representative's
Warrant by the Company and the performance by the Company of its obligations
thereunder (other than performance by the Company of its obligations
under the
indemnification section of the Underwriting Agreement, as to which no
opinion
need be rendered) (i) have been duly authorized by all necessary corporate
action on the part of the Company; (ii) will not result in any violation
of the
provisions of the charter or bylaws
of the
Company; (iii) will not constitute a breach of, or default under, or
result in
the creation or imposition of any lien, charge or encumbrance upon any
property
or assets of the Company pursuant to any existing instrument; or (iv)
will not
result in any violation of any statute, law, rule, judgment, regulation,
order
or decree applicable to the Company of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having
jurisdiction over the Company or any of its respective properties.
8) The
Company is not, and after receipt of payment for the Shares and the application
of the proceeds thereof as contemplated under the caption “Use of Proceeds” in
the Final Prospectus will not be, an “investment company” within the meaning of
Investment Company Act.
9) The
Company (A) is
not
in
violation of (i) its charter or bylaws or (ii) any statute, law, rule,
judgment,
regulation, order or decree applicable to the Company of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its respective properties;
or (B)
except as disclosed in the Effective Prospectus and the Final Prospectus,
is in
default in the performance or observance of any obligation, agreement,
covenant
or condition contained in any material existing instrument, except with
respect
to this clause (B) only, for such defaults as would not result in a Material
Adverse Effect
on
the Company.
10) To
such
counsel's knowledge, the Company has reserved a number of its authorized,
but
unissued shares of common stock, that permit the issuance of the
Shares,
the
Representative's Warrant and the Shares of Common Stock issuable upon
exercise
of the Representative's
Warrant
outstanding from time to time.
In
addition to the matters set forth above, such counsel shall state that
they have
participated in conferences with officers and other representatives of
the
Company, representatives of the independent public or certified public
accountants for the Company at
which
the contents of the Registration Statement, the Effective Prospectus
and Final
Prospectus, and any supplements or amendments thereto, and related matters
were
discussed and, although such counsel is not passing upon and does not
assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Effective Prospectus and
Final
Prospectus (other than as specified above), and any supplements or amendments
thereto, on the basis of the foregoing, nothing has come to their attention
which would lead them to believe that either (i)
2
3