Exhibit 1.1
INTERCORP EXCELLE INC.
1,000,000 Shares of Common Stock and
1,000,000 Redeemable
Common Stock Purchase Warrants
UNDERWRITING AGREEMENT
June __, 1997
▇▇▇▇▇▇ Capital, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Intercorp Excelle Inc., a Canadian corporation (the "Company"),
hereby confirms its agreement with ▇▇▇▇▇▇ Capital, Inc. (the
"Representative") and Aegis Capital Corporation. ("Aegis" and collectively
with the Representative, the "Underwriters") as follows:
1. Description of the Securities.
The Company proposes to issue and sell to the Underwriters 1,000,000
shares of common stock, no par value per share (the "Common Stock"), and
1,000,000 redeemable Common Stock purchase warrants (the "Warrants," and
collectively with the Common Stock, the "Securities") in the amounts set
forth on Schedule A hereto. Each Warrant shall entitle to the holder to
purchase one share of Common Stock for $6.00, subject to adjustment. The
Company proposes to grant to the Underwriters an option to purchase up to
150,000 additional shares of Common Stock and up to an additional 150,000
Warrants (the "Additional Securities"). The offering of Securities and
Additional Securities contemplated hereby may sometimes be referred to as the
"Offering."
(a) The Warrants.
The Warrants are exercisable from the effective date of the
Registration Statement, as defined in Paragraph 2(a) (the "Effective Date"),
until expiration four years thereafter, subject to prior redemption by the
Company. The Warrants will be exercisable at $6.00 per share and expire on
_______, 2001. The shares of Common Stock issuable upon the exercise of the
Warrants are hereinafter referred to as the "Warrant Shares."
The Warrants will be redeemable at a price of $.10 per Warrant,
commencing 12 months after the Effective Date ( or earlier with the consent
of the Representative) and prior to their expiration upon written notice
given within 30 days after 20 consecutive business days ending on the third
day prior to the date the notice of redemption is given during which the
Common Stock maintains a per share closing bid price (or closing sales price
if listed on an exchange or on a reporting system that provides last sales
prices) at least equal to 150% of the then current Warrant exercise price
(initially $9.00 per share, subject to adjustment), subject to the right of
the holder to exercise his purchase rights thereunder until redemption.
(b) Underwriters' Securities.
The Company will sell to the Underwriters, for $10.00, a
warrant to purchase an amount equal to ten percent 10% of the Common Stock
and Warrants sold in this Offering excluding the Additional Securities (a
maximum of 100,000 shares of Common Stock and Warrants) (the" Underwriters'
Warrants," and collectively with the Securities underlying the Underwriters'
Warrants, the "Underwriters' Securities"). The Warrants underlying the
Underwriters' Warrants shall be exercisable at a price of $6.00 per Warrant.
The Underwriters' Securities shall be non-exercisable and non-transferable
(other than to (i) officers of the Underwriters, and (ii) members of the
selling group and their officers or partners) for a period of 12 months
following the Effective Date. Thereafter, they are exercisable and
transferable for a period of four years. If the Underwriters' Securities are
not exercised during their term, they shall, by their terms, automatically
expire. The Underwriters' Securities shall be registered for sale to the
public and shall be included in the Registration Statement filed in
connection with the Offering.
2. Representations and Warranties of the Company.
The Company represents and warrants to the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission"), a registration statement on Form SB-2 (File
No. 333-_____), including any related preliminary prospectus ("Preliminary
Prospectus"), for the registration of the Securities under the Securities Act
of 1933 (the "Act"). The Company will file further amendments to said
registration statement in the form to be delivered to you and will not,
before the registration statement becomes effective, file any other amendment
thereto to which you shall have objected in writing after having been
furnished with a copy thereof. Except as the context may otherwise require,
such registration statement, as amended, on file with the Commission at the
time the registration statement becomes effective (including the prospectus,
financial statements, exhibits and all other documents filed as a part
thereof or incorporated therein), is hereinafter called the "Registration
Statement", and the prospectus, in the form filed with the Commission
pursuant to Rule 424(b) of the General Rules and Regulations of the
Commission under the Act (the "Regulations") or, if no such filing is made,
the definitive prospectus used in the Offering, is hereinafter called the
"Prospectus." The Company has delivered to you copies of each Preliminary
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Prospectus as filed with the Commission and has consented to the use of such
copies for purposes permitted by the Act.
(b) The Commission has not issued any orders preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects with the requirements of
the Act and has not included any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading, subject to the provisions set forth below and
to except as such untrue statement or omission has been cured in the a
subsequent preliminary prospectus or in the final prospectus.
(c) When the Registration Statement becomes effective under
the Act and at all times subsequent thereto including the Closing Date
(hereinafter defined) and the Option Closing Date (hereinafter defined) and
for such longer periods as in the opinion of counsel for the Underwriters, a
Prospectus is required to be delivered in connection with the sale of the
Securities by the Underwriters, the Registration Statement and Prospectus,
and any amendment thereof or supplement thereto, will contain all material
statements which are required to be stated therein in accordance with the Act
and the Regulations, and will in all material respects conform to the
requirements of the Act and the Regulations, and neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto, will
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty does not
apply to statements or omissions made in reliance upon and in conformity with
written information furnished to the Company by you, or by any of the Selling
Shareholders, for use in connection with the preparation of the Registration
Statement or Prospectus, or in any amendment thereof or supplement thereto.
It is understood that the statements set forth under the heading
"Underwriting" in the Prospectus with respect to (i) the amounts of the
selling concession and reallowance; (ii) the identity of counsel to the
Underwriters under the heading "Legal Matters"; and (iii) the information
concerning the NASD affiliation of the Underwriters, constitute the only
information supplied by you for use in the Registration Statement or
Prospectus.
(d) The Company is, and at the Closing Date and the Option
Closing Date will be, a corporation duly organized, validly existing and in
good standing under the laws of the Province of Ontario, Canada. The Company
is duly qualified or licensed and in good standing as a foreign corporation
in each jurisdiction in which its ownership or leasing of any properties or
the character of its operations requires such qualification or licensing,
except those jurisdictions in which the failure to so qualify would not have
a material adverse effect. The Company has all requisite corporate powers
and authority, and except as set forth in the Registration Statement the
Company and its employees have all material and necessary authorizations,
approvals, orders, licenses, certificates and permits of and from all
governmental regulatory officials and bodies to own or lease the Company's
properties and conduct its business as described in the Prospectus and the
Company is doing business and has been doing business during the period
described in the Registration
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Statement in compliance with all such material authorizations, approvals,
orders, licenses, certificates and permits and all material federal, state
and local laws, rules and regulations concerning the business in which the
Company is engaged. The disclosures in the Registration Statement concerning
the effects of federal, state and local regulation on the Company's business
as currently conducted and as contemplated are correct in all material
respects and do not omit to state a material fact. The Company has all
corporate power and authority to enter into this Agreement and carry out the
provisions and conditions hereof, and all consents, authorizations, approvals
and orders required in connection therewith have been obtained or will have
been obtained prior to the Closing Date.
(e) This Agreement has been duly and validly authorized and
executed by the Company. The Securities (including the Common Stock and the
Warrants), the Warrant Shares, the Underwriters' Warrants to be issued and
sold by the Company pursuant to this Agreement, the Securities issuable upon
exercise of the Underwriters' Warrants and payment therefor, and the Common
Stock and Warrant Shares underlying such Underwriters' Warrants, have been
duly authorized (and, in the case of the Common Stock and the Warrant Shares,
have been duly reserved for issuance) and, when issued and paid for in
accordance with this Agreement (and, in the case of the Warrant Shares, upon
exercise of the Warrants and payment to the Company of the exercise price
therefor), the Common Stock and Warrant Shares will be validly issued, fully
paid and non-assessable; the Common Stock, Warrants, Warrant Shares,
Underwriters' Warrants, Additional Securities and Underwriters' Warrants
Shares are not and will not be subject to the preemptive rights of any
stockholder of the Company and conform and at all times up to and including
their issuance will conform in all material respects to all statements with
regard thereto contained in the Registration Statement and Prospectus; and
all corporate action required to be taken for the authorization, issuance and
sale of the Common Stock, Warrants, Warrant Shares and Underwriters' Warrants
has been taken, and this Agreement constitutes a valid and binding obligation
of the Company, enforceable in accordance with its terms, to issue and sell,
upon exercise in accordance with the terms thereof, the number and kind of
securities called for thereby.
(f) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof will not result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, the Articles of Incorporation, as amended, or bylaws of the Company or
of any evidence of indebtedness, lease, contract or other agreement or
instrument to which the Company is a party or by which the Company or any of
its properties is bound, or under any applicable law, rule, regulation,
judgment, order or decree of any government, professional advisory body,
administrative agency or court, domestic or foreign, having jurisdiction over
the Company or its properties, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the properties or assets of the
Company; and no consent, approval, authorization or order of any court or
governmental or other regulatory agency or body is required for the
consummation by the Company of the transactions on its part herein
contemplated, except as such as may be required under the Act or under state
securities or blue sky laws, except where a breach, violation or failure to
obtain such consent would not have a material adverse effect upon the
business or operation of the Company.
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(g) Subsequent to the date hereof, and prior to the Closing
Date and the Option Closing Date, the Company will not issue or acquire any
equity securities except that the Company may make short-term investments as
contemplated in the "Use of Proceeds" section of the Prospectus. Except as
described in the Registration Statement, the Company does not have, and at
the Closing Date and at the Option Closing Date will not have, outstanding
any options to purchase or rights or warrants to subscribe for, or any
securities or obligations convertible into, or any contracts or commitments
to issue or sell shares of its Preferred Stock, Common Stock or any such
options, warrants, convertible securities or obligations.
(h) The financial statements and notes thereto included in the
Registration Statement and the Prospectus fairly present the financial
position and the results of operations of the Company at the respective dates
and for the respective periods to which they apply; and such financial
statements have been prepared in conformity with generally accepted
accounting principles, consistently applied throughout the periods involved.
(i) Except as set forth in the Registration Statement, the
Company is not, and at the Closing Date and at the Option Closing Date will
not be, in violation or breach of, or default in, the due performance and
observance of any term, covenant or condition of any indenture, mortgage,
deed of trust, note, loan or credit agreement, or any other agreement or
instrument evidencing an obligation for borrowed money, or any other
agreement or instrument to which the Company is a party or by which the
Company may be bound or to which any of the property or assets of the Company
is subject, which violations, breaches, default or defaults, singularly or in
the aggregate, would have a material adverse effect on the Company. The
Company has not and will not have taken any action in material violation of
the provisions of the Articles of Incorporation, as amended, or the Bylaws of
the Company or any statute or any order, rule or regulation of any court or
regulatory authority or governmental body having jurisdiction over or
application to the Company, its business or properties.
(j) The Company has, and at the Closing Date and at the Option
Closing Date will have, good and marketable title to all properties and
assets described in the Prospectus as owned by it, free and clear of all
liens, charges, encumbrances, claims, security interests, restrictions and
defects of any material nature whatsoever, except such as are described or
referred to in the Prospectus and liens for taxes not yet due and payable.
All of the material leases and subleases under which the Company is the
lessor or sublessor of properties or assets or under which the Company holds
properties or assets as lessee as described in the Prospectus are, and will
on the Closing Date and the Option Closing Date be, in full force and effect,
and except as described in the Prospectus, the Company is not and will not be
in default in respect to any of the terms or provisions of any of such leases
or subleases (which would have a material adverse effect on the business,
business prospects or operations of the Company taken as a whole), and no
claim has been asserted by anyone adverse to rights of the Company as lessor,
sublessor, lessee or sublessee under any of the leases or subleases mentioned
above, or affecting or questioning the right of the Company to continue
possession of the leased or subleased premises or assets under any such lease
or sublease except as described or referred to in the Prospectus, and the
Company owns or leases all such properties as are necessary to its
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operations as now conducted and, except as otherwise stated in the
Prospectus, as proposed to be conducted set forth in the Prospectus (which
would have a material adverse effect on the business, business prospects or
operations of the Company taken as a whole).
(k) The authorized, issued and outstanding capital stock of
the Company as of _____________________ and as of the date of the Prospectus
is as set forth in the Prospectus under "Capitalization"; the shares of
issued and outstanding capital stock of the Company set forth thereunder have
been duly authorized, validly issued and are fully paid and non-assessable;
except as set forth in the Prospectus, no options, warrants or other rights
to purchase, agreements or other obligations to issue, or agreements or other
rights to convert any obligation into, any shares of capital stock of the
Company have been granted or entered into by the Company; and the Common
Stock, the Warrants and all such options and warrants conform in all material
respects, to all statements relating thereto contained in the Registration
Statement and Prospectus.
(l) Except as described in the Prospectus, the Company does
not own or control any capital stock or securities of, or have any
proprietary interest in, or otherwise participate in any other corporation,
partnership, joint venture, firm, association or business organization;
provided, however, that this provision shall not be applicable to the
investment, if any, of the net proceeds from the sale of the Securities sold
by the Company in certificates of deposits, savings deposits, short-term
obligations of the United States Government, money market instruments or
other short-term investments.
(m) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, who have given their reports on
certain financial statements filed and to be filed with the Commission as a
part of the Registration Statement, which are incorporated in the Prospectus,
are with respect to the Company, independent public accountants as required
by the Act and the Rules and Regulations.
(n) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as may
otherwise be indicated or contemplated herein or therein, the Company has not
(i) issued any securities or incurred any liability or obligation, direct or
contingent, for borrowed money; or (ii) entered into any transaction other
than in the ordinary course of business; or (iii) declared or paid any
dividend or made any other distribution on or in respect to its capital stock.
(o) There is no litigation or governmental proceeding pending
or to the knowledge of the Company threatened against, or involving the
properties or business of the Company which might materially adversely affect
the value, assets or the operation of the properties or the business of the
Company, except as referred to in the Prospectus. Further, except as
referred to in the Prospectus, there are no pending actions, suits or
proceedings related to environmental matters or related to discrimination on
the basis of age, sex, religion or race, nor is the Company charged with or,
to its knowledge, under investigation with respect to any violation of any
statutes or regulations of any regulatory authority having jurisdiction over
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its business or operations, and no labor disturbances by the employees of the
Company exist or, to the knowledge of the Company, have been threatened.
(p) The Company has, and at the Closing Date and at the Option
Closing Date will have, filed all necessary federal, state and foreign income
and franchise tax returns or has requested extensions thereof (except in any
case where the failure to so file would not have a material adverse effect on
the Company), and has paid all taxes which it believes in good faith were
required to be paid by it except for any such tax that currently is being
contested in good faith or as described in the Prospectus.
(q) The Company has not at any time (i) made any contribution
to any candidate for political office, or failed to disclose fully any such
contribution, in violation of law, or (ii) made any payment to any state,
federal, foreign governmental or professional regulatory agency, officer or
official or other person charged with similar public, quasi-public or
professional regulatory duties, other than payments or contributions required
or allowed by applicable law.
(r) Except as set forth in the Registration Statement, to the
knowledge of the Company, neither the Company nor any officer, director,
employee or agent of the Company has made any payment or transfer of any
funds or assets of the Company or conferred any personal benefit by use of
the Company's assets or received any funds, assets or personal benefit in
violation of any law, rule or regulation, which is required to be stated in
the Registration Statement or necessary to make the statements therein not
misleading.
(s) On the Closing Date and on the Option Closing Date, all
transfer or other taxes, if any (other than income tax) which are required to
be paid, and are due and payable, in connection with the sale and transfer of
the Securities by the Company to the Underwriters will have been fully paid
or provided for by the Company as the case may be, and all laws imposing such
taxes will have been fully complied with in all material respects.
(t) There are no contracts or other documents of the Company
which are of a character required to be described in the Registration
Statement or Prospectus or filed as exhibits to the Registration Statement
which have not been so described or filed.
(u) The Company will apply the net proceeds from the sale of
the Securities sold by it for the purposes and in the manner set forth in the
Registration Statement and Prospectus under the heading "Use of Proceeds."
(v) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (1) transactions are
executed in accordance with management's general or specified authorizations;
(2) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (3) access to assets is permitted only in
accordance with management's general or specific authorizations; and (4) the
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recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(w) Except as set forth in the Prospectus, no holder of any
securities of the Company has the right to require registration of any
securities because of the filing or effectiveness of the Registration
Statement.
(x) The Company has not taken and at the Closing Date will not
have taken, 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 Common
Stock or the Warrants to facilitate the sale or resale of such securities.
(y) To the Company's knowledge, there are no claims for
services in the nature of a finder's origination fee with respect to the sale
of the Securities hereunder, except as set forth in the Prospectus.
(z) No right of first refusal exists with respect to any sale
of securities by the Company.
(aa) No statement, representation, warranty or covenant made by
the Company in this Agreement or made in any certificate or document required
by this Agreement to be delivered to Underwriters was, when made, or as of
the Closing Date or as of the Option Closing Date will be materially
inaccurate, untrue or incorrect.
3. Covenants of the Company.
The Company covenants and agrees that:
(a) It will deliver to the Representative, without charge, two
conformed copies of each Registration Statement and of each amendment or
supplement thereto, including all financial statements and exhibits.
(b) The Company has delivered to each of the Underwriters, and
each of the Selected Dealers (as hereinafter defined) without charge, as many
copies as have been requested of each Preliminary Prospectus heretofore filed
with the Commission in accordance with and pursuant to the Commission's Rule
430 under the Act and will deliver to the Underwriters and to others whose
names and addresses are furnished by the Underwriters or a Selected Dealer,
without charge, on the Effective Date of the Registration Statement, and
thereafter from time to time during such reasonable period as you may request
if, in the opinion of counsel for the Underwriters, the Prospectus is
required by law to be delivered in connection with sales by the Underwriters
or a dealer, as many copies of the Prospectus (and, in the event of any
amendment of or supplement to the Prospectus, of such amended or supplemented
Prospectus) as the Underwriters may request for the purposes contemplated by
the Act. The Company will take all necessary actions to furnish to whomever
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directed by the Underwriters, when and as requested by the Underwriters, all
necessary documents, exhibits, information, applications, instruments and
papers as may be reasonably required or, in the opinion of counsel to the
Underwriters desirable, in order to permit or facilitate the sale of the
Securities.
(c) The Company has authorized the Underwriters to use, and
make available for use by prospective dealers, the Preliminary Prospectus,
and authorizes the Underwriters, all dealers selected by you in connection
with the distribution of the Securities (the "Selected Dealers") to be
purchased by the Underwriters and all dealers to whom any of such Securities
may be sold by the Underwriters or by any Selected Dealer, to use the
Prospectus, as from time to time amended or supplemented, in connection with
the sale of the Securities in accordance with the applicable provisions of
the Act, the applicable Regulations and applicable state law, until
completion of the distribution of the Securities and for such longer period
as you may request if the Prospectus is required under the Act, the
applicable Regulations or applicable state law to be delivered in connection
with sales of the Securities by the Underwriters or the Selected Dealers.
(d) The Company will use its best efforts to cause the
Registration Statement to become effective and will notify the Representative
immediately, and confirm the notice in writing: (i) when the Registration
Statement or any post-effective amendment thereto becomes effective; (ii) of
the issuance by the Commission of any stop order or of the initiation, or to
the best of the Company's knowledge, the threatening, of any proceedings for
that purpose; (iii) the suspension of the qualification of the Securities and
the Underwriters' Warrants, or underlying securities, for offering or sale in
any jurisdiction or of the initiating, or to the best of the Company's
knowledge the threatening, of any proceeding for that purpose; and (iv) of
the receipt of any comments from the Commission. If the Commission shall
enter a stop order at any time, the Company will make every reasonable effort
to obtain the lifting of such order at the earliest possible moment.
(e) During the time when a prospectus is required to be
delivered under the Act, the Company will comply with all requirements
imposed upon it by the Act and the Securities Exchange Act of 1934 (the
"Exchange Act"), as now and hereafter amended and by the Regulations, as from
time to time in force, as necessary to permit the continuance of sales of or
dealings in the Securities in accordance with the provisions hereof and the
Prospectus. If at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event shall have occurred as a
result of which, in the opinion of counsel for the Company or counsel for the
Underwriters, the Prospectus as then amended or supplemented includes an
untrue statement of a material fact or omits to state any 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, or
if it is necessary at any time to amend the Prospectus to comply with the
Act, the Company will notify you promptly and prepare and file with the
Commission an appropriate amendment or supplement in accordance with Section
10 of the Act and will furnish to you copies thereof.
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(f) The Company will endeavor in good faith, in cooperation
with you, at or prior to the time the Registration Statement becomes
effective, to qualify the Securities for offering and sale under the
securities laws or blue sky laws of such jurisdictions as you may reasonably
designate. In each jurisdiction where such qualification shall be effected,
the Company will, unless you agree that such action is not at the time
necessary or advisable, file and make such statements or reports at such
times as are or may reasonably be required by the laws of such jurisdiction.
(g) The Company will make generally available to its security
holders, as soon as practicable, but in no event later than the first day of
the fifteenth full calendar month following the Effective Date of the
Registration Statement, an earnings statement of the Company, which will be
in reasonable detail but which need not be audited, covering a period of at
least twelve months beginning after the Effective Date of the Registration
Statement, which earnings statements shall satisfy the requirements of
Section 11(a) of the Act and the Regulations as then in effect. The Company
may discharge this obligation in accordance with Rule 158 of the Regulations.
(h) During the period of five years commencing on the
Effective Date of the Registration Statement, the Company will furnish to its
stockholders an annual report (including financial statements audited by its
independent public accountants), in reasonable detail, and, at its expense,
furnish each of the Underwriters (i) within the time frame of the
jurisdiction of the Company's domicile and as otherwise required by the
federal securities laws, a consolidated balance sheet of the Company and its
consolidated subsidiaries and a separate balance sheet of each subsidiary of
the Company the accounts of which are not included in such consolidated
balance sheet as of the end of such fiscal year, and consolidated statements
of operations, stockholder's equity and cash flows of the Company and its
consolidated subsidiaries and separate statements of operations,
stockholder's equity and cash flows of each of the subsidiaries of the
Company the accounts of which are not included in such consolidated
statements, for the fiscal year then ended all in reasonable detail and all
certified by independent accountants (within the meaning of the Act and the
Regulations), (ii) only at such time that the Company becomes subject to the
filing of such, within 45 days after the end of each of the first three
fiscal quarters of each fiscal year, similar balance sheets as of the end of
such fiscal quarter and similar statements of operations, stockholder's
equity and cash flows for the fiscal quarter then ended, all in reasonable
detail, and subject to year end adjustment, all certified by the Company's
principal financial officer or the Company's principal accounting officer as
having been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, (iii) as soon as available, each
report furnished to or filed with the Commission or any securities exchange
and each report and financial statement furnished to the Company's
shareholders generally and (iv) as soon as available, such other material as
the Representative may from time to time reasonably request regarding the
financial condition and operations of the Company. Other than the annual
report, the filing of such reports and other material with the Commissions
shall be deemed furnishing the same to its stockholders.
(i) Prior to the Closing Date or the Option Closing Date, the
Company will not issue, directly or indirectly, without your prior written
consent and that of counsel for the Representative, any press release or other
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public announcement or hold any press conference with respect to the Company
or its activities with respect to this Offering.
(j) The Company will deliver to you prior to filing, any
amendment or supplement to the Registration Statement or Prospectus proposed
to be filed after the Effective Date of the Registration Statement and will
not file any such amendment or supplement to which you shall reasonably
object after being furnished such copy.
(k) During the period of 120 days commencing on the date
hereof, the Company will not at any time take, directly or indirectly, any
action designed to, or which will constitute or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of
the Securities to facilitate the sale or resale of any of the Securities.
(l) The Company will apply the net proceeds from the Offering
received by it in the manner set forth under "Use of Proceeds" in the
Prospectus.
(m) Counsel for the Company, the Company's accountants, and
the officers and directors of the Company will, respectively, furnish the
opinions, the letters and the certificates referred to in subsections of
Paragraph 9 hereof, and, in the event that the Company shall file any
amendment to the Registration Statement relating to the offering of the
Securities or any amendment or supplement to the Prospectus relating to the
offering of the Securities subsequent to the Effective Date of the
Registration Statement, such counsel, such accountants, such officers and
directors, respectively, will, at the time of such filing or at such
subsequent time as you shall specify, so long as securities being registered
by such amendment or supplement are being underwritten by the Underwriters,
furnish to you such opinions, letters and certificates, each dated the date
of its delivery, of the same nature as the opinions, the letters and the
certificates referred to in said Paragraph 9, as you may reasonably request,
or, if any such opinion or letter or certificate cannot be furnished by
reason of the fact that such counsel or such accountants or any such officer
or director believes that the same would be inaccurate, such counsel or such
accountants or such officer or director will furnish an accurate opinion or
letter or certificate with respect to the same subject matter.
(n) The Company will comply with all of the provisions of any
undertakings contained in the Registration Statement in all material respects.
(o) The Company will reserve and keep available for issuance
that maximum number of its authorized but unissued shares of Common Stock
which are issuable upon exercise of the Warrants and issuable upon exercise
of the Underwriters' Warrants (including the underlying securities)
outstanding from time to time.
(p) Following the Effective Date and from time to time
thereafter, so long as the Warrants are outstanding, the Company will timely
prepare and file at its sole cost and expense one or more post-effective
amendments to the Registration Statement or a new registration statement as
11
required by law as will permit Warrant holders to be furnished with a current
prospectus in the event Warrants are exercised, and to use its best efforts
and due diligence to have same be declared effective. The Company will
deliver a draft of each such post-effective amendment or new registration
statement to the Underwriter at least ten days prior to the filing of such
post-effective amendment or registration statement.
(q) Following the Effective Date and from time to time
thereafter so long as any of the Warrants remain outstanding, the Company
will timely deliver and supply to its warrant agent sufficient copies of the
Company's current Prospectus, as will enable such Warrant Agent to deliver a
copy of such Prospectus to any Warrant or other holder where such Prospectus
delivery is by law required to be made.
(r) So long as any of the Warrants remain outstanding, the
Company shall continue to employ the services of a firm of independent
certified public accountants reasonably acceptable to the Representative in
connection with the preparation of the financial statements to be included in
any registration statement to be filed by the Company hereunder, or any
amendment or supplement thereto (it being understood that ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ is acceptable to the Representative). During the same period, the
Company shall employ the services of a law firm(s) acceptable to the
Representative in connection with all legal work of the Company, including
the preparation of a registration statement to be filed by the Company
hereunder, or any amendment or supplement thereto.
(s) So long as any of the Warrants remain outstanding, the
Company shall continue to appoint a Warrant Agent for the Warrants, who shall
be reasonably acceptable to the Representative.
(t) The Company agrees that it will, upon the Effective Date,
for a period of no less than three (3) years, engage a designee of the
Representative as an advisor (the "Advisor") to its Board of Directors where
such Advisor shall attend meetings of the Board, receive all notices and
other correspondence and communications sent by the Company to members of its
Board of Directors and will not receive compensation therefor. However, such
Advisor shall be entitled to receive reimbursement for all reasonable costs
incurred in attending such meetings including, but not limited to, food,
lodging, and transportation. The Company further agrees that, during said
three (3) year period, it shall schedule no less than four (4) formal and "in
person" meetings of its Board of Directors in each such year. Further,
during such three (3) year period, the Company shall give notice to the
Representative with respect to any proposed acquisitions, mergers,
reorganizations or other similar transactions.
The Company agrees to indemnify and hold the Underwriters and
such Advisor or Director harmless against any and all claims, actions,
damages, costs and expenses, and judgments arising solely out of the
attendance and participation of your designee at any such meeting described
herein. In the event the Company maintains a liability insurance policy
12
affording coverage for the acts of its officers and directors, it agrees, if
possible, to include the Representative's designee as an insured under such
policy.
(u) Upon the Closing Date, the Company shall have entered into
an agreement with the Underwriters in form reasonably satisfactory to the
Underwriters (the "Consulting Agreement"), pursuant to which the Underwriters
will be retained as management and financial consultants and will be paid a
fee of $2,444.44 a month for a term of thirty-six months, all of which shall
be paid upon the Closing Date.
(v) The Company's Common Stock and Warrants shall be listed on
the Nasdaq SmallCap Market ("Nasdaq") not later than the Effective Date.
Prior to the Effective Date, the Company will make all filings required,
including registration under the Exchange Act, to obtain the listing of the
Common Stock and Warrants on Nasdaq and will effect and use its best efforts
to maintain such listing (unless the Company is acquired) for at least five
years from the date of this Agreement.
(w) The Company will apply for listing in Standard and Poor's
Corporation Reports or Moodys OTC Guide and shall use its best efforts to
have the Company included in such publications for at least five years from
the Closing Date.
(x) Except as contemplated in the Registration Statement, no
person who is currently an officer or director of the Company nor any
stockholder, warrant holder or option holder of the Company shall, without
your written consent, offer for sale, pledge, contract to sell, or sell or
otherwise dispose of directly or indirectly, any shares of the Common Stock
of the Company owned by such stockholder (including shares issuable upon
exercise of existing options and shares saleable pursuant to Rule 144 under
the Act), on the date of this Agreement for a period of two years from the
Closing Date. The Company has caused ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, its
principal stockholders and any other ▇▇▇▇▇ family interests and other
presently existing stockholders (excluding the Bridge Investors), to deliver
to you, on or before the date of this Agreement, an agreement to this effect,
in form and substance reasonably satisfactory to the Representative and to
counsel for the Representative.
(y) The Company will not, without the prior written consent of
the Representative, issue or sell, or contract to sell or otherwise dispose
of any of its securities, except sales of the Securities (and the Warrant
Shares) pursuant to this Agreement and except for the issuance of options to
purchase up to 10% of the Company's Common Stock outstanding immediately
after the Closing Date, which may be granted under the Company's stock option
plan, outstanding warrants and other shares issuable upon the exercise or
conversion of currently outstanding securities, or as otherwise described in
the Prospectus, for a period of one year from the Effective Date. The
Company agrees not to file any registration statement on Form S-8 for a
period of one year from the Effective Date, without the prior written
approval of the Representative.
(z) For so long as any of the Warrants remain outstanding, the
Company shall maintain key person life insurance payable to the Company on
the lives of ▇▇▇▇▇ ▇▇▇▇▇, President of the Company, and ▇▇▇▇▇▇ ▇▇▇▇▇, Chief
13
Executive Officer of the Company, in the amounts of Cdn$240,000 respectively,
unless their employment with the Company is earlier terminated. In such
event, the Company will obtain a comparable policies on the lives of their
successors for the balance of such period.
(aa) The Company will use its best efforts to obtain, as soon
after the Closing Date as is reasonably possible, liability insurance
covering its officers and directors.
(bb) The Company agrees that any conflict of interest arising
between a member of the Company's Board of Directors and the Company in
connection with such Director's dealing with, or obligations to, the Company,
shall be resolved by a vote of the majority of the independent members of the
Board of Directors.
4. Sale, Purchase and Delivery of Securities; Closing Date.
(a) The Company agrees to sell to the Underwriters, and the
Underwriters, on the basis of the warranties, representations and agreements
of the Company herein, and subject to the terms and conditions herein, agree
to purchase the Securities from the Company at a price of $5.00 per share of
Common Stock and $.10 per Warrant, less an underwriting discount of ten
percent (10%) of the offering price for each security. The Underwriter may
allow a concession not exceeding $.__ per share of Common Stock and $.__ per
Warrant to Selected Dealers who are members of the National Association of
Securities Dealers, Inc ("NASD"), and to certain foreign dealers, and such
dealers may reallow to NASD members and to certain foreign dealers a
concession not exceeding $.__ per share of Common Stock and $.__ per Warrant.
(b) Delivery of the Securities and payment therefor shall be
made at 10:00 A.M., New York time on the Closing Date, as hereinafter
defined, at the offices of the Representative or such other location as may
be agreed upon by you and the Company. Delivery of certificates for the
Common Stock and Warrants (in definitive form and registered in such names
and in such denominations as you shall request by written notice to the
Company delivered at least four business days' prior to the Closing Date),
shall be made to you for the account of the Underwriters against payment of
the purchase price therefor by certified or bank check or wire transfer
payable in New York Clearing House funds to the order of the Company. The
Company will make such certificates available for inspection at least two
business days prior to the Closing Date at such place as you shall designate.
(c) The "Closing Date" shall be ______ __, 1997, or such other
date not later than the sixth business day following the effective date of
the Registration Statement as you shall determine and advise the Company by
at least three full business days' notice, confirmed in writing.
(d) The cost of original issue tax stamps, if any, in
connection with the issuance and delivery of the Securities by the Company to
the Underwriters shall be borne by the Company. The Company will pay and
14
hold the Underwriters, and any subsequent holder of the Securities, harmless
from any and all liabilities with respect to or resulting from any failure or
delay in paying federal and state stamp taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale
to the Underwriters of the Securities or any portions thereof.
5. Sale, Purchase and Delivery of Additional Securities; Option
Closing Date.
(a) The Company agrees to sell to the Underwriters, and upon
the basis of the representations, warranties and agreements of the Company
herein contained, subject to the satisfaction of all the terms and conditions
of this Agreement, the Underwriters shall have the option (the "Option") to
purchase the Additional Securities from the Company, at the same price per
Security as set forth in Paragraph 4(a) above. Additional Securities may be
purchased solely for the purpose of covering over-allotments made in
connection with the distribution and sale of the Securities.
(b) The Option to purchase all or part of the Additional
Securities covered thereby is exercisable by you at any time and from time to
time before the expiration of a period of 45 calendar days from the date of
the Effective Date of the Registration Statement (the "Option Period") by
written notice to the Company setting forth the number of Additional
Securities for which the Option is being exercised, the name or names in
which the certificates for such Additional Securities are to be registered
and the denominations of such certificates. Upon each exercise of the
Option, the Company shall sell to the Underwriters the aggregate number of
Additional Securities specified in the notice exercising such Option.
(c) Delivery of the Additional Securities with respect to
which Options shall have been exercised and payment therefor shall be made at
10:00 A.M., New York time on the Option Closing Date, as hereinafter defined,
at the offices of the Representative or at such other locations as may be
agreed upon by you and the Company. Delivery of certificates for Additional
Securities shall be made to you for the account of the Underwriters against
payment of the purchase price therefor by certified or bank check or wire
transfer in New York Clearing House Funds to the order of the Company. The
Company will make certificates for Additional Securities to be purchased at
the Option Closing Date available for inspection at least two business days
prior to such Option Closing Date at such place as you shall designate.
(d) The "Option Closing Date" shall be the date not later than
five business days after the end of the Option Period as you shall determine
and advise the Company by at least three full business days' notice, unless
some other time is agreed upon between you and the Company.
(e) The obligations of the Underwriters to purchase and pay
for Additional Securities at such Option Closing Date shall be subject to
compliance as of such date with all the conditions specified in Paragraph 2
herein and the delivery to you of opinions, certificates and letters,
15
each dated such Option Closing Date, substantially similar in scope to those
specified in Paragraph 9 herein.
(f) The cost of original issue tax stamps, if any, in
connection with the issuance and delivery of the Additional Securities by the
Company to the Underwriters shall be borne by the Company. The Company will
pay and hold the Underwriters, and any subsequent holder of Additional
Securities, harmless from any and all liabilities with respect to or
resulting from any failure or delay in paying federal and state stamp taxes,
if any, which may be payable or determined to be payable in connection with
the original issuance or sale to the Underwriters of the Additional
Securities or any portion thereof.
6. Warrant Solicitation Fee.
The Company agrees to pay the Underwriters a fee of five percent
(5%) of the aggregate exercise price of the Warrants if: (i) the market price
of the Common Stock is greater than the exercise price of the Warrants on the
date of exercise; (ii) the exercise of the Warrants are solicited by a member
of the NASD; (iii) the Warrants are not held in a discretionary account; (iv)
the disclosure of compensation arrangements was made both at the time of the
Offering and at the time of the exercise of the Warrant; and (v) the
solicitation of the Warrant is not in violation of Regulation M promulgated
under the Exchange Act. The Company agrees not to solicit the exercise of
any Warrants other than through the Underwriters and will not authorize any
other dealer to engage in such solicitation without the prior written consent
of the Representative which will not be unreasonably withheld. The Warrant
solicitation fee will not be paid in a non-solicited transaction. No Warrant
solicitation by the Underwriters will occur for a period of 12 months from
the Effective Date.
7. Representations and Warranties of the Underwriters.
The Underwriters represent and warrant to the Company that:
(a) The Underwriters are each members in good standing of the
National Association of Securities Dealers, Inc., and have complied with all
NASD requirements concerning net capital and compensation to be received in
connection with the Offering.
(b) To the Underwriters' knowledge, there are no claims for
services in the nature of a finder's origination fee with respect to the sale
of the Securities hereunder to which the Company is, or may become, obligated
to pay.
8. Payment of Expenses.
(a) The Company will pay and bear all costs, fees, taxes and
expenses incident to and in connection with: (i) the issuance, offer, sale
and delivery of the Securities, including all expenses and fees incident to
the preparation, printing, filing and mailing (including the payment of
16
postage with respect to such mailing) of the Registration Statement
(including all exhibits thereto), each Preliminary Prospectus, the
Prospectus, and amendments and post-effective amendments thereof and
supplements thereto, and this Agreement and related documents, Preliminary
and Final Blue Sky Memoranda, including the cost of preparing and copying all
copies thereof in quantities deemed necessary by the Underwriters; (ii) the
printing, engraving, issuance and delivery of the Common Stock, Warrants,
Warrant Shares, Additional Securities, Underwriters' Warrants and the
securities underlying the Underwriters' Warrant, including any transfer or
other taxes payable thereon in connection with the original issuance thereof;
(iii) the qualification of the Common Stock and Warrants under the state or
foreign securities or "Blue Sky" laws selected by the Underwriters and the
Company, and disbursements and reasonable fees of counsel for the
Underwriters in connection therewith (not to exceed $35,000) plus the filing
fees for such states; (iv) fees and disbursements of counsel and accountants
for the Company; (v) other expenses and disbursements incurred on behalf of
the Company; (vi) the filing fees payable to the Commission and the National
Association of Securities Dealers, Inc. ("NASD"); (vii) any listing of the
Common Stock and Warrants on a securities exchange or on NASDAQ.
(b) In addition to the expenses to be paid and borne by the
Company referred to in Paragraph 8(a) above, the Company shall reimburse you
at closing for expenses incurred by you in connection with the Offering (for
which you need not make any accounting), in the amount of 3% of the price to
the public of the Securities and Additional Securities sold in the Offering.
This 3% non-accountable expense allowance shall cover the fees of your legal
counsel, but shall not include any expenses for which the Company is
responsible under Paragraph 8(a) above, including the reasonable fees and
disbursements of your legal counsel with respect to Blue Sky matters. As of
the date hereof, $50,000 has been advanced by the Company to the Underwriters
with respect to such non-accountable expense allowance.
(c) In the event that the Company does not or cannot, for any
reason whatsoever other than a default by the Underwriters, expeditiously
proceed with the Offering, or if any of the representations, warranties or
covenants contained in this Agreement are not materially correct or cannot be
complied with by the Company, or business prospects or obligations of the
Company are adversely affected and the Company does not commence or continue
with the Offering at any time or terminates the proposed transaction prior to
the Closing Date, the Company shall reimburse the Underwriters on an
accountable basis for all out-of-pocket expenses actually incurred in
connection with the Underwriting, this Agreement and all of the transactions
hereby contemplated, including, without limitation, your legal fees and
expenses, up to an aggregate total of $100,000 less such sums which have
already been paid.
9. Conditions of Underwriters' Obligations.
The obligations of the Underwriters to consummate the transactions
contemplated by this Agreement shall be subject to the continuing accuracy of
the representations and warranties of the Company contained herein as of the
date hereof and as of the Closing Date, the accuracy of the statements of the
Company and its officers and directors made pursuant to the provisions hereof,
17
and to the performance by the Company of its covenants and agreements hereunder
and under each certificate, opinion and document contemplated hereunder and to
the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 p.m., New York time, on the date following the date of this
Agreement, or such later date and time as shall be consented to in writing by
you and, on or prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement or the qualification or
registration of the Securities under the securities laws of any jurisdiction
shall have been issued and no proceedings for that purpose shall have been
instituted or shall be pending or to your knowledge or the knowledge of the
Company, shall be contemplated by the Commission or any such authorities of
any jurisdiction and any request on the part of the Commission or any such
authorities for additional information shall have been complied with to the
reasonable satisfaction of the Commission or such authorities and counsel to
the Underwriters and after the date hereof no amendment or supplement shall
have been filed to the Registration Statement or Prospectus without your
prior consent.
(b) The Registration Statement or the Prospectus or any
amendment thereof or supplement thereto shall not contain an untrue statement
of a fact which is material, or omit to state a fact which 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) Between the time of the execution and delivery of this
Agreement and the Closing Date, there shall be no litigation instituted
against the Company or any of its officers or directors and between such
dates there shall be no proceeding instituted or, to the Company's knowledge,
threatened against the Company or any of its officers or directors before or
by any federal, state or county commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, in which litigation
or proceeding an unfavorable ruling, decision or finding would have a
material adverse effect on the Company or its business, business prospects or
properties, or have a material adverse effect on the financial condition or
results of operation of the Company.
(d) Each of the representations and warranties of the Company
contained herein and each certificate and document contemplated under this
Agreement to be delivered to you shall be true and correct in all material
respects at the Closing Date as if made at the Closing Date, and all
covenants and agreements contained herein and in each such certificate and
document to be performed on the part of the Company, and all conditions
contained herein and in each such certificate and document to be fulfilled or
complied with by the Company at or prior to the Closing Date shall be
fulfilled or complied with.
(e) At the Closing Date, you shall have received the opinion
of ▇▇▇▇▇▇▇, Savage, Kaplowitz, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, counsel to the
Company, dated as of such Closing Date, addressed to the Underwriters and in
form and substance satisfactory to counsel to the Underwriters, to the effect
that:
18
(i) The Registration Statement was declared
effective under the Act on ______ __, 1997; to the best of our knowledge, 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, threatened or contemplated under the Act or applicable state
securities laws;
(ii) The Registration Statement and the Prospectus,
as of the Effective Date (except for the financial statements and other
financial data included therein or omitted therefrom, as to which we express
no opinion), comply as to form in all material respects with the requirements
of the Act and Regulations and the conditions for use of a registration
statement on Form SB-2 have been satisfied by the Company;
(iii) The description in the Registration Statement
and the Prospectus of statutes, regulations, contracts and other documents
have been reviewed by us, and, based upon such review, are accurate in all
material respects and present fairly the information required to be
disclosed, and to the best of our knowledge, there are no material statutes
or regulations, or, to the best of our knowledge, material contracts or
documents, of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not so described or filed as required.
To the best of our knowledge, none of the
material provisions of the contracts or instruments described above violates
any existing applicable law, rule or regulation or judgment, order or decree
known to us of any United States governmental agency or court having
jurisdiction over the Company or any of its assets or businesses;
(vi) To the best of our knowledge, except as set
forth in the Prospectus, no holders of any of the Company's securities has
any rights, "demand," "piggyback" or otherwise, to have such securities
registered under the Act;
(v) We have participated in reviews and discussions
in connection with the preparation of the Registration Statement and the
Prospectus. Although we are not passing upon and do not assume
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, no facts came to our attention which
lead us to believe that (A) the Registration Statement (except as to the
financial statements and other financial data contained therein, as to which
we express no opinion), on the Effective Date, contained any untrue statement
of 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 that (B) the Prospectus (except as to the financial
statements and other financial data contained therein, as to which we express
no opinion) contains any untrue statement or a material fact or omits to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
19
(f) At the Closing Date, you shall have received the opinion
of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Thomson Apps & Dellelce, special counsel to the Company
with respect to Canadian law, dated as of such Closing Date, addressed to the
Underwriters and in form and substance satisfactory to counsel to the
Underwriters, to the effect that:
(i) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the Province of
Ontario, Canada, with full corporate power and authority, and all licenses,
permits, certifications, registrations, approvals, consents and franchises to
own or lease and operate its properties and to conduct its business as
described in the Registration Statement. The Company is duly qualified to do
business as a foreign corporation and is in good standing in all
jurisdictions wherein such qualification is necessary and failure so to
qualify could have a material adverse effect on the financial condition,
results of operations, business or properties of the Company;
(ii) The Company has full corporate power and
authority to execute, deliver and perform the Underwriting Agreement, the
Consulting Agreement, the Warrant Agreement and the Underwriters' Warrants
and to consummate the transactions contemplated thereby. The execution,
delivery and performance of the Underwriting Agreement, the Consulting
Agreement, the Warrant Agreement and the Underwriters' Warrants by the
Company, the consummation by the Company of the transactions therein
contemplated and the compliance by the Company with the terms of the
Underwriting Agreement, the Consulting Agreement, the Warrant Agreements and
the Underwriters' Warrants have been duly authorized by all necessary
corporate action, and each of the Underwriting Agreement, the Consulting
Agreement, the Warrant Agreement and the Underwriters' Warrant has been duly
executed and delivered by the Company. Each of the Underwriting Agreement,
the Consulting Agreement, the Warrant Agreements and the Underwriters'
Warrants is a valid and binding obligation of the Company, enforceable in
accordance with their respective terms, subject, as to enforcement of
remedies, to applicable bankruptcy, insolvency, reorganization, moratorium
and other laws affecting the rights of creditors generally and the discretion
of courts in granting equitable remedies and except that enforceability of
the indemnification provisions and the contribution provisions set forth in
the Underwriting Agreement may be limited by the federal securities laws or
public policy underlying such laws;
(iii) The execution, delivery and performance of the
Underwriting Agreement, the Consulting Agreement, the Warrant Agreement and
the Underwriters' Warrants by the Company, the consummation by the Company of
the transactions therein contemplated and the compliance by the Company with
the terms of the Underwriting Agreement, the Consulting Agreement, the
Warrant Agreement and the Underwriters' Warrants do not, and will not, with
or without the giving of notice or the lapse of time, or both, (A) result in
a violation of the Articles of Incorporation, as the same may be amended, or
by-laws of the Company, (B) to the best of our knowledge, result in a breach
of, or conflict with, any terms or provisions of or constitute a default
under, or result in the modification or termination of, or result in the
creation or imposition of any lien, security interest, charge or encumbrance
upon any of the properties or assets of the Company pursuant to, any
indenture, mortgage, note, contract, commitment or other material agreement
20
or instrument to which the Company is a party or by which the Company or any
of its properties or assets are or may be bound or affected, except where any
of the foregoing would not result in a material adverse effect upon the
Company's business or operations; (C) to the best of our knowledge, violate
any existing applicable law, rule or regulation or judgment, order or decree
known to us of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its properties or business; or (D) to
the best of our knowledge, have any effect on any permit, certification,
registration, approval, consent, license or franchise necessary for the
Company to own or lease and operate its properties and to conduct its
business or the ability of the Company to make use thereof;
(iv) No authorization, approval, consent or license
of any Canadian governmental or regulatory body, agency or instrumentality is
required in connection with the conduct of the business of the Company as
described in the Prospectus, except with respect to compliance with
government environmental rules and regulations relating to the use of
chemicals and other hazardous materials in the Company's production process;
(v) The Company has obtained, or is in the process
of obtaining, all licenses, permits and other governmental authorizations
necessary to conduct its business as described in the Prospectus, and such
licenses, permits and other governmental authorizations obtained are in full
force and effect, and the Company is in all material respects complying
therewith;
(vi) To the best of our knowledge, no authorization,
approval, consent, order, registration, license or permit of any court or
governmental agency or body (other than under the Act, the Regulations and
applicable state securities or Blue Sky laws) is required for the valid
authorization, issuance, sale and delivery of the Securities, the Additional
Securities, the Common Stock, the Warrants, the Warrant Shares, or the
Underwriters' Warrants, and the consummation by the Company of the
transactions contemplated by the Underwriting Agreement, the Consulting
Agreement, the Warrant Agreement or the Underwriters' Warrants;
(vii) The outstanding Common Stock and Warrants have
been duly authorized and validly issued. The outstanding Common stock is
fully paid an nonassessable. To the best of our knowledge, none of the
outstanding Common Stock has been issued in violation of the preemptive
rights of any shareholder of the Company. None of the holders of the
outstanding Common Stock is subject to personal liability solely by reason of
being such a holder. The authorized Common Stock conforms to the description
thereof contained in the Registration Statement and Prospectus.
(viii) The issuance and sale of the Securities, the
Additional Securities, the Common Stock, the Warrants, the Warrant Shares and
the Underwriters' Warrants have been duly authorized and when issued will be
validly issued, fully paid and nonassessable, and the holders thereof will
not be subject to personal liability solely by reason of being such holders.
Neither the Securities, the Additional Securities, nor the Common Stock are
21
subject to preemptive rights of any stockholder of the Company. The
certificates representing the Securities are in proper legal form;
(ix) The issuance and sale of the Warrant Shares and
the Underwriters' Warrants have been duly authorized and, when paid for,
issued and delivered pursuant to the terms of the Underwriters' Agreement or
the Underwriters' Warrants, as the case may be, the Warrants, the Warrant
Shares and the Underwriters' Warrants will constitute the valid and binding
obligations of the Company, enforceable in accordance with their terms, to
issue and sell the Warrants, the Warrant Shares and/or Underwriters'
Warrants. All corporate action required to be taken for the authorization,
issuance and sale of the securities has been duly, validly and sufficiently
taken. The Common Stock and the Warrants have been duly authorized by the
Company to be offered in the form of the Securities. The Warrants, the
Warrant Shares and the Underwriters' Warrants conform to the descriptions
thereof contained in the Registration Statement and Prospectus;
(x) The Underwriters have acquired good title to the
Securities, free and clear of all liens, encumbrances, equities, security
interests and claims;
(xi) Assuming that the Underwriters exercise the
over-allotment option to purchase the Additional Securities and make payments
therefor in accordance with the terms of the Underwriting Agreement, upon
delivery of the Additional Securities to the Underwriters thereunder, the
Underwriters will acquire good title to the Additional Securities, free and
clear of any liens, encumbrances, equities, security interests and claims;
(xii) To the best of our knowledge, there are no
claims, actions, suits, proceedings, arbitrations, investigations or
inquiries before any governmental agency, court or tribunal, foreign or
domestic, or before any private arbitration tribunal, pending or threatened
against the Company or involving its properties or business, other than as
described in the Prospectus, such description being accurate, and other than
litigation incident to the kind of business conducted by the Company which,
individually and in the aggregate, is not material, and, except as otherwise
disclosed in the Prospectus and the Registration Statement, the Company has
complied with all federal and state laws, statutes and regulations concerning
its business;
(xiii) Such counsel is familiar with all contracts or
other agreements entered into by the Company with other Canadian companies,
entities, banking institutions or individuals referred to in the Registration
Statement and Prospectus, including the employment agreements with ▇▇▇▇▇
▇▇▇▇▇, its President and ▇▇▇▇▇▇ ▇▇▇▇▇, its Chief Executive Officer
(collectively, the "Canadian Agreements"), and all such Canadian Agreements
are valid, binding and enforceable under Canadian law, and to the knowledge
of such counsel, the Company is not in default under any of the Canadian
Agreements;
(xiv) The description in the Registration Statement
and the Prospectus of statutes, regulations, contracts and other documents
have been reviewed by us, and, based upon such review, are accurate in all
material respects and present fairly the information required to be
22
disclosed, and to the best of our knowledge, there are no material statutes
or regulations, or, to the best of our knowledge, material contracts or
documents, of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not so described or filed as required.
(xv) The Company is not in violation of or in default
under its Articles of Incorporation or by-laws, or to the knowledge of such
counsel, in the performance or observance of any material obligation,
agreement, covenant or condition contained in any bond, debenture, note or
other evidence of indebtedness or in any contract, indenture, mortgage, loan
agreement or instrument to which the Company is a party or by which it or any
of its properties may be bound, or in violation of any material order, rule,
regulation, writ, injunction or decree of any government or governmental
instrumentality or court; and
(xvi) We have participated in reviews and discussions
in connection with the preparation of the Registration Statement and the
Prospectus. Although we are not passing upon and do not assume
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, no facts came to our attention which
lead us to believe that (A) the Registration Statement (except as to the
financial statements and other financial data contained therein, as to which
we express no opinion), on the Effective Date, contained any untrue statement
of 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 that (B) the Prospectus (except as to the financial
statements and other financial data contained therein, as to which we express
no opinion) contains any untrue statement or a material fact or omits to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(g) On or prior to the Closing Date, counsel for the
Underwriters shall have been furnished such documents, certificates and
opinions as they may reasonably require for the purpose of enabling them to
review the matters referred to in subparagraphs (e) and (f) of this Paragraph
9, or in order to evidence the accuracy, completeness or satisfaction of any
of the representations, warranties or conditions herein contained.
(h) Prior to the Closing Date:
(i) There shall have been no material adverse change
in the condition or prospects or the business activities, financial or
otherwise, of the Company from the latest dates as of which such condition is
set forth in the Registration Statement and Prospectus;
(ii) There shall have been no transaction, outside
the ordinary course of business, entered into by the Company from the latest
date as of which the financial condition of the Company is set forth in the
Registration Statement and Prospectus which is material to the Company, which
23
is either (x) required to be disclosed in the Prospectus or Registration
Statement and is not so disclosed, or (y) likely to have material adverse
effect on the Company's business or financial condition;
(iii) The Company shall not be in default under any
material provision of any instrument relating to any outstanding
indebtedness, except as described in the Prospectus;
(iv) No material amount of the assets of the Company
shall have been pledged, mortgaged or otherwise encumbered, except as set
forth in the Registration Statement and Prospectus;
(v) No action, suit or proceeding, at law or in
equity, shall have been pending or to its knowledge threatened against the
Company or affecting any of its properties or businesses before or by any
court or federal or state commission, board or other administrative agency
wherein an unfavorable decision, ruling or finding would materially and
adversely affect the business, operations, prospects or financial condition
or income of the Company, taken as a whole, except as set forth in the
Registration Statement and Prospectus; and
(vi) No stop order shall have been issued under the
Act and no proceedings therefor shall have been initiated or, to the
Company's knowledge, threatened by the Commission.
(vii) Each of the representations and warranties of
the Company contained in this Agreement and in each certificate and document
contemplated under this Agreement to be delivered to you was, when originally
made and is at the time such certificate is dated, true and correct in all
material respects.
(i) Concurrently with the execution and delivery of this
Agreement and at the Closing Date, you shall have received a certificate of
the Company signed by the Chief Executive Officer of the Company and the
principal financial officer of the Company, dated as of the Closing Date, to
the effect that the conditions set forth in subparagraph (h) above have been
satisfied and that, as of the Closing Date, the representations and
warranties of the Company set forth in Paragraph 2 herein and the statements
in the Registration Statement and Prospectus were and are true and correct.
Any certificate signed by any officer of the Company and delivered to you or
for counsel for the Underwriters shall be deemed a representation and
warranty by the Company to the Underwriters as to the statements made therein.
(j) At the time this Agreement is executed, and at the Closing
Date, you shall have received a letter, addressed to the Underwriters and in
form and substance satisfactory in all respects to you and counsel for the
Underwriters, and including estimates of the Company's revenues and results
of operations for the period ending at the end of the month immediately
preceding the Effective Date and results of the comparable period during the
prior fiscal year, from ___________________, dated as of the date of this
Agreement and as of the Closing Date.
24
(k) All proceedings taken in connection with the
authorization, issuance or sale of the Common Stock, Warrants, Warrant
Shares, Additional Securities, the Underwriters' Warrants and the
Underwriters' Warrants Shares as herein contemplated shall be satisfactory in
form and substance to you and to counsel to the Underwriters, and the
Underwriters shall have received from such counsel an opinion, dated as the
Closing Date with respect to such of these proceedings as you may reasonably
require.
(l) The Company shall have furnished to you such certificates,
additional to those specifically mentioned herein, as you may have reasonably
requested in a timely manner as to the accuracy and completeness, at the
Closing Date, of any statement in the Registration Statement or the
Prospectus, as to the accuracy, at the Closing Date, of the representations
and warranties of the Company herein and in each certificate and document
contemplated under this Agreement to be delivered to you, as to the
performance by the Company of its obligations hereunder and under each such
certificate and document or as to the fulfillment of the conditions
concurrent and precedent to your obligations hereunder.
(m) The obligation of the Underwriters to purchase Additional
Securities hereunder is subject to the accuracy of the representations and
warranties of the Company contained herein on and as of the Option Closing
Date and to the satisfaction on and as of the Option Closing Date of the
conditions set forth herein.
(n) On the Closing Date there shall have been duly tendered to
you for your account the appropriate number of shares of Common Stock and
Warrants constituting the Securities.
10. Indemnification and Contribution.
(a) Subject to the conditions set forth below, the Company
agrees to indemnify and hold harmless the Underwriters and each person, if
any, who controls the Underwriters ("controlling person") within the meaning
of either Section 15 of the Act or Section 20 of the Exchange Act, against
any and all losses, liabilities, claims, damages, actions and expenses or
liability, joint or several, whatsoever (including but not limited to any and
all expense whatsoever reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever), joint or several, to which it or such controlling persons may
become subject under the Act, the Exchange Act or under any other statute or
at common law or otherwise or under the laws of foreign countries, arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any Preliminary
Prospectus or the Prospectus (as from time to time amended and supplemented);
in any post-effective amendment or amendments or any new registration
statement and prospectus in which is included the Warrant Shares of the
Company issued or issuable upon exercise of the Warrants, or Underwriters'
Warrant Shares upon exercise of the Underwriters' Warrants; or in any
application or other document or written communication (in this Paragraph 10
collectively called "application") executed by the Company or based upon
written information furnished by the Company filed in any
25
jurisdiction in order to qualify the Common Stock, Warrants, Warrant Shares,
Additional Securities, Underwriters' Warrants and Underwriters' Warrant
Shares (including the Shares issuable upon exercise of the Warrants
underlying the Underwriters' Warrants) under the securities laws thereof or
filed with the Commission or any securities exchange; or the omission or
alleged omission therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading (in the case of
the Prospectus, in the light of the circumstances under which they were
made), unless such statement or omission was made in reliance upon or in
conformity with written information furnished to the Company with respect to
the Underwriters or to the Selling Shareholders, by or on behalf of the
Underwriters or the Selling Shareholders expressly for use in any Preliminary
Prospectus, the Registration Statement or Prospectus, or any amendment or
supplement thereof, or in application, as the case may be. Notwithstanding
the foregoing, the Company shall have no liability under this Paragraph 10(a)
if any such untrue statement or omission made in a Preliminary Prospectus, is
cured in the Prospectus and the Underwriters failed to deliver to the person
or persons alleging the liability upon which indemnification is being sought,
at or prior to the written confirmation of such sale, a copy of the
Prospectus. This indemnity will be in addition to any liability which the
Company may otherwise have.
(b) The Underwriters agree to indemnify and hold harmless the
Company and each of the officers and directors of the Company who have signed
the Registration Statement and each other person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from the Company
to the Underwriters in Paragraph 10(a), but only with respect to any untrue
statement or alleged untrue statement of any material fact contained in or
any omission or alleged omission to state a material fact required to be
stated in any Preliminary Prospectus, the Registration Statement or
Prospectus or any amendment or supplement thereof or necessary to make the
statements therein not misleading or in any application made solely in
reliance upon, and in conformity with, written information furnished to the
Company by you specifically expressly for use in the preparation of such
Preliminary Prospectus, the Registration Statement or Prospectus directly
relating to the transactions effected by the Underwriters in connection with
this Offering. This indemnity agreement will be in addition to any liability
which the Underwriters may otherwise have. Notwithstanding the foregoing, the
Underwriters shall have no liability under this Paragraph 10(b) if any such
untrue statement or omission made in a Preliminary Prospectus is cured in the
Prospectus, and the Prospectus is delivered to the person or persons alleging
the liability upon which indemnification is being sought.
(c) If any action is brought against any indemnified party
(the "Indemnitee") in respect of which indemnity may be sought against
another party pursuant to the foregoing (the "Indemnitor"), the Indemnitor
shall assume the defense of the action, including the employment and fees of
counsel (reasonably satisfactory to the Indemnitee) and payment of expenses.
Any Indemnitee shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense
of such Indemnitee unless the employment of such counsel shall have been
authorized in writing by the Indemnitor in connection with the defense of
such action. If the Indemnitor shall have employed counsel to have charge of
26
the defense or shall previously have assumed the defense of any such action
or claim, the Indemnitor shall not thereafter be liable to any Indemnitee in
investigating, preparing or defending any such action or claim. Each
Indemnitee shall promptly notify the Indemnitor of the commencement of any
litigation or proceedings against the Indemnitee in connection with the issue
and sale of the Common Stock, Warrants, Warrants Shares, Additional
Securities, Underwriters' Securities or in connection with the Registration
Statement or Prospectus.
(d) In order to provide for just and equitable contribution
under the Act in any case in which: (i) the Underwriters make a claim for
indemnification pursuant to Paragraph 10 hereof, but it is judicially
determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the time to appeal has expired or the last right
of appeal has been denied) that such indemnification may not be enforced in
such case notwithstanding the fact that this Paragraph 10 provides for
indemnification of such case; or (ii) contribution under the Act may be
required on the part of the Underwriters in circumstances for which
indemnification is provided under this Paragraph 10, then, and in each such
case, the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject (after
any contribution from others) in such proportion so that the Underwriters are
responsible for the portion represented by dividing the total compensation
received by the Underwriters herein by the total purchase price of all
Securities sold in the public offering and the Company is responsible for the
remaining portion; provided, 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.
The foregoing contribution agreement shall in no way affect the
contribution liabilities of any persons having liability under Section 11 of
the Act other than the Company and the Underwriters. As used in this
Paragraph 10, the term "Underwriters" includes any officer, director, or
other person who controls the Underwriters within the meaning of Section 15
of the Act, and the word "Company" includes any officer, director or person
who controls the Company within the meaning of Section 15 of the Act. If the
full amount of the contribution specified in this paragraph is not permitted
by law, then the Underwriters and each person who controls the Underwriters
shall be entitled to contribution from the Company to the full extent
permitted by law. No contribution shall be requested with regard to the
settlement of any matter from any party who did not consent to the settlement.
(e) Within fifteen (15) days after receipt by any party to
this Agreement (or its representative) of notice of the commencement of any
action, suit or proceeding, such party will, if a claim for contribution in
respect thereof is 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 it
may have to any other party other than for contribution hereunder.
In case any such action, suit or proceeding is brought against any
party, and such party notifies a contributing party or his or its
representative of the commencement thereof within the aforesaid fifteen (15)
27
days, the contributing party will be entitled to participate therein with the
notifying party and any other contributing party similarly notified. Any
such contributing party shall not be liable to any party seeking contribution
on account of any settlement of any claim, action or proceeding effected by
such party seeking contribution without the written consent of such
contributing party. The indemnification provisions contained in this
Paragraph 10 are in addition to any other rights or remedies which either
party hereto may have with respect to the other or hereunder.
11. Representations, Warranties, Agreements to Survive Delivery.
The respective indemnity and contribution agreements by the
Underwriters and the Company contained in Paragraph 10 hereof, and the
covenants, representations and warranties of the Company and the Underwriters
set forth in this Agreement, shall remain operative and in full force and
effect for a period of one (1) year regardless of (i) any investigation made
by the Underwriters or on its behalf or by or on behalf of any person who
controls the Underwriters, or by the Company or any controlling person of the
Company or any director or any officer of the Company, (ii) acceptance of any
of the Securities and payment therefor, or (iii) any termination of this
Agreement, and shall survive the delivery of the Securities; and any
successor of the Underwriters or the Company, or of any person who controls
you or the Company or any other indemnified party, as the case may be, shall
be entitled to the benefit of such respective indemnity and contribution
agreements. The respective indemnity and contribution agreements by the
Underwriters and the Company contained in this Paragraph 11 shall be in
addition to any liability which the Underwriters and the Company may
otherwise have.
12. Effective Date of This Agreement and Termination Thereof.
(a) This Agreement shall become effective at 10:00 A.M., New
York time, on the first full business day following the day on which you and
the Company receive notification that the Registration Statement became
effective.
(b) This Agreement may be terminated by the Representative by
notifying the Company at any time on or before the Closing Date, if (i)
material governmental restrictions have been imposed on trading in securities
generally (not in force and effect on the date hereof) ; (ii) trading in
securities on the New York Stock Exchange, the American Stock Exchange, or in
the over-the-counter market shall have been suspended or limited; (iii) a
banking moratorium has been declared by Federal or New York State
authorities; (iv) an outbreak of international hostilities or other national
or international calamity or crisis or change in economic or political
conditions shall have occurred; (v) the Company shall have sustained a loss
material or substantial to the Company, whether or not insured, taken as a
whole by fire, flood, accident, hurricane, earthquake, theft, sabotage or
other calamity or malicious act, or from any labor dispute or court or
government action, order or decree; (vi) a pending or threatened legal or
governmental proceeding or action relating generally to the Company's
business, or a notification having been received by the Company of the threat
of any such proceeding or action, which could materially adversely affect
28
the Company; (vii) except as contemplated by the Prospectus, the Company is
merged or consolidated into or acquired by another company or group or there
exists a binding legal commitment for the foregoing or any other material
change of ownership or control occurs; (viii) the passage by the Congress of
the United States or by any state legislative body or federal or state agency
or other authority of any act, rule or regulation, measure, or the adoption
of any orders, rules or regulations by any governmental body or any
authoritative accounting institute or board, or any governmental executive,
which is reasonably believed likely by the Underwriter to have a material
impact on the business, financial condition or financial statements of the
Company or the market for the securities offered pursuant to the Prospectus;
(ix) any adverse change in the financial or securities markets beyond normal
market fluctuations having occurred since the date of this Agreement, or (x)
any material adverse change having occurred, since the respective dates of
which information is given in the Registration Statement and Prospectus, in
the earnings, business prospects or general condition of the Company,
financial or otherwise, whether or not arising in the ordinary course of
business.
(c) If you elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Paragraph 12,
the Company shall be notified promptly by you by telephone or facsimile,
confirmed by letter.
(d) If this Agreement shall not become effective by reason of
an election of the Representative pursuant to this Paragraph 12 or if this
Agreement shall not be carried out within the time specified herein by reason
of any failure on the part of the Company to perform any material
undertaking, or to satisfy any material condition of this Agreement by it to
be performed or satisfied, the sole liability of the Company to the
Underwriters, in addition to the obligations assumed by the Company pursuant
to Paragraph 8 herein, will be to reimburse the Underwriters for the
following: (i) Blue Sky counsel fees and expenses to the extent set forth in
Paragraph 8(a)(iv); (ii) Blue Sky filing fees; and (iii) such reasonable
out-of-pocket expenses of the Underwriters (including the fees and
disbursements of their counsel), to the extent set forth in Paragraph 8(c),
in connection with this Agreement and the proposed offering of the
Securities, but in no event to exceed the sum of $100,000 less such amounts
already paid.
Notwithstanding any contrary provision contained in this Agreement,
any election hereunder or any termination of this Agreement, and whether or
not this Agreement is otherwise carried out, the provisions of Paragraph 8
and 10 hereof shall not be in any way affected by such election or
termination or failure to carry out the terms of this Agreement or any part
hereof.
13. Notices.
All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and, if sent to the Underwriters,
shall be mailed, delivered or telegraphed and confirmed to the Representative
at ▇▇▇▇▇▇ Capital, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇▇ Hoes, with a copy thereof to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.,
Singer ▇▇▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and, if
sent to the Company, shall be mailed, delivered or telegraphed and confirmed
to the Company at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
29
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer, with a copy thereof to
▇▇▇▇▇▇▇, Savage, Kaplowitz, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
14. Parties.
This Agreement shall inure solely to the benefit of and shall be
binding upon, the Underwriters, the Company and the controlling persons,
directors and officers referred to in Paragraph 10 hereof, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or
claim under or in respect of or by virtue of this Agreement or any provision
herein contained.
15. Construction.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York and shall supersede any
agreement or understanding, oral or in writing, express or implied, between
the Company and you relating to the sale of any of the Securities.
16. Jurisdiction and Venue.
The Company agrees that the courts of the State of New York shall
have jurisdiction over any litigation arising from this Agreement, and venue
shall be proper in the Southern District of New York.
17. Counterparts.
This agreement may be executed in counterparts.
30
If the foregoing correctly sets forth the understanding between you
and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between
us.
Very truly yours,
INTERCORP EXCELLE INC.
By:
-------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
Accepted as of the date first above
written:
▇▇▇▇▇▇ CAPITAL, INC.
By:
-----------------------------------
▇▇▇▇▇▇▇▇ Hoes, Chief Executive Officer
AEGIS CAPITAL CORPORATION
By:
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇, Chairman
31
SCHEDULE A
Number of Number of
Shares to be Warrants to
Underwriter Purchased be Purchased
----------- ------------ ------------
▇▇▇▇▇▇ Capital, Inc. 500,000 500,000
Aegis Capital Corp. 500,000 500,000
--------- --------
Total: 1,000,000 1,000,000
--------- ---------
--------- ---------
32