Ex 1
1,100,000 Units
AMERICAN MOLD GUARD, INC.
UNDERWRITING AGREEMENT
____________________, 2006
▇▇▇▇▇▇▇ Investment Company, Inc.
As Representative of the
several Underwriters
▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
American Mold Guard, Inc., a California corporation (the "Company"),
proposes to sell to the several underwriters (the "Underwriters") named in
Schedule I hereto for whom you are acting as Representative (the
"Representative") an aggregate of 1,100,000 Units (the "Firm Units") issued by
the Company. Each Unit will consist of two shares ("Shares") of the common
stock, no par value, of the Company ("Common Stock), two redeemable Class A
warrants (the "Class A Warrants") and one redeemable Class B warrant (the "Class
B Warrants," and together with the Class A Warrants, the "Warrants"). The
Warrants are to be issued under the terms of a Warrant Agreement (the "Warrant
Agreement") by and between the Company and U.S. Stock Transfer Corporation, as
warrant agent (the "Warrant Agent"), in each case substantially in the form most
recently filed as an exhibit to the Registration Statement (hereinafter
defined). Each Class A Warrant entitles the holder thereof to purchase one share
of Common Stock at a price equal to $___ [75% of the initial public offering
price of the Units], subject to adjustment under the terms of the Warrant
Agreement. Each Class B Warrant entitles the holder thereof to purchase one
share of Common Stock at a price equal to $___ [100% of the initial public
offering price of the Units], subject to adjustment under the terms of the
Warrant Agreement. Shares of Common Stock issued upon exercise of the Warrants
are referred to herein collectively as the "Warrant Shares." The Shares,
Warrants and Warrant Shares are sometimes referred to herein as the "Underlying
Securities."
The respective number of the Firm Units to be so purchased by the several
Underwriters are set forth opposite their names in Schedule I hereto. The
Company also proposes to grant to the Representative an option to purchase up to
165,000 additional Units (the "Option Units"), identical to the Firm Units, as
set forth below. Unless specified to the contrary, all references herein to
"Units" shall be deemed to include the Firm Units and the Option Units (to the
extent the aforementioned option has been exercised) and all references herein
to Shares, Warrants and
Warrant Shares shall be deemed to include the Shares, Warrants and Warrant
Shares underlying the Option Units (to the extent the aforementioned option has
been exercised).
As the Representative, you have advised the Company that: (a) that you are
authorized to enter into this Agreement for yourself as Representative and on
behalf of the several Underwriters; and (b) the several Underwriters are
willing, acting severally and not jointly, to purchase the numbers of Firm Units
set forth opposite their respective names in Schedule I.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each of the Underwriters as follows:
(a) The Company has filed with the Securities and Exchange Commission
(the Commission") a registration statement on Form SB-2 (File No. 333-_____) and
a related preliminary prospectus for the registration of the Units, underlying
Common Stock, Warrants and Warrant Shares under the Securities Act of 1933, as
amended (the "Securities Act") and the rules and regulations thereunder (the
"Securities Act Regulations"). The Company has prepared and filed such
amendments to the registration statement and such amendments or supplements to
the related preliminary prospectus as may have been required to the date hereof
and will file such additional amendments or supplements as may hereafter be
required. The registration statement has been declared effective under the
Securities Act by the Commission. The registration statement as amended at the
time it was declared effective by the Commission (and, if the Company files a
post-effective amendment to such registration statement that becomes effective
prior to the Closing Date (as defined below), such registration statement as so
amended) and including all information deemed to be a part of the registration
statement pursuant to Rule 430A of the Securities Act Regulations or otherwise,
is hereafter called the "Registration Statement." Any registration statement
filed pursuant to Rule 462(b) of the Securities Act Regulations is hereinafter
called the "Rule 462(b) Registration Statement," and after such filing, the term
"Registration Statement" shall include the 462(b) Registration Statement. Each
prospectus included in the Registration Statement, or amendments thereof or
supplements thereto, before it was declared effective by the Commission under
the Securities Act, and any preliminary form of prospectus filed with the
Commission by the Company with the consent of the Underwriters pursuant to Rule
424(a) of the Securities Act Regulations is hereinafter called the "Preliminary
Prospectus."
The term "Prospectus" means the final prospectus, as first filed with the
Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Securities Act
Regulations, and any amendments thereof or supplements thereto. If applicable,
each Preliminary Prospectus and the Prospectus, if filed by electronic
transmission pursuant to the Commission's Electronic Data Gathering Analysis and
Retrieval System ("▇▇▇▇▇"), was identical to the copies thereof delivered to the
Underwriters for use in connection with the offer and sale of the Units, other
than with respect to any artwork and graphics that were not filed or otherwise
as permitted by Regulation S-T. If Rule 434 of the Securities Act Regulations is
used, the Company will comply with the requirements of Rule 434, and the
Prospectus shall not be "materially different," as such
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term is used in Rule 434, from the Prospectus included in the Registration
Statement at the time it became effective.
(b) The Registration Statement, at the time it became effective and as
of the date hereof complied in all material respects with the Securities Act.
The Registration Statement, as of the effective date and as of the date hereof,
did not, does not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the
immediately preceding sentence do not apply to statements in or omissions from
the Registration Statement, or any amendments or supplements thereto, made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by the Representative expressly for use
therein, it being understood and agreed that the only such information furnished
by the Representative consists of the information described as such in Section
14 hereof.
(c) Each Preliminary Prospectus, and any amendments or supplements
thereto, when filed, complied in all material respects with the Securities Act
and did not and will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Prospectus, as amended or supplemented, as of its date and
at all subsequent times, did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the two
immediately preceding sentences do not apply to statements in or omissions from
the Preliminary Prospectus or the Prospectus, or any amendments or supplements
thereto, made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by the Representative
expressly for use therein, it being understood and agreed that the only such
information furnished by the Representative consists of the information
described as such in Section 14 hereof.
(d) The term "Disclosure Package" shall mean (i) the Preliminary
Prospectus, as amended or supplemented, (ii) the issuer free writing
prospectuses as defined in Rule 433 of the Securities Act (each, an "Issuer Free
Writing Prospectus"), if any, identified in Schedule II hereto, and (iii) any
other free writing prospectus that the parties hereto shall hereafter expressly
agree in writing to treat as part of the Disclosure Package. As of _____ p.m.
(Eastern time) on the date of this Agreement (the "Initial Sale Time"), the
Disclosure Package did not contain any untrue statement of a material fact or
omit 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. The representations and warranties set forth in the immediately
preceding sentence do not apply to statements in or omissions from the
Disclosure Package, or any amendments or supplements thereto, made in reliance
upon and in conformity with information relating to any Underwriter furnished to
the Company in writing by the Representative expressly for use therein, it being
understood and agreed that the only such information furnished by the
Representative consists of the information described as such in Section 14
hereof. If at any time following issuance of an Issuer Free Writing Prospectus
there occurred or occurs an event or development as a result of which such
Issuer Free Writing Prospectus included or would include an untrue
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statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances, not misleading, the Company has notified or will promptly notify
the Representative so that any use of such Issuer Free Writing Prospectus may
cease until it is amended or supplemented. Each Issuer Free Writing Prospectus,
as of its issue date and at all subsequent times through the completion of the
offering and the sale of the Units did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement that has not been superseded or
modified.
(e) The Company is eligible to use Free Writing Prospectuses in
connection with this offering pursuant to Rules 164 and 433 under the Securities
Act; any Free Writing Prospectus that the Company is required to file pursuant
to Rule 433(d) under the Securities Act Regulations has been, or will be, filed
with the Commission in accordance with the requirements of the Securities Act
and the Securities Act Regulations; and each Free Writing Prospectus that the
Company has filed, or is required to file, pursuant to Rule 433(d) under the
Securities Act Regulations or that was prepared by or on behalf of or used by
the Company complies or will comply in all material respects with the
requirements of the Securities Act and the Securities Act Regulations. Any
Issuer Free Writing Prospectus (to the extent any such Issuer Free Writing
Prospectus was required to be filed with the Commission) delivered to the
Underwriters for use in connection with this offering have been and will be
identical to the versions of such documents created to be transmitted to the
Commission for filing via ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
(f) The Company has satisfied and will satisfy the conditions of Rule
433 to avoid a requirement to file with the Commission any electronic road show,
except to the extent such electronic road show has been identified as an Issuer
Free Writing Prospectus. If such electronic road show has been identified as an
Issuer Free Writing Prospectus, it is listed in Schedule II hereof and has been
filed with the Commission via ▇▇▇▇▇, if required to be filed pursuant to Rule
433(d).
(g) Except for the Issuer Free Writing Prospectuses identified in
Schedule II hereto, if any, and any electronic road show relating to the
offering, the Company has not prepared, used or referred to, and will not,
without the Representative's prior consent, prepare, use or refer to, any Free
Writing Prospectus.
(h) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of California, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement, the Prospectus and the
Disclosure Package. The Company has one consolidated subsidiary, Trust One
Termite, Inc., a California corporation ("Trust One"). The Company also holds a
50% interest in Zero Plus, Inc., a _________ corporation, which is an
unconsolidated subsidiary. The Company has also formed AMG Franchise, Inc., a
_____ corporation; however, AMG Franchise, Inc. has engaged in no business or
financial activity from inception through the date hereof. As used in this
Agreement, the term "Subsidiary" refers only to Trust One. The Subsidiary has
been duly organized and is validly existing under the laws of its jurisdiction
of organization and has the necessary legal power and authority to own or lease
its properties and to
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conduct its business as described in the each of Registration Statement, the
Prospectus and the Disclosure Package. The Company and the Subsidiary are each
duly qualified to transact business in each jurisdiction in which they conduct
their respective businesses or in which they own or lease real property or
otherwise maintain an office and in which the failure, individually or in the
aggregate, to be so qualified or licensed could have a material adverse effect
on the assets, business, operations, earnings, prospects, properties or
condition (financial or otherwise), present or prospective, of the Company and
its Subsidiary, taken as a whole, (any such effect or change, where the context
so requires, is hereinafter called a "Material Adverse Effect" or "Material
Adverse Change"); except as disclosed in both the Prospectus and the Disclosure
Package, the Subsidiary is not prohibited or restricted, directly or indirectly,
from paying dividends to the Company, nor from making any other distribution
with respect to such Subsidiary's capital stock or from repaying to the Company
or any other Company subsidiary, if then-existing, any amounts that may from
time to time become due under any loans or advances to such Subsidiary from the
Company or such other then-existing subsidiary, or from transferring any such
Subsidiary's property or assets to the Company or to any such then-existing
Subsidiary; other than as disclosed in both the Prospectus and the Disclosure
Package, the Company does not own, directly or indirectly, any capital stock or
other equity securities of any other corporation or any ownership interest in
any partnership, joint venture or other association.
(i) This Agreement has been duly authorized, executed and delivered by
the Company, and is a valid and binding agreement of the Company, enforceable in
accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(j) The outstanding shares of each class or series of capital stock or
other equity interests of the Company and its Subsidiary have been duly
authorized and validly issued and are fully paid and non-assessable and, except
as disclosed in the Registration Statement, the Prospectus and the Disclosure
Package, have been issued and sold by the Company or its Subsidiary in
compliance in all material respects with applicable securities laws. Except as
disclosed in both the Registration Statement, the Prospectus and the Disclosure
Package, there are no outstanding (i) securities or obligations of the Company
or its Subsidiary convertible into or exchangeable for any capital stock of the
Company or its Subsidiary, (ii) warrants, rights or options to subscribe for or
purchase from the Company or its Subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or (iii) obligations of
the Company or its Subsidiary to issue any shares of capital stock, any such
convertible or exchangeable securities or obligation, or any such warrants,
rights or options. Except as set forth in the Registration Statement, the
Prospectus and the Disclosure Package, all of the outstanding shares of capital
stock of the Subsidiary are directly or indirectly owned of record and
beneficially by the Company. Except as set forth in the Registration Statement,
the Prospectus and the Disclosure Package, neither the filing of the
Registration Statement nor the offering or sale of the Units as contemplated by
this Agreement gives rise to any rights, other than those which have been waived
or satisfied, for or relating to the registration of any shares of Common Stock
or other securities of the Company.
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(k) The issuance and sale of the Units have been duly authorized by all
necessary corporate action and, when issued and paid for as contemplated herein,
the Units will be validly issued, fully paid and non-assessable; and no
preemptive rights of shareholders exist with respect to any security of the
Company or the issue and sale thereof. The Company has duly and validly
reserved, out of its authorized and unissued Common Stock, for issuance upon
exercise of the Warrants and the Representative's Warrant (defined below), a
number of shares sufficient for such purposes.
(l) A registration statement has been filed on Form 8-A pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which complies in all material respects with the Exchange Act. The
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Units, Common Stock and Warrants under the
Exchange Act, nor has the Company received any notification that the Commission
is contemplating terminating such registration.
(m) The information set forth under the caption "Capitalization" in the
Registration Statement, the Prospectus and the Disclosure Package is true and
correct in all material respects. The Common Stock conforms and the Warrants and
the Representative's Warrants will conform to the respective descriptions
thereof contained in the Registration Statement, the Prospectus and the
Disclosure Package in all material respects. The forms of certificates for the
Common Stock, the Warrants and the Representative's Warrant conform in all
material respects to the requirements of the corporate law of California.
(n) The consolidated financial statements of the Company, together with
related notes as set forth in each of the Registration Statement, the Prospectus
and the Disclosure Package present fairly the consolidated financial position
and the results of operations and cash flows of the Company and its consolidated
Subsidiary at the indicated dates and for the indicated periods. The impact of
each material accounting judgment made in the preparation of the financial
statements included in the Registration Statement has been fairly and adequately
disclosed in the notes thereto or elsewhere in the Registration Statement. Such
financial statements have been prepared in accordance with generally accepted
principles of accounting, consistently applied throughout the periods involved,
except as disclosed in the Registration Statement, the Prospectus and the
Disclosure Package, and all adjustments necessary for a fair presentation of
results for such periods have been made. The amounts in both the Prospectus and
the Disclosure Package under the captions "Prospectus Summary - Summary
Consolidated Financial Information" and "Selected Consolidated Financial Data"
fairly present the information shown therein and have been compiled on a basis
consistent with the financial statements included in each of the Registration
Statement, the Prospectus and the Disclosure Package; no other financial
statements or supporting schedules are required to be included in the
Registration Statement, the Prospectus or the Disclosure Package. The unaudited
pro forma financial information included in each of the Registration Statement,
the Prospectus and the Disclosure Package complies as to form in all material
respects with the applicable accounting requirements of the Securities Act and
the Securities Act Regulations, and management of the Company believes that the
assumptions underlying the pro forma adjustments are reasonable; such pro forma
adjustments have been properly applied to the historical amounts in the
compilation of the information and such information fairly presents
6
with respect to the Company and its Subsidiary, the financial position, results
of operations and other information purported to be shown therein at the
respective dates and for the respective periods specified; and no other pro
forma financial information is required to be included in the Registration
Statement, the Prospectus or the Disclosure Package.
(o) The statistical, industry-related and market-related data included
in the Registration Statement, the Prospectus and the Disclosure Package are
based on or derived from sources that the Company reasonably and in good faith
believes to be reliable and accurate, such data agree with the sources from
which they are derived, and the Company has received any consents required from
such sources in connection with the inclusion of their data in the Registration
Statement.
(p) ▇▇▇▇▇▇▇ & White LLP, which has expressed its opinion with respect
to the consolidated financial statements of the Company and its Subsidiary filed
as part of the Registration Statement and included in the Registration
Statement, the Prospectus and the Disclosure Package, is, and during the periods
covered by its reports was, an independent registered public accounting firm, as
required by the Securities Act and the Securities Act Regulations and is
registered with the Public Company Accounting Oversight Board.
(q) There is no action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company or its Subsidiary
before any court or administrative agency or otherwise, which, if determined
adversely to the Company or such Subsidiary, might reasonably be expected to
have a Material Adverse Effect or prevent the consummation of the transactions
contemplated hereby, except as set forth in the Registration Statement, the
Prospectus and the Disclosure Package.
(r) The Company and its Subsidiary either has, or has disposed of in
the ordinary course of business since the date of the latest consolidated
balance sheet included in the Registration Statement, the Prospectus and the
Disclosure Statement, good and marketable title to all of its properties and
material assets, tangible and intangible, reflected in the consolidated balance
sheet of the Company and its Subsidiary as of that date, and has good and
marketable title to all other property described in the Registration Statement,
the Prospectus and the Disclosure Package as owned by the Company or a
Subsidiary, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except those reflected in such consolidated financial statements (or as
described in the Registration Statement, the Prospectus and the Disclosure
Package) or that are not material. All of the leases and subleases under which
the Company or its Subsidiary holds properties are in full force and effect
(with only such exceptions as are commonly accepted by prudent companies engaged
in the business of the Company or such Subsidiary), and neither the Company nor
its Subsidiary has received notice of any claim that is materially adverse to
the rights of the Company or its Subsidiary under any of such leases or
subleases.
(s) The Company, for itself and its consolidated Subsidiary, has filed
all federal, state, local and foreign income tax returns that have been required
to be filed prior to the date hereof (other than those income tax returns as to
which the Company has timely filed a request for an extension to file) and has
paid all taxes indicated by said returns and all
7
assessments received by the Company to the extent that such taxes have become
due and are not being contested in good faith. No entities in which the Company
has an interest, other than Trust One, are required to be consolidated with the
Company for tax purposes.
(t) Since the respective dates as of which information is given in each
of the Prospectus and the Disclosure Package (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement), there has not
been any change or development involving a prospective Material Adverse Change
whether or not occurring in the ordinary course of business, that has had or
might reasonably be expected to have a Material Adverse Effect, and there has
not been any material transaction entered into or any material transaction that
is probable of being entered into by the Company or its Subsidiary, other than
transactions in the ordinary course of business and changes and transactions
described in each of the Registration Statement, the Prospectus and the
Disclosure Package. Neither the Company nor its Subsidiary has directly or
indirectly incurred any obligation material to the Company and its Subsidiary
taken as a whole, contingent or otherwise, that is not disclosed in the
Company's consolidated financial statements included in each of the Registration
Statement, the Prospectus and the Disclosure Package, and no dividend or
distribution of any kind has been declared, paid or made by the Company on any
class of its capital stock.
(u) Neither the Company nor its Subsidiary is, nor, with the giving of
notice or lapse of time or both, will such entity be, in violation of or in
default under its Articles of Incorporation or Bylaws or other charter documents
or under any agreement, lease, contract, indenture or other instrument or
obligation to which it is a party or by which it, or any of its properties or
its business, is bound and which default might reasonably be expected to have a
Material Adverse Effect. The execution and delivery of this Agreement, the
consummation of the transactions herein contemplated and the fulfillment of the
terms hereof will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default in the performance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust or other agreement or instrument to which the Company is
a party or by which it or any of its properties may be bound, or any license,
permit, judgment, decree, order, statute, rule or regulation to which it or any
of its properties or its business, or the properties or business of its
Subsidiary, may be subject, which would result in a Material Adverse Effect.
(v) Each approval, registration, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
governmental body necessary to the execution or delivery of this Agreement by
the Company and the consummation or completion of the transactions contemplated
herein (except for such additional steps that such regulatory, administrative or
governmental body may require to be performed after the date of this Agreement)
has been obtained or made.
(w) The Company and its Subsidiary have obtained, are in compliance in
all material respects with and maintain in full force and effect all licenses,
certificates, permits, orders or other, similar authorizations granted or issued
by any governmental agency (collectively "Government Permits") required to
conduct their respective businesses as they are presently conducted. No
proceeding to revoke, limit or otherwise materially change any Government Permit
has been commenced or, to the Company's knowledge, is threatened
8
against the Company or its Subsidiary, and the Company has no reason to
anticipate that any such proceeding will be commenced against the Company or its
Subsidiary. Except as disclosed or contemplated in the each of the Registration
Statement, the Prospectus and the Disclosure Package, the Company has no reason
to believe that any pending application for a Government Permit will be denied
or limited in a manner inconsistent with the Company's business plan as
described in each of the Registration Statement, Prospectus and the Disclosure
Package. Neither the Company nor its Subsidiary is in violation of, in default
under, or has received any notice regarding a possible violation, default or
revocation of Government Permit applicable to the Company or its Subsidiary the
effect of which could result in a Material Adverse Change; and no such
Government Permit contains a materially burdensome restriction that is not
adequately disclosed in each of the Registration Statement, the Prospectus and
the Disclosure Package.
(x) Except as disclosed in the Registration Statement, the Prospectus
and the Disclosure Package, the Company and its Subsidiary hold all patents,
patent rights, trademarks, trade names, service marks, copyrights, trade
secrets, other intangible property rights know-how, and licenses of any of the
foregoing (collectively, "Intellectual Property Rights") that are necessary to
the conduct of its businesses; there is no claim pending or, to the knowledge of
the Company, threatened against the Company or its Subsidiary or any of their
respective officers, directors or employees alleging any infringement of
Intellectual Property Rights, or any violation of the terms of any license
relating to Intellectual Property Rights, nor does the Company know of any basis
for any such claim. The Company knows of no infringement by others of
Intellectual Property Rights owned by or licensed to the Company or its
Subsidiary.
(y) The Company and its Subsidiary are in all material respects in
compliance with all applicable Environmental Laws. The Company has no knowledge
of any past, present or, as anticipated by the Company, future events,
conditions, activities, investigation, studies, plans or proposals that: (i)
would interfere with or prevent compliance with any Environmental Law by the
Company or its Subsidiary or (ii) could reasonably be expected to give rise to
any common law or other liability, or otherwise form the basis of a claim,
action, suit, proceeding, hearing or investigation, involving the Company or its
Subsidiary and related to Hazardous Substances or Environmental Laws. Except for
the prudent and safe use and management of Hazardous Substances in the ordinary
course of the Company's business: (i) no Hazardous Substance is or has been
used, treated, stored, generated, manufactured or otherwise handled on or at any
Facility and (ii) to the Company's knowledge, no Hazardous Substance has
otherwise come to be located in, on or under any Facility. No Hazardous
Substances are stored at any Facility except in quantities necessary to satisfy
the reasonably anticipated use or consumption by the Company. No litigation,
claim, proceeding or governmental investigation is pending regarding any
environmental matter for which the Company or its Subsidiary has been served or
otherwise notified or, to the knowledge of the Company, threatened or asserted
against the Company or its Subsidiary, or the officers or directors of the
Company or its Subsidiary in their capacities as such, or any Facility or the
Company's business. There are no orders, judgments or decrees of any court or of
any governmental agency or instrumentality under any Environmental Law which
specifically apply to the Company or its Subsidiary, any Facility or any of the
Company's or its Subsidiary's operations. Neither the Company nor its Subsidiary
has received from a governmental authority or other person: (i) any notice that
it is a potentially responsible person for any Contaminated site or (ii) any
request for information about a site alleged to be
9
Contaminated or regarding the disposal of Hazardous Substances. There is no
litigation or proceeding against any other person by the Company or its
Subsidiary regarding any environmental matter. The Company has disclosed in the
Prospectus or made available to the Underwriters and their counsel true,
complete and correct copies of any reports, studies, investigations, audits,
analyses, tests or monitoring in the possession of or initiated by the Company
or its Subsidiary pertaining to any environmental matter relating to the
Company, its Subsidiary, their past or present operations or any Facility.
For the purposes of the foregoing paragraph, "Environmental Laws" means
any applicable federal, state or local statute, regulation, code, rule,
ordinance, order, judgment, decree, injunction or common law pertaining in any
way to the protection of human health or the environment, including without
limitation, the Resource Conservation and Recovery Act of 1976, as amended, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Toxic Substances Control Act, as amended, the Clean Air Act, as
amended, the Hazardous Material Transportation Act, as amended, the Occupational
Safety and Health Act of 1970, as amended, the Federal Water Pollution Control
Act, as amended, and any similar or comparable state or local law; "Hazardous
Substance" means any hazardous, toxic, radioactive or infectious substance,
material or waste as defined, listed or regulated under any Environmental Law;
"Contaminated" means the actual existence on or under any real property of
Hazardous Substances, if the existence of such Hazardous Substances triggers a
requirement to perform any investigatory, remedial, removal or other response
action under any Environmental Laws or if such response action legally could be
required by any governmental authority; "Facility" means any property currently
owned, leased or occupied by the Company.
(z) The descriptions or summaries in each of the Registration
Statement, the Prospectus and the Disclosure Package of the legal or
governmental proceedings, contracts, leases and other legal documents therein
described or summarized present fairly the information required to be shown, and
there are no legal or governmental proceedings, contracts, leases, or other
documents of a character required to be described or summarized in the
Registration Statement, the Prospectus or the Disclosure Package, or required to
be filed as exhibits to the Registration Statement, which are not described,
summarized or filed as required; all agreements between the Company or its
Subsidiary and third parties expressly referenced in both the Prospectus and the
Disclosure Package are legal, valid and binding obligations of the Company or
its Subsidiary, enforceable in accordance with their respective terms, except to
the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and by general equitable principles.
(aa) Neither the Company, nor to the Company's best knowledge, any of
its affiliates, has taken or intends to take, directly or indirectly, any action
which is designed to cause or result in, or which constitutes or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of Common Stock or the Warrants to facilitate the sale or
resale of the Units.
(bb) The Company is not an "investment company" within the meaning of
such term under the Investment Company Act of 1940, as amended, and the rules
and regulations of the Commission thereunder.
10
(cc) The Company maintains a system of internal control over financial
reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act that
complies with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder (the "Exchange Act") and has been designed by the
Company's principal executive officer and principal financial officer, or under
their supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of consolidated financial statements for
external purposes in accordance with generally accepted accounting principles.
The Company's internal control over financial reporting is effective, and the
Company is not aware of any material weaknesses in its internal control over
financial reporting. Since the date of the latest audited financial statements
included in the Registration Statement and the Prospectus, there has been no
change in the Company's internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting. The books, records and accounts of
the Company and its Subsidiary accurately and fairly reflect, in reasonable
detail, the transactions in, and dispositions of, the assets of, and the results
of operations of, the Company and its Subsidiary. The Company's system of
internal accounting controls is sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(dd) The minute books of the Company and its Subsidiary have been made
available to the Underwriters and counsel for the Underwriters, and such books
(i) contain a complete summary of all meetings and actions of the board of
directors or comparable body (including each committee thereof) and the
shareholders of the Company and its Subsidiary since the time of its respective
incorporation or formation through the date of the latest meeting and action and
(ii) accurately reflect all transactions referred to in such minutes.
(ee) The Company and its Subsidiary are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are customary in the businesses in which they are engaged, all of
which insurance is in full force and effect. The Company and its Subsidiary are
in compliance with the terms of such policies and instruments in all material
respects; and neither the Company nor its Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that is not materially greater
than the current cost. Except as disclosed in the Registration Statement, the
Prospectus and the Disclosure Package, neither the Company nor its Subsidiary
has been denied any insurance coverage which it has sought or for which it has
applied.
(ff) The Company and its Subsidiary are in compliance in all material
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company or its Subsidiary would have any liability; neither the
11
Company nor its Subsidiary has incurred and the Company does not expect that it
or its Subsidiary will incur liability under (i) Title IV of ERISA with respect
to termination of, or withdrawal from, any "pension plan" or (ii) Sections 412
or 4971 of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and each
"pension plan" for which the Company or its Subsidiary would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such qualification.
(gg) The Company and its Subsidiary are in material compliance with all
laws, rules, regulations, orders of any court or administrative agency,
operating licenses or other requirements imposed by any governmental body
applicable to it, including, without limitation, all applicable laws, rules,
regulations, licenses or other governmental standards applicable to its
business; and the conduct of the business of the Company and its Subsidiary, as
described in the Registration Statement, the Prospectus and the Disclosure
Package, will not cause the Company or such Subsidiary to be in violation of any
such requirements.
(hh) Each of the Warrants and the Representative's Warrant (defined
below) has been authorized for issuance to the purchasers thereof or to the
Representative or its designees, as the case may be, and will, when issued, and
delivered pursuant to this Agreement and, in the case of the Warrants,
countersigned by the Warrant Agent as provided in the Warrant Agreement, will
have been duly executed, issued and delivered and will constitute valid and
legally binding obligations of the Company, and the holders thereof will possess
the rights, privileges, and characteristics as represented in the most recent
form of Warrant Agreement or Representative's Warrant, as the case may be, filed
as an exhibit to the Registration Statement; the securities to be issued upon
exercise of the Warrants and the Representative's Warrant, when issued and
delivered against payment therefor in accordance with the terms thereof, will be
duly and validly issued, fully paid, nonassessable and free of preemptive
rights, and all corporate action required to be taken for the authorization and
issuance of the Warrants and the Representative's Warrant, and the securities to
be issued upon their exercise, have been validly and sufficiently taken. The
execution by the Company of the Warrant Agreement and the Representative's
Warrant has been duly authorized by all required action of the Company and, when
so executed and delivered (and assuming due and valid execution by the Warrant
Agent, in the case of the Warrant Agreement) will constitute the valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(ii) Except as disclosed in each of the Registration Statement, the
Prospectus and the Disclosure Package, neither the Company nor any of its
officers, directors or affiliates have caused any person, other than the
Underwriters, to be entitled to reimbursement of any kind, including, without
limitation, any compensation that would be includable as underwriter
compensation under the NASD's Corporate Financing Rule with respect to the
offering of the Units, as a result of the consummation of such offering based on
any activity of such person as a finder, agent, broker, investment adviser or
other financial service provider.
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(jj) There are no affiliations with the NASD among the Company's
officers, directors or, to the best of the knowledge of the Company, any five
percent or greater shareholder of the Company, except as set forth in the
Registration Statement, the Prospectus and the Disclosure Package or otherwise
disclosed in writing to the Representative.
(kk) The Units, the Common Stock and the Warrants have been approved
for listing on the Nasdaq Capital Market upon the effectiveness of the
Registration Statement, and the Company has satisfied all of the requirements of
the Nasdaq Capital Market for such listing and for the trading of its Units,
Common Stock and Warrants on the Nasdaq Capital Market. The Units, the Common
Stock and the Warrants have also been approved for dual listing on the Pacific
Exchange upon the effectiveness of the Registration Statement, and the Company
has satisfied all of the requirements of the Pacific Exchange for such listing
and for the trading of its Units, Common Stock and Warrants on the Pacific
Exchange. The Company has taken no action designed to, or likely to have the
effect of, terminating the quotation or listing, as the case may be, of the
Units, Common Stock and Warrants on the Nasdaq Capital Market or the Pacific
Exchange, nor has the Company received any notification that the Nasdaq Capital
Market or the Pacific Exchange is contemplating terminating such quotation or
listing.
(ll) The Company has adopted organizational structures and policies
sufficient to comply with the requirements of the Nasdaq Corporate Governance
Rules in effect as of the date hereof (collectively, the "Nasdaq Corporate
Governance Rules"). Without limiting the generality of the foregoing, the
Company's Board of Directors has validly appointed an Audit Committee, a
Nominating Committee and a Compensation Committee whose composition satisfies
the requirements of the Nasdaq Corporate Governance Rules. The Board of
Directors, the Audit Committee, the Nominating Committee or the Compensation
Committee, as the case may be, has adopted a charter governing the respective
activities of the Committees that satisfies the requirements of the Nasdaq
Corporate Governance Rules. The Audit Committee, the Nominating Committee and
the Compensation Committee have each acted in accordance with the provisions of
their respective charters, as amended from time to time. The Company has adopted
additional organizational structures and policies sufficient to comply with the
requirements of the Pacific Exchange in effect as of the date hereof.
(mm) Neither the Board of Directors nor the Audit Committee has been
informed, nor is any director of the Company aware, of: (i) any significant
deficiencies or material weaknesses existing in the design or operation of the
Company's internal controls over financial reporting of the Company which could
adversely affect the Company's ability to record, process, summarize and report
financial data or any material weakness in the Company's internal controls; or
(ii) any fraud, whether or not material, that involves management or other
employees of the Company who have a significant role in the Company's internal
controls.
(nn) No relationship, direct or indirect, exists between or among the
Company, on the one hand, and the directors, officers, shareholders, customers
or suppliers of the Company, on the other hand, which is required to be
described in the Registration Statement, the Disclosure Package and the
Prospectus and which is not so described. There are no outstanding loans,
advances or guarantees of indebtedness by the Company to or for the benefit of
any of the officers or directors of the Company or any of their respective
family members, except as disclosed in the Registration Statement, the
Disclosure Package and the Prospectus.
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(oo) The Company is in compliance with all currently effective
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations
promulgated thereunder that are applicable, or will be applicable to the Company
as of the date of payment for and delivery of the Firm Units pursuant hereto.
(pp) The Company or any other person associated with or acting on
behalf of the Company including, without limitation, any director, officer,
agent or employee of the Company or its Subsidiary, has not, directly or
indirectly, while acting on behalf of the Company or its Subsidiary (i) used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (ii) made any unlawful payment
to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made
any other unlawful payment.
(qq) The operations of the Company and its Subsidiary are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the USA Patriot Act, the money laundering statutes of all
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the "Money Laundering Laws") and no action,
suit or proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or its Subsidiary with respect to
the Money Laundering Laws is pending, or to the best knowledge of the Company,
threatened.
(rr) Neither the Company nor its Subsidiary nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the Company
or its Subsidiary is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department ("OFAC"); and
the Company will not directly or indirectly use the proceeds of the offering, or
lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(ss) Neither the Company nor its Subsidiary nor, to the knowledge of
the Company, any employee or agent of the Company or its Subsidiary, has made
any payment of funds of the Company or its Subsidiary or received or retained
any funds in violation of any law, rule or regulation or of a character required
to be disclosed in the Prospectus or the Disclosure Package.
(tt) Except as described in the Registration Statement, the Company has
not sold or issued any securities during the six-month period preceding the date
of the Prospectus, including any sales pursuant to Rules 144A or 701 under, or
Regulations D or S of, the Securities Act.
(uu) In connection with this offering, the Company has not offered and
will not offer its Units or any other securities convertible into or
exchangeable or exercisable for Common Stock in a manner in violation of the
Securities Act; and the Company has not
14
distributed and will not distribute any offering material in connection with the
offer and sale of the Units, except for the Preliminary Prospectus, the
Prospectus, any Issuer Free Writing Prospectus or the Registration Statement.
(vv) No relationship, direct or indirect, exists between or among the
Company or its Subsidiary, on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or its Subsidiary, on the
other hand, which is required by the Securities Act and the Securities Act
Regulations to be described in the Registration Statement, the Prospectus or the
Disclosure Package, and which is not so described;
(ww) The Company and its Subsidiary has complied with all provisions of
Section 517.075 Florida Statutes, relating to doing business with the Government
of Cuba or with any person or affiliate located in Cuba.
2. PURCHASE, SALE AND DELIVERY OF THE UNITS.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Company
agrees to sell to the Underwriters and each Underwriter agrees, severally and
not jointly, to purchase, at a price of $____ per Unit (which price reflects an
underwriter's discount of 8%), the number of Firm Units set forth opposite the
name of each Underwriter in Schedule I hereof, subject to adjustments in
accordance with Section 9 hereof.
(b) Payment for the Firm Units to be sold hereunder is to be made in
New York Clearing House funds and, at the option of the Representative, by bank
wire to an account specified by the Company, certified or bank cashier's checks
drawn to the order of the Company, against either uncertificated delivery of
Firm Units or of certificates therefor (which delivery, if certificated, shall
take place in such location in New York, New York as may be specified by the
Representative) to the Representative for the several accounts of the
Underwriters. Such payment is to be made at the offices of the Representative at
the address set forth on the first page of this agreement, at 7:00 a.m., Pacific
time, on the third business day after the date of this Agreement or at such
other time and date not later than five business days thereafter as you and the
Company shall agree upon, such time and date being herein referred to as the
"Closing Date." (As used herein, "Business Day" means a day on which the New
York Stock Exchange is open for trading and on which banks in New York are open
for business and not permitted by law or executive order to be closed.) Except
to the extent uncertificated Firm Units are delivered at closing, the
certificates for the Firm Units will be delivered in such denominations and in
such registrations as the Representative requests in writing not later than the
second full business day prior to the Closing Date, and will be made available
for inspection by the Representative at least one business day prior to the
Closing Date.
(c) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the Representative to purchase the Option
Units at the price per Unit as set forth in Section 2(a). The option granted
hereby may be exercised in whole or in part by giving written
15
notice: (i) at any time before the Closing Date and (ii) only once thereafter
within 45 days after the date of this Agreement, by the Representative to the
Company setting forth the number of Option Units as to which the Representative
is exercising the option, the names and denominations in which the Option Units
are to be registered and the time and date at which certificates representing
such Units are to be delivered. The time and date at which certificates for
Option Units are to be delivered shall be determined by the Representative but
shall not be earlier than three nor later than 10 full business days after the
exercise of such option, nor in any event prior to the Closing Date (such time
and date being herein referred to as the "Option Closing Date"). If the date of
exercise of the option is three or more days before the Closing Date, the notice
of exercise shall set the Closing Date as the Option Closing Date. The option
with respect to the Option Units granted hereunder may be exercised only to
cover over-allotments in the sale of the Firm Units by the Underwriters. The
Representative may cancel such option at any time prior to its expiration by
giving written notice of such cancellation to the Company. To the extent, if
any, that the option is exercised, payment for the Option Units shall be made on
the Option Closing Date in New York Clearing House funds and, at the option of
the Representative, by bank wire to an account specified by the Company, or
certified or bank cashier's check drawn to the order of the Company for the
Option Units to be sold by the Company in consideration either of uncertificated
delivery of Option Units or delivery of certificates therefor (which delivery,
if certificated, shall take place in such location in New York, New York as may
be specified by the Representative) to the Representative for the several
accounts of the Underwriters. Except to the extent uncertificated Option Units
are delivered at closing, the certificates for the Option Units will be
delivered in such denominations and in such registrations as the Representative
requests in writing not later than the second full business day prior to the
Option Closing Date, and will be made available for inspection by the
Representative at least one business day prior to the Option Closing Date.
(d) In addition to the sums payable to the Representative as provided
elsewhere herein, the Representative shall be entitled to receive at the
Closing, for itself alone and not as Representative of the Underwriters, as
additional compensation for its services, a warrant for the purchase of up to
110,000 Units at a price of $____ per Unit (120% of the initial public offering
price), upon the terms and subject to adjustment and conversion as described in
the form of the Representative's Warrant filed as an exhibit to the Registration
Statement.
3. OFFERING BY THE UNDERWRITERS.
(a) It is understood that the several Underwriters are to make a public
offering of the Firm Units as soon as the Representative deems it advisable to
do so. The Firm Units are to be initially offered to the public at the initial
public offering price set forth in the Prospectus. The Representative may from
time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Units are purchased pursuant to
Section 2 hereof, the Representative will offer them to the public on the
foregoing terms.
It is further understood that you will act as the Representative for the
Underwriters in the offering and sale of the Units in accordance with an
Agreement Among Underwriters entered into by you and the several other
Underwriters.
16
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with the
several Underwriters that:
(a) The Company will (i) use its best efforts to cause the Registration
Statement to become effective or, if the procedure in Rule 430A of the
Securities Act Regulations is followed, to prepare and timely file with the
Commission under Rule 424(b) of the Securities Act Regulations a Prospectus in a
form approved by the Representative containing information previously omitted at
the time of effectiveness of the Registration Statement in reliance on Rule 430A
of the Securities Act Regulations and (ii) not file any amendment to the
Registration Statement or supplement to the Prospectus of which the
Representative shall not previously have been advised and furnished with a copy
or to which the Representative shall have reasonably objected in writing or
which is not in compliance with the Securities Act Regulations.
(b) The Company will advise the Representative promptly: (i) when the
Registration Statement or any post-effective amendment thereto shall have become
effective; (ii) of receipt of any comments from the Commission; (iii) of any
request of the Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information; and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the use of the Prospectus or of the institution of any
proceedings for that purpose. The Company will use its best efforts to prevent
the issuance of any such stop order preventing or suspending the use of the
Prospectus and to obtain as soon as possible the lifting thereof, if issued.
(c) The Company will file promptly with the Commission any amendment or
supplement to the Registration Statement, any Preliminary Prospectus, the
Prospectus or any Issuer Free Writing Prospectus that may, in the judgment of
the Company or the Representative, be required by the Securities Act or
requested by the Commission.
(d) Prior to filing with the Commission any amendment or supplement to
the Registration Statement, any Preliminary Prospectus, the Prospectus or any
Issuer Free Writing Prospectus, the Company will furnish a copy thereof to the
Representative and counsel for the Underwriters and obtain the consent of the
Representative to the filing.
(e) The Company will cooperate with the Representative in endeavoring
to qualify the Units for sale under the securities laws of such jurisdictions as
the Representative may reasonably have designated in writing and will make such
applications, file such documents, and furnish such information as may be
reasonably required for that purpose; PROVIDED, HOWEVER, that the Company shall
not be required in connection therewith, as a condition thereof, to qualify as a
foreign corporation or to execute a general consent to service of process in any
jurisdiction or subject itself to taxation as doing business in any
jurisdiction. The Company will, from time to time, prepare and file such
statements, reports, and other documents, as are or may be required to continue
such qualifications in effect for so long a period as the Representative may
reasonably request for distribution of the Units and exercise of the Warrants.
17
(f) The Company will deliver to, or upon the order of, the
Representative, from time to time, as many copies of any Preliminary Prospectus
as the Representative may reasonably request. The Company will deliver to, or
upon the order of, the Representative during the period when delivery of a
Prospectus is required under the Securities Act, as many copies of the
Prospectus in final form, or as thereafter amended or supplemented, as the
Representative may reasonably request. The Company shall furnish to the
Representative and counsel for the Underwriters, without charge, signed copies
of the Registration Statement (including all exhibits thereto and amendments
thereof) and to each other Underwriter a copy of the Registration Statement
(without exhibits thereto) and all amendments thereof and, so long as delivery
of a prospectus by an Underwriter or dealer may be required by the Securities
Act or the Securities Act Regulations, as many copies of any preliminary
prospectus and the Prospectus and any amendments thereof and supplements thereto
as the Representative may reasonably request. If applicable, the copies of the
Registration Statement and Prospectus and each amendment and supplement thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(g) The Company will advise the Representative immediately, confirming
such advice in writing, of (i) the receipt of any comments from, or any request
by, the Commission for amendments or supplements to the Registration Statement,
the Preliminary Prospectus, the Prospectus or any Issuer Free Writing
Prospectus, or for additional information with respect thereto, or (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of the
Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus, or
of the suspension of the qualification of the Units for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes and, if the Commission or any other government agency or authority
should issue any such order, to make every reasonable effort to obtain the
lifting or removal of such order as soon as possible; to advise the
Representative promptly of any proposal to amend or supplement the Registration
Statement, the Preliminary Prospectus, the Prospectus or any Issuer Free Writing
Prospectus and to file no such amendment or supplement to which the
Representative shall reasonably object in writing.
(h) The Company will advise the Underwriters promptly of the happening
of any event or development known to the Company within the time during which a
Prospectus relating to the Units (or, in lieu thereof, the notice referred to in
Rule 172(a) of the Securities Act Regulations) is required to be delivered under
the Securities Act Regulations which, in the judgment of the Company or in the
reasonable opinion of the Representative or counsel for the Underwriters, would
require the making of any change in the Prospectus or the Disclosure Package so
that the Prospectus or the Disclosure Package would not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
at any time to amend or supplement the Prospectus or the Disclosure Package to
comply with any law and, during such time, to promptly prepare and furnish to
the Underwriters copies of the proposed amendment or supplement before filing
any such amendment or supplement with the Commission and thereafter promptly
furnish at the Company's own expense to the Underwriters and to dealers, copies
in such quantities and at such
18
locations as the Representative may from time to time reasonably request of an
appropriate amendment or supplement to the Prospectus or the Disclosure Package
so that the Prospectus or the Disclosure Package as so amended or supplemented
will not, in the light of the circumstances when it (or, in lieu thereof, the
notice referred to in Rule 172(a) under the Securities Act Regulations) is so
delivered, be misleading, or so that the Prospectus or the Disclosure Package
will comply with the law.
(i) The Company will make generally available to its security holders,
as soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earnings statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earning statement shall satisfy the requirements of Section
11(a) of the Securities Act and Rule 158 of the Securities Act Regulations and
will advise you in writing when such statement has been so made available.
(j) The Company will, for a period of five years from the Closing Date,
deliver to the Representative copies of annual reports and copies of all other
documents, reports and information furnished by the Company to its stockholders
or filed with any securities exchange pursuant to the requirements of such
exchange or with the Commission pursuant to the Securities Act or the Exchange
Act. The Company will deliver to the Representative similar reports with respect
to significant subsidiaries, as that term is defined in the Securities Act
Regulations, which are not consolidated in the Company's financial statements.
(k) The Company will make no offering, sale, short sale or other
disposition of any shares of Common Stock of the Company or other securities
convertible into or exchangeable or exercisable for shares of Common Stock or
derivatives of Common Stock (or agreement therefor), directly or indirectly, for
a period of ninety days after the date of this Agreement otherwise than
hereunder, or pursuant to contractual obligations existing on the date hereof,
or pursuant to employee benefit plans in effect on the date hereof, or with the
prior written consent of the Representative, which consent will not be
unreasonably withheld.
(l) The Company will use its best efforts to list, subject to notice of
issuance of the Units, the Common Stock and the Warrants on the Nasdaq Capital
Market and to cause such listing to remain in effect with respect to each such
security unless and until: (i) such security expires; (ii) such security is
listed on another exchange of at least comparable reputation; or (iii) the
Company is no longer required to file reports under Section 12 of the Exchange
Act.
(m) The Company will furnish a copy of each proposed Free Writing
Prospectus to the Representative and counsel for the Underwriters and obtain the
consent of the Representative prior to referring to, using or filing with the
Commission any Free Writing Prospectus pursuant to Rule 433(d) under the
Securities Act, other than the Issuer Free Writing Prospectuses, if any,
identified in Schedule II.
19
(n) The Company will comply with the requirements of Rules 164 and 433
of the Securities Act Regulations applicable to any Issuer Free Writing
Prospectus, including timely filing with the Commission, legending and record
keeping, as applicable.
(o) The Company has caused all of its officers and directors and each
holder of its Common Stock outstanding immediately prior to the date hereof
(including holders of securities convertible into or exercisable for Common
Stock) to furnish to you, on or prior to the date of this Agreement, a letter or
letters, in form and substance satisfactory to the Underwriters ("Lock-Up
Agreements"), pursuant to which each such person has agreed not to offer, sell,
sell short or otherwise dispose of any shares of Common Stock or other capital
stock of the Company, or any other securities convertible, exchangeable or
exercisable for Common Stock or derivatives of Common Stock owned by such person
or request the registration for the offer or sale of any of the foregoing (or as
to which such person has the right to direct the disposition) for a period of
one year after the date of this Agreement, directly or indirectly, except with
the prior written consent of the Representative.
(p) Except with the prior written consent of the Representative, for a
period of one year from the date of this Agreement, the Company will refrain
from, directly or indirectly, (i) offering, pledging, selling, contracting to
sell, selling any option or contract to purchase, purchasing any option or
contract to sell, granting any option for the sale of, or otherwise disposing of
or transferring, (or entering into any transaction or device which is designed
to, or could be expected to, result in the disposition by any person at any time
in the future of), any share of Common Stock or any securities convertible into
or exercisable or exchangeable for Common Stock, or filing any registration
statement under the Securities Act with respect to any of the foregoing, or (ii)
entering into any swap or any other agreement or any transaction that transfers,
in whole or in part, directly or indirectly, the economic consequence of
ownership of the Common Stock, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing shall not apply to (A)
issuance of the Units to be sold hereunder and issuance of the Underlying
Securities applicable thereto; (B) issuance of any shares of Common Stock upon
the exercise of warrants or upon conversion of convertible securities that are
described in the Prospectus; (C) grants of options to purchase shares of Common
Stock pursuant to the Company's Equity Incentive Plan as described in the
Prospectus or issuances of Common Stock upon exercise of such options; or (D)
filing of a registration statement to register for resale the securities
issuable on the date of this Agreement to holders of Unsecured Notes, as
described in the Prospectus.
(q) The Company shall apply the net proceeds of its sale of the Units
as set forth in the Prospectus and the Disclosure Package, and shall file such
reports with the Commission with respect to the sale of the Units and the
application of the proceeds therefrom as may be required in accordance with Rule
463 under the Securities Act.
(r) The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Units in such a manner as would
require the Company to register as an investment company under the Investment
Company Act of 1940, as amended (the "1940 Act").
20
(s) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, a registrar for the Common
Stock, and shall comply with the provisions of the Warrant Agreement with
respect to the appointment and maintenance of a Warrant Agent for the Warrants.
(t) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
securities of the Company.
5. COSTS AND EXPENSES.
(a) The Representative shall be entitled to reimbursement from the
Company, for itself alone and not as Representative of the Underwriters, to a
non-accountable expense allowance equal to 3.0% of the gross offering proceeds
from the sale of the Firm Units to the public but not any Units sold pursuant to
the exercise of the over-allotment option, or $_______ assuming _________ Firm
Units to be sold at $____ per Unit. The Representative shall be entitled to
withhold this allowance on the Closing Date related to the purchase of the Firm
Units. The Company shall receive as a credit against this non-accountable
expense allowance, any amounts previously paid to the Representative.
(b) In addition to the payment described in Paragraph (a) of this
Section 5, the Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Company under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting and
auditing fees of the Company; the fees and disbursements of counsel and other
advisors for the Company; the cost of printing and delivering to the
Underwriters copies of the Registration Statement, Preliminary Prospectuses, the
Prospectus, any Issuer Free Writing Prospectus, this Agreement, the Blue Sky
Survey and any supplements or amendments thereto; the filing fees of the
Commission; the filing fees incident to securing the required review and
approval by the NASD Corporate Finance Department of the underwriting terms and
arrangements; the Nasdaq Capital Market application and listing fees; the
Pacific Exchange application and listing fees; the expenses associated with the
placement of tombstone advertisements; the expenses related to "road show"
meetings, including travel, lodging, food and similar expenses; and the
expenses, including the fees and disbursements of counsel for the Underwriters,
incurred in connection with the qualification of the Units under state
securities or Blue Sky laws, to the extent such registration/qualification is
required or recommended by counsel for the Underwriters. Any transfer taxes
imposed on the sale of the Units to the several Underwriters will be paid by the
Company. The Company agrees to pay all costs and expenses of the Underwriters,
including the fees and disbursements of counsel for the Underwriters, incident
to the offer and sale of directed Units by the Underwriters to employees and
persons having business relationships with the Company. Except as set forth
above, the Company shall not, however, be required to pay for any of the
Underwriters' expenses (other than those related to NASD review and approval and
state securities or Blue Sky laws) except that, if this Agreement shall not be
consummated, then the Company shall reimburse the several Underwriters for their
actual accountable out-of-pocket expenses, including fees and disbursements of
counsel, reasonably incurred in connection with investigating, marketing and
proposing to market the
21
Units or in contemplation of performing their obligations hereunder, and any
portion of monies advanced to the Underwriters or the Representative other than
actual out-of-pocket accountable expenses shall be returned to the Company. The
Company shall not in any event be liable to any of the several Underwriters for
damages on account of loss of anticipated profits from the sale by them of the
Units.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS. The several obligations
of the Underwriters to purchase the Firm Units on the Closing Date and the
Option Units, if any, on the Option Closing Date are subject to the accuracy, as
of the Closing Date or the Option Closing Date, as the case may be, of the
representations and warranties of the Company contained herein, and to the
performance by the Company of their covenants and obligations hereunder and to
the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule 424
and Rule 430A of the Securities Act Regulations shall have been made, and any
request of the Commission for additional information (to be included in the
Registration Statement or otherwise) shall have been disclosed to the
Representative and complied with to their reasonable satisfaction. No stop order
suspending the effectiveness of the Registration Statement, as amended from time
to time, shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company, shall be contemplated by the
Commission and no injunction, restraining order, or order of any nature by a
Federal or state court of competent jurisdiction shall have been issued as of
the Closing Date which would prevent the issuance of the Units.
(b) The Representative shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇ LLP, counsel for the Company, dated the Closing Date or the Option
Closing Date, as the case may be, addressed to the Underwriters (and stating
that it may be relied upon by counsel to the Underwriters) to the effect that:
(i) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of California, with
corporate power and authority to own or lease its properties and conduct its
business as described in each of the Registration Statement, the Prospectus and
the Disclosure Package.
(ii) The Subsidiary has been duly organized and is validly existing
as a business entity in good standing under the laws of its jurisdiction of
formation with all requisite power and authority under the laws governing such
entities to own or lease its properties and conduct its business as described in
each of the Registration Statement, the Prospectus and the Disclosure Package.
(iii) The Company and its Subsidiary are duly qualified or licensed
by each jurisdiction in which they conduct their respective businesses and in
which the failure, individually or in the aggregate, to be so licensed could
have a Material Adverse Effect, and the Company and its Subsidiary are duly
qualified, and are in good standing, in each jurisdiction in which they own or
lease real property or maintain an office and in which such qualification is
22
necessary except where the failure to be so qualified and in good standing could
not have a Material Adverse Effect; except as disclosed in both the Prospectus
and the Disclosure Package, the Subsidiary is not prohibited or restricted,
directly or indirectly, from paying dividends to the Company or any other
Company subsidiary, nor from making any other distribution with respect to such
Subsidiary's capital stock nor from repaying to the Company or any other Company
subsidiary any amounts which may from time to time become due under any loans or
advances to such Subsidiary from the Company or such other subsidiary, nor from
transferring its Subsidiary's property or assets to the Company or to such other
subsidiary; other than as disclosed in both the Prospectus and the Disclosure
Package, the Company does not own, directly or indirectly, any capital stock or
other equity securities of any other corporation or any ownership interest in
any partnership, joint venture or other association;
(iv) The Company has authorized and outstanding capital stock as set
forth under the caption "Capitalization" in the Prospectus and the Disclosure
Package; the outstanding shares of Common Stock have been duly authorized and
validly issued and are fully paid and non-assessable; the Units to be sold by
the Company have been duly authorized; the Shares to be sold by the Company as a
component of the Units have been duly authorized and, when issued and delivered
in accordance with the terms of this Agreement, will be validly issued, fully
paid and non-assessable; all of the securities of the Company conform to the
description thereof contained in the Prospectus and the Disclosure Package; the
certificates for the Common Stock and the Warrants are in due and proper form
under California law and comply in all material respects with requirements of
the Nasdaq Capital Market and the Pacific Exchange; no preemptive rights of
shareholders exist with respect to any of the Common Stock or the issuance or
sale thereof pursuant to any applicable statute or the provisions of the
Company's Articles of Incorporation or Bylaws or, to such counsel's best
knowledge, pursuant to any contractual obligation. To counsel's knowledge, all
of the outstanding shares of capital stock of the Subsidiary are directly or
indirectly owned of record and beneficially by the Company.
(v) Except as described in or contemplated by the Prospectus and the
Disclosure Package, to the knowledge of such counsel (a) there are no
outstanding securities of the Company convertible or exchangeable into or
evidencing the right to purchase or subscribe for any shares of capital stock of
the Company and (b) there are no outstanding or authorized options, warrants or
rights of any character obligating the Company to issue any shares of its
capital stock or any securities convertible or exchangeable into or evidencing
the right to purchase or subscribe for any shares of such stock; and except as
described in the Prospectus and the Disclosure Package, to the knowledge of such
counsel, no holder of any securities of the Company or any other person has the
right, contractual or otherwise, which has not been satisfied or effectively
waived, to cause the Company to sell or otherwise issue to them, or to permit
them to underwrite the sale of, any of the Units or the right to have any Common
Stock or other securities of the Company included in the Registration Statement
or the right, as a result of the filing of the Registration Statement, to
require registration under the Securities Act of any shares of Common Stock or
other securities of the Company.
(vi) To the best of such counsel's knowledge, each of the Company
and its Subsidiary has all necessary material licenses, authorizations, consents
and approvals and has made all necessary filings required under any federal,
state or local law, regulation or rule, and
23
has obtained all necessary authorizations, consents and approvals from other
persons, required to conduct their respective businesses, as described in both
the Prospectus and the Disclosure Package; to the best of such counsel's
knowledge, neither the Company nor its Subsidiary is in violation of, in default
under, or has received any notice regarding a possible violation, default or
revocation of any such material license, authorization, consent or approval or
any federal, state, local or foreign law, regulation or decree, order or
judgment applicable to the Company or its Subsidiary;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company as contemplated in the Registration Statement, the
Prospectus and the Disclosure Package. This Agreement constitutes a legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(viii) The Warrant Agreement has been duly authorized, executed and
delivered by the Company and the Warrants have been duly authorized,
authenticated, issued and delivered by the Company as contemplated in the
Registration Statement, the Prospectus, the Disclosure Package and the Warrant
Agreement. The Warrant Agreement and the Warrants constitute legally binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms and, in the case of the Warrants, entitled to the
benefits of the Warrant Agreement subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
(ix) The Warrants are exercisable to purchase the Warrant Shares in
accordance with the terms of the Warrant Agreement; the Warrant Shares initially
issuable upon exercise of the Warrants (including the Warrants underlying the
Units issuable on exercise of the Representative's Warrant) have been duly
authorized and reserved for issuance upon such exercise, and, when issued upon
such exercise in accordance with the terms of the Warrant Agreement, will be
validly issued, fully paid and nonassessable.
(x) The Representative's Warrant has been duly authorized by the
Company. When duly executed, issued and delivered by the Company as contemplated
in this Agreement and the Registration Statement, the Prospectus and the
Disclosure Package, the Representative's Warrant will constitute the legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(xi) The Registration Statement has become effective under the
Securities Act and, to the best of the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Securities Act.
(xii) The Registration Statement, the Prospectus, and the Disclosure
Package comply as to form in all material respects with the requirements of the
Securities Act and the
24
applicable rules and regulations thereunder (except that such counsel need
express no opinion as to the financial statements therein).
(xiii) The statements under the caption "Description of Securities"
in the Registration Statement, the Prospectus and the Disclosure Package, and in
Items 24 and 26 of the Registration Statement, insofar as such statements
constitute a summary of documents referred to therein or matters of law, fairly
summarize in all material respects the information called for with respect to
such documents and matters.
(ivx) Such counsel does not know of any contracts or documents
required to be filed as exhibits to the Registration Statement or described or
summarized in the Registration Statement, the Prospectus and the Disclosure
Package, which have not been so filed, summarized or described as required, and
all such summaries and descriptions, in all material respects, fairly and
accurately set forth the material provisions of such contracts and documents.
(xv) Except as described in or contemplated by the Registration
Statement, the Prospectus and the Disclosure Package, there are no material
actions, suits or proceedings, inquiries, or investigations pending or, to the
best of such counsel's knowledge, threatened against the Company or its
Subsidiary or any of their respective officers and directors or to which the
properties, assets or rights of any such entity are subject, at law or in
equity, before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority, arbitral panel or agency which
are required to be described in the Registration Statement, the Prospectus or
the Disclosure Package but are not so described.
(xvi) To the best of such counsel's knowledge, the Company and its
Subsidiary each owns or possesses adequate licenses or other rights to use all
patents, trademarks, service marks, trade names, copyrights, software and design
licenses, trade secrets, manufacturing processes, other intangible property
rights and know-how (collectively "Intangibles") necessary to entitle the
Company and its Subsidiary to conduct its business as described in both the
Prospectus and the Disclosure Package, and neither the Company, nor its
Subsidiary, has received notice of infringement of or conflict with (and knows
of no such infringement of or conflict with) asserted rights of others with
respect to any Intangibles which could materially and adversely affect the
business, prospects, properties, assets, results of operations or condition
(financial or otherwise) of the Company or its Subsidiary.
(xvii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, the Articles of Incorporation or Bylaws of the
Company, as amended, or any agreement or instrument known to such counsel to
which the Company is a party or by which the Company may be bound.
(xviii) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body is necessary in connection with the execution and delivery of
this Agreement and the consummation of the transactions herein contemplated
(other than as may be required by the NASD or as required by
25
state securities and Blue Sky laws, as to which such counsel need express no
opinion) except such as have been obtained or made.
(ixx) The Company is not, and will not become, as a result of the
consummation of the transactions contemplated by this Agreement, and application
of the net proceeds therefrom as described in the Prospectus, required to
register as an investment company under the 1940 Act.
The opinions set forth in Paragraphs (b) of this Section shall be based on
the federal laws of the United States of America and the laws of the State of
California. Insofar as the laws of any other jurisdiction apply, such counsel
may rely on local counsel in such jurisdictions, provided that in each case such
counsel shall state that they believe that they and the Underwriters are
justified in relying on such other counsel. With respect to factual matters,
counsel for the Company may rely on (i) certificates issued by governmental
agencies, (ii) certificates executed and delivered by an executive officer of
the Company and (iii) the representations and warranties of the Company as set
forth herein, provided that such counsel shall not have actual knowledge that
any information or statements set forth in such certificates or any
representations and warranties contained herein are untrue, inaccurate, wrong or
misleading and such counsel shall specifically state that they believe that the
Underwriters and their counsel may rely on the same. In addition to the matters
set forth above, the opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP shall also state
that such counsel has participated in conferences with officers and other
representatives of the Company, representatives of the Representative and
representatives of the independent certified public accountants of the Company,
at which conferences the contents of the Registration Statement, the Prospectus
and the Disclosure Package and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus, on the basis of the foregoing, no
facts have come to the attention of such counsel which lead such counsel to
believe that (i) the Registration Statement at the time it became effective
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) that the Prospectus as amended or supplemented (except with
respect to the financial statements and notes thereto and other financial data,
as to which such counsel need make no statement) on the date thereof, the
Closing Date or any Option Closing Date, as the case may be; or (iii) the
Disclosure Package as of the Initial Sale Time contained any untrue statement of
a material fact or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief as to the financial statements and notes thereto and other financial data
derived therefrom included in the Registration Statement, the Prospectus or the
Disclosure Package.
(c) The Representative shall have received from ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, a
Professional Corporation ("▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C."), counsel for the
Underwriters, an opinion dated the Closing Date or the Option Closing Date, as
the case may be, substantially to the effect specified in subparagraphs (x) and
(xi) of Paragraph (b) of this Section 6. In rendering such opinion ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, P.C. may rely as to all matters governed other than by the laws of the
State of California or federal laws on the opinion of counsel referred to in
Paragraph
26
(b) of this Section 6. In addition to the matters set forth above, such opinion
shall also include a statement to the effect that nothing has come to the
attention of such counsel that has caused them to believe that; (i) the
Registration Statement at the time it became effective contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
that the Prospectus as amended or supplemented (except with respect to the
financial statements and notes thereto and other financial data, as to which
such counsel need make no statement) on the date thereof, the Closing Date or
any Option Closing Date, as the case may be; or (iii) the Disclosure Package as
of the Initial Sale Time contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no belief as to
the financial statements and notes thereto and other financial data derived
therefrom included in the Registration Statement, the Prospectus or the
Disclosure Package). With respect to such statement, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
may state that their belief is based upon the procedures set forth therein.
(d) If the Units are to be listed only on an exchange or system other
than the New York Stock Exchange, American Stock Exchange or Nasdaq National
Market, the Representative shall have received at or prior to the Closing Date
from ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C. a memorandum or summary, in form and substance
satisfactory to the Representative, with respect to the qualification for
offering and sale by the Underwriters of the Units under the state securities or
Blue Sky laws of such jurisdictions as the Representative may reasonably have
designated to the Company.
(e) The Representative, on behalf of the several Underwriters, shall
have received, on each of the dates hereof, the Closing Date and the Option
Closing Date, as the case may be, a letter dated the date hereof, the Closing
Date or the Option Closing Date, as the case may be, in form and substance
satisfactory to the Representative, of ▇▇▇▇▇▇▇ & White LLP, confirming that it
is an independent registered public accounting firm within the meaning of the
Securities Act and the applicable published Securities Act Regulations
thereunder and stating that in its opinion the financial statements examined by
them and included in the Registration Statement comply in form in all material
respects with the applicable accounting requirements of the Securities Act and
the related published Securities Act Regulations and containing such other
statements and information as is ordinarily included in accountants' "comfort
letters" to Underwriters with respect to the financial statements and certain
financial and statistical information contained in the Registration Statement
and Prospectus.
(f) Prior to the Closing Date and each Option Closing Date (i) no stop
order suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of the Prospectus or any document in the
Disclosure Package shall have been issued, and no proceedings for such purpose
shall have been initiated or threatened, by the Commission, and no suspension of
the qualification of the Units for offering or sale in any jurisdiction, or the
initiation or threatening of any proceedings for any of such purposes, has
occurred; (ii) all requests for additional information on the part of the
Commission shall have been complied with to the reasonable satisfaction of the
Representative; (iii) the Registration Statement shall not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated
27
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and (iv) the Prospectus
and the Disclosure Package shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(g) No amendment or supplement to the Registration Statement, the
Prospectus or any document in the Disclosure Package shall have been filed to
which the Underwriters shall have objected in writing.
(h) The Representative shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
Chief Executive Officer and the Chief Financial Officer of the Company to the
effect that, as of the Closing Date or the Option Closing Date, as the case may
be, each of them severally represents as follows:
(i) The Registration Statement has become effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for such purpose have
been taken or are, to his or her knowledge, contemplated by the Commission;
(ii) The representations and warranties of the Company contained in
Section 1 hereof are true and correct as of the Closing Date or the Option
Closing Date, as the case may be;
(iii) All filings required to have been made pursuant to Rules 424
or 430A under the Securities Act have been made;
(iv) The signers of such certificate have carefully examined the
Registration Statement, the Prospectus, the Disclosure Package and this
Agreement, and that when the Registration Statement became effective and at all
times subsequent thereto up to the Closing Date or the Option Closing Date, as
the case may be, the Registration Statement and the Prospectus, and any
amendments or supplements thereto, contained all material information required
to be included therein by the Securities Act and the Securities Act Regulations,
as the case may be, and in all material respects conformed to the requirements
of the Securities Act and the Securities Act Regulations, as the case may be;
the Registration Statement, the Prospectus and the Disclosure Package, and any
amendments or supplements thereto, did not and do not include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made (in the case of the Prospectus and the
Disclosure Package only), not misleading; and, since the effective date of the
Registration Statement, there has occurred no event required to be set forth in
an amendment or supplement to the Prospectus or the Disclosure Package which has
not been so set forth; and
(v) Since the respective dates as of which information is given in
the Registration Statement, Prospectus and the Disclosure Package, there has not
been any change or development involving a prospective change, whether or not
arising in the ordinary course of business, which has had or might reasonably be
expected to have a Material Adverse Effect.
28
(i) The Company shall have furnished to the Representative such further
certificates and documents confirming the representations and warranties,
covenants and conditions contained herein and related matters as the
Representative may reasonably have requested.
(j) The Units, Common Stock and the Warrants have been approved for
quotation upon notice of issuance of the Units on the Nasdaq Capital Market and
for dual listing on the Pacific Exchange.
(k) The Lock-up Agreements described in Section 4(o) are in full force
and effect.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects reasonably satisfactory to the Representative and to ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, P.C., counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representative by notifying the Company of such termination in writing or by
telegram at or prior to the Closing Date or the Option Closing Date, as the case
may be.
In such event, the Company and the Underwriters shall not be under any
obligation to each other (except to the extent provided in Sections 5 and 9
hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY. The obligations of the
Company to sell and deliver the portion of the Units required to be delivered as
and when specified in this Agreement are subject to the conditions that at the
Closing Date or the Option Closing Date, as the case may be, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and in effect or proceedings therefor initiated or threatened.
8. ABSENCE OF FIDUCIARY RELATIONSHIP. The Company acknowledges and agrees
that:
(a) In connection with the sale of the Units, the Underwriters have
been retained solely to act as underwriters and no fiduciary, advisory or agency
relationship between the Company and the Underwriters has been created in
respect of any of the transactions contemplated by this Agreement, even if the
Underwriters have advised the Company on other matters previously.
(b) The price of the Units set forth in this Agreement was established
following discussions and arms-length negotiations between the Company and the
Representative, and the Company is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement.
29
(c) It has been advised that the Underwriters and their respective
affiliates are engaged in a broad range of transactions which may involve
interests that differ from those of the Company and that the Underwriters have
no obligation to disclose such interests and transactions to the Company by
virtue of any fiduciary, advisory or agency relationship.
(d) It waives, to the fullest extent permitted by law, any claims it
may have against the Underwriters for breach of fiduciary duty or alleged breach
of fiduciary duty and agrees that the Underwriters shall have no liability
(whether direct or indirect) to the Company in respect of such a fiduciary duty
claim or to any person asserting a fiduciary duty claim on behalf of or in right
of the Company, including stockholders, employees or creditors of the Company.
9. INDEMNIFICATION AND CONTRIBUTION
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 the Securities Act or Section 20 of the Exchange Act and the
respective directors, officers, employees and agents of each Underwriter and
control person, against any losses, expenses, damages, liabilities or claims
(including the reasonable cost of investigation) to which such Underwriter or
any such controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, expenses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon: (i)
any breach of any representation, warranty or covenant of the Company contained
herein, (ii) any failure on the part of the Company to comply with any
applicable law, rule or regulation relating to the offering of securities being
made pursuant to the Prospectus, (iii) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in any
amendment thereof), any Issuer Free Writing Prospectus, the Prospectus (the term
Prospectus for the purpose of this Section 9 being deemed to include any
Preliminary Prospectus, the Prospectus and the Prospectus as amended or
supplemented by the Company), (iv) any application or other document, or any
amendment or supplement thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
(domestic or foreign) in order to qualify the Units and underlying Securities
under the securities or blue sky laws thereof or filed with the Commission or
any securities association or securities exchange (each an "Application"), (v)
any omission or alleged omission to state a material fact required to be stated
in any such Registration Statement or necessary to make the statement made
therein not misleading; (vi) any omission or alleged omission to statement a
material fact required to be stated in any Issuer Free Writing Prospectus,
Prospectus or any Application or necessary to make the statements made therein,
in the light of the circumstances under which they were made, not misleading,
(vii) any untrue statement or alleged untrue statement of any material fact
contained in any audio or visual materials used in connection with the marketing
of the Units, including, without limitation, slides, videos, films and tape
recordings; except in the case of (iii), (v) and (vi) above only insofar as any
such loss, expense, liability, damage or claim arises out of or is based upon
any untrue statement or alleged untrue statement or omission or alleged omission
of a material fact contained in and in conformity with information furnished in
writing by the Underwriters through the Representative to the Company expressly
for use in such ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ or Application. The indemnity agreement set forth in this
Section 9(a) shall be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter severally and not jointly will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Section 15 of the Securities Act or Section 20
of the Exchange Act, to the same extent as the foregoing indemnity from the
Company to such Underwriter, but only insofar as such loss, expense, liability,
damage or claim arises out of or is based upon (i) an untrue statement or
alleged untrue statement of a material fact contacted in the Registration
Statement, any amendment thereof, any Issuer Free Writing Prospectus, the
Prospectus, or any Application, (ii) any omission or alleged omission to state a
material fact in connection with such information required to be stated in the
Registration Statement or necessary to make such information not misleading or
(iii) any omission or alleged omission to state a material fact in connection
with such information required to be stated either in any Issuer Free Writing
Prospectus, the Prospectus or any Application or necessary to make such
information, in light of the circumstances under which made, not misleading, in
each case to the extent and only to the extent that such untrue statement or
alleged untrue statement or omission was made in reliance upon and in conformity
with information furnished in writing by such Underwriter through the
Representative to the Company expressly for use therein.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of whom indemnity may be
sought pursuant to this Section 9, such person (the "Indemnified Party") shall
promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Party") in writing. No indemnification provided for in Section
9(a) or (b) shall be available to any party who shall fail to give notice as
provided in this Section 9(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 9(a) or (b). In case any
such proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party and
shall pay as incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing, the
indemnifying party shall pay as incurred (or within 30 days of presentation) the
fees and expenses of the counsel retained by the indemnified party in the event:
(i) the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel; (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them; or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel acceptable to the indemnified party within a reasonable period of time
after notice of commencement of the action. It is understood that the
indemnifying
31
party shall not, in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm for all such indemnified parties. Such firm shall be
designated in writing by you in the case of parties indemnified pursuant to
Section 9(a) and by the Company in the case of parties indemnified pursuant to
Section 9(b). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding in respect of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 9(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Units. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bears to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or the Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 9(d) were determined by PRO
RATA allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 9(d). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in
this Section 9(d) shall be deemed to include any legal or other expenses
reasonably incurred by such
32
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d): (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Units purchased by such
Underwriter; and (ii) no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 9(d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 9 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of: (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any persons
controlling the Company; (ii) acceptance of any Units and payment therefor
hereunder; and (iii) any termination of this Agreement. A successor to any
Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 9.
10. DEFAULT BY UNDERWRITERS. If on the Closing Date or the Option Closing
Date, as the case may be, any Underwriter shall fail to purchase and pay for the
portion of the Units which such Underwriter has agreed to purchase and pay for
on such date (otherwise than by reason of any default on the part of the
Company), you, as Representative of the Underwriters, shall use reasonable
efforts to procure within 36 hours thereafter one or more of the other
Underwriters, or any others, to purchase from the Company such amounts as may be
agreed upon and upon the terms set forth herein, the Firm Units or Option Units,
as the case may be, which the defaulting Underwriter or Underwriters failed to
purchase. If during such 36 hours you, as such Representative, shall not have
procured such other Underwriters, or any others, to purchase the Firm Units or
Option Units, as the case may be, agreed to be purchased by the defaulting
Underwriter or Underwriters, then (a) if the aggregate number of Units with
respect to which such default shall occur does not exceed 10% of the Firm Units
or Option Units, as the case may be, covered hereby, the other Underwriters
shall be obligated, severally, in proportion to the respective numbers of Firm
Units or Option Units, as the case may be, which they are obligated to purchase
hereunder, to purchase the Firm Units or Option Units, as the case may be, which
such defaulting Underwriter or Underwriters failed to purchase or (b) if the
aggregate
33
number of Firm Units or Option Units, as the case may be, with respect to which
such default shall occur exceeds 10% of the Firm Units or Option Units, as the
case may be, covered hereby, the Company or you as the Representative of the
Underwriters will have the right, by written notice given within the next
36-hour period to the parties to this Agreement, to terminate this Agreement
without liability on the part of the non-defaulting Underwriters or of the
Company except to the extent provided in Section 9 hereof. In the event of a
default by any Underwriter or Underwriters, as set forth in this Section 10, the
Closing Date or Option Closing Date, as the case may be, may be postponed for
such period, not exceeding seven days, as you, as Representative, may determine
in order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 10 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
11. NOTICES.
All communications hereunder shall be in writing and, except as otherwise
provided herein, will be mailed, delivered, telecopied or telegraphed and
confirmed as follows:
if to the Underwriters, to
▇▇▇▇▇▇▇ Investment Company, Inc.
▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
with a copy, which shall not constitute notice, to
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
if to the Company, to
American Mold Guard, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
with copy, which shall not constitute notice, to
Morse, Zelnick, Rose & Lander LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
34
12. TERMINATION. This Agreement may be terminated by you by notice to the
Company as follows:
(a) at any time prior to the earlier of (i) the time the Units are
released by you for sale by notice to the Underwriters, or (ii) 11:30 a.m. on
the first business day following the date of this Agreement;
(b) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, in your judgment, there has occurred
any change or development involving a prospective change whether or not arising
in the ordinary course of business that has had or might reasonably be expected
to have a Material Adverse Effect; (ii) any outbreak or escalation of
hostilities or declaration of war or national emergency or other national or
international calamity or crisis or change in economic or political conditions
if the effect of such outbreak, escalation, declaration, emergency, calamity,
crisis or change on the financial markets of the United States would, in your
reasonable judgment, make it impracticable to market the Units or to enforce
contracts for the sale of the Units; (iii) the Dow ▇▇▇▇▇ Industrial Average
shall have fallen by 15 percent or more from its closing price on the day
immediately preceding the date that the Registration Statement is declared
effective by the Commission; (iv) suspension of trading in securities generally
on the New York Stock Exchange or the Nasdaq Capital Market or limitation on
prices (other than limitations on hours or numbers of days of trading) for
securities on either such Exchange; (v) the enactment, publication, decree or
other promulgation of any statute, regulation, rule or order of any court or
other governmental authority which in your opinion materially and adversely
affects or may materially and adversely affect the business or operations of the
Company; (vi) declaration of a banking moratorium by United States or New York
State authorities; (vii) the suspension of trading of the Common Stock or the
Warrants by the Commission or the Nasdaq Capital Market; or (viii) the taking of
any action by any governmental body or agency in respect of its monetary or
fiscal affairs which in your reasonable opinion has a material adverse effect on
the securities markets in the United States; or
(c) as provided in Sections 6 and 10 of this Agreement.
13. SUCCESSORS. This Agreement has been and is made solely for the benefit
of the Underwriters, the Company and their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Units from any Underwriter
shall be deemed a successor or assign merely because of such purchase.
14. INFORMATION PROVIDED BY UNDERWRITERS. The Company and the Underwriters
acknowledge and agree that the only information furnished or to be furnished by
any Underwriter to the Company for inclusion in the Prospectus or the
Registration Statement consists of the information set forth in the last
paragraph on the front cover page (insofar as such information relates to the
Underwriters), legends required by Item 502(b) of Regulation S-B under the
Securities Act and the information under the caption "Underwriting" in the
Prospectus (insofar as such information relates to the Underwriters).
35
15. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or its directors or officers and (c) delivery of and payment for the
Units under this Agreement.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Oregon. All disputes relating to this Underwriting
Agreement shall be adjudicated before a court located in Multnomah County,
Oregon to the exclusion of all other courts that might have jurisdiction.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS)
36
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
AMERICAN MOLD GUARD, INC.
By: ___________________________________
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted as
of the date first above written.
▇▇▇▇▇▇▇ INVESTMENT COMPANY, INC.
As Representative of the several
Underwriters listed on Schedule I
By: ___________________________________
Name:
Title:
37
SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Units
Underwriter to Be Purchased
------------------------------------------------------ -----------------------
▇▇▇▇▇▇▇ Investment Company, Inc. .....................
---------
Total ............................................. 1,100,000
=========
SCHEDULE II
SCHEDULE OF ISSUER FREE WRITING PROSPECTUSES