EX-1.4
FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.
[ ] SHARES OF COMMON STOCK
AND
[ ] REDEEMABLE COMMON STOCK PURCHASE WARRANTS
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FORM OF AGREEMENT AMONG UNDERWRITERS
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, 2004
▇▇▇▇▇▇ Securities, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We understand that Fusion Telecommunications International, Inc., a
Delaware corporation ("Company"), desires to enter into an agreement,
substantially in the form of Exhibit A hereto ("Underwriting Agreement"). The
Underwriting Agreement provides for the sale by the Company to you and the other
prospective Underwriters named in Schedule I to the Underwriting Agreement,
severally and not jointly, of an aggregate of [ ] shares of Common Stock
("Shares") and [ ] Redeemable Common Stock Purchase Warrants ("Warrants"). Each
Warrant entitles the holder to purchase one Share of Common Stock commencing on
the effective date of the Registration Statement (as hereinafter defined) and
expiring on the fifth year anniversary of the effective date of the Registration
Statement. The Warrant is initially exercisable at $[ ] per Share and provides
for the exercise price to increase to one and one-third (1-1/3), rounded up to
the nearest ▇▇▇▇▇ of the initial exercise price (as adjusted) upon the 18-month
anniversary of its issuance, if the Company has had a registration statement
effective for the exercise of the Warrants for the sixty days immediately prior
thereto. The Warrants are redeemable at any time, in whole and not in part, at
any time once they become exercisable, with ▇▇▇▇▇▇ Securities Inc.'s prior
consent, at a price of $.01 per Warrant, upon not less than 30 days' prior
written notice, if the last sale price of the Shares has been at least 200% of
the initial exercise price (as adjusted) on all of the 20 trading days ending on
the third business day prior to the date on which notice of redemption is given.
The foregoing Shares and Warrants are referred to herein as the "Firm
Securities." Pursuant to the Underwriting Agreement between the Company and
▇▇▇▇▇▇ Securities, Inc., as representative of the several Underwriters
("Representative"), the Company will grant to the Underwriters an option to
purchase up to an additional [ ] Shares ("Option Shares") and/or [ ] Warrants
("Option Warrants" and, together with the Option Shares, the "Option
Securities"). The Firm Securities and Options Securities are referred to herein
as the "Securities."
We understand that changes may be made in those who are to be
Underwriters and in the respective number of Securities to be purchased by them,
but that the number of Securities to be purchased by us as set forth in said
Schedule I will not be changed without our consent, except as provided herein or
in the Underwriting Agreement. The parties on whose behalf you execute the
Underwriting Agreement are herein called the "Underwriters."
We desire to confirm the agreement among you, the undersigned, and the
other Underwriters with respect to the purchase of the Securities by the
Underwriters, severally and not jointly, from the Company. The aggregate number
of Securities which any Underwriter will be obligated to purchase from the
Company pursuant to the terms of the Underwriting Agreement is herein called the
"Underwriting Obligation" of that Underwriter.
1. AUTHORITY AND COMPENSATION OF REPRESENTATIVE. We hereby authorize
you, as our representative and on our behalf, (a) to enter into an agreement
with the Company, in substantially the form attached hereto as Exhibit A, but
with such changes therein as in your judgment will not be materially adverse to
the Underwriters, providing for the purchase by us, severally and not jointly,
from the Company, at the purchase price per Security determined as set forth in
said Exhibit A, of the number of Securities set forth opposite our name in
Schedule I to said Exhibit A, and our proportionate share of the Option
Securities which you determine to be purchased; (b) to exercise all the
authority and discretion vested in the Underwriters and in you by the provisions
of the Underwriting Agreement; (c) to take all such action as you in your
discretion may deem necessary or advisable in order to carry out the provisions
of the Underwriting Agreement and of this Agreement, and the sale and
distribution of the Securities; and (d) to determine all matters relating to the
public advertisement of the Securities.
As our share of the compensation for your services hereunder, we will
pay to you, and we authorize you to charge to our account on the Closing Dates
referred to in the Underwriting Agreement, $____ per Share and $____ per Warrant
in respect of the aggregate number of Shares and Warrants which we shall agree
to purchase pursuant to the Underwriting Agreement.
2. PUBLIC OFFERING OF SECURITIES. The sale of Securities to the public
is to be made, as herein provided, as soon after the Registration Statement
relating to the Securities becomes effective as in your judgment is advisable.
The purchase price to be paid by the Underwriters for the Securities and the
initial public offering price have been determined by agreement between you and
the Company. The Securities shall be first offered to the public at the initial
public offering price as so determined ("Initial Public Offering Price") and
shall be offered and sold only on the basis of one share and one warrant (I.E.,
Underwriters will not be permitted to sell the common stock and warrants
separately. You will advise us by facsimile or telephone when the Securities
shall be released for offering and when the Registration Statement relating to
the Securities shall become effective. We agree not to sell any of the
Securities until you have released them for that purpose. We authorize you,
after the initial public offering, to change the public offering price, the
concession, and the re-allowance if, in your sole discretion, such action
becomes desirable by reason of changes in general market conditions or
otherwise. As used herein, the terms "Registration Statement," "Preliminary
Prospectus," and "Prospectus" shall have the meanings ascribed thereto in the
Underwriting Agreement. The public offering price at the time in effect is
herein called the "Offering Price." After notice from you that the Securities
are released for public sale, we will offer to the public in conformity with the
provisions hereof and with the terms of offering set forth in the Prospectus
such of our Securities as you advise us are not reserved. We agree not to offer
or sell any of the Securities to persons over whose accounts we exercise
investment discretion without their specific advance consent.
3. OFFERING TO DEALERS AND RETAIL SALES. We authorize you to reserve
for offering and sale, and on our behalf to sell, to retail purchasers (such
sales being herein called "Retail Sales") and to dealers selected by you (such
dealers, among whom any Underwriter may be included, being herein called
"Selected Dealers") all or any part of our Securities as you, in your sole
discretion, shall determine. Such sales, if any, shall be made (a) in the case
of Retail Sales, at the Offering Price, and (b) in the case of sales to Selected
Dealers, at the Offering Price less such concession as you, in your sole
discretion, shall determine. Except for such sales as are designated by a
purchaser to be for the account
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of a particular Underwriter or Selected Dealer, any sales to Selected Dealers
made for our account shall be as nearly as practicable in the ratio that the
Securities reserved for our account for offering to Selected Dealers bears to
the aggregate of all Securities of all Underwriters so reserved.
You agree to notify us promptly on the date of the public offering as
to the number, if any, of the Securities which we may retain for direct sale by
us. Prior to the termination of the provisions referred to in Section 13 hereof,
you may reserve for offering and sale as hereinbefore provided any Securities
theretofore retained by us remaining unsold, and we may, with your consent,
retain any Securities theretofore reserved by you remaining unsold.
We agree that, from time to time prior to the termination of the
provisions referred to in Section 13 hereof, we shall furnish to you such
information as you may request in order to determine the number of Securities
purchased by us under the Underwriting Agreement which then remain unsold, and
we shall upon your request sell to you for the account of any Underwriter as
many of such unsold Securities as you may designate at the Offering Price, less
all or any part of the concession to Selected Dealers as you, in your sole
discretion, shall determine. The provisions of Section 4 hereof shall not be
applicable in respect of any such sale.
We authorize you to determine the form and manner of any communications
or agreements with Selected Dealers. In the event that there shall be any
agreements with Selected Dealers, you are authorized to act as manager
thereunder and we agree, in such event, to be governed by the terms and
conditions of such agreements. The form of Selected Dealer Agreement attached
hereto as Exhibit B is satisfactory to us.
It is understood that any Selected Dealer to whom an offer may be made
as hereinbefore provided shall be actually engaged in the investment banking or
securities business and shall be either (a) a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD") or (b) a foreign
dealer or institution which is not eligible for membership in the NASD and which
agrees not to make any sales within the United States of America, its
territories or its possessions or to persons who are citizens thereof or
residents therein. Each Selected Dealer shall agree to comply with the
provisions of Rule 2740 of the NASD Conduct Rules and with Rule 2110-01 of the
NASD's Conduct Rules ("Free-Riding Interpretation"). Each foreign Selected
Dealer who is not a member of the NASD also shall agree to comply with the
NASD's Free-Riding Interpretation and to comply, as though it were a member of
the NASD, with Rules 2730, 2740 and 2750 of the NASD's Conduct Rules, and to
comply with Rule 2420 thereof as that Rule applies to a non-member broker or
dealer in a foreign country. The several Underwriters may allow, and the
Selected Dealers, if any, may re-allow, such concession or concessions as you
may determine from time to time on sales of Securities to any qualified dealer,
all subject to the NASD's Conduct Rules.
You, and any of the several Underwriters with your prior consent, may
make purchases or sales of the Securities from or to any of the other
Underwriters, at the Offering Price, less all or any part of the gross spread,
and from or to any of the Selected Dealers at the Offering Price, less all or
any part of the concession to Selected Dealers.
Upon your request, we will advise you of the identity of any dealer to
whom we allow such a discount and any Underwriter or Selected Dealer from whom
we receive such a discount.
4. REPURCHASE IN THE OPEN MARKET. Any Securities sold by us (otherwise
than through you) which shall be contracted for or purchased in the open market
by you on behalf of any Underwriter or
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Underwriters shall be repurchased by us on demand at a price equal to the cost
of such purchase plus commissions and taxes on redelivery. Any Securities
delivered on such repurchase need not be the identical certificates originally
sold by us. In lieu of delivery of such Securities to us, you may sell such
Securities in any manner for our account and charge us with the amount of any
loss or expense or credit us with the amount of any profit, less any expense
resulting from such sale, or charge our account with an amount not in excess of
the concession to Selected Dealers.
5. DELIVERY AND PAYMENT. Upon your request, we shall deliver to you
payment for the Securities to be purchased by us under the Underwriting
Agreement in an amount equal to the Initial Public Offering Price for such
Securities, less the concession to Selected Dealers. Such payment shall be made
in such form and at such time and place as may be specified in such request, and
we authorize you to make payment for such Securities against delivery thereof
for our account hereunder. If any Underwriter is a member of, or clears through
a member of, The Depository Trust Company ("DTC"), you may, in your discretion,
deliver such Underwriter's Securities through the facilities of DTC.
You shall remit to us, as promptly as practicable, the amounts received
by you from Selected Dealers and retail purchasers as payment in respect of
Securities sold by you for our account pursuant to Section 3 hereof for which
payment has been received. Securities purchased by us under the Underwriting
Agreement and not reserved or sold by you for our account pursuant to Section 3
hereof shall be delivered to us as promptly as practicable after receipt by you.
Any Securities purchased by us and so reserved which remain unsold at any time
prior to the settlement of accounts hereunder may, in your discretion, and
shall, upon your request, be delivered to us, but, until termination of the
Selected Dealer Agreement pursuant to the terms thereof and of other selling
arrangements, such delivery shall be for carrying purposes only. In case any
Securities reserved for sale in Retail Sales or to Selected Dealers shall not be
purchased and paid for in due course as contemplated hereby, we agree (a) to
accept delivery when tendered by you of any Securities so reserved for our
account and not so purchased and paid for, and (b) in case we shall have
received payment from you in respect of any such Securities, to reimburse you on
demand for the full amount which you shall have paid us in respect of such
Securities.
In the event of our failure to tender payment for Securities as
provided in the Underwriting Agreement, you shall have the right under the
provisions thereof to arrange for other persons, who may include you and any
other Underwriter, to purchase such Securities which we had agreed to purchase,
but without relieving us from liability for our default.
6. AUTHORITY TO BORROW. We authorize you to advance your funds for our
account (charging current interest rates) and to arrange loans for our account
or the account of the Underwriters for the purpose of carrying out this
Agreement, and in connection therewith to execute and deliver any notes or other
instruments, and to handle or pledge as security therefor all or any part of our
Securities purchased hereunder for our account. Any lender is hereby authorized
to accept your instructions in all matters relating to such loans. Any part of
our Securities so held by you may be delivered to us for carrying purposes and,
if so delivered, will be redelivered to you upon demand.
7. ALLOCATION OF EXPENSES AND LIABILITY. We authorize you to charge our
account with and we agree to pay (a) all transfer taxes on sales made by you for
our account, except as herein otherwise provided; and (b) our proportionate
share (based on our Underwriting Obligation) of all expenses incurred by you in
connection with the purchase, carrying, sale and distribution of the Securities
and all other expenses arising under the terms of the Underwriting Agreement or
this Agreement. Your determination of all such expenses and your allocation
thereof shall be final and conclusive. You may at any time make partial
distributions of credit balances or call for payment of debit balances. Funds
for our account at any time in your hands may be held in your general funds
without accountability for
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interest. As soon as practicable after the termination of this Agreement, the
net credit or debit balance in our account after proper charge and credit for
all interim payments and receipts, shall be paid to or by us, provided that you
may establish such reserve as you, in your sole discretion, shall deem advisable
to cover possible additional expenses chargeable to the several Underwriters.
Notwithstanding any settlement, we will remain liable for any taxes on transfers
for our account and for our proportionate share (based on our Underwriting
Obligations) of all expenses and liabilities that may be incurred for the
accounts of the Underwriters.
8. LIABILITY FOR FUTURE CLAIMS. Neither any statement by you of any
credit or debit balance in our account, nor any reservation from distribution to
cover possible additional expenses relating to the Securities, shall constitute
any representation by you as to the existence or nonexistence of possible
unforeseen expenses of liabilities of, or charges against, the several
Underwriters. Notwithstanding the distribution of any net credit balance to us
or the termination of this Agreement or both, we shall be and remain liable for,
and will pay on demand, (a) our proportionate share (based on our Underwriting
Obligation) of all expenses and liabilities which may be incurred by or for the
accounts of the Underwriters if they are deemed to constitute an association,
unincorporated business, partnership or any separate entity, and (b) any
transfer taxes paid after such settlement on account of any sale or transfer for
our account.
9. STABILIZATION AND OVER-ALLOTMENT. We authorize you (a) to make
purchases and sales of Securities in the open market or otherwise, for long or
short account, and on such terms and at such prices as you, in your sole
discretion, shall deem advisable; (b) in arranging for sales of the Securities,
to over-allot; and (c) either before or after the termination of this Agreement,
to cover any short position or liquidate any long position incurred pursuant to
this Section 9; subject, however, to the applicable rules and regulations of the
Securities and Exchange Commission ("Commission") under the Securities Exchange
Act of 1934, as amended ("1934 Act"). All such purchases and sales and
over-allotments shall be made for the accounts of the several Underwriters as
nearly as practicable in proportion to their respective Underwriting
Obligations; provided, however, that our net position resulting from such
purchases and sales and over-allotment shall not exceed, for either long or
short account, 15% of the aggregate amount which we shall become obligated to
pay in respect of the total number of Securities purchased for our account. We
agree to take up at cost on demand any Securities or Securities purchased for
our account pursuant to this Section 9, and to deliver on demand any such
Securities over-allotted for our account pursuant to this Section 9.
If you effect any stabilizing purchase pursuant to this Section 9, you
will promptly notify us of the date and time when the first stabilizing purchase
was effected, and the date and time when stabilizing was terminated. You will
retain such information as is required to be retained by you "as manager"
pursuant to Rule 17a-2 under the 1934 Act. We will furnish to you not later than
three business days following the date on which stabilizing was commenced such
information as is required by Rule 17a-2(d) and notify you of the date and time
when stabilizing was terminated.
10. OPEN MARKET TRANSACTIONS. We agree that we will not make bids or offers, or
make or induce purchases or sales for our own account or the accounts of
customers, in the open market or otherwise, either before or after the purchase
of the Securities and for either long or short account of any Securities or any
security of the same class and series, or any right to purchase any such
security except (a) as provided in this Agreement, the Underwriting Agreement,
and the Selected Dealer Agreements or otherwise approved by you; (b) in
brokerage transactions not involving solicitation of the customer's order; and
(c) in connection with option and option-related transactions that are
consistent with the "no-action" position set forth in Release No. 17609, as
amended in Release No. 19565, of the Commission under the 1934 Act. We further
agree that we will not lend, either before or after the
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purchase of the Securities, to any customer, Underwriter, Selected Dealer, or to
any other securities broker or dealer, any Securities. Before the completion of
our participation in the distribution (as defined in Regulation M), we will
otherwise comply with Regulation M.
11. BLUE SKY. Before the initial offering by the Underwriters, you will
inform us as to the states and other jurisdictions under the respective
securities or blue sky laws of which it is believed that the Securities have
been qualified for sale or are exempt from such qualification, but you do not
assume any responsibility or obligation as to the accuracy of such information
or as to the right of any Underwriter or dealer to offer or sell the Securities
in any state or other jurisdiction. You agree to file or cause to be filed, on
behalf of the Underwriters, a Further State Notice in respect of the Securities
pursuant to Article 23-A of the General Business Law of the State of New York,
if necessary.
12. DEFAULT BY UNDERWRITERS. Default by one or more Underwriters in
respect of their obligations under the Underwriting Agreement shall not release
us from any of our obligations, or in any way affect the liability of any
defaulting Underwriter to the other Underwriters for damages resulting from such
default. In the event of such default by one or more Underwriters, you are
authorized to increase, pro rata with the other non-defaulting Underwriters, the
amount of Securities which we shall be obligated to purchase from the Company;
provided, however, that the aggregate amount of all such increases for all
non-defaulting Underwriters shall not exceed 10% of the Securities and, if the
aggregate amount of the Securities not taken up by such defaulting Underwriters
exceeds such 10%, you are further authorized, but shall not be obligated, to
arrange for the purchase by other persons, who may include you and other
non-defaulting Underwriters, of all or a portion of the Securities not taken up
by such Underwriters. In the event any such increases or arrangements are made,
the respective amounts of the Securities to be purchased by the non-defaulting
Underwriters and by any such other person or persons shall be taken as the basis
for the Underwriter's Obligations under this Agreement, but this shall not in
any way affect the liability of any defaulting Underwriter to the other
Underwriters for damages resulting from such default.
In the event of default by one or more Underwriters in respect of their
obligations under this Agreement to take and pay for any Securities purchased by
you for their respective accounts pursuant to Section 9 hereof, or to deliver
any such Securities sold or over-allotted by you for their respective accounts
pursuant to any provision of this Agreement, and to the extent that arrangements
shall not have been made by you for other persons to assume the obligations of
such defaulting Underwriter or Underwriters, each non-defaulting Underwriter
shall assume its proportionate share of the aforesaid obligations of each such
defaulting Underwriter without relieving any such defaulting Underwriter of its
liability therefor.
13. TERMINATION. Section 2, the second paragraph and the first sentence
of the third paragraph of Section 3, Section 4, the first sentence of Section 9
(other than clause (c) thereof) and Section 10 hereof will terminate at the
close of business on the forty-fifth calendar day after the effective date of
the Registration Statement, unless extended or sooner terminated as hereinafter
provided. You may extend such provisions, or any of them, for a period not to
exceed thirty additional calendar days by notice to us to such effect. You may
terminate any of such provisions at any time by notice to us, and you may
terminate all such provisions at any time by notice to us to the effect that the
offering provisions of this Agreement are terminated.
14. GENERAL POSITION OF THE REPRESENTATIVE. In taking action under this
Agreement, you shall act only as agent of the several Underwriters. Your
authority shall include the taking of such action as you may deem advisable in
respect of all matters pertaining to any and all offers and sales of the
Securities, including the right to make any modifications which you consider
necessary or desirable in
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the arrangements with Selected Dealers or others. You shall be under no
liability for or in respect of the value of the Securities or the validity or
form thereof, the Registration Statement, the Prospectus, or agreements or other
instruments executed by the Company or others; or for or in respect of the
delivery of the Securities; or for the performance by the Company or others of
any agreement on its or their part; nor shall you as Representative or otherwise
be liable under any of the provisions hereof or for any matters connected
herewith, except for want of good faith, and except for any liability arising
under the Securities Act of 1933, as amended ("1933 Act"); and only obligations
expressly assumed by you as Representative herein shall be implied from this
Agreement. In representing the Underwriters hereunder, you shall act as the
Representative of each of them, respectively. Nothing herein contained shall
constitute the several Underwriters as partners with you or with each other, or
render any Underwriter liable for the commitments of any other Underwriter,
except as otherwise provided in Section 12 hereof and in section 6 of the
Underwriting Agreement. If the Underwriters shall be deemed to constitute a
partnership for Federal income tax purposes, it is the intent of each
Underwriter to be excluded from the application of Subchapter K, Chapter 1,
Subtitle A, of the Internal Revenue Code of 1986, as amended. Each Underwriter
elects to be so excluded and agrees not to take any position inconsistent with
such election. Each Underwriter authorizes you, in your discretion, to execute
and file on behalf of the Underwriters such evidence of election as may be
required by the Internal Revenue Service. The commitments and liabilities of
each of the several Underwriters are several in accordance with their respective
Underwriting Obligations, and are not joint.
15. ACKNOWLEDGMENT OF RECEIPT OF REGISTRATION STATEMENT, ETC. We hereby
confirm that we have examined the Registration Statement relating to the
Securities as heretofore filed by the Company with the Commission and each
amendment thereto, if any, filed through the date hereof, including any
documents filed under the 1934 Act through the date hereof and incorporated by
reference into the Prospectus, that we are willing to be named as an Underwriter
therein and to accept the responsibilities of an Underwriter thereunder, and
that we are willing to proceed as therein contemplated. We confirm that we have
authorized you to advise the Company on our behalf (a) as to the statements to
be included in any Preliminary Prospectus and in the Prospectus under the
heading "Underwriting" insofar as they relate to us; and (b) that there is no
other information about us required to be stated in the Registration Statement
or Prospectus. We understand that the aforementioned documents are subject to
further change and that we will be supplied with copies of any further
amendments or supplements to the Registration Statement, of any document filed
under the 1934 Act after the effective date of the Registration Statement and
before termination of the offering of the Securities by the Underwriters, if
such document is deemed to be incorporated by reference into the Prospectus, and
of any amended or supplemented Prospectus promptly, if and when received by you,
but the making of such changes, amendments and supplements shall not release us
or affect our obligations hereunder or under the Underwriting Agreement.
16. (a) INDEMNITY. We agree to indemnify and hold harmless each other
Underwriter and any person who controls any such Underwriter within the meaning
of Section 15 of the 1933 Act, to the extent that, and upon the terms on which,
we agree to indemnify and hold harmless the Company and other specified persons
as set forth in the Underwriting Agreement. Our indemnity agreement contained in
this Section 16 shall remain in full force and effect, regardless of any
investigation made by or on behalf of such other Underwriter or controlling
person, and shall survive the delivery of and payment for the Securities and the
termination of this Agreement and the similar agreements entered into with the
other Underwriters.
(b) CLAIMS AGAINST UNDERWRITERS. Each Underwriter (including you)
will pay, upon request, as contribution, its proportionate share, based upon its
underwriting obligation, of any loss, claim, damage, or liability, joint or
several, paid or incurred by any Underwriter (including you) to any
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person other than an Underwriter, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus, any amendment or supplement thereto or
any Preliminary Prospectus or any other selling or advertising material approved
by you for use by the Underwriters in connection with the sale of the
Securities, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading (other than an untrue statement or alleged untrue statement or
omission or alleged omission made in conformity with written information
furnished to the Company through you by or on behalf of an Underwriter expressly
for use therein) or relating to any transaction contemplated by this Agreement;
and will pay such proportionate share of any legal or other expense reasonably
incurred by you or with your consent in connection with investigating or
defending against any such loss, claim, damage, or liability, or any action in
respect thereof. In determining the amount of our obligation under this
paragraph, appropriate adjustment may be made by you to reflect any amounts
received by any one or more Underwriters in respect of such claim from the
Company pursuant to section 5 of the Underwriting Agreement or otherwise. There
shall be credited against any amount paid or payable by us pursuant to this
paragraph any loss, claim, damage, liability, or expense which is incurred by us
as a result of any such claim asserted against us, and if such loss, claim,
damage, liability, or expense is incurred by us subsequent to any payment by us
pursuant to this paragraph, appropriate provision shall be made to effect such
credit, by refund or otherwise. If any such claim is asserted, you may take such
action in connection therewith as you deem necessary or desirable, including
retention of counsel for the Underwriters, and in your discretion separate
counsel for any particular Underwriter or group of Underwriters, and the fees
and disbursements of any counsel so retained by you shall be included in the
amounts payable pursuant to this paragraph. In determining amounts payable
pursuant to this paragraph, any loss, claim, damage, liability or expense
incurred by any person who controls any Underwriter within the meaning of
Section 15 of the 1933 Act which has been incurred by reason of such control
relationship shall be deemed to have been incurred by such Underwriter. Any
Underwriter may elect to retain, at its own expense, its own counsel. You may
settle or consent to the settlement of any such claim on advice of counsel
retained by you. Whenever you receive notice of the assertion of any claim to
which the provisions of this paragraph would be applicable, you will give prompt
notice thereof to each Underwriter. If any Underwriter or Underwriters default
in its or their obligation to make any payments under this paragraph, each
non-defaulting Underwriter shall be obligated to pay its proportionate share of
all defaulted payments, based upon the proportion such non-defaulting
Underwriter's Underwriting Obligation bears to the Underwriting Obligations of
all non-defaulting Underwriters. Nothing herein shall relieve a defaulting
Underwriter from liability for its default.
17. CAPITAL REQUIREMENTS. We confirm that the incurrence by us of our
obligations under this Agreement and under the Underwriting Agreement will not
place us in violation of the net capital requirements of Rule 15c3-1 under the
1934 Act or of any applicable rules relating to capital requirements of any
securities exchange to which we are subject.
18. UNDERTAKING TO MAIL PROSPECTUS. We represent to you that we have
taken all action on our part required to have been taken to satisfy the policy
set forth in Release No. 4968 of the Commission under the 1933 Act, including
the distribution in the manner and at or prior to the time set forth in such
release, of copies of the Preliminary Prospectus relating to the Securities (or
if you have so requested, copies of any revised Preliminary Prospectus) to all
persons to whom we expect to mail confirmation of sale.
As contemplated by Rule 15c2-8 under the 1934 Act, you agree to mail a
copy of the Prospectus mentioned in the Underwriting Agreement to any person
making a written request therefor during the period referred to in said rule,
the mailing to be made to the address given in the request. We confirm that we
have delivered all Preliminary Prospectuses and revised Preliminary
Prospectuses, if any,
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required to be delivered under the provisions of Rule 15c2-8 and agree to
deliver all Prospectuses required to be delivered thereunder. We acknowledge
that the copies of the Preliminary Prospectus furnished to us have been
distributed to dealers who have been notified of the foregoing requirements
pertaining to the delivery of Preliminary Prospectuses and Prospectuses. You
have heretofore delivered to us such number of copies of Preliminary
Prospectuses as have been reasonably requested by us, receipt of which is hereby
acknowledged, and will deliver such number of copies of Prospectuses as will be
reasonably requested by us.
19. MISCELLANEOUS. Any notice hereunder from you to us or from us to
you shall be deemed to have been duly given if sent by registered mail, telegram
or facsimile transmission, to us at our address as set forth in our
Underwriters' Questionnaire previously delivered to you, or to you c/▇ ▇▇▇▇▇▇
Securities, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
We understand that you are a member in good standing of the NASD. We
hereby confirm that we are actually engaged in the investment banking or
securities business and are either (a) a member in good standing of the NASD and
will comply with Rule 2740 of the NASD Conduct Rules and the Free-Riding
Interpretations or (b) a foreign dealer or institution which is not eligible for
membership in the NASD and which agrees (i) not to make any sales within the
United States of America, its territories, or its possessions, or to persons who
are citizens thereof or residents therein (except that we may participate in
sales to Selected Dealers and others under Section 3 of this Agreement); (ii)
that any and all sales shall be in compliance with the NASD's Free-Riding
Interpretations; (iii) to comply, as though it were a member of the NASD, with
Rules 2730, 2740 and 2750 of the NASD's Conduct Rules, and to comply with Rule
2420 thereof as that Rule applies to a non-member broker or dealer in a foreign
country. In connection with sales and offers to sell Securities made by us
outside the United States, its territories, and possessions (a) we will either
furnish to each person to whom any such sale or offer is made a copy of the then
current Preliminary Prospectus or the Prospectus, as the case may be, or inform
such person that such Preliminary Prospectus or Prospectus will be available
upon request, and (b) we will furnish to each person to whom any such sale or
offer is made such prospectus, advertisement, or other offering document
containing information relating to the Securities or the Company as may be
required under the law of the jurisdiction in which such sale or offer is made.
Any prospectus, advertisement, or other offering document furnished by us to any
person in accordance with the preceding sentence and any such additional
offering material as we may furnish to any person shall (i) comply in all
respects with the law of the jurisdiction in which it is so furnished, (ii) be
prepared and so furnished at our sole risk and expense and (iii) not contain
information relating to the Securities or the Company which is inconsistent in
any respect with the information contained in the then current Preliminary
Prospectus or in the Prospectus, as the case may be. This instrument may be
signed by or on behalf of the Underwriters in one or more counterparts, each of
which shall constitute an original and all of which together shall constitute
one and the same agreement among all the Underwriters, and shall become
effective at such time as all the Underwriters shall have signed or have had
signed on their behalf such counterparts and you shall have confirmed all such
counterparts. You may confirm such counterparts by facsimile signature.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to the choice of law or
conflicts of laws principles thereof.
9
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to us a counterpart.
Very truly yours,
------------------------------
As Attorney-in-Fact for each
of the Several Underwriters
named in Schedule I to the
Underwriting Agreement
Confirmed as of the date first above written:
As Representative
▇▇▇▇▇▇ Securities, Inc.
By:
--------------------------
Title:
----------------------
10
EXHIBIT A
Form of Underwriting Agreement
between
Fusion Telecommunications International, Inc.
and
▇▇▇▇▇▇ Securities, Inc.
11
EXHIBIT B
Form of Selected Dealer Agreement
12