WESTSTAR ENVIRONMENTAL, INC.
800,000 Units
UNDERWRITING AGREEMENT
March , 2001
Xxxxxx Partners, Inc.
0000 Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Gentlemen:
Weststar Environmental, Inc., a corporation organized under the laws
of the State of Florida, together with its subsidiaries (the "Company"), hereby
confirms its agreement with Xxxxxx Partners, Inc., the managing underwriter of
its securities (the "Underwriter" and together with the several underwriters the
"Underwriters"), as set forth below.
The Company proposes to issue and sell to the Underwriters, severally
and not jointly, 800,000 units, each unit consisting of one share of the
Company's common stock, $.001 par value per share (the "Common Stock"), and one
class A redeemable Common Stock purchase warrant (the "Warrants," and
collectively with the Common Stock, the "Units"). The Units being sold by the
Company are referred to as the "Firm Units." The Units will be sold to the
public at a price of $7.50 per Unit and the Underwriters will be entitled to a
discount of ten percent (10%) (resulting in a purchase price of $6.75 per Unit).
The Underwriters shall also be entitled to a three percent (3%) non-accountable
expense allowance as described herein.
In addition, for the sole purpose of covering over-allotments from the
sale of the Firm Units, the Company proposes to grant to the Underwriters an
option to purchase an additional 120,000 Units (the "Firm Option Units" or the
"Option Units"), all as provided in Section 2(c) of this agreement (the
"Agreement") and to issue to you the Underwriter's Warrant (as defined in
Section 2 hereof) to purchase certain further additional Units. The Firm Units
and the Option Units are collectively referred to herein as the "Securities."
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriter
that:
(a) A registration statement on Form SB-2 (File No.
333-43356), with respect to the Securities and the Underwriter's Warrant
Securities (as hereinafter defined), including a prospectus subject to
completion, has been filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act "), and one or more amendments to that registration statement may have been
so filed. Copies of such registration statement and of each amendment heretofore
filed by the Company with the Commission have been delivered to the
Underwriters. After the execution of this Agreement, the Company will file with
the Commission either (i) if the registration statement, as it may have been
amended, has been declared by the Commission to be effective under the Act, a
prospectus in the form most recently included in that registration statement
(or, if an amendment thereto shall have been filed, in such amendment), with
such changes or insertions as are required by Rule 430A under the Act or
permitted by Rule 424(b) under the Act and as have been provided to and approved
by the Underwriters prior to the execution of this Agreement, or (ii) if that
registration statement, as it may have been amended, has not been declared by
the Commission to be effective under the Act, an amendment to that registration
statement, including a form of prospectus, a copy of which amendment has been
furnished to and approved by the Underwriter prior to the execution of this
Agreement. The Company also may file a related registration statement with the
Commission pursuant to Rule 462(b) under the Act for purposes of registering
certain additional Securities, which registration statement shall become
effective upon filing with the Commission (the "Rule 462(b) Registration
Statement"). As used in this Agreement, the term "Registration Statement" means
that registration statement, as amended at the time it was or is declared
effective, and any amendment thereto that was or is thereafter declared
effective, including all financial schedules and exhibits thereto and any
information omitted therefrom pursuant to Rule 430A under the Act and included
in the Prospectus (as hereinafter defined), together with any Rule 462(b)
Registration Statement; the term "Preliminary Prospectus" means each prospectus
subject to completion filed with the Registration Statement (including the
prospectus subject to completion, if any, included in the Registration Statement
at the time it was or is declared effective); and the term "Prospectus" means
the prospectus first filed with the Commission pursuant to Rule 424(b) under the
Act or, if no prospectus is so filed pursuant to Rule 424(b), the prospectus
included in the Registration Statement. The Company has caused to be delivered
to the Underwriters copies of each Preliminary Prospectus and has consented to
the use of those copies for the purposes permitted by the Act. If the Company
has elected to rely on Rule 462(b) and the Rule 462(b) Registration Statement
has not been declared effective, then (i) the Company has filed a Rule 462(b)
Registration Statement in compliance with and that is effective upon filing
pursuant to Rule 462(b) and has received confirmation of its receipt and (ii)
the Company has given irrevocable instructions for transmission of the
applicable filing fee in connection with the filing of the Rule 462(b)
Registration Statement, in compliance with Rule 111 promulgated under the Act or
the Commission has received payment of such filing fee.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When each Preliminary
Prospectus and each amendment and each supplement thereto was filed with the
Commission it (i) contained all statements required to be stated therein, in
accordance with, and complied with the requirements of, the Act and the rules
and regulations of the Commission thereunder and (ii) did not include 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. When the Registration Statement was or is
declared effective, it (i) contained or will contain all statements
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required to be stated therein in accordance with, and complied or will comply
with the requirements of, the Act and the rules and regulations of the
Commission thereunder and (ii) did not or will not include any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus and each amendment or
supplement thereto is filed with the Commission pursuant to Rule 424(b) (or, if
the Prospectus or such amendment or supplement is not required so to be filed,
when the Registration Statement containing such Prospectus or amendment or
supplement thereto was or is declared effective) and on the Firm Closing Date
and any Option Closing Date (as each such term is hereinafter defined), the
Prospectus, as amended or supplemented at any such time, (i) contained or will
contain all statements required to be stated therein in accordance with, and
complied or will comply with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not include
any statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The foregoing provisions of this paragraph (b)
do not apply to statements or omissions made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment or supplement thereto
in reliance upon and in conformity with written information furnished to the
Company by the Underwriters specifically for use therein.
(c) The Company is duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation, and duly qualified or authorized to transact business as a
foreign corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its businesses require
such qualification or authorization.
(d) The Company has full corporate power and authority, and
all necessary material authorizations, approvals, orders, licenses, certificates
and permits of and from all governmental regulatory authorities, to own or lease
its property and conduct its business as now being conducted and as proposed to
be conducted as described in the Registration Statement and the Prospectus (and,
if the Prospectus is not in existence, the most recent Preliminary Prospectus).
(e) Except as set forth in the Prospectus, at the date of the
Closing, the Company does not own, directly or indirectly, an interest in any
corporation, partnership, limited liability company, joint venture, trust or
other business entity.
(f) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus (and, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). All of the issued shares of
capital stock of the Company, have been duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive rights. There are no
outstanding options, warrants or other rights granted by the Company to purchase
shares of its Common Stock or other securities, other than as described in the
Prospectus (and, if the Prospectus is not in existence, the most recent
Preliminary Prospectus). The Firm Units have been duly authorized, by all
necessary corporate action on the part of the Company and, when the Firm Units
are issued and delivered to and paid for by the Underwriter pursuant to this
Agreement, the Firm Units, including the Common Stock and Warrants, will be
validly issued, fully paid, nonassessable and free of preemptive rights and will
conform to the description thereof in the Prospectus (and, if
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the Prospectus is not in existence, the most recent Preliminary Prospectus).
When the Common Stock underlying the Warrants contained in the Firm Units is
issued and delivered to and paid for by the holder thereof in accordance with
the terms of shuch Warrants, such shares of Common Stock will be validly issued,
fully paid, nonassessable and free of preemptive rights and will conform to the
description thereof in the Prospectus. No holder of outstanding securities of
the Company is entitled as such to any preemptive or other right to subscribe
for any of the Securities, and no person is entitled to have securities
registered by the Company under the Registration Statement or otherwise under
the Act other than as described in the Prospectus (and, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(g) The capital stock of the Company conforms to the
description thereof contained in the Prospectus (and, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(h) All issuances of securities of the Company have been
effected pursuant to an exemption from the registration requirements of the Act.
No compensation was paid to or on behalf of any member of the National
Association of Securities Dealers, Inc. ("NASD"), or any affiliate or employee
thereof, in connection with any such issuance.
(i) The financial statements of the Company included in the
Registration Statement and the Prospectus (and, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) fairly present the financial
position of the Company as of the dates indicated and the results of operations
of the Company for the periods specified. Such financial statements have been
prepared in accordance with accounting principles generally accepted in effect
in the United States of America, consistently applied, except to the extent that
certain footnote disclosures regarding unaudited interim periods may have been
omitted in accordance with the applicable rules of the Commission under the
Securities Exchange Act of 1934, as amended (the "1934 Act"). The financial data
set forth under the caption "Summary Financial Information" in the Prospectus
(and, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) fairly present, on the basis stated in the Prospectus (or such
Preliminary Prospectus), the information included therein.
(j) Xxxxxx & Company LLC has audited the financial statements
of the Company as of December 31, 1998 and 1999, and Reddish & White, C.P.A.'s
has audited the financial statements of Pipeline Contractors, Inc., Wealing
Brothers, Inc. and Village Ventures, Inc. for the year ended December 31, 1999,
and each has delivered their report with respect to the financial statements
included in the Registration Statement and the Prospectus (and, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), and are
independent public accountants with respect to the Company as required by the
Act and the applicable rules and regulations thereunder.
(k) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus (and, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), (i) except as
otherwise contemplated therein, there has been no material adverse change in the
business, operations, condition (financial or otherwise), earnings or prospects
of the Company, whether or not arising in the ordinary course of business, (ii)
except as otherwise stated therein, there have been no transactions entered into
by the Company and no commitments made by the Company that, individually or in
the aggregate, are material with respect to the Company, (iii) there has not
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been any change in the capital stock or indebtedness of the Company, and
(iv) there has been no dividend or distribution of any kind declared, paid or
made by the Company in respect of any class of its capital stock.
(l) The Company has full corporate power and authority to
enter into and perform its obligations under this Agreement, the agreement
pursuant to which the Warrants are to be issued (the "Warrant Agreement") and
the Underwriter's Warrant Agreement (as hereinafter defined). The execution and
delivery of this Agreement, the Warrant Agreement and the Underwriter's Warrant
Agreement have been duly authorized by all necessary corporate action on the
part of the Company and this Agreement, the Warrant Agreement and the
Underwriter's Warrant Agreement have each been duly executed and delivered by
the Company and each is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and other similar laws affecting creditors'
rights generally and by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law), and except as
rights to indemnity and contribution under this Agreement may be limited by
applicable law. The issuance, offering and sale by the Company to the
Underwriters of the Securities pursuant to this Agreement or the Underwriter's
Securities pursuant to the Underwriter's Warrant Agreement, the compliance by
the Company with the provisions of this Agreement and the Underwriter's Warrant
Agreement, and the consummation of the other transactions contemplated by this
Agreement and the Underwriter's Warrant Agreement do not (i) require the
consent, approval, authorization, registration or qualification of or with any
court or governmental or regulatory authority, except such as have been obtained
or may be required under state securities or Blue Sky laws and, if the
registration statement filed with respect to the Securities (as amended) is not
effective under the Act as of the time of execution hereof, such as may be
required (and shall be obtained as provided in this Agreement) under the Act, or
(ii) conflict with or result in a breach or violation of, or constitute a
default under, any material contract, indenture, mortgage, deed of trust, loan
agreement, note, lease or other material agreement or instrument to which the
Company is a party or by which the Company or any of its property is bound or
subject, or the certificate of incorporation or by-laws of the Company, or any
statute or any rule, regulation, judgment, decree or order of any court or other
governmental or regulatory authority or any arbitrator applicable to the
Company.
(m) No legal or governmental proceedings are pending to which
the Company is a party or to which the property of the Company is subject, and
no such proceedings have been threatened against the Company or with respect to
any of its property, except such as are described in the Prospectus (and, if the
Prospectus is not in existence, the most recent Preliminary Prospectus). No
contract or other document is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement that is not described therein (and, if the Prospectus is not in
existence, in the most recent Preliminary Prospectus) or filed as required.
(n) The Company is not in (i) violation of its certificate of
incorporation, by-laws or other governing documents, (ii) violation in any
material respect of any law, statute, regulation, ordinance, rule, order,
judgment or decree of any court or any governmental or regulatory authority
applicable to it, or (iii) other than as described in the Prospectus, default in
any material respect in the performance or observance of any obligation,
agreement, covenant or condition contained in any
5
material contract, indenture, mortgage, deed of trust, loan agreement, note,
lease or other material agreement or instrument to which it is a party or by
which it or any of its property may be bound or subject, and no event has
occurred which with notice or lapse of time or both would constitute such a
default.
(o) The Company currently owns or possesses adequate rights to
use all intellectual property, including all trademarks, service marks, trade
names, copyrights, inventions, know-how, trade secrets, proprietary
technologies, processes and substances, or applications or licenses therefor,
that are described in the Prospectus (and if the Prospectus is not in existence,
the most recent Preliminary Prospectus), and any other rights or interests in
items of intellectual property as are necessary for the conduct of the business
now conducted or proposed to be conducted by them as described in the Prospectus
(or, such Preliminary Prospectus), and, except as disclosed in the Prospectus
(and such Preliminary Prospectus), the Company is not aware of the granting of
any patent rights to, or the filing of applications therefor by, others, nor is
the Company aware of, nor has the Company received notice of, infringement of or
conflict with asserted rights of others with respect to any of the foregoing.
All such intellectual property rights and interests are (i) valid and
enforceable and (ii) to the best knowledge of the Company, not being infringed
by any third parties.
(p) The Company possesses adequate licenses, orders,
authorizations, approvals, certificates or permits issued by the appropriate
federal, state or foreign regulatory agencies or bodies necessary to conduct its
business as described in the Registration Statement and the Prospectus (and, if
the Prospectus is not in existence, the most recent Preliminary Prospectus),
and, except as disclosed in the Prospectus (and, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), there are no pending or, to
the best knowledge of the Company, threatened, proceedings relating to the
revocation or modification of any such license, order, authorization, approval,
certificate or permit.
(q) The Company has good and marketable title to all of the
properties and assets reflected in the Company's financial statements or as
described in the Registration Statement and the Prospectus (and, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), subject
to no lien, mortgage, pledge, charge or encumbrance of any kind, except those
reflected in such financial statements or as described in the Registration
Statement and the Prospectus (and such Preliminary Prospectus). Except as
disclosed in the Prospectus, the Company occupies its leased properties under
valid and enforceable leases conforming to the description thereof set forth in
the Registration Statement and the Prospectus (and such Preliminary Prospectus).
(r) The Company is not and does not intend to conduct its
business in a manner in which it would be an "investment company" as defined in
Section 3(a) of the Investment Company Act of 1940 (the "Investment Company
Act").
(s) The Company has obtained and delivered to the Underwriter
the agreements (the "Lock-up Agreements") with the officers, directors and
principal shareholders of the Company substantially to the effect that, among
other things, each such person will not, commencing on the date that the
Registration Statement is declared effective by the SEC (the "Effective Date")
and continuing for a period of twelve months with respect to the shareholders
and up to five years with respect to the officers, directors and principal
shareholders thereafter, without the prior written
6
consent of the Underwriter, directly or indirectly, publicly sell, offer or
contract to sell or grant any option to purchase, transfer, assign or pledge, or
otherwise encumber, or dispose of any shares of Common Stock now or hereafter
owned by such person and that the purchaser or transferee in any private sale
agrees to be bound by the Lock-Up Agreement.
(t) No labor dispute with the employees of the Company exists,
is threatened or, to the best of the Company's knowledge, is imminent that could
result in a material adverse change in the condition (financial or otherwise),
business, prospects, net worth or results of operations of the Company, except
as described in or contemplated by the Prospectus (and, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(u) The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which it is engaged; the Company
has not been refused any insurance coverage sought or applied for; and the
Company has no 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 would not materially and adversely affect the condition (financial or
otherwise), business, prospects, net worth or results of operations of the
Company, except as described in or contemplated by the Prospectus (and, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(v) The Underwriter's Warrant (as hereinafter defined) will
conform to the description thereof in the Registration Statement and in the
Prospectus (and, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and, when sold to and paid for by the Underwriter in
accordance with the Underwriter's Warrant Agreement, will have been duly
authorized and validly issued and will constitute valid and binding obligations
of the Company entitled to the benefits of the Underwriter's Warrant Agreement.
The shares of Common Stock and warrants issuable upon exercise of the
Underwriter's Warrant (the "Underwriter's Warrant Units") have been duly
authorized and reserved for issuance upon exercise of the Underwriter's Warrant
by all necessary corporate action on the part of the Company and, such shares
when issued and delivered and paid for upon such exercise in accordance with the
terms of the Underwriter's Warrant Agreement and the Underwriter's Warrant,
respectively, will be validly issued, fully paid, nonassessable and free of
preemptive rights and will conform to the description thereof in the Prospectus
(and, if the Prospectus is not in existence, the most recent Preliminary
Prospectus). The shares of Common Stock issuable upon the exercise of the
Warrants included in the Underwriter's Warrant Units when issued and delivered
and paid for upon such exercise in accordance with the terms of the warrants,
will be validly issued, fully paid, nonassessable and free of preemptive rights
and will conform to the description thereof in the Prospectus (and, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(w) No person has acted as a finder in connection with, or is
entitled to any commission, fee or other compensation or payment for services as
a finder for or for originating, or introducing the parties to, the transactions
contemplated herein and the Company will indemnify the Underwriter with respect
to any claim for finder's fees in connection herewith. Except as set forth in
the Registration Statement and the Prospectus (and, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), the Company has no
management or financial consulting agreement
7
with anyone. No promoter, officer, director or stockholder of the Company is,
directly or indirectly, affiliated or associated with an NASD member and no
securities of the Company have been acquired by an NASD member, except as
previously disclosed in writing to the Underwriter.
(x) The Company has filed all federal, state, local and
foreign tax returns which are required to be filed through the date hereof, or
has received extensions thereof, and has paid all taxes shown on such returns
and all assessments received by it to the extent that the same are material and
have become due.
(y) Neither the Company nor any director, officer, agent,
employee or other person associated with or acting on behalf of the Company has,
directly or indirectly: used any corporate funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses relating to political activity;
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; violated any provision of the Foreign Corrupt Practices Act of
1977, as amended; or made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment. No transaction has occurred between or
among the Company and any of its officers or directors or any affiliates of any
such officer or director, that is required to be described in and is not
described in the Registration Statement and the Prospectus.
(z) Neither the Company nor any of its officers, directors or
affiliates (as defined in the Regulations), has taken or will take, directly or
indirectly, prior to the completion of the Offering, any action designed to
stabilize or manipulate the price of any security of the Company, or which has
caused or resulted in, or which might in the future reasonably be expected to
cause or result in, stabilization or manipulation of the price of any security
of the Company, to facilitate the sale or resale of any of the Securities or the
Option Securities.
(aa) The operations of the Company have been conducted in
accordance with all applicable laws, regulations and other requirements of all
governmental bodies having jurisdiction over the Company, including, without
limitation, all such laws, regulations and requirements relating to antitrust,
consumer protection, currency exchange, equal opportunity, health, pollution or
protection of the environment, occupational safety or pension, except where the
failure so to comply would not individually or in the aggregate have a material
adverse effect on the business or financial condition of the Company. The
Company has all licenses, permits, orders or approvals from governmental bodies
required for the conduct of it business, and the Company is not in violation of
any such license, permit, order or approval. All such licenses, permits, orders
and approvals are in full force and effect, and no suspension or cancellation
thereof has been threatened.
(bb) The Company has obtained all permits, licenses and other
authorizations which are required with respect to the Company under all
applicable laws, regulations and other requirements of governmental bodies
relating to pollution or protection of the environment, including laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, or hazardous or toxic materials or wastes into ambient air,
surface water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants or hazardous or toxic material or wastes,
except where the failure to have such permits, licenses and other authorizations
would not individually or in the aggregate have a materially adverse effect on
the business or financial
8
condition of the Company. The Company is in full compliance with all terms and
conditions of the required permits, licenses and authorizations, and are also in
full compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
those laws or contained in any regulation, code, plan, order, decree, judgment,
notice or demand letter issued, entered, promulgated or approved thereunder. The
Company is not aware of, nor has it received notice of, any past, present or
future events, conditions, circumstances, activities, practices, incidents,
actions or plans which may interfere with or prevent continued compliance, or
which may give rise to any common law or legal liability, or otherwise form the
basis of any claim, action, suit, proceedings, hearing or investigation, based
on or related to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling, or the emission, discharge, release
or threatened release into the environment, of any pollutant, contaminant, or
hazardous or toxic material or waste.
2. Purchase, Sale and Delivery of the Securities and the
Underwriter's Warrants.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to the
Underwriter, and the Underwriter agrees, to purchase from the Company, the
number of Firm Units as set forth opposite its name on Schedule 1 annexed
hereto, at a purchase price of $6.75 per Unit.
(b) Certificates in definitive form for the Firm Securities
that the Underwriters have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Underwriters request upon notice to the Company at least 48 hours prior to the
Firm Closing Date, shall be delivered by or on behalf of the Company to the
Underwriter, against payment by or on behalf of the Underwriters of the purchase
prices therefor by wire transfer of immediately available funds to a bank
account specified by the Company. Such delivery of the Firm Securities shall be
made at the offices of Sichenzia, Ross & Xxxxxxxx LLP, counsel for the
Underwriter, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Eastern Standard
Time on [DAY], [DATE] 2000, within three (3) business days from the Effective
Date, or at such other place, time or date as the Underwriter and the Company
may agree upon, such time and date of delivery against payment being herein
referred to as the "Firm Closing Date". The Company will make such certificates
for the Firm Securities available for checking and packaging by the Underwriter,
at such offices as may be designated by the Underwriter, at least 24 hours prior
to the Firm Closing Date. In lieu of physical delivery, the closing may occur by
"DTC" delivery.
(c) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as contemplated
by the Prospectus, the Company hereby grants to the Underwriter an option to
purchase any or all of the Option Units, which options are exercisable by the
Underwriter on behalf of and for the account of the Underwriter. The purchase
price to be paid for any of the Option Units shall be the same price per share
for the Firm Securities set forth above in paragraph (a) of this Section 2. The
option granted hereby may be exercised as to all or any part of the Option Units
from time to time within 45 calendar days after the Firm Closing Date. The
Underwriter shall not be under any obligation to purchase any of the Option
Units prior to the exercise of such option. The Underwriter may from time to
time exercise the option granted hereby by giving notice in writing or by
telephone (confirmed in writing) to the Company setting
9
forth the aggregate number of Option Units as to which the Underwriter is then
exercising the option and the date and time for delivery of and payment for such
Option Units. Any such date of delivery shall be determined by the Underwriter
but shall not be earlier than two business days or later than three business
days after such exercise of the option and, in any event, shall not be earlier
than the Firm Closing Date. The time and date set forth in such notice, or such
other time on such other date as the Underwriter and the Company may agree upon,
is herein called the "Option Closing Date" with respect to such Option Units.
Upon exercise of the option as provided herein, the Company shall become
obligated to sell to the Underwriter, and, subject to the terms and conditions
herein set forth, the Underwriter shall become obligated to purchase from the
Company, the Option Units as to which the Underwriter is then exercising its
option. If the option is exercised as to all or any portion of the Option Units,
certificates in definitive form for such Option Units, and payment therefor,
shall be delivered on the related Option Closing Date in the manner, and upon
the terms and conditions, set forth in paragraph (b) of this Section 2, except
that reference therein to the Firm Securities and the Firm Closing Date shall be
deemed, for purposes of this paragraph (c), to refer to such Option Units and
Option Closing Date, respectively.
(d) On the Firm Closing Date, the Company will further issue
and sell to the Underwriter or, at the direction of the Underwriter, to bona
fide officers of the Underwriter, for an aggregate purchase price of $100.00,
warrants to purchase Units (the "Underwriter's Warrant") entitling the holders
thereof to purchase an aggregate of 80,000 Units (which include modified
Warrants) for a period of four years, such period to commence on the first
anniversary of the Effective Date. The Underwriter's Warrant shall be
exercisable at a price equal to 165% of the public offering price of the Units,
and shall contain terms and provisions more fully described herein below and as
set forth more particularly in the warrant agreement relating to the
Underwriter's Warrant to be executed by the Company on the Effective Date (the
"Underwriter's Warrant Agreement"), including, but not limited to, (i) customary
anti-dilution provisions in the event of stock dividends, split mergers, sales
of all or substantially all of the Company's assets, sales of stock below then
prevailing market or exercise prices and other events, and (ii) prohibitions of
mergers, consolidations or other reorganizations of or by the Company or the
taking by the Company of other action during the five-year period following the
Effective Date unless adequate provision is made to preserve, in substance, the
rights and powers incidental to the Underwriter's Warrant. As provided in the
Underwriter's Warrant Agreement, the Underwriter may designate that the
Underwriter's Warrant be issued in varying amounts directly to bona fide
officers of the Underwriter. As further provided, no sale, transfer, assignment,
pledge or hypothecation of the Underwriter's Warrant shall be made for a period
of 12 months from the Effective Date, except (i) by operation of law or
reorganization of the Company, or (ii) to the Underwriter and bona fide
partners, officers (not directors)of the Underwriter and selling group members.
3. Offering by the Underwriter. The Underwriter proposes to offer
the Firm Securities for sale to the public upon the terms set
forth in the Prospectus (the "Offering").
4. Covenants of the Company. The Company covenants and agrees
with the Underwriter that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, to become effective as promptly as possible.
10
If required, the Company will file the Prospectus and any amendment or
supplement thereto with the Commission in the manner and within the time period
required by Rule 424(b) under the Act. During any time when a prospectus
relating to the Securities is required to be delivered under the Act, the
Company (i) will comply with all requirements imposed upon it by the Act and the
rules and regulations of the Commission thereunder to the extent necessary to
permit the continuance of sales of or dealings in the Securities in accordance
with the provisions hereof and of the Prospectus, as then amended or
supplemented, and (ii) will not file with the Commission any prospectus or
amendment referred to in the first sentence of section (a) (i) hereof, any
amendment or supplement to such prospectus or any amendment to the Registration
Statement as to which the Underwriter shall not previously have been advised and
furnished with a copy for a reasonable period of time prior to the proposed
filing and as to which filing the Underwriter shall not have given its consent.
The Company will prepare and file with the Commission, in accordance with the
rules and regulations of the Commission, promptly upon request by the
Underwriter or counsel to the Underwriter, any amendments to the Registration
Statement or amendments or supplements to the Prospectus that may be necessary
or advisable in connection with the distribution of the Securities by the
Underwriter, and will use its best efforts to cause any such amendment to the
Registration Statement to be declared effective by the Commission as promptly as
possible. The Company will advise the Underwriter, promptly after receiving
notice thereof, of the time when the Registration Statement or any amendment
thereto has been filed or declared effective or the Prospectus or any amendment
or supplement thereto as been filed and will provide evidence satisfactory to
the Underwriter of each such filing or effectiveness.
(b) The Company will advise the Underwriter, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, (ii) the
suspension of the qualification of any Securities for offering or sale in any
jurisdiction, (iii) the institution, threat or contemplation of any proceeding
for any such purpose, or (iv) any request made by the Commission for amending
the Registration Statement, for amending or supplementing the Prospectus or for
additional information. The Company will use its best efforts to prevent the
issuance of any such stop order and, if any such stop order is issued, to obtain
the withdrawal thereof as promptly as possible.
(c) The Company will, in cooperation with counsel to the
Underwriter, arrange for the qualification of the Securities for offering and
sale under the Blue Sky or securities laws of such jurisdictions as the
Underwriter may designate and will continue such qualifications in effect for as
long as may be necessary to complete the distribution of the Securities.
(d) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus, as then amended or supplemented, would include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if for any other
reason it is necessary at any time to amend or supplement the Prospectus to
comply with the Act or the rules or regulations of the Commission thereunder,
the Company will promptly notify the Underwriter thereof and, subject to Section
4(a) hereof, will prepare and file with the Commission, at the Company's
expense, an amendment to the
11
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e) Intentionally left blank.
(f) The Company will, without charge, provide to the
Underwriter and to counsel for the Underwriter (i) as many signed copies of the
registration statement originally filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto) as the Underwriter
may reasonably request, (ii) as many conformed copies of such registration
statement and each amendment thereto (in each case without exhibits thereto) as
the Underwriter may reasonably request, and (iii) so long as a prospectus
relating to the Securities is required to be delivered under the Act, as many
copies of each Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto as the Underwriter may reasonably request.
(g) The Company, as soon as practicable, will make generally
available to its security holders and to the Underwriter an earnings statement
of the Company that satisfies the provisions of Section 11 (a) of the Act and
Rule 158 thereunder.
(h) The Company will reserve and keep available for issuance
that maximum number of authorized but unissued shares of Common Stock which are
issuable upon exercise of any outstanding Warrants and the Underwriter's Warrant
(including the underlying securities) outstanding from time to time.
(i) The Company will apply the net proceeds from the sale of
the Securities being sold by it as set forth under "Use of Proceeds" in the
Prospectus.
(j) Intentionally left blank.
(k) Prior to the Closing Date or the Option Closing Date (if
any), the Company will not, directly or indirectly, without prior written
consent of the Underwriter, issue any press release or other public announcement
or hold any press conference with respect to the Company or its activities with
respect to the Offering (other than trade releases issued in the ordinary course
of the Company's business consistent with past practices with respect to the
Company's operations).
(l) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance upon
Rule 430A under the Act, then immediately following the execution of this
Agreement, the Company will prepare, and file or transmit for filing with the
Commission in accordance with Rule 430A and Rule 424(b) under the Act, copies of
the Prospectus including the information omitted in reliance on Rule 430A, or,
if required by such Rule 430A, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted.
(m) The Company will cause the Securities to be listed on The
Nasdaq SmallCap Market and the Boston Stock Exchange on the Effective Date and
to maintain such listing thereafter.
12
(n) During the period of five years from the Firm Closing
Date, the Company will, as promptly as possible, not to exceed 135 days, after
each annual fiscal period render and distribute reports to its stockholders
which will include audited statements of its operations and changes of financial
position during such period and its audited balance sheet as of the end of such
period, as to which statements the Company's independent certified public
accountants shall have rendered an opinion and shall timely file all reports
required to be filed under the securities laws.
(o) During a period of three years commencing with the Firm
Closing Date, the Company will furnish to the Underwriter, at the Company's
expense, copies of all periodic and special reports furnished to stockholders of
the Company and of all information, documents and reports filed with the
Commission.
(p) The Company has appointed Stock Trans, Inc., as transfer
agent for the Common Stock and Warrants contained in the Units, subject to the
Closing. The Company will not change or terminate such appointment for a period
of three years from the Firm Closing Date without first obtaining the written
consent of the Underwriter. For a period of three years after the Effective
Date, the Company shall cause the transfer agent to deliver promptly to the
Underwriter a duplicate copy of the daily transfer sheets relating to trading of
the Securities. The Company shall also provide to the Underwriter, on a weekly
basis, copies of the DTC special securities positions listing report.
(q) During the period of 180 days after the date of this
Agreement, the Company will not at any time, directly or indirectly, take any
action designed to or that will constitute, or that might reasonably be expected
to cause or result in, the stabilization of the price of the Common Stock to
facilitate the sale or resale of any of the Securities.
(r) The Company will not take any action to facilitate the
sale of any shares of Common Stock or Warrants pursuant to Rule 144 under the
Act if any such sale would violate any of the terms of the Lock-up Agreements.
(s) Prior to the 120th day after the Firm Closing Date, the
Company will provide the Underwriter and their designees with five bound volumes
of the transaction documents relating to the Registration Statement and the
closing(s) hereunder, in form and substance reasonably satisfactory to the
Underwriter.
(t) The Company shall consult with the Underwriter prior to
the distribution to third parties of any financial information news releases or
other publicity regarding the Company, its business, or any terms of this
offering and the Underwriter will consult with the Company prior to the issuance
of any research report or recommendation concerning the Company's securities.
Copies of all documents that the Company or its public relations firm intend to
distribute will be provided to the Underwriter for review prior to such
distribution.
(u) The Company and the Underwriter will advise each other
immediately in writing as to any investigation, proceeding, order, event or
other circumstance, or any threat thereof, by or relating to the Commission or
any other governmental authority, that could impair or prevent the Offering.
Except as required by law or as otherwise mutually agreed in writing, neither
the
13
Company nor the Underwriter will acquiesce in such circumstances and each will
actively defend any proceedings or orders in that connection.
(v) The Company shall first submit to the Underwriter
certificates representing the Securities for approval prior to printing, and
shall, as promptly as possible, after filing the Registration Statement with the
Commission, obtain CUSIP numbers for the Securities.
(w) The Company will prepare and file a registration statement
with the Commission pursuant to section 12 of the 1934 Act, and will use its
best efforts to have such registration statement declared effective by the
Commission on an accelerated basis on the day after the Effective Date. For this
purpose the Company shall prepare and file with the Commission a General Form of
Registration of Securities (Form 8-A or Form 10).
(x) For so long as the Securities are registered under the
1934 Act, the Company will hold an annual meeting of stockholders for the
election of directors within 180 days after the end of each of the Company's
fiscal years and within 135 days after the end of each of the Company's fiscal
years will provide the Company's stockholders with the audited financial
statements of the Company as of the end of the fiscal year just completed prior
thereto. Such financial statements shall be those required by Rule 14a-3 under
the 1934 Act and shall be included in an annual report pursuant to the
requirements of such Rule.
(y) The Company will take all necessary and appropriate
actions to be included in Standard and Poor's Corporation Descriptions or other
equivalent manual and to maintain its listing therein for a period of five (5)
years from the Effective Date or until such time as the Company's securities are
listed on the Nasdaq National Market. Such application shall be made on an
accelerated basis no more than two days following the Effective Date.
(z) On or prior to the Effective Date, the Company will give
written instructions to the transfer agent for the Common Stock directing said
transfer agent to place stop-order restrictions against, and appropriate legends
advising of the Lock-Up Agreements on, the certificates representing the
securities of the Company owned by the persons who have entered into the Lock-up
Agreements.
5. Expenses
(a) The Company shall pay all costs and expenses incident to
the performance of its obligations under this Agreement, whether or not the
transactions contemplated hereby are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including all costs and expenses incident to (i)
the preparation, printing and filing or other production of documents with
respect to the transactions, including any costs of printing the Registration
Statement originally filed with respect to the Securities and any amendment
thereto, any Preliminary Prospectus and the Prospectus and any amendment or
supplement thereto, this Agreement, the selected dealer agreement and the other
agreements and documents governing the underwriting arrangements and any Blue
Sky memoranda, (ii) all reasonable and necessary arrangements relating to the
delivery to the Underwriter of copies of the foregoing documents, and the costs
and expenses of the Underwriter in mailing or otherwise distributing the same
including telephone charges, duplications and other
14
accountable expenses, (iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company, (iv) the
preparation, issuance and delivery to the Underwriter of any certificates
evidencing the Securities, including transfer agent's, warrant agent's and
registrar's fees or any transfer or other taxes payable thereon, (v) the
qualification of the Securities under state Blue Sky or securities laws,
including filing fees and fees and disbursements of counsel relating thereto and
any fees and disbursements of local counsel, if any, retained for such purpose,
(vi) the filing fees of the Commission and the NASD relating to the Securities,
(vii) the inclusion of the Securities on The Nasdaq SmallCap Market and in the
Standard and Poor's Corporation Descriptions Manual, (viii) any "road shows" or
other meetings with prospective investors in the Securities, including
transportation, accommodation, meal, conference room, audio-visual presentation
an similar expenses, but not including such expenses for the Underwriter or
their designees and (ix) the publication of "tombstone advertisements" in
newspapers or other publications selected by the Underwriter, and the
manufacture of prospectus memorabilia, as directed by the Underwriter. In
addition to the foregoing, the Company, shall reimburse the Underwriter for its
expenses on the basis of a non-accountable expense allowance in the amount of
three percent (3%) of the gross offering proceeds to be received by the Company.
The non-accountable expense allowance, based on the gross proceeds from the sale
of the Firm Securities, shall be deducted from the funds to be paid by the
Underwriter in payment for the Firm Securities, pursuant to Section 2 of this
Agreement, on the Firm Closing Date. To the extent any Option Units are sold,
any remaining non-accountable expense allowance based on the gross proceeds from
the sale of the Option Units shall be deducted from the funds to be paid by the
Underwriter in payment for the Option Units, pursuant to Section 2 of this
Agreement, on the Option Closing Date. The Company warrants, represents and
agrees that all such payments and reimbursements will be promptly and fully
made.
(b) Notwithstanding any other provision of this Agreement, if
the Offering is terminated in accordance with the provisions of Section 6 or
Section 10(a), the Company agrees that, in addition to the Company paying its
own expenses as described in subparagraph (a) above, the Company shall pay
Underwriter a non-accountable out-of-pocket expense allowance (in addition to
expenses referred to in subparagraph (a) above) equal to 3% of the total
offering proceeds (of which $50,000 has previously been paid to Xxxxxxx Xxxxxxxx
Securities Corporation and $3,000 has been paid to the Underwriter's counsel),
up to a maximum of $180,000.
6. Conditions of the Underwriter's Obligations. The obligations
of the Underwriter to purchase and pay for the Firm Units shall be subject, in
the Underwriter's sole discretion, to the accuracy of the representations and
warranties of the Company contained herein as of the date hereof and as of the
Firm Closing Date as if made on and as of the Firm Closing Date, to the accuracy
of the statements of the Company's officers made pursuant to the provisions
hereof, to the performance by the Company of its covenants and agreements
hereunder and to the following additional conditions:
(a) If the Registration Statement, as heretofore amended, has
not been declared effective as of the time of execution hereof, the Registration
Statement, as heretofore amended or as amended by an amendment thereto to be
filed prior to the Firm Closing Date, shall have been declared effective not
later than 5:30 P.M., New York City time, on the date on which the amendment to
such Registration Statement containing information regarding the initial public
offering price of the Securities has been filed with the Commission, or such
later time and date as
15
shall have been consented to by the Underwriter; if required, the Prospectus and
any amendment or supplement thereto shall have been filed with the Commission in
the manner and within the time period required by Rule 424(b) under the Act, no
stop order suspending the effectiveness of the Registration Statement shall have
been issued, and no proceedings for that purpose shall have been instituted or
threatened or, to the knowledge of the Company or the Underwriter, shall be
contemplated by the Commission; and the Company shall have complied with any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise).
(b) The Underwriter shall have received an opinion,
dated the Firm Closing Date, of Xxxxxx & Xxxxxxxxx LLP, counsel to the Company,
substantially to the effect that:
(1) the Company, and each of its subsidiaries,
has been duly incorporated and are validly existing as corporations in good
standing under the laws of the jurisdiction of their organization and are duly
qualified to transact business as a foreign corporation and is in good standing
under the laws of each other jurisdiction in which its ownership or leasing of
any properties or the conduct of its business requires such qualification,
except where the failure to be in good standing or so qualify would not have a
materially adverse effect upon the Company;
(2) the Company and each of its subsidiaries has
full corporate power and authority to own or lease its property and conduct its
business as it is now being conducted and as it is proposed to be conducted, as
described in the Registration Statement and the Prospectus, and the Company and
each of its subsidiaries has full corporate power and authority to enter into
this Agreement and the Underwriter's Warrant Agreement and to carry out all the
terms and provisions hereof and thereof to be carried out by it;
(3) there are no outstanding options, warrants
or other rights granted by the Company to purchase shares of its Common Stock,
preferred stock or other securities other than as described in the Prospectus;
the Units and the securities contained therein have been duly authorized and the
Underwriter's Warrant Units have been duly reserved for issuance by all
necessary corporate action on the part of the Company and the Units when issued
and delivered to and paid for by the Underwriter, pursuant to this Agreement,
the Underwriter's Warrant when issued and delivered and paid for in accordance
with this Agreement and the Underwriter's Warrant Agreement by the Underwriter,
and the Underwriters Warrant Units when issued upon payment of the exercise
price specified in the Underwriter's Warrant, will be validly issued, fully
paid, non-assessable and free of preemptive rights and will conform to the
description thereof in the Prospectus; to the knowledge of such counsel, no
holder of outstanding securities of the Company is entitled as such to any
preemptive or other right to subscribe for any of the Units or the Underwriter's
Warrant Units; and to the knowledge of such counsel, no person is entitled to
have securities registered by the Company under the Registration Statement or
otherwise under the Act other than as described in the Prospectus;
(4) the execution and delivery of this
Agreement, the Warrant Agreement and the Underwriter's Warrant Agreement have
been duly authorized by all necessary corporate action on the part of the
Company and this Agreement, the Warrant Agreement and the Underwriter's Warrant
Agreement have been duly executed and delivered by the Company, and
16
each is a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and
other similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law) and except as rights to indemnity and
contribution under this Agreement, the Warrant Agreement and the Underwriter's
Warrant Agreement may be limited by applicable securities laws and the public
policy underlying such laws;
(5) the Underwriter's Warrant is duly
authorized and upon payment of the purchase price therefore specified in Section
2(d) of this Agreement will be validly issued and constitute valid and binding
obligations of the Company; and the certificates representing the Securities are
in due and proper form under law;
(6) the statements set forth in the Prospectus
under the caption "Description of Capital Stock" insofar as those statements
purport to summarize the terms of the capital stock and warrants of the Company,
provide a fair summary of such terms; to the knowledge of such counsel, the
statements set forth in the Prospectus describing statutes and regulations and
the descriptions of the consequences to the Company under such statutes and
regulations are fair summaries of the information set forth therein and are
accurate in all material respects; to the knowledge of such counsel, the
statements in the Prospectus, insofar as those statements constitute summaries
of the contracts, instruments, leases or licenses referred to therein,
constitute a fair summary in all material respects of those contracts,
instruments, leases or licenses and include all material terms thereof, as
applicable;
(7) none of (A) the execution and delivery of
this Agreement, the Warrant Agreement and the Underwriter's Warrant Agreement,
(B) the issuance, offering and sale by the Company to the Underwriter of the
Securities pursuant to this Agreement, the Warrant Agreement and the
Underwriter's Warrant Units pursuant to the Underwriter's Warrant Agreement, or
(C) the compliance by the Company with the other provisions of this Agreement,
the Warrant Agreement and the Underwriter's Warrant Agreement and the
consummation of the transactions contemplated hereby and thereby, to the
knowledge of such counsel (1) requires the consent, approval, authorization,
registration or qualification of or with any court or governmental authority
known to us, except such as have been obtained and such as may be required under
state Blue Sky or securities laws as to which we express no opinion or (2)
conflicts with or results in a breach or violation of, or constitutes a default
under, any material contract, indenture, mortgage, deed of trust, loan
agreement, note, lease or other material agreement or instrument known to such
counsel to which the Company is a party or by which the Company or any of its
property is bound or subject, or the certificate of incorporation or by-laws of
the Company, or any material statute or any judgment, decree, order, rule or
regulation of any court or other governmental or regulatory authority known to
us applicable to the Company;
(8) to the knowledge of such counsel, (A) no
legal or governmental proceedings are pending to which the Company is a party or
to which the property of the Company is subject except those arising in the
ordinary course of business and fully covered by insurance and (B) no contract
or other document is required to be described in the Registration Statement or
the
17
Prospectus or to be filed as an exhibit to the Registration Statement that is
not described therein or filed as required;
(9) to the knowledge of such counsel, the
Company possesses adequate licenses, orders, authorizations, approvals,
certificates or permits issued by the appropriate federal, state or local
regulatory agencies or bodies necessary to conduct its business as described in
the Registration Statement and the Prospectus, and, there are no pending or
threatened proceedings relating to the revocation or modification of any such
license, order, authorization, approval, certificate or permit, except as
disclosed in the Registration Statement and the Prospectus, which would have a
material adverse effect on the Company;
(10) The Company is not in violation or breach
of, or in default with respect to, any term of its certificate of incorporation
or by-laws, and to the knowledge of such counsel, the Company is not in (i)
violation in any material respect of any law, statute, regulation, ordinance,
rule, order, judgment or decree of any court or any governmental or regulatory
authority applicable to it, or (ii) default in any material respect in the
performance or observance of any obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, deed of trust, loan
agreement, note, lease or other material agreement or instrument to which it is
a party or by which it or any of its property may be bound or subject, and no
event has occurred which with notice, lapse of time or both would constitute
such a default;
(11) the Units have been approved for inclusion
on The Nasdaq SmallCap Market and the Boston Stock Exchange;
(12) the Registration Statement is effective
under the Act; any required filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule 424(b); and
to our knowledge, no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto has been issued, and no proceedings for that
purpose have been instituted or threatened or, to the best knowledge of such
counsel, are contemplated by the Commission;
(13) the Registration Statement originally filed
with respect to the Securities and each amendment thereto and the Prospectus (in
each case, other than the financial statements, the notes, schedules and other
financial and statistical information contained therein, as to which such
counsel need express no opinion) comply as to form in all material respects with
the applicable requirements of the Act and the rules and regulations of the
Commission thereunder; and
(14) the Company is not an "investment company"
as defined in Section 3(a) of the Investment Company Act of 1940 and, if the
Company conducts its business as set forth in the Prospectus, it will not become
an Investment company" and will not be required to register under the Investment
Company Act of 1940.
Such counsel also shall state in its opinion that it has
participated in the preparation of the Registration Statement and the Prospectus
and that nothing has come to its attention that has caused it to believe that
the Registration Statement, at the time it became effective (including the
information deemed to be a part of the Registration Statement at the time of
effectiveness pursuant to
18
Rule 430A(b), if applicable), contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus, as of its
date or as of the Firm Closing Date, contained an untrue statement of 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.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials, copies of which certificates will
be provided to the Underwriter, and, as to matters of the laws of certain
jurisdictions, on the opinions of other counsel to the Company, which opinions
shall also be delivered to the Underwriter, in form and substance acceptable to
the Underwriter, if such other counsel expressly authorize such reliance and
counsel to the Company expressly states in their opinion that such counsel's and
the Underwriter's reliance upon such opinion is justified.
(c). At the time this Agreement is executed, the
Underwriter shall have received a letter, dated such date, addressed to the
Underwriter in form and substance satisfactory (including the non-material
nature of the changes or decreases, if any, referred to in clause (3) below) in
all respects to the Underwriter and Underwriter's counsel, from each of Xxxxxx &
Company, LLC and Reddish & White, CPA's:
(1) confirming that it is a independent
certified public accountant with respect to the Company within the meaning of
the Act and the applicable Rules and Regulations and that it is SEC qualified;
(2) stating that it is their opinion that the
financial statements of the Company, or the subsidiaries, as the case may be, as
included in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act and the Rules
and Regulations thereunder and that the Underwriter may rely upon the opinion of
Xxxxxx & Company, LLC and Reddish & White, CPA's, auditors for the Company and
the subsidiaries, respectively, with respect to the financial statements
included in the Registration Statement;
(3) stating that, on the basis of a limited
review which included a reading of the latest available unaudited interim
financial statements of the Company, a reading of the latest available minutes
of the stockholders and board of directors and the various committees of the
boards of directors of the Company or the subsidiaries, as the case may be,
consultations with officers and other employees of the Company or the
subsidiaries, as the case may be, responsible for financial and accounting
matters and other specified procedures and inquiries (which, as to the interim
financial statements included in the Registration Statement, shall constitute a
review as described in SAS No. 71, Interim Financial Statements), nothing has
come to their attention which would lead them to believe that (A) the unaudited
financial statements of the Company, or the subsidiaries, as the case may be,
included in the Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the Rules
and Regulations or are not fairly presented in conformity with generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited financial statements of the Company included in the
Registration Statement, or (B) at a specified date not more than five (5) days
prior to the Effective Date, there has been any change in the capital stock or
long-term debt of
19
the Company, or the subsidiaries, as the case may be, or any decrease in the
stockholders' equity or net current assets or net assets of the Company as
compared with amounts shown in the December31, 1999 consolidated balance sheet
included in the Registration Statement, other than as set forth in or
contemplated by the Registration Statement, or, if there was any change or
decrease, setting forth the amount of such change or decrease, and (C) during
the period from September 30, 2000, to a specified date not more than five (5)
days prior to the Effective Date, there was any decrease (increase) in net
revenues, net income (loss) or in net earnings (loss) per common share of the
Company, in each case as compared with the corresponding period beginning
September 30, 2000, other than as set forth in or contemplated by the
Registration Statement, or, if there was any such decrease, setting forth the
amount of such decrease (increase);
(4) setting forth, at a date not later than five
(5) days prior to the Effective Date, the amount of liabilities of the Company;
(5) stating that they have compared specific
dollar amounts, numbers of shares, percentages of revenues and earnings,
statements and other financial information pertaining to the Company set forth
in the Prospectus in each case to the extent that such amounts, numbers,
percentages, statements and information may be derived from the general
accounting records, including work sheets, of the Company and excluding any
questions requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries and other
appropriate procedures (which procedures do not constitute an examination in
accordance with generally accepted auditing standards) set forth in the letter
and found them to be in agreement; and
(6) statements as to such other matters incident
to the transaction contemplated hereby as the Underwriter may request.
(d). At the Firm Closing Date and the Option Closing Date,
if any, the Underwriter shall have received from Xxxxxx & Company, LLC and
Reddish & White, CPA's, a letter, dated as of the Firm Closing Date or the
Option Closing Date, as the case may be, to the effect that it reaffirms that
statements made in the letter furnished pursuant to subsection A of this Section
6(c), except that the specified date referred to shall be a date not more than
five (5) days prior to the Firm Closing Date or the Option Closing Date, as the
case may be, and, if the Company has elected to rely on Rule 430A of the Rules
and Regulations, to the further effect that they have carried out procedures as
specified in clause (5) of this Section 6(c) with respect to certain amounts,
percentages and financial information as specified by the Underwriter and deemed
to be a part of the Registration Statement pursuant to Rule 430A(b) and have
found such amounts, percentages and financial information to be in agreement
with the records specified in such clause (5).
(e) The representations and warranties of the Company
contained in this Agreement shall be true and correct as if made on and as of
the Firm Closing Date; the Registration Statement shall not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein in order to make the statements therein not misleading, and the
Prospectus, as amended or supplemented as of the Firm Closing Date, shall not
include 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;
20
and the Company shall have performed all covenants and agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the Firm
Closing Date.
(f) No stop order suspending the effectiveness of the
Registration Statement or any amendment thereto shall have been issued, and no
proceedings for that purpose shall have been instituted or threatened or
contemplated by the Commission.
(g) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there shall not have
been any material adverse change, or any development involving a prospective
material adverse change, in the business, operations, condition (financial or
otherwise), earnings or prospects of the Company, except in each case as
described in or contemplated by the Prospectus (exclusive of any amendment or
supplement thereto).
(h) The Underwriter shall have received a certificate, dated
the Firm Closing Date, of the Chief Executive Officer and the Secretary of the
Company to the effect set forth in subparagraphs (e) through (g) above.
(i) The Securities shall be qualified in such jurisdictions as
the Underwriter may reasonably request pursuant to Section 4(c), and each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Firm Closing Date.
(j) The Company shall have executed and delivered to the
Underwriter the Warrant Agreement and the Underwriter's Warrant Agreement and a
certificate or certificates evidencing the Underwriter's Warrant, in each case
in a form acceptable to the Underwriter.
(k) The Underwriter shall have received Lock-up Agreements
executed by each stockholder of the Company.
(l) On or before the Firm Closing Date, the Underwriter and
counsel for the Underwriter shall have received such further certificates,
documents, letters or other information as they may have reasonably requested
from the Company and other security holders of the Company.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Underwriter and counsel
for the Underwriter. The Company shall furnish to the Underwriter such conformed
copies of such opinions, certificates, letters and documents in such quantities
as the Underwriter and counsel for the Underwriter shall reasonably request.
The obligation of the Underwriter to purchase and pay for any Option
Units shall be subject, in its discretion, to each of the foregoing conditions,
except that all references to the Firm Securities and the Firm Closing Date
shall be deemed to refer to such Option Units and the related Option Closing
Date, respectively.
21
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the Act or Section 20 of the 1934 Act against any
losses, claims, damages, or liabilities, joint or several, to which the
Underwriter, or such controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(1) any untrue statement or alleged untrue
statement of any material fact contained in (A) the Registration Statement or
any amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or (B) 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 in order to qualify the Securities under the Blue Sky or securities
laws thereof or filed with the Commission or any securities association or
securities exchange (each an "Application"), or
(2) the omission or alleged omission to state
in such Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or any
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse, as incurred, the
Underwriter and such controlling person for any legal or other expenses
reasonably incurred by the Underwriter or such controlling person in connection
with investigating or defending against any loss, claim, damage, liability,
action, investigation, litigation or proceeding; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in such
Registration Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or any Application in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter, specifically for use therein. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have. The Company will not, without the prior written consent of the
Underwriter, or controlling person, settle or compromise or consent to the entry
of any judgment in any pending or threatened claim, action, suit or proceeding
in respect of which indemnification may be sought hereunder (whether or not the
Underwriter or any person who controls the Underwriter or within the meaning of
Section 15 of the Act or Section 20 of the 1934 Act is a party to such claim,
action, suit or proceeding), unless such settlement, compromise or consent
includes an unconditional release of the Underwriter and each such controlling
person from all liability arising out of such claim, action, suit or proceeding.
(b) The Underwriter will indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the 1934 Act against, any losses,
claims, damages or liabilities to which the Company or any such director,
officer, or controlling person may become subject under the Act or otherwise,
but only insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto, or any Application, or (ii) the omission
or the alleged
22
omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or any Application, or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by the Underwriter
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company or any such director, officer,
or controlling person in connection with investigating or defending against any
such loss, claim, damage, liability, action investigation, litigation or
proceedings, in respect thereof. This indemnity agreement will be in addition to
any liability which the Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 7, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section 7. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 7 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence or (ii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not be
liable for the costs and expenses of any settlement of such action effected by
such indemnified party without the consent of the indemnifying party.
(d) In circumstances in which the indemnity obligation
provided for in the preceding paragraphs of this Section 7 is unavailable or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on
23
the other from the offering of the Securities, or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law, not
only such relative benefits but also the relative fault of the indemnifying
party or parties on the one hand and the indemnified party on the other in
connection with the statements or omissions or alleged statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof). The relative benefits received by the Company on the one hand
and the Underwriter on the other shall be deemed to be in the same proportion as
the total proceeds from the Offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriter. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriter, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and the other equitable considerations appropriate in the
circumstances. The Company and the Underwriter agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the first sentence of this
paragraph (d). Notwithstanding any other provision of this paragraph (d), the
Underwriter shall not be obligated to make contributions hereunder that in the
aggregate exceed the total public offering price of the Securities purchased by
the Underwriter under this Agreement, less the aggregate amount of any damages
that the Underwriter has otherwise been required to pay in respect of the same
or any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11 (f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Act or Section
20 of the 1934 Act shall have the same rights to contribution as the
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the 1934
Act, shall have the same rights to contribution as the Company.
8. Substitution of Underwriter.
If any Underwriter shall for any reason not permitted hereunder cancel
its obligations to purchase the Firm Securities hereunder, or shall fail to take
up and pay for the number of Firm Securities set forth opposite names in
Schedule 1 hereto upon tender of such Firm Securities in accordance with the
terms hereof, then:
(a) If the aggregate number of Firm Securities which such
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total number of Firm Securities, the other Underwriter shall be obligated to
purchase the Firm Securities which such defaulting Underwriter agreed but failed
to purchase.
(b) If any Underwriter so defaults and the agreed number of
Firm Securities with respect to which such default or defaults occurs is more
than 10% of the total number of Firm Securities, the remaining Underwriter shall
have the right to take up and pay for the Firm Securities which the defaulting
Underwriter agreed but failed to purchase. If such remaining Underwriter does
24
not, at the Firm Closing Date, take up and pay for the Firm Securities which the
defaulting Underwriter agreed but failed to purchase, the time for delivery of
the Firm Securities shall be extended to the next business day to allow the
remaining Underwriter the privilege of substituting within twenty-four hours
(including non-business hours) another underwriter or Underwriter satisfactory
to the Company. If no such underwriter or Underwriter shall have been
substituted as aforesaid, within such twenty-four hour period, the time of
delivery of the Firm Securities may, at the option of the Company, be again
extended to the next following business day, if necessary, to allow the Company
the privilege of finding within twenty-four hours (including non-business hours)
another underwriter or Underwriter to purchase the Firm Securities which the
defaulting Underwriter or Underwriter agreed but failed to purchase. If it shall
be arranged for the remaining Underwriter or substituted Underwriter to take up
the Firm Securities of the defaulting Underwriter as provided in this section,
(i) the Company or the Underwriter shall have the right to postpone the time of
delivery for a period of not more than seven business days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other document or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements to
the Prospectus which may thereby be made necessary, and (ii) the respective
numbers of Firm Securities to be purchased by the remaining Underwriter or
substituted Underwriter shall be taken as the basis of the underwriting
obligation for all purposes of this agreement.
In the event of a default by any Underwriter, if the remaining
Underwriter shall not take up and pay for all the Firm Securities agreed to be
purchased by the defaulting Underwriter, or substitute another underwriter or
Underwriter as aforesaid, and the Company shall not find or shall not elect to
seek another underwriter or Underwriter for such Firm Securities as aforesaid,
then this Agreement shall terminate.
If, following exercise of the option provided in Section 2(c) hereof,
any Underwriter or Underwriter shall for any reason not permitted hereunder
cancel their obligations to purchase Option Units at the Option Closing Date, or
shall fail to take up and pay for the number of Option Units, which it became
obligated to purchase at the Option Closing Date upon tender of such Option
Units in accordance with the terms hereof, then the remaining Underwriter or
substituted Underwriter may take up and pay for the Option Units of the
defaulting Underwriter in the manner provided in Section 8(b) hereof. If the
remaining Underwriter or substituted Underwriter shall not take up and pay for
all such Option Units, the Underwriter shall be entitled to purchase the number
of Option Units for which there is no default or, at their election, the option
shall terminate, the exercise thereof shall be of no effect.
As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. In the event of termination,
there shall be no liability on the part of any non-defaulting Underwriter to the
Company, provided that the provisions of this Section 8 shall not in any event
affect the liability of any defaulting Underwriter to the Company arising out of
such default.
9. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, any of
its officers or directors and the Underwriter set forth in this
25
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, the Underwriter or any controlling person referred to in Section 7
hereof, and (ii) delivery of and payment for the Securities. The respective
agreements, covenants, indemnities and other statements set forth in Sections 4
and 7 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
10. Termination.
(a) This Agreement may be terminated with respect to the Firm
Securities or any Option Units in the sole discretion of the Underwriter by
notice to the Company given prior to the Firm Closing Date or the related Option
Closing Date, respectively, in the event that the Company shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
its part to be performed or satisfied under Section 6 hereunder at or prior
thereto or if at or prior to the Firm Closing Date or such Option Closing Date,
respectively. In addition, the Underwriter may terminate this Agreement in the
event that the Underwriter determines that it is impracticable to offer for sale
or to enforce contracts made by the Underwriter for the resale of the Securities
agreed to be purchased hereunder, by reason of: (i) the Company having sustained
a material loss, whether or not insured, by reason of fire, earthquake, flood,
accident or other calamity, or from any labor dispute or court or government
action, order to decree: (ii) trading in securities on the New York Exchange or
the American Stock Exchange or the American Stock Exchange having been suspended
or limited; (iii) material governmental restrictions having been imposed on
trading in securities generally which are not in force and effect on the date
hereof; (iv) a banking moratorium having been declared by federal or New York
State authorities; (v) an outbreak or significant escalation of major
international hostilities or other national or international calamity having
occurred; (vi) the passage by the Congress of the United States or by any state
legislative body of similar impact, of any act or measure, or the adoption of
any orders, rules or regulations by any governmental body or any authoritative
accounting institute or board, or any governmental executive, which is
reasonably believed likely by you to have a material adverse impact on the
business, financial condition or financial statements of the Company; (vii) any
material adverse change in the financial or securities markets beyond normal
fluctuations in the United States have occurred since the date of this
Agreement; or (viii) any material adverse change having occurred, since the
respective dates for which information is given in the Registration Statement
and Prospectus, in the earnings, business, prospects or condition (financial or
otherwise) of the Company, whether or not arising in the ordinary course of
business. Termination of this Agreement pursuant to this Section 10 shall be
without liability of any party to any other party, except as provided in Section
5(b) and Section 7 hereof.
11. Information Supplied by the Underwriter. The statements set
forth in the first paragraph on page [ ] (as to the underwriting commitment of
the Underwriter) and the fourth paragraph under the heading "Underwriting" in
any Preliminary Prospectus or the Prospectus (to the extent such statements
relate to the Underwriter) constitute the only information furnished by the
Underwriter to the Company for the purposes of Section 7(b) hereof. The
Underwriter confirms that such statements (to such extent) are correct.
12. Notices. All notice hereunder to or upon either party hereto
shall be deemed to have been duly given for all purposes if in writing and
(i) delivered in person or by messenger or an
26
overnight courier service against receipt, or (ii) sent by certified or
registered mail, postage paid, return receipt requested, or (iii) sent by
telegram, facsimile, telex or similar means, provided that a written copy
thereof is sent on the same day by postage paid first-class mail, to such party
at the following address:
To the Company: Weststar Environmental, Inc.
0000 Xxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, President
With Copy To: Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxx, Esq.
To the Underwriter: Xxxxxx Partners, Inc.
0000 Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx X. Xxxx
with a copy to: Sichenzia, Ross & Xxxxxxxx LLP
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx, Esq.
or such other address as either party hereto may at any time, or from time to
time, direct by notice given to the other party in accordance with this section.
The date of giving of any such notice shall be, in the case of clause (i), the
date of the receipt; in the case of clause (ii), five business days after such
notice or demand is sent; and, in the case of clause (iii), the business day
next following the date such notice is sent.
13. Amendment. Except as otherwise provided herein, no amendment
of this Agreement shall be valid or effective, unless in writing and signed by
or on behalf of the parties hereto.
14. Waiver. No course of dealing or omission or delay on the part
of either party hereto in asserting or exercising any right hereunder shall
constitute or operate as a waiver of any such right. No waiver of any provision
hereof shall be effective, unless in writing and signed by or on behalf of the
party to be charged therewith. No waiver shall be deemed a continuing waiver or
waiver in respect of any other or subsequent breach or default, unless expressly
so stated in writing.
15. Applicable Law. This agreement shall be governed by, and
interpreted and enforced in accordance with, the laws of the State of New York
without regard to principles of choice of law or conflict of laws.
16. Jurisdiction. Each of the parties hereto hereby irrevocably
consents and submits to the exclusive jurisdiction of the Courts of the State of
New York and the United States District Court
27
for the Southern District of New York in connection with any suit, action or
other proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby, waives any objection to venue in the County of
New York, State of New York, or such District and agrees that service of any
summons, complaint, notice or other process relating to such suit, action or
other proceeding may be effected in the manner provided by clause (ii) of
Section 12.
17. Remedies. In the event of any actual or prospective breach or
default by either party hereto, the other party shall be entitled to equitable
relief, including remedies in the nature of rescission, injunction and specific
performance. All remedies hereunder are cumulative and not exclusive, and
nothing herein shall be deemed to prohibit or limit either party from pursuing
any other remedy or relief available at law or in equity for such actual or
prospective breach or default, including the recovery of damages.
18. Attorneys' Fees. The prevailing party in any suit, action or
other proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby, shall be entitled to recover its costs and
reasonable attorneys' fees.
19. Severability. The provisions hereof are severable and in the
event that any provision of this Agreement shall be determined to be invalid or
unenforceable in any respect by a court of competent jurisdiction, the remaining
provisions hereof shall not be affected, but shall, subject to the discretion of
such court, remain in full force and effect, and any invalid or unenforceable
provision shall be deemed, without further action on the part of the parties
hereto, amended and limited to the extent necessary to render the same valid and
enforceable.
20. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and which together shall constitute
one and the same agreement.
21. Successors. This Agreement shall inure to the benefit of and
be binding upon the Underwriter, the Company and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provisions herein contained,
this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of
no other person except that (i) the indemnities of the Company contained in
Section 7 of this Agreement shall also be for the benefit of any person or
persons who control any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the 1934 Act, and (ii) the indemnities of the Underwriter
contained in Section 7 of this Agreement shall also be for the benefit of the
directors of the Company, the officers of the Company who have signed the
Registration Statement and any person or persons who control the Company within
the meaning of Section 15 of the Act or Section 20 of the 1934 Act. No purchaser
of Securities from the Underwriter shall be deemed a successor because of such
purchase.
22. Titles and Captions. The titles and captions of the articles
and sections of this Agreement are for convenience of reference only and do not
in any way define or interpret the intent of the parties or modify or otherwise
affect any of the provisions hereof.
28
23. Grammatical Conventions. Whenever the context so requires,
each pronoun or verb used herein shall be construed in the singular or the
plural sense and each capitalized term defined herein and each pronoun used
herein shall be construed in the masculine, feminine or neuter sense.
24. References. The terms "herein," "hereto," "hereof," "hereby,"
and "hereafter," and other terms of similar import, refer to this Agreement as a
whole, and not to any Article, Section or other part hereof.
25. Entire Agreement. This Agreement embodies the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes any prior agreement, commitment or arrangement relating thereto.
[Signatures on following page]
29
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company, and the
Underwriter.
Very truly yours,
WESTSTAR ENVIRONMENTAL, INC.
By:
-------------------------
Name: Xxxxxxx X. Xxxxx,
Title: President
The foregoing agreement is hereby confirmed and accepted as of the date first
above written.
XXXXXX PARTNERS, INC.
By:______________________________________
Name: Xxxx X. Xxxx
Title: Senior Vice President and
Managing Director
