EXHIBIT 1
Success Development International, Inc.
500,000 Shares of Common Stock
(Par Value .001 Per Share)
February 4, 1998
XXXXXXXXX, XXXXXX & XXXXX
0000 Xxxxxxxxx Xxxx, XX
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Dear Sirs:
Success Development International, Inc., a Florida corporation (the "Company"),
hereby confirms its agreement with XXXXXXXXX XXXXXX & XXXXX (the "Agent"), as
follows:
1. GENERAL. The Company proposes to offer, through the Agent on a "best
efforts basis", up to 500,000 shares (the "Maximum Offering") of the
common stock, $.001 par value, of the Company (the "Shares") at a price
of $5.50 per Share in an offering to the public (the "Offering").
The Company has filed a Registration Statement on Form SB-2A (the
"Registration Statement") with the Securities and Exchange Commission
(the "SEC") pursuant to which the Company will register the Shares for
sale to the public.
On terms and conditions specified in this (the "Agreement"), the Agent,
for the compensation specified below, will provide the services
specified in this Agreement to assist the Company in the Offering.
2. THE OFFERING.
1 SERVICES TO BE RENDERED. Subject to the terms and conditions
hereof and upon the basis of the representations, warranties and
agreements herein set forth, the Company hereby appoints the
Agent as its agent to sell the Shares on a best efforts basis.
The Agent xxxxxx accepts such appointment and agrees to use its
best efforts to find purchasers for the Shares. The Company and
the Agent agree that the Shares shall be offered to the investing
public in Georgia, Florida, and any other state or states where
the Company deems it appropriate to offer the Shares, all in
compliance with the Securities Act of 1933 (the "Securities
Act"), the Securities Exchange Act of 1934 (the "Exchange Act"),
and the securities or "blue sky" laws of any applicable
jurisdiction.
2 EXCLUSIVE ENGAGEMENT. The Company shall not engage any other
person other than the Agent to solicit offers or sales of Shares
during the Offering Period (as such term is herein defined).
3 COMPENSATION. The Company agrees to pay to the Agent for the
Agent's services in connection with the Offering a commission on
all Shares sold in the Offering as follows: the sum of $.55 per
Share together with an option (an "Option") to purchase one Share
for each ten Shares sold in the Offering. Such Options shall have
a term of five years from the Effective Date, and shall have an
exercise price of $5.50 per Share.
4 PAYMENT OF EXPENSES. The Company will pay all expenses in
connection with the Offering including, but not limited to, the
Company's attorneys' fees, expenses for auditing and accounting
services, advertising fees, all securities registration and NASD
filing fees, postage, and document reproduction expenses, and the
engraving, issuance, transfer and delivery of certificates for
the Stock. The Company shall pay the Agent an expense retainer in
the amount of $5,000 upon execution of this Agreement. In the
event that the Agent incurs additional out-of-pocket expenses,
the Company shall immediately reimburse the Agent upon receipt of
the Agent's invoice. The aggregate out-of-pocket expenses to be
reimbursed to the Agent hereunder shall not exceed $15,000.
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5 BLUE SKY. The Company contemplates that the Offering will be made
in those states listed in Exhibit A attached hereto. The Company
shall, at its sole expense, take or cause to be taken all
necessary action and shall furnish to whomever the Agent may
direct such information as may be required to qualify the Shares
for sale under the laws of such jurisdictions and any other
jurisdictions where the Company may hereafter elect that Shares
shall be offered and shall continue such qualifications in effect
for as long as may be necessary for the distribution of the
Shares. At the request of the Agent the Company shall cause its
counsel to prepare and furnish to the Agent "Blue Sky" memoranda
concerning the requirements for qualification of the Shares for
sale under the law of such jurisdictions, and the Agent shall be
entitled to rely on such memoranda in carrying out its
obligations under this Agreement.
6 OFFERING PERIOD. The Shares will be offered for sale during the
period (the "Offering Period") commencing with the date that the
Registration Statement is declared effective by the SEC (the
"Effective Date" of the Offering) until the earlier to occur of
(a) the date the Maximum Offering is achieved, or (b) 120 days
from and after the Effective Date, or (C) the termination of the
Offering by the Company. The Company may, upon written notice to
the Agent, elect to extend the Offering Period, and as used
herein, the term "Offering Period" shall include any such
extension.
7 ESCROW AGREEMENT. During the period of the Offering, the proceeds
from the sale of Shares shall, upon receipt by the Agent, be
promptly placed in a special account with First Union National
Bank (the "Escrow Agent"), subject to an escrow agreement
substantially in the form of the Impound Agreement which is
attached hereto as Exhibit B and incorporated herein by this
reference (the "Escrow Agreement"). Each of the parties hereto
agrees that this Agreement shall be automatically terminated and
the entire proceeds received from subscriptions for the Shares
shall be returned to the subscribers for such Shares, without
interest, upon the failure of the Minimum Offering to be achieved
on or before the date which is 90 days from and after the
Effective Date, unless the Offering is extended by the Company.
8 DELIVERY OF AND PAYMENT FOR THE SHARES. Provided that the Escrow
Agent is authorized and empowered in accordance with the terms of
the Escrow Agreement to release the proceeds of the Offering from
escrow as described in the Escrow Agreement, and provided further
that this Agreement shall not have been terminated pursuant to
the terms hereof, payment for the Shares shall be made at a
closing (the "Closing") to be held at the offices of the Agent's
counsel (or such other place as the parties hereto may agree), as
provided herein. The date of a Closing hereunder is sometimes
referred to as the "Closing Date". Payment for the Shares sold on
behalf of the Company by the Agent shall be made to the Company
or to the order of the Company by the Escrow Agent acting upon
instructions from the Company and the Agent pursuant to the terms
and conditions of the Escrow Agreement, and payment shall be
delivered to the Company by the Escrow Agent by one or more
certified or official bank checks in next-day funds. Such payment
shall be made upon delivery by the Company of the certificates
for the Shares to the Agent, for the respective accounts of the
several purchasers of the Shares against receipt therefor signed
by the Agent. The certificates for the Shares to be delivered at
any Closing will be registered in such name or names, and shall
be in such denominations, as the Agent may request; PROVIDED,
HOWEVER, that such request shall be made no later than three (3)
business days prior to the Closing Date. The certificates
representing the Shares will be made available to the Agent for
inspection, checking and packaging at the office of the Company's
transfer agent and registrar (the "Transfer Agent"), not less
than one (1) business day prior to the Closing Date.
9 CLOSINGS.
(a) As soon as practicable after the Agent has determined that
100,000 Shares (the "Minimum Offering") have been
subscribed for, the Agent shall so notify the Company in
writing. The Agent's notice to the Company hereunder shall
set forth the number of shares of Common Stock to be
delivered to the Agent by the Company against payment
therefor by the
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Escrow Agent. The initial Closing hereunder (the "Initial
Closing") shall take place at 10:00 a.m., Atlanta time on
the fifth (5th) business day after the date on which the
Agent notifies the Company as provided herein or on such
other date and time as agreed to in writing by the parties
hereto; PROVIDED, HOWEVER, that the Initial Closing must
occur no later than the tenth (10th) business day after
such notice is given by the Agent.
(b) By notice given in writing at each Closing hereunder, the
Company may elect to continue this Agreement until such
time as the maximum number of Shares as provided herein
has been sold, or until January 30, 1999, whichever is
earlier; PROVIDED, HOWEVER, that such Shares may be sold
only in compliance with the terms and conditions of this
Agreement and the Registration Statement.
(c) Closing with respect to Shares sold pursuant to a
continuation of this Agreement pursuant to Section 2.9(b)
hereof will occur on such date(s) and time(s) as the
parties may agree in writing from time to time.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The Company
hereby represents and warrants to, and agrees with, the Agent that:
(a) The prospectus, including any amendments or supplements thereto
(the "Prospectus") when made available to prospective purchasers
throughout the Offering Period, will comply in all material
respects with federal statutes, regulations and policy statements
applicable thereto, including, without limitation, the applicable
rules, regulations and policy statements of the SEC. At all times
during the Offering Period, the Prospectus will contain all
information including financial statements that are required to
be included therein in accordance with applicable regulations
(including interpretations thereof), and policy statements of the
SEC and the Prospectus will not include any untrue statement of
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not
misleading; provided, however, that no representations or
warranties are made to the Agent with respect to statements or
omissions made in reliance upon, or in conformity with, written
information furnished to the Company with respect to the Agent,
by the Agent, or on its behalf expressly for use in the
Prospectus.
(b) The Company is, and at all times during the Offering Period will
be, a corporation duly incorporated and organized and is, and
will be, validly existing and in good standing under the laws of
the State of Florida. The Company has, and at all times during
the Offering Period will have, full power and authority to own or
lease all of its properties and conduct all of its business as
described in the Prospectus.
(c) The Company is, and at all times during the Offering Period will
be, duly qualified to do business and in good standing as a
foreign corporation in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business required
such qualification.
(d) The financial statements contained in the Prospectus present
fairly and accurately the financial position of the Company as
the respective dates thereof and the results of operations of the
Company for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied
on a consistent basis throughout the entire periods involved.
(e) At all times during the Offering Period except as set forth in or
contemplated by the Prospectus: (I) the Company will not have
incurred and will not incur any material liabilities or
obligations, direct or contingent, except for liabilities or
obligations entered into in the ordinary course of business, and
will not have entered into and will not enter into any material
transactions; and (ii) there will have been no, and there will be
no, material adverse change, or any development relating to the
Company which the Company has cause to believe would involve a
prospective material adverse change in or affecting
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the business, business prospects, general affairs, management,
financial position, net worth, results of operations, or
properties of the Company, or the value of the assets of the
Company.
(f) Except as set forth in or contemplated by the Prospectus, to the
best of its knowledge, the Company does not have and will not
have during the Offering Period any material contingent
liabilities or obligations.
(g) There are no actions, suits or proceedings pending or, to the
best of its knowledge, threatened against or affecting the
Company or its business, business prospects, financial condition,
results of operations or properties, or against or affecting any
of its principal officers, before or by any federal or state
court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, wherein an
unfavorable ruling or decision or finding would materially and
adversely affect the business, business prospects, financial
condition, results of operations, or properties of the Company.
(h) At all times during the offering Period, the Company will have
title to all properties and assets described in the Prospectus as
being owned by the Company, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the
Prospectus or which are not material to the business of the
Company. At all times during the Offering Period, the Company
will have valid, existing and enforceable leases to the
properties and equipment described in the Prospectus as being
leased by the Company, with such exceptions as are not material
and do not materially interfere with the uses made, and proposed
to be made, of such properties by the Company.
(i) The Company has filed all federal and state income tax returns
which are required to be filed by it and has paid all taxes shown
on such returns and on all assessments received by it to the
extent such taxes have become due. To the best of its knowledge,
all taxes with respect to which the Company is obligated have
been paid or adequate accruals have been established to cover any
such unpaid taxes.
(j) The Company is not, and at all times during the Offering Period
will not be, in violation of its articles of incorporation or
bylaws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
bond, debenture, note or other evidence of indebtedness or in any
contract, indenture, mortgage, loan agreement or other agreement
or instrument to which the Company is a party or by which it or
any of its properties is bound, and the Company is not, and at
all times during the Offering Period will not be, in violation of
any law, order, rule, regulation, writ, injunction or decree of
any government, governmental instrumentality or court, domestic
or foreign, of which it has knowledge. Neither the Company, nor
any employee or agent thereof, has made any payment of funds of
the Company or received or retained any funds in violation of any
law, rule or regulation which payment, receipt or retention of
funds is not fully disclosed in the Prospectus.
(k) At all times during the Offering Period, there will be no
document or contract of the character required to be described in
the Prospectus which is not described as required, and the
descriptions in the Prospectus are accurate and complete and
fairly present the information required to be shown.
(l) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document
required by this Agreement to be delivered to the Agent was or
will be, when made, inaccurate, untrue or incorrect in any
material respect.
(m) The Company has full right, power and authority to enter into
this Agreement and this Agreement has been duly authorized,
executed and delivered by the Company and will be, upon
acceptance by the Agent, a valid and binding agreement of the
Company enforceable in accordance with its terms. The performance
of this Agreement and the consummation of the transactions
contemplated herein will not result in a breach or violation of
any of the
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terms or provision of, or constitute a default under the articles
of incorporation or the bylaws of the Company, any obligation,
agreement, covenant or condition contained in any bond,
debenture, note or other evidence or indebtedness or in any
contract, indenture, mortgage, loan agreement or other agreement
or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries or any
of their respective properties is bound, or any law, order, rule,
regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign, and
will not result in the creation or imposition of any lien, charge
claim or encumbrance upon any property or asset of the Company.
No consent, approval, authorization or order of any government,
governmental instrumentality or court is required in connection
with the execution of this Agreement or the consummation of the
transactions contemplated by this Agreement except such as may be
required by the NASD or by state regulatory authorities under
state securities or blue sky laws in connection with the
distribution of the Shares or in connection with the Agent's
services hereunder.
(n) For purposes of the Agent's obligation to file certain documents
and make certain representations to the NASD in connection with
the Offering: (I) except as described in the Registration
Statement, the Company has not placed any securities within the
last eighteen months; (ii) there have been no material dealings
within the last twelve months between the Company and any NASD
member or any person related to or associated with any such
member; (iii) except as contemplated by this Agreement, no
financial or management consulting contracts are outstanding with
any other person; (iv) there has been no intermediary between the
Agent and the Company in connection with the Offering and no
person is being compensated in any manner for providing such
service.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE AGENT. The Agent
represents and warrants to, and agrees with the Company that:
(a) Any and all information furnished to the Company by the Agent in
writing expressly for use in the Prospectus will not contain any
untrue statement of 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.
(b) The Agent is registered with the Securities and Exchange
Commission as a broker-dealer and is a member in good standing
with the National Association of Securities Dealers, Inc. (the
"NASD"), and the Agent and all its agents and representatives
have or will have required licenses and registrations to perform
its obligations under this Agreement; and such registrations,
membership and licenses will remain in effect during the term of
this Agreement. The Agent agrees that, in performing its
obligations under this Agreement, the Agent will comply with all
applicable statutes and the rules and regulations of the NASD and
any other federal or state governmental agency which are
applicable to it. This Agreement has been duly and validly
authorized, executed and delivered by the agent and is its valid
and binding agreement and obligation.
(c) All checks and funds received by the Agent with respect to the
subscription price from prospective purchasers in the Offering
shall be made payable to the escrow agent and transmitted
directly to the escrow agent by noon of the next business day
after receipt by the Agent. If the Offering is terminated prior
to the end of the Offering Period by the Company, then
subscription funds received after any such termination shall be
promptly returned to the subscribers for the Shares, with
interest.
(d) The Agent will deliver to the Company the original copies of all
subscription documents of prospective purchasers received by the
Agent in the Offering, and the Agent will promptly inform the
Company of any facts which come to the Agent's attention which
would cause a reasonable person to believe that such subscription
documents contain any material misstatement or omission.
5. COVENANTS OF THE COMPANY. The Company further agrees with and covenants
to the Agent
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as follows:
(a) To comply with the "Blue Sky" and other securities laws and
regulations of each state in which subscriptions are solicited in
the Offering pursuant to the mutual agreement of the Agent and
the Company and to assist the Agent in any necessary registration
or filings that may be required of the Agent with respect to the
Offering, in the states mutually agreed upon by the Agent and the
Company. The Company will advise the Agent promptly of the
issuance by any state regulatory authority of any stop order or
other order suspending the registrations or exemptions therefrom
of the Prospectus or of the institution of any proceedings for
that purpose, will use its best efforts to prevent the issuance
of any stop order or other such order, and should a stop order or
other such order be issued, to obtain as soon as possible the
lifting thereof.
(b) To furnish the Agent with such numbers of printed copies of the
Prospectus, with all amendments, supplements and exhibits
thereto, together with subscription materials, as the Agent may
reasonable request, and similarly, to furnish the Agent and
others designated by the Agent with as many copies of additional
sales literature or other materials approved by the Company for
use in connection with the Offering as the Agent may reasonably
request.
(c) Promptly to furnish such information and execute and file such
documents as may be necessary for the Company to offer and sell
the Shares in full compliance with applicable state and federal
statutes, regulations and policy statements.
(d) To advise the Agent promptly if any event known to the Company
shall have occurred as a result of which the Prospectus in its
then current form (including any amendments or supplements
thereto) would include an untrue 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.
(e) To utilize or furnish no sales literature in connection with the
Offering, other than the Prospectus, unless such other sales
literature has been approved by the SEC and the NASD, if
necessary, and furnished to the Agent at least ten (10) days
prior to its first use and the Agent has failed to object to the
contents of, or the proposed use of, such other sales literature.
6. CONDITIONS OF THE AGENT'S OBLIGATIONS. The Agent's obligation to effect
the transactions contemplated by this Agreement shall be subject to the
continuing accuracy throughout the Offering Period of the
representations, warranties and agreements of the Company, the
performance by the Company of all of its obligations under this
Agreement, and the following further terms and conditions:
(a) The Agent shall have received on any Closing Date hereunder the
opinion of Xxxx Xxxxx, counsel for the Company, dated as of such
Closing Date. Such opinion may be given subject to the January 1,
1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by
the Legal Opinion Committee of the Corporate and Banking Law
Section of the State Bar of Georgia (the "Interpretive
Standards"), and shall be substantially to the effect that:
(i) the Company is a corporation duly organized, validly
existing and in good standing, under the laws of the State
of Florida.
(ii) the Shares to be sold by the Company have been duly
authorized and will be, upon issuance and delivery against
payment therefor in accordance with the terms of this
Agreement, validly issued, fully paid and non-assessable
and will not be subject to any preemptive or other rights
to subscribe for or purchase Shares pursuant to the
organizational documents of the Company or, to the best of
such counsel's knowledge, otherwise.
(iii) the Company's authorized shares consist of 25,000,000
shares of common stock, $.001 par value, of which
10,798,699 shares are outstanding. The outstanding shares
of the Company's stock have been duly authorized and
validly issued, were not issued in violation of any
statutory preemptive
34
rights of shareholders, and are fully paid and
nonassessable. Except as described in the Registration
Statement, there are no options, subscriptions, warrants,
calls, rights or commitments obligating the Company to
issue equity securities or acquire its equity securities.
(iv) the amounts, terms and designations of the capital stock
of the Company conform as to legal matters in all material
respects to the description thereof contained in the
Registration Statement under the caption "Description of
Capital Stock".
(v) this Agreement has been duly authorized, executed and
delivered by the Company and, when so executed and
delivered, constitutes the legal, valid and binding
obligation of the Company, enforceable against the
Company.
(vi) the execution and delivery by Company of this Agreement do
not, and if Company were now to perform its obligation
under this Agreement such performance would not, result in
any: (1) violation of Company's articles or incorporation
or bylaws; (2) violation of any existing federal or state
constitution, statute, regulation, rule, order, or law to
which Company or its assets are subject; (3) breach of or
default under any Material Agreements; (4) creation or
imposition of a contractual lien or security interest in,
on or against its assets under any Material Agreements; or
(5) violation of any judicial or administrative decree,
writ, judgment or order to which, to our knowledge,
Company or its assets are subject.
(vii) to the knowledge of such counsel, the Company has all
necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory
organizations, all courts and other tribunals, to own,
lease, license and use its properties and assets and to
conduct its business in the manner described in the
Registration Statement, except to the extent that the
failure to obtain or file would not have a material
adverse effect on the Company.
(viii) to the knowledge of such counsel, no authorization,
consent, approval of or qualification with any federal or
state governmental authority is required for the
execution, delivery or performance by the Company of this
Agreement, except such as have been previously made or
obtained, in connection with the distribution of the
Shares by the Agent, and except those which, if not made
or obtained, will not, individually or in the aggregate,
have a material adverse effect on the Company.
(ix) nothing has come to the attention of such counsel to cause
such counsel to believe that (except for financial
statements, projections, schedules and other financial and
statistical information included or incorporated by
reference in the Registration Statement as to which such
counsel need not express any opinion) the Registration
Statement contained any untrue statement of a material
fact or omitted to state a material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances under which they
were made, not misleading, or that the Registration
Statement as of the Closing Date, contained any untrue
statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in light of the circumstances under which they
were made, not misleading.
(x) to such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which
the Company is a party or to which any of the properties
of the Company is subject that are not fairly summarized
in all material respects in the Registration Statement.
(xi) to such counsel's knowledge, after due inquiry, all
contracts, indentures, mortgages, loan agreements, leases
or other documents to which the Company is a party or to
which its business or properties are subject are fairly
summarized in all material respects in the
35
Registration Statement; and
(xii) after due inquiry, such counsel does not know of any
pending or threatened proceeding relating to the
revocation or modification of any consent, authorization,
approval, order, certificate or permit necessary to the
conduct of the business of the Company.
As to questions of fact material to such opinion, counsel may
rely on (without independent verification of the accuracy or
completeness thereof), the representations and warranties of the
Company contained in this Agreement as well as the Material
Agreements. The term "Material Agreement", for purposes of such
opinion, shall mean each of the agreements which has been filed
with the Securities and Exchange Commission as an exhibit
(including any document which in lieu of being filed as an
exhibit, is incorporate by reference or which the Company agrees
or has agreed to provide to the Securities and Exchange
Commission upon request) to the Company's most recently-filed
Annual Report on Form 10-KSB or any subsequently filed report on
Form 10-QSB of Form 8-K, pursuant to the requirements of Item
601(b)(10) of SEC Regulation S-B, 17 CFR 228.601(b)(10), as
amended.
(b) On the Closing Date of any Closing hereunder, the Agent shall
have received from the President of the Company a letter dated as
of such Closing Date, in form and substance satisfactory to the
Agent in all respects, concerning the accuracy, to his best
knowledge and belief, of the financial information included in
the Prospectus.
(c) At the Closing Date of any Closing hereunder, there shall be
furnished to the Agent a certificate, dated as of such Closing
Date, signed by the President and Secretary of the Company
(collectively the "Officers") in form and substance satisfactory
to the Agent (the "Certificate") to the effect that, to their
best knowledge and belief:
(i) The Officers of the Company have carefully examined the
Prospectus, and as of the date of such Certificate, the
statements in the Prospectus are true and correct, and the
Prospectus does not misstate or omit to state a material
fact required to be stated therein or necessary to make
the statements therein not untrue or misleading.
(ii) The Company has complied with all conditions precedent to
the performance of the Agent's obligations under this
Agreement.
(iii) Each of the representations and warranties of the Company
contained in this Agreement was when originally made and
is as of the date of such Certificate true and correct.
(iv) No order from any regulatory body has been issued and no
proceedings have been instituted, or to the knowledge of
such Officers contemplated, to prevent the consummation of
the Offering.
7. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless the Agent, its
officers, directors, counsel, representatives and persons who
control the Agent within the meaning of the Exchange Act, from
and against all losses, claims, damages and liabilities, joint
and several, to which any of the aforesaid parties, including the
Agent (collectively, the "Agent Parties"), may become subject,
under federal or state securities laws or otherwise, 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 a material fact
contained in the Prospectus, or in any Blue Sky application or
other document executed by the Company or on its behalf for the
purpose of qualifying any or all of the Stock for sale under the
securities laws of any jurisdiction, or based upon written
information furnished by the Company under the securities laws
thereof (any such application, document, or information being
hereinafter referred to as a "Blue Sky Application") or (ii) the
omission to state in the Prospectus, or in any Blue Sky
Application, a material fact
36
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading. The Company will further reimburse the
Agent Parties, and each and every one of them, for any legal or
other expenses reasonably incurred by any one or more of the
Agent Parties in connection with investigating and defending such
loss, claim, damage, liability or action; provided, however, that
the Company will not be liable in any case to the extent that the
subject loss, claim, damage or liability arises out of, or is
based upon, an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and
nonconformity with written information furnished to the Company
by the Agent specifically for use in the preparation of the
subject Prospectus, Blue Sky Application, or any amendment or
supplement thereto. The indemnity provided for in this Section
7(a) will be in addition to any liability which the Company may
otherwise have.
(b) The Agent will indemnify and hold harmless the Company, its
officers, directors, counsel, representatives and persons who
control the Company which the meaning of the Securities Exchange
Act of 1934, from and against all losses, claims, damages and
liabilities, joint and several, to which any of the aforesaid
parties, including the Company (collectively, the "Company
Parties"), may become subject, under federal or state securities
laws or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon: (I) any untrue statement of material fact contained
in the Prospects, any Blue Sky Application, or any amendment or
supplement thereto; (ii) the omission to state in the Prospectus,
any Blue Sky Application, or any amendment or supplement to any
of the foregoing, a material fact required to be stated therein
or necessary to make the statements therein not misleading;
provided, in the case of Sections (7)(b)(I) and (7)(b)(ii) to the
extent, but only to the extent, that such untrue statement or
omission was made in reliance upon or in conformity with written
information furnished to the Company by the Agent specifically
for use with reference to the Agent in preparation of the
Prospectus, any Blue Sky Application, or any supplement or
amendment thereto; or (iii) arising out of any misrepresentation
by the Agent in this Agreement or any breach of warranty by the
Agent with respect to this Agreement. The Agent will further
reimburse the Company Parties for legal or other expenses
reasonably incurred by the Company Parties in connection with
investigating or defending any loss, claim, damage, liability or
action under this Section (7)(b). The indemnification provided
for in this Section 7(b) shall be in addition to any liability
which the Agent may otherwise have.
(c) Promptly after receipt by an indemnified party under Section
(7)(a) or (7)(b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such
Section, notify the indemnifying party in writing of the
commencement of the action; but the omission so to notify the
indemnified part shall not relieve it from any liability which it
may have to an indemnified party otherwise and under such
Section. In any case any such action shall be brought against any
indemnified person, then it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be
entitled to participate therein, and, to the extent it shall
wish, jointly with any other indemnifying party similarly
notified, the indemnifying party may assume the defense thereof,
with counsel satisfactory to such indemnified party (who may also
be counsel to the indemnifying party only if the representation
of both parties does not constitute a conflict) and after notice
from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under such Section
for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs
of investigation.
8. SURVIVAL CLAUSE. The respective indemnities, agreements (including,
without limitation, the agreement set forth in Section 7 hereof),
representations, warranties and other statements of the Company and the
Agent as set forth in this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the
results thereof) made by or behalf of the Agent, any officer or
37
director of the Agent, or counsel therefor, or the Company or any
officer or director of the Company, or counsel therefor, and shall
survive any termination of this Agreement and the receipt of any payment
for the Shares.
9. NOTICES. All notices under this Agreement shall be in writing and if
sent to the Agent shall be mailed, delivered or telecopied to the Agent
at the address first provided above, and if sent to the Company shall be
mailed or delivered to the Company at its present headquarters address,
0000 Xxx Xx. Xxxxxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, Attention:
President or to such other address as may be delivered to the Agent from
time to time. Any notice shall be deemed to have given when it is
received by the party to whom it is addressed.
10. GOVERNING LAW. Except to the extent governed by preemptive federal law,
this Agreement shall be governed by and construed in accordance with the
substantive laws of the State of Georgia.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.
SUCCESS DEVELOPMENT INTERNATIONAL, INC.
By:
Xxxxx X. Xxxxx
President and CEO
ACCEPTED AND AGREED TO this 4th day of February, 1998.
XXXXXXXXX XXXXXX & XXXXX
By:
Title:
