VALUERICH, INC. West Palm Beach, Florida 33407 Re: Underwriting Agreement Initial Public Offering Form SB-2 (File No.: 333-135511) Gentlemen:
US
Euro Securities, Inc.
00000
Xxxxxxx Xxx Xxxxx
Xxxxxxx
Xxx, Xxxxxxx 00000
|
Lane
Capital Markets, LLC
000
Xxxxxx Xxxxx Xxxx
Xxxxxxxxx,
Xxxxxxxxxxx 00000
|
________________,
2007
VALUERICH,
INC.
0000
X.
Xxxxx Xxxxxxx, Xxxxx X
Xxxx
Xxxx
Xxxxx, Xxxxxxx 00000
Re: Underwriting
Agreement
Initial
Public Offering
Form
SB-2 (File No.: 333-135511)
Gentlemen:
This
Agreement confirms the mutual understanding and agreement between ValueRich,
Inc., a Delaware corporation (the “Company”),
and
US Euro Securities, Inc. and Lane Capital Markets, LLC, as exclusive managing
agents (the “Managing
Agents”)
in
connection with the offering and sale, on a “best-efforts, minimum/maximum”
basis, through the Managing Agents and other broker-dealers identified on
Schedule
I
attached
hereto (together with the Managing Agents, the “Placement
Agents”)
of a
minimum of 1.6 million (1,600,000) (the “Minimum
Offering”)
and a
maximum of 2.3 million (2,300,000) shares (the “Maximum
Offering”)
of
common stock, par value $0.01 per share (the “Common
Stock”),
of
the Company (the “Securities”)
at an
initial offering price (the “Offering”)
to the
public of $3.50 per share (the “Offering
Price”)
pursuant to a registration statement on Form SB-2, as amended (File No.:
333-135511) (the “Registration
Statement”),
filed
with the Securities and Exchange Commission (the “SEC”
or
the
“Commission”) under
the
Securities Act of 1933, as amended (the “Securities
Act”).
The
Offering is further described in the Registration Statement.
1.
Registration
Statement.
The
Registration Statement, including the prospectus included in the Registration
Statement, and the exhibits filed therewith, for the registration of the
Securities under the Securities Act will be prepared by the Company and filed
with the SEC and the applicable state authorities. The Registration Statement,
any amendments thereto, and all documents filed by the Company with the SEC
shall conform in all material respects with the requirements of the Securities
Act and the Rules and Regulations promulgated thereunder. All financial
statements contained in the Registration Statement and any amendment thereto
shall have been reported on by independent certified public accountants
acceptable to the Managing Agents, it being agreed that Xxxxxxxx, Bierwolf
&
Xxxxxx, LLC, the Company’s current independent auditors, are acceptable to the
Managing Agents.
The
Registration Statement, includes the prospectus, Part II, and financial
schedules and exhibits thereto, as amended at the time when it shall become
effective, and the prospectus included as part of the Registration Statement
on
file with the SEC when it shall become effective or, if the procedure in Rule
430A of the Rules and Regulations (as defined below) under the Securities Act
is
followed, the prospectus that discloses all the information that was omitted
from the prospectus pursuant to such Rule on the date the Registration Statement
is declared effective by the SEC (the “Effective Date”), and in either case,
together with any changes contained in any prospectus filed with the SEC by
the
Company with your consent after the Effective Date, is herein referred to as
the
“Final Prospectus.” If the procedure in Rule 430A is followed, the prospectus
included as part of the Registration Statement on the date when the Registration
Statement became effective is referred to herein as the “Effective Prospectus.”
Any prospectus included in the Registration Statement and in any amendments
thereto prior to the Effective Date of the Registration Statement is referred
to
herein as a “Preliminary Prospectus.” For purposes of this Agreement, “Rules and
Regulations” mean the rules and regulations adopted by the SEC under the
Securities Act.
2.
Representations,
Warranties and Covenants of the Company.
In
order to induce the Managing Agents to enter into this Agreement, the Company
hereby represents, warrants and covenants as follows:
(a) Neither
the Registration Statement nor the other material to be filed with the SEC
will
contain any untrue statements of material facts nor will there be any omissions
of material fact required to be stated therein or that are necessary to make
the
statements therein not misleading, except that, as between the parties, this
covenant will not apply to any statement or omission made in reliance upon
or in
conformity with information furnished to the Company by and with respect to
the
Placement Agents expressly for use in the Registration Statement or any
amendment or supplement thereto.
(b) The
Registration Statement, as may be amended from time to time, shall be submitted
to the Managing Agents for review at least five (5) business days before the
date the Company and Managing Agents propose to file the Registration Statement
with the SEC. All amendments and supplements to the Registration Statement
shall
be submitted to the Managing Agents at least five (5) business days prior to
the
date that such amendments are intended to be filed with the SEC, which time
period may be shortened by mutual consent of the parties. The content of any
verbal comments and copies of all comment letters received from the SEC shall
immediately be supplied to Managing Agents and their counsel. The Company will
deliver to the Managing Agents as many copies of the manually executed and
conformed Registration Statement and each amendment thereto (including
exhibits), as the Managing Agents shall reasonably request and at the same
time
as such documents are filed with the SEC. The Company will not allow the
Registration Statement to become effective without obtaining the prior written
consent of the Managing Agents.
(c)
The
Company has obtained a CUSIP number for the Securities, and the Company will
use
its best efforts to register or qualify (or exempt from
registration/qualification) the Securities for offering in every state,
territory or possession of the United States (including the District of
Columbia, hereinafter referred to as a “State”)
in
which it plans to offer the Securities for sale. The materials filed or to
be
filed with any State will not contain any untrue statements of material fact
nor
are there or will there be any omissions of material facts required to be stated
therein that are necessary to make the statements therein not misleading, except
that, as between the parties, this covenant will not apply to any statement
or
omission made in reliance upon or in conformity with information furnished
to
the Company by and with respect to Placement Agents expressly for use in the
materials filed with the State.
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(d)
The
outstanding capital stock of the Company has been duly and validly authorized,
issued and is fully paid and non-assessable and will conform to all statements
made in the Registration Statement, including the Prospectus and relevant
exhibits, with respect thereto. The Securities have been duly and validly
authorized and, when issued and delivered against payment as provided in this
Agreement, will be validly issued, fully paid and non-assessable.
(e)
The
Securities are validly authorized, and when issued and delivered in accordance
with this Agreement, will be validly issued, fully paid and nonassessable,
without any personal liability attaching to the ownership thereof, and will
not
be issued in violation of any preemptive or similar rights of stockholders
of
the Company, and the holders thereof will receive good title to the Securities
free and clear of all liens, security interests, pledges, charges, encumbrances,
stockholders’ agreements and voting trusts. The Securities conform to all
statements relating thereto in the Registration Statement and
Prospectus.
(f) The
Company has been legally incorporated and is now, and always during the period
of the Offering will be, a validly existing corporation under the laws of the
State of Delaware, lawfully qualified to conduct the business for which is
was
organized and which it proposes to conduct. The Company will always during
the
period of the Offering be qualified to conduct business as a foreign corporation
in each jurisdiction where the nature of its business requires such
qualification.
(g)
The
Company’s certificate of incorporation provides for the authorization of 100
million (100,000,000) shares of Common Stock and ten million (10,000,000) shares
of preferred stock, par value $0.001 per share. There are no outstanding
options, warrants or other rights to purchase or otherwise receive securities
of
the Company except as described in the Registration Statement.
(h)
The
Company has no subsidiaries nor contemplates acquiring subsidiaries or engaging
in mergers with or the acquisition of any companies.
(i)
The
financial statements, together with related schedules and notes, to be included
in the Registration Statement will present fairly the financial condition of
the
Company and will be reported upon by independent public accountants according
to
generally accepted accounting principles and as required by the rules and
regulations of the Commission.
(j)
Neither
the Securities nor any other Company’s securities are subject to preemptive
rights.
(k)
The
Company has the legal right and authority to enter into this Underwriting
Agreement, to effect the proposed sale of the Securities, and to effect all
other transactions contemplated by this Agreement.
(l)
The
Company is eligible to use Form SB-2 for the offering of the
Securities.
(m)
The
Company possesses adequate certificates and permits issued by the appropriate
federal, state and local regulatory authorities necessary to conduct its
business and to retain possession of its properties. The Company has not
received any notice of any proceeding relating to the revocation or modification
of any of these certificates or permits.
3
(n)
The
Company has filed all tax returns required to be filed and is not in default
in
the payment of any taxes that have become due pursuant to any law or any
assessment.
(o)
All
of
the contracts, leases, licenses, permits and agreements under which the Company
operates as will be described in the Registration Statement are in full force
and effect. The Company is not in default under any of the material terms or
provisions of any such contracts, leases, licenses, permits or
agreements.
(p)
All
original documents and other information relating to the Company’s business are
and will continue to be made available upon request to the Managing Agents
and
their counsel at the offices of the Company, and copies of any such documents
will be promptly furnished upon request to the Managing Agents or their
counsel.
(q)
The
Company shall appoint Interwest Transfer Company, Inc., or another firm
reasonably acceptable to the Managing Agents, as the Company’s transfer agent.
The Company will continue to retain a transfer agent reasonably satisfactory
to
the Managing Agents for so long as the Company is subject to the reporting
requirements under Section 12(g) or Section 15(d) of the Securities Exchange
Act
of 1934, as amended (the "Exchange
Act").
The
Company will make arrangements to have available at the office of the transfer
agent sufficient quantities of the Company’s appropriate certificates as may be
needed for the quick and efficient transfer of the Securities.
(r)
The
Company will use the proceeds from the sale of the Securities as will be set
forth in the Registration Statement and Prospectus.
(s)
There
are
no contracts or other documents required to be described in the Registration
Statement or to be filed as exhibits to the Registration Statement that will
not
be described or filed as required.
All
of
the above representations and warranties shall survive the performance or
termination of this Agreement.
3.
Representations,
Warranties and Covenants of the Managing Agents.
Each of
the Managing Agents represents, warrants and covenants as follows:
(a)
It
is
registered as a broker-dealer with the Commission, and is registered to the
extent registration is required with the appropriate governmental agency in
each
State in which it offers or sells the Securities, and is a member of the
National Association of Securities Dealers, Inc. (“NASD”)
and
will use its best efforts to maintain such registrations, qualifications and
memberships throughout the term of the Offering.
(b)
To
the
knowledge of the Managing Agent, no action or proceeding is pending against
the
Managing Agent or any of its officers or directors concerning the Managing
Agent’s activities as a broker or dealer that would affect the Company’s
offering of the Securities.
4
(c)
The
Managing Agent, or the Placement Agents, will offer the Securities only in
those
states and in the quantities that are identified in the Blue Sky Memoranda
from
the Company’s counsel to the Managing Agent that the offering of the Securities
has been registered or qualified (or exempt from registration/qualification)
for
sale under the applicable State statutes and regulations. The Managing Agent
and
the Placement Agents, however, may offer the Securities in other States if
(i)
the transaction is exempt from the registration requirements in that State,
(ii)
the Company’s counsel has received notice ten days prior to the proposed sale,
and (iii) the Company’s counsel does not object within such ten-day
period.
(d)
The
Managing Agent, in connection with the offer and sale of the Securities and
in
the performance of its duties and obligations under this Agreement, agrees
to
use its best efforts to comply with all applicable federal laws; the laws of
the
states or other jurisdictions in which the Securities are offered and sold;
and
the Rules and current written interpretations and policies of the NASD.
(e)
The
Managing Agent is a duly organized entity, validly existing and in good standing
under the laws of the state of its formation with all requisite power and
authority to enter into this Agreement and to carry out its obligations
hereunder.
(f)
This
Agreement has been duly authorized, executed and delivered by the Managing
Agent
and is a valid agreement on the part of the Managing Agent.
(g)
Neither
the execution of this Agreement nor the consummation of the transactions
contemplated hereby will result in any breach of any of the terms or conditions
of, or constitute a default under, the formation documents or bylaws of the
Managing Agent or any indenture, agreement or other instrument to which the
Managing Agent is a party or violate any order directed to the Managing Agent
of
any court or any federal or State regulatory body or administrative agency
having jurisdiction over the Managing Agent or its affiliates.
(h)
No
person
acting by, through or under the Managing Agent will be entitled to receive
from
the Managing Agent or from the Company finders’ fees or similar payments, except
as set forth in this agreement.
All
of
the above representations and warranties shall survive the performance or
termination of this Agreement.
4. Employment
of the Managing Agents. In
reliance upon the representations and warranties and subject to the terms and
conditions of this Agreement:
(a)
The
Company employs the Managing Agents as its exclusive agents to sell for the
Company's account the Securities, on a cash basis only, at a price of $3.50
per
share. The Managing Agents agree to use their best efforts, as agents for the
Company, to sell the Securities subject to the terms and conditions set forth
in
this Agreement. It is understood between the parties that there is no firm
commitment by the Managing Agents to purchase any or all of the
Securities.
(b)
The
obligation of the Managing Agents to offer the Securities is subject to receipt
by it of written advice from the SEC that the Registration Statement is
effective, is subject to the Securities being registered or qualified (or exempt
from registration/qualification) for offering under applicable laws in the
States as may be reasonably designated, is subject to the absence of any
prohibitory action by any governmental body, agency or official, and is subject
to the terms and conditions contained in this Agreement and in the Registration
Statement.
5
(c)
The
Company and the Managing Agents agree that unless a minimum of 1.6 million
(1,600,000) of the Securities to be offered are subscribed on or within 60
days
(or such lesser number of days as may be required by the American Stock
Exchange) after the Effective Date, (which period may be extended by the
Managing Agents for an additional period or periods of up to 60 days in the
aggregate), the agency between the Company and the Managing Agents will
terminate. In such an event, the full proceeds that have been paid for the
Securities shall be returned to the purchasers within five (5) business days.
Prior to the sale of all of the Securities to be offered, all proceeds received
from the sale of the Securities will be deposited into a non-interest bearing
escrow account entitled "ValueRich, Inc. Escrow Account" (the "Escrow
Account")
with
Continental Stock Transfer & Trust Company (the "Escrow
Agent").
(d)
The
Managing Agents, the Company and the Escrow Agent have entered into a fund
escrow agreement ("Escrow
Agreement")
filed
as exhibit to the Registration Statement. The Company agrees to faithfully
perform its obligations under the Escrow Agreement. The Managing Agents will
promptly deliver the funds into the Escrow Account in accordance with Rule
15c2-4 of the Exchange Act, but in any event not later than noon the next
business day after receipt of such funds. The Managing Agents will promptly
deliver a copy of each subscription agreement received to the executive offices
of the Company, to the attention of the Company's Assistant Treasurer. In
accordance with the requirements of Rules 15c2-4 and 10b-9 of the Exchange
Act,
in the event that the Minimum Offering amount is not met, the funds paid into
the Escrow Account shall be promptly returned to each individual subscriber
by
the Escrow Agent, and not returned to the Managing Agents or the Company for
delivery to such subscribers.
(e)
Subject to the closing of the sale by the Company of the Minimum Offering,
the
Company agrees to pay to the Managing Agents immediately upon the release to
the
Company in such closing (the "Initial
Closing")
of the
investors' funds deposited into the Escrow Account, and upon release to the
Company of the investors' funds in each closing thereafter:
(i)
|
upon
each closing, an underwriting discount equal to nine percent (9%)
of the
aggregate subscription amount for all Securities placed by the Managing
Agents and the Placement Agents;
|
(ii)
|
a
non-accountable expense allowance to the Managing Agents for legal,
accounting, and other miscellaneous expenses equal to three percent
(3%)
of the aggregate subscription amount for all Securities placed by
the
Managing Agents and the Placement Agents; such allowance to be paid
on
each closing of the Offering with respect to the amount closed in
each
such closing less advances which are to be applied against such expense
allowance as stated; and
|
(iii)
|
A
bank check or wire transfer of $108,000 pursuant to a three (3) year
consulting agreement, in the form substantially similar to that attached
hereto as Annex
A,
at a fee of $36,000 per year to be entered into by and between the
Company
and the Managing Agents, which such agreement shall be effective
upon the
Closing.
|
6
(f)
At
the
Initial Closing, the Company shall also deliver to the Managing Agents, lock-up
agreements, satisfactory to the Managing Agents (the “Lock-Up
Agreements”),
from
each of the officers, directors and 5% or more stockholders to the Company,
agreeing that for a period of twelve (12) months from the date the Effective
Date, he, she or it will not, without the Company’s and each Managing Agent’s
prior written consent, offer, sell, contract to sell, grant any option for
the
sale of, or otherwise dispose of, directly or indirectly, any shares of Common
Stock of the Company, including without limitation, any shares of Common Stock
issuable upon the exercise of any employee stock options; provided
however,
that
such persons may offer, sell contract to sell, grant an option for the sale
of,
or otherwise dispose of all or any part of his, her or its shares of Common
Stock or other securities or instruments of the Company during such period
only
if such transaction is private in nature and the transferee of such shares
of
Common Stock or other securities or instruments agrees in writing prior to
such
transaction, to be bound by all of the provisions of such Lock-up Agreement.
The
Lock-up Agreements shall also provide that each of the officers, directors
and
5% or more stockholders of the Company will agree that subsequent to the
expiration of this twelve (12) month lock-up period, they will only dispose
of
or otherwise encumber any of their shares when the Securities price, adjusted
for any splits, or any material change in capital structure via merger or
business combination, trades 60% above the Offering Price for a twenty (20)
consecutive business day period. Commencing 12 months from the date of this
prospectus, should the Company’s Common Stock trade sixty percent (60%) above
the Offering Price for a twenty (20) consecutive business day period, all
contractual lock-ups will be terminated. The lock-up will expire in all cases
eighteen (18) months from the Effective Date. .
(g) The
Company shall be responsible for all of its selling expenses incident to the
offering which are customarily incurred, paid, or borne by or on behalf of
issuers in connection with the sale of securities, even though such expenses
are
paid through the Managing Agents. Such selling expenses include, but are not
limited to, the following: (1) the cost of preparing, printing, and filing
registration applications, registration statements, prospectuses, offering
circulars, and other documents used in registering securities, including any
registration fees and other expenses associated therewith; (2) the amount of
any
attorney's fees and expenses incurred or paid in connection with the Offering;
(3) the amount of any accountant's or auditor's fees and expenses incurred
or
paid in connection with the Offering; (4) the amount of the fees and charges
of
any transfer agents, registrars, indenture trustees, escrow agents,
depositories, engineers, appraisers, or other professional or technical experts;
(5) the cost of authorizing, preparing, and printing certificates for securities
and other documents relating thereto, including taxes and stamps; (6) the amount
of all printing, advertising, traveling expenses, and expenses in connection
with meetings and presentations for informational or promotional purposes (e.g.,
"road show") incurred or paid by the Company or, at the request of or with
the
prior approval of the Company, which approval shall not be unreasonably
withheld, by the Managing Agents, in registering or selling securities; and
(7)
any other costs (including staffing or other additional administrative costs)
directly or indirectly borne by the Company in respect of the sale of the
securities being offered, that are not selling costs for the offering.
7
(h) At
each
Closing, the Managing Agents shall have received the favorable opinion of Xxxxxx
& Xxxxx, LLP, counsel for the Company, having offices at Mission Bay Office
Plaza, 00000 Xxxxx Xxxx 0, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000, addressed
to
the Managing Agents, to the satisfaction of the Managing Agents.
(i) At
each
closing, the Managing Agents shall have received a customary “cold comfort”
letter from the Company’s auditors.
5.
Further
Agreements of the Company.
The
Company further agrees with the Managing Agents as follows:
(a)
To
use
its best efforts to cause the Registration Statement to become effective under
the Securities Act as promptly as possible and notify the Managing Agents
immediately, and confirm such notice in writing, (i) when the Registration
Statement and any post-effective amendment thereto become effective under the
Securities Act, (ii) of the receipt of any comments from the SEC or the “blue
sky” or securities authority of any jurisdiction regarding the Registration
Statement, any post-effective amendment thereto, the Prospectus, or any
amendment or supplement thereto, (iii) of the filing with the SEC of any
supplement to the Prospectus, and (iv) of the receipt of any notification with
respect to a Stop Order. The Company will use its best efforts to prevent the
issuance of any Stop Order and, if and if any Stop Order is issued, to obtain
the lifting thereof as promptly as possible. If the Registration Statement
has
become or becomes effective under the Securities Act with a form of prospectus
omitting information under Rule 430A of Regulation C promulgated under the
Securities Act, or filing of the prospectus with the SEC is otherwise required
under Rule 424(b) of Regulation C, the Company will file with the SEC the
Prospectus, properly completed, pursuant to such rule within the time period
prescribed and will provide evidence satisfactory to the Managing Agents of
such
timely filing.
(b) During
the time when a Prospectus relating to the Securities is required to be
delivered hereunder or under the Securities Acts or regulations promulgated
by
the SEC, comply with all the requirements imposed upon it by the Securities
Act,
as now existing and hereafter amended, and by the rules and regulations
promulgated thereunder, as from time to time in force, so far as necessary
to
permit the continuance of the sales of the Securities in accordance with the
provisions hereof. If, at any time when a Prospectus relating to the Securities
is required to be delivered hereunder or under the rules or the regulations
promulgated by the SEC, any event shall have occurred as a result of which,
in
the reasonable opinion of counsel for the Company or counsel for the Managing
Agents, the Registration Statement or the prospectus as then amended or
supplemented contains any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, or if, the in the reasonable opinion of
either of such counsel, it is necessary at any time to amend or supplement
the
Registration Statement or the prospectus to comply with the Securities Act
and
the rules and regulations promulgated thereunder, the Company will immediately
notify the Managing Agents and promptly prepare and file with the SEC an
appropriate amendment or supplement (in form and substance satisfactory to
the
Managing Agents) which will correct such statement or omission of which will
effect such compliance and will use its best efforts to have any such amendment
declared effective under the Securities Act as soon as possible.
8
(c) The
Company will use its best efforts to register or qualify the sale of the
Securities in such States as shall be reasonably requested by the Managing
Agents.
(d)
The
Company will deliver to the Managing Agents as many copies of the Preliminary
Prospectus the Managing Agents may reasonably request during the period
following the filing of the Registration Statement and each amendment thereto.
The Company will deliver to the Managing Agents as many copies of the Final
Prospectus and each post-effective amendment of the Registration Statement,
as
the Managing Agents may reasonably request during the period of the offering
and
for ninety
(90) days
after the closing date,
(e)
The
Company will file with the Commission and any appropriate State securities
commissioners any sales and other reports required by the rules and regulations
of such agencies and will promptly supply copies to the Managing
Agents.
(f)
The
Company will notify the Managing Agents a reasonable amount of time in advance
of any additional issuance of shares following a successful closing, for a
period of two years following the Final Closing Date, except upon the issuance
of shares underlying warrants outstanding on the closing date and shares issued
pursuant to any duly adopted directors or employees stock or stock option or
equivalent plan, the issuance of which Company will notify the Managing Agents
within five business days following such issuance.
6.
Indemnification
and Contribution.
(a) Indemnification
by Company.
The
Company shall indemnify and hold harmless each Managing Agent and each
participating dealer against any and all loss, claim, damage or liability,
joint
or several, to which such Managing Agent or participating dealer may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, or liability (or action with respect thereto) arises out of or is based
upon (a) any violation of any registration requirements; (b) any improper use
of
sales literature by the Company; (c) any untrue statement or alleged untrue
statement made by the Company in Section 2 hereof; (d) any untrue statement
or
alleged untrue statement of a material fact contained (i) in the Registration
Statement, any Preliminary Prospectus, Effective Registration or the Final
Prospectus or any amendment or supplement thereto, or (ii) in any
application or other document, executed by the Company specifically for such
application or based upon written information furnished by the Company, filed
in
order to qualify the Securities under the securities laws of the states where
filings were made (any such application, document, or information being
hereinafter called “Blue Sky Application”); or (e) the omission or alleged
omission to state in the Registration Statement, any Preliminary Prospectus,
the
Effective Prospectus, or the Final Prospectus or any amendment or supplement
thereto or in any Blue Sky Application a material fact required to be stated
therein or necessary to make the statements therein not misleading; and shall
reimburse the Managing Agents and each participating dealer for any legal or
other reasonable expenses incurred by the Managing Agents and participating
dealer in connection with investigating or defending against or appearing as
a
third-party witness in connection with any such loss, claim, damage, liability
or action, notwithstanding the possibility that payments for such expenses
might
later be held to be improper, in which case the person receiving them shall
promptly refund them; except that the Company shall not be liable in any such
case to the extent, but only to the extent, that any such 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
in
conformity with written information furnished to the Company through the
Managing Agents or participating dealer by or on behalf of the Managing Agents
or participating dealer specifically for use in the preparation of the
Registration Statement, any Preliminary Prospectus, the Effective Prospectus
and
the Final Prospectus or any amendment or supplement thereto, or any Blue Sky
Application.
9
(b) Indemnification
by Managing Agents.
The
Managing Agents shall indemnify and hold harmless the Company against any and
all loss, claim, damage or liability, joint or several, to which the Company
may
become subject under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability (or action in respect thereto) arises out of or is
based upon (a) any untrue statement or alleged untrue statement of a material
fact contained (i) in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or the Final Prospectus or any amendment
or
supplement thereto or (ii) in any Blue Sky Application; or (b) the omission
or alleged omission to state in the Registration Statement, any Preliminary
Prospective, the Effective Prospectus or the Final Prospectus or any amendment
or supplement thereto or in any Blue Sky Application a material fact required
to
be stated therein or necessary to make the statements therein not misleading;
except that such indemnification shall be available in each such 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 information
and in conformity with written information furnished to the Company through
the
Managing Agents or on behalf of the Managing Agents specifically for use in
the
preparation thereof; and shall reimburse any legal or other expenses reasonably
incurred by the Company in connection with the investigation or defending
against any such loss, claim, damage, liability or action.
(c) Right
to Provide Defense.
Promptly
after receipt by an indemnified party under Section 6(a) or 6(b) above of
written notice of a claim or the commencement of any action, the
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 claim or the commencement of that action; the failure to notify the
indemnifying party shall not relieve it of any liability which it may have
to an
indemnified party, except to the extent that the indemnifying party did not
otherwise have knowledge of the claim or the commencement of the action and
the indemnifying party’s ability to defend against the claim or action was
prejudiced by such failure. Such failure shall not relieve the indemnifying
party from any other liability which it may have to the indemnified party or
any
person identified in Section 6(d) below. If any such claim or action shall
be
brought against an indemnified party, and it shall notify the indemnifying
party
thereof, the indemnifying party shall be entitled to participate therein and,
to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim
or
action, the indemnifying party shall not be liable to the indemnified party
under such section for any legal or other expenses subsequently incurred by
the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; except that the indemnified party shall have the right
to employ counsel to represent the indemnified party who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the indemnified party under this Section 6 if, in the reasonable judgment
of
the indemnified party, it is advisable for the indemnified party to be
represented by separate counsel, and in that event the fees and expenses of
such
separate counsel shall be by the indemnifying party. The indemnified party
may,
but shall not be obligated to, participate in the defense at its own expense
with its own counsel. Notwithstanding anything contained herein, the Company
shall promptly reimburse, or advance if so requested by the Managing Agents,
any
and all reasonable and accountable attorney fees and expenses incurred, or
to be
incurred, by the Managing Agents under this Section 6.
10
(d) Contribution.
If the
indemnification provided for in Sections 6(a) and 6(b) of this Agreement is
unavailable or insufficient to hold harmless an indemnified party, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages, or liabilities
referred to in Sections 6(a) or 6(b) above (a) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one
hand and the Managing Agents or participating dealers on the other from the
offering of the Securities; or (b) if the allocation provided by clause (a)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect the relative benefits referred to in clause (a) above but also the
relative fault of the Company on the one hand and the Managing Agents or
participating dealers on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Managing Agents or participating dealers shall
be deemed to be in the same proportion as the total net proceeds from the
Offering (before deducting expenses) received by the Company bear to the total
compensation received by the Managing Agents or participating dealers under
this Agreement. Relative fault shall be determined by reference to, among other
things, whether the untrue statement of a material fact or the omission to
state
a material fact relates to information supplied by the Company, the Managing
Agents, or the participating dealers and the parties’ relative intent,
knowledge, access to information, and opportunity to correct or prevent such
untrue statement or omission. For purposes of this Section 6(d), the term
“damages” shall include reasonable counsel fees or other expenses reasonably
incurred by the Company, the Managing Agents, or participating dealers in
connection with investigating or defending any action or claim which is the
subject of the contribution provisions of this Section 6(d). Notwithstanding
the
provisions of this Section 6(d), no Managing Agent or participating dealer
shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such Managing
Agent or participating dealer has otherwise been required to pay by reason
of
any such untrue statements or omissions. No person adjudged guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Under this Section 6(d), each Managing Agent’s
obligations to contribute are several in proportion to their respective
underwriting obligations and not joint. Each party entitled to contribution
agrees that upon the service of a summons or other initial legal process upon
it
in any action instituted against it in respect of which contribution may be
sought, it shall promptly give written notice of such service to the party
or
parties from whom contribution may be sought, but the omission so to notify
such
party or parties of any such service shall not relieve the party from whom
contribution may be sought from any obligation it may have hereunder or
otherwise (except as specifically provided in Section 6(d) hereof).
11
(e) Extension
of Obligations.
The
obligations of the Company under this Section 6 shall be in addition to any
other liability which the Company may otherwise have, and shall extend, upon
the
same terms and conditions, to each person, if any, who controls any Managing
Agent within the meaning of the Securities Act; and the obligations of the
Managing Agents under this Section shall be in addition to any liability that
the respective Managing Agent may otherwise have, and shall extend, upon the
same terms and conditions, to each director of the Company (including any person
who, with his consent, is named in the Registration Statement as about to become
a director of the Company), to each officer of the Company who has signed the
Registration Statement, and to each person, if any, who controls the Company
within the meaning of the Securities Act.
7.
Termination.
(a)
This
Agreement shall become effective 9:30 a.m., New York City local time, on the
first full business day following the date on which the Registration Statement
becomes effective under the Securities Act. Subject to paragraph (c) of this
Section, this Agreement may be terminated by the Managing Agents by written
notice sent to the Company at the address shown in this Agreement
at any
time prior to the Initial Closing.
(b)
An
attempt to assign any rights and obligations under this Agreement shall
constitute automatic termination of this Agreement.
(c)
Managing
Agents may terminate this Agreement, by notice to the Company, at any time
prior
to the final closing of this Offering (i) if there has occurred any material
adverse change, outbreak of hostilities or other calamity or crisis the effect
of which on the financial markets of the United States is such as to make it,
in
the Managing Agents’ judgment impracticable to market the Securities or enforce
contracts for the sale of the Securities, (ii) if trading in the securities
of
the Company has been suspended or materially limited by the SEC, (iii) if
trading generally on any national or foreign stock exchange or over-the-counter
market has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by either
of said exchanges or market or by order of the SEC or any other governmental
authority, (iv) if a banking moratorium has been declared by either federal
or
any state authorities or (v) there shall have occurred any change, or any
development or event involving a prospective change, in the condition (financial
or otherwise), business, properties or results of operations of the Company,
which, individually or in the aggregate, in the judgment of the Managing Agents,
is material and adverse and makes it impractical or inadvisable to proceed
with
the offering, sale or delivery of the Securities on the terms and in the manner
contemplated in the Prospectus.
(d)
If
this
Agreement is terminated pursuant to this paragraph 7, such termination shall
be
without liability of any party to the other parties other than incurred and
payable expenses and fees owing under this Agreement..
8.
Notices.
All
notices shall be deemed to have been duly given if mailed, or if communicated
by
telegraph, facsimile, electronic mail or telephone and subsequently immediately
confirmed in writing:
12
To
the Company:
|
ValueRich,
Inc.
0000
X. Xxxxx Xxxxxxx, Xxx. X
Xxxx
Xxxx Xxxxx, XX 00000
Tel:
(000) 000-0000
Attn:
Xxxxxx Xxxxxxxx, CEO
|
|
With
a copy to:
|
Xxxxxx
& Xxxxx, XX
Mission
Bay Office Plaza
00000
Xxxxx Xxxx 0, Xxx 000
Xxxx
Xxxxx, XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Attn:
Xxxx Xxxxxx, Esq.
|
To
the Managing Agents:
|
US
EURO Securities, Inc.
00000
Xxxxxxx Xxx Xxxxx
Xxxxxxx
Xxx, XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Attn:
Xxxxxxx Xxx Xxxxxx
Xxxx
Capital Markets, LLC
000
Xxxxxx Xxxxx Xxxx
Xxxxxxxxx,
XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Attn:
Xxxx X. Xxxx
|
|
With
a copy to:
|
The
Xxxxxxx Law Firm
The
Galleria
0
Xxxxxx Xxxxxx
Xxxxxxxx
0, 0xx
Xxxxx
Xxx
Xxxx, XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Attn:
Xxxxxxxx X. Xxxxxxx, Esq.
|
9.
Binding
Effect.
This
Agreement shall inure to the benefit of and be binding upon the Company and
the
Managing Agents and their successors. Nothing expressed in this Agreement is
intended to give any person other than the persons mentioned in the preceding
sentence any legal or equitable right, remedy or claim under this
Agreement.
10.
Arbitration.
The
Company and the Managing Agents agree that in the event a dispute arises between
the Managing Agents and the Company or any their its officers, directors,
employees, agents, attorneys or accountants, arising out of, in connection
with
or as a result of the execution of this Agreement or as a result of any
subscription tendered by any purchaser of the Securities, such dispute shall
be
resolved through arbitration rather than litigation. The parties agree to submit
such disputes for resolution to the NASD within five (5) days after receiving
a
written request from any of the aforesaid parties to do so. The failure by
the
Company or Managing Agents to submit any dispute to arbitration as requested
may
result in the commencement of an arbitration proceeding against such party.
The
parties further agree that any hearing scheduled after an arbitration proceeding
is initiated by any of the aforesaid parties shall take place in Pensacola,
Florida. The parties acknowledge that the result of the arbitration proceeding
shall be final and binding on all of the parties to the proceeding, and by
agreeing to arbitration the parties are waiving their respective rights to
seek
remedies in Court.
13
11. Syndicate.
(a)
The
Managing Agents agree that they shall use their best efforts to be qualified
to
sell securities to purchasers in all 00 Xxxxxx Xxxxxx, xxx Xxxxxxxx xx Xxxxxxxx
and the Commonwealth of Puerto Rico either through its own brokers or through
qualified and/or licensed by NASD.
(b)
The
Managing Agents shall enter into selling agreements with licensed brokers and/or
dealers it selects who are acceptable to the Company using a form of selling
agreement reasonably acceptable to the Company ("Selling
Agreements").
The
Managing Agents may also enter into Selling Agreements with Placement Agents
selected by the Company who are reasonably acceptable to the Managing Agents,
which such Placement Agents upon the execution of Selling Agreements shall
be
deemed part of the syndicate of Placement Agents. Neither the Company nor the
Managing Agents shall unreasonably withhold acceptance of any Placement Agent
proposed by the other party.
12.
Miscellaneous
Provisions.
(a)
This
Agreement shall be construed in accordance with the laws of the State of New
York.
(b)
The
representations and warranties made in this Agreement shall survive the
termination of this Agreement and shall continue in full force and
effect.
(c)
This
Agreement is made solely for the benefit of the Company and its officers,
directors and controlling persons within the meaning of Section 15 of the
Securities Act and of the Managing Agents and their officers, directors and
controlling persons within the meaning of Section 15 of the Securities Act,
and
their respective successors, heirs and personal Managing Agents, and no other
person shall acquire or have any right under or by virtue of this Agreement.
The
term “successor”
as
used
in this Agreement shall not include any purchaser, as such, of the
Securities.
(d)
The
information contained in the Company’s database of potential investors is
strictly confidential and Placement Agent shall use that information as provided
by the Company solely for the purpose of offering the Securities, and satisfying
its fiduciary obligations to all purchasers of the Securities. The Managing
Agents may specifically open accounts for, and discuss other investments with,
any potential investor in the Company's database who already has a relationship
with the Managing Agents, or who specifically requests that service and/or
related information from the Managing Agents (including requests through
Managing Agents’ website contact form), but the Managing Agents shall not make
any general solicitation to others in the Company's investor database without
the express written consent of the Company. The Managing Agents shall use its
best efforts to obtain compliance with this paragraph by the Placement
Agents.
13.
Effectiveness.
The
effectiveness of this Agreement shall be subject to the approval of the
Company’s board of directors.
14
If
this
letter agreement correctly sets forth our understanding, please indicate your
acceptance in the space provided below for that purpose.
Sincerely, | |
US EURO SECURITIES, INC. | |
By:
________________________
Name:
Xxxxxxx Xxx Xxxxxx
Title: Chairman |
|
LANE CAPITAL MARKETS, LLC | |
By:
_______________________
Name:
Xxxx X. Xxxx
Title: President
|
Confirmed
and accepted as of ______________, 2007
VALUERICH,
INC.
By:
____________________
Name:
Xxxxxx Xxxxxxxx
Title:
Chief Executive Officer and President
15
SCHEDULE
I
Managing
Agents
|
US
Euro Securities, Inc.
|
Lane
Capital Markets, LLC
|
Placement
Agents
|
16