Exhibit 1(a)(i)
1,000,000 UNITS
EUROWEB INTERNATIONAL CORP.
(EACH UNIT CONSISTING OF
ONE SHARE OF SERIES A CONVERTIBLE CUMULATIVE REDEEMABLE PREFERRED STOCK
AND TWO COMMON STOCK PURCHASE WARRANTS)
UNDERWRITING AGREEMENT
Dated: , 1998
X.X. Xxxxxxx & Co., Inc.
as Representative of the Several Underwriters
One Battery Park Plaza
New York, New York 10004
Dear Sirs:
The undersigned, EuroWeb International Corp., a Delaware corporation (the
"Company"), hereby confirms its agreement with X.X. Xxxxxxx & Co., Inc.
(sometimes the "Representative" or "you") and the several Underwriters named in
Schedule A hereto (the "Underwriters") as follows:
1. DESCRIPTION OF UNITS. The Company has authorized by appropriate
corporate action, and proposes to issue and sell to the Underwriters, 1,000,000
Units (the "Units"), each Unit consisting of one share of Series A Convertible
Cumulative Redeemable Preferred Stock (the "Shares") and two Common Stock
Purchase Warrants, (the "Warrants"). An additional 150,000 Units have been
authorized to cover over-allotments as provided in Section 3 below. The Units,
Series A Convertible Cumulative Redeemable Preferred Stock and Common Stock
Purchase Warrants are more fully described in the Registration Statement and
Prospectus referred to hereinafter.
2. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to,
and agrees with, you and the Underwriters that:
(a) A registration statement on Form SB-2 with respect to the Units,
including a preliminary prospectus, copies of which have heretofore been
delivered by the Company to you, has been carefully prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended,
(hereinafter called the "Act") and the Rules and Regulations of the Securities
and Exchange Commission (hereinafter called the "Commission") under such Act,
and has been filed with the Commission (File No. 333-52841). On or prior to the
effective date of such registration statement, one or more amendments to such
registration statement (including a final prospectus), copies of which have
heretofore been or will be delivered to you, will have been so prepared and
filed in the form delivered to you. Such registration statement (including all
exhibits thereto) as
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amended as of the effective date thereof and each related preliminary prospectus
and final prospectus are herein respectively referred to as the "Registration
Statement", the "Preliminary Prospectus" and the "Prospectus".
(b) When the Registration Statement becomes effective (the "Effective
Date") and at all times subsequent thereto up to and at the Closing Date (as
defined in Section 3 hereof) and the Additional Closing Date (as defined in
Section 3 hereof), (i) the Registration Statement and the Prospectus and any
amendments or supplements thereto will contain all statements which are required
to be stated therein by the Act and the Rules and Regulations of the Commission
thereunder and will in all respects conform to the requirements of the Act and
such Rules and Regulations, (ii) neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto will include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(iii) all documents which are required to be filed as exhibits to the
Registration Statement will have been so filed; provided however, that the
Company makes no representations or warranties as to information contained in or
omitted from the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by you or any Underwriter expressly for use in the
preparation thereof.
(c) The Company and its subsidiaries have been duly incorporated and
are validly existing as corporations in good standing under the laws of their
jurisdictions of incorporation with all corpo rate and other powers and
authority necessary to carry on their businesses, and they are qualified and in
good standing in all other jurisdictions in which the nature of their business
requires such qualification, except where failure to so qualify would not have a
material adverse affect on the Company. As used herein, the term "Company" shall
mean EuroWeb International Corp. together with its subsidiary corporations
except where the context in which such term is used indicates otherwise.
(d) The consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company is a party or by which it or any of
its properties is bound, or of its Certificate of Incorporation, or By-laws, or
any order, rule or regulation applicable to the Company or any of its
properties, of any court or other governmental body.
(e) The Company has full power and lawful authority to authorize, issue
and sell the Units and the Underwriters' Unit Warrants (as defined hereinafter)
on the terms and conditions herein set forth, and has taken all corporate action
necessary therefor; no consent, approval, authorization or other order of any
regulatory authority is required for such authorization, issue or sale, except
as may be required under the Act or state blue sky laws. This Agreement has been
duly authorized, executed and delivered by the Company and is a valid and
legally binding agreement of the Company enforceable in accordance with its
terms. The Warrant Agreement between the Company and American Stock Transfer &
Trust Company, to be dated the Closing Date, pursuant to which the
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Warrants will be issued (the "Warrant Agreement") has been duly authorized by
the Company and, when executed and delivered by the Company and American Stock
Transfer & Trust Company, will be a valid and legally binding obligation of the
Company, enforceable in accordance with its terms.
(f) The Units and the authorized capitalization of the Company conform
to the descriptions thereof contained in the Registration Statement and
Prospectus. The holders of the Warrants will, upon their exercise, be entitled
to purchase shares in accordance with the terms and conditions set forth in the
Warrant Agreement and the form of Warrant filed as exhibits to the Registration
Statement. The outstanding shares of capital stock are, and the shares issuable
pursuant to the public offering contemplated hereby and upon exercise of any of
the warrants referred to herein will upon such issuance be, duly authorized,
validly issued and fully paid and nonassessable, and the Company has duly
authorized and reserved for issuance upon exercise of warrants such number of
shares as are initially issuable upon such exercise. The Warrants, the
Underwriters' Unit Warrants and the warrants underlying the Underwriters' Unit
Warrants will, when issued and delivered in accordance with the provisions of
the Warrant Agreement, the Underwriters' Unit Warrants and this Agreement, be
valid and legally binding obligations of the Company enforceable in accordance
with their respective terms. There are no options, warrants, rights of
conversion, indebtedness or calls on equity of the Company other than as
disclosed in the Prospectus and Registration Statement.
(g) Except as set forth or contemplated in the Registration Statement
and Prospectus, subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company has not
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, not in the ordinary course of business,
and there has not been any material change in the capital stock or funded debt
of the Company, or any material adverse change in the condition (financial or
other) or results of operations of the Company.
(h) The financial statements (audited and unaudited) set forth in the
Registration Statement and Prospectus fairly present the financial condition of
the Company and the results of its operations as of the dates and for the
periods therein specified; and said financial statements (including the related
notes and schedules) have been prepared in accordance with generally accepted
accounting principles which have been consistently applied throughout the
periods covered thereby. Such financial statements and the summaries thereof
included in the Registration Statement and the Prospectus conform in all
material respects to the requirements of the Rules and Regulations of the
Commission.
(i) The accountants whose opinion or opinions is or are included in the
Registration Statement are independent public accountants within the meaning of
the Act and the Rules and Regulations of the Commission thereunder.
(j) Except as set forth in the Prospectus, there is not pending any
action, suit or other proceeding to which the Company is a party or of which any
property of the Company is the subject, before or by any court or other
governmental body, which might result in any material adverse change in the
condition, business or prospects of the Company, or might materially adversely
affect
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the assets of the Company; and except as indicated in the Prospectus, no such
proceeding is known by the Company to be threatened or contemplated.
(k) The Company knows of no claim for services, either in the nature of
a finder's fee, brokerage fee or otherwise, with respect to the financing
contemplated hereby, whether or not heretofore satisfied, for which it or the
Underwriters, or any of them, may be responsible, other than as expressly
disclosed in the Prospectus.
(l) The business and operations of the Company and the ownership
thereof, except as may be disclosed in the Prospectus, comply with all statutes,
ordinances, laws, rules and regulations applicable thereto, the non-compliance
with which could reasonably be expected to have a material, adverse effect on
the Company or its condition (financial or other), business, prospects, net
worth or results of operations; the Company possesses, and is operating in
compliance with the terms, provisions and conditions of, all certificates,
licenses, permits, consents, waivers, approvals, franchises and concessions
required to conduct its business as now conducted, the non-compliance with which
could reasonably be expected to have a material adverse effect on the Company or
its condition (financial or other), business, prospects, net worth or results of
operations; each such certificate, license, permit, consent, waiver, approval,
franchise and concession is valid and in full force and effect and there is no
proceeding pending or threatened (or to the best of the knowledge of the Company
and the Selling Stockholders, any basis therefor) which may lead to the
revocation, termination, suspension or nonrenewal of any such certificate,
license, permit, consent, waiver, approval, franchise or concession.
(m) On the Effective Date of the Registration Statement and immediately
prior to the sale of the Units, the outstanding capital stock of the Company
will consist of no more than 5,406,750 shares of Common Stock, par value $.001
per share, and no shares of Preferred Stock, and there shall be no warrants or
options to purchase shares of capital stock of the Company except as set forth
in the Prospectus.
3. PURCHASE, SALE AND DELIVERY OF UNITS. Subject to the terms and
conditions of this Agreement, and on the basis of the representations,
warranties and agreements herein contained, the Company hereby agrees to sell to
the several Underwriters, the number of Units set forth opposite their
respective names on Schedule A hereto, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company such number of Units at
a purchase price of $5.40 per Unit.
The Company will deliver the Units to you at your office, or such other
place as you may designate, against payment to the Company for the Units by wire
transfer or by certified or official bank check or checks payable in New York
Clearing House funds to the order of the Company. The Units so to be delivered
will be in definitive, fully registered form in such authorized denominations
and registered in such names as you request by notice to the Company given not
later than 5:00 P.M., New York City time, on the second business day next
preceding the Closing Date. The date and the time of such delivery and payment
shall be 11:00 A.M., New York City time, on ________________, 1998 (or such
other time and date as you and the Company may agree upon).
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The time and date of such payment and delivery is herein sometimes referred to
as the "Closing Date".
The Company agrees to make the Units available to you for the purpose of
expediting the checking and packaging of the Units, at the office at which they
are to be delivered, not later than 2:00 P.M., New York City time, on the
business day next preceding the Closing Date.
The Company hereby grants to you the right, exercisable within 45 days from
the date hereof, to purchase from the Company up to 150,000 additional Units
(the "Additional Units") at a purchase price of $5.40 per Unit, for the purpose
of covering over-allotments in the sale by any of the Underwriters of the Units.
You may exercise your right to purchase Additional Units by giving written
notice of such exercise to the Company.
Such notice shall set forth the aggregate number of Additional Units as to
which such right is being exercised, the names in which Additional Units are to
be registered, the denominations in which Additional Units are to be issued and
the date and time, as determined by you, when the Additional Units are to be
delivered (such date and time being herein sometimes referred to as the
"Additional Closing Date"); provided, however, that the Additional Closing Date
shall not be earlier than the Closing Date. The Additional Closing Date may be
on the Closing Date; if not, it shall be no earlier than the third business day
after the date on which the right shall have been exercised nor later than the
twelfth business day after the date on which the right shall have been
exercised.
The Company will deliver the Additional Units to you at your office, or
such other place as you may designate, against payment to the Company for the
Additional Units by wire transfer or by certified or official bank check or
checks payable in New York Clearing House funds to the order of the Company. The
Additional Units so to be delivered will be in definitive, fully registered form
in such authorized denominations and registered in such names as you request by
notice to the Company given not later than 5:00 P.M., New York City time, on the
second business day next preceding the Additional Closing Date.
The Company agrees to make the Additional Units available to you for the
purpose of expediting the checking and packaging of the Units, at the office at
which they are to be delivered, not later than 2:00 P.M., New York City time, on
the business day next preceding the Additional Closing Date.
It is understood that the Underwriters propose to offer the Units for sale
to the public upon the terms and conditions set forth in the Registration
Statement, after the Registration Statement becomes effective.
4. COVENANTS OF THE COMPANY. The Company further covenants and agrees with
you that:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective and will not at any time, whether before or after
the effective date, file any amendment to the Registration Statement or
supplement to the Prospectus of which you shall not previously have
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been advised and furnished with a copy or to which you shall have reasonably
objected in writing or which is not in compliance with the Act, or the Rules and
Regulations of the Commission thereunder.
(b) The Company will notify you immediately and confirm in writing (i)
when the Registration Statement and any post-effective amendment thereto becomes
effective, (ii) of the issuance of any stop order suspending the effectiveness
of the Registration Statement or of any order preventing or suspending the use
of any Preliminary Prospectus or of the Prospectus or of the initiation of any
proceedings for such purposes, and (iii) of the receipt of any comments (in
writing or orally) from the Commission in respect of the Registration Statement
or requesting the amendment, post-effective amendment or supplementation of the
Registration Statement or Prospectus or for additional information. If the
Commission shall enter a stop order or any order preventing or suspending the
use of any Preliminary Prospectus or of the Prospectus at any time, or shall
initiate any proceedings for such purposes, the Company will make every
reasonable effort to prevent the issuance of such order and, if issued, to
obtain the withdrawal thereof. The Company will provide you with copies of all
written communications received by it from the Commission and any other
regulatory agency with respect to the Registration Statement, and every
amendment and post-effective amendment thereto and copies of all replies thereto
by the Company, its counsel and its accountants.
(c) Within the time during which a prospectus relating to the Units (or
the exercise of any Warrants) is required to be delivered under the Act, the
Company will comply so far as it is able with all requirements imposed upon it
by the Act, as now and hereafter amended, and by the Rules and Regulations of
the Commission thereunder, from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Units (or the shares of
stock to be acquired upon the exercise of the Warrants) as contemplated by the
provisions hereof and the Prospectus; and if during such period any event occurs
as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
then existing, not misleading, or if during such period it is necessary to amend
or supplement the Prospectus to comply with the Act, the Company will promptly
notify you and will amend or supplement the Prospectus (in form reasonably
satisfactory to your counsel and at the expense of the Company) so as to correct
such statement or omission or effect such compliance.
(d) The Company will cooperate with you and will take all necessary
action, and furnish to whomever you may direct such proper information, as may
be lawfully required in qualifying the Units for offering and sale under the
Units or blue sky laws of such states as you may designate, and in continuing
such qualifications in effect so long as required for the distribution of Units
by you; provided that the Company shall not be obligated to qualify as a foreign
corporation to do business under the laws of any such state, consent to general
service of process in such state or otherwise to submit to any requirements
which it reasonably deems unduly burdensome.
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(e) The Company will pay any and all fees, taxes and expenses incident
to the performance of its obligations under this Underwriting Agreement,
including expenses and taxes incident to the issuance and delivery to you of the
Units and Additional Units, if any, to be sold to the Underwriters pursuant to
Section 3 hereof; all fees and disbursements of counsel and accountants for the
Company; expenses and filing fees incident to the preparation, printing,
delivery, shipment and filing with the Commission, the National Association of
Securities Dealers, Inc., and state blue sky authorities of the Registration
Statement and all exhibits thereto and the Prospectus, and any amendments or
supplements thereto, including fees of blue sky counsel (to be designated by the
Representative and who may be counsel to the Underwriters) incident to the
qualification for sale of the Units and Additional Units, if any, under blue sky
laws. The Company will further pay you as Representative of the Underwriters for
your expenses incurred in connection with this offering, on a non-accountable
basis, an amount equal to 3% of the public offering price of the Units sold on
behalf of the Company hereunder, including any Units sold pursuant to the
overallotment option, such reimbursement and payment to be made to you on
closing, and may be deducted by you from the amount due to the Company for
purchase of the Units pursuant to Section 3 hereof. In the event that the
offering is not consummated, the Representative will be reimbursed only for its
actual, accountable, out-of-pocket expenses and any amounts received by the
Representatives as an advance for expenses in excess of such actual,
accountable, out-out-pocket expenses shall be returned to the Company.
(f) The Company will apply the net proceeds from the sale of the Units
substantially as set forth under the caption "Use of Proceeds" in the
Prospectus.
(g) The Company will deliver to you as promptly as practicable three
signed copies of the Registration Statement and all amendments thereto,
including all exhibits therewith or incorporated therein by reference, and
signed consents, certificates and opinions of accountants and of any other
persons named in the Registration Statement as having prepared, certified or
reviewed any part thereof, and will deliver to you such number of unsigned
copies of the Registration Statement and exhibits, and of all amendments
thereto, as you may reasonably request. The Company will deliver to you or upon
your order, from time to time until the effective date of the Registration
Statement, as many copies of the Preliminary Prospectus as you may reasonably
request. The Company will deliver to you or upon your order, on the effective
date of the Registration Statement and thereafter, subject to the provisions of
Section 4(a)(iii) hereof, from time to time, as many copies of the Prospectus in
final form or as thereafter amended or supplemented, as you may reasonably
request. The Company will deliver to you, promptly after closing, three (3)
bound volumes of all of the documents, papers, exhibits, correspondence and
records forming the materials involved in this public offering.
(h) The Company will make generally available to its security holders,
as soon as it is practicable to do so (but in no event later than fifteen months
after the effective date of the Registration Statement), an earnings statement
of the Company (which need not be audited) covering a period of at least twelve
months beginning not later than the first day of the fiscal quarter next
succeeding such effective date which shall satisfy the provisions of Section
11(a) of the Act.
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(i) For a period of at least five years from the date hereof, the
Company will supply to the Representative, (i) as soon as practicable after the
end of each fiscal year, a balance sheet and statement of operations of the
Company and its consolidated subsidiaries (if any) as at the end of and for each
such year, all in reasonable detail and certified by independent certified
public accountants, (ii) as soon as practicable after the end of each of the
first three quarters of each fiscal year, an unaudited statement of operations
of the Company and its consolidated subsidiaries (if any) for such period, (iii)
copies of such financial statements and reports as the Company may, from time to
time, furnish generally to holders of any class of its stock, (iv) copies of
each report which it shall be required to file with the Commission, any blue sky
authority or any securities exchange at the same time as such reports are filed
and (v) copies of the daily stock transfer sheets and weekly DTC reports for
securities of the Company.
(j) Simultaneously with the purchase and payment by the Underwriters
for the Units on the Closing Date, the Company shall sell, at a price of $0.001
per warrant, and issue and deliver to the Representative and, at its request, to
any of the several Underwriters or to dealers in the selling group, or to
officers or partners of the Representative, the several Underwriters or dealers
in the selling group, 100,000 warrants, in form and substance satisfactory to
your counsel, to purchase 100,000 Units of the Company (similar to those being
sold to the public) at a price of $9.90 per Unit ("Underwriters' Unit
Warrants"). The Underwriters' Unit Warrants will be exercisable for a period of
five years commencing on the Effective Date, and will not be transferable for a
period of one year from the Effective Date except to Underwriters and Selected
Dealers and officers and partners thereof. The Underwriters' Unit Warrants and
underlying securities shall have been registered under the Registration
Statement and the holders of a majority of such Underwriters' Unit Warrants or
the securities which may have been issued thereunder shall have the right, at
any one time, to require the Company to prepare and file a post-effective
amendment to the Registration Statement (or a new registration statement, if
then required under the Act) covering all or any portion of the Underwriters'
Unit Warrants and their underlying securities to permit the public sale thereof
after twelve months from the Effective Date. In connection therewith, the
Company shall be obligated to prepare and file such post-effective amendment (or
such new registration statement) under the Act promptly upon the receipt of the
request of the holders of a majority of the Underwriters' Unit Warrants or
securities issued thereunder, and the Company shall be further obligated to use
its best efforts to have such post-effective amendment (or such new registration
statement) rendered effective under the Act, as it may from time to time be
amended hereafter, and Rules and Regulations promulgated thereunder, as soon as
practicable after the filing date of any such post-effective amendment or such
new registration statement, and the Company shall also be required to take such
action as may be necessary to maintain such post-effective amendment or such new
registration statement effective under the Act for the period, not in excess of
nine months, required to sell such Underwriters' Unit Warrants and their
underlying securities in compliance with the Act and Rules and Regulations
promulgated thereunder, and the Company shall be required to provide the
accounting necessary for the filing of any such post-effective amendment or such
new registration statement, plus any amendments or supplements thereto. In
addition to, and not in lieu of, the obligations of the Company hereinabove
recited in this subsection, the Company hereby further covenants and agrees that
if, the Company shall prepare and file a post-effective amendment to the
Registration Statement
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or a new registration statement under the Act or notification pursuant to
Regulation A under the Act, either of which is to become effective at any time
after the expiration of twelve months from the Effective Date with respect to
the public offering of any equity or debt Units of the Company now or hereafter
authorized, the Company will include in such post-effective amendment or new
registration statement or such notification such number of the Underwriters'
Unit Warrants and their underlying securities as requested by the holders of the
Underwriters' Units Warrants or securities issued thereunder, and neither you
nor such holders shall be under any obligation to bear any of the expenses or
professional fees and disbursements to be incurred by the Company in connection
with the preparation and filing of such post-effective amendment, or new
registration statement or such notification. With respect to any post-effective
amendment, or new registration statement, or notification filed by the Company
pursuant to this subsection, the selling securityholders offering any
Underwriters' Unit Warrants or their underlying securities thereunder shall be
entitled to the benefits of indemnification by the Company in like manner and to
the same extent as the Company indemnifies the Underwriters pursuant to Section
6(a) hereof.
(k) The Company will not, without the prior written consent of the
Representative, for a period of six months after the effective date of the
Registration Statement, sell any Units of the Company or sell or grant options,
warrants or rights with respect to any Units of the Company, or permit or cause
a public offering of any Units of the Company except in accordance with the
provisions of the Registration Statement.
(l) For a period of five years after the effective date of the
Registration Statement, the Representative shall have the right to designate one
person as an advisor to the Company's Board of Directors, who will receive
compensation equal to that received by any other director as well as
reimbursement of expenses for attending meetings, but who will have no power to
vote as a director. Such person shall be indemnified by the Company against any
claim arising out of his participation at meetings of the Board of Directors to
the same extent as any director. During such five year period, the Company will
hold at least four meetings per year of its Board of Directors. In the event the
Company maintains a liability insurance policy with coverage for the acts of its
officers and directors, the Company agrees, if possible, to include the
Representative and its designee as an insured under the policy.
(m) At the Closing, the Company shall enter into a consulting agreement
("Consulting Agreement") retaining the Representative as financial consultant to
the Company for a two-year period commencing as of such closing, at a fee of
$37,500 per year, the total amount of which shall be paid at the Closing. The
Company and the Representative shall also enter into an agreement which will
provide for a finder's fee, ranging from 7% of the first $1,000,000 down to
2-1/2% of the excess over $9,000,000 of the consideration involved in any
transaction (including mergers and acquisitions) consummated by the Company in
which the Representative introduced the other party to the Company during the
five-year period commencing on the Effective Date.
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(n) The Company shall cooperate with the Underwriters in making
available to their representatives such information as they may request in
making an investigation of the Company and its affairs.
(o) Until such time as the Units of the Company are listed on the New
York Stock Exchange or the American Stock Exchange but in no event more than
three years from the effective date, the Company shall retain Compliance
Management Company or a similar company, to prepare a post registration blue sky
market survey for the Representative for distribution to market makers. Such
survey shall be provided to the Representative annually with the first survey
delivered to it promptly after the completion of the public offering hereunder.
The cost of the first year's survey will not exceed $5,000. In lieu of the
foregoing, the Company may cause its legal counsel to provide the Representative
with a survey to be updated at least annually.
(p) At all times, so long as any of the warrants referred to herein are
outstanding, the Company will have reserved authorized but unissued shares of
stock and underlying warrants, available for immediate issuance in amounts
necessary for the exercise of all warrants then outstanding. The Company agrees
to qualify the Units for listing on the NASDAQ System Small- Cap Issues on the
Effective Date and will take all necessary and appropriate action so that the
Units and after separation of the Units, their underlying securities will be
listed for trading on the NASDAQ Small-Cap Market for at least five years from
the Effective Date provided the Company otherwise complies with the prevailing
maintenance requirements of NASDAQ Small-Cap Market. In addition, at such time
as the Company qualifies for listing its Units or underlying securities on the
National Market System of NASDAQ, the Company will take all steps necessary to
have the Units or underlying securities listed on the National Market System of
NASDAQ in lieu of listing on the Small-Cap Market. The Company shall comply with
all periodic reporting and proxy solicitation requirements imposed by the
Commission pursuant to the 1934 Act, and shall promptly furnish you with copies
of all material filed with the Commission pursuant to the 1934 Act or otherwise
furnished to shareholders of the Company.
(q) The Company will register the Units and components thereof pursuant
to Section 12(g) of the Securities Exchange Act of 1934, as amended, not later
than the Effective Date.
(r) The Company will pay the fees and expenses (but not transfer taxes,
if any) of the Company's transfer agents, warrant agents, and registrars (if
any), without charge to stockholders and warrantholders, for not less than five
years after the effective date of the Registration Statement.
(s) The Representative shall receive a fee of 10% of the proceeds as
and when received by the Company from time to time upon the exercise of any
Warrants after one year from the Effective Date, provided that such fee shall be
paid only in accordance with the rules of the NASD and any applicable Units laws
and rules and regulations. The Representative will not be eligible to receive
the aforementioned warrant exercise fee as a result of transactions of the
following nature: (i) the exercise of Warrants when the market price of the
Company's Common Stock is lower than the exercise price; (ii) the exercise of
Warrants held in any discretionary account; (iii) the exercise of
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Warrants where documents disclosing the compensation arrangements (e.g., the
Prospectus) have not been provided to the warrantholder at the time of issuance
and at the time of exercise; (iv) the exercise of Warrants in unsolicited
transactions; and (v) the exercise of any warrants during the one year period
commencing on the Effective Date, and further provided that no broker shall be
paid a fee unless such broker is designated in writing by the customer as the
soliciting broker. In addition, it will be a condition to the receipt by the
Representative of such fee that it shall not, in the ten days immediately
preceding the solicitation of the exercise or the date of such exercise, have
bid for or purchased the Common Stock of the Company (or any Units of the
Company convertible into or exchangeable for such Common Stock, including the
Warrants) or otherwise have engaged in any activity that would be prohibited
under the Securities Exchange Act of 1934, as amended, by one participating in a
distribution of the Company's securities whether as underwriter or otherwise.
The Company will not solicit warrant exercises except through the
Representative.
(t) Immediately following the closing, the Company shall exercise its
best efforts to have the Units listed in the appropriate Standard & Poor's
manual in order to comply with the requirements of the so-called "standard
manuals exemption" of various blue sky authorities.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The Underwriters' obligations
to purchase and pay for the Units, as provided herein, shall be subject to the
accuracy, as of the date hereof and as of the Closing Date (as if made on the
Closing Date), of the representations and warranties of the Company herein, to
the accuracy of statements made in each certificate delivered pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not later than
5:00 P.M., New York City time, on the day following the date of this Agreement,
unless a later time and date be agreed to by you; and no stop order suspending
the effectiveness of the Registration Statement, or order preventing or
suspending the use of any Preliminary Prospectus or of the Prospectus, shall
have been issued and no proceedings for such purpose shall have been instituted
or be pending or, to the knowledge of the Company or you, shall be contemplated
by the Commission; and any request of the Commission for additional information
(to be included in the Registration Statement or the Prospectus or otherwise)
shall have been complied with to the satisfaction of the Underwriters' Counsel.
(b) On the Closing Date the Underwriters shall have received an opinion of
Xxxxx & Xxxxx, counsel for the Company, dated the Closing Date, to the effect
that:
(i) The Company has full corporate power and authority to enter into
this Agreement and this Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company enforceable in accordance with its terms, subject to bankruptcy,
insolvency or similar laws governing the rights of creditors generally and to
the discretion of courts in granting equitable remedies, except insofar as
rights to indemnity or contribution hereunder may be limited by Federal
Securities laws.
11
(ii) The Warrant Agreement, the Consulting Agreement and the Mergers
and Acquisitions Agreement have been duly authorized, executed and delivered by
the Company and constitute the legal, valid and binding obligations of the
Company enforceable in accordance with their terms (except insofar as
enforcement of the indemnification provisions thereof may be limited by
applicable Federal securities laws or principles of public policy and subject to
bankruptcy, insolvency, moratorium, reorganization and similar laws affecting
creditors' rights generally and to general principles of equity). The Company
has full corporate power and authority to enter into the Warrant Agreement, the
Consulting Agreement and the Mergers and Acquisitions Agreement and to sell,
issue and deliver the Units and Underwriters' Unit Warrants.
(iii) The Company has authorized and outstanding capital stock as set
forth under "Capitalization" in the Prospectus; all of the Company's outstanding
shares of capital stock have been duly authorized and validly issued, and are
fully paid and nonassessable; all of the Units and Underwriters' Unit Warrants
sold pursuant to this Agreement have been duly authorized, validly issued and
delivered and are fully paid and nonassessable, and conform to the descriptions
thereof in the Prospectus and such descriptions conform to the rights duly set
forth in the Certificate of Incorporation of the Company and this Agreement; the
Warrants and the Underwriters' Unit Warrants are, and the warrants underlying
the Underwriters' Unit Warrants will, when issued in accordance with the
provisions of the Warrant Agreement, the Underwriters' Unit Warrants and this
Agreement be, valid and legally binding obligations of the Company in accordance
with their respective terms (subject to bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization and similar laws affecting creditors'
rights generally and to general principles of equity); the Units underlying the
Underwriters' Unit Warrants have been validly authorized and reserved for
issuance, and when issued in accordance with the terms of the Underwriters' Unit
Warrants, will be validly issued and will be fully paid and non-assessable; the
holders of the Units and Underwriters' Unit Warrants are not, and will not be,
subject to any personal liability for liabilities of the Company by reason of
being holders thereof; and none of such Units which have been issued, have been
issued in violation of the preemptive rights or any other rights of any
stockholder of the Company and no stockholder of the Company has any preemptive
right to subscribe for or to purchase any of the Units or Underwriters' Unit
Warrants;
(iv) The Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of Delaware, has full corporate
power and authority to conduct its business as presently conducted and as
described in the Prospectus and to own its properties and is duly qualified to
do business and is in good standing in each jurisdiction wherein the property
owned or leased, or the conduct of business, by it makes such qualification
necessary (except where failure to so qualify would not have a material adverse
effect on the Company);
(v) The Companies subsidiaries have been duly incorporated and are
validly existing as corporations in good standing under the laws of Hungary and
have corporate powers and authority necessary to carry on their business as
presently being conducted and as described in the Prospectus;
12
(vi) The Registration Statement has become effective under the
Securities Act and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been instituted or is pending or contemplated
by the Commission;
(vii) The Registration Statement and the Prospectus, and any amendment
or supplement thereto, comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations thereunder
(except that such counsel need express no opinion as to the financial statements
and schedules and financial data included therein or omitted therefrom);
(viii) Such counsel has assisted in the preparation of the Registration
Statement and the Prospectus and no fact has come to the attention of such
counsel which leads such counsel to believe that, either as of the Effective
Date or the date of the opinion, (A) either the Registration Statement or the
Prospectus or any amendment or supplement thereto (except for the financial
statements and schedules and financial data included therein or omitted
therefrom, as to which such counsel need express no opinion) contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(B) there is any material legal, governmental or administrative proceeding
pending, threatened or contemplated to which the Company is or may become a
party or to which any of its property is or may become subject, or any basis for
any legal, governmental or administrative proceeding, required to be described
in the Prospectus under the Act which is not described as required, or (C) there
is any contract or document of a character required to be described in the
Registration Statement or the Prospectus, or to be filed as an exhibit to the
Registration Statement, under the Act which is not described or filed as
required.
(ix) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated therein do not and
will not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, the Articles of Incorporation or
By-Laws of the Company or any indenture, mortgage, deed of trust, note agreement
or other agreement or instrument known to such counsel to which the Company is a
party or by which it is bound or to which any of its property is subject, or any
Federal, state or other statute, law, rule or regulation, or any judgment, order
or decree of any court or governmental agency or body known to such counsel
having jurisdiction over the Company or any of its property;
(x) No consent, approval, authorization or order of, or declaration or
filing with, any government, governmental instrumentality or court, is required
for the valid consummation by the Company of the transactions contemplated by
this Agreement, except such as may be required under the Securities Act or any
state or "blue sky" laws in connection with the purchase, sale and distribution
of the Units; and
(xi) To the best of such counsel's knowledge, the Company possesses all
material permits, certificates of compliance, approvals, licenses, waivers,
consents and other rights from governmental authorities which are requisite for
the material conduct of its business as presently conducted and
13
as described in the Prospectus (except such as in the aggregate would not
materially affect the business or operations of the Company), for the
consummation of the transactions contemplated in this Agreement and for the
offering contemplated by the Prospectus, and each such permit, certificate of
compliance, approval, license, waiver, consent and right is valid and in full
force and effect.
(xii) Such opinion shall be to such further effect with respect to
other legal matters relating to this Agreement and the sale of the Units
hereunder as counsel for the Underwriters may reasonably request. In rendering
the opinions set forth above, such counsel may rely upon certificates of
officers of the Company and public officials as to matters of fact, and may rely
as to all matters of law other than the laws of the United States or the
corporate laws of the State of Delaware upon opinions of counsel satisfactory to
you, in which case the opinion shall state that they have no reason to believe
that you and they are not entitled to so rely. Additionally, in rendering such
opinion, counsel shall not be required to opine upon the availability of
equitable remedies, including but not limited to, the remedies of specific
performance and injunctive relief.
(c) At the time this Agreement is executed by the parties hereto and on the
Closing Date (and on the Additional Closing Date, if any), the Underwriters
shall have received from BDO Xxxxxxx, LLP, a letter dated as of each such date,
to the effect that:
(i) They are independent accountants with respect to the Company within
the meaning of the Act and the applicable published Rules and Regulations
thereunder;
(ii) In their opinion, the financial statements (including the
schedules, if any) in the Registration Statement examined by such firm, comply
as to form in all material respects with the applicable accounting requirements
of the Act and the published Rules and Regulations thereunder with respect to
registration statements on Form SB-2;
(iii) On the basis of procedures (but not an examination in accordance
with generally accepted auditing standards) consisting of reading the minutes of
meetings of the stockholders and the Board of Directors of the Company since the
date of the latest audited balance sheet as set forth in the minute books
through a specified date not more than five business days prior to the date of
the letter, reading the unaudited interim financial statements (if any),
including the schedules (if any), of the Company included in the Registration
Statement and making inquiries of certain officials of the Company who have
responsibility for financial and accounting matters regarding the specific items
for which representations are requested below, nothing has come to their
attention as a result of the foregoing procedures that caused them to believe
that (A) the unaudited financial statements (if any), including the schedules
(if any), of the Company 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 published Rules and Regulations thereunder; (B) said financial
statements, including the schedules (if any), are not presented fairly, in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements; (C)
during the period from the date of the latest balance sheet covered by their
report(s) included in the Registration Statement to a specific date not more
than five business days prior to the date of the
14
letter, there has been any change in the capital stock or long-term debt of the
Company as compared with the amounts shown in the balance sheet included in the
Registration Statement, except as set forth in or contemplated by the
Registration Statement; or (D) for the period from the date of the last balance
sheet contained in the Prospectus to a specified date not more than five days
prior to the date of such letter, there has been any decrease, except as
described in such letter and previously discussed with you, in consolidated
gross revenues, net income, consolidated assets or total stockholders' equity as
compared with the amounts shown on such balance sheet, except for such changes
or decreases which the Registration Statement discloses have occurred or may
occur; and
(iv) In addition to the examination referred to in their report
included in the Registration Statement and the limited procedures referred to in
clause (iii) above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information which are included in the Registration Statement and Prospectus and
which are specified by you, and have found such amounts, percentages and
financial information to be in agreement with the relevant accounting and
financial records of the Company and its subsidiaries identified in such letter.
(d) The Representative shall have received a certificate or
certificates, dated the Closing Date and the Additional Closing Date, executed
by at least two officers of the Company, including the Chairman of the Board or
the President and the principal financial or accounting officer of the Company,
to the effect that:
(i) No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act;
(ii) Neither the Registration Statement nor the Prospectus nor any
amendment or supplement thereto 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; and since the effective date of
the Registration Statement, there has occurred no event required to be set forth
in an amended or supplemented Prospectus which has not been so set forth;
(iii) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, the Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material transaction, not
in the ordinary course of business, and there has not been any material change
in the capital stock or funded debt of the Company, or any material adverse
change in the condition (financial or other) or results of operations of the
Company;
(iv) There are no legal proceedings pending or threatened against the
Company of a character affecting the validity of this Agreement or required to
be disclosed in the Prospectus which are not disclosed therein; there are no
transactions or contracts which are required to be summarized
15
therein which are not so summarized; and there are no material contracts or
documents required to be filed as exhibits to the Registration Statement which
are not so filed;
(v) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, the Company has not sustained
any material loss or damage to its properties, whether or not insured; and
(vi) The representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the date of the letter;
and the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the date of
the letter.
(e) The Company shall have furnished to you such certificates, in
addition to those specifically mentioned herein, as you may have reasonably
required in a timely manner as to the accuracy and completeness of any statement
in the Registration Statement or the Prospectus; as to the accuracy of the
representations and warranties of the Company herein and in each certificate and
document contemplated under this Agreement to be delivered to you; as to the
performance by the Company of its respective obligations hereunder and under
each such certificate and document; or as to the fulfillment of the conditions
concurrent and precedent to your obligations hereunder.
(f) All corporate proceedings and related matters in connection with
the organization of the Company and the qualification, authorization, issuance,
sale and delivery of the Units shall be satisfactory to Xxxxx X. Xxxxx, Esq.,
counsel for the Underwriters, and such counsel shall have been furnished with
such papers and information as he may reasonably have requested in this
connection.
(g) Certain holders of outstanding Units of the Company shall have
agreed not to sell or transfer their Units under Rule 144 under the Act or
otherwise for certain periods of time following the Effective Date of the
offering, as set forth in the Prospectus, without the prior written consent of
the Representative.
(h) All such opinions, letters, certificates and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to the Underwriters and to their counsel.
(i) If any condition to the Underwriters' obligations hereunder to be
satisfied at or prior to the Closing Date is not so satisfied, the Underwriters
may terminate this Agreement without liability on their part or on the part of
the Company, except for the expenses to be paid or reimbursed by the Company
pursuant to Section 4(e) of this Agreement and except for any liability under
Sections 6 and 7 of this Agreement.
6. INDEMNIFICATION. (a) The Company agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls each Underwriter within
the meaning of the Act against any losses, claims, damages or liabilities, joint
or several, to which it or such controlling person may
16
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 any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or in any blue sky
application or other document executed by the Company specifically for that
purpose or based upon written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any or all of the Units under
the Units laws thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; and will reimburse
it and each such controlling person for any legal or other expenses reasonably
incurred by it or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; 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 an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, such Preliminary Prospectus, the Prospectus or such
amendment or supplement, or in such blue sky application or such other document,
in reliance upon and in conformity with written information furnished to the
Company by an Underwriter specifically for use in the preparation thereof; and
provided, further, that the Company will not be liable under this indemnity
agreement, insofar as it relates to any Preliminary Prospectus, to the extent
that any such loss, claim, damage, liability or action results from the fact
that an Underwriter sold Units to a person to whom there was not sent or given,
at or prior to the written confirmation of such sales, a copy of the Prospectus
(or of the Prospectus as then amended or supplemented if the Company had
previously furnished copies thereof to you). This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of the Act, to the same extent as the foregoing indemnity from the Company to
such Underwriter, against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director, officer or 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 any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or in any blue sky
application or other document executed by the Company specifically for that
purpose filed in any state or other jurisdiction in order to qualify any or all
of the Units under the Units laws thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, 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 the
Registration Statement, such Preliminary Prospectus, the Prospectus or such
amendment or supplement, or in such blue sky application or such other document,
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter specifically for use in the preparation thereof; and
will reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer or controlling person in connection with
investigating
17
or defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which an Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 6, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 6. In case any such action is brought against any indemnified party, and
it notifies an indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in, and, to the extent that it may wish,
jointly with any other indemnifying party, similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 6 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall be liable for any settlement of any action effected without its
written consent.
7. CONTRIBUTION. (a) In order to provide for just and equitable
contribution under the Act in any case in which (i) an Underwriter (or any
person who controls the Underwriter within the meaning of the Act) makes claim
for indemnification pursuant to Paragraph 6(a) hereof but it is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that Paragraph 6(a) provides for indemnification in
such case or (ii) contribution under the Act may be required on the part of an
Underwriter or any such controlling person in circumstances for which
indemnification is provided under Paragraph 6(b), then, and in each case, the
Company and the Underwriters shall contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (after contribution from
others) in such proportion so that the Underwriters are responsible for an
aggregate of 10% (being the amount of the Underwriter's commission) and the
Company are responsible for the remaining portion; provided, however, that, in
any such case, no person guilty of a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(b) Promptly after receipt by any party to this Agreement of notice of
the commencement of any action, suit or proceeding, such party will, if a claim
for contribution in respect thereof is to be made against another party (the
"contributing party"), notify the contributing party of the commencement
thereof; but the omission so to notify the contributing party will not relieve
it from any liability which it may have to any other party other than for
contribution under the Act. In case any such action, suit or proceeding is
brought against any party, and such party notifies a contributing party of the
commencement thereof, the contributing party will be entitled to participate
therein with the notifying party and any other contributing party will be
entitled to participate therein with the notifying party and any other
contributing party similarly notified.
18
8. SUBSTITUTION OF UNDERWRITERS. (a) If one or more Underwriters shall
default in its or their obligations to purchase and pay for the Units hereunder
and if the aggregate number of such Units which all Underwriters so defaulting
shall have agreed to purchase does not exceed 10% of the aggregate number of
Units to be purchased by the Underwriters, each non-defaulting Underwriter shall
have the right and is obligated, severally, to purchase and pay for (in addition
to the Units set forth opposite its name in Schedule A) that portion of the
Units agreed to be purchased by all such defaulting Underwriters which the Units
set forth opposite its name in Schedule A bears to the aggregate Units so set
forth opposite the names of all such non-defaulting Underwriters. In such event,
you as Representative, for the accounts of the several non-defaulting
Underwriters, shall take up and pay for all or any part of such additional Units
to be purchased by each such Underwriter under this Section 8(a), and may
postpone the Closing Date to a time not exceeding three full business days after
the Closing Date determined as provided in Section 3 hereof during which time
the Company will prepare and file any amendments to the Registration Statement
and take any other action which the Representative or its counsel shall deem
necessary or appropriate to reflect such event; or
(b) If one or more Underwriters default in its or their obligations to
purchase and pay for Units hereunder and if the aggregate number of such Units
which all Underwriters so defaulting shall have agreed to purchase shall exceed
10% of the aggregate number of Units to be purchased by the Underwriters, or if
one or more Underwriters for any reason permitted hereunder cancel its or their
obligations to purchase and pay for Units hereunder, the non-canceling and
non-defaulting Underwriters (hereinafter called the "remaining Underwriters")
shall have the right to purchase such Units in such proportion as may be agreed
among them, at the Closing Date determined as provided in Section 3 hereof. If
the remaining Underwriters do not purchase and pay for such Units at such
Closing Date, the Closing Date shall be postponed for twenty-four hours and the
remaining Underwriters shall have the right to purchase such Units or to
substitute another person or persons, to purchase the same, or both, at such
postponed Closing Date. If by such postponed Closing Date the remaining
Underwriters have not exercised such right to purchase or obtained a substitute
purchaser or purchasers, the Closing Date shall be postponed for a further
twenty-four hours and the Company shall have the right to substitute another
person or persons, satisfactory to the Representative, to purchase such Units at
such second postponed Closing Date. If the Company shall not have found such
purchasers for such Units by such second postponed Closing Date, then this
Agreement shall automatically terminate and neither the Company nor the
remaining Underwriters shall be under any obligation under this Agreement except
that the Company shall remain liable for the full amount of expenses incurred as
provided in Section 4(e) and to the extent provided in Sections 6(a) and 7
hereof and the Underwriters shall remain liable to the extent provided in
Sections 6(b) and 7 hereof. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default or
obligate any Underwriter to purchase or find purchasers for any Units in excess
of those agreed to be purchased by such Underwriter under the terms of Sections
3 and 8(a) hereof.
19
9. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. All representations
and warranties of the Company contained herein and in the certificate or
certificates delivered pursuant to Section 5(d) hereof, and the indemnity and
contribution agreements contained in Sections 6 and 7 hereof, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person, or by or on behalf of
the Company or any officer, director or controlling person, or of any
termination of this Agreement, and shall survive delivery of and payment for the
Units.
10. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION THEREOF. (a) This
Agreement shall become effective at 9:00 A.M., New York City time, on the first
full business day after the Registration Statement has become effective, or at
such earlier time after the Registration Statement has become effective as you
in your discretion shall first release the Units for sale to the public. For the
purposes of this Section 10, the Units shall be deemed to have been released for
sale to the public upon release by you of the publication of a newspaper
advertisement relating to the Units or upon release by you of telegrams or
facsimile transmissions offering the Units for sale, whichever shall first
occur. You or the Company may prevent this Agreement from becoming effective
without liability of any party to any other party, except as noted below, by
giving the notice hereinafter specified at or before the time this Agreement
becomes effective; provided however, that the provisions of this Section,
Section 4(e), Section 6 and Section 7 shall at all times be effective.
(b) You shall have the right to terminate this Agreement by giving the
notice hereinafter specified at any time at or prior to the Closing Date if (i)
the Company shall have failed, refused or been unable, at or prior to the
Closing Date, to perform any agreement on its part to be performed hereunder, or
because any other condition precedent to the Underwriters' obligations hereunder
required to be fulfilled by the Company has not been fulfilled, or if (ii)
trading on the New York Stock Exchange shall have been generally suspended, or
minimum or maximum prices for trading shall have been generally fixed, or
maximum ranges for prices for Units shall have been generally required, on the
New York Stock Exchange or by order of the Commission or any other governmental
authority having jurisdiction, or if there has been a substantial adverse change
in general market or economic conditions, or if a banking moratorium shall have
been declared by Federal or New York authorities, or if an outbreak of
hostilities or other national or international calamity of such nature as to
disorganize the Units markets in the United States shall have occurred since the
execution hereof.
If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in this Section 10, you shall notify the
Company promptly by telephone or telegram, confirmed by letter. If the Company
elects to prevent this Agreement from becoming effective, the Company shall
notify you promptly by telephone or telegram, confirmed by letter.
11. NOTICES. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and if sent to the Underwriters shall
be mailed, delivered or telegraphed and confirmed to you as Representative at 0
Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or if sent
20
to the Company, shall be mailed, delivered or telegraphed and confirmed to it
at 000 Xxxx Xxxxxx, 00xx xxxxx, Xxx Xxxx, X.X. 10022 marked to the attention
of the President.
12. PARTIES. This Agreement shall inure to the benefit of and be binding
upon you and the Company and the several Underwriters and their respective
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person , other than the parties
hereto and their respective successors and assigns and the controlling persons
and the officers and directors referred to in Section 6 hereof, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of the
parties hereto and their respective successors and assigns and said controlling
persons and said officers and directors, and for the benefit of no other person.
No purchaser of any of the Units from any Underwriter shall be construed a
successor or assign by reason merely of such purchase.
13. INFORMATION FURNISHED BY UNDERWRITERS. The statements set forth in the
last paragraph on the cover page, in the stabilization legend, under the caption
"Underwriting" and the statements regarding counsel for the Underwriters under
the caption "Legal Matters" in any Preliminary Prospectus and in the Prospectus
and in blue sky reports of sales, if any, constitute the written information
furnished by or on behalf of any Underwriter referred to in Sections 2(b), 6(a)
and 6(b) hereof.
14. MISCELLANEOUS. In all dealings hereunder, you shall act on behalf of
each of the Underwriters, and the Company shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriters made
by you as the Representative. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York, and
the Company hereby consents and will submit to the jurisdiction of the courts of
the State of New York and of any federal court sitting in the City of New York
with respect to controversies arising under this Agreement.
If the foregoing correctly sets forth the understanding between the Company
and the several Underwriters, please so indicate on behalf of the Underwriters
in the space provided below for that purpose, whereupon this letter shall
constitute a binding agreement between the Company and each of the Underwriters.
Very truly yours,
EUROWEB INTERNATIONAL CORP.
By:_________________________________
Accepted as of the date first above written:
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X.X. XXXXXXX & CO., INC.
Acting on behalf of the several
Underwriters named in Schedule A hereto.
By:_____________________________
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SCHEDULE A
EUROWEB INTERNATIONAL CORP.
UNDERWRITING AGREEMENT DATED ______________________, 1998
This Schedule sets forth the name and address of each Underwriter and the
number of Shares to be purchased by each Underwriter from the Company.
NUMBER OF
NAME ADDRESS UNITS
------------ ------- ---------
X.X. Xxxxxxx 1 Battery Park Plaza
& Co., Inc. New York, NY 10004
---------
Total............................ ................ 1,000,000
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