EXHIBIT 1
GALACTICOMM TECHNOLOGIES, INC.
[ ] Units
UNDERWRITING AGREEMENT
As of ________ , 1998
First Equity Corporation of Florida
000 Xxxxx Xxxxxxxx Xxxxxxxxx
0000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
____________________
____________________
____________________
Gentlemen:
Galacticomm Technologies, Inc., a Florida corporation (the "Company")
confirms its agreement with First Equity Corporation of Florida, Inc., a Florida
corporation ("First Equity"), and _________________ , a ___________corporation
(collectively, the "Representatives") as representatives and members of the
group of several underwriters, if any, named in Schedule I attached hereto (the
"Underwriters" or "you", and if there is no Schedule I attached, all references
in this Agreement to the "Underwriters" or "you" shall be deemed to refer only
to the Representatives) as follows:
1. THE UNITS. Subject to the terms and conditions set forth herein, the
Company proposes to sell to you on a "firm commitment" basis an aggregate of
[_________________ ] Units (sometimes collectively referred to herein as the
"Firm Units"), each Unit consisting of one share (a "Share") of the Company's
authorized but unissued common stock, par value $.0001 per share (the "Common
Stock"), and one Redeemable Common Stock Purchase Warrant (the "Warrants"), each
Warrant entitling the holder thereof to purchase one-half share of Common Stock
(a minimum of two Warrants will be required to purchase a share of Common Stock;
no fractional shares will be issued) on the basis of an exercise price of
$___________ [120% of the offering price of a Unit] per share pursuant to a
warrant agreement (the "Warrant Agreement") between the Company and Continental
Stock Transfer & Trust Company ("Warrant Agent"). The Company also proposes to
grant to you an option to purchase up to an additional [_______________ ] Units
for the sole purpose of covering over-allotments, if any (the "Option Units").
The shares of Common Stock issuable upon exercise of the Warrants are sometimes
collectively referred to herein as the "Warrant Shares". The Firm Units and the
Shares and Warrants underlying the Firm Units are sometimes collectively
referred to herein as the "Firm Securities"; the Option Units and the Shares and
Warrants underlying the Option Units are sometimes collectively referred to
herein as the "Option Securities". The Firm
Securities and the Option Securities are more fully described in the
Registration Statement and the Prospectus referred to herein and are hereinafter
sometimes collectively referred to as the "Securities."
2. REGISTRATION STATEMENT AND PROSPECTUS. A registration statement on
Form SB-2 (File No. 333- __________ ) together with exhibits and including a
preliminary form of prospectus for the registration of the Securities and the
Warrant Shares, has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended, and all applicable
instructions, rules and regulations (collectively, the "Securities Act") of the
Securities and Exchange Commission (the "Commission"), and has been filed with
the Commission. There have been delivered to you copies of each Preliminary
Prospectus and the Final Prospectus. Such registration statement, including the
Prospectus, Part II, any documents incorporated by reference therein and all
financial schedules and exhibits thereto, as amended at the time when it shall
become effective, is herein referred to as the "Registration Statement," and the
prospectus included as part of the Registration Statement on file with the
Commission when it shall become effective or, if the procedure in Rule 430A of
the Rules and Regulations (as defined below) is followed, the prospectus that
discloses all the information that was omitted from the prospectus on the
effective date of the Registration Statement pursuant to such rule, and in
either case, together with any changes contained in any prospectus filed with
the Commission by the Company with your consent after the effective date of the
Registration Statement, 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 of the Company and in any amendments
thereto prior to the effective date of the Registration Statement is referred to
herein as a "Pre- Effective Prospectus." For purposes of this Agreement, "Rules
and Regulations" mean the rules and regulations adopted by the Commission under
either the Securities Act or the Securities Exchange Act of 1934 (the "Exchange
Act"), as applicable.
3. AGREEMENTS TO SELL AND PURCHASE.
a. FIRM SECURITIES. The Company agrees to sell to you, and upon the
basis of the representations, warranties and agreements of the Company herein
contained and subject to the terms and conditions hereof, you shall, severally
but not jointly, purchase from the Company, at a purchase price of $_________
per Firm Unit. This purchase price of the Units represents the public offering
price of such securities, less a discount, equaling ten percent (10%), that the
Company has agreed to allow the Underwriters. All or any portion of such
discount may be reallowed by you for sales through licensed securities dealers
who are members of the National Association of Securities Dealers, Inc. (the
"NASD").
b. OPTION SECURITIES. The Company also grants you an option to pur
chase, upon your written notice to the Company, the Option Units for the sole
purpose of covering over-allotments, if any, at the purchase price and on the
same terms as set forth in the preceding paragraph. The Option Units may be
purchased, in whole or in part, at any time for a period of forty-
-2-
five (45) days following the effective date of the Registration Statement. The
notice from you to the Company shall specify the number of Option Units to be
purchased and the date and time of pay ment and delivery thereof (the "Option
Closing Date"). You, as the Underwriters, in your sole discretion, shall
determine the number of Option Units, if any, to be purchased as provided
herein. Such over-allotment option shall not be exercised more than on one
occasion.
c. UNDERWRITER'S PURCHASE OPTION. On the Closing Date (as defined
herein) for the Firm Securities, the Company shall further issue and sell to
[First Equity, individually and not as a Representative,] or, at its direction,
to its bona fide officers and directors and/or employees, an option (the
"Underwriter's Purchase Option") pursuant to the Purchase Option Agreement to
purchase [ ____________ ] Units (such Units, the "Underwriter's Units", the
Shares and Warrants underlying the Underwriter's Units, the "Underwriter's
Shares" and the "Underwriter's Warrants", respectively) for an aggregate
purchase price of $75.00. The Underwriter's Purchase Option shall be exercisable
at any time during the four year period commencing one-year after the effective
date of the Registration Statement (the "Term"), at a price per Unit equal to
120% of the public offering price of a Unit. For a period of one (1) year after
the effective date of the Registration Statement, the Underwriter's Purchase
Option (and the Purchase Option Securities, as hereinafter defined) may not be
sold, assigned, transferred, pledged or hypothecated except to officers and
partners of First Equity or members of the selling group (and their officers or
partners). Such transfers will only be made if they do not violate the
registration provisions of the Securities Act. The Underwriter's Purchase Option
and the Purchase Option Securities shall be transferable after one year from the
effective date of the Registration Statement pursuant to available exemptions
from registration (if not otherwise covered by an effective registration
statement) under the Securities Act, provided, however, that the Underwriter's
Purchase Option may not be transferred to a direct competitor of the Company
without the Company's prior written consent. Except as otherwise set forth in
the Purchase Option Agreement, you may designate that the Underwriter's Purchase
Option be issued in varying amounts directly to your officers or partners and
not the Underwriters, and to other underwriters, if any, and their designees.
Such designation will be made by you only if you determine that such issuances
would not violate the interpretation of the Board of Governors of the NASD
relating to the review of corporate financing arrangements. The Underwriter's
Units and the Underwriter's Shares and Underwriter's Warrants underlying the
Underwriter's Units (collectively sometimes referred to herein as the "Purchase
Option Securities") shall be entitled to piggyback and demand registration
rights acceptable to you and your counsel and as set forth in the Purchase
Option Agreement.
4. DELIVERY AND PAYMENT. Delivery of and payment for the Firm
Securities shall be made at 10:00 A.M., Miami Time, on _____________ , 1998
(such time and date are referred to herein as the "Closing Date") at the offices
of Akerman, Senterfitt & Xxxxxx, P.A., SunTrust International Center, 28th
Floor, Xxx Xxxxxxxxx 0xx Xxxxxx, Xxxxx, Xxxxxxx 00000. The Closing Date and the
time and the place of delivery of and payment for the Firm Securities may be
varied by agreement between you and the Company.
-3-
If you elect to purchase and take delivery of any Option Securities,
delivery of and payment for such Option Securities shall be made at said office
or at such place as may be agreed upon in writing by you and the Company, on the
Option Closing Date, which may be the same as the Closing Date but shall in no
event be earlier than the Closing Date or earlier than one or later than ten
business days after the giving of the written notice referenced in Section 3
hereof from you to the Company of the determination to purchase a number,
specified in said notice, of Option Securities. Such notice may be given by you
to the Company at any time within forty-five (45) days after the date of the
Final Prospectus. The Option Closing Date may be varied by agreement between you
and the Company. On the Option Closing Date, if any, there shall be delivered to
you supplemental opinions and certificates, dated such Option Closing Date, to
the same effect as those required to be delivered on the Closing Date pursuant
to Section 8 hereof. The Closing Date and the Option Closing Date are heretofore
and hereinafter collectively referred to as the "Closing Date."
Delivery of certificates for the shares of Common Stock which comprise
the Shares and the certificates for the Warrants (in definitive form and
registered in such names and in such denominations as you shall request prior to
the Closing Date) shall be made to you against payment of the purchase price for
the Units by certified or official bank check or wire transfer of immediately
available funds payable to the order of the Company in the aggregate amount of
$_________________ (less all amounts payable to the Underwriters under this
Agreement and any agreement referred to herein). For the purpose of expediting
the checking and packaging of certificates for the Shares and the Warrants, the
Company agrees to make such certificates available for inspection at least 24
hours prior to the Closing Date. Time shall be of the essence and delivery at
the time and place specified in this Agreement is a further condition to the
obligations of the Underwriter.
5. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company further
covenants and agrees with you as follows:
a. FILING OF REGISTRATION STATEMENT. The Company shall use its best
efforts to cause the Registration Statement to become effective or, if the
procedure in Rule 430A of the Rules and Regulations is followed, comply with the
provisions of and make all requisite filings with the Commission pursuant to
such Rules and Regulations. The Company will give you advance notice of its
intention to file or make any amendment or post-effective amendment to the
Registration Statement or any amendment or supplement to the Prospectus and will
submit all such amendments or supplements to you and to your counsel as soon as
possible, but not later than five (5) business days before the Company proposes
to file such amendments or supplements with the Commission. The Company will not
file any such amendment or supplement to which you shall reasonably object in
writing within a reasonable time after being furnished copies thereof. The
Company will not allow the Registration Statement to be declared effective by
the Commission without your approval.
b. NOTICE TO UNDERWRITERS. The Company will advise you promptly and
confirm that advice in writing (i) when any post-effective amendment to the
Registration Statement shall have become effective, (ii) of the mailing or the
delivery to the Commission for filing of any
-4-
amendment or post-effective amendment to the Registration Statement or any
amendment or supplement to the Prospectus, (iii) of any request by the
Commission for amendment or supplement to the Registration Statement or the
Prospectus, or for additional information, immediately supplying you with copies
of all comment letters and all other correspondence with the Commission, (iv) of
the issuance by the Commission of any stop order suspending effectiveness of the
Registration Statement or of the suspension of the qualification of the
Securities or Warrant Shares for offering or sale in any jurisdiction, or of the
initiation or threat of any proceeding for any such purpose, (v) of the issuance
by any state securities commission or other regulatory authority of any order
suspending the qualification or the exemption from qualification of the
Securities or Warrant Shares under state securities or Blue Sky laws or the
initiation or threat of any proceedings for that purpose and (vi) of the
happening of any event during the period mentioned in Section 5.d hereof that
makes any statement made in the Registration Statement or the Prospectus untrue
in any material respect or which requires the making of any changes in the
Registration Statement or the Prospectus in order to make the statements therein
not misleading in any material respect. The Company will use its best efforts to
prevent the issuance of any stop order or suspension order and to obtain the
withdrawal of any such stop order or suspension order at the earliest possible
moment.
c. NASDAQ LISTING. On the effective date of the Registration
Statement, the Units and the Common Stock (including the Warrant Shares) and
Warrants comprising the Units shall each be listed for quotation on the NASDAQ
SmallCap Market, and the Company shall use its best efforts to maintain such
listing for not less than five (5) years, provided, however, that the Company
may withdraw the listing of its securities on the NASDAQ if the Company lists
the Units, the Common Stock (including the Warrant Shares) and the Warrants on
the NASDAQ National Market System or on the New York or American Stock Exchange.
In addition to the foregoing, the Company shall, pursuant to Schedule D of the
NASD By-Laws, prepare and file with NASD any required notification along with
applicable fees to list the Securities on the NASDAQ system. The Company shall,
as required, prepare and file as promptly as practicable a Report by Issuer of
Securities Quoted on NASDAQ Interdealer Quotation System on Form 10-C (or any
successor form) with respect to the shares of Common Stock and the Warrants.
d. POST-EFFECTIVE AMENDMENT. Within the time during which a Final
Prospectus relating to the Securities is required to be delivered under the
Securities Act, the Company shall comply with all requirements imposed upon it
by the Securities Act and by the Rules and Regulations, as from time to time in
force, so far as is necessary to permit the continuance of sales of or dealings
in the Securities as contemplated by the provisions hereof and the Final
Prospectus. If at any time when a prospectus relating to the Securities is
required to be delivered under the Securities Act, any event occurs as a result
of which, in the judgment of the Company and its counsel, the Prospectus as then
amended or supplemented would include any untrue statement of a material fact,
or omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which made, not misleading in any material
respect, or if it is necessary at any time to amend or supplement the Prospectus
to comply with the Securities Act or any other applicable law, the Company will
promptly notify you, and the Company shall promptly prepare and file with the
Commission an amendment or supplement to the Registration Statement which will
-5-
correct such statement or omission, or an amendment or supplement which will
effect such compliance, and deliver to you in connection therewith such
prospectus or prospectuses in such quantity as may be necessary to permit
compliance with the requirements of the Securities Act.
e. BLUE SKY QUALIFICATION. Prior to any public offering of the
Securities by you, the Company will endeavor in good faith, using your counsel,
and in cooperation with you and your counsel in taking such action as may be
necessary to register or qualify the Securities for offer and sale under the
applicable securities or Blue Sky laws of any states or jurisdictions of the
United States as you may reasonably designate and will maintain such
qualifications in effect for so long as may be required for the distribution of
the Securities. The foregoing shall be subject to the reasonable consent of the
Company as to any state or jurisdiction that seeks to impose an escrow
requirement with respect to insiders' shares or some other restrictive condition
upon the Company that exceeds the insiders lock-up provision of Section 5.k
(other than because no escrow is required herein) or a comparable condition
contained herein. Copies of all applications and related documents for the
registration or qualification of securities (except for the Registration
Statement and Prospectus) filed with the various states shall be sent to the
Company's counsel not later than the next business day following their
transmission to the various states, and copies of all comments and orders
received from the various states shall be made available to the Company's
counsel. As information is received from various states and immediately prior to
the effective date of the Registration Statement, counsel for the Underwriters
shall advise counsel for the Company in writing of all states where the offering
has been registered or qualified for sale or has been canceled, withdrawn or
denied, the date(s) of such event(s), and the number of Securities (and amount
of other securities, if any) registered or qualified for sale in each state. The
Company shall be responsible for the cost of state registration filing fees and
legal fees and expenses of Underwriter's counsel in connection with such
filings, which filing fees shall be paid to Underwriter's counsel in advance of
such filings. The Underwriter's counsel's legal fees with respect to blue sky
filing shall be $2,000 for each state in which application for registration or
qualification is made, up to an aggregate of $25,000 for all states combined.
All outstanding fees and expenses of the Underwriter's counsel solely with
respect to Blue Sky matters shall be paid by the Company on or prior to the
Closing Date.
f. STANDARD AND POOR'S. The Company shall, as soon as practicable
after the Closing Date, apply for listing in Standard and Poor's Stock Guide and
use its best efforts to effect and maintain such listing for at least five (5)
years.
g. INVESTOR RELATIONS. The Company further agrees, no later than the
25 days after the Closing Date, to engage the services of an investor relations
firm (which firm shall also be qualified to act and shall serve as the financial
publicist of the Company) reasonably acceptable to the Representatives and to
maintain such services from the date of engagement for two (2) years following
the Closing Date.
h. ISSUANCES OF ADDITIONAL SECURITIES. Except as provided in this
Agreement and except for options granted pursuant to the Company's 1997 Stock
Option Plan (the
-6-
"Plan") and other convertible securities outstanding on the effective date of,
and as described in, the Registration Statement, the Company will not sell,
offer to sell, solicit an offer to buy, contract to sell or otherwise dispose of
any Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or grant any options or warrants to purchase
Common Stock, for a period of 180 days after the effective date of the
Registration Statement, without the consent of the Representatives. The
Underwriters acknowledge that the Company intends to file a Form S-8
registration statement with respect to the granting of the stock options to be
issued under the Plan and the sale of the shares of Common Stock underlying such
options.
i. INFORMATION TO THE UNDERWRITERS. The Company will deliver to you,
for a period of at least five (5) years (or such earlier date if the
Underwriter's Purchase Option and the Underwriter's Warrant have been exercised
in full) from the Closing Date: (i) as soon as practicable, but in any event
within ninety-five (95) days after the close of each fiscal year of the Company,
or as soon thereafter as practicable, a financial report of the Company and its
subsidiaries, if any, on a consolidated basis, and a similar financial report of
all unconsolidated subsidiaries, if any, all such reports to include a balance
sheet as of the end of the preceding fiscal year, a statement of operations, a
statement of changes in financial condition and a statement of shareholders'
equity covering such fiscal year, and all to be in reasonable detail and
certified by independent public accountants who may, however, be the regularly
employed independent public accountants of the Company; (ii) within one hundred
and five (105) days after the end of each quarterly fiscal period of the
Company, other than the last quarterly fiscal period in any fiscal year, or as
soon thereafter as practicable, copies of the consolidated statement of
operations, the statement of shareholders' equity and statement of changes in
financial condition for that period, and the balance sheet as of the end of that
period of the Company and its subsidiaries, if any, the statement of operations,
the statement of shareholders' equity and statement of changes in financial
condition and the balance sheet of each unconsolidated subsidiary, if any, of
the Company for that period, all subject to year-end adjustment, certified by
the principal financial or accounting officer of the Company; (iii) copies of
all other statements, documents, or other information which the Company shall
mail or otherwise make available to any class of its security holders, to the
financial press or to the public, or shall file with the Commission, including,
but not limited to periodic reports required to be filed under Sections 13 and
15 of the Exchange Act, in particular Forms 10-KSB, 10-QSB and 8-K (which shall
be provided within the same period such reports are required to be filed with
the Commission); (iv) a copy of each "weekly position sheet" generated by the
Depository Trust Corporation pursuant to a subscription for such service that
the Company shall maintain at its expense; and (v) upon request in writing, such
other information as may reasonably be requested with reference to the property,
business, shareholders and affairs of the Company and its subsidiaries, if any.
j. SECTION 11(a) EARNINGS STATEMENT. The Company will, as promptly
as possible after the close of each fiscal year of the Company, prepare and
distribute reports to its shareholders which will include audited statements of
its operations and changes of financial position during such period and its
balance sheet as of the end of such period. The Company will make generally
available to its shareholders and will deliver to you, as soon as practicable,
but in no event later than the first day of the 15th full calendar month
following the effective date of the
-7-
Registration Statement, an earnings statement (which need not be audited but
which will satisfy the provisions of Section 11(a) of the Securities Act)
covering a period of at least twelve (12) months beginning after the effective
date of the Registration Statement.
k. LOCK-UP AGREEMENTS. The Company will cause each of its officers,
directors, holders of the Company's Common Stock, any other persons deemed to be
"affiliates" as defined in Rule 144 under the Securities Act immediately prior
to the effective date of the Registration Statement, to agree in writing (the
"Lock-Up Agreement") that: (i) such person shall not sell, including a short
sale or sale against the box, or otherwise dispose of any shares of the Common
Stock owned directly, indirectly, or beneficially (as defined by the Exchange
Act and the Rules and Regulations) by him, her or it (including shares of Common
Stock hereinafter acquired through the exercise or conversion of derivative
securities or otherwise) for a period of twelve (12) months from the effective
date of the Registration Statement ("Lock-Up Period") without the
Representatives' prior written consent; and (ii) such person will permit all
certificates evidencing his, her or its shares of Common Stock, Warrants,
Options or Notes to be affixed with an appropriate restrictive legend, and will
cause the transfer agent for the Company to note such restrictions on the
transfer books and records of the Company. Notwithstanding the foregoing, (i)
such person may sell or otherwise dispose of such shares in a privately
negotiated transaction, provided that: (a) the purchaser agrees in advance in
writing with the Underwriters to the restrictions on transfer of securities as
set forth herein and to vote the Common Stock as set forth in the Lock-Up
Agreements and (b) the disposition is otherwise in accordance with the federal
securities and other laws, and (ii) such person may make gifts and transfers of
Common Stock to the undersigned's immediate family (as such term is defined in
rules promulgated under the Securities Exchange Act of 1934, as amended). On or
before the effective date, the Company shall have furnished to the
Representatives the Lock-Up Agreements, which shall be in a form reasonably
acceptable to the Representatives and which shall be duly executed, and shall be
valid and binding obligations of such persons enforceable against such persons
in accordance with their respective terms.
l. PRESS RELEASES. For a period commencing on the date hereof and
ending two years after the date of the Prospectus, neither the Company nor any
of its officers or directors will issue news releases or permit other such
publicity about the Company regarding the financial condition or any significant
event of the Company without the approval of the Company's legal counsel named
in the Prospectus under the heading "Legal Opinions," or such other counsel as
may be approved by you. During such period, the Company will deliver to you
copies of such news releases or other publicity about the Company promptly after
distribution thereof.
m. UNDERWRITERS' COPIES. The Company will promptly deliver to you,
without charge: (i) two complete copies (one of which is manually signed) of the
Registration Statement, as originally filed, and of each amendment thereto, and
of each post-effective amendment thereto filed at any time when a prospectus
relating to the Securities is required to be delivered under the Securities Act,
in each such case manually executed by the proper officers and a majority of the
directors of the Company (or, in case of amendments, by their duly constituted
attorneys-in-fact) and including signed copies of each consent of experts named
in the Registration Statement and all
-8-
financial statements, schedules and exhibits filed therewith (including those
incorporated by reference to the extent not previously furnished to you), and
(ii) such number of conformed copies of the Registration Statement, as
originally filed, and of each amendment and post-effective amendment thereto (in
each such case excluding exhibits), as you may reasonably require. The Company
will promptly deliver, without charge, to you or such others whose names and
addresses are designated by you as soon as possible after the effective date of
the Registration Statement, and thereafter from time to time during the period
when delivery of a prospectus relating to the Securities is required by the
Securities Act, as many printed copies as you may reasonably request of the
Final Prospectus and of any amended or supplemented prospectus. The Company will
promptly deliver, without charge, as soon as practicable following the public
offering or sale of the Securities, and thereafter from time to time for such
period as delivery of a prospectus or any amendment or supplement thereto may be
required, to you or any dealers to whom Securities may be issued, as many copies
as you reasonably request of the Prospectus and any amendment or supplement
thereto.
n. NASD MATTERS. The Company shall supply your counsel with the
following as appropriate to satisfy the NASD filing requirements: (i) such
copies of any amendment or supplement to the Registration Statement and the
preliminary prospectus or Final Prospectus; and (ii) the statutory filing fee in
the form of a certified or cashier's check. The Company shall further supply to
your counsel, no later than one (1) week before the effective date of the
Registration Statement, a written representation as to: (i) the existence or
nonexistence of any NASD affiliation or association of any officer, director, or
five percent (5%) or greater shareholder of the Company, and, if a shareholder
of the Company is a corporation, the existence or nonexistence of any direct or
indirect NASD affiliation or association of any officer, director, or five
percent (5%) or greater shareholder of such corporation, (ii) whether or not any
unregistered securities of the Company have been acquired by any NASD affiliated
persons during the twelve (12) month period prior to filing the Registration
Statement, and (iii) whether or not key-man life insurance has been or will be
provided for any officer or director of the Company by any NASD affiliate.
o. EXPENSES. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is terminated,
the Company shall bear all costs and expenses incident to the issuance, offer,
sale, and delivery of the Securities, including, but not limited to, stock
transfer taxes, all expenses and fees incident to the filing of the Registration
Statement and the registration statements with the Commission pursuant to the
Securities Act and the Exchange Act, the costs, filing fees and (subject to
Section 1.e. hereof) counsel fees related to qualification under state
securities laws, fees and disbursements of counsel and accountants for the
Company, NASD filing fees, NASDAQ system fees, costs of preparing and printing
the Registration Statement and as many copies of the preliminary prospectus and
Prospectus as you may reasonably deem necessary, including all amendments and
supplements to the Registration Statement, and the printing, delivery, and
shipping of this Agreement and other underwriting documents, including
Underwriter's questionnaires, Underwriter's powers of attorney, Blue Sky
memoranda, and selected dealers' agreements, the cost of printing certificates
representing the Shares and the Warrants, the costs and charges of the Transfer
Agent and Warrant Agent, and all other costs and expenses incident to the
performance of its obligations hereunder which are not
-9-
otherwise provided for in this Agreement. The Company shall also bear all costs
of holding informational meetings and "road shows" to acquaint securities
dealers with the affairs of the Company, provided that the Company shall not be
responsible for any Representatives' travel, meals and/or lodging expenses in
the continental United States. The Company, at its sole expense, shall make a
representative of its management available at the offices of the Underwriters,
at mutually convenient times, prior to the effective date of the Registration
Statement and shall likewise make representatives available at the Company for
due diligence or other informational meetings. The Company will also pay the
reasonable out-of-pocket travel expenses of the Underwriters and their counsel
or the professionals designated by the Underwriters to visit the Company's
facilities (as well as those of any significant supplier to, or customer of, the
Company) for purposes of discharging their due diligence responsibilities. The
Prospectus (preliminary and definitive) shall be printed by a financial printer
selected by the Company and approved by the Underwriters. The Company agrees to
supply the Underwriters (within ten weeks of the Closing Date) at the Company's
sole cost and expense up to five (5) bound volumes of all the documents, papers
and exhibits, correspondence and records forming the materials included in the
public offering. In addition, the Company agrees to pay for all pre- and
post-closing advertisements relating to the public offering.
In addition to the foregoing, the Company shall reimburse you for your
expenses on the basis of a nonaccountable expense allowance in the amount of 3%
of the gross offering proceeds, including over-allotment proceeds, less, as to
First Equity, the sum of Twenty Five Thousand Dollars ($25,000) previously paid
to it; all of your costs in excess of the nonaccountable expense allowance shall
be paid by you. Expenses to which the allowance shall be applied include,
without limitation, fees of your counsel, but shall not include the following:
fees of the Company's counsel; Commission or state filing fees; Blue Sky counsel
fees (subject to Section 1.e. hereof) and expenses (as described herein); NASD
filing fees; NASDAQ listing fees; printing; tombstone advertisements; and any
and all other expenses customarily paid by the issuer in a public offering. The
Company represents that such payment will be made in full through a deduction
from the payment by the Underwriters for the Units on each Closing Date.
Notwithstanding any other provisions of this Agreement, if (i) (a)
there is a material adverse change in the business or financial condition of the
Company, (b) there exists any material misrepresentation of the Company
contained herein or otherwise, (c) you discover in the course of your due
diligence examination of the Company facts which you determine, in your sole
discretion, could materially adversely affect the sale of the Securities, or (d)
market conditions, in your sole judgment, do not justify an offering on the
terms set forth in the Registration Statement, and in any such event you elect
to terminate the underwriting, (ii) there is any judicial, administrative or
other regulatory or governmental judgment, decree, order, injunction or similar
action or proceeding enjoining, suspending, prohibiting, limiting or otherwise
restricting you from engaging in underwrit ing activities or sales of
securities, and in any such event you elect to terminate the underwriting, or
(iii) if the transactions contemplated by this Agreement or related thereto are
not consummated because the Company decides not to proceed with the offering,
the Company agrees that in addition to paying the Company's own expense, you
will be entitled to be reimbursed by us, on an accountable basis, for all of its
reasonable accountable out-of-pocket costs incurred in connection
-10-
with the offering of securities contemplated by the Registration Statement
(including, as to First Equity, the Twenty Five Thousand Dollars ($25,000)
previously paid to it). Furthermore, if the Company should fail to pay the
agreed upon amounts set forth above to you, your successors or assigns, the
Company, shall, furthermore, be liable to you for reasonable attorney's fees and
costs incurred in the collection of said amounts.
p. TRANSFER SHEETS. The Company shall furnish to you a list of the
names and addresses of all shareholders subsequent to the Closing Date and shall
cause the Transfer Agent to furnish to you a copy of all transfer sheets for a
period of three years from the later of the Closing Date or the Option Closing
Date.
q. UNDERTAKINGS AND USE OF PROCEEDS. The Company will comply with
all of the undertakings contained in the Registration Statement and shall apply
the net proceeds of the sale of the Securities substantially in accordance with
the description set forth in the Prospectus.
r. RIGHT OF FIRST REFUSAL. The Company hereby grants to First
Equity, for a period of two years from the effective date of the Registration
Statement: (i) the right to represent the Company in connection with any merger
or acquisition involving the Company and for which the Company intends to engage
an investment banker or financial advisor, which shall be upon terms reasonably
acceptable to First Equity and the Company; and (ii) a right of first refusal to
manage (or act as placement agent in respect of) any public offering or private
placement of securities of the Company or its subsidiaries. If the Company or a
subsidiary of the Company seeks to effect a public or private offering of its
securities, the Company shall consult with First Equity and in the case of any
such offering of securities of the Company or a subsidiary of the Company, the
Company agrees to offer to First Equity the opportunity, on terms no more
favorable to the Company or its subsidiary than it or they can secure elsewhere,
the opportunity to act as the managing underwriter (or placement agent, as
applicable) for such offering. Notwithstanding the foregoing, the Company shall
have the right to select a "lead managing" underwriter for any such public
offering if such underwriter is a "higher bracket" underwriter than First Equity
and, if the terms of engagement of such "higher bracket" underwriter are
acceptable to First Equity in its reasonable discretion.
s. EXCHANGE ACT REGISTRATION. The Company shall prepare and file a
registration statement with the Commission pursuant to Section 12(g) of the
Exchange Act. Such registration statement under the Exchange Act shall be
declared effective contemporaneously with the effectiveness of the Registration
Statement. The Company shall comply with the Securities Act, the Exchange Act
and the Rules and Regulations, the applicable rules and regulations of the NASD
and applicable states securities laws so as to permit the continuance of sales
of and dealings in the Securities in compliance with applicable provisions of
such laws, rules, and regulations, including the filing with the Commission and
the NASD of all reports required to be so filed by each, and the Company will
deliver to the holders of the shares all reports required to be provided to such
holders pursuant to such laws, rules, or regulations. The Company will use its
best efforts to maintain its registration under the Exchange Act in effect for a
period of five (5) years from the Closing Date.
-11-
t. STOCK OPTION PLANS. The Company shall not amend any of its stock
option plans to increase the number of shares of Common Stock available for
grant under any of such option plans by more than 10%, in the aggregate, for a
period of two years from the effective date of the Registration Statement
without the prior written consent of the Representatives.
u. REDEMPTION AND DIVIDENDS. For a period of two years from the
Closing Date, the Company shall not, either directly or through a subsidiary,
(i) redeem or purchase any of its securities outstanding as of the Closing Date,
other than redemptions of the Warrants as permitted by the Warrant Agreement, or
that may be required in connection with possible termination of employment with
the Company under the terms of employment agreements in effect on the Closing
Date, or redemptions as otherwise provided for herein, or (ii) pay any
dividends, or make any other cash distribution in respect of its securities, in
excess of the amount of the Company's current or retained earnings derived after
the Closing Date, without the prior written consent of the Representatives,
which consent may be withheld for any reason. The Representatives shall either
approve or disapprove, in writing of such contemplated stock redemption or
dividend or distribution within five (5) business days after the date the
Representatives receive written notice of the proposed action. Failure by the
Representatives to provide a response to within such five (5) day period shall
be deemed to be an approval of the redemption or dividend.
v. DESIGNATION OF DIRECTORS AND ATTENDANCE AT BOARD MEETINGS. [First
Equity] [Each Representative] shall have the right, for the three (3) year
period following the Closing Date, to designate a nominee (the "Nominees") for
election to the Company's Board of Directors. The officers, directors, and
principal shareholders of the Company shall agree in writing at or prior to the
Closing Date to vote all shares of voting capital stock owned by them (or over
which they have the power to direct the vote) during such three-year period in
favor of the election of the Nominee[s] designated by [each of the
Representatives] and shall solicit proxies in support of such nomination. If
[the Representative] shall not have designated a Nominee at the time of any
meeting of the Board or such person shall not have been elected or shall be
unavailable to serve, the Company shall notify [the Representative] of each
meeting of the Board. If a Nominee is not serving on the Board, an individual
selected by [the Representative] shall be permitted to attend all meetings of
the Board and to receive all notices and other correspondence and communications
sent by the Company to members of the Board. The Company shall reimburse [the
Representative's] Nominee (or attendee) for his or her out-of-pocket expenses
reasonably incurred in connection with his or her attendance of Board meetings.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to you that:
a. CONDITIONS FOR USE OF A REGISTRATION STATEMENT ON FORM SB-2. The
conditions for use of a registration statement on Form SB-2 set forth in the
General Instructions to Form SB-2 have been satisfied with respect to the
Company, the transactions contemplated herein and in the Registration Statement.
The Company has prepared in conformity with the requirements of the Securities
Act and the Rules and Regulations and filed with the Commission the Registration
-12-
Statement. Each Preliminary Prospectus was endorsed with the legend required by
Item 501(a)(5) of Regulation S-B of the Rules and Regulations, including, if
applicable, Rule 430A thereof.
b. ACCURACY OF REGISTRATION STATEMENT AND PROSPECTUS. To its
knowledge, neither the Commission nor any state regulatory authority has issued
any order preventing or suspending the use of any preliminary prospectus or
Prospectus, no proceedings for that purpose have been threatened or instituted
and each preliminary prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto or filed pursuant to Rule
424 under the Securities Act in all material respects, at the time of the filing
thereof, complied with the Securities Act and did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; when the
Registration Statement becomes effective, and when the Prospectus is filed with
the Commission, and at all times subsequent thereto up to and including the
Closing Date and the Option Closing Date, or for such longer period as the
Prospectus is required under the Securities Act to be delivered in connection
with sales by you or a dealer selected by you, the Registration Statement and
the Prospectus and any amendments or supplements thereto will comply with the
Securities Act; when the Registration Statement becomes effective, the
Registration Statement will contain all statements required to be stated therein
in accordance with the Securities Act and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and when the
Prospectus is filed with the Commission, it will contain all statements required
to be stated therein in accordance with the Securities Act and will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; PROVIDED, HOWEVER,
that the Company makes no representations or warranties as to information
contained in or omitted from any preliminary prospectus or the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information (or oral information to the extent
such information relates to the private ongoing investigation of you by the
Commission) furnished to the Company with respect to you by or on behalf of you
expressly for use with reference to you (or any person who may be deemed to be
affiliated with you or an associated person of yours) in connection with the
preparation thereof.
c. ORGANIZATION AND GOOD STANDING. The Company and each of its
subsidiaries are Florida corporations duly organized, validly existing and in
good standing under the laws of the State of Florida, with full power and
authority, corporate and other, to own or lease and operate their respective
properties and to conduct their business as described in the Registration
Statement and in the Prospectus. The Company and the Subsidiary (hereinafter
defined) are duly qualified to do business as foreign corporations and are in
good standing in all jurisdictions where such qualification is necessary and
where failure to so qualify could have a material adverse effect on the
financial condition, results of operations, business or properties of the
Company or the Subsidiary. The Company has one subsidiary, Galacticomm, Inc., a
Florida corporation (the "Subsidiary") of which it owns 8,885,607 of the
Subsidiary's 10,000,000 shares of outstanding
-13-
capital stock. No changes will be made in the Articles of Incorporation or
bylaws of the Company or any subsidiary subsequent to the date hereof and prior
to the Closing Date or the Option Closing Date without the prior written consent
of the Representatives.
d. CORPORATE AUTHORIZATION. The Company has full power and
authority, corporate and other, to execute, deliver and perform this Agreement,
the Warrant Agreement, the Underwriter's Purchase Option, and the Purchase
Option Agreement, and to consummate the transactions contemplated hereby and
thereby. This Agreement has been, and the Warrant Agreement, Warrants,
Underwriter's Purchase Option, and the Purchase Option Agreement will be on the
Closing Date, duly executed and delivered by the Company and, as to this
Agreement, constitutes, and, as to the Warrant Agreement, the Warrants (when
sold to and paid for by you), the Purchase Option Agreement and the
Underwriter's Purchase Option (when sold to and paid for by you), will
constitute, as applicable, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms except
as such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, or other similar laws or arrangements affecting creditors' rights
generally and the discretion of courts in granting equitable remedies and except
that enforceability of the indemnification provisions and the contribution
provisions set forth herein may be limited by federal or state securities laws
or public policy underlying such laws. The execution, delivery and performance
by the Company of this Agreement, the Warrant Agreement, the Underwriter's
Purchase Option and the Purchase Option Agreement, the consummation by the
Company of the transactions herein and therein contemplated, the issuance and
sale of the Securities, the Warrant Shares and the Purchase Option Securities
and the compliance by the Company with the terms of such agreements have been
duly authorized by all necessary corporate action and do not and will not, with
or without the giving of notice or the lapse of time, or both: (i) result in any
violation of the Articles of Incorporation or Bylaws of the Company; (ii) result
in a material breach of or conflict with any of the terms or provisions of, or
constitute a default under, or result in the modification or termination of, or
result in the creation or imposition of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company pursuant to any
indenture, mortgage, note, contract, commitment or other agreement or instrument
to which the Company or the Subsidiary is a party or by which the Company or the
Subsidiary or any of their respective properties or assets are or may be bound
or affected; (iii) violate in any material respect any existing applicable law,
rule or regulation, or any judgment, order or decree of any governmental agency
or court, domestic or foreign, having jurisdiction over the Company or the
Subsidiary or any of their respective properties or business; or (iv) have any
material effect on any permit, certification, registration, approval, consent,
license or franchise necessary for the Company or the Subsidiary to own or lease
and operate their prospective properties and to conduct their business or the
ability of the Company or the Subsidiary to make use thereof.
e. CONSENTS. No authorization, approval, consent, order,
registration, license or permit of any court or governmental agency or body, is
required for the valid authorization, issuance, sale and delivery of the
Securities, the Underwriter's Purchase Option and Purchase Option Securities or
in connection with the consummation of the other transactions contemplated by
this Agreement, the Warrant Agreement and the Purchase Option Agreement, other
-14-
than under the Securities Act, the Rules and Regulations, and the rules and
regulations of the state securities laws of the states in which offers or sales
will be made in connection with the purchase and distribution of the Securities
by you and the purchase of the Underwriter's Purchase Option and Purchase Option
Securities.
f. CAPITALIZATION - THE COMPANY. The duly authorized, issued and
outstanding capital stock of the Company and the Subsidiary conforms to the
description thereof in the Registration Statement and in the Prospectus. Except
as set forth in the Registration Statement and the Prospectus, there are no
outstanding options to purchase, warrants, or other rights to subscribe for
securities, or any securities or obligations convertible into, or any contracts
or commitments to issue or sell, shares of the Company's capital stock or any
such warrants, convertible securities or obligations. Except as set forth in the
Registration Statement and the Prospectus, no holder of any of the Company's
securities has any rights, "demand", "piggyback" or otherwise, to have such
securities registered under the Securities Act.
g. CAPITALIZATION - THE SUBSIDIARY. The Subsidiary has on the date
hereof 10,000,000 shares of Common Stock, par value $.01, duly authorized of
which 8,891,207 are issued and outstanding. There are no outstanding options to
purchase, warrants, or other rights to subscribe for securities, or any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, shares of the Subsidiary's capital stock (including, without
limitation, rights pursuant to any phantom stock or stock option plan) or any
such warrants, convertible securities or obligations. No holder of any of the
Subsidiary's securities has any rights, "demand", "piggyback" or otherwise, to
have such securities registered under the Securities Act.
h. MATERIAL CONTRACTS. The descriptions in the Registration
Statement and in the Prospectus of contracts and other agreements of the Company
or the Subsidiary are accurate in all material respects and present fairly the
information required to be disclosed, and there are no material contracts or
other agreements which have not been so described.
i. FINANCIAL STATEMENTS. The financial statements and schedules and
the notes thereto included in the Registration Statement and in the Prospectus
comply as to form in all material respects with the requirements of the
Securities Act and fairly present the financial position of the Company as of
the dates thereof, and the results of operations and changes in financial
position and cash flows of the Company and its subsidiaries for the periods
indicated therein, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods. The pro forma
financial statements included in the Registration Statement and the Prospectus
and any amendment or supplement thereto, have been prepared on a basis
consistent with such historical financial statements, except for the pro forma
adjustments specified therein, and give effect to assumptions made on a
reasonable basis and present fairly the financial position and results of
operations of the Company at the dates and for the periods specified therein.
The other financial and statistical data included in the Registration Statement
and in the Prospectus, historical and pro forma, are, in all material respects,
fairly presented and prepared on a basis consistent with such financial
statements and the books and records of the entities covered thereby. The
selected financial
-15-
data set forth in the Registration Statement and in the Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited and unaudited financial statements included
in the Registration Statement and in the Prospectus.
j. ACCOUNTING CONTROLS. The books, records and accounts of the
Company and its subsidiaries, if any, accurately reflect, in reasonable detail,
the transactions and dispositions of the assets of the Company and its
subsidiaries, as the case may be. The Company and its subsidiaries maintained,
and the Company and its subsidiaries maintains, a system of internal accounting
controls sufficient to provide reasonable assurances that: (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
difference.
k. ACCOUNTANTS. The accountants, KPMG Peat Marwick LLP (the
"Accountants"), who have audited the financial statements filed with the
Commission as a part of the Registration Statement and the Prospectus are
independent accountants with respect to the Company as required by the
Securities Act.
l. COMPLIANCE WITH DOCUMENTS AND LAWS. Neither the Company nor the
Subsidiary is in violation of its respective Articles of Incorporation, Bylaws,
or other governing documents, or, except as disclosed in the Registration
Statement and the Prospectus, in material default in the due performance of any
material obligation, lease or other material contract, indenture, mortgage, deed
of trust, note, loan, or other material agreement or instrument to which the
Company or the Subsidiary, as applicable, is a party or by which it, or any of
its properties or businesses is subject or any applicable material license,
franchise, certificate, permit, authorization, statute, rule or regulation of or
from any public, regulatory, or governmental agency or authority having
jurisdiction over the Company or the Subsidiary or any of their respective
properties or assets, or any approval, consent, order, judgment or decree,
except such as could not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), earnings, business, assets,
results of operations of the Company and, to the knowledge of the Company after
reasonable investigation, there exists, and through the Closing Date and the
Option Closing Date, if any, there shall exist, no condition which, with the
passage of time or otherwise, would constitute a default under any of the
foregoing or result in the imposition of any penalty or acceleration of any
indebtedness.
m. TAXES. The Company and the Subsidiary have filed with the
appropriate federal, state and local governmental agencies, and all foreign
countries and political subdivisions thereof, all tax returns, including
franchise tax returns, which are required to be filed or have duly obtained
extensions of time for the filing thereof and have paid all taxes shown on such
returns and all assessments received by them to the extent that the same have
become due; and the
-16-
provisions for income taxes payable, if any, shown on the financial statements
included as part of the Registration Statement and in the Prospectus are
sufficient for all accrued and unpaid foreign and domestic taxes, whether or not
disputed, and for all periods to and including the dates of such financial
statements. Except as disclosed in the Registration Statement and in the
Prospectus , (i) neither the Company nor the Subsidiary have executed or filed
with any taxing authority, foreign or domestic, any agreement extending the
period for assessment or collection of any income taxes and neither is a party
to any pending action or proceeding by any foreign or domestic governmental
agency for assessment or collection of taxes; and (ii) no claims for assessment
or collection of taxes have been, or to its knowledge might be, asserted against
the Company or the Subsidiary.
n. AUTHORIZATION OF OUTSTANDING SECURITIES - THE COMPANY. The
outstanding Common Stock and outstanding options and warrants to purchase Common
Stock of the Company have been duly authorized and validly issued. The
outstanding Common Stock is fully paid and non-assessable. The outstanding
options and warrants to purchase Common Stock, all as described in the
Registration Statement and in the Prospectus, constitute the valid and binding
obligations of the Company, enforceable in accordance with their terms. None of
the outstanding Common Stock options or warrants to purchase Common Stock have
been issued in violation of the preemptive rights of any shareholder of the
Company. None of the holders of the outstanding Common Stock are subject to
personal liability solely by reason of being such a holder. The offers and sales
of such outstanding shares of Common Stock, and outstanding options, warrants
and other securities to purchase Common Stock were at all relevant times either
registered under the Securities Act and the applicable state securities or Blue
Sky laws, or exempt from such registration or prospectus filing requirements.
The authorized Common Stock and outstanding options and warrants to purchase
Common Stock and all promissory notes conform to the descriptions thereof
contained in the Registration Statement and in the Prospectus.
o. AUTHORIZATION OF OUTSTANDING SECURITIES - THE SUBSIDIARY. The
outstanding capital stock (and previously issued but no longer outstanding
options and warrants to purchase capital stock) of the Subsidiary have been duly
authorized and validly issued. The outstanding capital stock is fully paid and
non-assessable. None of the outstanding capital stock of the Subsidiary (and
previously issued but no longer outstanding options or warrants to purchase
capital stock) has been issued in violation of the preemptive rights of any
shareholder of the Subsidiary. None of the holders of the outstanding capital
stock of the Subsidiary are subject to personal liability solely by reason of
being such a holder. The offers and sales of such outstanding shares of capital
stock (and previously issued but no longer outstanding options, warrants and
other securities to purchase capital stock of the Subsidiary) were at all
relevant times either registered under the Securities Act and the applicable
state securities or Blue Sky laws, or exempt from such registration or
prospectus filing requirements.
p. AUTHORIZATION OF THE OFFERED SECURITIES. The Securities, the
Warrant Shares, the Underwriter's Purchase Option and the Purchase Option
Securities have been duly authorized. The Securities, when sold and paid for in
accordance with the terms of this Agreement, will be validly issued, fully paid
and non-assessable and free of preemptive and, with the exception
-17-
of the Warrants, redemption rights, and holders thereof will not be subject to
personal liability solely by reason of being such holders. The Warrant Shares,
when paid for in accordance with the terms of the Warrants, will be validly
issued, fully paid and non-assessable and free of preemptive and redemption
rights. The Underwriter's Purchase Option and Purchase Option Securities, when
sold to and paid for by you, will be validly issued, and, when issued upon
exercise of the Underwriter's Purchase Option and the Underwriter's Warrant in
accordance with the terms at the price therein provided, will be validly issued,
fully paid and non-assessable and free of preemptive and redemption rights. The
Securities and the Underwriter's Purchase Option and the Purchase Option
Securities conform to the descriptions thereof contained in the Registration
Statement and in the Prospectus. The Company has reserved for issuance the
number of shares of Common Stock issuable upon exercise of the Warrants and the
Underwriter's Purchase Option and the Purchase Option Securities issuable upon
exercise of the Underwriter's Purchase Option and the Underwriter's Warrant.
q. CONSENTS, ETC. Each of the Company and the Subsidiary owns,
possesses or has obtained all material governmental and other (including those
obtainable from third parties) licenses, permits, certifications, registrations,
approvals or consents and other authorizations necessary to own or lease, as the
case may be, and to operate its properties, whether tangible or intangible, and
to conduct any of the business or operations of the Company or the Subsidiary,
as applicable, as presently conducted and all such licenses, permits,
certifications, registrations, approvals, consents and other authorizations are
in full force and effect, the Company and the Subsidiary are in material
compliance therewith and there are no proceedings pending or, threatened, or any
basis therefor, seeking to cancel, terminate or limit such licenses, permits,
certifications, registrations, approvals or consents or other authorizations.
r. LITIGATION. Except as set forth in the Registration Statement and
in the Prospectus, there are no pending actions, suits, proceedings,
arbitrations, and the Company is not aware of any pending or threatened claims,
investigations or inquiries, before any governmental agency, court or tribunal,
domestic or foreign, or before any private arbitration tribunal against the
Company or the Subsidiary or involving their respective properties or business
that, if determined adversely to the Company or the Subsidiary, would,
individually or in aggregate, result in any materially adverse change in the
financial condition, shareholders' equity, results of operations, properties,
business, management, or affairs of the Company or the Subsidiary or that relate
to environmental matters or discrimination on the basis of age, sex, religion,
race or national origin or that question the validity of the capital stock of
the Company or the Subsidiary or this Agreement or of any action taken or to be
taken by the Company or the Subsidiary pursuant to, or in connection with, this
Agreement; there is no basis for any such action, suit, proceeding, arbitration,
claim, investigation or inquiry. There are no outstanding orders, judgments or
decrees of any court, governmental agency or other tribunal naming the Company
or the Subsidiary and enjoining the Company or the Subsidiary from taking, or
requiring the Company or the Subsidiary to take, any action, or to which the
Company or the Subsidiary, their respective properties or businesses are bound
or subject. Except as set forth in the Registration Statement and in the
Prospectus, there is not now pending or, to the knowledge of the Company,
threatened, any material contingent liability.
-18-
s. FOREIGN CORRUPT PRACTICES ACT. Neither the Company nor the
Subsidiary nor any of their respective directors or officers acting in any
capacity on behalf of the Company or the Subsidiary nor any of the Company's or
the Subsidiary's foreign sales agents, directly or indirectly, has used any
corporate funds for unlawful contributions, gifts, entertainment, or other
unlawful expenses relating to political activity; made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended; or made any bribe,
rebate, payoff, influence payment, kickback, or other unlawful payment. The
Company's internal accounting controls and procedures are sufficient to cause
the Company to comply in all material respects with the Foreign Corrupt
Practices Act of 1977, as amended.
t. CERTAIN PERSONS. Neither the Company, the Subsidiary nor any of
their respective directors, officers or beneficial owners of ten percent or more
of any class of its equity securities:
(1) Has filed a registration statement which is the subject of a
currently effective order denying, suspending or revoking effectiveness of the
registration statement, which order has been entered pursuant to any state's law
within five years prior to the date of this Agreement;
(2) Was, or was named as an underwriter of any securities (A)
covered by any registration statement which is the subject of any pending
proceeding or examination under Section 8 of the Securities Act, or is the
subject of any refusal order or stop order entered thereunder within five years
prior to the date of this Agreement, or (B) covered by any filing which is
subject to any pending proceeding under Rule 261 of Regulation A promulgated
under the Securities Act relating to the temporary or permanent suspension of an
exemption from registration or any similar rule adopted under Section 3(b) of
the Securities Act, or an order entered thereunder within five years prior to
the date of this Agreement;
(3) Has been convicted or has pleaded nolo contendere prior to
the date of this Agreement of any felony or misdemeanor in connection with the
offer, purchase or sale of any franchise or commodity or any felony involving
fraud, deceit or intentional wrongdoing, including but not limited to forgery,
embezzlement, obtaining money under false pretenses, larceny, theft or
conspiracy to defraud;
(4) Has been convicted within five years prior to the date of
this Agreement of any felony or misdemeanor of which fraud is an essential
element, or which is a violation of the securities laws or regulations of any
state or of the United States or any foreign jurisdiction, or which is a crime
involving moral turpitude, or which is a criminal violation of statutes designed
to protect investors or consumers against unlawful practices involving
insurance, securities, commodities or commodities futures, real estate,
franchises, business opportunities, consumer goods or other goods and services;
-19-
(5) Has been convicted or pleaded nolo contendere within ten
years prior to the date of this Agreement of any felony or misdemeanor (A) in
connection with the offer, purchase or sale of any security, (B) involving the
making of any false filing with the Commission or any state or (C) arising out
of the conduct of the business of an underwriter, broker, dealer, municipal
securities dealer or investment adviser;
(6) Has been or is currently subject to any order or judgment
(including an injunction) entered or obtained by the Commission or any state
securities commission or administrator within five years prior to the date of
this Agreement; or (B) has been or is currently subject to any administrative
order or judgment (including an injunction) issued by state or federal
authorities within five years prior to the date of this agreement which order or
judgment (1) includes or is based upon a finding or stipulation of fraud,
fraudulent conduct, deceit (including the making of any untrue statement of a
material fact or omitting to state a material fact) or intentional wrongdoing,
(2) has the effect of enjoining such person from activities subject to federal
or state statutes designed to protect investors or consumers against unlawful or
deceptive practices involving securities, insurance, commodities or commodities
futures, real estate, franchises, business opportunities, consumer goods or
other goods and services;
(7) Is subject to any judgment, order or decree of any court
entered within five years prior to the date of this Agreement which (A)
temporarily or permanently restrains or enjoins such person from engaging in or
continuing any conduct or practice (1) in connection with the offer, purchase or
sale of any security or commodity, (2) involving the making of any false filing
with the Commission or any state, or (3) arising out of the conduct of the
business of an underwriter, broker, dealer, municipal securities dealer or
investment adviser, or (B) restrains or enjoins such person from activities
subject to federal or state statutes designed to protect consumers against
unlawful or deceptive practices involving insurance, commodities or commodities
futures, real estate, franchises, business opportunities, consumer goods or
other goods and services;
(8) Is currently subject to any order or judgment entered or
obtained by any federal or state authority which prohibits, denies or revokes
the use of any exemption from registration in connection with the offer,
purchase or sale of any security;
(9) Is suspended or expelled from membership in, or suspended
or barred from association with a member of, an exchange registered as a
national securities exchange pursuant to Section 6 of the Exchange Act, an
association registered as a national securities association under Section 15A of
the Exchange Act, or a Canadian securities exchange or association for any act
or omission to act constituting conduct inconsistent with just and equitable
principles of trade;
(10) Is subject to a United States Postal Service false
representation order entered under Section 3005 of title 39, United States Code,
within five years prior to the date of this agreement, or is subject to a
restraining order or preliminary injunction entered under Xxxxxxx
-00-
0000 xx xxxxx 00, Xxxxxx Xxxxxx Code, with respect to conduct alleged to have
violated Section 3005 of title 39, United States Code; or
(11) Has experienced a personal bankruptcy, or been an officer,
director, or key employee of any company that during their tenure with such
company experienced any bankruptcy other than as disclosed in the Registration
Statement and in the Prospectus as required, or had any trustee, receiver, or
conservator appointed with respect to its business or assets.
u. PRIOR SALES. No securities of the Company have been sold by the
Company or by, or on behalf of, or for the benefit of the Company within three
years prior to the date hereof, except as set forth in the Registration
Statement and in the Prospectus.
v. EXHIBITS. There are no material contracts, agreements or other
documents required to be described in the Registration Statement or in the
Prospectus or to be filed as exhibits to the Registration Statement by the
Securities Act which have not been described or filed as required, and neither
the Company nor its subsidiaries is in material violation of, and no material
default exists in the performance, observance or fulfillment of, any material
obligation, agreement, covenant or condition contained in any of such contracts,
agreements or documents except as disclosed in the Registration Statement and
the Prospectus.
w. EMPLOYMENT AGREEMENTS. The employment agreements between the
Company and its officers described in the Registration Statement are valid,
binding and enforceable obligations upon the respective parties thereto in
accordance with their respective terms, subject to the effect of bankruptcy or
similar proceedings and the effect and application of general principles of
equity.
x. LIQUIDATION. The Company's articles of incorporation provide that
(A) any liquidation of the Company, or (B) any business combination in which the
Company is not the surviving corporation or any sale of all or substantially all
of its assets (which combination or sale occurs during the five-year period
immediately following the Closing Date): (i) must be approved by a vote of the
holders of a majority of the outstanding shares of the capital stock entitled to
vote; and (ii) all "affiliates," as such term is defined in Rule 144 promulgated
under the Securities Act, of the Company on the Closing Date shall agree to
vote, during the two-year period immediately following the closing date of the
Public Offering, all shares of voting capital stock of the Company owned by them
(or over which they have the power to direct the vote) in the same proportion as
the votes cast by non-affiliates voting shares of the same class or series, with
respect to the above-referenced matters on which a vote of shareholders is
taken.
y. FINDER OR BROKER. The Company has not retained or dealt with any
broker or finder with respect to the transactions contemplated hereby, and the
Company knows of no outstanding claims for services in the nature of a finder's
fee or origination fee with respect to the sale of the Securities. The Company
will indemnify and hold harmless the Underwriters with respect to any claim for
a finder's fee by any party claiming to be owed such fee based on contacts,
-21-
conversations or arrangements with the Company. Furthermore, except as set forth
in the Registration Statement and in the Prospectus, the Company has no
management or financial consulting agreement with anyone. Except as set forth in
the Registration Statement and in the Prospectus or otherwise disclosed to you
in writing prior to the date hereof, no promoter, officer, director or five
percent or greater shareholder of the Company is, directly or indirectly,
associated with an NASD member broker/dealer.
z. STABILIZATION. Neither the Company, its subsidiaries, nor any
of their respective officers, directors or affiliates (as defined under the
Securities Act) has taken, directly or indirectly, any action to cause or result
in, or which has constituted, or might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or the resale thereof, within the meaning of the Securities Act or the
Exchange Act.
aa. NASDAQ LISTING. The Units, the Common Stock (including the
Warrant Shares) and Warrants comprising the Units have been approved for listing
on the NASDAQ SmallCap Market.
bb. NO ADVERSE CHANGE. Except as reflected in the Registration
Statement and in the Prospectus or any amendment or supplement thereto, since
the respective dates as of which information is given in the Registration
Statement and in the Prospectus or any amendment or supplement thereto and prior
to the Closing Date, or Option Closing Date, as the case may be, the Company and
the Subsidiary have each conducted its respective business in substantially the
same manner as of November __, 1997, neither the Company nor the Subsidiary has
incurred, or will have incurred, any material liability or obligation, direct or
contingent, or entered into any material transaction, whether or not in the
ordinary course of business, nor has or will have sustained any material loss or
interference with its business from fire, storm, explosion, flood or other
casualty, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree; and there have not been, and
prior to the Closing Date or Option Closing Date, as the case may be, there will
not be, any changes in the capital stock or any material increases in the
long-term or short-term debt of the Company or the Subsidiary or any materially
adverse change in or affecting the general affairs, management, financial
condition, shareholders' equity, results of operations or prospects of the
Company, and no event has occurred concerning the Company or its subsidiaries
and which might result in a material adverse change or effect in or on the
general affairs, management, financial condition, shareholders' equity, results
of operations or prospects of the Company or the Subsidiary, except as disclosed
in the Registration Statement.
cc. TITLE TO PROPERTIES. Each of the Company and the Subsidiary
has good title to all property (tangible and intangible) and assets owned by it,
free and clear of all security interests, charges, mortgages, liens,
encumbrances and defects, except as are described in the Registration Statement
and in the Prospectus and except those which are not material in amount and do
not adversely affect the use made and proposed to be made of such property by
the Company or the Subsidiary. Each of the Company and the Subsidiary owns or
leases all such properties, real, personal and mixed, tangible and intangible,
as are necessary to carry on its operations as heretofore
-22-
conducted and, except as otherwise stated in the Registration Statement and in
the Prospectus, as proposed to be conducted, as set forth in the Registration
Statement and in the Prospectus. The leases, licenses or other contracts or
instruments under which the Company or the Subsidiary leases, holds or is
entitled to use any property, real or personal, are valid, subsisting and
enforceable, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or other similar laws or arrangements
affecting creditors' rights generally and subject to principles of equity and
public policy considerations. All rentals, royalties or other payments accruing
thereunder that became due prior to the date of this Agreement have been duly
paid, and neither the Company nor, to the Company's knowledge, any other party
is in default thereunder and, to the Company's knowledge, no event has occurred
that, with the passage of time or the giving of notice, or both, would
constitute a default thereunder. Neither the Company nor the Subsidiary is in
violation of any applicable law, ordinance, regulation, order or requirement
relating to its owned or leased properties material to the conduct of its
business and has not received any notice of an alleged violation. Each of the
Company and the Subsidiary has adequately insured its properties against loss or
damage by fire or other casualty and maintains, in adequate amounts, such other
insurance as is usually maintained by companies engaged in the same or similar
businesses located in its geographical area.
dd. ENFORCEABILITY OF CONTRACTS. Each material contract or other
instrument (however characterized or described) to which the Company and/or the
Subsidiary is a party or by which its property or business is or may be bound or
affected has been duly and validly executed, is in full force and effect in all
material respects and is enforceable against the parties thereto in accordance
with its terms, and none of such contracts or instruments has been assigned by
the Company and/or the Subsidiary and, except as disclosed in the Registration
Statement and in the Prospectus, neither the Company, the Subsidiary nor, to the
Company's knowledge, any other party is in default thereunder, and no event has
occurred that, with the lapse of time or the giving of notice, or both, would
constitute a default thereunder. None of the material provisions of such
contracts or instruments violates any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court having
jurisdiction over the Company or the Subsidiary or any of their respective
assets or businesses.
ee. EMPLOYEE BENEFIT PLANS. Except as set forth in the
Registration Statement and in the Prospectus, neither the Company nor the
Subsidiary has any employee benefit plans (including, without limitation, profit
sharing and welfare benefit plans) or deferred compensation arrangements that
are subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
ff. LABOR RELATIONS. No labor problem exists with any of the
Company's or the Subsidiary's employees or is imminent, which labor problem
could materially and adversely affect the Company or the Subsidiary, and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or its Subsidiary's principal suppliers, contractors or
customers that could be expected to materially adversely affect the condition
(financial or otherwise), earnings, business affairs or business prospects of
the Company or the Subsidiary.
-23-
gg. RELATED PARTY TRANSACTIONS. Except as disclosed in the
Registration Statement and in the Prospectus, no present officer or director of
the Company or the Subsidiary or any related party or affiliate of any such/
person, (i) has any material direct or indirect interest in (A) any entity which
does any material business with the Company or the Subsidiary, or (B) any
material property, asset or right which is used in the conduct of the Company's
or the Subsidiary's business, or (ii) has any material contractual relationship
with the Company or the Subsidiary other than such relationship as attaches to
being an officer or director of the Company or the Subsidiary.
hh. INTELLECTUAL PROPERTY. The Company and the Subsidiary own or
possess all patents, trademarks, trademark registrations, service marks, service
xxxx registrations, trade names, copyrights, licenses, inventions, trade secrets
and rights described in the Registration Statement and in the Prospectus as
being owned by them or any of them or necessary for the conduct of their
respective businesses and, except as disclosed in the Registration Statement and
in the Prospectus, the Company is not aware of any claim to the contrary or any
challenge by any other person to the rights of the Company and the Subsidiary
with respect to the foregoing.
ii. INVESTMENT COMPANY. Neither the Company nor any of its
subsidiaries is now, or after the sale of the securities hereunder and
application of the net proceeds from such sale as described in the Registration
Statement and in the Prospectus will be, and will not be operated so as to
become, an "investment company" or a person "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
jj. BUSINESS WITH CUBA. As of the date hereof, the Company is in
compliance with all provisions of Florida Statutes, Section 517.075, relating to
issuers doing business with Cuba.
kk. ENVIRONMENTAL LAWS; HEALTH AND SAFETY. The Company and the
Subsidiary are: (i) in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) in receipt of all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company and
the Subsidiary. Neither the Company nor the Subsidiary has been named as a
"potentially responsible party" under the Comprehensive Environmental
Compensation Liability Act of 1980, as amended.
ll. DUE DILIGENCE MATERIALS. The Company has provided Akerman,
Senterfitt & Xxxxxx, P.A., the Representatives' counsel, all agreements,
certificates, correspondence and other items, documents and information
requested by such counsel's due diligence review memorandum.
-24-
Any certificate signed by an officer of the Company and delivered to
you or to your or the Representatives' counsel shall be deemed to be a
representation and warranty by the Company to you as to the matters covered
thereby.
7. INDEMNIFICATION.
a. BY COMPANY. The Company agrees to indemnify and hold harmless you
and each person, if any, who controls you within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act, from and against any
and all losses, liabilities, claims, damages and expenses (including but not
limited to reasonable attorneys' fees and any and all reasonable expenses
incurred in investigating, preparing or defending against any claim whatsoever,
and any and all amounts paid in settlement of any claim or litigation), joint or
several, to which you or they or any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, as originally filed or
any amendment thereof, or any related preliminary prospectus or the Prospectus,
or in any supplement thereto or amendment thereof, 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 Securities
under the securities laws thereof (any such application, document or information
being hereinafter called a "Blue Sky Application") or arise out of or are based
upon any 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 any material respect, or arise out of or are based upon any failure of the
Company to comply with any provision of this Underwriting Agreement resulting in
a claim or loss to the Underwriters. Notwithstanding the preceding sentence, the
Company will not be liable in any such case to the extent, but only to the
extent that, any such loss, liability, claim, damage or expense arises out of or
is based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of you expressly for use
therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have, including under this Agreement. The Company agrees
to pay any reasonable legal or other expenses for which it is liable under this
subsection from time to time (but not more frequently than monthly) within 30
days after its receipt of a xxxx therefor; and further provided, however, that
the foregoing provisions are subject to the condition that, insofar as they
relate to any untrue statement, alleged untrue statement, omission or alleged
omission made in any Preliminary Prospectus but eliminated or remedied in the
Prospectus, such indemnity provision shall not inure to you or any person who
controls you within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act if a copy of the Prospectus was not sent or given to
such person with or prior to the written confirmation of sale of such Securities
to such person. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
-25-
b. BY UNDERWRITERS. You agree to indemnify and hold harmless the
Company, each of the officers of the Company who shall have signed the
Registration Statement and each other person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, from and against any and all losses, liabilities, claims, damages
and reasonable expenses whatsoever (including but not limited to attorneys' fees
and any and all reasonable expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, as originally filed or
any amendment thereof, or any related preliminary prospectus or the Prospectus,
or in any amendment thereof or supplement thereto, or in any Blue Sky
Application, 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 any such loss, liability, claim, damage or expense arises
out of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by you expressly for use
therein; PROVIDED, HOWEVER, that in no case shall you be liable or responsible
for any amount in excess of the underwriting discounts and commissions received
by you, as set forth on the cover page of the Prospectus. You agree to pay any
legal or other expenses for which you are liable under this subsection (b) from
time to time (but not more frequently than monthly) within 30 days after receipt
of a xxxx therefor. This indemnity agreement will be in addition to any
liability which you may otherwise have.
c. PROCEDURES IN CASE OF INDEMNIFICATION. Promptly after receipt by
an indemnified party under subsection (a) or (b) above of notice of the
commencement of any action or proceeding (including any governmental
investigation), such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify each
party against whom indemnification is to be sought in writing of the
commencement thereof (but the failure so to notify an indemnifying party shall
not relieve it from any liability which it may have under this Section 7 except
to the extent that it has been prejudiced in any material respect by such
failure or from any liability which it may have otherwise). 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 assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the indemnified party and the payment of all expenses. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by one of the
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel reasonably satisfactory to
the indemnified party to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably
-26-
concluded and have been so advised in a written opinion from counsel that there
may be defenses available to it or them which are different from or additional
to those available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties. Anything in
this subsection to the contrary notwithstanding, an indemnifying party shall not
be liable for any settlement of any claim or action effected without its written
consent; PROVIDED, HOWEVER, that such consent was not unreasonably withheld.
d. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7.a and b
hereof is for any reason held to be unavailable from the Company, or you, or is
insufficient to hold harmless a party indemnified thereunder, in lieu of
indemnifying such indemnified party, the Company, and you shall contribute to
the aggregate losses, claims, damages, liabilities and reasonable expenses of
the nature contemplated by such indemnification provisions (including any
investigation, legal and other reasonable expenses incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claims asserted, but after deducting in the case of losses, claims, damages,
liabilities and reasonable expenses suffered by the Company or you any
contribution received by the Company or you from persons who may also be liable
for contribution, including persons who control the Company or you within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, officers of the Company who signed the Registration Statement and directors
of the Company) to which the Company or you may be subject, in such proportions
as is appropriate to reflect the relative benefits received by the Company and
by you from the offering of the Securities or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 7.d
hereof in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and you in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and by
you shall be deemed to be in the same proportion as (a) the total proceeds from
the offering (before deducting expenses) received by the Company bear to (b) the
total underwriting discounts and commissions received by you in each case as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company and of you shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by you or any agent expressly authorized by you to
supply such information and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and you agree that it would not be just and equitable if
contribution pursuant to this Section 7.d were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 7.d, (i) in no case shall you be liable or responsible for any
amount in excess of the underwriting discount applicable to the Securities
purchased hereunder and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any
-27-
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7.d, each person, if any, who controls an underwriter within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act
shall have the same rights to contribution as you, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to clauses
(i) and (ii) of this Section 7.d. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 7.d, notify such
party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under Section
7.d or otherwise. No party shall be liable for contribution with respect to any
action or claim settled without its consent; PROVIDED, HOWEVER, that such
consent was not unreasonably withheld. The indemnity and contribution agreements
contained in this Agreement shall remain operative and in full force and effect
regardless of (A) any investigation made by or on behalf of you or any person
controlling you or by or on behalf of the Company, (B) acceptance of any of the
Securities and payment therefore or (C) any termination of this Agreement. A
successor to the Company, its directors or officers or any person controlling
the Company or to the Underwriter, shall be entitled to the benefits of the
indemnity, contribution, and reimbursement agreements contained in this Section
7.
8. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. Your obligation to
purchase and pay for the Firm Securities on the Closing Date shall be subject to
the accuracy of and compliance with the representations and the warranties of
the Company herein contained and in each certificate and document contemplated
to be delivered to you hereunder as of the date hereof and the Closing Date, to
the performance by the Company of its obligations herein contained and to the
following additional terms and conditions:
a. EFFECTIVE REGISTRATION STATEMENT. The Registration Statement
shall have become effective not later than 5:00 P.M., Miami time, on the date of
this Agreement, or at such later time or on such later date as you may agree to
in writing and any and all filings required by Rule 424 and Rule 430A of the
Rules and Regulations shall have been made. At or prior to the Closing, no stop
order suspending the effectiveness of the Registration Statement or the
qualification or registration of the Securities under the Blue Sky laws of any
jurisdiction (whether or not a jurisdiction which you shall have specified)
shall have been issued and no proceeding for that purpose shall have been
initiated or shall be threatened by the Commission or the authorities of any
such jurisdiction. Any request for additional information on the part of the
Commission or any such authorities shall have been complied with to the
satisfaction of the Commission or such authorities and counsel for you. The
NASD, upon review of the terms of the public offering of the Securities, shall
not have objected to such offering, such terms, or your participation in the
same. After the date hereof no amendment or supplement shall have been filed to
the Registration Statement or the Prospectus without your prior written consent.
-28-
b. ACCURACY OF REGISTRATION STATEMENT. No person shall have
discovered and advised the Company prior to the Closing Date that the
Registration Statement or Prospectus or any amendment or supplement thereto
contains an untrue statement of material fact which, in your opinion, is
material, or that the Registration Statement or any amendment or supplement
thereto omits to state a fact which, in your opinion after consultation with
legal counsel, is material and is required to be stated therein or is necessary
to make the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto omits to state a fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
c. LITIGATION. Between the time of the execution and delivery of
this Agreement and the Closing, there shall be no material litigation instituted
against the Company, any of its subsidiaries or any of their respective officers
or directors, and between such dates there shall be no proceeding instituted or
threatened against the Company, any of its subsidiaries or any of their
respective officers or directors before or by any Federal, state, county or
local commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, in which litigation or proceeding an unfavorable
ruling, decision or finding could materially adversely affect the Company, any
of its subsidiaries or their respective businesses, business prospects,
properties, financial conditions or results of operations.
d. REVIEW BY UNDERWRITER'S COUNSEL. The authorization and
issuance of the Securities, the sale and delivery thereof, the Registration
Statement, the Prospectus and all other documents and corporate proceedings
incident thereto shall be satisfactory in all material respects to you and your
counsel, and your counsel shall be furnished on the Closing Date with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the matters referred to in this Section 8.
e. TENDER. There shall have been tendered to the Representatives
certificates representing the Firm Securities to be sold on the Closing Date in
accordance with the terms and provisions of this Agreement.
f. STANDARD & POOR'S/XXXXX'X. The Company shall have registered
with (a) the Corporation Records Service published by Standard & Poor's
Corporation or (b) Xxxxx'x Industrial Manual (excluding Xxxxx'x OTC Industrial
Manual).
g. INDEPENDENT DIRECTORS. The Company shall have serving on its
Board of Directors at least two (2) persons who satisfy the criteria for
"independent director" set forth in Rule 4460(c) of the NASD rules.
h. OPINION OF LEGAL COUNSEL. You shall have received an opinion
dated the effective date of the Registration Statement, and an updated version
of such opinion dated the Closing Date, satisfactory in form and substance to
you and your counsel, from Lucio, Mandler,
-29-
Xxxxxxx, Bronstein, Garbett, Stiphany & Xxxxxxxx, P.A., counsel for the Company,
in the form of Exhibit "A" hereto.
In giving such opinion, such counsel may rely as to matters of fact
upon statements and certifications of officers of the Company or public
officials as to matters of fact of which the maker of such certificate has
knowledge, and as to matters of law of jurisdictions other than Florida, such
counsel may rely on opinions of local counsel acceptable to you, copies of which
opinions shall be attached to the said opinion, provided, however, that such
counsel may not rely on an opinion if he has actual knowledge that such opinion
is not correct or knows that the facts or law on which the opinion of local
counsel is based are not correct.
i. PRESIDENT'S CERTIFICATE. The Company shall have furnished to you
on the Closing Date a certificate of its President, or other principal executive
officer of the Company dated as of the Closing Date, to the effect that:
(1) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for such purpose
have been commenced or are, to the knowledge of each signer of such
certificate, threatened or contemplated by the Commission; no stop order
suspending the qualification or registration of any of the Securities under
the Blue Sky laws of any jurisdiction (whether or not a jurisdiction you
shall have specified) has been issued, and no material proceedings for such
purpose have been commenced or are, to the knowledge of each signer of such
certificate after reasonable investigation, threatened or contemplated by
any jurisdiction; and the conditions, separately set forth in such
certificate, contained in Section 8 hereof have been complied with in all
material respects.
(2) The respective signers and each other member of the Company's
Board of Directors have each read the Registration Statement and Prospectus
and any amendments and supplements thereto, and the Registration Statement
and the Prospectus and any amendments and supplements thereto and all
statements contained therein are true and correct in all material respects,
and neither the Registration Statement nor Prospectus nor any amendment or
supplement thereto includes any untrue statement of a material fact or
omits to state any material fact re quired to be stated therein or
necessary to make the statements therein not misleading and, since the
effective date of the Registration Statement, they are not aware of any
event required to be set forth in an amendment to the Registration
Statement or a supplement to the Prospectus which has not been so set
forth.
(3) Except as reflected in the Registration Statement and
Prospectus or any amendment or supplement thereto, since the respective
dates as of which information is given in the Registration Statement and
Prospectus or any amendment or supplement thereto and prior to the date of
such certificate, (a) there
-30-
has not been any material adverse change, financial or otherwise, in the
affairs or condition of the Company and of its subsidiaries taken as a
whole, and (b) the Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, otherwise than in the ordinary course of business.
(4) There are no legal proceedings pending or, to the knowledge
of the Company after reasonable investigation, threatened against the
Company or any of its subsidiaries, 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 material transactions or contracts
which are required to be sum marized 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.
(5) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, no dividends or
distribution whatever have been declared and/or paid on or with respect to
any securities of the Company.
(6) 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 property, whether or not
insured.
(7) At and as of the Closing Date, the representations and
warranties contained in Section 6 of this Agreement are true and correct in
all material respects; the Company has complied with all the agreements and
has satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date, and the matters set forth in Section 8 of
this Agreement have been satisfied and/or complied with, as applicable.
(8) The Company and each of its subsidiaries has such licenses,
registrations, permits, approvals, qualifications and certificates of
authority from the appropriate regulatory authorities as are necessary to
transact its business as described in the Registration Statement and in the
Prospectus in the jurisdictions in which the Company and each of its
subsidiaries transacts its business or owns or leases property, and in
which the failure to have such licenses, registrations, permits, approvals,
qualifications and certificates could have a material adverse effect on the
business, properties or results of operation of the Company and its
subsidiaries taken as a whole.
-31-
j. CHIEF FINANCIAL OFFICER'S CERTIFICATE. The Company shall have
furnished to you on the Closing Date a certificate of its Chief Financial
Officer, or other principal executive financial officer or accounting
officer of the Company, dated as of the Closing Date, to the effect that:
(1) To the knowledge of such officer after reasonable inquiry no
stop order suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for such purpose have been commenced or
are, to the knowledge of each signer of such certificate, threatened or
contemplated by the Commission; no stop order suspending the qualification
or registration of any of the Securities under the Blue Sky laws of any
jurisdiction (whether or not a jurisdiction you shall have specified) has
been issued, and no proceedings for such purpose have been commenced or
are, to the knowledge of each signer of such certificate, threatened or
contemplated by any jurisdiction; and the conditions contained in Section 8
of this Agreement have been satisfied and/or complied with, as applicable.
(2) The Prospectus and any amendments and supplements thereto and
all statements contained therein are true and correct, and to his
knowledge, after reasonable inquiry, neither the Registration Statement nor
Prospectus nor any amendment or supplement thereto includes 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, he
is not aware of any event required to be set forth in an amendment to the
Registration Statement or a supplement to the Prospectus which has not been
so set forth.
(3) Except as reflected in the Registration Statement and
Prospectus or any amendment or supplement thereto, since the respective
dates as of which information is given in the Registration Statement and
Prospectus or any amendment or supplement thereto and prior to the date of
such certificate, (a) there has not been any material adverse change,
financial or otherwise, in the affairs or condition of the Company or any
of its subsidiaries taken as a whole, and (b) the Company has not incurred
any material liabilities or obligations, direct or contingent, or entered
into any material transactions, otherwise than in the ordinary course of
business.
(4) There are no material legal proceedings pending or to his
knowledge after reasonable inquiry, threatened against the Company or any
of its subsidiaries, 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 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.
-32-
(5) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, no dividends or
distribution whatever have been declared and/or paid on or with respect to
any securities of the Company.
(6) 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 property, whether or not
insured.
(7) At and as of the Closing Date, to his knowledge after
reasonable inquiry, the representations and warranties contained in Section
6 of this Agreement are true and correct; the Company has complied with all
the agreements and has satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date, and the conditions
set forth in Section 8 of this Agreement have been satisfied and/or
complied with, as applicable.
k. ACCOUNTANT'S LETTER. You shall have received from the independent
certified public accountants that audited the financial statements of the
Company included in the Registration Statement, at least two letters each
addressed to you, substantially in the form heretofore approved by you, one
dated the effective date of the Registration Statement and the second, the
Closing Date.
l. UNDERWRITER'S PURCHASE OPTION. The Company shall have executed
the Purchase Option Agreement and shall have delivered properly executed
Underwriter's Option Certificates to you simultaneously with the closing of the
sale of the Firm Securities.
m. LOCK-UP AGREEMENTS. You shall have received the executed
"lock-up" letters described in Section 5.k of this Agreement.
n. NASDAQ LISTING. The Units, the Common Stock (including the
Warrant Shares) and Warrants were each qualified for listing on the Nasdaq
SmallCap Market on the effective date of the Registration Statement and continue
to be so qualified.
o. BLUE SKY QUALIFICATION. The Securities and Warrant Shares shall
be qualified in such states as determined under Section 5.e above and each
qualification shall be in effect and not subject to an stop order or other
proceeding on the Closing Date.
All such opinions, certificates, letters and documents delivered
pursuant to this Agreement will be in compliance with the provisions of this
Section 8 only if they are reasonably satisfactory to you and your counsel. The
Company shall furnish to you such conformed copies of such opinions,
certificates, letters and documents in such quantities as you shall reasonably
request.
If any of the conditions hereunder to be satisfied at or prior to the
Closing Date are not so satisfied, or subsequently waived, you may terminate
this Agreement without liability on your part
-33-
or on the part of the Company, except for the expenses to be paid or reimbursed
by the Company pursuant to Section 5.o of this Agreement and except for any
liability under Section 7 of this Agreement.
Your obligation to purchase and pay for all or any portion of the
Option Securities on the Option Closing Date upon the exercise of the option
contained in Section 3 hereof shall be subject to the accuracy of and compliance
with the representations and the warranties of the Company herein contained as
of the date hereof and the Closing Date and Option Closing Date, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
(A) You shall have purchased the Firm Securities from the Company
(which purchase may occur simultaneously with the purchase of the Option
Securities from the Company).
(B) The conditions set forth in paragraphs a., b. and c. of this
Section 8 shall be satisfied as of the Option Closing Date.
(C) There shall have been tendered for delivery in accordance
with the terms and provisions of this Agreement the Option Securities being
purchased on the Option Closing Date from the Company.
(D) You shall have received an opinion of counsel for the
Company, dated the Option Closing Date, confirming their opinion delivered
pursuant to Section 8.h hereof as of the Option Closing Date. In each instance
in which the opinion referred to in Section 8.h refers to the Firm Securities,
the opinion delivered pursuant hereto shall also refer to the Option Securities.
(E) You shall have received from the independent certified public
accountants the audited financial statements of the Company included in the
Registration Statement, a letter addressed to you, substantially in the form
heretofore approved by you, dated the Option Closing Date.
(F) You shall have received a certificate, dated the Option
Closing Date, of the Company, confirming the matters stated in the certificate
delivered pursuant to Section 8.i hereof as of the Option Closing Date and
stating further that the Company has performed or a waiver has been given for
all or a part of the agreements herein contained to be performed on its part at
or prior to such Option Closing Date.
(G) You shall have received a certificate, dated the Option
Closing Date, of the Company, confirming the matters stated in the certificate
delivered pursuant to Section 8.j hereof as of the Option Closing Date and
stating further that the Company has performed or a waiver has been given for
all or a part of the agreements herein contained to be performed on its part at
or prior to such option Closing Date.
-34-
9. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
a. This Agreement shall become effective when you and the Company
shall have received notification of the effectiveness of the Registration
Statement.
b. This Agreement may be terminated at any time prior to the
Closing Date by you by written notice to the Company if in your judgment it is
impracticable to offer for sale or to enforce contracts made by you for the
resale of the Securities agreed to be purchased hereunder by reason of (i) the
Company or its subsidiaries having sustained a loss by reason of fire, flood,
accident or other calamity, which, in your opinion, substantially affects the
value of the properties of the Company or its subsidiaries or which materially
interferes with the operation of the business of the Company or any of its
subsidiaries regardless of whether such loss shall have been insured, (ii) the
existing financial, political or economic conditions in the United States or
elsewhere having undergone such material change as in your opinion would make it
inadvisable to proceed with the offering, sale and delivery of the Securities on
the terms contemplated by the Prospectus, (iii) a banking moratorium shall have
been declared by either federal or New York authorities, (iv) a war involving
the United States or other national calamity shall have occurred, (v) any
material adverse change in the condition or obligations of the Company and any
of its subsidiaries taken as a whole or in the earnings, operations, management
or business prospects of the Company and any of its subsidiaries taken as a
whole, (vi) any action, suit or proceeding shall be threatened or pending, at
law or in equity, against the Company and any of its subsidiaries taken as a
whole, by any Federal, state or other commission, board or agency, which is not
disclosed in the Prospectus and in which an unfavorable result or decision could
materially adversely affect the business, prospects, property, financial
condition or income or earnings of the Company and any of its subsidiaries taken
as a whole, (vii) an action, suit or proceeding that is threatened or pending,
which has been previously disclosed in the Prospectus, shall have worsened in
any way such that an unfavorable result or decision could materially adversely
affect the business, prospects, property, financial condition or income or
earnings of the Company and/or any of its subsidiaries, or (viii) during the
course of your due diligence investigation of the Company, facts arise which
vary materially in an adverse manner from representations which have been
previously made concerning the Company's business and financial condition. In
addition, this Agreement may be terminated by you by prompt written notice to
the Company (i) at any time before it becomes effective or (ii) in the event
that the Company shall have failed to comply with any of the provisions of this
Agreement to be performed by it at or prior to any Closing Date which have not
been waived by you, or if any of the representations, warranties, covenants,
agreements or conditions of, or applicable to, the Company herein contained
shall not have been complied with or satisfied within the time specified unless
waived by you.
c. At any time after the Closing Date, if you should (i) cease to
be a broker-dealer registered with the Commission, (ii) be suspended from such
registration for any period of time in excess of 30 days, (iii) cease to be a
member of the NASD or other self-regulatory organization or (iv) become subject
to a proceeding, action or notification under Section 6 of the Securities
Investor Protection Act of 1970, the obligations of the Company under this
Agreement shall cease without any liability on the part of the Company.
-35-
10. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES AND
COVENANTS. The respective indemnities of the Company and the Underwriters and
the respective representations, warranties and covenants of the Company and the
Underwriters set forth in this Agreement will remain in full force and effect,
regardless of any investigations made by or on behalf of the Company or the
Underwriters or any of their respective officers, directors, partners or any
controlling person, and will survive delivery of and payment for the Securities
or termination of this Agreement pursuant to Section 9 hereof as the case may
be.
11. MISCELLANEOUS.
a. This Agreement shall inure to the benefit of the Company and
the Underwriters, the officers and directors of such parties, each controlling
person referred to in Section 8 hereof and their respective successors. Nothing
in this Agreement is intended or shall be construed to give to any other person,
firm or corporation any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. The term
"successor" as used in this Agreement shall not include any purchaser of any
Securities from the Underwriter.
b. This Agreement constitutes the entire agreement among the
parties concerning the subject matter hereof and supersedes all prior agreements
and understandings.
c. All notices and other communications hereunder (unless
otherwise expressly provided for herein) shall be in writing and shall be deemed
given when delivered in person on the business (before 5:00 P.M.) sent by
facsimile transmission, or on the date indicated on the return receipt if sent
registered or certified mail return receipt requested) to the party to receive
the same at the following addresses (or at such other address for a party as
shall be specified by like notice):
If to the Company: Galacticomm Technologies, Inc.
0000 X.X. 00xx Xxxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxx, Chairman
Facsimile: (000) 000-0000
-36-
With a Copy to: Xxxxx, Mandler, Croland, Bronstein, Garbett,
Stiphany & Xxxxxxxx, P.A.
Xxxxxxx Bank Tower
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Underwriters: First Equity Corporation of Florida
000 Xxxxx Xxxxxxxx Xxxxxxxxx
0000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxx,
Senior Vice President
Facsimile: (000) 000-0000
____________________________
____________________________
____________________________
____________________________
Attn:_______________________
Facsimile: (___) ___________
With a Copy to: Akerman, Senterfitt & Xxxxxx, P.A.
SunTrust International Center, 00xx Xxxxx
Xxx Xxxxxxxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
d. This Agreement was executed and delivered in, and its validity,
interpretation and construction shall be governed by the internal laws of, the
State of Florida appli cable to agreements made and to be performed wholly
within such State. This Agreement may be executed in any number of counterparts.
Each counterpart, when executed and delivered, shall be an original contract,
but all counterparts, when taken together, shall constitute one and the same
Agreement.
e. The Company hereby acknowledges that the breach of material terms
contained in this Agreement (whether or not specifically designated as such)
would cause irreparable damage and substantial prejudice to your rights.
Accordingly, the Company agrees that in the event of any such breach or
threatened breach, you shall have, in addition to its and your legal remedies,
the right to injunctive or other equitable relief, as permitted by law, to
prevent the Company's violation of their obligations hereunder.
-37-
f. Titles and headings to sections herein are inserted for the
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
g. Any consent or approval of the Underwriters required hereunder to
any action of the Company shall not be unreasonably withheld, and
notwithstanding any other provisions hereof, such consent or approval shall not
be required if the Company obtains an opinion from counsel acceptable to the
Underwriters that the requirement of such consent or approval constitutes an
abrogation of the Board of Directors' duties under the corporate law of such
jurisdiction.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and us in accordance with its terms.
Very truly yours,
Galacticomm Technologies, Inc.
By:
---------------------------
Xxxxx Xxxx, Chairman and
Chief Executive Officer
Accepted and agreed to as of
the date first above written:
First Equity Corporation of Florida
By:
--------------------------------
Xxxxxxx X. Xxxxxxxxxx,
Senior Vice President
-38-
SCHEDULE I
UNDERWRITERS
-39-
EXHIBIT A
OPINION OF
XXXXX, MANDLER, CROLAND, BRONSTEIN,
GARBETT, STIPHANY & XXXXXXXX
A-1
