______________ Shares(1)
ECO SOIL SYSTEMS, INC.
Common Stock
AGREEMENT AMONG UNDERWRITERS
X. X. XXXXXXXX & COMPANY ______________, 1996
As Representative of the several Underwriters
named in Schedule I to the Underwriting
Agreement described herein
Midwest Plaza, Suite 1100
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Dear Sirs:
1. Underwriting Agreement. We understand that an underwriting agreement
(the "Underwriting Agreement") substantially in the form furnished
simultaneously herewith with respect to __________ shares (the "Firm Shares") of
common stock, $.005 per share par value ("Common Stock"), of Eco Soil Systems,
Inc., a Nebraska corporation (the "Company"), proposed to be sold by the Company
is to be entered into among the Company, you and other prospective underwriters,
acting severally and not jointly. The parties on whose behalf you are to execute
the Underwriting Agreement to be named in Schedule I thereto and are herein
called the "Underwriters." The Underwriting Agreement also provides for the
grant by the Company to the several Underwriters of an option, on the terms and
conditions set forth therein, to purchase up to an additional __________ shares
of Common Stock (the "Option Shares"). The Firm Shares and any Option Shares
purchased pursuant to the Underwriting Agreement are hereinafter collectively
called the "Shares." It is also understood that changes may be made to those who
are to be Underwriters and to the respective aggregate number of Shares to be
purchased by them, but that the aggregate number of the Shares to be purchased
by us as set forth in the accompanying form of Underwriting Agreement will not
be changed without our consent except as provided herein or in the Underwriting
Agreement.
2. Registration Statement and Prospectus. As used herein, the terms
"Registration Statement," "Preliminary Prospectus" and "Prospectus" shall have
the meanings ascribed to them in the Underwriting Agreement. You will furnish to
us as soon as possible copies of the Prospectus to be used in connection with
the offering of the Shares. We will confirm that, if requested by you as
Representative, that we have furnished a copy of any amended Preliminary
Prospectus to each person to whom we have furnished a copy of any previous
Preliminary Prospectus, and we confirm that we have delivered and agree that we
will deliver all Preliminary
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(1) Plus an option to purchase up to ___________ additional shares to cover
over-allotments.
Prospectuses and Prospectuses and all supplements thereto required for
compliance with the provisions of Rule 15c2-8 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). We consent to being named in the
Prospectus as one of the Underwriters of the Shares.
3. Authority and Compensation. We hereby authorize you, as our
Representative and on our behalf, to enter into the Underwriting Agreement with
the Company substantially in the form furnished simultaneously herewith and to
take such action as you deem advisable in connection with the performance of the
Underwriting Agreement and this Agreement and the purchase, carrying, sale and
distribution of the Shares. You may waive performance or satisfaction by the
Company of other obligations or conditions included in the Underwriting
Agreement if, in your judgment, such waiver will not have a material adverse
effect upon the interests of the Underwriters.
As compensation for your services, we will pay you an amount equal to
$_____ per share with respect to each share of the Shares which we agree to
purchase under the Underwriting Agreement, and you may charge our account
therefor.
4. Public Offering. In connection with the public offering of the
Shares, we authorize you, in your discretion:
(a) To determine the time of the initial public offering, to
change the public offering price and the concessions and discounts to
dealers after the initial public offering, to furnish the Company with
the information to be included in the Registration Statement or
Prospectus with respect to the terms of offering and to determine all
matters relating to advertising and communications with dealers or
others;
(b) To reserve for sale to dealers selected by you ("Selected
Dealers") and to others, all or any part of our Shares, such
reservations for sales to others to be as nearly as practicable in
proportion to the respective underwriting obligations of the
Underwriters unless you agree to a smaller proportion at the request of
any Underwriter and, from time to time, to add to the reserved Shares
any Shares retained by us remaining unsold and to release to us any of
our Shares reserved but not sold;
(c) To sell reserved Shares, as nearly as practicable in
proportion to the respective reservations, to Selected Dealers at the
public offering price less the Selected Dealers' concession and to
others at the public offering price; and
(d) To buy Shares for our account from Selected Dealers at the
public offering price less such amount not in excess of the Selected
Dealers' concession as you determine.
We authorize you to determine the form and manner of any communications
or agreements with Selected Dealers. If there shall be any agreements with
Selected Dealers, you are authorized to act as manager thereunder, and we agree
in such event to be governed by the terms and conditions of such agreements. The
form of Selected Dealers' Agreement furnished simultaneously herewith is
satisfactory to us.
Sales of Shares between Underwriters may be made with your prior
consent, or as you deem advisable for Blue Sky purposes.
After advice from you that the Shares have been released for public
offering, we will offer to the public in conformity with the terms of offering
set forth in the Prospectus such of our Shares as you advise us are not
reserved.
If, prior to the termination of this Agreement, you shall purchase or
contract to purchase, in the open market or otherwise, any Shares sold by us
(otherwise than through you) pursuant to this Agreement, we agree to repurchase
such Shares on demand at a price equal to the total cost of such purchase made
by you as Representative, including commissions, if any, and transfer taxes on
the redelivery. Certificates for the Shares delivered on such repurchase need
not be the identical certificates so purchased by you. In lieu of such action,
you may in your discretion sell for our account the Shares so purchased and
debit or credit our account for the loss or profit resulting from such sale, or
charge our account with an amount not in excess of the Selected Dealers'
concession with respect to such Shares.
5. Payment and Delivery. We authorize you to make payment on our behalf
to the Company of the purchase price of our Shares, to take delivery of our
Shares, registered as you may direct in order to facilitate deliveries, and to
deliver our reserved Shares against sales. At your request, we will pay you an
amount equal to the public offering price, less the selling concession, of
either our Shares or our unreserved Shares as you direct, and such payment will
be directed to our account and applied to the payment of the purchase price.
After you receive payment for reserved Shares sold for our account, you will
remit to us the purchase price (if any) paid by us for such Shares and credit or
debit our account with the difference between the sale price and the purchase
price thereof. You will deliver to us our unreserved Shares promptly, and our
reserved but unsold Shares against payment of the purchase price therefor
(except in the case of Shares for which payment has previously been made), as
soon as practicable after the termination of the provisions referred to in
Section 9 hereof, except that if the aggregate number of reserved but unsold
Shares upon such termination does not exceed 10% of the total number of the
Shares, you may in your discretion sell such reserved but unsold Shares for the
accounts of the several Underwriters as soon as practicable after such
termination, at such prices and in such manner as you determine.
6. Authority to Borrow. In connection with the purchase or carrying of
our Shares, we authorize you, in your discretion, to advance your funds for our
account, charging current interest rates, to arrange loans for our account, and
in connection therewith to execute and deliver any notes or other instruments
and to hold or pledge as security any of our Shares. Any lender may rely upon
your instructions in all matters relating to any such loan. Any Shares held by
you for our account may be delivered to us for carrying purposes and, if so
delivered, will be redelivered to you upon demand.
7. Stabilization and Over-Allotment. We authorize you, in your
discretion, to make purchases and sales of Shares and of the outstanding shares
of Common Stock, in the open market or otherwise, for long or short account, on
such terms as you deem advisable, and to over-allot in arranging sales. Such
purchases and sales and over-allotments will be made for the accounts of the
Underwriters as nearly as practicable in proportion to their respective
underwriting obligations. We authorize you, in your discretion, to cover any
short position incurred pursuant to this Section by purchasing securities on
such terms as you deem advisable. At no time will our net commitment under the
foregoing provisions of this Section exceed 15% of our underwriting obligation.
We will on demand take up at cost any securities so purchased and deliver any
securities so sold or over-allotted for our account, and, if any other
Underwriter defaults in its corresponding obligation, we will assume our
proportionate share of such obligation without relieving the defaulting
Underwriter from liability. Upon request, we will advise you of the Shares
retained by us and unsold and will sell to you for the account of one or more of
the Underwriters such of our unsold Shares at such price, not less than the net
price to Selected Dealers nor more than the public offering price, as you
determine.
If you effect stabilizing purchases pursuant to Section 7 hereof, you
will notify us promptly of the initiation and termination thereof. If
stabilization is effected, we will furnish to you not later than three business
days following the date on which stabilizing was commenced such information as
is required by Rule 17a-2(d) under the Exchange Act.
8. Open Market Transactions. We and you agree not to bid for, purchase,
attempt to induce others to purchase, or sell, directly or indirectly, any
Shares or outstanding shares of Common Stock, except as brokers pursuant to
unsolicited orders and as otherwise provided in this Agreement.
We represent that we have not participated in any transaction
prohibited by the preceding paragraph and that we have at all times complied
with the provisions of Rules l0b-6 and l0b-6A of the Securities and Exchange
Commission as applicable to the offering of the Shares.
9. Termination. The provisions of the last two paragraphs of Section 4,
the first sentence of Section 7, and all of Section 8 hereof, will terminate at
the close of business on the thirtieth (30th) day after the date of the initial
public offering of the Shares, unless sooner terminated as hereinafter provided.
You may terminate such provisions at any time by notice to us to the effect that
the offering provisions of this Agreement are terminated.
10. Expenses and Settlement. You may charge our account with any
transfer taxes on sales made by you of Shares purchased by us under the
Underwriting Agreement and with our proportionate share (based upon our
underwriting obligation) of all other expenses incurred by you under this
Agreement or in connection with the purchase, carrying, sale or distribution of
the Shares. The accounts hereunder will be settled as promptly as practicable
after the termination of the provisions referred to in Section 9 hereof, but you
may reserve such amount as you may deem advisable for additional expenses. Your
determination of the amount to be paid to or by us will be conclusive. You may
at any time make partial distributions of credit balances or call for payment of
debit balances. Any of our funds in your hands may be held with your general
funds without accountability for interest. Notwithstanding any settlement, we
will remain liable for any taxes on transfers for our account, and for our
proportionate share (based upon our underwriting obligation) of all expenses and
liabilities which may be incurred by or for the accounts of the Underwriters.
11. Default by Underwriters. Default by one or more Underwriters
hereunder or under the Underwriting Agreement will not release the other
Underwriters from their obligations or affect the liability of any defaulting
Underwriter to the other Underwriters for damages resulting from such default.
If one or more Underwriters default under the Underwriting Agreement, you may
arrange for the purchase by others, including nondefaulting Underwriters, of
Shares not taken up by the defaulting Underwriter or Underwriters.
12. Position of Representative. You will be under no liability to us
for any act or omission except for obligations expressly assumed by you herein,
and no obligation on your part will be implied hereby or inferred herefrom. The
rights and liabilities of the Underwriters are several and not joint, and
nothing will constitute the Underwriters a partnership, association or separate
entity.
If for federal income tax purposes the Underwriters should be deemed to
constitute a partnership, then each Underwriter elects to be excluded from the
application of Subchapter K, Chapter 1, Subtitle A, of the Internal Revenue Code
of 1986, as amended. You, as Representative of the several Underwriters, are
authorized, in your discretion, to execute on behalf of the Underwriters such
evidence of such election as may be required by the Internal Revenue Service.
13. Indemnification. We will indemnify and hold harmless each other
Underwriter and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Securities Act of 1933, as amended (the "Securities
Act"), or Section 20(a) of the Exchange Act, and reimburse your and their
expenses, to the extent and upon the terms upon which each Underwriter agrees to
indemnity the Company in the Underwriting Agreement.
14. Contribution. Each Underwriter (including you) will pay upon your
request, as contribution, its proportionate share, based upon its underwriting
obligation, of any losses, claims, damages or liabilities, joint or several,
paid or incurred by any Underwriter to any person other than an Underwriter,
arising out of or based upon any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any related Preliminary Prospectus, or any
other selling or advertising material approved by you for use by the
Underwriters in connection with the sale of the Shares, or 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 (other than an untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by an Underwriter specifically for use therein); and will pay such
proportionate share of any legal or other expenses reasonably incurred by you or
with your consent in connection with investigating or defending any such loss,
claim, damage or liability, or any action in respect thereof. In determining the
amount of any Underwriter's obligation under this Section, appropriate
adjustment may be made by you to reflect any amounts received by one or more
Underwriters in respect of such claim from the Company pursuant to Section 6 of
the Underwriting Agreement or otherwise. There shall be credited against any
amount paid or payable by us pursuant to this Section any loss, damage,
liability or expense which is incurred by us as a result of any such claim
asserted against us, and if such loss, claim, damage, liability or expense is
incurred by us subsequent to any payment by us pursuant to this Section,
appropriate provisions shall be made to effect such credit, by refund or
otherwise. If any such claim is asserted, you may take such action in connection
therewith as you deem necessary or desirable, including retention of counsel for
the Underwriters, and in your discretion separate counsel for any particular
Underwriter or group of Underwriters, and the fees and disbursements of any
counsel so retained by you shall be included in the amount payable pursuant to
this Section. In determining amounts payable pursuant to this Section, any loss,
claim, damage, liability or expense incurred by any person controlling any
Underwriter within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act which has been incurred by reason of such control
relationship shall be deemed to have been incurred by such Underwriter. Any
Underwriter may elect to retain at its own expense its own counsel. You may
settle or consent to the settlement of any such claim, on advice of counsel
retained by you, with the approval of a majority in interest of the
Underwriters. Whenever you receive notice of the assertion of any claim to which
the provisions of this Section would be applicable, you will give prompt notice
thereof to each Underwriter. You will furnish each Underwriter with periodic
reports, at such times as you deem appropriate, as to the status of such claim
and the action taken by you in connection therewith. If any Underwriter or
Underwriters default in their obligation to make any payments under this
Section, each nondefaulting Underwriter shall be obligated to pay its
proportionate share of all defaulted payments, based upon such Underwriter's
underwriting obligation as related to the underwriting obligations of all
nondefaulting Underwriters.
15. Reports and Blue Sky Matters. We authorize you to file with the
Securities and Exchange Commission and any other governmental agency any reports
required in connection with any transaction effected by you for our account
pursuant to this Agreement, and we will furnish any information needed for such
reports. You will not have any responsibility with respect to the right of any
Underwriter or other person to sell the Shares in any jurisdiction,
notwithstanding any information you may furnish in that connection.
16. Miscellaneous. Any notice hereunder from you to us or from us to
you shall be deemed to have been duly given when sent by mail, telegram or
delivered in person, if to us, at the address stated in the Underwriters'
Questionnaire or telex constituting Questionnaire which we have furnished in
connection with this offering or, if to you, to X. X. Xxxxxxxx & Company,
Midwest Plaza, Suite 1100, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000.
We understand that you are members in good standing of the National
Association of Securities Dealers, Inc. ("NASD"). We hereby confirm that we are
either (i) a member in good standing of the NASD or (ii) a dealer with its
principal place of business located outside the United States, its territories
and its possessions and not registered as a broker or dealer under the Exchange
Act who agrees not to make any sales within the United States, its territories
or its possessions or to persons who are nationals thereof or residents therein.
We hereby agree to comply with all applicable rules of the NASD, including,
without limitation, the NASD's Interpretation with respect to Free-Riding and
Withholding and Rule 2740 of the Rules of the Association and, if we are a
foreign dealer and not a member of the NASD, to comply with such Interpretation
with respect to Free-Riding and Withholding and the provisions of Rules 2730,
2740, 2420 (as such Section applies to foreign nonmembers) and 2750 of Article
III of such Rules of the Association as though we were a member of the NASD. In
connection with the sales and offers to sell Shares made by us outside the
United States (x) we will either furnish to each person to whom any such sale or
offer is made a copy of the then current Preliminary Prospectus or the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), as the case may be, or inform such
person that such Preliminary Prospectus or Prospectus will be available upon
request and (y) we will furnish to each person to whom any such sale or offer is
made such Prospectus, advertisement or other offering document containing
information relating to the Shares or the Company as may be required under the
law of the jurisdiction in which such offer or sale is made. Any prospectus,
advertisement or other offering document furnished by us to any such person in
accordance with the preceding sentence and any such additional offering material
as we may furnish to any person (A) shall comply in all respects with the law of
the jurisdiction in which it is so furnished, (B) shall be prepared and so
furnished at our sole risk and expense, and (C) shall not contain information
relating to the Shares or the Company which is inconsistent in any respect with
the information contained in the then current Preliminary Prospectus or in the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), as the case may be. We confirm that we
will not make sales of the Shares to discretionary accounts.
This instrument may be signed by the Underwriters in various
counterparts which together shall constitute one and the same agreement among
all the Underwriters and shall become effective at such time as all the
Underwriters shall have signed such counterparts and you shall have confirmed
all such counterparts.
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to us a counterpart hereof.
Very truly yours,
_______________________________________
[Type or Print Firm Name]
By____________________________________
Signature of Authorized Representative
_______________________________________
Name of Authorized Representative Typed
or Printed
Its_____________________________________
Title of Authorized Representative Typed
or Printed
Accepted and confirmed as of the date first above written.
X. X. XXXXXXXX & COMPANY
As Representative
By: ___________________________________
Its____________________________________
