THE HAVANA GROUP, INC. EXHIBIT 1.1
460,000 Units
Each Unit Consisting of one Share of Common Stock
and two Class A Common Stock Purchase Warrants
AGREEMENT AMONG UNDERWRITERS
, 1998
To each of the Underwriters named in Schedule I
to the attached Underwriting Agreement
Dear Sirs:
1. Underwriting Agreement. The Havana Group, Inc., a Delaware
corporation (the "Company"), proposes to enter into an underwriting agreement
in the form of the Underwriting Agreement attached hereto as Exhibit "A" (the
"Underwriting Agreement") with the underwriters named in Schedule I to the
Underwriting Agreement (the "Underwriters"), acting severally and not
jointly, with respect to the purchase from the Company of 460,000 Units, each
unit consisting of one share of Common Stock and two Class A Common Stock
Purchase Warrant (the "Firm Units"). Upon our request, and as provided in
Section 3 of the Underwriting Agreement, Xxxxxx Xxxx, Inc., the Company's
principal stockholder, also will sell to the Underwriters up to a maximum of
an additional 69,000 Units (the "Optional Units"). Both the Firm Units and
the Optional Units are sometimes collectively referred to herein as the
"Units." All of the Units which are the subject of this Agreement are more
fully described in the Prospectus of the Company described below. Under the
terms of the Underwriting Agreement, each of the Underwriters will agree, in
accordance with the terms thereof to purchase the aggregate number of Firm
Units set forth opposite its name in said Schedule I, subject to adjustment
pursuant to Section 12 hereof and Section 14 of the Underwriting Agreement.
2. Registration Statement and Prospectus. The Units are described in
a registration statement and related prospectus which have been filed with
the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"). An amendment to such
registration statement has been or will be filed in which you have been or
will be named as one of the Underwriters of the Units. Copies of the
registration statement as filed and as amended have been delivered to you,
and you hereby authorize us to approve on your behalf any further amendments
or supplements which may be necessary or appropriate. The registration
statement, as amended at the time it becomes effective, is called the
"Registration Statement" and the final prospectus relating to the Units as
filed by the Company with the Commission pursuant to Rule 424(b) under the
Act is referred to as the "Prospectus."
3. Authority of Representative. You authorize us as your
Representative to execute the Underwriting Agreement with the Company in the
form attached with such insertions, deletions or other changes as we may
approve (but not as to the number of, and price of, the Units to be
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purchased by you except as provided herein and therein) and to take such
action as in our discretion we may deem advisable in respect of all matters
pertaining to the Underwriting Agreement, this Agreement, the transactions
for the accounts of the several Underwriters contemplated thereby and hereby,
and the purchase, carrying, sale and distribution of the Units.
4. Public Offering. In connection with the public offering of the
Units, you authorize us, in our discretion:
(a) To determine the time and manner of the initial public
offering (after the Registration Statement become effective), the initial
public offering price, and the concessions and reallowances to dealers, to
change the public offering price and such concessions and reallowances after
the initial public offering, to furnish the Company with the information to
be included in the Registration Statement and the Prospectus (and any
amendment or supplement thereto) with respect to the terms of the public
offering, and to determine all matters relating to the public advertisement
of the Units and any communications with dealers or others;
(b) To reserve all or any part of your Units for sale to retail
purchasers (including institutions) and to dealers selected by us ("Selected
Dealers") among which may be included any Underwriter (including ourselves)
and each of which shall be a member of the National Association of Securities
Dealers, Inc., and each of which shall agree that in making sales to
purchasers in the United States it will conform to the Rules of Fair Practice
of said Association (or, in the case of a foreign dealer not eligible for
membership in such Association, which shall agree not to reoffer, resell or
deliver Units in the United States, its territories or its possessions, or to
persons whom it has reason to believe are citizens thereof or residents
therein), such reservations for sales to retail purchasers to be as nearly as
practicable in proportion to the respective underwriting obligations of the
Underwriters and such reservations for sales to Selected Dealers to be in
such proportion as we determine, and from time to time to add to the reserved
Units such Units retained by you remaining unsold and to release to you any
of your Units reserved but not sold;
(c) To sell reserved Units as nearly as practicable in proportion
to the respective reservations to retail purchasers at the public offering
price, and to Selected Dealers at the public offering price less the Selected
Dealer's concession pursuant to the Selected Dealer Agreement in
substantially the form attached; and
(d) To buy Units for your account from Selected Dealers at the
public offering price less such amount not in excess of the Selected Dealer's
concession as we may determine.
After advice from us that the Units are released for public offering,
you will offer to the public in conformity with the terms of offering set
forth in the Prospectus, or any amendment or supplement, such of your Units
as we advise you are not reserved.
You recognize the importance of a broad distribution of the Units among
bona fide investors and you agree to use your best efforts to obtain such
broad distribution and to that end, to the extent
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you deem practicable, to give priority to small orders. In offering the
Units to Selected Dealers we will take such action as we deem appropriate to
effect a broad distribution.
5. Repurchase of Units Not Effectively Placed for Investment. You are
requested to place for investment those of your Units which are not reserved
as aforesaid. Any Units sold by you (otherwise than through us) which may be
delivered to us against a purchase contract made by us for the account of any
Underwriter prior to termination of the provisions referred to in Section 11
of this Agreement, shall be purchased by you upon demand from us at the cost
of such purchase plus brokerage commissions and transfer taxes on redelivery.
Units delivered on such repurchase need not be identical to those purchased
by you. In lieu of demand repurchase by you we may in our discretion (i)
sell for your account the Units so purchased by us, at such price and upon
such terms as we may determine, and debit or credit your account with the
loss and expense or net profit resulting from such sale, or (ii) charge your
account with an amount not in excess of the Selected Dealer's concession with
respect to such Units plus brokerage commissions and transfer taxes paid in
connection with such purchase.
6. Payment and Delivery. We shall give you at least 24 hours prior
notice of the Closing Date (as defined in the Underwriting Agreement). You
agree to deliver to us at or before 9:00 a.m., New York City time, on such
Closing Date and at or before 9:00 a.m. New York City time, on the Additional
Closing Date referred to in the Underwriting Agreement if the Optional Units
are purchased, at the office of VTR Capital, Inc., 00 Xxxxxxx Xxxxx, Xxx
Xxxx, XX 00000 (or such other office as we may direct), a certified check or
bank cashier's check payable in New York Clearing House funds to the order of
VTR Capital, Inc., as Representative, for the full purchase price of the
Units which you shall have agreed to purchase from the Company less the
concession to Selected Dealers. If you are a member or clear through a
member of the Depository Trust Company ("DTC"), you may, in your discretion,
deliver payment and receive Units through the facilities of DTC. The
proceeds shall be delivered in the amounts required in each case for payment
of the full purchase price by us to the Company against delivery of the Units
to us for your account. We are authorized to accept that delivery and to
give a receipt therefor. We may in our discretion make such payment on your
behalf with our own funds, in which event you will reimburse us promptly upon
request. You authorize us, as your custodian, to take delivery of your
Units, registered as we may direct in order to facilitate deliveries. You
also authorize us to hold for your account such of your Units as we have
reserved for sale to retail purchasers and to Selected Dealers, and to
deliver your reserved Units against such sales. We will deliver your
unreserved Units to you promptly and, after we receive payment for reserved
Units sold by us for your account, we will remit to you, as promptly as
practicable, an amount equal to the price paid by you for such Units. As
soon as practicable after termination of Sections 4, 5 and 9 and the first
and penultimate sentences of Section 8 of this Agreement (pursuant to Section
11 hereof) we will deliver to you any of your Units reserved but not sold.
All Units delivered to you pursuant to this Section will be evidenced by
certificates for the Common Stock and Warrants included in the Units in such
denominations as you shall direct by written notice received by us not later
than the second full business day preceding the Closing Date.
7. Authority to Borrow. In connection with the purchase or carrying
of any Units purchased hereunder for your account, you authorize us, in our
discretion, to advance funds for your
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account, charging current interest rates, or to arrange loans for your
account, and in connection therewith to execute and deliver any notes or
other instruments and hold or pledge as security any of your Units. Any
lender may rely on our instructions in all matters relating to any such loan.
Any of your Units held by us for your account may be delivered to you for
carrying purposes only, and subject to our further direction.
8. Stabilization and Over-Allotment. To facilitate the distribution
of the Units, you authorize us during the term of this Agreement, or for such
longer period as may be necessary in our discretion, to make purchases and
sales of the Units for your account in the open market or otherwise, for long
or short account, on such terms as we deem advisable and, in arranging sales,
to over-allot. You also authorize us to cover any short position incurred
pursuant to this Section on such terms as we deem advisable. Included in the
authority granted to us by you is the authority to exercise the
over-allotment option to purchase the Optional Units granted by Section 3 of
the Underwriting Agreement. Except with respect to the exercise of such
over-allotment option, all such purchases and sales (other than purchases and
sales of the Optional Units) shall be made for the accounts of the several
Underwriters as nearly as practicable in proportion to their respective
underwriting obligations. Your net commitment under this Section shall not,
at the end of any business day, exceed 15% of your maximum underwriting
obligation. You will on our demand take up at cost or deliver against
payment any Units purchased or sold or over-allotted for your account and, if
any such other Underwriter defaults in its corresponding obligation, you will
assume your proportionate share of such obligation without relieving the
defaulting Underwriter from liability. You will be obligated in respect to
purchases and sales made for your account hereunder whether or not the
proposed purchase of the Units is consummated. Upon request you will advise
us of Units retained by you and unsold and will sell to us for the account of
one or more of the Underwriters such of your unsold Units as we may
designate, at the public offering price thereof less such amount as we may
determine, but not in excess of the Selected Dealer's concession with respect
thereto. Until the termination of this Agreement pursuant to Section 11
hereof, or prior notification by us, we shall have the sole right to effect
stabilizing transactions in the Units. You agree that until such time you
will not make any purchases or sales of any of such Units except as provided
in Section 9 hereof. You also agree to timely provide us with the information
required by Rule 17a-2(d) under the Securities Exchange Act of 1934, as
amended (the "1934 Act").
9. Open Market Transactions. You agree not to bid for, purchase,
attempt to induce others to purchase, or sell, directly or indirectly, any
Units, except as brokers pursuant to unsolicited orders and as otherwise
provided in this Agreement or in the Underwriting Agreement. You further
agree not to offer the Units for sale until notified by us, as the
Representative of the Underwriters, that they are released for that purpose.
10. Expenses and Settlement. We may charge your account with Selected
Dealer's concessions and all transfer taxes on sales made by us for your
account and with your proportionate share (based upon your underwriting
obligation) of all other expenses incurred by us under the terms of this
Agreement or the Underwriting Agreement, in excess of those reimbursed by the
Company pursuant to Section 8 of the Underwriting Agreement, or in connection
with the purchase, carrying, sale or distribution of the Units. Our
determination of the amount and allocation of expenses shall
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be conclusive. As soon as practicable after termination of the provisions
referred to in Section 11, the accounts hereunder will be settled, but we may
reserve from distribution such amount as we deem advisable to cover possible
additional expenses. We may at any time make partial distribution of credit
balances or call for payment of debit balances. Any of your funds in our
hands may be held with our general funds without accountability for interest.
Notwithstanding any settlement, you will pay (i) your proportionate share
(based upon your underwriting obligation) of any liability which may be
incurred by the Underwriters, or any of them, based on the claim that the
Underwriters constitute an association, partnership, unincorporated business
or other separate entity, and of any expenses incurred by us, or by any other
Underwriter with our approval, in contesting any such liability, and (ii) any
transfer taxes which may be assessed and paid after such settlement on
account of any sale or transfer for your account.
11. Termination and Settlement. This Agreement will terminate (a) at
the close of business on the 30th day after the date of the Underwriting
Agreement; or (b) on such earlier or later date, not more than 30 days after
the date specified in (a), as we may determine; or (c) on the date of
termination of the Underwriting Agreement, if the same shall be terminated as
provided by its terms.
Upon termination of this Agreement, all authorizations, rights and
obligations hereunder will cease, except (a) the mutual obligation to settle
accounts hereunder, (b) your obligation to pay any claims referred to in the
last paragraph of this Section, (c) the obligations with respect to indemnity
set forth in Section 15 hereof (all obligations of which will continue until
fully discharged), and (d) your obligation with respect to purchases which
may be made by us from time to time thereafter to cover any short position
with respect to the offering, all of which will continue until fully
discharged, and except our authority with respect to matters to be determined
by us, or by us and the Company, pursuant to the terms of the Underwriting
Agreement, which will survive the termination of this Agreement.
The accounts arising pursuant to this Agreement will be settled and paid
as soon as practicable after termination. The determination by us of the
amounts to be paid to or by you will be final and conclusive.
Notwithstanding any settlement upon the termination of this Agreement,
you will pay your proportionate share of any amount asserted against and
discharged by the Underwriters, or any of them, based upon the claim that the
Underwriters constitute an association, unincorporated business or other
separate entity, or based upon or arising out of a claim that this Agreement
or the Underwriting Agreement is invalid or illegal for any reason, including
any expense incurred in defending against such claim, and will pay any
transfer taxes which may be assessed thereafter on account of any sale or
transfer of Units for our account.
12. Default by Underwriters. Default by one or more Underwriters
hereunder or under the Underwriting Agreement shall 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. In case of default under the Underwriting Agreement by one or more
Underwriters, we may
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arrange for the purchase by others, including non-defaulting Underwriters, of
Units not taken up by such defaulting Underwriter and you will, at our
request, increase pro rata with the other non-defaulting Underwriters the
aggregate principal amount of Units which you are to purchase, or both, by an
amount not exceeding one-ninth of your original underwriting obligations. In
the event any such arrangements are made, the respective Units to be
purchased by non-defaulting Underwriters and by such others shall be taken as
the basis for the underwriting obligations under this Agreement.
In the event of default by one or more Underwriters in respect of their
obligations under this Agreement, each non-defaulting Underwriter shall
assume its proportionate share of the obligations under this Agreement of
each such defaulting Underwriter (other than, to the extent stated in the
first paragraph of this Section, the purchase obligation of such defaulting
Underwriter).
13. Position of Representative. We shall be under no liability to you
for any act or omission except for obligations expressly assumed by us in
this Agreement, but no obligation on our part shall be implied or inferred.
Nothing shall constitute the Underwriters, or any of them, an association,
partnership, unincorporated business or other separate entity and the rights
and liability of ourselves and each of the Underwriters are several and not
joint.
14. Compensation to Representative. As compensation for our services
as Representative, you agree to pay us $. per Unit out of the aggregate
underwriting discount attributable to Units which you agree to purchase from
the Company under the Underwriting Agreement. We are authorized to charge
your account with such an amount.
15. Indemnification. You 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 Act to the extent and upon the terms by which
each Underwriter agrees to indemnify the Company in the Underwriting
Agreement. Such indemnity agreement shall survive the termination of any of
the provisions of this Agreement.
In the event that at any time any claim shall be asserted against us as
or as a result of our having acted as Representative, or otherwise involving
the Underwriters generally, relating to the Registration Statement or any
preliminary prospectus or the Prospectus, as from time to time amended or
supplemented, the public offering of the Units or any of the transactions
contemplated by this Agreement, you authorize us to make such investigation,
to retain such counsel and to take such other action as we shall deem
necessary or desirable under the circumstances, including settlement of any
claim or claims if such course of action shall be recommended by counsel
retained by us. You agree to pay to us, on request, your proportionate share
(based upon your underwriting obligation) of all expenses incurred by us
(including, but not limited to, the disbursements and fees of counsel so
retained) in investigating and defending against such claim or claims, and
your proportionate share (based upon your underwriting obligation) of any
liability incurred by us in respect of such claim or claims, whether such
liability shall be the result of a judgment against us or as a result of any
such settlement.
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16. Blue Sky Matters. We shall not have any responsibility with
respect to the right of any Underwriter or other person to sell Units in any
jurisdiction, notwithstanding any information we may furnish in that
connection. You hereby authorize us to take such action as may be necessary
or advisable to qualify the Units for offering and sale in any jurisdiction.
We have caused to be filed Further State Notices respecting the Units to be
offered to the public in New York in the form required by, and pursuant to,
the provisions of Article 23A of the General Business Law of the State of New
York.
17. Title to Units. The Units purchased for the respective accounts of
the several Underwriters shall remain the property of those Underwriters
until sold; and no title to such Units shall in any event pass to us, as
Representative, by virtue of any of the provisions of this Agreement.
18. Capital Requirements. Unless the provisions of clause (b) of the
second sentence of the last paragraph of this Agreement are applicable to
you, you confirm that your commitment hereunder will not result in any
violation of Section 8(b) or 15(c) of the 1934 Act or in any violation of any
of the rules and regulations promulgated under the 1934 Act, including,
without limitation, Rule 15c3-1, or any provision of any applicable rules of
any securities exchange to which you are subject or of any restriction
imposed upon you by such exchange.
19. Notices and Governing Laws. Any notice from you to us shall be
mailed or transmitted by any standard form of written telecommunication to us
at 00 Xxxxxxx Xxxxx, Xxx Xxxx, XX 00000. Any notice from us to you shall be
mailed or transmitted by any standard from of written telecommunication to
you at your address as set forth in your Underwriter's Questionnaire. This
Agreement shall be governed by and construed in accordance with the laws of
the State of New York (without regard to conflicts of laws principles).
We represent that we are a member in good standing of the National
Association of Securities Dealers, Inc. You represent that you are (a) a
member in good standing of such Association or (b) a foreign dealer which is
not eligible for membership in such Association, in which event you will make
sales of any Units only outside the United States and its territories and
possessions to persons who are not citizens or residents of the United States
or its territories or possessions, and that in making any such sales, you
will comply with such Association's Interpretation with respect to
Free-Riding and Withholding. You further represent that: (i) you will
notify each of your customers with respect to whose account you have
investment discretion and to whose account you intend to sell any Units that
you propose to sell Units to such account as a principal and you will obtain
the customer's written consent to such sale; and (ii) you will comply with
the requirements of Rule 15c2-8 under the 1934 Act and have distributed or
are distributing copies of a Preliminary Prospectus to all persons to whom
you then expected to mail confirmations of sale, not less than 48 hours prior
to the time it is expected to mail such confirmations.
Very truly yours,
VTR CAPITAL, INC.
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By:
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As Representative of the several
Underwriters
Confirmed and accepted as of
the date first above written.
--------------------------------
Attorney-in-fact for the several
Underwriters named in Schedule I
to the Underwriting Agreement
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